Cost Transparency in Supply-Chains: Demystification of the Cooperation Tenet

Recent studies on open-book accounting focus mainly on the functions and consequences, difficulties, and determinants of interorganizational cost management. Research is also generally based on case studies. To offer a new direction, we seek to detect and systematize applications of open-book accounting. We follow a qualitative approach to analyze why and how open-book accounting is being used in practice. Data were obtained from 59 interviews conducted with purchasing experts and analyzed through content analysis. We find that, besides being used for interorganizational cost management, open-book accounting is used in price management. This includes increasing negotiation pressure on a supplier. Based on this finding, we develop a ramework to systematize different open-book accounting uses according to both underlying motives for cost transparency and purchasing strategies.