An organizational perspective on the implementation of strategic goals in public procurement
| Date | 01 April 2017 |
| Published date | 01 April 2017 |
| DOI | https://doi.org/10.1108/JOPP-17-04-2017-B004 |
| Pages | 572-605 |
| Author | Andreas H. Glas,Markus Schaupp,Michael Essig |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 17, ISSUE 4, 572-605 WINTER 2017
AN ORGANIZATIONAL PERSPECTIVE ON THE IMPLEMENTATION OF
STRATEGIC GOALS IN PUBLIC PROCUREMENT
Andreas H. Glas, Markus Schaupp and Michael Essig*
ABSTRACT. In the EU and especially in Germany, public procur ement is
bound to a tight legislation that also sets and enforces strategic goals such
as innovation or sustainability. The purpose of this paper is to analyze
whether different archetypes of public procurement organizations
(centralized or decentralized; state-level or local-level) perceive and
implement strategic goals differentl y. A survey with data from 104 entities is
used for this purpose. The findings reveal that the implementation of
strategy is different in centralized or state-level organizations compared with
decentralized or local organizations. Centralized organizations give goa ls
such as innovation, transparency, and sust ainability a high priority, while
local ones highlight regional development and SME support.
INTRODUCTION
The argument that organizations should align to coherent and
distinctive strategies and adapt their internal characteristics to reflect
these strategies has a respected place in the management literature
and has also been researched in the context of public organizations
(Andrews, Boyne, Law, & Walker, 2009). The discussion is closely
linked to the contingency theory which states that an organization’s
ability to accomplish its goals involves congruence between
organizational structure and its strategic orientation (Chandler,
1962).
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* Andreas H. Glas, Ph.D., is a Postdoctoral Researcher and Lecturer,
Markus Schaupp, MBA, is a Resea rcher and Doctorate Candidate, and
Michael Essig, Ph.D. is a Full Professor and Director at the Research Center
for Law and Management of Public Procurement of the Bundeswe hr
University Munich. Their research interests ar e i n strategi c public
procurement and more specifically in performance based contracts and the
procurement of innovations in public organizations.
Copyright © 2017 by PrAcademics Press
IMPLEMENTATION OF STRATEGIC GOALS IN PUBLIC PROCUREMENT 573
In fact, the public procurement organizational structure varies
from a very simple to a very complex structure (Thai, 2001), what
could have an influence on the structure-strategy fit. The main
organizational alternatives discussed in the literature are the central
or decentral procurement organizations (e.g. McCue & Pitzer, 2000),
while also state or local level procurement organization is often
mentioned (MacManus, 2002). Connecting to the research of
Kamann (2007), who explains the diversity of public procurement
organization with managerial approaches, this research names these
four organizational alternatives (central, decentral, state, local)
“organizational archetypes”.
This study analyzes the fit of the organizational archetypes with
strategic goals. Strategic goals in public procurement are often set or
enforced through legal regulations (e.g. Brammer & Walker, 2011).
Three sets of strategic goals of public procurement are distinguished:
(1) regulatory goals, (2) commercial goals, and (3) socioeconomic
(political) goals (Erridge & McIlroy, 2002). The inclusion of
socioeconomic goals, more precisely strategic goals, in public
procurement policies and practices has been progressively
emphasized in recent years. The discussed strategic goals are social
benefits e.g. support of minimum wages (McCrudden, 2004),
environmental sustainable procurement (Gelderman, Semeijn &
Bouma, 2015), the support of small and medium-sized enterprises
(Nicholas & Fruhmann, 2014) or the procurement of innovation
(Hommen & Rolfstam, 2009).
The existence of different goals calls for priorities and a
substantial awareness of possible conflicts amongst them. However,
the perception of strategic priorities and goal conflicts depends on
the subjectivity of each public procurement organization and its
personnel. This would support that different organizational
archetypes set different priorities in the strategic goals according to
their perception. Then the archetypes are strategically
heterogeneous.
On the other hand, public procurement law is enforcing strategic
goals in many countries. According to the regulatory goal of good
governance and conformance to regulation, each public procurement
organization is intended to interpret and apply the legislation and
their strategic goals in the same way. This would support that
different organizational archetypes have the same priorities of
574 GLAS, SCHAUPP & ESSIG
strategic goals. Then, the archetypes are strategically aligned. In that
case, only minor differences between the archetypes and their
strategic goals are expected. Minor differences are maybe due to a
disparity in the quality of implementation (implementation bias of
strategic goals).
This research analyzes organizational archetypes and their
heterogeneous or aligned perception of strategic goals. The purpose
is to get deeper insights into the structure-strategy fit of public
procurement entities, what promises to reveal recommendations for
both strategy-use and strategy-implementation in public procurement.
For that purpose, the research work defines organizational
archetypes and structures and discusses the strategic goals of public
procurement and their linkages in various models. On that basis, two
main hypotheses are developed and tested applying discriminant
analysis on data from a survey. If the test reveals that the perception
of strategic goals is significantly able to discriminate organizational
archetypes, then the archetypes are strategically heterogeneous. If
there is no significant discriminant function, the archetypes are
strategically aligned.
The remainder of the paper is structured as follows. The next
section reviews the organization of public procurement and illustrates
the situation in Germany and other countries. Then, the theoretical
foundations of strategic goals in public procurement are presented
and structured using a maturity model. Next, the hypotheses are
formulated and the methodology is described. This is followed by the
findings section, which is divided into subsections for H1 and H2. The
study’s findings are discussed and recommendations outlined in the
subsequent sections. The paper concludes with implications for
research and practice.
ORGANIZATION OF PUBLIC PROCUREMENT
The organizational practice of public procurement is essentially
divided into two perspectives: political and administrative (Thai,
2001). The political level sets strategic goals in the form of visions
and regulations and particularly through procurement law. The
administrative level is then tasked with process execution (Kattel &
Lember, 2010; Thai, 2001). This paper focuses on the organizational
setup of the administrative level of public procurement.
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