Procedural Justice in Procurement Management and Inclusive Interorganizational Relations: An Institutional Perspective
| Published date | 01 April 2015 |
| DOI | http://doi.org/10.1111/1467-8551.12071 |
| Date | 01 April 2015 |
Procedural Justice in Procurement
Management and Inclusive
Interorganizational Relations: An
Institutional Perspective*
Nicholas Theodorakopoulos, Monder Ram1and Nada Kakabadse2
Aston Business School, Aston University, Aston Triangle, Birmingham B4 7ET, UK, 1Centre for Research in
Ethnic Minority Entrepreneurship, Birmingham Business School, University of Birmingham, Edgbaston,
Birmingham B15 2TT, UK, and 2Henley Business School, University of Reading, Henley-on-Thames
RG9 3AU, UK
Corresponding author email: n.theodorakopoulos@aston.ac.uk
This paper applies the concept of procedural justice to one of the most important focal
points of interorganizational relations: the purchaser–supplier relationship. The few
extant studies of the concept in the purchaser–supplier domain have overlooked an
important aspect of this key relationship: that is, inclusiveness in procurement. This is
despite the fact that interest in the specific empirical context of supply chain links between
large purchasing organizations (LPOs) and ethnic minority suppliers (EMSs) from
disadvantaged communities proceeds apace on both sides of the Atlantic. Institutional
theory is used to examine the form that procedural justice takes in eight case studies of
LPOs from the private and public sectors, which actively engage with inclusive procure-
ment management initiatives in England. The guiding question is twofold: ‘What may
LPO approaches to installing procedural justice in procurement management entail?’ and
‘How are these approaches shaped?’ This paper identifies specific approaches to installing
procedural justice for inclusive procurement and submits theoretical propositions about
how these are shaped. The study contributes to a macro-level assessment of procedural
justice, i.e. interorganizational procedural justice, as a significant aspect of inclusive
interorganizational relationships, which is a domain in need of theoretical development.
Introduction
What form does ‘justice’ take in purchaser–
supplier relations? The concept of justice is helping
to cast light on a range of interorganizational rela-
tionships, including strategic alliances, joint ven-
tures, mergers and acquisitions, and public–
private partnerships (e.g. Barden, Steensma and
Lyles, 2005; Edwards and Edwards, 2012, 2014;
Luo, 2005, 2006, 2007, 2008; Meyer, 2001; Meyer
and Altenborg, 2007; Zhang and Jia, 2010). Yet,
rarely has the concept been applied to the
purchaser–supplier relationship setting. Further,
justice-centred studies on interorganizational rela-
tionships in general, and procurement relation-
ships in particular, have focused mainly on the
characteristics of such relationships, their interac-
tion effects and their performance outcomes (Choi
and Wu, 2009; Kumar, Scheer and Steenkamp,
1995; Liu et al., 2012; Narasimhan, Narayanana
*A free Video Abstract to accompany this article is avail-
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(ISSN)1467-8551.
Correction Note: This article was first published online
on the 17th of September 2014, under a subscription
publication licence. The article has since been made Onli-
neOpen, and the copyright line and licence statement was
therefore updated in January 2015.
© 2014 The Authors. British Journal of Management published by John Wiley & Sons Ltd on behalf of the British
Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and
350 Main Street, Malden, MA, 02148, USA.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which
permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used
for commercial purposes.
British Journal of Management, Vol. 26, 237–254 (2015)
DOI: 10.1111/1467-8551.12071
and Srinivasan, 2013). Relatively little is known
about the justice approaches of large purchasing
organizations (LPOs) to inclusive interorganiza-
tional relationships with ethnic minority suppliers
(EMSs), which are typically small organizations,
employing fewer than 20 workers (Woldesenbet,
Ram and Jones, 2012; Worthington, 2009).
This is despite a recent surge of interest in level-
ling the playing field for small and epresented sup-
pliers such as EMSs by making trade opportunities
accessible to them (Ram and Smallbone, 2003;
Ram, Theodorakopoulos and Worthington, 2007;
Woldesenbet, Ram and Jones, 2012; Worthington,
2009; Worthington, Ram and Shah, 2008). Beyond
enhancing their social performance by helping
EMSs ‘break out’, such inclusive interorganiza-
tional relationships may bestow LPOs with
competitiveness-related benefits. These include
positive reputation, efficiency gains, ethnic market
insight and/or innovative input (CRE, 2006;
Theodorakopoulos et al., 2013; Worthington,
2009). Notably, in stark contrast to the USA, in the
UK the notion of inclusive relationships between
LPOs and EMSs is based on applying procedural
justice to procurement management. Put another
way, ‘inclusiveness’ is not based on positive dis-
crimination logic, but rather on the logic of
‘equality of opportunity’ or fairness (Ram and
Jones, 2008; Ram and Smallbone, 2003; Ram,
Woldesenbet and Jones, 2011). The latter is
defined as the extent to which the supplier search
and selection procedures employed by a LPO, as a
reflection of its procurement policies and practices,
are impartial, fair and inclusive of EMSs.
The theoretical neglect in procedural justice for
inclusive LPO–EMS relations is addressed in this
study. We focus on the perspective of LPOs for two
reasons. First, power asymmetries in LPO–small
supplier relationships often render the former ‘rule
makers’ in such interorganizational relationship
arrangements. Their approaches to procedural
justice in the procurement process largely deter-
mine the degree of inclusiveness and outcomes of
the LPO–EMS interorganizational relationship.
Second, EMS perceptions of relations with LPOs
have been addressed in recent studies (Ram,
Woldesenbet and Jones 2011; Woldesenbet, Ram
and Jones, 2012). Consequently, the ‘grand tour’
research question of this paper is twofold: ‘What
may LPO approaches to installing procedural
justice in procurement management entail?’ and
‘How are these approaches shaped?’
We address these questions by examining the
procurement management practices of public- and
private-sector LPOs engaging actively with inclu-
sive procurement initiatives in England. We focus
on approaches to procedural justice in supplier
search and selection, using institutional theory as
an analytical lens. We contribute to the study of
interorganizational relationships by exploring
empirically and offering theoretical propositions
about LPO approaches to installing procedural
justice in sourcing for inclusive procurement rela-
tions. Our institutional approach enriches social
exchange (Blau, 1964; Emerson, 1976; Homans,
1958, 1961) and transaction costs economics
(Williamson, 1975, 1985) perspectives on interor-
ganizational relationships in procurement, and has
theoretical and practical implications.
The paper is organized as follows. The next
section presents the theoretical background, while
the third section deals with the adopted method-
ology. Following from this, the fourth section dis-
cusses the findings of the study and submits
theoretical propositions. Finally, the paper con-
cludes by outlining implications for theory devel-
opment and practice in this field of procedural
justice in the interorganizational relationships
context of LPOs–EMSs.
Theoretical background
Procedural justice and interorganizational
relationships
‘Interorganizational procedural justice’ derives
from the concept of organizational procedural
justice, which itself is a form of organizational
justice (Colquitt, 2001). It differs from its theoreti-
cal cousin, distributive justice. While distributive
justice focuses on perceptions of fairness associ-
ated with the outcomes of the exchange between
two parties, procedural justice refers to the percep-
tion of fairness of formal procedures used for
decision-making (Thibaut and Walker, 1975; Lind
and Tyler, 1988). That is, procedural justice
focuses on the means (procedures) by which out-
comes arise from the interaction between exchange
parties (for instance, between LPO and EMS) and
on the attitudes of those directly involved in, or
affected by those decisions (Korsgaard, Schweiger
and Sapienza, 1995). Because procedural justice is
shaped around concerns for formal procedures
and equity distribution, it embodies the structural
© 2014 The Authors. British Journal of Management published by John Wiley & Sons Ltd on behalf of the British
Academy of Management
238 N. Theodorakopoulos, M. Ram and N. Kakabadse
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