Improving the Validity of Public Procurement Research

International Journal of Public Sector ManagementEmerald Article: Improving the validity of public procurement researchJ. Gordon Murray

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To cite this document: J. Gordon Murray, (2009),"Improving the validity of public procurement research", International Journal of Public Sector Management, Vol. 22 Iss: 2 pp. 91 - 103

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Improving the validity of publicprocurement research

J. Gordon MurrayIDeA, Lisburn, UK

Abstract

Purpose – The purpose of this paper is to argue that the fundamental difference between private andpublic procurement, that of politicians, has been largely overlooked in public procurement strategyand management research. It then aims to argue that existing public procurement research could beimproved if greater attention were given to in research design to validity and the interface withpoliticians.

Design/methodology/approach – The research is based on a critical literature review of publicprocurement strategy and management literature, examining the methodologies used and roles ofpoliticians.

Findings – The findings suggest there is an in-built bias through over reliance on procurementmanagers as the key respondents, tendency to focus on private sector procurement research attributesand questions, and a tendency to focus on operational as opposed to strategic public procurementdecision making.

Research limitations/implications – The research suggests a need for greater understanding ofpoliticians’ engagement in public procurement strategy and management and the need for greatertriangulation in public procurement research.

Originality/value – The paper highlights how public procurement strategy and managementresearch can be improved to increase its validity. It explores the neglected area of the role of politiciansin public procurement.

Keywords Public procurement, Management strategy, Research, Politics

Paper type Conceptual paper

IntroductionThe elevation of procurement to a strategic role has been the focus of considerableattention since the 1990s. Most of the initial literature was set against the privatesector, and predominately manufacturing industry focussed (for example, Lamming,1993; Brandes, 1994; Gadde and Hakansson, 1994; Speckman et al., 1994; van Weele,1994), with comparatively little attention given to the public sector procurementstrategy and management. While the Public Contract Law Journal dates back to 1981and Public Procurement Law Review to 1992, both had sit within the legal andregulatory disciplines, it is only in the last decade that public procurement strategy andmanagement has, however, been recognised as different from that of the private sectorand developed into a research discipline in itself with its own biennial internationalconference (Thai et al., 2005; Piga and Thai, 2007), journal, and international researchstudy on public procurement (Knight et al., 2007a, b).

This paper illustrates that existing public procurement strategy and managementresearch may be myopic, suffering from Cox’s (1997, p. 29) “Tyranny of Experience”,

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0951-3558.htm

The views expressed are those of the authors and not necessarily those of IDeA.

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Received 19 September 2007Revised 18 December 2007

Accepted 18 December 2007

International Journal of Public SectorManagement

Vol. 22 No. 2, 2009pp. 91-103

q Emerald Group Publishing Limited0951-3558

DOI 10.1108/09513550910934501

paraphrased as assuming that the research methodologies adopted for private sectorprocurement will be appropriate, without adjustment, in the public sector. If that is thecase there may be a need to improve the validity of existing public procurementstrategy and management research approaches.

The paper rests on the platform that at national, supra-national and internationallevels public procurement sits within legislative, administrative and judicialframeworks and much of those frameworks have been set by politicians. At thatlevel, through the development of legal regulation and establishing its precise contents,the influence of politicians on public procurement policy is pervasive. Clearly at thepublic procurement policy level, there is a fundamental and accepted differencebetween public procurement and private sector procurement.

However, given that fundamental difference between public procurement andprivate sector procurement, the paper argues that, at the level of the organisationalstrategy and management, the fundamental difference between private and publicprocurement has been largely overlooked in public procurement research; that of thevoice of democracy, politicians, a major stakeholder in public procurement (Murray,1999, 2007). As a consequence, there is little understanding of politicians’ views, eventhough Ellram and Carr (1994) advocated that research would be of benefit, whichcompares procurement’s view of itself with that of top management. Furthermore, thepaper argues that research claiming to be on strategic public procurement cannot beconsidered strategic if it leaves out the role of politicians; local, regional and national.The paper therefore discusses why a political perspective is important, suggests thatthe gap in research has arisen as a result of researcher myopia leading to bias, andmakes recommendations both for improving the validity of public procurementstrategy and management research and for future research.

Why political procurement is importantThere are many facets to the interplay of politicians and procurement managers inpublic procurement; this paper only explores democratic accountability, strategicprocurement management, the principal/agent relationship, and the performancemanagement roles. Other facets exist but it is not necessary to explore those, as if onlyone key facet is accepted as overlooked, the core argument is supported and there ispotential for improving the validity of public procurement research.

Democratic accountabilityAt national, supra-national and international levels public procurement sits withinlegislative, administrative and judicial frameworks and much of those frameworkshave been set by politicians. At that level, through the development of legal regulationand establishing its precise contents, the influence of politicians on public procurementpolicy is pervasive. Clearly at the public procurement policy level, there is afundamental and accepted difference between public procurement and private sectorprocurement. However, at the national, regional and local levels, the public sectorworks within a narrower framework of democratic governance strategy andmanagement; local people exercise their right to determine how and by whom theyshould be governed through the “ballot box”. In turn, those elected not only have arepresentative advocacy role, but also take on the responsibility of beingdemocratically accountable to the electorate for the decisions made “under their

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watch” (Hill, 1974; Mulgan, 2006; Stoker, 2006; Murray, 1999, 2007; Caldwell et al., 2007,pp. 149-59); at its most visible this can mean a change of government or a politicianhaving to resign when things go badly wrong.

In the past the public sector delivered most of its services through direct serviceprovision; the client and provider were both public servants. However, politicians havehad a shift to what Osborne and Gaebler (1993) refer to as “steering not rowing”.“Steering” relates to policy and ends, while “rowing” is concerned with the means ofservice delivery. Elected “members steer” in determining outcomes to be achieved,what public money is to be raised and on what public services it is to be spent (Lyne,1996, pp. 1-6), unshackled of defining service outcomes through the constraints of theirown workforce, while “officers row” in recommending the best-fit delivery means. Thishas manifested itself in recent times as a shift to a mix of service providers (Donahue,1989; Walsh, 1995); sometimes the public sector, sometimes the private sector andsometimes the third sector. The UK best value regime considers this choice of servicedelivery options to be procurement decisions (DETR, 1999) and they are recognisedwithin procurement literature as the “make or buy” decision (Baily et al., 1994,pp. 187-200; Saunders, 1994, pp. 128-34; van Weele, 1994, p. 18; McIlvor, 2005, pp. 7-8).These decisions are truly strategic procurement decisions (Cox and Lamming, 1997;Ramsay, 2001), although previous research (Murray, 1996; de Boer and Telgen, 1998;White and Hammer-Lloyd, 1999; Ramsay, 2001) suggests that procurementprofessionals are unlikely to be included in these strategic procurement decisions.

Phillips et al. (2007) recognised, in their review of governance, that politicians werelikely to be held accountable for public procurement although “the missing link” ofgood governance reflecting democracy in procurement strategy was not explored.Equally, in their evaluation of the procurement processes within the internationalresearch study on public procurement, Caldwell et al. (2007, p. 156) recognised that: “. . .public bodies and their procurement are subject to the particular need of electedrepresentatives who have to be concerned with image and votes”, yet then failed,through their evaluation, to report on any engagement of elected representatives in theactual procurement process. As evidenced later, the predominant informant of existingpublic procurement strategy and management research rarely, if ever, considerspoliticians perspective as opposed to that of procurement managers, even though thosesame officers are considered to be ignored from many of the strategic decisions.Logically, if elected representatives are democratically accountable for publicprocurement decisions, research, to be robust, needs to consider politicians’ perceptionsas opposed to only those of procurement managers who are rarely involved in thestrategic decision-making process.

Strategic procurement managementTaking a “planning” approach to strategy (Ansoff, 1985; Mintzberg, 2000), which istypical in the public sector (Worrall et al., 1998; Joyce, 2000; Stewart, 2000), a tightlyscheduled, formalised and systematic approach is taken to identify a gap between theorganisation’s current position and the desired performance. To close that gap andachieve the corporate objectives, hierarchies of strategies are developed (Ansoff, 1985,pp. 45-7; Joyce, 2000, pp. 72-3) and cascaded to the various divisions, business units orfunctions as their functional objectives (Leenders et al., 1989, p. 607; Baily et al., 1994,p. 19; Hines and Rich, 1997; DETR, 1999).

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It has therefore been argued that it is only after an organisation has developed itscore objectives that functional strategies, including those of procurement, can bedeveloped (Carr and Smeltzer, 1997). Assuming that a procurement strategy has beendeveloped in line with this cascading it is said to be aligned. Significantly Cousins(1999) and Cousins and Hampson (2000, p. 238) argue that without strategic alignmentit will not be possible to effect change in procurement as a strategic function. It wouldtherefore follow that, if public procurement is to make a strategic contribution, itshould have strategic “fit” and be consistent with the issues important to the rest of theorganisation. A strategy pursued that is not aligned with the core objectives is said tobe dysfunctional.

Within the public sector the core objectives are set by politicians (Hill, 1974;Osborne and Gaebler, 1993; Lyne, 1996); they make political choices regarding theprioritisation and allocation scarce resources. Theoretically, those choices should setthe objectives of the procurement strategy, yet of the little comparative analysis ofpoliticians and procurement managers’ priorities, Murray (2001a) demonstrated a lackof correlation. That being the case, it is quite possible that procurement may bepursuing goals at variance to those of their political leaders. For example, while therehas been considerable public procurement research devoted to the pursuit ofsocio-economic goals (such as Murray, 2000; Coggburn and Rahm, 2005, pp. 23-53;Bolton, 2006, pp. 193-217; van Valkenburg and Nagelkerke, 2006, pp. 250-73; Erridgeand Henningan, 2007, pp. 280-303; Walker et al., 2007) and collaborative procurement(Baker et al., 2007, pp. 14-44; McCue and Prier, 2007, pp. 45-70), apart from Murray’s(2001a) tripartite survey and his case study (Murray, 2001b), setting out that it wasonly through consulting and gaining the confidence of politicians that ownership wasgained of a procurement strategy, there has not been any empirical research toestablish that those priorities, on a case-by-case basis, are shared by the correspondingpoliticians. It may therefore be that procurement managers are pursuing dysfunctionalstrategies. While these scenarios are hypothetical, in the absence of research taking theviews of an array of key actors, and primarily those of politicians, how can it really beknown what the areas of increasing significance in the public sector are and how theacademic community really make the maximum contribution in solving the problemsof the future.

On a related theme, Thai and Drabkin (2007, p. 99), in a single case discussion,which also appears to have lacked politicians’ input, found that US FederalGovernment felt constrained by the lack of expertise of procurement managers toaddress the wider political issues:

In the US Government there is a constant tension between a desire to divorce socio-economicprogrammes from the businesses process of purchasing and the desire to achieve laudablenational objectives by both Congress and the President through the purchasing process. Inmany case, the government’s acquisition workforce lacks the technical expertise tounderstand the implications of the socio-economic objectives and its impact on the product orservice being acquired and the terms and conditions for the goods or services.

Discussing the international research study on public procurement’s findings,Callander and McGuire (2007, p. 315), in the context of changes in training demands,while considering that “it is also apparent from the cases that overt and covert politicaldemands, which are typical of the public sector, add an additional level of complexityto public procurement compared to the private sector” made no recommendations for

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political skills training or engagement with politicians or for the development ofpoliticians’ procurement skills.

Procurement strategy must be aligned with those priorities set by politiciansotherwise procurement risks being dysfunctional. While public procurement strategyand management research espouses the pursuit of particular procurement strategies, itis rarely, if ever, within a context of understanding political priorities. Equally, little isknown about politicians’ expectations regarding competences required of futureprocurement managers.

Principal-agent relationshipSignificant literature has been devoted to the principal/agent relationship inprocurement strategy and management research (for example, Donahue, 1989)however, that research is presented from the buyer/supplier relationship and the needof the buyer, as the principal, to minimise the risks posed by the agent. Little attentionhas been given to the reality that, within public procurement, procurement managerstake on the role of agent for elected representatives. Soudry (2007, pp. 435-6) recognisedthis principal/agent relationship in a paper on how accountability systems have beenput in place. He identified that, among the possible risks, procurement managers mayshow apathy towards politicians’ preferred outcomes or even overriding of theprincipals preferences:

It follows that in the absence of effective control mechanisms, procurement officials are likelyto involve some personal preferences, derived from their primary interests, career prospects,social contacts, monetary reward or merely aversion to effort, when making procurementdecisions . . . The difference between the case of public and private agents however lies in theavailability and quality of potential control mechanisms . . . in the case of public procurementexercising control over agents is much more complicated . . . there is no homogeneous groupof principals to monitor the actions taken by the agent. Instead there is a diverse collection ofprincipals, composed of interests represented by pressure groups influencing politicians andthe general public (Soudry, 2007).

While Michael Barber (2007, pp. 312-13), reflecting on his time as adviser to former UKPrime Minister, Tony Blair, viewed the Civil Service as presenting a constraint:

All to often though constraint . . . is through other means – excessive risk aversion,exaggeration of the likely difficulties, refusing to believe that what politicians have said theywant is what they really want, slowing down or watering down implementation and, last butnot least, simple incompetence . . .

An alternative, but complementary perspective, related to the principal/agentrelationship is that of respective roles of “knaves, knights, pawns, and queens” (LeGrand, 2003). Knaves pursue their own interests, knights have no self-interest and aremotivated to help others, pawns are moved or controlled by others, and queens arethose with the most power. When public procurement research focuses on theprocurement manager, in the absence of the political dimension, it is affectively placingprocurement managers in the position of a knight but without a leader. However, in theabsence of a leader, is arguing that procurement managers therefore have the role ofqueens, beyond the control of others? However, the critical factor within the publicsector is the supremacy of the democratic voice legitimised through the ballot box,

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which being the case, as implied by Soudry and Barber, procurement managers couldactually be knaves!

Therefore, research has been skewed and failed to address how procurementmanagers behave as agents of politicians. Do politicians view procurement as a majorrisk, and how do politicians protect against asset specificity, moral hazard, first moveradvantage, etc.

Performance managementAn effective performance management approach helps both the organisation and theindividual understand what is involved (Moran and Avergun, 1997) while usefullyembedding change (Johnson and Scholes, 1993, pp. 398-401). To be effective though aprocurement performance management systems must focus on “measuring the correctthings” (Speckman et al., 1994; Leenders, 1998; White and Hammer-Lloyd, 1999).

There has been little specific discussion on public procurement performancemanagement. Reed et al. (2005) advocated that when designing performance metrics itis important to consider the audience, even though in their development of metrics theydo not appear to have consulted with politicians. Erridge et al. (1998) provided a casestudy on the application of a balanced scorecard approach; although that scorecardincluded “leadership” and “policy and strategy” it failed to address engagement withpoliticians. Like Schiele and McCue’s (2006) study, it appears to imply thatprocurement’s customers are actually internal departments.

If these approaches to public procurement performance management are typical,and there is an absence of literature to demonstrate they are not, it would suggest thatthe needs of politicians are not only ignored in the design of the systems, but also in themanagement of performance. Given the importance of strategic alignment andprocurement managers appropriately acting as agents of politicians, it could be that alack of understanding politicians’ perspectives compromises the integrity of publicprocurement performance management, indeed it may be that, having ignored thatperspective, there is room for improving public procurement performancemanagement.

What role does existing research allocate to politicians?The core of the argument within this paper is that public procurement strategy andmanagement research has generally overlooked the role and perspective of politicians.However, given the above discussion, and the pre-eminence of politicians in the publicsector, it makes sense to consider how politicians are presented in public procurementstrategy and management literature.

Caldwell et al. (2007, p. 156), commenting on the findings of the internationalresearch study of public procurement, viewed elected representatives as “. . . concernedabout their image and votes”. Lian and Laing (2004), in their comparative study ofapproaches between UK public and private sector buying of occupational healthservices, felt that the perceived restrictions of accountability to politicians were ahindrance to managers. While Bayens and Martell (2007) noted the freedom ofprocurement managers to make management decisions is constrained in that thosedecisions must be within the goals determined by politicians prior to concluding thatcouncillors decide on the conditions of contract and the awarding of public works,supplies and services responsible for initiating a purchase, supplier selection and

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contracts awards. Soudry (2007, p. 438) in a particularly negative view of politiciansargued:

Ministerial control is fraught with weaknesses. Firstly, given the politicians limited time andexpertise they are more likely to respond only to urgent concerns of affected citizens orinterest groups, or “fire alarms”, rather than conducting random checks on public officials’actions, or policy controls. Secondly, the technical capability of Ministers to absorb, examineand make effective evaluations of information regarding the financial and professionaldecisions taken by the bureaucracy is doubtful. Thirdly, as public choice theory teaches us,politicians are usually subject to pressure stemming from lobbying by interest groups.Therefore, the intervention of politicians in the bureaucratic decision-making process mayactually create more distortions and open opportunities for political corruption. Lastly, thesupervision of the bureaucracy by the political level involves excessive costs and may causeserious delays in the provision of public goods and services, which is after all the mainpurpose of procurement legislation.

These perceptions, which appear anecdotal, view politicians as only being engaged indiscussions on the conditions of contract, contract awards and purchasing initiation,while concerned about image; together with public accountability being viewed as ahindrance, present a negative and very narrow perspective, yet there does not actuallyappear to have been any research into the actual roles and potential roles of politiciansin public procurement strategy and management. Indeed, such perceptions ofpoliticians’ engagement with public procurement do little more than undermine thevery democratic process so fundamental to public procurement and highlight the needfor a wider understanding of how public procurement fits within democraticgovernance.

Ironically, Murray (2007) demonstrated, from a small number of action learningresearch projects, that, within UK local government, politicians, in collaboration withchief officers, exhibited an enthusiasm and appeared to have the capabilities to beengaged in strategic procurement management, specifically, determining the corporateprocurement strategy and mapping the procurement portfolio; challenging the desiredprocurement outcome; challenging procurement delivery options; supplier selectionand contract award; and, post-contract management and review.

Limitation of research methodologiesIf the role of politicians in public procurement is so critical, why has existing researchnot reflected that?

A scan of the existing public procurement strategy and management researchmethodologies literature reveals that key informants, almost without exception, areprocurement professionals – there appears to be little triangulation of other actorsperceptions, particularly those of politicians. Thus we find, and only as illustrativeexamples, that when Ogden et al. (2007) try to establish the differences in “strategicpurchasing” across seven American and European countries; Schiele (2005) seeking toincrease the “meaningful involvement” of procurement; Schiele and McCue (2006)discussing the procurement of professional services, including major consultingservices of political significance; Lian and Laing (2004) comparing public and privatesector procurement approaches; and, Snider (2006) arguing of the need for procurementto take on a greater leadership role; all base their research on procurement managers askey respondents without any triangulation of politicians’ views. One potential

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limitation of existing public procurement research methods is therefore that it suffersfrom an in-built bias as a result of a reliance on a single group of key respondents,procurement managers, without triangulating the views of politicians.

This is not to say that public procurement research is alone in this procurementpractitioner respondent myopia; it appears to be a weakness in procurement researchper se. For example, a recent special issue of the Journal of Purchasing and SupplyManagement (Volume 13 Number 3) was devoted to “Methods” yet, in one of the twocore articles, Dubois and Araujo (2007, p. 175) acknowledged, with regard to case studyresearch, that “The use of multiple respondents, however, appears to be a wise choicein order to capture variety of perceptions and meanings, which could be seen as vital tounderstanding complex business relations”, although in progressing to set out fiverules of good practice in using the case study method, did not include, what could be asixth rule, ensure that cases are internally valid (Yin, 1994, p. 35; Schofield, 2000, p. 71)by testing the perceptions of a wide range of actors for conflicting and supportingevidence. This issue appears to be a key weakness of procurement case study researchyet is not discussed at all in an article considering purchasing and supply managementcase research methods. A parallel article by Batenburg (2007, p. 182) in the samespecial issue on research methods, acknowledges that “the organisational decision toadopt e-procurement is frequently taken by boards and managers” yet whendiscussing the merits of quantitative research in purchasing and supply management,he does not argue that research should consider that wider decision-making unit, forexample, those board members and managers.

van Weele (2007, p. 205) suggests that the single respondent bias has a simplejustification, namely, “when it concerns research in the purchasing and supply chainmanagement domain, it is usually easiest to use purchasing managers as a primesource of information”.

A bias in empirical research leads to consequential weakness in literature reviews.Therefore, for example, when Zheng et al. (2007) look at the future of purchasing andsupply management, including the public sector, they review the literature, but if theavailable literature has left out one of the key actors, their literature review has abuilt-in bias, which in turn suffers from the pitfall that they exclude any reference tothe political aspects of public procurement. We therefore end up with key politicalissues, such as, market shaping, contestability, shared-services and third sectorcommissioning being overlooked through no fault of those reviewing the literature. Asecond potential limitation on existing public procurement research is that of makinguse of literature reviews without critically reviewing the methodologies behind theliterature for weaknesses and omissions.

A further potential reason is that public procurement strategy and management hastended to suffer from the “Tyranny of Experience” (Cox, 1997, p. 29), paraphrased asassuming that the research mythologies adopted for private sector procurement will beappropriate without adjustment, in the public sector, this is illustrated in that the scopeof the international study of public procurement was confined to the operationalaspects of selecting potential suppliers, contracting, ordering, expediting andevaluating suppliers, and evaluating purchasing (Knight et al., 2007b, p. 6) – theseare traditional private sector approaches to procurement research and yet fall short ofaddressing the fundamental distinguishing feature of public procurement, the politicaldimension. A third potential limitation of existing public procurement research is

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therefore its tendency to focus on traditional, private sector procurement aspects asopposed to fully exploring the uniqueness of public procurement.

Snider (2006, pp. 275-6) provides a further possibility:

[procurement] literature is generally introspective in that it is produced by members of theprocurement community in procurement-related publications, the principal audience of whichare members of that same community . . . basic procurement texts indicate that the fieldessentially defines itself in a way that excludes it from participation in a major activity of anyorganisation determination of need that may result in a procurement action. Through suchtexts, procurement professionals learn to think of their field in a way that discourages themfrom participating in strategic decisions and thus acting as organisational and institutionalleaders.

Therefore, a fourth potential limitation of existing public procurement strategy andmanagement research approaches, paradoxically is its focus on operationalprocurement as opposed to strategic procurement decision making.

Does this mean that all the public procurement strategy and management researchheretofore has to be disregarded? No, but, in some studies, a limitation should beacknowledged that the findings were not triangulated with those of other actors, forexample, politicians, and there may therefore be questions of validity.

Conclusions and recommendationsThis paper has argued that the fundament difference between private and publicprocurement strategy and management, that of the political interface, has beenoverlooked in research. The role of politicians is not fully understood and sometimespresented in a negative light. Politicians have major responsibilities for strategicprocurement management as a result of democratic accountability, the need to setstrategic procurement priorities, ensure procurement managers have the will andcompetence to deliver aligned procurement strategies, and in the performancemanagement of procurement strategy implementation.

Existing public procurement research approaches have limitations as frequentlythere is an in-built bias and lack of triangulation through an over reliance onprocurement managers as the sole key respondents, carrying over the in-built bias ofempirical research into literature reviews through not critically reviewing themethodologies behind the literature for weaknesses and omissions, tending to focus onprivate sector procurement research attributes and questions, and a tendency to focuson operational as opposed to strategic public procurement decision making.

To improve the validity of public procurement strategy and management researchthere is a need to be more critical of potential responses from procurement managersand look for triangulation from other actors, particularly those of the respectivepoliticians. Indeed, there is a need for more research on politicians’ perspectives onpublic procurement.

Given the above, research would be of benefit which answers the following researchquestions: do democratically elected public representatives believe that procurement isnot a political tool, is procurement politically maximising its contribution, is publicprocurement an underused political tool, what are the actual views of procurementmanagers with regard to the leadership of politicians in procurement strategy, is therea difference between the procurement strategies of the political left or right?

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About the authorJ. Gordon Murray DipM MSc PhD MCIPS AdvDipAM is a Programme Manager with the IDeA(Improvement and Development Agency for local government). His research interests are inimproving public procurement performance. J. Gordon Murray can be contacted at:[email protected]

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