International Journal of Public Sector Management

Emerald Article: Improving the validity of public procurement research J. 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 Permanent link to this document: http://dx.doi.org/10.1108/09513550910934501 Downloaded on: 08-01-2013 References: This document contains references to 73 other documents Citations: This document has been cited by 4 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 3913 times since 2009. *

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J. Gordon Murray, (2009),"Improving the validity of public procurement research", International Journal of Public Sector Management, Vol. 22 Iss: 2 pp. 91 - 103 http://dx.doi.org/10.1108/09513550910934501 J. Gordon Murray, (2009),"Improving the validity of public procurement research", International Journal of Public Sector Management, Vol. 22 Iss: 2 pp. 91 - 103 http://dx.doi.org/10.1108/09513550910934501 J. Gordon Murray, (2009),"Improving the validity of public procurement research", International Journal of Public Sector Management, Vol. 22 Iss: 2 pp. 91 - 103 http://dx.doi.org/10.1108/09513550910934501

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Improving the validity of public procurement research

J. Gordon Murray
IDeA, Lisburn, UK
Abstract

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Received 19 September 2007 Revised 18 December 2007 Purpose The purpose of this paper is to argue that the fundamental difference between private and Accepted 18 December 2007

public procurement, that of politicians, has been largely overlooked in public procurement strategy and management research. It then aims to argue that existing public procurement research could be improved if greater attention were given to in research design to validity and the interface with politicians. Design/methodology/approach The research is based on a critical literature review of public procurement strategy and management literature, examining the methodologies used and roles of politicians. Findings The ndings suggest there is an in-built bias through over reliance on procurement managers as the key respondents, tendency to focus on private sector procurement research attributes and questions, and a tendency to focus on operational as opposed to strategic public procurement decision making. Research limitations/implications The research suggests a need for greater understanding of politicians engagement in public procurement strategy and management and the need for greater triangulation in public procurement research. Originality/value The paper highlights how public procurement strategy and management research can be improved to increase its validity. It explores the neglected area of the role of politicians in public procurement. Keywords Public procurement, Management strategy, Research, Politics Paper type Conceptual paper

Introduction The elevation of procurement to a strategic role has been the focus of considerable attention since the 1990s. Most of the initial literature was set against the private sector, 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 procurement strategy and management. While the Public Contract Law Journal dates back to 1981 and Public Procurement Law Review to 1992, both had sit within the legal and regulatory disciplines, it is only in the last decade that public procurement strategy and management has, however, been recognised as different from that of the private sector and developed into a research discipline in itself with its own biennial international conference (Thai et al., 2005; Piga and Thai, 2007), journal, and international research study on public procurement (Knight et al., 2007a, b). This paper illustrates that existing public procurement strategy and management research may be myopic, suffering from Coxs (1997, p. 29) Tyranny of Experience,
The views expressed are those of the authors and not necessarily those of IDeA.

International Journal of Public Sector Management Vol. 22 No. 2, 2009 pp. 91-103 q Emerald Group Publishing Limited 0951-3558 DOI 10.1108/09513550910934501

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paraphrased as assuming that the research methodologies adopted for private sector procurement will be appropriate, without adjustment, in the public sector. If that is the case there may be a need to improve the validity of existing public procurement strategy and management research approaches. The paper rests on the platform that at national, supra-national and international levels public procurement sits within legislative, administrative and judicial frameworks and much of those frameworks have been set by politicians. At that level, through the development of legal regulation and establishing its precise contents, the inuence of politicians on public procurement policy is pervasive. Clearly at the public procurement policy level, there is a fundamental and accepted difference between public procurement and private sector procurement. However, given that fundamental difference between public procurement and private sector procurement, the paper argues that, at the level of the organisational strategy and management, the fundamental difference between private and public procurement has been largely overlooked in public procurement research; that of the voice of democracy, politicians, a major stakeholder in public procurement (Murray, 1999, 2007). As a consequence, there is little understanding of politicians views, even though Ellram and Carr (1994) advocated that research would be of benet, which compares procurements view of itself with that of top management. Furthermore, the paper argues that research claiming to be on strategic public procurement cannot be considered strategic if it leaves out the role of politicians; local, regional and national. The paper therefore discusses why a political perspective is important, suggests that the gap in research has arisen as a result of researcher myopia leading to bias, and makes recommendations both for improving the validity of public procurement strategy and management research and for future research. Why political procurement is important There are many facets to the interplay of politicians and procurement managers in public procurement; this paper only explores democratic accountability, strategic procurement management, the principal/agent relationship, and the performance management roles. Other facets exist but it is not necessary to explore those, as if only one key facet is accepted as overlooked, the core argument is supported and there is potential for improving the validity of public procurement research. Democratic accountability At national, supra-national and international levels public procurement sits within legislative, administrative and judicial frameworks and much of those frameworks have been set by politicians. At that level, through the development of legal regulation and establishing its precise contents, the inuence of politicians on public procurement policy is pervasive. Clearly at the public procurement policy level, there is a fundamental and accepted difference between public procurement and private sector procurement. However, at the national, regional and local levels, the public sector works within a narrower framework of democratic governance strategy and management; local people exercise their right to determine how and by whom they should be governed through the ballot box. In turn, those elected not only have a representative advocacy role, but also take on the responsibility of being democratically accountable to the electorate for the decisions made under their

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 politician having to resign when things go badly wrong. In the past the public sector delivered most of its services through direct service provision; the client and provider were both public servants. However, politicians have had 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 of service 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 dening service outcomes through the constraints of their own workforce, while ofcers row in recommending the best-t delivery means. This has 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 and sometimes the third sector. The UK best value regime considers this choice of service delivery options to be procurement decisions (DETR, 1999) and they are recognised within 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 procurement professionals are unlikely to be included in these strategic procurement decisions. Phillips et al. (2007) recognised, in their review of governance, that politicians were likely to be held accountable for public procurement although the missing link of good governance reecting democracy in procurement strategy was not explored. Equally, in their evaluation of the procurement processes within the international research study on public procurement, Caldwell et al. (2007, p. 156) recognised that: . . . public bodies and their procurement are subject to the particular need of elected representatives who have to be concerned with image and votes, yet then failed, through their evaluation, to report on any engagement of elected representatives in the actual procurement process. As evidenced later, the predominant informant of existing public procurement strategy and management research rarely, if ever, considers politicians perspective as opposed to that of procurement managers, even though those same ofcers are considered to be ignored from many of the strategic decisions. Logically, if elected representatives are democratically accountable for public procurement decisions, research, to be robust, needs to consider politicians perceptions as opposed to only those of procurement managers who are rarely involved in the strategic decision-making process. Strategic procurement management Taking a planning approach to strategy (Ansoff, 1985; Mintzberg, 2000), which is typical in the public sector (Worrall et al., 1998; Joyce, 2000; Stewart, 2000), a tightly scheduled, formalised and systematic approach is taken to identify a gap between the organisations current position and the desired performance. To close that gap and achieve 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 or functions 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 its core objectives that functional strategies, including those of procurement, can be developed (Carr and Smeltzer, 1997). Assuming that a procurement strategy has been developed in line with this cascading it is said to be aligned. Signicantly Cousins (1999) and Cousins and Hampson (2000, p. 238) argue that without strategic alignment it will not be possible to effect change in procurement as a strategic function. It would therefore follow that, if public procurement is to make a strategic contribution, it should have strategic t and be consistent with the issues important to the rest of the organisation. A strategy pursued that is not aligned with the core objectives is said to be 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 the prioritisation and allocation scarce resources. Theoretically, those choices should set the objectives of the procurement strategy, yet of the little comparative analysis of politicians and procurement managers priorities, Murray (2001a) demonstrated a lack of correlation. That being the case, it is quite possible that procurement may be pursuing goals at variance to those of their political leaders. For example, while there has been considerable public procurement research devoted to the pursuit of socio-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; Erridge and 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 Murrays (2001a) tripartite survey and his case study (Murray, 2001b), setting out that it was only through consulting and gaining the condence of politicians that ownership was gained of a procurement strategy, there has not been any empirical research to establish that those priorities, on a case-by-case basis, are shared by the corresponding politicians. It may therefore be that procurement managers are pursuing dysfunctional strategies. While these scenarios are hypothetical, in the absence of research taking the views of an array of key actors, and primarily those of politicians, how can it really be known what the areas of increasing signicance in the public sector are and how the academic community really make the maximum contribution in solving the problems of 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 Federal Government felt constrained by the lack of expertise of procurement managers to address the wider political issues:
In the US Government there is a constant tension between a desire to divorce socio-economic programmes from the businesses process of purchasing and the desire to achieve laudable national objectives by both Congress and the President through the purchasing process. In many case, the governments acquisition workforce lacks the technical expertise to understand the implications of the socio-economic objectives and its impact on the product or service being acquired and the terms and conditions for the goods or services.

Discussing the international research study on public procurements ndings, 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 political demands, which are typical of the public sector, add an additional level of complexity to public procurement compared to the private sector made no recommendations for

political skills training or engagement with politicians or for the development of politicians procurement skills. Procurement strategy must be aligned with those priorities set by politicians otherwise procurement risks being dysfunctional. While public procurement strategy and management research espouses the pursuit of particular procurement strategies, it is rarely, if ever, within a context of understanding political priorities. Equally, little is known about politicians expectations regarding competences required of future procurement managers. Principal-agent relationship Signicant literature has been devoted to the principal/agent relationship in procurement strategy and management research (for example, Donahue, 1989) however, that research is presented from the buyer/supplier relationship and the need of the buyer, as the principal, to minimise the risks posed by the agent. Little attention has been given to the reality that, within public procurement, procurement managers take on the role of agent for elected representatives. Soudry (2007, pp. 435-6) recognised this principal/agent relationship in a paper on how accountability systems have been put in place. He identied that, among the possible risks, procurement managers may show apathy towards politicians preferred outcomes or even overriding of the principals preferences:
It follows that in the absence of effective control mechanisms, procurement ofcials are likely to involve some personal preferences, derived from their primary interests, career prospects, social contacts, monetary reward or merely aversion to effort, when making procurement decisions . . . The difference between the case of public and private agents however lies in the availability and quality of potential control mechanisms . . . in the case of public procurement exercising control over agents is much more complicated . . . there is no homogeneous group of principals to monitor the actions taken by the agent. Instead there is a diverse collection of principals, composed of interests represented by pressure groups inuencing politicians and the general public (Soudry, 2007).

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While Michael Barber (2007, pp. 312-13), reecting on his time as adviser to former UK Prime 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 difculties, refusing to believe that what politicians have said they want is what they really want, slowing down or watering down implementation and, last but not least, simple incompetence . . .

An alternative, but complementary perspective, related to the principal/agent relationship is that of respective roles of knaves, knights, pawns, and queens (Le Grand, 2003). Knaves pursue their own interests, knights have no self-interest and are motivated to help others, pawns are moved or controlled by others, and queens are those with the most power. When public procurement research focuses on the procurement manager, in the absence of the political dimension, it is affectively placing procurement managers in the position of a knight but without a leader. However, in the absence of a leader, is arguing that procurement managers therefore have the role of queens, beyond the control of others? However, the critical factor within the public sector 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 could actually be knaves! Therefore, research has been skewed and failed to address how procurement managers behave as agents of politicians. Do politicians view procurement as a major risk, and how do politicians protect against asset specicity, moral hazard, rst mover advantage, etc. Performance management An effective performance management approach helps both the organisation and the individual understand what is involved (Moran and Avergun, 1997) while usefully embedding change (Johnson and Scholes, 1993, pp. 398-401). To be effective though a procurement performance management systems must focus on measuring the correct things (Speckman et al., 1994; Leenders, 1998; White and Hammer-Lloyd, 1999). There has been little specic discussion on public procurement performance management. Reed et al. (2005) advocated that when designing performance metrics it is important to consider the audience, even though in their development of metrics they do not appear to have consulted with politicians. Erridge et al. (1998) provided a case study on the application of a balanced scorecard approach; although that scorecard included leadership and policy and strategy it failed to address engagement with politicians. Like Schiele and McCues (2006) study, it appears to imply that procurements 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 that the needs of politicians are not only ignored in the design of the systems, but also in the management of performance. Given the importance of strategic alignment and procurement managers appropriately acting as agents of politicians, it could be that a lack of understanding politicians perspectives compromises the integrity of public procurement performance management, indeed it may be that, having ignored that perspective, there is room for improving public procurement performance management. What role does existing research allocate to politicians? The core of the argument within this paper is that public procurement strategy and management research has generally overlooked the role and perspective of politicians. However, given the above discussion, and the pre-eminence of politicians in the public sector, it makes sense to consider how politicians are presented in public procurement strategy and management literature. Caldwell et al. (2007, p. 156), commenting on the ndings of the international research study of public procurement, viewed elected representatives as . . . concerned about their image and votes. Lian and Laing (2004), in their comparative study of approaches between UK public and private sector buying of occupational health services, felt that the perceived restrictions of accountability to politicians were a hindrance to managers. While Bayens and Martell (2007) noted the freedom of procurement managers to make management decisions is constrained in that those decisions must be within the goals determined by politicians prior to concluding that councillors 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 politicians argued:
Ministerial control is fraught with weaknesses. Firstly, given the politicians limited time and expertise they are more likely to respond only to urgent concerns of affected citizens or interest groups, or re alarms, rather than conducting random checks on public ofcials actions, or policy controls. Secondly, the technical capability of Ministers to absorb, examine and make effective evaluations of information regarding the nancial and professional decisions 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 may actually create more distortions and open opportunities for political corruption. Lastly, the supervision of the bureaucracy by the political level involves excessive costs and may cause serious delays in the provision of public goods and services, which is after all the main purpose of procurement legislation.

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These perceptions, which appear anecdotal, view politicians as only being engaged in discussions on the conditions of contract, contract awards and purchasing initiation, while concerned about image; together with public accountability being viewed as a hindrance, present a negative and very narrow perspective, yet there does not actually appear to have been any research into the actual roles and potential roles of politicians in public procurement strategy and management. Indeed, such perceptions of politicians engagement with public procurement do little more than undermine the very democratic process so fundamental to public procurement and highlight the need for a wider understanding of how public procurement ts within democratic governance. Ironically, Murray (2007) demonstrated, from a small number of action learning research projects, that, within UK local government, politicians, in collaboration with chief ofcers, exhibited an enthusiasm and appeared to have the capabilities to be engaged in strategic procurement management, specically, determining the corporate procurement strategy and mapping the procurement portfolio; challenging the desired procurement outcome; challenging procurement delivery options; supplier selection and contract award; and, post-contract management and review. Limitation of research methodologies If the role of politicians in public procurement is so critical, why has existing research not reected that? A scan of the existing public procurement strategy and management research methodologies literature reveals that key informants, almost without exception, are procurement professionals there appears to be little triangulation of other actors perceptions, particularly those of politicians. Thus we nd, and only as illustrative examples, that when Ogden et al. (2007) try to establish the differences in strategic purchasing across seven American and European countries; Schiele (2005) seeking to increase the meaningful involvement of procurement; Schiele and McCue (2006) discussing the procurement of professional services, including major consulting services of political signicance; Lian and Laing (2004) comparing public and private sector procurement approaches; and, Snider (2006) arguing of the need for procurement to take on a greater leadership role; all base their research on procurement managers as key respondents without any triangulation of politicians views. One potential

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limitation of existing public procurement research methods is therefore that it suffers from 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 procurement practitioner respondent myopia; it appears to be a weakness in procurement research per se. For example, a recent special issue of the Journal of Purchasing and Supply Management (Volume 13 Number 3) was devoted to Methods yet, in one of the two core articles, Dubois and Araujo (2007, p. 175) acknowledged, with regard to case study research, that The use of multiple respondents, however, appears to be a wise choice in order to capture variety of perceptions and meanings, which could be seen as vital to understanding complex business relations, although in progressing to set out ve rules of good practice in using the case study method, did not include, what could be a sixth rule, ensure that cases are internally valid (Yin, 1994, p. 35; Schoeld, 2000, p. 71) by testing the perceptions of a wide range of actors for conicting and supporting evidence. This issue appears to be a key weakness of procurement case study research yet is not discussed at all in an article considering purchasing and supply management case research methods. A parallel article by Batenburg (2007, p. 182) in the same special issue on research methods, acknowledges that the organisational decision to adopt e-procurement is frequently taken by boards and managers yet when discussing the merits of quantitative research in purchasing and supply management, he does not argue that research should consider that wider decision-making unit, for example, those board members and managers. van Weele (2007, p. 205) suggests that the single respondent bias has a simple justication, namely, when it concerns research in the purchasing and supply chain management domain, it is usually easiest to use purchasing managers as a prime source 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 and supply management, including the public sector, they review the literature, but if the available literature has left out one of the key actors, their literature review has a built-in bias, which in turn suffers from the pitfall that they exclude any reference to the political aspects of public procurement. We therefore end up with key political issues, such as, market shaping, contestability, shared-services and third sector commissioning being overlooked through no fault of those reviewing the literature. A second potential limitation on existing public procurement research is that of making use of literature reviews without critically reviewing the methodologies behind the literature for weaknesses and omissions. A further potential reason is that public procurement strategy and management has tended to suffer from the Tyranny of Experience (Cox, 1997, p. 29), paraphrased as assuming that the research mythologies adopted for private sector procurement will be appropriate without adjustment, in the public sector, this is illustrated in that the scope of the international study of public procurement was conned to the operational aspects of selecting potential suppliers, contracting, ordering, expediting and evaluating suppliers, and evaluating purchasing (Knight et al., 2007b, p. 6) these are traditional private sector approaches to procurement research and yet fall short of addressing the fundamental distinguishing feature of public procurement, the political dimension. A third potential limitation of existing public procurement research is

therefore its tendency to focus on traditional, private sector procurement aspects as opposed 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 the procurement community in procurement-related publications, the principal audience of which are members of that same community . . . basic procurement texts indicate that the eld essentially denes itself in a way that excludes it from participation in a major activity of any organisation determination of need that may result in a procurement action. Through such texts, procurement professionals learn to think of their eld in a way that discourages them from participating in strategic decisions and thus acting as organisational and institutional leaders.

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Therefore, a fourth potential limitation of existing public procurement strategy and management research approaches, paradoxically is its focus on operational procurement as opposed to strategic procurement decision making. Does this mean that all the public procurement strategy and management research heretofore has to be disregarded? No, but, in some studies, a limitation should be acknowledged that the ndings were not triangulated with those of other actors, for example, politicians, and there may therefore be questions of validity. Conclusions and recommendations This paper has argued that the fundament difference between private and public procurement strategy and management, that of the political interface, has been overlooked in research. The role of politicians is not fully understood and sometimes presented in a negative light. Politicians have major responsibilities for strategic procurement management as a result of democratic accountability, the need to set strategic procurement priorities, ensure procurement managers have the will and competence to deliver aligned procurement strategies, and in the performance management of procurement strategy implementation. Existing public procurement research approaches have limitations as frequently there is an in-built bias and lack of triangulation through an over reliance on procurement managers as the sole key respondents, carrying over the in-built bias of empirical research into literature reviews through not critically reviewing the methodologies behind the literature for weaknesses and omissions, tending to focus on private sector procurement research attributes and questions, and a tendency to focus on operational as opposed to strategic public procurement decision making. To improve the validity of public procurement strategy and management research there is a need to be more critical of potential responses from procurement managers and look for triangulation from other actors, particularly those of the respective politicians. Indeed, there is a need for more research on politicians perspectives on public procurement. Given the above, research would be of benet which answers the following research questions: do democratically elected public representatives believe that procurement is not a political tool, is procurement politically maximising its contribution, is public procurement an underused political tool, what are the actual views of procurement managers with regard to the leadership of politicians in procurement strategy, is there a difference between the procurement strategies of the political left or right?

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