Public procurement as an attractive customer: a supplier perspective

Abstract

PurposeBuyer–supplier relationships in public procurement have garnered increasing attention in research, yet studies on the perspective of suppliers on public procurement have remained limited. This research takes the perspective of suppliers and aims to investigate the innovativeness of suppliers and the impact of supply chain ambidexterity strategies on their perceptions about public procurement in terms of innovation enablers and customer attractiveness.Design/methodology/approachThis research draws from a survey of 137 suppliers to the public sector in Finland and applies PLS-path modeling to test its hypotheses.FindingsThe findings reveal that the ambidexterity strategy of suppliers in the supply chain influences how they perceive the innovation enablers and customer attractiveness of public organizations since processes of public procurement do not support these strategies fully. Supplier innovativeness has an influence on the perceived innovation enablers of public procurement, which, in turn, influences customer attractiveness.Practical implicationsThe innovativeness and strategies of suppliers for the supply chain have an impact on how attractive they perceive public procurement. The findings of this research provide insights on why the customer attractiveness of public procurement may not be high enough to secure the competition in their bidding processes.Originality/valueThe study’s contribution adds to the field of buyer–supplier relationships and customer attractiveness in public procurement by showing the importance of innovation enablers and highlighting the impact of supplier's ambidexterity in the supply chain on their perceptions about public procurement.

The perks of being an attractive public customer

“…This study fills a significant research gap by exploring the influence of customer attractiveness on supplier behavior in the public sector context. While previous research has discussed how to become an attractive public customer (Karttunen et al , 2022; Kelly et al , 2021; Schiele, 2020), this study provides an in-depth understanding of the outcomes ensuing from reaching such a position with the suppliers. The principal contribution is the empirically derived framework that elucidates how customer attractiveness influences supplier resource mobilization toward the public sector.…”

“…Unfortunately, there is little research beyond theoretical speculation to guide us. As previously mentioned, studies involving customer attractiveness in the public sector (Karttunen et al , 2022; Kelly et al , 2021; Schiele, 2020) have targeted antecedents rather than outcomes. With that said, Kelly et al (2021) touch on the latter in finding that suppliers’ dissatisfaction with the tendering process can lead to rejecting business proposals, poorly developed bids and an adversarial attitude in the subsequent relationship.…”

“…In addition, public procurement suffers from insufficient supplier appeal judging from studies examining the price effects of attracting more bidders in the tender phase (Jääskeläinen and Tukiainen, 2019; Onur and Tas, 2019). Recently, the concept of customer attractiveness has been introduced to the public sector by Schiele (2020), Kelly et al (2021) and Karttunen et al (2022). However, these studies target how public customers can improve their standings with suppliers, as opposed to the behavioral outcomes an attractive customer can expect from its suppliers.…”

Leveraging the supply base for innovation: how does supply base management affect innovation performance?

“…Supplier innovativeness refers to the extent to which suppliers are inclined to engage in innovative behavior such as adopting new ideas or new technology (Bryan Jean et al. , 2016; Espino-Rodríguez and Taha, 2022; Hurley and Hult, 1998; Karttunen et al. , 2022; Kim and Chai, 2017).…”

“…Firms with the ability to build a reasonable supply base can reposition themselves in the market and maintain their strengths or develop new ones (Ziggers and Henseler, 2016). Supplier innovativeness refers to the extent to which suppliers are inclined to engage in innovative behavior such as adopting new ideas or new technology (Bryan Jean et al, 2016;Espino-Rodr ıguez and Taha, 2022;Hurley and Hult, 1998;Karttunen et al, 2022;Kim and Chai, 2017). If a buyer utilizes supplier innovativeness to achieve innovation, the following three preconditions must be met: (1) suppliers are innovative;…”