The influence of business and political ties on supplier selection decisions: the case of the Nigerian public sector

Abstract

Extant relevant literature suggests that nonmarket elements such as social ties are important strategic options that may help organisations enhance their competitiveness relative to other competitors when bidding for important supply jobs. However, our current understanding of their effects on organisational outcomes, especially in public supplier selection decisions in emerging economies, is far from complete. Using a sample of 342 experienced senior management team (SMT) members and senior level staff in 40 public sector organisations in Nigeria, this study examined the relative importance of business and political ties as sources of advantage and strategic intelligence for prospective vendors and contractors during strategic supplier selection decisions. Our findings show that both business and political ties are significant predictors of supplier selection outcomes, and their relative importance in the selection outcome is indistinguishable and key to strategic decision making. Overall, our result suggests that both business and political ties can be utilised as sources of important resources by supplier firms.

Understanding the Influence of Time Pressure and Social Ties on Public Sector Supplier Selection Decisions: A Polychronic Context Explanation

“…On the other hand, the non-significant relationship between social ties and performance may imply that the width and depth of the personal connections maintained by decision makers in public sector organizations does not necessarily translate to higher performance; these connections will only be meaningful to performance if they lead to the selection of the ‗right' suppliers. This conclusion is largely consistent with previous studies that found that social ties are important determinants of organizational behavior (Essien et al, 2018), and they may influence organizational outcomes indirectly via appointments to decision making roles and level of resource allocation (Li et al, 2008;Peng & Luo, 2000;Sheng et al, 2011).…”

“…This makes some sense because it fits into the avoidance strategy often associated with polychronic people (Arndt et al, 2006;Bluedorn et al, 1999;Kaufman-Scarborough & Lindquist, 1999). Moreover, it has been shown that decision makers leverage on their network of political connections to mitigate hostility from the business environment (Essien et al, 2018;Peng & Luo, 2000). Based on the foregoing reasoning, we hypothesise that: H 3 : Social ties will be Significantly Associated with Supplier Selection Decisions.…”

“…This is because in the Nigerian public sector, decision makers do not feel the need to complete a project in a hurry. Even when they are time-pressured to deliver, they are more likely to appeal to their socio-ethnic and political connections (for the mitigation of any penalty that may arise from their non-performance) than focusing efforts to achieve desired results (Essien et al, 2018). In fact, there are numerous cases where important time-bound public work projects were commissioned, and huge mobilization fees paid to contractors, but such projects were either abandoned or never fully executed to specification (Achua, 2011;Osisioma, 2001).…”

“…Collectively, these studies have contributed to our understanding of some of the salient behavioral and non-economic determinants of organizational buying process and outcomes. Some of the determinants of organizational buying behavior that have received attention in recent marketing literature include time pressure perception (e.g., Garrido-Samaniego & Gutié rrez-Cillá n, 2004) and the social ties of organizational decision-makers (e.g., Essien, Konstantopoulou, Konstopoulos, & Lodorfos, 2018;Peng & Luo, 2000;Sheng, Zhou, & Li, 2011). However, the findings on the influence of these variables with respect to organizational decision processes and outcomes differ significantly.…”

Enhancing supply chain resilience in SMEs: the role of business and political ties

“…business and political ties) in enhancing supply chain management has received growing but relatively limited attention (see Table 1). It has been documented that managerial ties can have a positive influence on strategic (Essien et al, 2018) and market-based supplier selection (Yan and Lu, 2018). They also can reduce supplier opportunism (Zhu et al, 2017) and promote information sharing (Wang et al, 2014) and specific knowledge acquisition in the buyer-supplier relationship (Zhou et al, 2014).…”