Leveraging social capital in public procurement : a pathway to value creation and delivery

Abstract

Due to its formal legislative boundaries, public procurement has been perceived as a price-centric function that undermines collaboration between the public and private sectors and adversely influences public procurement outcomes. Under such conditions, public procurement should primarily invest in the social dynamics, behaviours, and practices that improve the (public) buyer – (private) supplier relationships. At the core of such relationships lies the concept of social capital, which can be described as the collective actions amongst actors, relationships, or networks that enable the mobilization of key resources otherwise unattainable when working in isolation. The premise underlying this theory is that the public sector can fully leverage the private sector’s collaboration and expertise, moving beyond traditional norms and formalities. This dissertation seeks to uncover a critical gap in public procurement literature by exploring the role of social capital in value creation and delivery in all diverse procurement phases, in essence: tendering, negotiation, contract formation and management, and purchasing.

This dissertation employs a mixed research method with qualitative and quantitative approaches, along with a systematic literature review. The findings of this dissertation reveal that social capital, used as a theoretical lens, provides deeper insights into collaboration between the public and private sectors. This includes identifying the antecedents, contingency factors, and performance outcomes for guiding the behavior between public buyers and private suppliers. The focus on drafting suitable tender proposals is also highlighted. The findings also indicate the importance of relational dynamics (e.g., bi-directional dialogue) for transitioning into a proactive procurement strategy. Furthermore, strategic purchasing integration plays a crucial role in social capital development and value creation. Finally, the findings promote the understanding of socialization mechanisms to deliver value to end customers. Ultimately, the dissertation promotes a theoretical framework in which social capital can be leveraged across the public procurement phases for optimizing value creation and delivery. From a practical standpoint, this research helps managers and procurement professionals in allocating resources and implementing adequate procurement strategies and practices.