Electronic Procurement Assimilation, Procurement Process and Value for Money in the Public Sector: Investigating the Role of Influence Mechanisms and Absorptive Capacity

No Thumbnail Available
Journal Title
Journal ISSN
Volume Title
The concept of value for money has become very critical in developing countries where states struggle to raise the needed revenue in-house and must augment with funds from international sources to finance public projects. Given the limited resources available to government, ensuring value for money in procurement is key to attain the optimum utilization of scarce budgetary resources. To realize the objective of value for money in public procurement, several interventions have been employed by developing nations including instilling professionalism in procurement actors, enacting procurement laws and implementing sustainable initiatives. One initiative is the use of electronic procurement systems in the public procurement process. These systems afford public sector organisations to respond rapidly to changes and to pursue technologically innovative strategies. The ability of public institutions to recognize the value of a new information, assimilate and apply it largely depends on the institutions’ prior knowledge, institutional pressures emanating from regulations that govern the practice of procurement in the public sector and government policies and initiatives. However, the relationships among institutional pressures, absorptive capacity, e-procurement assimilation and value for money have not been studied. The study first develops a survey instrument to measure value for money and examines how absorptive capacity and institutional pressures influence e-procurement assimilation and the tendering process to achieve value for money in public procurement. A total of 306 public entities were surveyed and partial least squares structural equation modelling was used to analyse the empirical data. Theoretical implications of the study include: 1) institutional pressures and absorptive capacity are key drivers of an efficient and effective tendering process, 2) institutional pressure have direct effect on institutional absorptive capacity, 3) the influence of institutional pressures on e-procurement assimilation is mediated by absorptive capacity, 3) the influence of e-procurement assimilation on value for money is mediated by an efficient tendering process and 4) industry type has marginal statistical significance on the influence of institutional pressures and absorptive capacity on e-procurement assimilation leading to value for money in public procurement. Practical implication of this study include: 1) a legal framework for e-procurement would compel actors to comply and use the application, 2) provision of tools needed to scan, identify and assimilate new information necessary for e-procurement application use would enhance efficient procurement process and 3) the instrument developed could be used to conduct value for money audit prior to the selection of appropriate service providers in public sector tendering.
A Thesis Submitted to the Department of Supply Chain and Information Systems, School of Business, College Humanities and Social Sciences in partial fulfilment of the requirements for the award of the degree of Doctor of Philosophy procurement and supply chain management