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Organizational Culture and Habit Formation in Public Procurement

Author

Listed:
  • Janne Tukiainen

    (Department of Economics, University of Turku)

  • Vesa Soini

    (Hanken School of Economics and Department of Economics, University of Turku)

  • Susmita Baulia

    (RBB Economics and Department of Economics, University of Turku)

  • Jan Jääskeläinen

    (Finnish Competition and Consumer Authority)

Abstract

We study the extent of a one-size-fits-all approach in the design of public procurement (PP) tenders using comprehensive data from Finland. We show that crucial PP design features related to auction and contract rules tend to have significant lack of variation across different tenders for different industries within a contracting authority. We show that this organizational rigidness is due to both organizational level culture and individual employee level work habit formation with the latter being more important. We find that both greater organizational rigidity and deviating from the national industry norms are associated with lower number of bids and higher probability of zero-bid tenders, pointing to a potential efficiency loss from organizational rigidness in PP, and offering a solution that buyers should mimic how other organizations typically buy similar products rather than how they themselves buy very different products. Keywords: public procurement, organizational culture

Suggested Citation

  • Janne Tukiainen & Vesa Soini & Susmita Baulia & Jan Jääskeläinen, 2026. "Organizational Culture and Habit Formation in Public Procurement," Discussion Papers 177, Aboa Centre for Economics.
    • Handle: RePEc:tkk:dpaper:dp177
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    Keywords

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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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