Organizational Culture and Habit Formation in Public Procurement

Janne Tukiainen, Vesa Soini, Susmita Baulua and Jan Jääskeläinen
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Janne Tukiainen: Department of Economics, University of Turku
Vesa Soini: Hanken School of Economics and Department of Economics, University of Turku
Susmita Baulua: RBB Economics and Department of Economics, University of Turku
Jan Jääskeläinen: Finnish Competition and Consumer Authority

No 177, Discussion Papers from Aboa Centre for Economics

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

Keywords: public procurement; organizational culture (search for similar items in EconPapers)
JEL-codes: D44 H57 H76 L25 (search for similar items in EconPapers)
Pages: 53
Date: 2026-02
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