Economic Sustainability by Using Life Cycle Cost Information in the Buying Center: Insights from the Public Sector

Julian Gaus, Sven Wehking, Andreas H. Glas and Michael Eßig
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Julian Gaus: Working Field Procurement, Department of Economics and Management, Bundeswehr University Munich, 85577 Munich, Germany
Sven Wehking: Working Field Procurement, Department of Economics and Management, Bundeswehr University Munich, 85577 Munich, Germany
Andreas H. Glas: Research Group Defense Acquisition & Supply Management, Department of Economics and Management, Bundeswehr University Munich, 85577 Munich, Germany
Michael Eßig: Working Field Procurement, Department of Economics and Management, Bundeswehr University Munich, 85577 Munich, Germany

Sustainability, 2022, vol. 14, issue 3, 1-28

Abstract: Following the triple-bottom-line approach, sustainability comprises not only an ecologic and a social dimension but also an economic one. In that sense, economic sustainability (ES) tries to achieve a state in which present economic activities do not place a disproportionate burden on future economic activities. The time-related dimension of ES is of interest for this research, because procurement management makes use of life cycle cost (LCC), which is an instrument to measure long-term economic effects. LCC information could help to consider ES, but practice struggles to consider the information. This research addresses this issue and merges organizational information processing with organizational buying behavior theory. Empirically, it reports original insights into eight cases in the public sector. Decisions in the cases are usually made by councils (buying centers); as such, a group of people with different backgrounds must be informed with ES LCC information. The findings show ES LCC information requirements, capabilities, and fit, as well as information distribution and perception in buying centers. As such, the cases provide indications as to which decisions in the project are influenced by ES LCC information. Overall, the analysis integrates two theoretical perspectives and provides strong indications that LCC is a promising instrument to link decision making with a sustainability rational.

Keywords: economic sustainability; life cycle cost management; public procurement; case studies; organizational information processing theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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