Leveraging social capital for value creation in public procurement: the role of strategic purchasing integration

Purpose Although the integration of the purchasing function within strategic decision-making has been extensively studied in the context of the private sector, its significance for the effective functioning of public procurement (PP) remains underexplored. Effective PP is critical for suppliers, users of public services and society at large. This study investigates how the strategic integration of PP influences operational, environmental and innovative value creation by developing social capital in buyer–supplier relationships. Design/methodology/approach This study empirically examined how strategic purchasing integration contributes to the development of social capital in buyer–supplier relationships, which in turn affects value creation. It utilizes survey data from PP experts in Finland, complemented by a series of post-survey interviews designed to gain deeper insights, especially into some less-expected findings. Findings Applying social capital theory, we discovered that the strategic integration of purchasing is crucial for effectively developing social capital within buyer–supplier relationships. Interestingly, we revealed that different types of value creation require varying combinations of social capital. The post-survey interviews suggested that these differences likely arise from the limited capabilities of public organizations or perceived barriers imposed by legislation. Originality/value This study complements findings from the private sector showing that purchasing integration and social capital are relevant for value creation. It also reveals the unique public sector dynamics that limit the effectiveness of relational and cognitive capital in realizing operational and environmental value.