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ABSTRACT. Purchasing management has been recently focused by public organisations aiming to maximise its contribution to operations. Such an aspect has been emphasised by the impacts of on going commercialisation process in the network public service sector. This paper provides evidence of changes in purchasing management behaviour in public firms in the water supply sector. In particular, in Italy the firms, after a first phase of increasing attention to purchasing management and suppliers selection, slowly has come back to a clerical approach, maintaining an "arms-length" relationship with suppliers. A model for describing the oscillation of purchasing management within the firms is presented and an explanation of such an oscillation is suggested in terms of flow of power between technical management and political managers.
INTRODUCTION
The increasing inadequacy of traditional public organisations in satisfying the customers requests have pushed toward the externalisation of public services provision. This mainly occurred in the network public services sector (NPS) where an international trend to contestability and market approach is clearly on-going. The underlying motivation of such a trend is that competition definitively results in improved outcomes such as greater efficiency, higher quality of service, a clearer focus on customers and better value for money (Brown, Ryan & Parker, 2000).
This approach has determined an orientation toward privatisation, although in some cases there has been evidence that the privatisation of utilities has caused a relevant decrease in workforce employment and increasing prices for the users. Therefore, in such a context, it would appear adequate to maintain the service provision in public hands, although the pressure for improved performances would require the application of efficiency, effectiveness, and economic criteria in public organisations. Such an approach can be pursued either through financially autonomous departments or through firms wholly publicly owned (both of them are, in Italy, called commercialisation).
Since all business area should contribute to apply the abovementioned criteria, also the purchasing function has to be focused according to the new orientation that during the last 20 years has gradually emerged. In fact, such an area of activities has been moving forward from being considered a clerical function (with the ultimate purpose of buying as cheaply as possible) to be regarded today as a major strategic function (Gadde & Hakansson, 1994)....