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.
Highlights
Scholars identified several causes for companies to commit to sustainability, on the one hand increasing public pressure and on the other the perception that sustainability is a means of long-term competitive advantage [1]
The work merges theory from organizational information processing theory (OIPT) with organizational buying behavior theory (OBB) in order to better understand how the information processing of an economic sustainability (ES) life cycle cost (LCC) can result in better procurement decisions
Our research showed that LCC is able to measure a product/project in a holistic way, even though aspects such as carbon footprint can be calculated as part of LCC, e.g., by taking the cost of CO2 emissions during production and use phases as part of the cost breakdown structure
Summary
Scholars identified several causes for companies to commit to sustainability, on the one hand increasing public pressure and on the other the perception that sustainability is a means of long-term competitive advantage [1]. LCC as an Instrument to Measure ES. The LCC approach, as an instrument for complete and comprehensive cost recording, emphasizes the consideration of the entire life cycle of a procurement object. The LCC approach is used extensively in private procurement, the public sector is seen as a key driver for its application [24]. The LCC approach has established itself within the framework of Green Public Procurement [33]
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