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A realist exploration of small firm tendering for public sector contracts: a micro-foundational study of capability

Turner, Paula Lousie (2017) A realist exploration of small firm tendering for public sector contracts: a micro-foundational study of capability. Doctoral thesis (PhD), Manchester Metropolitan University.

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Abstract

Keywords: Small firm (SME), tendering, critical realism, routines, capability, generative mechanisms, case study, absorptive capacity Objectives: The current state of theory building in the field of small firm tendering capability requires better explanation of the detailed routines that underlie capability. This thesis enhances small firm productivity literature by proposing a new conceptual framework to explore small firm capability to competitively tender for public sector contracts Prior Work: My prior work has tested literature themes in human capital and dynamic capability theory to move beyond the resource scarcity explanation of small firm difficulty in competing for public sector contracts. This suggested a conceptual framework to link competitiveness with capability building, drawing on cutting-edge organisational theory. It prepared me to begin an empirical mobilisation of dynamic capability theory, as it relates to small firms Approach: A detailed analysis of an exceptionally successful small firm identifies specific resources and routines that form the micro-foundations for contingently contextual capability. Primary case findings are augmented by a comparative case analysis. Research is operationalised through a critical realist mode of perception, where tendering is examined as a social institution with overlapping layers of structural power that constrain and enable the exercise of agential efforts inside a firm. Theoretical case sampling through interviews and wider observational and documentary analysis demonstrates the utility of the framework Results: Tendering capability is conceptualised using institutional, capability and absorptive capacity theory. Fifteen firm routines are identified and organised into a capability framework that comprises of operational and dynamic domains. Competitive capability emerges from routines that command resources effectively, not just resource ownership. Tendering activity is amenable to routinisation that are situated in regular patterns of knowledge, skills and action, but also in dynamic capabilities Implications: The study of successful firm routines suggests a new research direction for studying aspects of small firm productivity, of which tendering is an example. The capability framework and findings will help practitioners and policy makers to focus beyond descriptions of practice towards a better understanding of causal relationships Value: The study addresses a capability knowledge gap in small firms’ empirical literature. It demonstrates how the exercise of agency is built and shaped through the notion of context. It benefits researchers, business support providers, public procurers and small firms. It creates knowledge about learning pathways that lead to more small firms placing themselves in the opportunity flow of public sector tendering, by using a capability framework.

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