Understanding and Solving Late Payment: The Role of Organizational Routines

Abstract

European legislation has so far failed to alleviate late payment. We introduce the concept of organizational routine; this contributes to understanding late payment and its persistence and focuses on more effective ways of alleviating it. The case study between a large Spanish company and its Spanish SME suppliers gives an exemplary illustration of organizational (trade credit) routines and their dynamics in a two-sided business relationship. The large company’s imbalanced routine and the SMEs’ balanced routine explain late payment. Potential for change and the alleviation of late payment is to be found in routines’ internal dynamics and in participants’ understanding.

Payment to Suppliers; Assessment of Efficient Public Service Delivery in the Local Government

“…Thus, the government should ensure public-sector procurement leading toward quick payment processes. Maque and San Jose (2017) introduced four (4) aspects in improving the processing payment of procurement; the policies, people, process, and practices. The payment process system in the government should focus on and emphasize these aspects to where management leadership from the top management should religiously take responsibility.…”

“…According to ASEAN Report 2021; and Boyne et al (2020) the impact of organizational culture on organizational performance is expected to be higher when results are emphasized over procedures. Maque and San-Jose (2017). Thus, Paul and Boden (2011) suggested the four aspects of improvements in payment to procure management: policies, people, processes, and practices: Hypothesis 3: The existing procedural process, computerized system program, policy implementation, and transacting public and leadership management in the provincial government contributed to the performance outcome of the timely payment.…”