Under pressure from European Union, which had accepted Italy to the "Eurozone" hesitantly, on condition that the nation control its deficit spending and reduce its high public debt, the central government in Italy began dozens of cost cutting programs in the late 1990s and early 2000s. One such program planned to economize, on public procurement of goods and services, to the tune of billions of euros. The program's first priority was to identify services and products purchased extensively by public agencies at every stage of government, and consolidate them into nation-spanning mega contracts.
Analyzers had reasoned, by aggregating public sector demand in this style, the public sector of Italy could greatly amplify its market leverage and win huge discounts from suppliers. This assessment proved correct-but also explosive. In November 2003, the Minister of Economy and Finance of Italy ordered a temporary halt to the plan to give an opportunity to figure out what to do to administrative and political leaders. This choice-compelling case allows students to contemplate how Italy might have averted this political backlash, and challenge them to recommend how the government might correct the project in ways that tackle the anxiety of the critic, but still permit it to enhance procurement efficiency and reduce its costs. HKS Case Number 1925.0.
PUBLICATION DATE: September 30, 2008 PRODUCT #: HKS125-PDF-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
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