Understanding and Solving Late Payment: The Role of Organizational Routines

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 Spanis...

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Bibliographic Details
Published in:Management international (Montréal) 2017, Vol.22 (1), p.146-156
Main Authors: Maque, Isabelle, San-Jose, Leire
Format: Article
Language:English
Subjects:
Accounts payable
Business administration
Case studies
Commercial credit
Credit management
Credit policy
Customers
Humanities and Social Sciences
Legislation
Market positioning
Payments
Small & medium sized enterprises-SME
Small business
Vendor supplier relations
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Summary: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.
ISSN:1206-1697
1918-9222
DOI:10.7202/1053694ar