Managing relationships in public private partnerships
In seeking to establish and maintain a quality relationship and optimise performance, partners in long-term inter-organisational partnerships must choose which of the available governance strategies and control strategies to use in managing their partnership. Despite literature reporting that governance and control strategy mechanism choices will affect partnership performance this literature is silent about the relationship between these strategies and the impact of their mechanism choices on the quality of their relationship. To address these shortcomings, this study examined the use of governance and control strategies in bilateral long-term inter-organisational partnerships. Two conceptual models were developed and operationalised. Measurement items were mainly borrowed from existing research and contextualised and adapted from this study. One new scale (financial performance) was developed based on expert comments in the exploratory research phase. Prior to issue of the self-completion questionnaire, telephone contact was made to identify those with direct partnership management responsibility in the public and private sectors. On identification the nature of the study was explained and confirmation of a willingness to participate sought. Only those who agreed to participate were sent the questionnaire. Local Authority Private Finance Initiative projects were used as the research setting and this produced a sample size of 211. Of the 113 people who agreed to participate, 64 completed and returned a questionnaire. The overall return rate was 29% with 29% of the public sector and 29% of the private sector participants responding. Partial Least Squares (PLS) was used to test the high level research and lower level operational model structures and hypothesised casual pathways. Despite both the research and operational models demonstrated r[sup]2 and Goodness of Fit results. Both model results were tested for reliability and validity with all constructs meeting widely accepted physchometric benchmarks. The findings from both models are reported and debated. As with all studies, there are a number of limitations. These include possible limits to the genralisability given the very specific type of partnership from which the data is drawn. In carrying out a cross-sectional study the benefits associated with a longitudinal study have been forsaken and it would be very helpful to understand if the passage of time impacts on governance and control strategy choices. Similarly, the absence of control variables means it is not possible to understand whether more experienced partnership mangers employ a different approach to their less experienced counterparts in the management of their partnerships. The findings provide an original contribution to academia through an evaluation of the role of governance strategy, control strategy and relationship quality in the management of long-term inter-organisational partnerships. These confirm that integrated governance strategy is a significant determinant for integrated control strategy and that integrated givernance and integrated control strategy are both significant determinants for relationship quality. Relationship quality has been found to link governance and control strategy to performance, confirming its mediating role in maximising performance outcomes. The major contribution to business practice is the development of normative guidelines that support informed decisions about how the partnership should be managed to optimise performance. Specifically the guidelines promote that governance strategy, control strategy and relationship quality should be treated as three interdependent elements of an integrated partnership management framework. This implies that those exploring new partnerships and those in existing partnerships should design their governance and control strategies to capitalise on those mechanisms that act in a complementary and reinforcing manner to strengthen the quality of their relationship and in turn optimise performance.