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Looking for the options: Hybrid governance, Analytical perspective

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

In press, to be published in August 2017 MA course in English, spring 2018, 3rd semester. University of Tampere, Faculty of Management

• Private enterprises in charge of public duties: Public buildings, mines, supplies

for the army, grazing lands, and tax collection (’tax farming’).

• First descriptions were related to the contracts for feeding of sacred hens in the

hill of Capitolium 390 BC.

• Societas publicanorum: limited liability public service corporations, shares,

flexible organisation, division between administration and politics, in other private business limited liability through the joint slave ownership and ’slave CEO’.

• Criticism for malpractice: fraudulent behaviour in transportation, detachment

from unprofitable public contracts, cruelty in mines, excessive tax collection.

• In the imperial era the centralized civil service replaced the private companies

in administering public duties. The autocratic rule of the Emperors replaced the

• ligarchic rule of the Senate.
• The written historical sources originate from the descriptions of the Senators

and followers of the Caesars who were in competitive position in relation to the

• publicani. Caesars followed their whips and whims, and the conduct of civil

service was not always exemplary.

I II III IV Follow Me! a b c a b

• Shared ownership.
• Goal incongruence and

different institutional logics in the same organisation.

• Variety in the sources of

financing.

• Differentiated forms of

economic and social control.

Monstruous hybrid (mixing

• f syndromes)

A cute little pet

Listen a story about Chimera

• Syndrome as a compatibility problem, not as a disease.
• Guardian syndrome is important for the integration.
• Commerce syndrome is important for survival.
• Consider two tribes: a tribe of fishermen and an agricultural tribe.

Separate community effort to fulfill goals and exchange with the other are equally important functions.

• Hybrid organisations mix integration and exchange. Therefore, there

are risks involved.

Guardian Syndrome Commerce Syndrome

• Shun trading
• Exert prowess
• Be obedient and disciplined
• Adhere to tradition
• Respect hierarchy
• Be loyal
• Take vengeance
• Deceive for the sake of the task
• Make rich use of leisure
• Be ostentatious
• Dispense largesse
• Be exclusive
• Show fortitude
• Be fatalistic
• Treasure honor
• Shun force
• Compete
• Be efficient
• Be open to inventiveness and novelty
• Use initiative and enterprise
• Come to voluntary agreements
• Respect contracts
• Dissent for the sake of the task
• Be industrious
• Be thrifty
• Invest for productive purposes
• Collaborate easily with strangers
• Promote comfort and convenience
• Be optimistic
• Be honest

Hybridihallinta ”Labradoodle”

Labradoodle

• Crossbreed between a

labrador and a poodle.

• Inflicts very little allergies.
• May suffer from health

problems.

• Has not been approved as a

pure dog breed.

• Some say that it should not

have been created in the first place.

• Greek mythology: a

combination of a lion, a goat and a snake (or scorpion or dragon)

• It can breath fire
• Was considered as a bad
• men predicting disasters
• Refers to things highly

imaginative or implausible

Chimera

Questions

• How should we understand

the space in between public and private?

• What kind of empirical

categorisations are used to classify hybridity?

• How do hybrid
• rganisations legitimate

their activities?

• How are hybrid activities

valued in society? Answers

• Micro,-meso ja macro.
• Singular, Dyadic, and Triadic.
• ”Conceptual waste”,

”Muddling through”, ”Deviation from optimum”.

• External – internal.
• Hybrids by design vs. by

default.

• Impure goods, Combinations
• f orders of worth.

Johanson & Vakkuri (2017) Governing hybrid organisations. Exploring diversity of institutional life. Abingdon & New York, Routledge..

Johanson & Vakkuri (2017) Governing hybrid organisations. Exploring diversity of institutional life. Abingdon & New York, Routledge..

Coxa- Hospital (Case 4.2) National innovation system (Case 3.3) Global air travel (Case 3.4) Health policy (Case 3.1) Cleantech –industry (3.2) Energy company In Vietnam (Case 4.1) PPP Road construction In China (Case 2.2) System of National Accounts (Case 3.5) European PPP pension Provision (Case 5.1) Publicani in the Roman Republic (Case 2.1)

• Innovation system as a catalyst of innovations
• Old: basic research, applied research, commercial applications.
• New: university, enterprise and government interaction as a source of innovation (triple

helix).

• Specialisation into particular industries implies that industries differ from one
• another. Usually there is no unified national innovation system. The significance
• f an innovation system is difficult to verify.
• Forerunners: (Greece, Ireland) efficient production and commercialization.
• Laggards: Problems with both innovation production and commercialisation

(Netherlands, UK),

• Problems with commercialisation: (Canada, Finland, Korea, New-Zealand)
• Problems with innovation production: (Italy, Norway, Mexico Portugal).
• If universities take a position in developing innovations, students and basic

research might suffer.

• The wealth of industrialized countries is both antecedent and consequence of

innovations.

Looking for the options: Hybrid governance, Reasons for hybrids

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

• Strategy: public organisation is capable of achieving change in

the environment of an organization. Private enterprises are geared to adaptation to the environment. Hybrids might be better equipped to influence their environment than private enterprises

• Performance: Performance measurement is ambiguous also in

business and government organisations. The combination of profit-seeking and public policy goals in hybrids requires the simultaneous use of two different yardsticks.

Strategies as goal-oriented future actions

• Strategic design. Advancing

goals through programming

• Strategic scanning.

Advancing goals through combining resources

• Strategic governance.

Advancing goals through sharing work and connecting with others Performance as evaluation

• f past actions
• Principle of economy.

Performance as parsimony. Minimum costs and efforts.

• Principle of efficiency. The

best possible output with given resources

• Principle of effectiveness.

The best possible value and

• utcome with given

resources

• The combination of public policy goals and for-profit activity.

Environmental sustainability as source of business

• pportunities rather than as a counterforce.
• Interest of capital investors in new technologies. The concern of

citizens of the degradation of environment.

• Changing environmental problems into business opportunities.
• ”doing well by doing good”.
• Conceptual battle and boundary concepts in the background:

”biotech”, ”infotech”, “cleantech”.

• Continuous problem of demarcation: Is low-emission diesel

engine part of cleantech?

Adapted from Ostrom 1990

• The categorisation into public and private goods is far from

clear

• The categorisation is ambiguous, vulnerable to change, and it

depends upon the structure of the institutions in a given society

• A straightforward interpretation is that hybrids would be

related to impure goods such as toll goods and common pool resources

• In practice, hybrids are part of the production of public goods

as well. e.g. private enterprises in providing supply of weapons and personnel for the army or building a spacecraft

• There were no highways in

mainland China in 1988, the length of highways was 104 400 kilometers in 2013.

• Highway construction as public-

private partnership.

• Highway companies: 19 stock

listed companies.

• Road tolls provide revenue for

the companies as well as income for the local governments.

• Road tolls as a device for

regulating road congestion.

The main features in the orders of worth (Table 2.1)

Adapted from Boltanski and Thévenot 2006, Thévenot et al. 2000, Boltanski et al. 2005.

Order of worth Main features Inspired world Creativity, passion, emotion Domestic world Reputation, trustworthiness, authority World of fame Popularity, media, vogue, trends Civic world Collective welfare, equality, rules, and regulations Market world Price, competition, short-term Industrial world Technical efficiency, engineering, long-term Green world Environmental friendliness, sustainability, future generations Project world Connectivity, flexibility, social capital, networks

• Orders of worth do not recognize public or private sectors.
• There are two possible worlds for the market activity: market

world and industrial world

• For public sector the nearest equivalent would be the civic

world (and domestic world)

• For strategic design the long term-orientation of the industrial

world is important point of reference

• For strategic scanning, the inspired world is important point of

reference

• For strategic governance, the project world and the domestic

word are important points of reference

• Hybrids combine the practices of public and private sector, but

they combine also orders of worth

• Hybrids do not have a conceptual position in existing
• categories. Therefore, they are vulnerable to grievances
• Examples:
• Why are public services provided by private enterprises (Market

world) if it endangers the equality of citizens (civic world)?

• Why to employ practices such as public-private partnerships even if

they provide uncomfortable mixing of market and civic worlds?

• Why do societies intervene with market actions even if there are no

conspicuous implications for social policy?

• Vouchers. Instead of allocating public

budgets and funding to service- providing organisations, funds are allocated to the users of the service. The user is able to utilise her voice when making choices. This may contribute to higher levels of variation in terms of service volume and quality.

• Contracting out. This is based on an

assumption that public service provision is fundamentally a ‘make or buy’ decision (Williamson 1999). The buy decision may have implicated new types of internal quasi-markets (a purchaser-provider split) or externalised public service systems.

• Privatisation. At the macro level of

society, an extreme form of indirect control is privatisation, in which control is actually delegated to private economic agents. for example, energy, transportation, and

• telecommunications. It has not been

able to evade the hybridity of parallel institutional logics.

• Public-private partnerships

(PPPs). The impetus to mix governments with markets has created an industry of new forms of interaction between public and private sectors. Public-private partnerships may assume several different forms and thus create families of conceptual positions.

Looking for the options: Hybrid governance, Conceptualising hybrids

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

Animals are divided into (a) those that belong to the Emperor, (b) embalmed ones, (c) those that are trained, (d) suckling pigs, (e) mermaids, (f) fabulous ones, (g) stray dogs, (h) those that are included in this classification, (i) those that tremble as if they were mad, (j) innumerable

• nes, (k) those drawn with a very fine camel’s hair

brush, (l) others, (m) those that have just broken a flower vase, (n) those that resemble flies from a distance. (Borges 1966, 108)

Impure types, demarcation from the original species Forms of hybridity in public admistration context: Politics and administration Public administration and business activity

• As a governance structure
• As an entity
• As a relationship

ccc No specific features Markets Unprotected hazard Hybrid contracting Firm No contractual safeguards Market support Private Regulation Specific features Contractual safeguard Administrative support Public Public agency

Williamson 1999

• Cooperatives, mutual companies and public enterprises and

non-profits illustrate entities which do not conform to the

• wnership perspective.
• Rationale: the cost of ownership (Hansmann 1996). Those that

would suffer most for not owning, are the most likely owners

• University as an example: Public ownership might help to sort
• ut possible grievances between students, academic oligarchy,

private enterprises and public authorities.

• Ambiguous organisations in terms of ownership, goals, resource

acquisition and control.

• Education includes features of both public and private goods. In terms of

control, societies have always been eager to control university activities.

• Academic oligarchy: in addition to public and private regulation, there is

the aspect of self-regulation.

• Logics of performance measurement: multiple measurers (government,

business, and students), There is no one single yardstick. How universities serve for profit motives, education policies and willingness of citizens to invest in human capital?

• e.g. Does university produce new knowledge? (academic oligarchy)? Does

the higher education conform to the requirements and is it comparable with other units (government). Can I get a good job by acquiring higher education? (student)

• In what ever way you evaluate the performance, it cannot be done

satisfactorily in any one single way.

• Public-private partnerships, (PPP)
• Long-lasting cooperation between public

and private actors in producing services and products by sharing risk, cost and resources (Koppenjan, Enserink 2009)

• Forms: Public leverage, outsourcing,

licencing, joint venture, open strategic partnership (Schelcher 2005)

• A step further: Any meaningful interaction

between public and private actors

Dimension Publicleverage Outsourcing Lisencing Joint venture Open strategic partnership

Significance for the public sector Inciting private sector investments Savings, quality, efficiency, improved management Public sector attention to the private sector Access to private resources, transfer of risk to private partner Attachment of private interest in public action Mode of operation Industrial subsidies Public service provision in private enterprises Private enteprise acquires right to produce public services Agreement in which the private partner acquires capital and is resposible for the

• perational cost

Long-term unofficial cooperation Financing Public public User fees, Often public supporrt Private, public reimbursement Public, Private funding is possible Example Subsidies for declining industrial areas Carbage disposal, Social services Many public private pension schemes Infrastrucuture projects Civic engagement

• Public-private arrangements have become more common in European

pension provision since the 1990’s (within private sector).

• Three models: 1) public leverage, 2) licensing, 3) franchising.
• Accountability: 1) public leverage: defining private service as mandatory,

usually no specific accountability mechanism; 2) licensing: public authority requires private producers to comply with the stipulated requirements, accountability can be evaluated according to the requirements; 3) Franchising: public authority defines the product and grants production right to private enterprise, the forms of accountability vary.

• Two basic forms of accountability: 1) accountability to the key

stakeholders (social partners, employers in particular). 2) mandatory private arrangements. The accountability is realised between service provider and public authority.

• The freedom of choice has increased, but the voice of he beneficiary is
• muffled. If accountability is defined, it is connected to the employers as

financers of the schemes, not to employees as beneficiaries.

Johanson & Vakkuri (2017) Governing hybrid organisations. Exploring diversity of institutional life. Abingdon & New York, Routledge..

• Bilateral government agreements (ASA) over the routes between

two destinations. Overall there are more than 3000 agreements globally.

• Restrictions of foreign operators within national airspace.
• Private airlines, state-owned airlines (flag carriers) and hybrid

airlines.

• Hybrid contracting in global alliances: Star Alliance, Oneworld,

Skyteam.

• Landing rights to government -owned airports.
• Aircraft manufacturing: public subsides (army acquisitions) and

direct government stakes, government guarantees for aircraft purchasing

• Main manufacturers: Bombardier (Canada), Embraer (Brasil), Boeing

(USA), Airbus (Europe).

• Wide-body aircrafts. Two manufacturers: Boeing and Airbus.

• PERSPECTIVES
• Hybrid organisations

(organisation)

• Global air travel (hybrid

industry)

• Other
• National bilateral contracts in

establishing routes

• State influence on aircraft

manufacturing

• Public airports and

distribution of landing slots to aitlines

• ACCORDING TO THE

NUMBER OF ACTORS

• Singular

(public/private/hybrid)

• Dyadic (Public –private

cooperation in global alliances)

• Triadic (global alliances)

Taxonomy in biology: Scientific names of animals and hierarchical levels

• f taxonomy

(According to Carl von Linné 1707-1778)

• Organisations resemble living creatures in a sense that

they are born and they face institutional life and death

• BUT Organisations do not reproduce sexually. They do

not possess DNA that would dictate their life and death

• Organisations can inherit acquired characteristics
• For any classification it is noteworthy that
• rganisations may alter their actions due to the

classifications

• Organisations are social beings. Therefore, univocal

and exhaustive classification of organisations is very difficult

• The system of national accounts aims at statistical classification of economic activity according to globally

accepted principles.

• Background: the need for public intervention to combat the Depression in the 1930s, the increased role of

government in economy, the need to calculate the available resources for the war effort and recovery after the war.

• The national accounts were designed to inform macroeconomic policy by supporting macroeconomic analysis and

providing a conceptual basis for the formation of long-term strategic development and reform (Ward 2006; Vanoli 2005).

• By identifying the distinct roles of different institutions, national accounts give guidance on the mandates and

incentive structures of corporations, households, governments, and nonprofit institutions

• For the purposes of the SNA, institutional units that are resident in the economy are grouped together into five

mutually exclusive sectors (and many subunits) composed of the following types of units: 1) Nonfinancial corporations 2) Financial corporations 3) Government units, including social security funds 4) Nonprofit institutions serving households (NPISHs) 5) Households

Level of analysis Main distinction The result of distinction Level one All institutional units No distinction between institutional units is possible (kingdom) Totality of units Level two Geographical location Distinction between resident and foreign (rest of the world) institutional units (phylum) Domestic, foreign Level three Type of institutional unit Distinction between types of households (class) Institutional households, households Level four Pricing Distinction according to market principle (order) Nonmarket producer, market producer Level five Area of activity Distinction between the institutional nature of

• rganisations (family)

Nonprofit institutions serving households, nonfinancial institutions, financial institutions, government Level six Control Distinction according to controlling entities of the unit (subarea of activity only) (genus) Public, private, and foreign control of market producers

• Denial: Public – private partnership (PPP)
• PPP first appeared in classification in the latest 2008 edition
• PPP arrangements are categorized into either public or private

according to the distribution of risk

• PPP is ”conceptual” waste and its independent existence is

denied

• Restricted approval: Originally non-profit institutions

were subjected to serving households

• The initial categorisation could not grasp the variety of non-

profit activities

• Solution: A more detailed classification outside the System of

National Accounts

Looking for the options: Strategies for different types of organisations

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

The young lieutenant of a small Hungarian detachment in the Alps sent a reconnaissance unit into the icy wilderness. It began to snow immediately, snowed for two days, and the unit did not

• return. The lieutenant suffered, fearing that he had sent his own

people to death, but on the third day the unit came back. Where had they been? How had they made their way? “Yes, they said, we considered ourselves lost and waited for the

• end. Then one of us found a map in his pocket. That calmed us
• down. We pitched camp, lasted the snowstorm, and then with the

map we discovered our bearings. And here we are”. The lieutenant borrowed this remarkable map and had a good look at it. He discovered to his astonishment that it was not a map

• f the Alps, but a map of the Pyrenees.

(Weick 1995, 54)

Johanson & Vakkuri (2017) Governing hybrid organisations. Exploring diversity of institutional life. Abingdon & New York, Routledge.

Strategic design Strategic scanning Strategic governance The role of strategy The strategy defines ways to expand and

• rganise current

actions (programming) The strategy enables the mapping of novel ways to match resources to fulfil goals (combining) The strategy defines the basis for sharing work with external partners (relating) Assumption about the environment Disturbed-reactive Turbulent fields Turbulent fields Primary type of capital Financial Human Social Managerial control Budget Division of labour Contract Main challenges Unanticipated situations Rigid resources, misinterpretation of resources Contracting costs,

• verwhelming external

stakeholders

THREE PERSPECTIVES ON THE STRATEGY OF HYBRID ORGANISATIONS (FIGURE 4.1)

How is it going to be? What do we have? With whom are we going to be with?

Threats and opportunities Strenghts and weaknesses

• Pv Power in Vietnam (Case 4.1) (Binh 2016)
• Part of the Vietnamese oil and gas group (Petrovietnam), overall

approximately 30% of GDP.

• Pv Power: Securing energy production, management of power plants,

production of electricity.

• Previously the use of domestic coal. Following the economic growth,

increased import.

• Import restrictions: Only three companies can import coal. The approval of

prices by public authorities. Ambiguous rules in accepting prices.

• In the evaluation of bids, there are two main criteria: the continuity of

supply and competitive pricing. Not all producers wish to take part in bidding and brokers sometimes make false promises.

• Unclear rules result in difficulties in deciding on acceptable prices and

requirements for continuity. Negotiations between ministries and state-

• wned enterprises.

• Public – private hospital (Coxa: Tampere, Finland). Previous

quality problems in hip and joint replacement surgery.

• Systematic management training (TQM) within Pirkanmaa

health district.

• Possibility to establish private hospital within public health

care system.

• Coxa was a result from long-term negotiations among the

stakeholders.

• Both public and private owners, representation of

stakeholders within the board.

• The construction of the hospital as public- private

partnership.

• The use of profits for use within one’s own organisation.
• The results of the care have been improving. The finances are

good.

• Russia: SOEs control many important industries
• Mass media, military-industrial complex, infrastructure,

natural resources, financial services, public sector accounts for 40% of stock market capitalisation

• Political elite controls foreign trade, economy is structured

around industry groups with holding company structure led by tycoons (oligarchs)

• In industry groups, the success of subunits is dependent

upon the contacts to the oligarch. The success of an oligarch is dependent upon the contacts to the members of political elite

• The result: parasitic politico-economic structures which

enables the influence of political elite on society as a whole

• Patron-client structure: Public

authorities as patrons, oligarchs as clients

• Client provides financial benefits

and acquires political support for

• patron. Patron gives political

protection.

• The most important patrons:

president, prime ministeri, the mayor of Moskow. The most important oligarchs are connected to these institutions

• In practice, the same structure in

89 districts and cities

• In the Putin era, some of the
• ligarchs have been removed, but

they have been replaced with

• thers

Owner Enterprise

(Grosman & Leiponen)

Private enterprises Public agencies Hybrid organisations Strategic design Strong position in lucrative industry Ideal position in proximity to power or the enlargement of bureaus Beneficial position between private and public spheres Strategic scanning Inimitable and unique combinations of internal resources Command of valued expertise and information in the policy process Privileged access to both public and private resources Strategic governance Exploitation of lack of contact between other firms. Brokering in the policy- making process, divide-and- rule through power and alliances Exploitation of lack of contact between other

• rganisations,

brokering between government bodies and business enterprises

Looking for the options: Performance of organisations

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

Super-goals

• Relatively permanent

criteria for measurement purposes.

• The aim is to identify
• ptimality and deviance.

Hybrids and supergoals

• The dual goals of hybrids

are vulnerable to changes

• f emphasis.
• Hybrids are different in

comparison to others, but they do not constitute a homogeneous group.

• Vulnerability of change may

induce adaptation.

State-owned Enterprises in China

• Over half of thet SOEs follow

hybrid governance as follows:

• Politics: communist party section,

employee association, employee meeting.

• Corporate governance:

shareholder’s meeting, the board and supervisory board.

• Differentiated incentives:

ideological education for management to combat corruption, financial perks for employees to increase efficiency (Hua et al. 2006)

Social enterprises USA vs. Europe

• USA: ”big government” and increase in

non-profit activity in 1960’s and 1970’s.

• USA: The decrease of government funding

in 1980’s did not change thet social mission of non-profits, but required additional resources from the market activities of non-profits.

• Europe: The unemployment in 1980’s,

availability of public support for the reduction of unemployment.

• Europe: The emphasis of non-profit activity
• n employment and financing from the

public sources (Defourny & Nyssens 2014).

For performance measurement

• Business enterprises, public

agencies or hybrids do not have a single common goal

• Measurement is a feature of

successful organisation

• Organisations justify their

existence by being connected to other

• rganisations
• The action does not have
• ther easily manageable

alternatives Implications for hybrids

• The rationality of

measurement decreases insecurity

• Measurement decreases

impurity

• Measurement produces

comparability

• Measurement helps to sort
• ut future direction

Performance measurement as a form of social action

(Figure 5.1)

Main features

• Measurement is a product
• f social action
• Measurement is a medium

for human (inter-)action

• Measurement both

constrains and enables

• Measurement solves

problems, but also creates new ones

Measurement of economic performance (Figure 5.2) Main features

• Measurer: who is the measurer?
• Measuree: the object of

measurement

• Measurement system: The rule

system of calculation, according to which performance is quantified

• Measurement result: The results
• f measurements to be used for

the decision-making of public policies, organisations, and relevant stakeholders

• Measurer: Multiple possibilities 1) students and business, 2)

higher education authorities 3) academic oligarchy.

• Questions: whose value should be increased?
• Measuree: 1) universities as service providers, 2) universties as

implementors of policy goals, 3) universities as academic tribes.

• Question: How should we understand universities as objects of

measurement?

• Measurement system: 1) performance satisfying stakeholder

needs, 2) Performance in fulfilling goals of higher education policies, 3) performance measurement as device to verify the creation of new knowledge.

• Question: how to define the rules for measurement systems?
• Measurement results: 1) legitimation for satisfaction, 2)

legitimation over fulfilling political goals or 3) legitimations over production of new knowledge.

• Question: Who needs to be convinced with the results?

• Accountability over actions which one

has no say.

• Compromises to number of directions.
• ‘Organizations trying to meet conflicting

expectations are likely to be dysfunctional, pleasing no one while trying to please everyone.’ (Koppell 2005, 95)

• Measurement as a solution. As a

consequence, more performance measurements, which require more work, but do not solve the underlying contradictions.

• Balancing between access to service, service quality and cost

containment.

• US: organisation, financing, production and management

combines public and private features.

• Financing: public private 50/50. Production predominantly

private.

• The health expenditures as share of GDP (16,4 %) are higher

than in other OECD countries (8,9%), but the coverage is lower than in other countries

• Cost containment is not equally important to all stakeholders.
• How to evaluate the inefficiency of hybrid governance?

Compared to what? Public, private, and other feasible arrangements.

Private enterprises Public agencies Hybrid organisations Economy, the principle of parsimony

Minimising product costs in a competitive environment, minimising transaction costs Minimising public expenditures and the financial burden to taxpayers Minimising the cost of collaborative governance and joint production

Efficiency, the principle of

• ptimality

Technical efficiencies, optimal input-output relationships, scale efficiencies emphasising the volume of production, economies

• f scope emphasising the

benefits of joint production Scale efficiencies emphasising the volume of production, allocative efficiencies ensuring the equal distribution of outputs and

• utcomes

Economies of scope beyond

• rganisational boundaries, producing a

complementary variety of services and goods

Effectiveness, the principle of value creation

Value for customers and shareholders (the profit motive and the concept of profitability) Value for society, taxpayers, and the public Value for society, taxpayers, and the public, value for customers and shareholders (the profit motive and the concept of profitability)

Motto

‘Doing good by doing well’ ‘Doing good by doing good’ ‘Doing well by doing good’

Defining the alternatives: Strategy and performance in hybrid setting

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

• Principle of economy: how to organise processes; heuristics

and external interactions as simply and economically as possible in the presence of both public and private influence (financial sustainability).

• Principle of efficiency: balancing goals, administering fruitful

doses of resources and evaluation of external interaction in two spheres to maximise outputs (equilibrium).

• Principle of effectiveness: what are the long term concequences
• f hybrids, how innovations within hybrids are evaluated, what

is the role of hybrids in the social integration)? (value creation)

• Strategic design: How to organise goals and division of labour to

maximise the future benefits? (legacy)

• Strategic scanning: how to combine public and private modes of
• peration, resources and innovations in such a way that the

resulting whole is more than sum of its individual parts? (social welfare)

• Strategic governance: How to combine dual directions of

external relationships in such a way that public and private stakeholders are present for fruitfull goal attainment and integration of society? (social capital)

• Process integration: The use of same channel for multiple client

groups (public/private)

• Balancing goals: The control of stakeholders
• Harvesting legitimacy: acceptance from multiple sources
• Legacy: The well-being of future generations

• Combining heuristics: e.g. Ideological education against

corruption, financial incentives for efficiency

• Administering doses for synergy: The balancing of public and

private resources to avoid dependence

• Creating innovations: The balance between public and private

innovations

• Social welfare: The well-being in society in different economic

and social structures.

• Establishing connecting positions: With minimal number of ties

maximal number of connections. The centralization and decentralisation of external relationship management

• Weighing dual reciprocities: how beneficial the contacts are to

public and private partners. Paradox: community building most often requires reduction of contacts to other groups

• Integrating communities: Brokering positions shorten the paths

that would otherwise be longer (horizontal and vertical integration, bottom-up and top-down)

• Social capital: intertwined society

Defining the alternatives: New understanding of hybrid governance

Source: Jan-Erik Johanson & Jarmo Vakkuri (2017) Governing hybrid organizations. Exploring variety

• f institutional life. Abingdon & New York, Routledge.

External: problems of regulation

• Ambiguous organization

structures

• Dual rule structures
• Problems of accountability

Internal: operational possibilities

• Vitality in specific space
• Institutional survival despite

contradictions

• Hidden strenghts beyond

politics and business

• The role and position of hybrids and hybridity in institutional life is

significantly determined by the extent to which their action and behaviour is perceived as rational

• a system of hollow politics in which important strategic choices have

been made through somewhat obscure and nontransparent processes and mechanisms of decision-making

• system of lousy business practices in which, in terms of performance,

bureaucratic red tape and the pursuit of a common good prevent the pursuit of sensible profit seeking

• We may give credit for no particular reason, and we may also assign

blame to hybrid organisations with insufficient causal reasoning and improper empirical evidence.

• 1) Conscious selection of accountability structures: As agents, hybrids are

not expected to demonstrate accountabilities in all directions or to be loyal to all principals. Some stakeholders and audiences are more permissive of the ambiguity of accountabilities, which encourages permissive accountability structures.

• 2) Choosing the modes of value to demonstrate. One important

characteristic of hybrid activities is that, despite high expectations, hybrids are not able to produce all kinds of value. Hybrids may have an

• ption to disclose those forms of value they wish to hide.
• 3) Selecting the forums to be present. Hybrids may be able to benefit from

the problem of multiple decision-making heuristics and institutional

• logics. This may be an excuse for hybrids to justify their decision-making

procedures in favourable forums.

OECD -countries Democracy

• The significance of hybrids varies according to context
• Hybrids and advanced industrial countries:hybrid activity as an

extension of market activity with a social twist. When considering the highly coordinated market economies in Nordic countries, hybridity easily appears to be a government-driven system with a market twist. In liberal societies hybrids appear as extension of markets with a social twist.

• Hybrids and state-centric societies: economic activity with the central

influence of the government. In these settings, there is no need to see hybridity as a transitory phase. Instead, hybridity can be seen as a device to retain continuous top-down government control of market transactions.

• Hybrids and developing countries: Could be the only option to organise

large-scale economic activity in the developing world. Hybridity is not an extension of the existing categories but instead an anchor point for

• rganising economic structures and government activity in the future.