Control Mechanisms in Service Outsourcing Relationships in the Public Sector

Authors

DOI:

https://doi.org/10.51341/cgg.v25iesp.2871

Keywords:

Management Control. Public Sector. Outsourcing. Cooperation and Coordination Challenges.

Abstract

Objective: analyze the role of management control mechanisms in service outsourcing relationships in the public sector, considering the challenges of cooperation and coordination of activities.

Method: qualitative research, based on interviews, a questionnaire, and triangulation of these data with documents, supported by a case study in a decentralized unit of the Public Ministry of Labor, with the analysis of outsourced cleaning and conservation services.

Results: the services analyzed do not use specific assets, operate in an environment of moderate uncertainty, have easy-to-measure, and note very complex tasks, in addition to having moderate interdependence between the contracting organization and the contracted organizations. the use of formal and informal control instruments was observed. The results also suggest that the bureaucratic environment of these contracts can influence the configuration of management control mechanisms, with little flexibility for activities or relationships to develop beyond contractual terms.

Originality/Relevance: the study contributes to the advancement of the scientific debate on the subject in public organizations and the Brazilian context.

Theoretical/methodological contributions: the work adds to the literature by approaching the configuration of management control mechanisms in supplier-buyer relationships in public organizations.

Social/management contributions: the results can help public sector organizations to understand the aspects that influence the configuration of the control system of their outsourced service contracts, in addition to encouraging discussions about the challenges of these contracts.

Downloads

Download data is not yet available.

References

Ahlgren, P. C., & Pettersen, I. J. (2015). Local government and management control in inter-organizational settings. Public Money and Management, 35(5), 383–389. https://doi.org/10.1080/09540962.2015.1061183

Anderson, S. W., & Dekker, H. C. (2005). Management control for market transactions: The relation between transaction characteristics, incomplete contract design, and subsequent performance. Management Science, 51(12), 1734–1752. https://doi.org/10.1287/mnsc.1050.0456

Anderson, S. W., & Dekker, H. C. (2014). The role of management controls in transforming firm boundaries and sustaining hybrid organizational forms. Foundations and Trends® in Accounting, 8(2), 75–141. https://doi.org/10.1561/1400000032

Bresser-Pereira, L.C.(1996) Da administração pública à gerencial. Revista do Serviço Público. 47 (120).1-34

Brown, T. L., & Potoski, M. (2003a). Managing contract performance: a transaction costs approach. Journal of Policy Analysis and Management, 22(2), 275–297. https://doi.org/10.1002/pam.10117

Brown, T. L., & Potoski, M. (2003b). Transaction costs and institutional explanations for government service production decisions. Journal of Public Administration Research and Theory, 13(4), 441–468. https://doi.org/10.1093/jopart/mug030

Caglio, A., & Ditillo, A. (2008). A review and discussion of management control in inter-firm relationships: Achievements and future directions. In Accounting, Organizations and Society (Vol. 33, Issues 7–8). Elsevier Ltd. https://doi.org/10.1016/j.aos.2008.08.001

Cäker, M. (2008). Intertwined coordination mechanisms in interorganizational relationships with dominated suppliers. Management Accounting Research, 19(3), 231–251. https://doi.org/10.1016/j.mar.2008.06.003

Cäker, M., & Siverbo, S. (2011). Management control in public sector joint ventures. Management Accounting Research, 22(4), 330–348. https://doi.org/10.1016/j.mar.2011.08.002

Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2–3), 127–168. https://doi.org/10.1016/S0361-3682(01)00027-7

Cristofoli, D., Ditillo, A., Liguori, M., Sicilia, M., & Steccolini, I. (2010). Do environmental and task characteristics matter in the control of externalized local public services?: Unveiling the relevance of party characteristics and citizens’ offstage voice. Accounting, Auditing and Accountability Journal, 23(3), 350–372. https://doi.org/10.1108/09513571011034334

Dekker, H. C. (2004). Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements. Accounting Organizations and Society, 29(1), 27–49. https://doi.org/10.1016/S0361-3682(02)00056-9

Ditillo, A., Liguori, M., Sicilia, M., & Steccolini, I. (2015). Control patterns in contracting-out relationships: It matters what you do, not who you are. Public Administration, 93(1), 212–229. https://doi.org/10.1111/padm.12126

Druck, G., Sena, J., Pinto, M. M., & Araújo, S. (2018). A terceirização no serviço público: Particularidades e implicações. In Terceirização do Trabalho no Brasil: novas e distintas perspectivas para o debate (pp. 113–141). Ipea.

Gonçalves, L. A. E. B. (2006). Sistema de Coontrole da terceirização na Universidade Federal do Rio Grande do Sul. Universidade Federal do Rio Grande do Sul.

Johansson, T., & Siverbo, S. (2011). Governing cooperation hazards of outsourced municipal low contractibility transactions: An exploratory configuration approach. Management Accounting Research, 22(4), 292–312. https://doi.org/10.1016/j.mar.2011.01.001

Johansson, T., Siverbo, S., Camen, C., & Carmén, C. (2016). Managing cooperation, coordination, and legitimacy Control of contracted public services. Accounting Auditing & Accountability Journal, 29(6), 1012–1037. https://doi.org/10.1108/AAAJ-08-2014-1805

Konrad, T. S. (2018). Control archetypes and typologies. In Management Control in Public-Private Partnerships (pp. 65–88). Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-22868-2_3

Langfield-Smith, K., & Smith, D. (2003). Management control systems and trust in outsourcing relationships. Management Accounting Research, 14(3), 281–307. https://doi.org/10.1016/S1044-5005(03)00046-5

Maia, T. S. V., & Correia, P. M. A. R. (2022). Desafios da Implementação da Nova Gestão Pública. Lex Humana (ISSN 2175-0947), 14(2), 121–138. Recuperado de https://seer.ucp.br/seer/index.php/LexHumana/article/view/2189

Merchant, K., & Van der Stede, W. (2012). Management Control Systems: Performance Measurement, Evaluation and Incentives. Pearson Education.

MPT. (2019). Relatório de Gestão 2018 (p. 155).

Murad, C. G. C. (2019). A fiscalização administrativa dos contratos de prestação de serviços em uma Universidade Federal. Universidade Federal de Alfenas.

Oliveira, T. T. S. C. de O. (2019). Gestão de riscos em contratos da terceirização de serviços: uma análise na Universidade Federal Rural de Pernambuco [Universidade Federal de Pernambuco]. https://doi.org/10.1017/CBO9781107415324.004

Ouchi, W. G. (1979). A conceptual framework for the design of organizational control mechanisms. Management Science, 25(2).

Peci, A., Pieranti, O. P., & Rodrigues, S. (2008). Governança e new public management: convergências e contradições no contexto brasileiro. Organizações & Sociedade, 15(46), 39–55. https://doi.org/10.1590/s1984-92302008000300002.

Petersen, O. H., Baekkeskov, E., Potoski, M., & Brown, T. L. (2019). Measuring and managing ex ante transaction costs in public sector contracting. Public Administration Review, 79(5), 641–650. https://doi.org/10.1111/puar.13048

Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements? Strategic Management Journal, 23(8), 707–725. https://doi.org/10.1002/smj.249

Pyun, H. O., & Edey Gamassou, C. (2018). Looking for Public Administration Theories? Public Organization Review, 18(2), 245–261. https://doi.org/10.1007/s11115-017-0374-6.

Santos, F. B. (2014). Determinantes de custos na limpeza predial terceirizada: benchmarking em universidades federais [Universidade de São Paulo - USP]. http://www.teses.usp.br/teses/disponiveis/12/12136/tde-11122014-175209/

Santos, N. M. L., Andrade, D. M., & Lima, J. B. de. (2019). Valores públicos e contratação de serviços terceirizados : desafios no setor público. Administração Pública e Gestão Social, 11(3), 1–18.

Schepker, D. J., Oh, W.-Y., Martynov, A., & Poppo, L. (2014). The many futures of contracts : moving beyond structure and safeguarding to coordination and adaptation. Journal of Management, 40(1), 193–225. https://doi.org/10.1177/0149206313491289

Secchi, L. (2009). Modelos organizacionais e reformas da administração pública. Revista De Administração Pública, 43(2), 347 a 369. Recuperado de https://bibliotecadigital.fgv.br/ojs/index.php/rap/article/view/6691.

Simoni, V. L. D. (2018). Análise crítica do modelo de cálculo dos custos na contratação do serviço terceirizado: o caso do instituto federal de educação, ciência e tecnologia do estado de Mato Grosso. Instituto Politécnico do Porto.

Speklé, R. F. (2001). Explaining management control structure variety: A transaction cost economics perspective. Accounting, Organizations and Society, 26(4–5), 419–441. https://doi.org/10.1016/S0361-3682(00)00041-6

ter Bogt, H. (2018). NPM’s “ideals” about the accountability and control of outsourced activities: tough, but realizable, or a utopian dream? European Policy Analysis, 4(1), 118–145. https://doi.org/10.1002/epa2.1032

van der Meer-Kooistra, J., & Vosselman, E. G. J. (2000). Management control of interfirm transactional relationships: The case of industrial renovation and maintenance. Accounting, Organizations and Society, 25(1), 51–77. https://doi.org/10.1016/S0361-3682(99)00021-5

van Genugten, M. (2010). Comparing the impact of modes of governance. In P. Lægreid & K. Verhoest (Eds.), Governance of Public Sector Organizations Proliferation, Autonomy and Performance (1st ed., pp. 177–194). Palgrave Macmillan UK. https://doi.org/10.1057/9780230290600

Vosselman, E. G. J., & van Der Meer-Kooistra, J. (2006). Efficiency seeking behaviour in changing management control in interfirm transactional relationships: An extended transaction cost economics perspective. Journal of Accounting & Organizational Change, 2(2), 123–143. https://doi.org/10.1108/18325910610675970

Williamson, O. E. (1979). Transaction-Cost Economics: the governance of contractual relations. The Journal of Law and Economics, 22(2), 233–261. https://doi.org/10.1086/466942

Williamson, O. E. (1985). The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. The Free Press.

Williamson, O. E. (1998). Transaction cost economics: How it works; where it is headed. Economist, 146(1), 23–58. https://doi.org/10.1023/A:1003263908567

Williamson, O. E. (2012). As Instituições Econômicas do Capitalismo: firmas, mercados, relações contratuais. Pezco.

Yin, R. K. (2017). Case study research and applications: Design and methods. Sage publications.

Published

2022-12-30

How to Cite

Neves, T., & Gasparetto, V. (2022). Control Mechanisms in Service Outsourcing Relationships in the Public Sector. Journal of Accounting, Management and Governance, 25(esp), 291–307. https://doi.org/10.51341/cgg.v25iesp.2871

Issue

Section

Special Issue: Public Sector Reforms and Changes in Public Accounting

Most read articles by the same author(s)