Outsourcing of public services and implications for managerial knowledge and careers

Abstract

Purpose

This paper aims to explore the role of managers in managing the inter‐organisational relationship. It investigates how the nature of work and career prospects may have changed for managers in both the public and the private sector under the public/private outsourcing relationships.

Design/methodology/approach

Two case studies were carried out on the outsourcing of public services: PFI of a hospital and the outsourcing of housing benefits administration.

Findings

The most important task performed by managers with this boundary‐spanning role appears to be to enforce and achieve performance targets set out for the service provider firms which are then cascaded down to individual workers. However, these managers are subject to corporate surveillance themselves in the form of tightening targets and constant performance assessments, often through the intervention of the client organisations, and may experience even less job security.

Research limitations/implications

In view of the significantly increased level of interdependence between the organisations in the outsourcing relationships and the managers who are managing the relationships, the multiple facets of this principle‐agency relationship need to be further explored beyond the traditional organisational boundary as the framework for analysis.

Practical implications

Management knowledge is often context‐specific and cannot be readily codified. As such the knowledge of the managerial workers remains part of the competitive advantages of the organisation. How to acquire, retain and develop this body of knowledge is an essential part of the organisation and management development strategy of the organisation.

Originality/value

This paper provides insights into the (changing) role of the managerial workers in managing the public‐private outsourcing relationships.

Citation

Lee Cooke, F. (2006), "Outsourcing of public services and implications for managerial knowledge and careers", Journal of Management Development, Vol. 25 No. 3, pp. 269-284. https://doi.org/10.1108/02621710610648187