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In control we trust!? Exploring formal control configurations for municipally owned corporations

Tobias Alexander Krause (Department of Public Management, Hochschule des Bundes für öffentliche Verwaltung, Brühl, Germany)
Martyna Daria Swiatczak (Department of Public Management and Leadership, German University for Administrative Sciences Speyer, Speyer, Germany)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 13 August 2020

Issue publication date: 2 June 2021

244

Abstract

Purpose

This study examines the interplay of formal types of control (input, behavior and outcome) exercised on municipally owned corporations (MOCs). It further investigates whether particular informal contingencies (trust and interdependence) predict affiliation to the derived municipal control configurations.

Design/methodology/approach

The paper applies an exploratory cluster analysis based on survey data from 243 top-level managers of German MOCs. It then investigates the clustered municipal control configurations using binomial logistic regression.

Findings

The exploratory analysis reveals four municipal control configurations: (1) input-dominated control, (2) outcome-dominated control, (3) mixed input/outcome control and (4) “neglect of formal control”. As expected, both of the informal contingencies demonstrate strong predictive power. More precisely, trust increases the likelihood of belonging to the dominant outcome control cluster and interdependence increases the likelihood of belonging to the mixed input/outcome control cluster. Surprisingly, the neglect of formal control cluster is characterized by low trust and low interdependence.

Originality/value

The study sheds light on the widely assumed but understudied interplay of different formal controls in hybrid governance settings. Furthermore, the analysis stresses the importance of trust and interdependence when explaining hybrid control configurations.

Keywords

Acknowledgements

We greatfully thank the two anonymous referees and the editor for their extraordinary helpful and constructive comments. Tobias would like to thank Isabella Proeller for her continuous support as a supervisor of the thesis that led to this publication.Funding: The authors have no potential conflict of interest to declare and did not receive any funding for the publication of this article. The article is based on data that was acquired at the time when Tobias worked as a research assistant at the University of Potsdam.

Citation

Krause, T.A. and Swiatczak, M.D. (2021), "In control we trust!? Exploring formal control configurations for municipally owned corporations", Journal of Public Budgeting, Accounting & Financial Management, Vol. 33 No. 3, pp. 314-342. https://doi.org/10.1108/JPBAFM-10-2019-0160

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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