Decision-making approaches to contracting out

Abstract

This article compares and contrasts two classical decision-making approaches used in outsourcing specific public services. We perform content analysis of semi-structured interviews with public managers who are engaged in contracting for different public services, and find that incremental or small step-by-step decision-making is more likely to be observed in the outsourcing of “soft” or human services. Rational decision-making on the hand is more likely for “hard” services including janitorial services, public works, bridge design, street striping, parks maintenance, strategic planning, refrigeration experts, and food services. Our findings also indicate that some services can be outsourced using both decision-making approaches in certain cases. Using comparative analysis, we identify three factors associated with incremental decision-making across the organizations in our sample. All organizations that outsourced services using incremental models of decision-making had a for-profit business partner, experienced managers, and exhibited desire for cooperation and coordination.

Public managers’ valuation of secondary policy objectives in public procurement – results from a discrete choice experiment

“…Yet, we argue that it probably mirrors real-life behavior where public managers, responsible for the environment, might be more likely to promote green initiatives. As public managers' preferences or decision-making approach might vary under different type of public services (Kolpakov & Anguelov, 2020), it is essential for further research to analyze public managers' stated preferences when contracts are awarded in different service areas.…”

“…Decision-makers who have to choose, on behalf of their institutions, between competing service providers make use of a decision rule to process the information they have at their disposal. Although the literature has paid limited attention to this phenomenon (Kolpakov & Anguelov, 2020), several studies have examined decision-makers' attitudes towards secondary policy objectives.…”

“…They consequently posit that decision-makers can be identified as satisficers who intend to opt for a satisfying option instead of the solution that will maximize the utility of their institutions. Yet, Kolpakov and Anguelov (2020) observed that incremental decision-making was more likely to take place in social services while rational decision-making was more likely to happen in technical services.…”

Research Movements and Theorizing Dynamics in Management and Organization Studies

“…Similarly, Weber's discussion of contract as a basis of organization structure was interpreted strictly in terms of contracts of employment as the measure of organization size. By the turn of the century, after the widespread development of contracting out (Kolpakov & Anguelov 2020) and supply chains (Vonderembse, Uppal, Huang, & Dismukes 2006), the notion of contract would likely have been rethought to include forms other those of individual employment.…”

Partners or Providers? An Analysis of Nonprofit Federal Contractor Performance

“…Assessing contractor performance is difficult, as publicly available data are limited worldwide due to legal restrictions, nontransparent procurement processes, and decentralized purchasing programs (Ferwerda et al, 2017;Garvin et al, 2011). There have also been a range of approaches used to assess contractor performance, including the organizational effects of contracting (Boyne, 1998;Kettl, 2015;Shi & Cheng, 2021), elements of contractor management and oversight (Girth, 2014;Kolpakov & Anguelov, 2018), relative output efficiency (largely measured through costs; Savas, 1977Savas, , 2002, and, more recently, the attainment of goals and objectives (Amirkhanyan, 2011;Petersen et al, 2018;Reis & Cabral, 2015). As a result, it is important to clearly define performance for this study.…”