Purpose – The purpose of this paper is to create knowledge about what factors explain the design of control systems for contracted public services. Design/methodology/approach – Questionnaire data analyzed with structural equation models. Findings – Legitimacy-seeking is the most important driver in explaining intensity in control of contracted public services. Competition increases the intensity of control which is opposite to standard transaction cost reasoning. Coordination requirements do not affect the design of control systems for contracted public services. Research limitations/implications – The study suffers from limitations in the form of the use of perception and questionnaire data and imposes restrictions on empirical generalization. Practical implications – Supplier competition may add control costs rather than lower them. The strong focus on stakeholder alignment may induce more intensive control than necessary for supplier alignment. Originality/value – The authors add important knowledge on the determinants of control system design for contracted public sector services. The authors conceptualize and measure the control system in use in a more compelling manner than previous research.

Purpose -The aim of this paper is to explore the links between contractual governance and performance measurement in a value network for public service business, in the context of public transport, by positing service-dominant logic (S-D logic) as an alternative paradigm to the conventional goods-dominant logic (G-D logic). The paper addresses the following research questions: how does S-D logic influence contractual governance and performance measurement? How do these influences of S-D logic on contractual governance and performance measurement affect the governance of public service businesses in a value network? Design/methodology/approach -The study adopts a qualitative approach, using case studies to undertake an analysis of the role of contractual governance and performance management in the Swedish public transport system. Findings -The paper demonstrates that the current model of contractual governance and performance measurement is focused on operand resources, and driven by G-D logic, rather than focused on operant resources, with S-D logic. The effect of this dichotomy is an effective negation of the professed desire for a customer-oriented public service system. The paper also develops and proposes a viable model of how a redefined arrangement, based on S-D logic, could be achieved. The challenge is to govern a loosely coupled value network based on values rather than rules. Another challenge is how to create more sustainable public service based on value-in-use for all stakeholders in the value network. When developing a service business based on S-D logic, it is important to invest resources in accordance with a balanced set of social, environmental and economic perspectives. The current study also contributes to the ongoing discussion of S-D logic as an open source. Originality/value -In service research, little attention has been devoted to the links between contractual governance and performance measurement. The paper proposes and develops a novel model of contractual governance and performance measurement based on S-D logic.

What is contractual governance in a scenario of performance management? When approached from a static viewpoint, contracting is largely connected with the securing of resources, thus acquiring a capacity focus. In this article, we focus on contractual governance as a part of performance management for a stakeholder network in a specific, government-controlled context: Public Transport. In order to contribute to more dynamic and sustainable public service, a more process-oriented approach to contractual governance is necessary. Public Transportation in Sweden has undergone an initial wave of development, the production paradigm, and is now undergoing what is more a second wave of service, the service paradigm. A third wave of development is approaching: sustainability. We argue that contractual governance creates a more dynamic contractual relationship as a key element of performance management leading to more sustainable public service. We also argue that a proactive approach during the mission will positively affect all the stakeholders involved.

Purpose-The purpose of this paper is to assess the applicability of care quality concepts as contract award criteria for public procurement of health and social care, using the case of Sweden. Design/methodology/approach-Based on a literature review, European and Swedish legal texts, government regulations as well as 26 Swedish court review cases concerning care procurement have been analysed. Findings-Methods used for assessing care quality are seldom useful for predicting the quality to be delivered by a potential contractor. Legal principles of transparency and equal treatment of tenderers make it necessary to apply strict requirements for verification. Research limitations/implications-Results refer primarily to a Swedish context but could be applicable throughout the EU. Further studies of relations between award criteria and public/private collaborative practices for improving care quality during contractual periods are desirable. Practical implications-Local and regional procurement officials should benefit from a better understanding of how quality criteria should be designed and applied to the award procedures for care contracts. Care providers in the private sector would also be able to develop their quality strategies and present their abilities more efficiently when tendering for public contracts. Social implications-Issues of quality of health and social care are of obvious importance for social sustainability. Public awareness of care quality problems is evident and often a cause of media concern. Originality/value-This investigation pinpoints the difference between traditional care quality thinking and the legal principles underlying contract award in public procurement of care services.

PurposeThe purpose of this paper is to investigate the significance of contracts in long‐term relationship building comparing public and private contexts. In order to investigate this, the paper addresses literature about relationship building, negotiation process and the role of contracts.Design/methodology/approachThis paper takes a qualitative approach and is based on comparative studies between the private and public sectors with the main focus on four companies within the public transport and paper industry. The unit of analysis is the enterprise's use of contracts in relationships. The analysis is based on the empirical material received from interviews and contextual analysis of the actual contracts. Internal and external documents have also been used in the analysis. The paper has categorized the material into different areas in relation to the relationship building.FindingsIn this paper the authors highlight the importance of contracts in the interaction between companies in different business situations. The findings in this study show that contracts function as cornerstones in relationship building. The conclusions also indicate that the type of contract used is depending of the uncertainty in the business relationship due to the relationship lifecycle. A main contribution from the study is that contracts affect the relationship building. In the private sector the relationship forms the contract while in the public sector the contract forms the relationships.Originality/valuePrevious research has mainly focused on how to manage long‐term relationships where the relationship is the result of a gradual development process between the parties and where there are few or next to no regulations regarding the interactions between the parties, for example who are involved or how the counterparty should be selected. Consequently, the results of this study adds to the literature the importance of contracts in long‐term relationship building comparing private and public contexts. Further, previous research has acknowledged that there is a need for more empirical research concerning the nature and form of contractual arrangements.