The meaning of institutional logics for performance assessment in boards of municipal companies

Abstract

Municipal companies are hybrid organizations hosting multiple institutional logics operating at the interface between the public and private sector. We propose an analytical framework inspired by the institutional logics perspective, which can help us understand how performance assessment in municipal corporate boards develops as they navigate between the interests of the owner, the external stakeholders and the company.

Governance challenges of different institutional logics and modes of organising: a Norwegian case study of municipal water supply

“…Thornton, Ocasio, and Lounsbury (2012), building on ideas originally developed by Friedland and Alford (1991), have identified seven ideal types of institutional logics: family, community, religion, state, market, profession, and corporation. Although it is no easy task to associate these meta-categories with observable empirical types, they may serve as inspiration in trying to identify logics of public service-provision organising (Olsen, Solstad, and Torsteinsen 2017). We conceptualise the state logic as two separate but closely connected logics, politics (democracy) and bureaucracy (hierarchy), and the profession logic as engineering expertise.…”

“…However, distance may also be conceptualised as a cultural phenomenon in terms of different institutional logics (Thornton, Ocasio, and Lounsbury 2012). We expect that local politicians and municipal administrative leaders are carriers of political and bureaucratic logics (Argento, Culasso, and Truant 2016;Olsen, Solstad, and Torsteinsen 2017), while engineers of the municipal water service are embedded in a professional logic associated with the task of providing high quality water to the local community. The cultural distance exits therefore irrespective of the organisational mode, but through increasing structural-formal distance, we expect that the cultural distance between the political-bureaucratic and the professional institutional logics will be accentuated.…”

Local Public Sector Reforms in Times of Crisis

“…However, the share of municipalities practising the agency model has levelled off and lately decreased (Blåka et al, 2012). Also, most municipalities have started to merge some of their agencies into larger organisational entities (Olsen & Torsteinsen, 2012). As for municipal companies, the growth in numbers also seems to have levelled off lately (Bjørnsen et al, 2015).…”

Corporate governance and democratic accountability: local state-owned enterprises in Norway

“…However, the implications of this shift in accountability are poorly understood. While there is a long-standing debate on the transition from public administration to public management and the general implications of this shift for accountability (Painter 1988;Hughes 1992), only recently has a growing awareness of the specific accountability problems associated with SOEs been evident (Luke 2010;Bruton et al 2015;Grossi et al 2015;Olsen et al 2017). Following the pervasive "corporatisation" of the public sector in many countries, increasing attention to market signals and corporate strategy may divert attention away from the political agendas of elected principals.…”