Governance of dependency relationships in mandated networks

Abstract

ABSTRACT Mandated service delivery networks have become common in both developing and developed worlds; however, our understanding of what makes these arrangements work is still limited. In this study, we draw upon existing business literature, specifically focusing on dependency relationships and resulting opportunism within mandated networks, a critical but often overlooked aspect. Further, within mandated networks characterised by limited autonomy and trust, ways in which network members navigate dependency relationships remain unexplored. We conduct a comparative case analysis, examining network arrangements within India’s National Health Insurance Programme. Based on our findings, we propose that the nature of interdependence among network members and the resultant dependency relationships impact the conduct of network members and, thereby, network performance. If the dependency relationships are not governed effectively, conflict bargaining and opportunistic behaviours get manifested. Contrary to expectation, network performance tends to be higher in jurisdictions where dependency relationships are effectively governed through hierarchical authority. These findings hold significant relevance; as mandated networks are created under the shadow of hierarchy but governed through clan or trust-based mechanisms.