Hybrid Governance Structures Research Articles

Institutional logics and organisational hybridity: English housing associations’ diversification into the private rented sector

State withdrawal combined with challenges in raising private finance has led not-for-profit housing organisations in a range of countries to diversify into commercial activities as means to generate additional income streams and cross subsidise their core social operations. Within England, an increasing number of housing associations (HAs) has looked for new forms of investment, notably from private rental housing, to generate additional cash flows and fill gaps in the housing market. Drawing on the concepts of institutional logics and organisational hybridity, the paper uses organisational archetypes to examine the different hybrid financing, governance structures and housing products that two pioneering London-based HAs have employed to undertake private rental activities alongside their social businesses. The paper argues that the trends identified are indicative of wider institutional change, with not-for-profit housing organisations facing difficult strategic choices about how to fund their core business in a world of lower public subsidy and uncertainty over future sources of private finance.

Public procurement for school breakfasts in the Bolivian Altiplan: Governance structures enabling smallholder inclusion

Public food procurement offers the prospect for an alternative development path toward market inclusion, upgraded skills, and raised income for smallholder farmers. In Bolivia, the current public administration favors smallholder participation by regulating a preference of up to 40% for smallholders and local producers as opposed to other types of suppliers. However, smallholders' provision to local public institutions remains limited. To analyze the reasons for this, three municipalities with different approaches to smallholder procurement were investigated in a multiple-case study. Using transaction cost theory, our findings show that high transaction costs and pure market coordination act as strong barriers to smallholders' active participation. We found that hybrid governance structures, based on different types of relationship-oriented coordination and market exchange enable the inclusion of smallholders via: a) direct and active support from decision-makers, b) gate openers at the municipalities, and c) community embeddedness that supports trust-building and reduces uncertainty. Thus, our study contributes to opening up the ‘black box’ of hybrids in transaction cost theory by illustrating how social capital influences the mechanisms through which resources are distributed – a dimension inadequately considered in the traditional transaction cost theory approach.

The administrative subcontract: Significance, relevance and implications for intergovernmental relations in China

This article attempts to demonstrate the significance, relevance and implications of the ‘administrative subcontract’ as an analytical framework for understanding China’s intergovernmental relations, bureaucratic incentives and administrative governance. As an ideal type, the term ‘administrative subcontract’ refers to a subcontracting relationship inside the government system, representing a hybrid governance structure between bureaucracy in the Weberian sense and a ‘pure’ subcontract which occurs among independent entities having no hierarchical relationships. An administrative subcontract exhibits a coherent and consistent set of characteristics along the dimensions of authority relations, economic incentives and internal control. It is argued that these three dimensions are complementary and mutually supportive, and tend to move together if the system encounters systemic shocks. This new framework helps with identifying the key and durable features of China’s intergovernmental relations and administrative governance. The notion of the administrative subcontract enables many puzzling observations and patterns regarding the workings of China’s government system to be reinterpreted and some important and as yet long understudied issues brought to our attention. The theory of the administrative subcontract is combined with that of ‘political tournaments’ to extend the analysis of China’s political incentives and governance. With regard to vertical subcontracting and horizontal (political) competition inside the government system, an attempt is made to explain the strength and weakness of China’s state capacity in various areas of public service.

The Paris Agreement and Global Climate Governance: China’s Role and Contribution

The United Nations Climate Change Conference held in Paris in late 2015 is regarded as a milestone in the progress of global climate governance. Adopting the approach of “Intended Nationally Determined Contributions (INDCs) plus Periodic Review”, the Paris Climate Agreement reached at the conference has rejuvenated the multilateral negotiation process and established a hybrid governance structure as the basic framework of the post-2020 climate regime. The Agreement also sends a clear and strong signal regarding the sustainable transformation of the world economy. Through low-carbon economic transformation and international climate diplomacy, China played a leadership role in achieving the Paris Agreement, which ushered in a new era for the international community to combat climate change. The future of global climate governance will depend on the follow-up measures of all contracting parties, and China should continue to show climate leadership in the post-Paris era.

Organizing a Venture Factory: Company Builder Incubators and the Case of Rocket Internet

We study the phenomenon of “company builders” – a recent type of business incubators that create new ventures in a factory-like manner, i.e., with a focus on efficiency and scale, and by using standardized processes and shared resources. To characterize this novel organizational form and delineate it from existing incubator models, we conceptualize incubator organizations as hybrid governance structures along key dimensions of the market-hierarchy spectrum. We contextualize and extend our conceptual arguments through an in-depth study of Rocket Internet, the incubator that pioneered an extreme company builder strategy by replicating successful Internet business models. We argue that while traditional incubators lean toward the market end of the market-hierarchy spectrum, company builders are truly hybrid organizational forms in that new ventures are assembled and scaled up in a centrally-coordinated manner. Referring to cooperation and coordination as basic organizational challenges, we discuss the stability, advantages, and pitfalls of the company builder model, as well as its applicability to other domains. Our findings make contributions to work on organizing venturing processes, novel organizational forms, and business model replication.

Explaining hybrid “personalities” in smallholder sugar cane sourcing

Purpose – The purpose of this paper is to analyse the extent to which transaction cost theory on hybrid governance structures can explain hybrid personalities observed in the South African sugar industry. Design/methodology/approach – Three governance structures used simultaneously by the same company to purchase sugar cane from small-scale growers are described in detail. One of these structures is close to a market arrangement, the other two are hybrids. The discriminating alignment hypothesis and more recent work on hybrid models are used to explain the factors driving the choice for a hybrid arrangement and determining their specific form. Factors not covered by theory are identified. Findings – At least two areas would need to be included to explain the specific form taken by the studied governance structures: production characteristics and financial constraints of the transacting parties. Furthermore, the importance of national and local regulations in affecting organizational form by determining wh...

English

This paper aims to identify both the level and the reasons of the decreasing loyalty in the transactions between tobacco growers and tobacco processors in Brazil. The theoretical approach relies on Transaction Cost Economics. Semi-structured interviews were held with growers and companies’ directors, and a structured questionnaire was used to obtain data from a sample of 381 tobacco growers in Brazil. Indicators of loyalty were created and analyzed. Based on the Euclidean distance, an original method to measure the level of loyalty is provided. It was found that 55% of growers were yet loyal. The number of non-loyal growers was increasing due to increasing competition among processors. Processors´ procurement strategies disturbed the traditional hybrid governance structure, which was based on loyalty, introducing uncertainty, higher costs and unknown consequences to competitiveness. The article brings empirical evidence on how sector competitiveness can be threatened by competition for suppliers. There are lessons for business managers and for anti-trust authorities.   Key words: Tobacco, buyer-supplier relations, coordination, contracts, competitiveness, Brazil.

The Institutional Challenges of Payment for Ecosystem Service Program in China: A Review of the Effectiveness and Implementation of Sloping Land Conversion Program

This study is an overview of the effectiveness and institutional challenges of China’s Sloping Land Conversion Program (SLCP). The SLCP is the Chinese government’s largest Payment for Ecosystem Services (PES) program and one of the largest PES programs in the world. From an institutional perspective, the SLCP is particularly interesting because it represents a hybrid governance type that includes both voluntary and hierarchical (top-down) elements rather than traditional command-and-control approach. Our analysis is based on a literature review that encompasses 164 international scientific articles. To identify institutional challenges, we linked the results regarding the effectiveness of the program to its institutional aspects. Our SLCP case study highlights the dependence of the effectiveness of a governmental PES program on the specific regulatory institutional setting and the particular actors involved. Our results show that some institutional challenges undermine the anticipated advantages of PES (local participation) and eventually reshape the program outcomes through implementation process, particularly in cases of hybrid governance structures in which institutional requirements are as important as the design of the specific financial incentives. The collaboration between relevant government actors at different hierarchical levels, and specifically the motivations and interests of the government actors responsible for the implementation on the ground, play crucial roles. The SLCP can be an important milestone in environmental policy in China and the world, if more innovative elements of a theoretically ideal PES—such as local flexibility and self-interest (or at least the acceptance of the service providers supplying the relevant ecosystem services) can be strengthened. The environmental goals can be achieved in combination with greater self-interest of the applicable government actors on all hierarchical levels.

Shifting Structure of One National Disaster Management Network in the Caribbean

This research investigates a cross-sector national disaster management network in the Caribbean. It seeks to provide a better understanding of the evolution of a network structure and how that structure affects operations and member relations. Data collected for this case study from interviews with network participants reveal that the network constitutes a dynamic system that shifts its structure based to some extent on the disaster management cycle. The findings indicate that the network is most productive when it employs a hybrid governance structure in the preparedness and response stages and is least productive when it assumes a lead organization-governed form during the recovery and mitigation stages.

Connecting Mediterranean countries through electricity corridors: New Institutional Economic and regulatory analysis

A super grid connecting the two shores of the Mediterranean could help Europe meet its targets for integrating renewable energy. This paper assesses the business models for building a platform for wholesale renewable energy trade via electricity corridors linking the two regions of the Mediterranean basin. We demonstrate that the optimal framework for designing the corridor project is a long-term contractual agreement to coordinate bilaterally the necessary investments. Furthermore a hybrid governance structure requiring only limited regulatory adaptation seems to be the most efficient structure for facilitating investment in the corridor's infrastructure.

Managing Network Based Governance Structures in Disasters: The Case of the Passau Flood in 2013

AbstractOver the past decades, an increasing number of environmental situations posed threats to humans and assets. Natural disasters happen more frequently and with higher intensity – such as floods caused by heavy rains. One example was the flood that hit in the middle of Europe in 2013. This article reports a single case study of the flood in the German city of Passau in 2013. In the case study we analyze the governance structure employed throughout the flooding as well as how it was managed. Beyond this, we examine how information and communication technology supported the management staff in fulfilling their tasks. Data were collected through semi-structured qualitative interviews with members of the management staff from the main organizations involved in the relief work for the Passau Flood in 2013. Our results show that a hybrid governance structure was employed. All in all, the disaster could be averted, but we identified several challenges and areas for improvement, which could be helpful for managing future disasters successfully.

Capabilities for living with paradox in hybrids: the case of innovation in public service spin-out

Processes of change and innovation within organisations have long been recognised as involving tensions between competing interests and cultural logics. This paper contributes to the understanding of such dynamics by focusing on how newly emergent public service spin outs operating with hybrid governance structures, have capabilities that allow them to operate at the interstices between the public, private and non profit sectors. Case study evidence from recent UK public sector spin-out organisations is used to explore how leaders, staff and other stakeholders make sense of and respond to the challenges and tensions involved. Although such tensions can be found in many different organisations, the hybrid nature of social enterprises means that paradoxes and multiple tensions are confronted more explicitly than elsewhere. Three paradoxical tensions are examined in detail: creativity versus resistance to change, democratic versus hierarchical decision making, social mission versus commercial objectives. The...

The Land Conversion in the Urbanization Process of China and Ecosystem Service Value

The paper studies the changes of welfare and ecosystem service value (ESV) in urbanization process under the fact that the land is a kind of ecological capital. We develop a model to analyze the impact of the current hybrid governance structure on the welfare changes for different groups of actors and calculate the ESV changes caused by the urbanization in the Hang-Jia-Hu region (China) between 1994 and 2003. The results show that the farmers’ welfare and the net social welfare will be changed comparing to the results of Rong TAN, Futian QU (2011) and the ESV decreases; the declines of ESV can reach up to 3% of the GDP in the study region.

Qualidade e segurança de vegetais minimamente processados: proposta de estruturas de governança entre os agentes da cadeia e os sinais da qualidade

A adequada gestão da qualidade e da segurança dos alimentos é essencial para o alcance de vantagens competitivas para as empresas de processamento mínimo de vegetais. Para essa gestão, são necessários controles preventivos, específicos e sistemáticos durante as etapas de produção dos alimentos para que os produtos atinjam os atributos desejados de qualidade. A cadeia de vegetais minimamente processados (VMP) é composta de produtores rurais, empresa processadora, transportadores de produtos finais e empresas varejistas e mercado institucional. Nesta cadeia, as transações entre seus agentes, apesar da alta frequência, são caracterizadas por grande assimetria de informações e diferenças nas especificidades dos ativos destes agentes, promovendo a possibilidade de ações oportunistas entre eles, principalmente nas relações entre produtores rurais e empresa processadora. Isto gera impactos negativos para a qualidade e a segurança do produto final e, como consequência, pode promover a seleção adversa pelo mercado consumidor e risco moral para as empresas processadoras. O objetivo deste trabalho foi definir e propor as estruturas de governança, entre os agentes desta cadeia, que minimizem os impactos negativos para a qualidade e segurança dos VMP, a partir da análise das especificidades do ativo entre estes agentes e dos atributos das transações. Adotou-se como método de pesquisa o estudo de casos múltiplos compreendendo 18 unidades de análise em duas cadeias de VMP localizadas nos estados de São Paulo e do Rio de Janeiro. Verificou-se que a empresa processadora lidera as transações entre os agentes em função da alta especificidade do seu ativo, em detrimento dos demais agentes. Propõem-se as estruturas de governança híbrida e hierárquica entre esses agentes, cujas formas de contratação dependem do agente e do tipo de matéria-prima transacionado.

Firm valuation effects of the decision to adopt relationally governed business process outsourcing arrangements

Business process outsourcing (BPO) has recently grown in incidence and importance. However, academic research on this phenomenon is sparse. Further, studies on outsourcing have primarily used a transaction cost economics (TCE) lens, largely neglecting other key theoretical explanations of the outsourcing decision and performance. While TCE provides a useful framework, it underemphasises hybrid governance structures that reflect relationships that fall between markets and hierarchies. We examine the decision to adopt relationally governed BPO arrangements and the impact on firm value. We recognise ‘discriminatory alignment’ aspects of governance and argue that the nature of the process itself will influence the value that can be garnered through relational governance. Using secondary data on 298 BPO announcements, we test the proposed model and confirm that a higher level of relational governance adoption strongly enhances firm valuation. This positive valuation impact of relational governance adoption reaches an even higher level in situations of primary processes and processes that have had a presence in the outsourcing organisation. The results emphasise the importance of considering all processes for outsourcing, the critical consideration of relational governance and the importance of planning governance structures that are aligned with the nature and experience with the process being outsourced.

Stormwater Governance and Future Cities

Urban stormwater infrastructure traditionally promoted conveyance. Cities are increasingly designing stormwater infrastructure that integrates both conveyance and infiltration in hybrid systems to achieve public health, safety, environmental, and social goals. In addition, cities face decisions about distribution of responsibilities for stormwater management and maintenance between institutions and landowners. Hybrid governance structures combine centralized and distributed management to facilitate planning, operations, funding, and maintenance. Effective governance in any management approach will require changes in the expertise of stormwater agencies. Recognizing the distinction between hybrid infrastructure and hybrid governance is important in long-term planning decisions for construction and management of stormwater systems. A framework is presented that relates the level and type of existing stormwater infrastructure with available capital, institutional development, and predominant citizen contributions. Cities with extensive existing infrastructure are increasingly integrating distributed, “green” approaches that promote infiltration, and must improve institutional expertise for governance decisions. For cities with little existing infrastructure, landowner management often dominates, especially when municipalities cannot keep pace with rapid growth. In between, rapidly industrializing cities are positioned to use growing capital resources to fund both conveyance and infiltration measures based on current design principles. For all cities, local management innovations, including decisions regarding public engagement, will be critical in shaping future urban stormwater systems.

Hybrid governance in an adult program: A nuanced relationship

AbstractEastern Mennonite University's adult program uses a hybrid governance structure. Functions separated from the traditional program include marketing, admissions, and student advising. Functions that remain connected to the traditional program include the registrar, financial aid, and student business accounts.

Access, Veto, and Ownership in the Theory of the Firm

Ownership may not always be the best driver for investment incentives in an incomplete contract context. This paper shows that ownership has two facets (access and veto) which can be used specifically, and sometimes independently, to foster investment. Access is more efficient than ownership when assets are complements at the margin, and veto is sometimes more efficient when assets are substitutes at the margin. In pa rticular, outside veto is more efficient than ownership because it reduces the incentive to invest on substitute assets. And joint veto is more efficient than ownership because it protects the incentives of highly productive agents while preventing them to merge the a sset with substi tute assets. We discuss several implications, in particular the existence of shareholders and non-owner workers, the optimality of outside ownership, joint ownership and partnerships, hybrid governance structures, employments contracts and capital structure (debt vs equity).

Organising the digital commons: a case study on engagement strategies in open source

In this paper we develop a conceptual framework for understanding the co-evolution of a virtual community and a hybrid governance regime. The research site is the Eclipse software development community led by IBM and based on data collected from activities of community members, we examine the attempts of participants to construct and refine a hybrid governance structure while developing and expanding the community. Drawing on strategy-as-practice approach and institutional theory, we bring arguments at two instances of this co-evolution process: the initiation and enactment. For the initiation of the community we argue that, beyond market-driven considerations, tensions and polarisation in the existing proprietary regimes, governance structures, and philosophies promote new practices. For the establishment process we emphasise the role of member-driven horizontal and vertical structural adjustments, and the maintenance of open-source developer spirit.

Rural to urban land conversion in China — How large is the over-conversion and what are its welfare implications?

The current system of converting farmland to urban land use in China can be characterized as a hybrid system that combines government controls with market-based transfers. In this paper we argue that this hybrid governance structure causes an over-conversion of farmland from the rural to the urban sector, as compared to a competitive market situation, and a welfare reallocation that discriminates against farmland owners. We develop a partial equilibrium model that can be used to examine the impact of the current hybrid governance structure on the over-conversion of farmland and to analyze the welfare changes for different groups of actors and the resulting net social welfare loss. Using a dataset with detailed information on farmland acquisitions and urban land transactions in Yingtan City in Jiangxi Province, we illustrate how this framework can be applied. Our results indicate an over-conversion of 33.5% of the total converted farmland in this city between 1999 and 2003. The welfare of farmland owners affected by the conversion decreased by 1.38 billion RMB, while the net social welfare loss equaled more than 270 million RMB during the same period. The local government obtained 380 million RMB of revenues by re-selling farmland as urban land through competitive conveyance mechanisms between 2002 and 2005, while the manufacturing sector gained an estimated 280 million RMB from buying land use rights at relatively low prices. We conclude that the current policy of increasing urban land conveyance through competitive mechanisms does not address two major underlying causes of over-conversion, and that protection of farmland would be better served by replacing the current hybrid rural to urban land market structure by a competitive land market. ► The current system of converting farmland to urban land use in China combines government controls with market-based transfers. ► We present a partial equilibrium framework that can be used to examine the degree of over-conversion of farmland and its welfare implications. ► Over-conversion of farmland in Yingtan City, Jiangxi between 1999 and 2003 amounted to 33.5 % of the total converted farmland. ► The estimated welfare loss of farmland owners in Yingtan City equaled 1.38 billion RMB, and the estimated net social welfare loss amounted more than 270 million RMB. ► The current policy of increasing urban land conveyance through competitive mechanisms does not address major underlying causes of over-conversion.