A Shift from In-house to Contracting out: A Public Management View on Delivering Services
Taponen, Suvituulia (2011)
Kuvaus
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Tiivistelmä
Several municipalities are currently contracting out their service deliveries with varying outcomes. Especially big cities, such as Helsinki and Vantaa, are looking for increased efficiency and meeting their customer´s needs better through contracting out public service deliveries. There is no simple answer to the question whether contracting out public service deliveries is the best way to organize the delivery. However it undeniably seems that contracting out offers benefits, but certain conditions have to be met in order to realize positive outcomes.
Unprofessional contract management and poorly managed competitive tendering have inflicted multiple problems on Finnish municipalities. These issues indicate that there is a lack of expertise in the municipalities to manage the competitive tendering according to the law and manage the contracted out service delivery.
Hence this study aims to offer guidelines for better public management with contracts. The specific research questions are how managing contracted out service deliveries differs from managing in-house service deliveries and how public service deliveries should be managed in order to achieve success.
This is a theoretical study, which introduces two management doctrines, public service management and public contract management. Public contract management is divided into managing the process of contracting out and managing with contracts. The theory illustrates the background of contracting out, public service management, the special characteristics of public services, the phases of the contracting out process and management with contracts.
The method of study is comparative, as managing in-house delivered public services and managing contracted out public services are compared throughout this study. The material analyzed in this study is an inclusive combination of publications form achieved scholars within the field of public management.
Managing in-house delivered public services and managing contracted out public services differ from each other in multiple public management areas. Correspondingly similarities between the management doctrines were recognized, but the differences were more significant. The major differences and similarities between the management doctrines were identified within the management areas of planning, organizing, budgeting, directing, coordinating, communicating and monitoring the service deliveries.
Public service management and public contract management require differing managerial skills as the means for achieving success in management are dissimilar. The most significant difference between public service management and public contract management are the management instruments. As a public contract manager depends on the contract, a public service manager cannot achieve success without motivated employees.
Unprofessional contract management and poorly managed competitive tendering have inflicted multiple problems on Finnish municipalities. These issues indicate that there is a lack of expertise in the municipalities to manage the competitive tendering according to the law and manage the contracted out service delivery.
Hence this study aims to offer guidelines for better public management with contracts. The specific research questions are how managing contracted out service deliveries differs from managing in-house service deliveries and how public service deliveries should be managed in order to achieve success.
This is a theoretical study, which introduces two management doctrines, public service management and public contract management. Public contract management is divided into managing the process of contracting out and managing with contracts. The theory illustrates the background of contracting out, public service management, the special characteristics of public services, the phases of the contracting out process and management with contracts.
The method of study is comparative, as managing in-house delivered public services and managing contracted out public services are compared throughout this study. The material analyzed in this study is an inclusive combination of publications form achieved scholars within the field of public management.
Managing in-house delivered public services and managing contracted out public services differ from each other in multiple public management areas. Correspondingly similarities between the management doctrines were recognized, but the differences were more significant. The major differences and similarities between the management doctrines were identified within the management areas of planning, organizing, budgeting, directing, coordinating, communicating and monitoring the service deliveries.
Public service management and public contract management require differing managerial skills as the means for achieving success in management are dissimilar. The most significant difference between public service management and public contract management are the management instruments. As a public contract manager depends on the contract, a public service manager cannot achieve success without motivated employees.