Systemic risk in public sector outsourcing contracts

Bloomfield, Katherine

Abstract

The research presented in this thesis responds to a call towards the expansion of current perceptions of risk in complex organisational settings. Observing the literature, it becomes apparent that risk in projects is frequently treated as independent, thereby disregarding the interrelatedness or ‘systemicity’ of these risks, and/or any other causal dynamics. The systemicity of risk is therefore of fundamental importance to this research, particularly in terms of its definition which is sparsely covered within the literature, making it a suitable first research question. In addition to this, where a project represents an undertaking that has commissioned for by a permanent organisation, and is to be delivered by a temporary organisation, the verdict as to whether or not the commissioned project is deemed as being successful is heavily dependent upon the project’s ability to protect against unwanted risk. At the forefront of the commissioned project is the contractual relationship that has been established between the buyer and seller, which sets out the obligations of the contracting parties. Since the contract governs the legality and functionality of the project, it must therefore be designed to balance and mitigate risk effectively.

To improve knowledge and awareness of the risk dynamics encased within a project’s legal documentation, multiple methods of analysis have been incorporated within the research design in order to extract meaningful data from a sample of MOD case studies, each of which comprise of a set of framework contracts, project documentation and interviews. In doing so, the thesis identifies the extent to which public sector organisations like the MOD account for systemic risk in their contracting procedures and reveals the shortcomings in the design and implementation of these fundamental legal agreements. Whilst the core methods introduced within this thesis represent well-established and justifiable qualitative methods (such as hermeneutics), the research provides a novel methods contribution through the development of a visual mapping tool. Throughout the research process, the visual tool has demonstrated its capacity to equip the contract writer with greater insight into the dynamic characteristics of risk that are inherent within a contract. Triangulating the data that was extracted using multiple methods, a set of key findings were deduced which reveals the current flaws that originate in the front-end phase of the project, the structural design choices made when constructing (or implementing) the formal contract and the unrealistic relational expectations that underpin the contractual agreement. As a result, it is believed that the research has contributed new knowledge to both the academic and practitioner realms, yet recognises that there is scope for further research to be undertaken. It is envisaged that such future research would benefit from further piloting, expanding the application of the research methodology towards other complex organisations within the public sector, whilst testing the robustness of the newly developed risk mapping tool.

Citation

Bloomfield, K. (2018). Systemic risk in public sector outsourcing contracts. (Thesis). University of Hull. Retrieved from https://hull-repository.worktribe.com/output/4221366

• Thesis Type: Thesis
• Deposit Date: Mar 22, 2019
• Publicly Available Date: Feb 23, 2023
• Keywords: Business
• Public URL: https://hull-repository.worktribe.com/output/4221366
• Additional Information: Business School, The University of Hull
• Award Date: Oct 1, 2018