Governance challenges of different institutional logics and modes of organizing: A Norwegian case study of municipal water supply

In this paper, we explore and compare governance challenges of three modes of organizing water supply in Norwegian local government. The three modes of delivery are the integrated in-house provision type, the externalized... [ view full abstract ]

In this paper, we explore and compare governance challenges of three modes of organizing water supply in Norwegian local government. The three modes of delivery are the integrated in-house provision type, the externalized inter-municipal company and finally a borderline form, the in-house, but relatively autonomous municipal firm. We expect that due to its technical complexity and the specialized competence of its personnel, water supply is a service that enjoys considerable operational autonomy irrespective of organizational mode. This normally implies little intervention in daily operations from political and administrative municipal leaders and limited interest among local politicians for the service. In addition, we expect that the level of insight, interest and intervention will decline even further as the service is placed at arm’s length from the immediate governance control of the municipal CEO and the local council.

Our basic idea is that increasing distance between principal (the political-administrative power centre of the municipality) and agent (the service provider) conceptualized as agentification (Torsteinsen & Van Genugten 2016), will weaken the principal’s control with the agent. However, distance may also be operationalized in a less formal way as cultural distance between different institutional logics (Thornton et al. 2012). We expect that the municipal CEO and his or her staff are carriers of a bureaucratic logic (Olsen et al. 2017) characterized by administrative-economic rules, frames and procedures, while the engineers and personnel of the municipal water service are embedded in an institutional logic of the technology of providing high quality water to the local community. The cultural distance is there irrespective of organizational mode, but through increasing formal distance (agentification), we expect that the distance between the two institutional logics will be accentuated.

Our research question is; will agentification of a municipal service increase governance challenges in a situation where the principal and the agent are carriers of different institutional logics?

We use data from three case studies, municipality A with integrated in-house provision, municipality B with the borderline organizational form, and municipality C which is co-owner of an inter-municipal company.