Understanding Risk in the Theory of Collaborative Advantage

Collaborative service delivery is assumed to create value in public services, otherwise there is little sense in engaging in such a resource intensive task. However, it is relatively easy to destroy value, by not appropriately... [ view full abstract ]

Collaborative service delivery is assumed to create value in public services, otherwise there is little sense in engaging in such a resource intensive task. However, it is relatively easy to destroy value, by not appropriately governing relevant risks in a collaboration. Trust is a critical part in the collaborative risk governance process. The Theory of Collaborative Advantage (TCA, Huxham & Vangen, 2005) suggests that as trust develops it becomes a way of dealing with risk. Risk management implies that certain aspects of the collaboration are discussed and negotiated from the start of the collaboration, including aims and expectations of partners (Vangen & Huxham, 2003a), and it would be beneficial for partners to discuss issues, challenges and concerns prior to starting a collaboration, though in reality these seem difficult to achieve (Bailey et al., 2011; CIPFA, 2010; Dickinson & Glasby, 2010; Fone & Young, 2005; Hallikas et al., 2004; McQuaid, 2009; Vangen, 1998). If there are tensions in terms of trust, it is likely that risk management also fails. The TCA so far has noted risk as a theme that can create tension and inertia in collaborations, and highlighted it as an issue that needs to be managed (Huxham & Vangen, 2005). Literature on risk in the TCA has not advanced beyond these propositions. This conceptual paper considers the risk theme further, and discusses the limitations of the theory, aiming to advance the TCA in terms of improving the understanding of risk in collaboration. As a theory, the TCA is not one that can be tested, as it does not provide any specific hypothesis in relation to collaborations: it simply focuses on issues that often cause concern and tensions. However, by combining other relevant risk literature a tentative hypothesis (or proposition) is offered in relation to the contradiction involving risk and trust. The risk-trust paradox suggests that risk is higher in more integrated partnerships (e.g. because your partners’ risks become your risks) compared to less integrated collaborations, yet the level of trust should facilitate proper governance of risk, therefore reducing risk in more integrated partnerships. The situation is reversed in less integrated collaborations, such as contractual relationships, where risk is lower, but as trust is also low, opportunity to properly govern risk is reduced, increasing the overall level of risk. Furthermore, a modification is proposed to the TCA, integrating risk into the wider conceptualisation, rather than as a theme of its own. It is argued that risk permeates all aspects of the TCA, as risk can lead to a positive outcome (collaborative advantage), or a negative outcome (collaborative inertia). In other words, it is proposed that risk is linked explicitly to the broader discussion of the tensions leading to potential advantage, which should result in value creation, or inertia, which may result in value destruction.