Demirag, Istemi (2018) A study of the operationalization of management controls in UK's Private Finance Initiative (PFI) contracts. Public Administration.

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Utilizing evidence from a United Kingdom (UK) road case study Private Finance Initiative (PFI) project, this article considers how the UK central government's infrastructure strategy is operationalized through accounting‐based performance measures and incentive systems, and articulates how the adoption of such systems is moderated by trust practices. The findings indicate that initial government policy objectives, translated as performance indicators in the case study, failed to offer adequate incentives for contractors and created tensions. However, controls were later developed through inter‐party trust practices for managing performance and relational risk. These findings have important implications for PFI policy and practice, including that negotiation can: (i) lead to pragmatic controls being introduced to foster cooperation and trust‐building; and (ii) provide opportunities for adapting the monitoring and incentive mechanisms. This study also contributes to the previous literature where PFI control systems were largely regarded as inadequate for dealing with unforeseen conflicts between parties.

Item Type: Article
Additional Information: This is the peer reviewed version of the following article: A study of the operationalization of management controls in UK's Private Finance Initiative (PFI) contracts, which has been published in final form at DOI TBC. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Uncontrolled Keywords: Private Finance Initiative (PFI); Public Private Partnerships (PPPs); Accounting; Management controls; Performance measurement; Incentives; Trust
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting. Bookkeeping
Divisions: Faculty of Humanities and Social Sciences > Keele Management School
Depositing User: Symplectic
Date Deposited: 30 Jan 2018 14:35
Last Modified: 30 Jan 2020 01:30

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