Tighter contracts or more trust? Outsourcing in Finnish water utilities
Research output: Contribution to journal › Article › Scientific › peer-review
|Number of pages||19|
|Journal||Public Works Management and Policy|
|Publication status||Published - 2015|
|Publication type||A1 Journal article-refereed|
This article discusses the outsourcing of water utility operations and the prerequisites for successful partnerships between water utilities and external service providers. A questionnaire survey in Finland indicated that the outsourcing of various water utility operations will increase in the future. This trend includes great opportunities to utilize the best features of external service providers and efficiently develop the water services sector. However, the outsourcing also includes risks because there is a lack of trust between water utilities and private companies. Therefore, “hard,” rigid contracts are preferred to reduce the uncertainty in outsourcing such undertakings. In uncertain conditions, this approach may not be an effective and fruitful development path in the long term. If relationships are more trust based, uncertainty can actually strengthen these relationships. Thus, more attention should be paid to building trust instead of intensively attempting to reduce uncertainty.