Managing information asymmetry in public-private relationships undergoing a digital transformation : The role of contractual and relational governance

Aben, Tom and van der Valk, Wendy and Roehrich, Jens and Selviaridis, Kostas (2021) Managing information asymmetry in public-private relationships undergoing a digital transformation : The role of contractual and relational governance. International Journal of Operations and Production Management, 41 (7). pp. 1145-1191. ISSN 0144-3577

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Purpose Inter-organisational governance is an important enabler for information processing, particularly in relationships undergoing digital transformation (DT) where partners depend on each other for information in decision-making. Based on information processing theory (IPT), the authors theoretically and empirically investigate how governance mechanisms address information asymmetry (uncertainty and equivocality) arising in capturing, sharing and interpreting information generated by digital technologies. Design/methodology/approach IPT is applied to four cases of public–private relationships in the Dutch infrastructure sector that aim to enhance the quantity and quality of information-based decision-making by implementing digital technologies. The investigated relationships are characterised by differing degrees and types of information uncertainty and equivocality. The authors build on rich data sets including archival data, observations, contract documents and interviews. Findings Addressing information uncertainty requires invoking contractual control and coordination. Contract clauses should be precise and incentive schemes functional in terms of information requirements. Information equivocality is best addressed by using relational governance. Identifying information requirements and reducing information uncertainty are a prerequisite for the transformation activities that organisations perform to reduce information equivocality. Practical implications The study offers insights into the roles of both governance mechanisms in managing information asymmetry in public–private relationships. The study uncovers key activities for gathering, sharing and transforming information when using digital technologies. Originality/value This study draws on IPT to study public–private relationships undergoing DT. The study links contractual control and coordination as well as relational governance mechanisms to information-processing activities that organisations deploy to reduce information uncertainty and equivocality.

Item Type:
Journal Article
Journal or Publication Title:
International Journal of Operations and Production Management
Uncontrolled Keywords:
?? digital transformationinformation asymmetrycontractual governancerelational governancepublic-private relationshipsinformation processing theorystrategy and managementdecision sciences(all)management of technology and innovation ??
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Deposited By:
Deposited On:
08 Jun 2021 15:35
Last Modified:
08 Jan 2024 00:21