Clarifying Terms

Three terms are important to this discussion: collaboration, governance, and external environment.

We assert that collaboration occurs in the midrange of a continuum for how organizations work on public problems (Crosby & Bryson, 2005). (See figure 3.1.) At one end are organizations that hardly relate to each other, and at the other are organizations merged into a new entity. In the middle, toward the formal end of network configurations, are collaborations: entities that link or share information, resources, activities, and capabilities to achieve jointly what could not be achieved by organizations separately. In particular, we focus here on cross-sector collaborations: those involving government, business, nonprofits, and community groups. We see collaborations as formal networks joined by strong ties, in contrast with informal networks consisting mainly of weak ties (e.g., a group of public managers, elected officials, nonprofit leaders, and for-profit developers who cooperate to pass affordable housing legislation but have no formal working arrangements with each other). Collaborations are given a variety of labels (e.g., consortium, alliance) and may be categorized by their governance structures (lead agency, network administrative agency, participant-governed, or hybrid).

We use collaborations interchangeably with partnerships because of the prevalence of that term in the literature. However, we make an important distinction between collaborations and public-private partnerships (PPPs). Public-private partnership has become a catch-all term for referring to government's relying on businesses or nonprofits to deliver public services, build infrastructure, or improve government functioning (Goldsmith & Eggers, 2004; Hodge & Greve, 2007; Van Gestal et al., 2012). They have acquired an aura of international “best practice,” which becomes a factor in some countries' pursuit of such arrangements (Mouraviev, 2012). Nevertheless, in order to distinguish PPPs from collaborations in the sense we are using the term, we see them as a particular type of cross-sector collaboration—those based on formal, contractual relationships between two or more entities (Zhao, 2011). Often they are a means for government to share risks with partners and tie funding to performance.

Governance is a critical issue yet remains ambiguous (Hughes, 2010), in part because it is used at different levels of analysis, including the governance of single organizations, interorganizational networks or collaborations, and whole societies or communities (Kooiman, 2010). Across these levels are central characteristics of governance that include making collective decisions about the purpose of collective action and other vital issues, designing strategies for achieving purpose, and providing oversight and accountability mechanisms (Cornforth, 2004). The focus of this chapter is on governance by and of interorganizational networks or collaborations.

In line with Daft (2001), we treat the external environment as “all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization” (p. 53). Because we are focusing on collaborations that cross and often blur organizational boundaries, the environment potentially encompasses greater diversity and complexity of external elements than may be faced by a single organization. A useful analytical approach to such diversity and complexity is to examine two aspects of the environment (Scott & Davis, 2007). The first is the systemic forces that constitute what we call the macroenvironment. For collaborations, this environment may include broad economic, political, or policy trends and resides largely outside the control of the partnership and its members. The second aspect of the environment is more proximate, that is, the environment as directly experienced by, in this case, the cross-sector collaboration. This proximate environment may in turn be influenced by the collaboration.

The Environment and Its Effects on Collaborations

Work on interorganizational relationships has directly linked certain environmental conditions to the necessity for single organizations to join with others. Emery and Trist (1965) argued that increased environmental complexity necessitated linkages among organizations to decrease uncertainty and increase stability. Yet in order for such networks to form, they require some degree of stability in organizational systems and sufficient resources to develop and operate effectively (Sharfman et al., 1991; Provan & Milward, 1995). Exogenous events can either strengthen or loosen ties among partnership members (Brass, Galaskiewicz, Greve, & Tsai, 2004). For example, changes in government policy or political leadership often destabilize collaborative systems and relationships and may alter resource priorities (Sharfman et al., 1991; Huxham & Vangen, 2005).

This latter point draws attention to the vital role played by a collaboration's institutional environment. While both competitive and institutional environments can stimulate or constrain the formation and development of partnerships (Oliver, 1990; Sharfman et al., 1991; Sharma, 2011; Vangen & Huxham, 2012), the institutional environment is especially important for those focused on public policy or public problem solving because it includes broad systems of relationships across public jurisdictional areas (Scott & Meyer, 1991) that can directly affect collaborative purpose, structure, and outcomes (Dickinson & Glasby, 2010; McGuire & Agranoff, 2011). For example, Sharfman and colleagues (1991) found in their study of a partnership in the garment industry that institutional forces were more intractable than competitive forces: a decrease in public funds and changes in welfare payment policies created strong disincentives for the partnership to continue.

An important aspect of the institutional environment is the presence of government mandates requiring certain institutions and organizations to collaborate to implement programs. Mandates may specify collaboration membership, designate decision makers, and establish performance measures or accountability mechanisms. For example, during the 1990s, the Blair government in the United Kingdom mandated a number of joint working initiatives in human services, an approach that has continued under successor governments (Huxham & Vangen, 2005; Vangen & Huxham, 2012; Andrews & Entwistle, 2010). Mandates to collaborate may also be less explicit but clearly indicate that collaboration among organizations, groups, and institutions will be needed to implement the policy goals. Such was the case in one US county's efforts to implement federal welfare reform legislation: a board of county commissioners approved, in general, a community partnership model for welfare reform but did not specify its parameters (Stone et al., 2013).

The external environment is the “major source of technical knowledge, work technologies and tools, and trained personnel” for any organization (Scott & Davis, 2007, p. 124). Increasingly sophisticated technologies also can facilitate the formation of cross-sector collaborations. They can reduce the transaction costs of facilitation and may be the innovation that draws partners together in order to gain access to needed expertise or to take advantage of potential new solutions. This was the case in two collaborations we have studied extensively: the Urban Partnership Agreements sponsored by the US Department of Transportation (DOT) and the creation of MetroGIS, a regional geographic information system serving the Minneapolis–St. Paul area of Minnesota (Bryson, Crosby, & Stone, 2006).

In the more proximate environment facing collaborations, meaning the immediate environment as experienced by the collaborations and its members, several aspects deserve attention. The first derives from the institutional environment and concerns challenges associated with multiple institutional logics that may emerge from the different sectors. Institutional logics are macrolevel, historical patterns, both symbolic and material, that establish formal and informal rules of the game and provide interpretations of action (Friedland & Alford, 1991; Thornton & Ocasio, 1999). Partners from the business sector are likely to act on the basis of market logic—a predilection for competition and efficiency—while some nonprofit partners may operate from a logic of democracy or the family. Meanwhile, government partners may be operating with the logic of the bureaucratic state and thus focusing on hierarchy, rules, and standard operating procedures. Partners in different parts of the same sector may have very different perspectives; for example, a university and a foundation may both be nonprofits but have very different views about engagement with public problems. A result of multiple logics is that partners from one sector or industry may see as foreign or illegitimate the norms, processes, and structures that make perfect sense to partners from another sector (Bryson, Crosby, & Stone, 2006; Di Domenico, Tracey, & Haugh, 2009; Wadham, 2009).

Another aspect of the proximate environment is sector failure—the degree to which single-sector efforts to solve a public problem have failed (Bryson & Crosby, 2008). Many societies rely on the differential strengths of the for-profit, government, and nonprofit sectors to help overcome the weaknesses or failures of the other sectors and to contribute to the creation of public value (Salamon, 1995; Bozeman, 2007; Bryson & Crosby, 2008). However, policymakers and managers from different sectors may become more interested in collaborating with each other when they have tried and failed to deal with a significant challenge by working only in their own sectors. For example, US government leaders have experienced failure in their efforts to alleviate affordable housing shortages or traffic congestion on their own and have had to forge partnerships with businesses and nonprofits to accomplish the public purposes of ensuring citizens are decently housed and that people and goods can easily reach their destinations.

A third element in the proximate environment is prior relationships or existing networks. It is often through these relationships that partners judge the trustworthiness of other partners and the legitimacy of key stakeholders. Scholars refer to this factor as the degree of structural embeddedness: the more partners have interacted in the past in positive ways, the more that social mechanisms enable coordination and safeguard exchanges (Ring & Van de Ven, 1994; Jones, Hesterly, & Borghatti, 1997). If prior relationships do not exist, partnerships are likely to emerge more incrementally and begin with small, informal deals that do not require much trust (Ring & Van de Ven, 1994; Gulati, 1995). Also important may be partners' previous experience working with cross-sector collaborations (Lee & Liu, 2013), perhaps because partners have worked through aspects of multiple and even competing logics. The availability of partners with a shared vision, forged in previous experiences with each other, allows them to come together more easily to form an effective collaboration (Chen, 2010). Sometimes relationships can be hard to establish because potential partners with the capacity to collaborate are not available.

Finally, cross-sector collaborations are unlikely to get off the ground and operate effectively without leadership from two types of people: sponsors and champions (Bryson et al., 2006). We include available leaders as an aspect of the external, albeit proximate, environment because sponsors and champions are people (typically within organizations that are important to a collaborative effort) who see the need for the collaboration and try to enroll others in forming it. Sponsors (e.g., elected officials, business CEOs, heads of foundations) can provide visibility, legitimacy, staffing, funding, and favorable policy decisions by virtue of their formal authority. Champions operate mainly on the basis of informal authority and connections. They are the people who tirelessly attend to organizing the collaboration and foster constant enthusiasm for its work. Either sponsors or champions may serve as initial conveners, a critical linking mechanism role (Waddock, 1986) and an important characteristic of both sponsors and champions is a “collaborative mind-set” (Cikaliuk, 2011).

Sponsors and champions are especially crucial in managing the unity-diversity tension, or paradox, that characterizes every collaboration (Tschirhart, Christensen, & Perry, 2005; Ospina & Saz-Carranza, 2010). By definition, a collaboration is a network of organizations with partially shared and partially separate interests and goals. As a collaboration is being formed and as it proceeds, individual participants can be expected to experience tension between loyalty to their own organizations and commitment to the new entity. Indeed, sponsors and champions who represent a partner organization must personally cope with the tension. Strategies for managing the tension include finding ways to protect and celebrate the diverse “brands” and capacities of member organizations, while shaping a unifying or transcendent identity and establishing equitable governance mechanisms for the collaboration itself (Tschirhart et al., 2005; Ospina & Saz-Carranza, 2010; Ospina & Foldy, 2010; Saz-Carranza & Ospina, 2010). As they attempt to bring partners together in a particular context, they should consider which partners can bring needed resources (e.g., legitimacy, political connections) that can help the collaboration deal with political and institutional forces in its environment. As they think strategically about the collaboration, sponsors and champions should focus especially on likely sources of funds and expertise that can be used at the collaboration level to build relationships among the partners and begin developing shared understandings of the challenge prompting the collaboration (Keast, Mandell, Brown, & Woolcock, 2004; Ospina & Saz-Carranza, 2010).

Conditions in either macro and proximate environments can provide what John Kingdon (2002) has called a “window of opportunity,” and sponsors and champions play crucial roles in recognizing and shaping these windows. From our own research, in the case of the Urban Partnership Agreements, top officials at the DOT became convinced that previous approaches to combating urban traffic congestion were not working and that major progress would occur only if federal funds were directed to combinations of dynamic tolling, transit, technology, and telecommuting. The department's launch of a competitive funding process that would implement this new approach coincided with an unusual congressional failure to earmark transportation funds; thus, the transportation secretary was able to use her discretionary authority to channel $1.1 billion to the program (Bryson, Crosby, Stone, & Saunoi-Sandgren, 2009).

The concept of windows of opportunity also brings political environments into the discussion as important macro or proximate elements of the environment. Because many collaborations seek to solve complex public problems, they are likely to exist in contentious political environments comprising elected public officials, policymakers, public opinion leaders, and other stakeholders who maintain strongly held but conflicting opinions and views on problem definition, solutions, and needed resource allocation. Such was the case in our research in the transportation field over the highly politicized issue of highway tolling and in the social welfare field concerning authority over workforce development programs (Stone et al., 2010).

Table 3.1 summarizes this section. Overall, it is important to understand that several different elements in the macro or proximate environments, either by themselves or through their interactions, can significantly influence collaboration formation, development, and sustainability. The power of these influences can be seen in the ways in which governance structures in particular may rapidly change and may help explain collaborations' dynamic nature (Provan & Kenis, 2008; Stone et al., 2010).

Source: Partially adapted from Sharfman et al. (1991).

Environmental Effects on a Collaboration's Governance Processes and Structures

In the United States, state statutes set parameters for governance in the case of corporate entities. A board of directors consisting of a minimum number of directors must meet basic legal standards and through its policies and by-laws demonstrate duty of obedience to the corporate purpose, duty of care in providing managerial oversight, and duty of loyalty to avoid conflicts of interest. The board is legally responsible for the acts of the corporation. No such parameters exist for collaborations. Indeed, some argue that a hierarchical concept like governance is problematic (Provan & Kenis, 2008) in the context of most collaborations. Nevertheless, for collective decision making and action to occur, collaborations must answer essential questions: Who is “authorized” to make what kinds of decisions, and by what rules are those decisions made (Ostrom, 1990; Thomson & Perry, 2006)?

Implications

Public managers seeking to remedy complex public problems have multiple incentives for establishing cross-sector collaborations. Yet cross-sector collaborations are not easy solutions to tough problems, and environmental conditions very much affect the chances that these often-complex shared-power arrangements can be formed and governed effectively. Thus, public managers should assess relevant aspects of the macro and proximate environments to determine whether a window of opportunity exists. An assessment could focus on the following questions:

1. Is the issue or problem at hand complex enough that cross-sector collaboration is required?
2. Have previous single-sector efforts to deal with the issue failed?
3. Will a collaborative initiative have adequate political support?
4. Do policy mandates exist that either facilitate or constrain formation of a collaboration?
5. Do external resources to support the collaboration—including financial, technological, information, skills, and competencies—exist?
6. What preexisting relationships among potential partners exist, and are these relationships largely positive or negative? Can the collaboration overcome negative relationships?
7. Do potential sponsors and champions exist to establish both internal and external legitimacy and provide energy and other resources for the collaboration?
8. Can the collaboration be flexible enough to cope with significant shifts that may necessitate altering governing structures and processes?
9. What are the prospects for producing public value—outcomes that citizens value and that promote societal well-being?

A helpful tool for answering these questions is a policy field analysis, which traces flows of policy authority, funding, and legal and regulatory mechanisms among governmental and nongovernmental organizations and networks and across levels from national to local (Stone & Sandfort, 2009). The analysis could also be extended to the international level as appropriate. Conducting a policy field analysis can deepen the collaboration's ability to understand its external environment and then identify ways in which it can reduce constraints and respond to changes.

If conditions are favorable enough to proceed with a cross-sector collaboration, public managers should determine what kinds of governance structures and processes will match external demands; that is, governance systems should be aligned with their environments in much the same way as organization structures, and processes should match the demands of their environment environments. Relatively stable environments favor participant-governed collaborations, and less stable environments may make governance by lead organization or network administrative organization more effective. Regardless, governance processes and structures should provide ways for partners to reconcile their differences, learn from each other, and obtain benefits from the partnership while achieving public purposes. Processes for sharing resources and building trust may be especially important (Chen, 2011). While attending to all of these factors, public managers should keep in mind that both external and internal conditions for collaborations are likely to be especially dynamic—and indeed, the collaboration itself often is aimed at significantly altering those conditions. As part of coping with environmental shifts or unanticipated shocks, partners likely will have to alter the collaboration's governance structures and processes if the collaboration is to thrive.

Finally, in line with Dienhart and Ludesher (2010), we argue that governance systems in cross-sector collaborations must be appropriate for particular circumstances and must have the internal capacity and external legitimacy to:

• Monitor the network of inputs, processes, and outputs
• Evaluate the efficiency of how the sectors contribute and integrate resources to promote the project and redirect them as needed
• Use members' capacity and legitimacy to convene, exhort, or redefine rights and responsibilities
• Distribute the right to define and judge the value of what is being produced
• Evaluate and alter the governance of the project in terms of justice, fairness, and community well-being

Summary

The use of cross-sector partnerships to accomplish public purposes is a growing global phenomenon. Many of these collaborations, which take various forms, have produced valuable outcomes for the partners and their communities, but many others have foundered. Meanwhile, even successful collaborations must deal with the challenges of recruiting and retaining committed partners, gaining adequate financial and political support, and governing the collaboration in ways that help it articulate and achieve its mission.

Public managers who initiate or join cross-sector partnerships enter the realm of governance, where government does not have sole responsibility for or control over collective decision making, program design, and evaluation of results. In this realm, public managers, as the stewards of public value, should pay particular attention to designing appropriate governance structures and processes for the collaboration.

This chapter has discussed the ways that the external environment drives and constrains the formation and operation of collaborations. Of particular importance in the macroenvironment are the degree of complexity and system stability associated with the issue, the availability of resources, and policy changes, including mandates. In the more proximate environment, a history of sector failure, positive preexisting relationships among partners, and the availability of sponsors and champions facilitate the formation of collaborations. Partners' competing institutional logics or lack of positive relationships, meanwhile, make partnership more challenging. Political shifts in the macro and proximate environments, as well as available technologies, can facilitate or hinder the collaboration.

Environmental conditions also affect which governance structures and processes will be best suited to a particular partnership. The policy environment, for example, may establish mandates regarding membership, decision making, and performance, a situation in which a lead organization form of governance may work best. When mandates are less of a factor, more participatory governance forms have the advantage of allowing partners more influence over (and promoting more commitment to) major collaboration decisions.

Public managers should assess both the macro and proximate environments to determine whether conditions are favorable for forming a cross-sector collaboration. As collaboration forms, organizers should attempt to align governance structures and processes with environmental conditions, but recognize that they may need to change as time goes on and environmental shifts and shocks occur.