Involuntary backsourcing in the public sector: From conflict to collaboration

The aim of this study is to contribute to the literature on how involuntary backsourcing in public organizations is performed in practice and how it affects the relationship between principal and agent. The study focuses on two questions: (1) Which stages characterize the process when public contracts are involuntary terminated? (2) How does involuntary backsourcing affect the relationship between principal and agent during the transfer period? The study's case concerns public backsourcing in Sweden, in particular, how a metropolitan municipality manages involuntary backsourcing. This study provides in-depth insights into backsourcing and its practice, as well as the degree to which the conflict dimension between the parties is affected. The study shows — paradoxically — that the relationship between principal and agent during the transition phase is characterized by dependence, mutual exchange of information, collaboration, and less conflict. The study contributes to developing the theory of backsourcing, particularly the behavior that is played out between principal and agent in the transition stage. The findings identify the need for public organizations which make outsourcing decisions to have contingency plans for bringing operations back in-house. involuntary backsourcing can lead to an “ organizational limbo ” arising, with an unfavorable and difficult situation which needs to be managed. The study demonstrates that, in distinction from earlier theoretical assumptions about opportunistic behavior (Eisenhardt, 1989), the process was characterized by exchange of information and collaboration, which leads to reduced accountability and risk of sanctions, from which both parties can derive benefit. The parties' consequently refrained from their usual procedures and roles, and applied continuity instead of conflict during the period of notice. The study contributes theoretically by highlighting the occurrence of collaboration between principal and agent, so that the operation can be returned in an orderly manner. This study shows the more profound relationship at an overall level that can arise between principal and agent in connection with involuntary backsourcing. The findings show that a more in-depth and complex relationship develops. By using our new theoretical knowledge on how principals and agents are assumed to act in order to manage polarized situations, the findings can also be used to explain behavior during the transfer process within other areas. This knowledge important in explaining how the transfer process needs to be managed and regulated in future contracts. Like-wise, increased knowledge concerning involuntary backsourcing can have significance for the propensity that principals and agents have to enter into contracts and impose sanctions in future contexts. In that we now know more about which we can expect, we can more easily formulate preparations, handover, and follow-up according to more correct assumptions. Our study indicates that the previous trust and relationship may affect the degree to which the parties are inclined to cooperate. More knowledge on how involuntary public backsourcing is affected by previous relationships between parties, as well as the characteristics of the operations, should be considered in future studies. Fur-thermore, the findings the major need for public sector organizations that are involved in sourcing management to develop a readiness to prepare, manage, and follow-up involuntary backsourcing.