Managing beyond the contract: Communicating and connecting to build sustainable collaborative relationships in international public-private partnerships

Partnerships between the public and private sectors are increasingly becoming the default approach for economic and infrastructure development worldwide. Such partnerships enable the partners to compensate for gaps in knowledge and capacity. However, the literature suggests that many public-private partnerships (PPP) fail to achieve their intended goals, arguing that managers may not possess the skill sets necessary to navigate the multiplicity of relationships involved. Using the theories of interpersonal-intercultural communication, social capital, relational signaling, and social networking, this dissertation investigated how PPP actors build sustainable and trusting collaborative relationships that facilitate mutual benefits and partner satisfaction. It examined the influence of interpersonal-intercultural communication, rapport, and social interactions on relationship development and maintenance leading to project success. An evidence-based research approach was undertaken, involving a systematic literature review and thematic synthesis of available empirical evidence. The findings suggested that the inherent conflicts between PPP actors, which can create project delays and failures, were reduced when all stakeholders were connected through effective communication and social interaction, based on a collaborative rather than contractual approach. Moreover, the study concluded that most PPP managers lacked "soft" relationship-building skills. This dissertation presents conclusions concerning the communication and other relationship challenges that PPP managers face and approaches to overcome them.Running head: PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS Managing Beyond the Contract: Communicating and Connecting to Build Sustainable Collaborative Relationships in International Public-Private Partnerships Moronke Oshin-Martin A Thesis Submitted to the Graduate Faculty of University of Maryland University College In Partial Fulfillment of The Requirements for the Degree of Doctor of Management Dr. Deborah M. Wharff Dr. G. David Andersen Dr. Eric B. Dent December 31, 2014 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 2 Abstract Partnerships between the public and private sectors are increasingly becoming the default approach for economic and infrastructure development worldwide. Such partnerships enable the partners to compensate for gaps in knowledge and capacity. However, the literature suggests that many public-private partnerships (PPP) fail to achieve their intended goals, arguing that managers may not possess the skill sets necessary to navigate the multiplicity of relationships involved. Using the theories of interpersonal-intercultural communication, social capital, relational signaling, and social networking, this dissertation investigated how PPP actors build sustainable and trusting collaborative relationships that facilitate mutual benefits and partner satisfaction. It examined the influence of interpersonal-intercultural communication, rapport, and social interactions on relationship development and maintenance leading to project success. An evidence-based research approach was undertaken, involving a systematic literature review and thematic synthesis of available empirical evidence. The findings suggested that the inherent conflicts between PPP actors, which can create project delays and failures, were reduced when all stakeholders were connected through effective communication and social interaction, based on a collaborative rather than contractual approach. Moreover, the study concluded that most PPP managers lacked “soft” relationship-building skills. This dissertation presents conclusions concerning the communication and other relationship challenges that PPP managers face and approaches to overcome them. Keywords: evidence-based management, public-private partnership, partnerships, collaboration, interpersonal communication, intercultural communication, public-private cooperation. PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 3 Dedication To my late mother, for trusting me enough to support and finance my solo venture from the UK to the U.S. to seek my fortunes. To my Dad, and late Father-in-Law for encouraging and pushing me to begin and complete my doctoral journey, especially in management and international affairs. PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 4 Acknowledgements My doctoral journey was a challenging, inspiring, and rewarding experience made possible by the support of my family, many friends, colleagues, and the doctoral faculty and staff at UMUC. First and foremost, I wish to thank God for giving me the health and strength to begin and complete this program. To my family, I share this honor with you. I could not have completed this degree without the patience and support of my husband, Jason, whose innumerable sacrifices allowed me to focus on my studies. Thank you to my children, Alex, Lorion, Jay, and Grace for your support and encouragement and for offering to read drafts of my work, even when you didn’t always understand what you were reading. Your enthusiasm fueled me. My deep appreciation and gratitude to my advisor and dissertation chair, Dr. Deborah Wharff, whose advice and feedback guided me through the process and the dissertation woes that come with the territory. You constantly challenged my thinking on the topic throughout the process. I truly appreciate that you were so generous with your time to listen to me thinking out loud, and your willingness to communicate by any means and as often as necessary. Your encouragement, advice, and dedication pushed me forward and past the finishing line. I would also like to thank my other dissertation advisors, Dr. G. David Andersen and Dr. Eric Dent, for their thought-provoking suggestions, friendly guidance, and constant encouragement. My sincere gratitude to the members of my subject matter expert panel who so generously spared time from their busy schedules to review several chapters of my dissertation in order to help me further develop my ideas and provide suggestions for improvement. I would like to recognize Dr. Michael Frank, Dr. Diana Watts, Dr. Laura Witz, Dr. John Sherlock, Dr. Kimberly Kelley, and Dr. Bijlani for shaping and guiding my academic PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 5 development over the years. Thanks also to TAs Dr. Chris Cason and Dr. John Kearney, as well as program Academic Specialist Marina Caminis for their support and encouragement. To my fellow doctoral colleagues, particularly my friend Ed, as well as those who graduated earlier, thank you for your support, feedback, and friendship. We accomplished our goals because we pushed and pulled each other along. Our team spirit led us through many challenging times over the course of the years. I wish you all much success. Thank you to the many friends, family members, and co-workers who encouraged me to move forward on my doctoral goal, who read my papers on occasion and cheered me on throughout. I am truly blessed with having you all in my life. PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 6 List of Figures Figure 1. Five Common PPP Models…………………………………. 27 Figure 2. An Example of the Variety of Actors in a PPP Project…….. 28 Figure 3. The General Goals of the Stakeholder..……………………...29 Figure 4. The 4 Elements of Evidence-Based Management…………...42 Figure 5. The Types of Evidence Used in Systematic Reviews………..43 Figure 6. The PRISMA Model for Systematic Reviews……………….49 Figure 7. Research Organization Schematic…………………………...62 Figure 8. Definitions of Social Capital………………………………...64 Figure 9. Social Network Ties………………………………………....68 Figure 10. The Transactional Communication Model………………...75 Figure 11. PPP Collaboration Continuum…………………………….90 Figure 12. Competency Model…………….………………………….176 Figure 13. Conceptual Framework Model……………………………180 Figure 14. Attributes, Behaviors and Outcomes……………………...204 Figure 15. Soft Skills Map……………………………………………205 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 7 List of Tables Table 1. Various Definitions of PPPs in the Literature……………………24 Table 2. Three Dimensions of Culture…………………………………….80 Table 3. Low-Context and High-Context Cultural Communication Styles……………………………....81 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 8 Table of Contents Abstract ............................................................................................................................... 2 Dedication ........................................................................................................................... 3 Acknowledgements ............................................................................................................. 4 List of Figures ..................................................................................................................... 6 List of Tables ...................................................................................................................... 7 Chapter One: Introduction and Overview of the Literature .............................................. 11 Statement and Significance of the Problem .................................................................. 11 Purpose of the Research ................................................................................................ 17 Research Background and Overview of the Literature ................................................. 21 PPP characteristics and models. ................................................................................ 26 Study Importance and Value to Management ............................................................... 33 Research Questions and Propositions ........................................................................... 33 Theoretical Framework ................................................................................................. 34 Definitions of Key Concepts Used in This Dissertation ............................................... 36 Summary ....................................................................................................................... 38 Organization of the Dissertation ................................................................................... 38 Chapter 2: Methodology ................................................................................................... 40 The Evidence-Based Research Movement ................................................................... 40 Evidence-Based Management (EBMgt) ....................................................................... 41 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 9 Systematic Reviews ...................................................................................................... 44 Identification of Potential Studies: Search Strategy ..................................................... 47 Quality Appraisal of Evidence ...................................................................................... 52 Data Extraction and Thematic Synthesis ...................................................................... 53 Advisory Panel of Subject Matter Experts.................................................................... 55 Chapter 3: Systematic Literature Review ......................................................................... 60 Theoretical Framework ................................................................................................. 63 Systematic Review ........................................................................................................ 86 Conflicting goals ....................................................................................................... 87 Communication. ........................................................................................................ 96 Cultural value differences ....................................................................................... 121 Power, politics, and external stakeholder engagement.. ......................................... 145 Summary ..................................................................................................................... 150 Chapter 4: Analysis and Discussion ............................................................................... 151 Review of Research Problem, Argument, Research Questions, and Propositions ..... 152 Summary of Findings .................................................................................................. 155 Consideration of Alternative Points of View .............................................................. 171 Summary ..................................................................................................................... 172 Chapter 5: Conceptual Framework ................................................................................ 174 Graphical Analysis and Synthesis ............................................................................... 174 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 10 Summary ..................................................................................................................... 185 Chapter 6: Conclusions, Implications, and Trends ......................................................... 187 Implications for Management ..................................................................................... 190 Implications of Emerging Trends ............................................................................... 207 Limitations and Areas for Future Research ................................................................ 211 Summary ..................................................................................................................... 214 References ....................................................................................................................... 217 Appendix A: Methodology ............................................................................................. 249 Appendix B: Critical Appraisal Form ............................................................................. 251 Appendix C: Expert Panel Letters .................................................................................. 253 Appendix D: List of Publications ................................................................................... 270 Appendix E: Analytic Themes/Keywords ...................................................................... 272 Appendix F: Findings/Number of Studies ...................................................................... 277 PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 11 Chapter One: Introduction and Overview of the Literature In order to understand people, we have to understand their way of life and approach. If we wish to convince them, we have to use their language in the narrow sense of the mind. Something that goes even much further than that is not the appeal to logic and reason, but some kind of emotional awareness of the other people. —Nehru, Indian statesman Statement and Significance of the Problem Public-Private Partnerships (PPP) have grown increasingly popular over the past 25 years as governments worldwide turn to the private sector for the development, financing, and provision of public infrastructure and services ranging from the construction of dams, bridges, transportation, and telecommunication systems to health and social services delivery (Hodge & Greve, 2007; Kwak, Chih, & Ibbs, 2009; Osborne, 2000; Roehrich, Lewis, & George, 2014; Siemiatycki, 2010). The United States, The United Kingdom (UK), Australia, Europe, and Canada frequently use PPPs or P3, also called Public Finance Initiatives (PFI) in the UK, for urban renewal projects and large-scale economic development and infrastructure development and maintenance to respond to the basic needs of increasingly changing demographics and urban growth (Chan & Levitt, 2011; European Commission, 2013; Siemiatycki, 2013). Some examples of these projects are the Channel Tunnel Rail Link in the UK, M5 toll motorway in Hungary, the Perpignan-Figueiras Rail Concession, cross-border link between France and Spain, the Canadian-US Ontario-Detroit Bridge Crossing, and the Takoradi Power Station in Ghana. Inadequate infrastructure has a negative effect on a country’s economic growth, driving unemployment and associated social problems (McKinley Global Institute [MGI], 2013; Woetzel & Pohl, 2014). In this dissertation, the different types of public-private collaborations are PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 12 referred to as PPPs for simplicity. In the United States, for example, an assessment of America’s infrastructure needs by The American Society of Civil Engineers (ASCE, 2013) reported that the government would need to spend an estimated $3.6 trillion by 2020 to fix the country’s decaying infrastructure as a result of years of delayed infrastructure maintenance projects. Without private investment, the government would have to depend on public tax dollars to accomplish this. Globally, infrastructure investments needs are estimated at $57 trillion in 2013-2030 to support economic growth through 2030 (MGI, 2013, p. 2). The UK, an early and prolific user of PPPs, has more than 600 PPP construction and public services delivery ranging from bridges and roads to hospitals, schools, and prisons worth over $100 billion (Roehrich et al., 2014; HM Treasury, 2013). Like many Olympic Games host countries before it, the UK used PPPs for the construction of Olympic stadiums and other facilities for the 2012 Games, as well as to revitalize the predominantly low-income East London neighborhood surrounding the venue (Maurrasse, 2012; Payne, 2012). Similar efforts have been credited for the redevelopment of Barcelona, Spain, following the 1992 Olympic Games (Bel & Warner, 2009; Nello, 1997), and Beijing, China’s 2008 Olympic Games (Ke, 2014; Chinyere, 2013). Rio de Janeiro, Brazil is expecting to achieve similar urban renewal successes from its 2016 event (Maurrasse, 2012; Payne, 2012). PPPs are particularly vital in developing countries, where the demand for public services and new infrastructure is acute and growing, but funding and capacity in the public sector of these countries to implement such projects are limited (Kwak et al., 2009). Worldwide, nearly 1.3 billion people lack access to electricity while 780 million people worldwide lack access to clean water (Kenny & Lavanchy, 2013). PPPs are frequently the only means to provide such services, as the public sector in developing countries cannot deliver the resources alone. Private PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 13 sector engagement, working together with government and communities, is necessary to close that gap, improve living conditions, and economic development (IFC, 2010). In this dissertation, a PPP is defined as a relationship between government and companies that involves “the sharing of power, work, support and/or information with others for the achievement of joint goals and/or mutual benefits” (Trafford & Proctor, 2006, p. 117). In partnering with the private sector, governments have an opportunity to meet the growing demands for new and better infrastructure since PPPs can help relieve the burden on the public sector and allow risks to be transferred from the public to the private sector, or shared between the two. Moreover, PPPs are attractive because they enable the public sector to leverage the innovations and efficiencies of the private sector, and financing in situations where budget constraints hinder vital development. For the private sector, PPPs provide access to new markets (CCPPP, 2014; Chan & Cheung, 2014; Jamali, 2004; Ke, Wang, Chan & Cheung, 2009; MGI, 2013). Investment in PPPs in the early 1990s reached $131 billion (Thomsen, 2005), and has risen significantly since. In emerging and developing countries, where the demand for infrastructure is great (Schwartz, 2013), private investment in infrastructure PPPs is robust. The World Bank (2013) reported that private investments in PPPs rose 4% in 2012 from 2011 to US$181.4 billion. In Latin America and Caribbean countries, investments rose 50% to $87 billion and accounted for 48% of global investment, which is the largest share of any region and the most investment seen in the region in the last two decades. Brazil had 54 of the 78 new projects, which accounts for 87% of the total investment in the region. Chile, Peru, Argentina, Mexico, Nicaragua, and Uruguay had the remaining new projects (World Bank, 2013). However, the number of PPPs has declined since 2010 despite the demand for PPPs in PPP COMMUNICATION & COLLABORATIVE RELATIONSHIPS 14 infrastructure (Schwartz, 2013). Studies suggest a variety of reasons including the impact of the global recession as well as concerns among investors that the risks associated with these investments are often very costly, and the returns are not as high as expected. Moreover, projects have unraveled in the face of public protests, investor withdrawal, or as a result of government dissatisfaction (Hayllar, 2010; Hayllar & Wettenhall, 2009; Hodge & Greve, 2007). Marin, Izaguirre, and Danilenko (2010) found that European and Western companies have lost ground to new private companies from emerging markets in Brazil, Russia, India, and China, and developing markets, including Colombia, Chile, and Argentina because of difficulties in working relationships between foreign and local partners. Koschmann, Kuhn, and Pfarrer (2012) described PPPs as “a unique form of social organization” (p. 332) because they bring together and depend on businesses, government, and civil society to address complex social problems in collaboration. Scholars and practitioners contend that alt