Leadership and Responsibility towards the key stakeholders of Municipally Owned Corporations : how organisational ambidexterity mediate the relationship between performance drivers and MOCs performance in Sweden

Municipally Owned Corporations (MOCs) have several interest groups because they are established to serve the public interest. These stakeholders including citizens expect MOCs to deliver high-quality service. MOCs, on the other hand, need to attract and retain the best talents to pursue their mandate. Based on these, service quality and Human Resource performance were conceptualised as key performance indicators for MOCs. This adds to the various performance measures used by other scholars in measuring performance in public sector organisations. In recent times, organisational ambidexterity has become topical in public sector organisations including MOCs as scholars have found it to have an impact on firm performance. Recognising the role of management in organisational success, this study investigated how two concepts (i.e. Managerial autonomy and Relationship) influence Service Quality and Human Resource Performance and how the relationships are mediated by organisational ambidexterity. A quantitative approach was adopted where 128 CEOs of MOCs in Sweden participated in a survey. The results indicate that managerial relationship and autonomy significantly influences ambidexterity. Ambidexterity was also found to significantly predict service quality and Human Resource performance. While evidence was found for ambidexterity’s mediation affection between autonomy/relationship and service quality, no mediation was found for autonomy and Human Resource Performance. The mediation of ambidexterity between the managerial relationship and Human Resource performance was however partial. Aside from testing rarely used performance measures (i.e. service quality and Human Resource performance), the study builds on the Leader-Member Exchange theory by finding support for relationship between managerial relationship and service quality, mediated by ambidexterity. The implication is that leaders of MOCs should prioritize building mutually beneficial relationships with their employees to enhance quality service delivery and Human Resource performance.