Shared Services as a Collaboration Strategy and Arrangement in Public Service Networks

Public Organisations (POs) have been criticised for their bureaucratic and intrusive style of working - with issues such as red tape, low service levels and costs continually deteriorating the overall reputation of POs. In recent times POs have been encouraged to collaborate with each other in distributed and loosely coupled networks by making use of each other´s services, i.e. the sharing of services. The development of these networks is a complex endeavour because they contain several organisations whose developments are often out-of-sync and their resources and absorptive capacity is limited and diverse. This study uncovers and examines three shared services development projects. In each of the cases a different collaboration strategy was taken. Using the core competency and absorptive capacity theory the three arrangements are compared and linked to the starting situation. The findings show that development of shared service arrangements is influenced by path-dependent factors including the type of organisations involved, their relationships, its absorptive capacity and geographical location.