TOPIC 1.5: Networked Government – Managing Networks

In complex systems, with multiple stakeholders and loosely coupled network arrangements, the question is ‘how do public managers thrive?’

A benefit of networks is being able to access information and resources ‘just in time’. Managers can utilise networks to ‘create public value’ and to get things done.

Hill (2014)^[1] explores movements within the system from pluralism to networks and highlights the State’s interest in fostering policy communities for example in agriculture. Hill refers to issue networks and policy communities as follows:

Issue networks are large and diverse with

• fluctuating levels of contacts and lower levels of agreement than policy communities
• varying resources and an inability to regulate their use on a collective basis
• unequal power.

Policy communities:

• have shared values and frequent interaction
• exchange resources
• have group leaders who regulate the relative balance of power amongst members.

Understanding networks and the ways in which personal and professional networks may be used to access information and resources and to influence people is central to the manager’s role.

Relationship management occurs informally and formally.  Network relationships may be defined by:

• the parties’ interests,
• their relative power and
• their interdependencies.

As government moves to engage citizens in the business of government, relationships may become increasingly formal. For example, industry and government partnerships for infrastructure development, joint venture projects, contractual arrangements with suppliers, alliances and consortia, set up for specific purpose collaboration to achieve results within agreed timeframes. Individual and shared accountabilities are defined and formally agreed in diverse governance mechanisms such as partnership agreements, memoranda of understanding, contracts and shared responsibility agreements. Strategic relationships and the means by which they are defined, connect diverse networks and systems of interaction for government business and service delivery.

The contractual approach may emphasise the relational or the legal aspects of the collaboration. Whilst strategic relationship management offers opportunities for engagement, innovation and risk sharing, the challenge is to manage diverse and possibly competing interests, over time.

A hard system (engineering) approach to network management suggests that network management is about controlling the state of the system and the objects in the system. Policies may be used to:

• Define the management model
• Establish the policy rules e.g., consider the partnership or contractual agreement
• Monitor network performance
• Focus on the overall behaviour of the system and
• Adjust policies based on how well the system is achieving its policy goals.

A soft system approach to network management is the relational exchange theory of value co-creation (Ehrmann, Windsperger, Cliquet & Hendrikse, 2013)^[2].

The basis of relational exchange theory and value co-creation is trust. Trust is defined as the expectation that you can be relied on to:

• fulfill your obligations
• behave in a predictable manner
• act and negotiate fairly when the opportunity for self-interest arises.

On the one hand, managers are urged to embrace strategic management. Strategic management is a means for organisations to adapt to, or, if they can, take charge of their environments.  At the same time, managers are embracing modern governance techniques, to engage with networks for policy making and policy implementation.

Contemporary approaches to network management include managing multiple stakeholders across diverse places to meet identified needs in the most efficient and effective way possible. Module 2 explores network management in more detail.

The idea that public managers should act strategically and create public value in the way they manage complex systems implies reframing relationships between stakeholders, moving towards co-creation and co-production…but within limits?