An analysis of the effect of social capital on performance outcomes in privatized operations

Privatization is a popular strategic choice, and affords private sector organizations the opportunity to expand into new market segments. The methods of transferring operations from the public to the private sector vary from the simple procurement of goods, to the complex provision of services, in which there is an on-going relationship between public and private sector actors. It is the more complex relationships that are of interest in this study. While research has been conducted regarding the selection of firms to be privatized, and the impact that it has on prompting behavior, such as entrepreneurialism, little has been conducted to investigate the impact that interorganizational relationships can have on the performance of a privatized operation.; This study empirically tested the relationship between the primary interorganizational liaisons in the privatized operation. Of interest was the relationship of the overlap of the liaison's respective organization's characteristics (referred to as publicness similarity) to the liaison's strategic values (referred to as strategic value consensus). These values were then examined to determine if differences had an effect on performance. The study further examined if sources of social capital had a moderating impact on the relationships between publicness similarity and strategic value consensus.; Surveys were sent to both public sector and private sector liaisons responsible for university food service operations; matched-pair analysis provided the publicness similarity and strategic value consensus measures. Findings indicated that value consensus did not directly influence performance outcomes. Likewise, publicness similarity did not impact the value consensus of the liaisons. However, further exploratory study of the same constructs revealed that sources of social capital were directly related to the three performance outcomes. And, there were significant results for a model, which considered publicness similarity and strategic value consensus as a moderator to the source of social capital-performance relationship. Contributions, limitations, and suggestions for future research are discussed.