INDIVIDUAL AGENCY AS EXPLANATION OF

ALLIANCE DEVELOPMENT AND CHANGE: A

CASE STUDY

A thesis submitted in fulfilment of the requirements for the award of the degree

Doctor of Philosophy

from

Queensland University of Technology Faculty of Business

School of Management

by

Katherine Anne Joyner

Bachelor of Music (Queensland Conservatorium of Music)

MBA (Queensland University of Technology)

2011

2

ABSTRACT

Alliances, with other inter-organisational forms, have become a strategy of

choice and necessity for both the private and public sectors. From initial

formation, alliances develop and change in different ways, with research

suggesting that many alliances will be terminated without their potential value

being realised. Alliance process theorists address this phenomenon, seeking

explanations as to why alliances unfold the way they do. However, these

explanations have generally focussed on economic and structural determinants:

empirically, little is known about how and why the agency of alliance actors

shapes the alliance path. Theorists have suggested that current alliance process

theory has provided valuable, but partial accounts of alliance development,

which could be usefully extended by considering social and individual factors.

The purpose of this research therefore was to extend alliance process theory by

exploring individual agency as an explanation of alliance events and in doing so,

reveal the potential of a multi-frame approach for understanding alliance process.

Through an historical study of a single, rich case of alliance process, this thesis

provided three explanations for the sequence of alliance events, each informed by

a different theoretical perspective. The explanatory contribution of the Individual

Agency (IA) perspective was distilled through juxtaposition with the

perspectives of Environmental Determinism (ED) and Indeterminacy/Chance

(I/C).

The research produced a number of findings. First, it provided empirical support

for the tentative proposition that the choices and practices of alliance actors are

partially explanatory of alliance change and that these practices are particular to

the alliance context. Secondly, the study found that examining the case through

three theoretical frames provided a more complete explanation. Two

propositions were put forward as to how individual agency can be theorised

within this three-perspective framework. Finally, the case explained which

alliance actors were required to shape alliance decision making in this case and

why.

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ACKNOWLEDGEMENTS

Undertaking a PhD in part-time mode requires the patience and faith of academic

supervisors. I am particularly fortunate to have enjoyed stability in my

supervision arrangements over the period of my candidature and thank Dr

Kavoos Mohannak for his steady and professional guidance as Principal

Supervisor. I would also like to thank my Associate Supervisor, Professor Boris

Kabanoff, for the time taken to read drafts, provide scholarly comments and for

the thought provoking dialogue around the many theories that inform this

research. I would also like to acknowledge the assistance of Professor Robert

Waldersee, as Associate Supervisor, who assisted the development of the study

up to the time of confirmation.

I am indebted to the case study organisations and all respondents who gave

generously of their time and professionalism in the interests of scholarship and

the public record. I am particularly grateful to David Cant, whose interest,

enthusiasm and practical assistance over the long life of the project buoyed my

spirit.

My friends and colleagues have been kind and generous in their encouragement.

I particularly thank my dear friends Professor Stephen Teo and Dr Judith

Matthews for maintaining my mental health.

Finally, to my husband, John Sears, thank you for the patience and tolerance

required to see me through to the end of this journey.

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STATEMENT OF ORIGINAL AUTHORSHIP

The work contained within this thesis has not been previously submitted for a

degree or diploma at any other higher education institution. To the best of my

knowledge and belief this thesis does not contain material previously published

or written by another person, except where due reference is made.

Signature Date

5

CONTENTS

INTRODUCTION................................................................................................8

CHAPTER ONE: Explaining Alliance Change and Development - A

Literature Review and Research Agenda ........................................................15 STRATEGY AND ORGANISATION LITERATURE: THEORIES OF HYBRIDS AND ALLIANCES .............................................................................................................19 INTER-ORGANISATIONAL THEORY IN THE PUBLIC MANAGEMENT LITERATURE.....................................................................................................................24 EXPLAINING ALLIANCE CHANGE AND DEVELOPMENT ......................................28 ADVANCING THE ALLIANCE PROCESS LITERATURE: TOWARD A MORE SOCIAL AND INDIVIDUAL PERSPECTIVE..................................................................35 THE INDIVIDUAL ACTOR IN THE ALLIANCE LITERATURE..................................38 EXTENDING EXPLANATIONS FOR ALLIANCE DEVELOPMENT AND CHANGE: INDIVIDUAL AGENCY PERSPECTIVE ......................................................49 RESEARCH FOCUS AND QUESTIONS..........................................................................54 CONCLUSION ...................................................................................................................55

CHAPTER TWO: Theoretical Framework: Environmental Determinism,

Individual Agency, Indeterminacy/Chance .....................................................56 ENVIRONMENTAL DETERMINISM PERSPECTIVE...................................................60 INDIVIDUAL AGENCY PERSPECTIVE.........................................................................72 INDETERMINACY/CHANCE PERSPECTIVE................................................................88 CONCLUSION ...................................................................................................................94

CHAPTER THREE: Research Methodology..................................................95 EPISTEMOLOGICAL ORIENTATION: CRITICAL REALISM .....................................96 RESEARCH STRATEGY...................................................................................................99 RESEARCH DESIGN AND PROCEDURES ..................................................................106 ANALYSIS .......................................................................................................................119 Evaluation of Research Strategy and Design.....................................................................126 SUMMARY.......................................................................................................................128 HOUSCO BACKGROUND AND CONTEXT ................................................................129 TOWARD THE HOUSCO CASE STUDIES FINDINGS ...............................................135

CHAPTER FOUR: Study One — Environmental Determinism Frame ....136 PHASE ONE: FALTERING COLLABORATIVE BEGINNINGS .................................139 PHASE TWO: FROM FALTERING BEGINNINGS TO FIRMER FOOTINGS............152 PHASE THREE: FROM FOOTINGS TO FRAME AND FITOUT - HOUSCO INCORPORATED AND FUNDED..................................................................................166 CROSS-PHASE SUMMARY: HOUSCO RESULTING FROM STRATEGIC CO-EVOLUTIONARY AND TELEOLOGICAL MECHANISMS .......................................176

CHAPTER FIVE: Study Two — Individual Agency Frame.......................182 PHASE ONE: FALTERING COLLABORATIVE BEGINNINGS .................................185 PHASE TWO: FROM FALTERING BEGINNINGS TO FIRMER FOOTINGS............198

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PHASE THREE: FROM FOOTINGS TO FRAME AND FITOUT: HOUSCO INCORPORATED AND FUNDED..................................................................................210 CROSS-PHASE SUMMARY: HOUSCO RESULTING FROM CUMULATIVE, COLLECTIVE AND COMPLEMENTARY AGENCY ..................................................222 CONCLUSION .................................................................................................................233

CHAPTER SIX: Study Three — Indeterminacy/Chance Frame................234 PHASE ONE .....................................................................................................................240 PHASE TWO ....................................................................................................................254 PHASE THREE.................................................................................................................266 CROSS-PHASE SUMMARY: CONFLUENCES AND RANDOM WALKS.................275 CONCLUSION .................................................................................................................284

CHAPTER SEVEN: Cross-Frame Comparison and Multi-Frame Synthesis

............................................................................................................................285 CROSS-FRAME COMPARISON ....................................................................................286 CROSS-FRAME CRITIQUE............................................................................................294 MULTI-FRAME SYNTHESIS .........................................................................................310 SUMMARY OF RESEARCH QUESTIONS AND FINDINGS ......................................324

CHAPTER EIGHT: Conclusions and Implications .....................................326 LIMITATIONS OF THIS STUDY ...................................................................................327 STRATEGIC CHOICE, AGENCY AND ALLIANCE PROCESS..................................328 INDIVIDUAL AGENCY AS PARTIAL EXPLANATION: MULTIPLE PERSPECTIVES REQUIRED TO EXPLAIN ALLIANCE PROCESS ..........................330 CONCERTED AND COMPLEMENTARY AGENCY REQUIRED TO SHAPE DECISION CHOICES ......................................................................................................333 DISTINCTIVE SKILLS AND PRACTICES OF ALLIANCE AGENCY .......................336 CONTRIBUTION TO KNOWLEDGE ............................................................................338 IMPLICATIONS FOR FUTURE RESEARCH................................................................341

REFERENCES.................................................................................................343

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Tables and Figures

TABLES

Table 1: Summary of Ideal-Type Theories of Social Change (Van de Ven & Poole, 1995: 514) 29 Table 2: Ideal-Type Theories of Alliance Process (adapted from de Rond and Bouchikhi, 2004: 60) 30 Table 3: Conceptual Framework 59 Table 4: Five Organising Concepts drawn from Alliance Process Theory 64 Table 5. Adapted from Denis et al, (2007) Strategising in pluralistic contexts: Re-thinking theoretical frames 80 Table 6: Key Interview Informants by Organisational Location 113 Table 7: Case Study Tactics and Responses 127 Table 8: Summary of Methodological Choices 128 Table 9: The Environmental Determinism Explanation for HOUSCO 181 Table 10: HOUSCO Key Actors 184 Table 11: The Individual Agency Explanation for HOUSCO 223 Table 12: Indeterminacy/Chance Explanation for HOUSCO 239 Table 13: Comparing the Three Frames as Explanations of HOUSCO 287 Table 14: Explanatory Contribution of Individual Agency Frame 308

FIGURES

Figure 1: Positioning the Study in the Literature 18 Figure 2 Coding Frames 121

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INTRODUCTION

The joint venture company HOUSCO was incorporated in July 2002 as the

culmination of a development process which had its early beginnings in 1991. It

was established as an independent, not-for-profit organisation, delivering

affordable rental accommodation (ARA) in inner and middle city locations.

HOUSCO was jointly developed and funded as a joint venture between two local

and state government organisations, with these two entities remaining the

ordinary shareholders of the company. There are also 15 organisations as

community shareholders, a seven-member Board of Directors comprising

members from the private, public and community sectors, and a staff of eight.

HOUSCO now has affordable housing developments in more than a dozen

suburbs across the city. From initial local and state contributions in 2002,

HOUSCO has grown to achieve a $134 million property portfolio. On

completion of current projects under development, HOUSCO will have 1160

units of affordable housing under management, with a business model that

increasingly relies on commercial revenue.

Growth of Inter-Organisational Forms

HOUSCO illustrates a trend toward inter-organisational responses which

gathered pace in the 1990s. Powerful drivers are compelling organisations to join

forces with others in a wide range of cooperative forms. Globalisation, or the

intensification of economic, political, social and cultural relations across borders

(e.g. Holm & Sorensen, 1995), has had significant consequences for firms. While

opening many opportunities, economically this phenomenon has intensified

competitive pressures, forcing companies to fill capability gaps and increase their

global reach swiftly. Alliances, being voluntary arrangements between

organisations involving exchange, sharing or co-development of products,

technologies or services, (Gulati, 1998) are often considered to provide the best

opportunity for rapid competitive positioning (Doz & Hamel, 1998).

Additionally, the opportunities of the information age, including value creation

9

from new products and new strategies of service delivery, frequently call for

skills and capital that lie outside the boundaries of any one organisation. Both

the public and the private sectors look to focus on core capability and look

externally for expert skills (e.g. Faulkner & de Rond, 2000).

The public sector is also increasingly looking to form alliances with other

organisations in the private and non-profit sectors, and with other institutions of

government, in order to achieve outcomes that cannot be achieved by acting

alone (e.g. Huxham, 2000a). The complex nature of the social, economic and

environmental issues which face governments, as well as the costs of delivery,

mean that effective strategies and solutions cannot be generated or implemented

by one organisation. While in the twentieth century government services were

delivered through hierarchical organisational models, today governments rely on

a vast network of partners - a trend which shows no sign of reversing (Goldsmith

& Eggers, 2004).

Alliance Dynamics and Change

The alliance process between local and state government organisations which

culminated in the joint venture company HOUSCO stretched over more than a

decade. From tentative early beginnings the process moved through periods of

inertia, uncertainty and conflict, before finally achieving momentum with the

joint approval of a business model. In reaching this milestone, HOUSCO was

more the exception than the rule in alliance life. While alliances have

proliferated, research indicates that many will be terminated without their

potential value being realised, (e.g. Park & Ungson, 2001) or succumb to

collaborative inertia (Huxham & Vangan, 2004). Alliances are dynamic and

socially complex forms which are characterised by disorder and instability

(Gulati, 1998). Yet, in the face of this complexity, some alliances — of which

HOUSCO is an example — adapt and are deemed successful. Others appear to

'die by accident' (Doz and Hamel, 1998) defying rational explanation. This

phenomenon is of both practical and theoretical interest. Practically, the

premature derailment of a potential alliance represents a significant cost to

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participating organisations of time and resources invested, and a lost opportunity

to realise stakeholder value or deliver a potential public benefit. Theoretically,

researchers are interested in explaining this variance in the alliance change and

development path.

From this research we know that explanations are divided among those who see

pattern and predictability and those who argue for the non-predictability of

alliance change and development. What is common to these studies, however, is

a bias towards viewing alliances as economic or strategic forms, with unitary,

rational organisational actors, overlooking their social and heterogeneous

characteristics. Remaining predominantly within this one research paradigm has

lead to explanations which are valuable, but partial. Theorists have recognised

this bias in the literature and are calling for a better understanding of agency in

order to build more complete explanations of how and why alliances develop and

change (Faulkner & de Rond, 2000; Gulati & Zajac, 2000; Hardy & Phillips,

1998). For example, De Rond and Bouchikhi (2004: 59) tentatively propose that

the mindsets, dynamics and interests of individual alliance actors are likely to

shape the alliance path as much as rational organisational goals.

The purpose of this study therefore was to explore individual agency, being the

choices, motivations, practices and attributes of individual alliance actors, as an

explanation of alliance development and change. The study employs the

Alternate Templates Strategy for theorising from process data (Langley, 1999) to

distil the explanatory contribution of individual agency in the HOUSCO case. In

doing so, the study aimed to extend alliance process theory by providing an

individual-level account of the factors which shaped the path of this alliance and

by demonstrating the explanatory strength of a multi-frame approach for

understanding alliance development and change.

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Thesis Plan

Chapter One critically reviews the literature which explains why alliances

develop and change in different ways. The chapter makes the case that current

theory can be extended by considering individual agency factors in dialogue with

more established structural and economic theories of alliance process. The

chapter also argues that the literature which describes the practices of alliance

leaders can inform the development of the Individual Agency (IA) perspective.

This provides the theoretical context and justification for the research questions

which follow at the end of the chapter. These questions seek to uncover the

relative explanatory strengths and limitations of an IA perspective in

understanding the HOUSCO case. The final research question asks how IA can

be theorised within the three-perspective framework applied in this case.

Chapter Two develops the conceptual and analytical framework which was

applied to the research questions. The chapter outlines the provenance and

underpinning assumptions, theoretical resources and organising concepts of each

of the three research frames. These frames are Environmental Determinism, IA

and I/C.

Chapter Three shifts from theory to methodology. The chapter outlines and

justifies the design choices made to address the research questions. In overview, I

chose to conduct a qualitative analysis of HOUSCO as a single explanatory case

study (Yin, 1994), using data from multiple sources, analysed through the

Alternate Templates Strategy for theorising from process data (Langley, 1999).

The chapter also places the HOUSCO case in its context and justifies the choice

of this particular case.

Chapters Four, Five and Six each provide an empirical study analysed through

one of the three theoretical frames. Chapter Four explains the sequence of events

in the HOUSCO case through the lens of the Environmental Determinism frame,

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the assumptions of which have been most frequently applied to studies of

alliance process. The study finds that HOUSCO was a strategic response by each

partner organisation to changes in their environment and that HOUSCO

developed as each organisation learned more of how the proposed HOUSCO

model would meet organisational purposes of efficiency, equity and fair dealing.

Chapter Five applies the frame of IA, which has been little explored as an

explanation of alliance development and change. This study finds that the

choices of key decision makers were also explanatory of development and

change through the three phases of the HOUSCO process. Further, the study

finds that the concerted and complementary agency of all HOUSCO actors from

both organisations, and at multiple levels, was explanatory of the choices made

by decision makers. Chapter Six applies the frame of I/C, which has also been

little explored as an explanation of alliance change and development. The study

finds that the HOUSCO process of development and change could be seen as

more a stochastic or random walk, rather than a linear progression, with the path

having the potential to take a different turn at each phase. HOUSCO finally

emerged from a ‘confluence of confluences’ which provided a brief window of

opportunity for HOUSCO to be funded and incorporated.

The analysis provided in Chapter Seven addresses each of the three research

questions. A cross-frame comparison demonstrates that each frame approaches

explanation from a different paradigmatic vantage point and is anchored in

different paradigmatic assumptions. However, each is found to have a particular

utility as an aid to explanation in this case and that explanation would be

diminished by the removal of any of the three. This comparative analysis finds

that IA, being the choices, motivations, practices and attributes of the individual

HOUSCO actors, provided much of the ‘who, why and how’ of the HOUSCO

process as a contested process of organisational and institutional transformation.

As such, this comparative analysis addressed the first two research questions

which ask for the distinctive explanatory contribution of each frame.

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A second, more synthetic, analysis is also provided in Chapter Seven. This

analysis addresses the final research question which asks how IA can be

theorised within the three-perspective framework to explain this case. Two

propositions are put forward. Firstly, that a multi-paradigmatic approach could be

taken (Gioia & Pitre, 1990), suggesting that IA contributes to a more

comprehensive explanation of HOUSCO events as one of three separate

paradigmatic worldviews. Alternatively, an integrative approach could be taken,

suggesting that IA is one of three inextricably interwoven causal strands (from

De Rond & Thietart, 2007). Each of the two approaches is found to be equally

useful in theorising the contribution of IA within a multi-perspective framework

in the HOUSCO case, and also of building theory in alliance process.

In the final chapter, conclusions are drawn as to IA as an explanation for the

sequence of events in the HOUSCO case. In summary, the choices made by

HOUSCO actors were partially explanatory of change and development in the

HOUSCO case but this perspective was not sufficient to explain the HOUSCO

process. A more comprehensive explanation relies on applying each of the three

frames in parallel or as an integrated framework. The concerted and

complementary agency of all HOUSCO actors from both organisations and at

multiple levels was explanatory of the choices made by decision makers and the

nature of agency in the HOUSCO case, as a hybrid or alliance form, has

distinguishing characteristics. The chapter goes on to provide implications for

alliance process theory, the alliance leadership literature and for alliance

practitioners.

The chapter concludes by addressing the original contribution to knowledge of

this research and implications for future research. In summary, the research

provides three contributions to knowledge. Firstly, the research extends alliance

process theory by providing a more individual-level account of the factors which

shape the path of an alliance — a contribution which has been called for in the

alliance process literature. Secondly, that the research also extends alliance

process theory by demonstrating the contingent nature of alliance events, or the

14

workings of ‘timing and luck’ (Eisenhardt & Zbaracki, 1992). This sensitises the

claims to causality that might be made for economic, structural or individual

factors. Finally the research contributes to knowledge by demonstrating the

explanatory strength of a multi-frame approach for understanding and explaining

alliance outcomes and of the frames of Environmental Determinism, IA and I/C

in particular.

15

CHAPTER ONE: Explaining Alliance Change and

Development - A Literature Review and Research

Agenda

… strategic alliances do not involve multiple abstract entities. If organizational

sociology has taught us anything, surely it must be that organizations are socially

complex organisms, comprising concrete individuals and groups whose mindsets,

dynamics, and interests are likely to shape an alliance at least as much as explicit

organizational goals and strategies (De Rond & Bouchikhi, 2004: 59).

The Introduction to this thesis identified that alliances, with other inter-

organisational forms, have become a strategy of choice and necessity for both the

private and public sectors. Converging economic, social and environmental

forces have compelled organisations to join with others in a variety of

cooperative forms. Having described the growing phenomenon of alliances, the

Introduction identified that alliances develop in different ways. Some alliances

adapt and are deemed successful, despite the inherent tensions and complexities

of the form. Others dissolve, often without their potential value being realised.

Alliance process theorists are divided in their explanations for this phenomenon.

Some see pattern and predictability in the path of an alliance, where others argue

for the non-predictability of alliance change and development.

What is common to these studies, however, is a bias towards viewing alliances as

economic or strategic forms, with unitary, rational goals, at the cost of

overlooking their social and heterogeneous characteristics. There have been calls

within the field to socialise and humanise our explanations for alliance process

(Faulkner & de Rond, 2000; Gulati & Zajac, 2000; Hardy & Phillips, 1998), and

to foreground the potential of individual actors to shape their path. As De Rond

(2003: 174) suggests “Our understanding of alliance life … may be improved by

examining their diversity and the role of human agency in authoring their various

plots.”

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Research Focus and Key Question

This thesis argues that through employing an IA perspective, either alongside or

integrated with current structural and economic explanations, we expand our

current understanding as to why alliances unfold the way they do. The thesis

seeks to demonstrate that individual agency, being the choices, motivations,

practices and attributes of individual alliance actors, was a generative mechanism

of change in the HOUSCO case.

Thus, the key research question this research seeks to address is:

� If alliances are socially complex, hybrid forms, what case can be made

for individual agency as an explanation of alliance change and

development in this case? What additional dimensions are illuminated by

the individual agency perspective which have otherwise been overlooked

in the alliance process literature?

In demonstrating the explanatory contribution of individual agency, we mitigate

the risk inherent in continuing to build theory within a single paradigm: that is,

that our discipline continues to produce incomplete views of organisational

phenomena (Gioia & Pitre, 1990).

Building the Individual Agency Perspective

The issue for an alliance process analyst wishing to employ this social and

individual perspective is then to choose the appropriate theoretical tools. When

looking to the alliance literature for accounts of the role of individuals in alliance

outcomes, we find studies which contribute to knowledge by describing and

predicting those leadership traits and skills which are associated with a

successful alliance. This literature usefully begins the process of building a more

socialised and heterogeneous account of alliance development and change.

However, while these traits and practices can inform the building of constructs

around the actions of alliance leaders, more is required to theorise the role of

human agency in shaping the alliance path. We need to be able to explain how

17

and why the actions of individuals shape the alliance path, who is doing the

shaping and why they choose these actions at this time. The building blocks

necessary for such explanations exist in organisational theory, particularly in

theories of agency and change. These theories would explain the sequence of

events in an alliance process as the skilled accomplishments of alliance actors.

However, these theories need to be sensitive to the particular organisational

context of the alliance. We need to be able to identify those distinguishing

practices of alliance actors that transform not just a single organisation but two or

more. Thus the alliance leadership literature can be ‘fused’ with theories of social

practice to build theoretical tools particular to the alliance form.

The purpose of this chapter therefore is twofold. Firstly the chapter will make the

case that explanations of alliance process would be usefully enriched and

extended by enabling theories of IA to be considered alongside, and in dialogue

with, more established structural and economic theories of alliance process.

Secondly, the chapter demonstrates that, while the existing alliance leadership

literature provides useful material from which to build an IA frame, theorising

the role of individual actors in alliance change requires merging this literature

with the organisational studies literature.

The chapter begins by establishing the study within the broader strategy and

public management literature. I then critically review current explanations for

alliance development and change, establishing the case for extension to include

more social and individual factors. I then order and advance the alliance

leadership literature, the core of which is a body of studies that examine the

characteristics of leadership for alliance success. I find that while the literature is

underpinned by assumptions that IA matters in the calculus of alliance outcomes,

these studies have not enabled an assessment of the explanatory potential of IA.

I argue that an IA perspective in an alliance context can be explored by

combining the knowledge gained from the alliance leadership literature with the

theoretical tools of organisational and institutional studies. I conclude by

establishing a research agenda for extending alliance process theory by

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considering social and individual factors. I put forward a range of ontological,

epistemological and methodological considerations required to advance this

research agenda and the research questions which follow for this study. Figure 1

graphically depicts the structure of this chapter.

Figure 1: Positioning the Study in the Literature

Strategy & Organisation - Alliances

Public Management – Inter-Organisational Relationships

Leadership Dynamics, Change & Development Agency & Change

Extending Explanations for Alliance

Development and Change:

Individual Agency Perspective

Organisation Studies

19

STRATEGY AND ORGANISATION LITERATURE: THEORIES OF

HYBRIDS AND ALLIANCES

There are many forms of cooperation among organisations (see Grandori &

Soda, 1995 for overview); however the term ‘alliance’ has been most frequently

adopted to denote inter-organisational forms of working. Faulkner & de Rond

(2000: 3) observe that while the term “may at some point have referred strictly to

a particular type of relationship, it now serves as an 'umbrella' label for a host of

cooperative relationships.” The definition which guides this research comes from

Gulati (1998: 293), being “voluntary arrangements between firms involving

exchange, sharing, or co-development of products, technologies or service.”

The study of the alliances has gained the interest of strategy and organisation

scholars since the 1990s, paralleling the growth in alliance practice in both the

public and private sector. Auster (1994) and Faulkner and De Rond (2000) have

provided comprehensive and critical reviews of this literature, the characteristic

feature of which is the wide range of disciplines and theoretical perspectives

represented as potential explanations for a variety of alliance phenomena,

although dominated by economic perspectives, such as market power theory, the

resource-based view, agency theory and transaction cost theory (Faulkner and de

Rond, 2000).

From this literature we have gained an understanding of the properties and

characteristics of an alliance as a hybrid organisational form (neither market nor

hierarchy), and also explanations and prescriptions for formation, governance,

change and performance outcomes, among a wide range of alliance phenomena.

I will briefly overview the current state of knowledge in these areas, prior to

identifying in more depth the current explanations regarding alliance change.

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Alliances as Hybrid Organisational Forms

It is useful to identify the theoretical provenance of alliance studies in the

literature on hybrid organisational forms. Explanations for the formation of

alliances, for the governance mechanisms employed and for their distinctive

dynamics can be seen to be underpinned by theories of hybrids.

Williamson specifically identified hybrid forms of organising — as distinct from

hierarchies or market forms of production — in his 1991 seminal paper

(“Comparative economic organization: the analysis of discrete structural

alternatives”), viewing these as ‘transactions of the middle kind’, being neither

market nor hierarchical forms of organising economic transactions between

firms. Studies into the phenomenon have grown since Williamson’s 1991

contribution, crossing over from economics to organisation studies journals,

although dominated by the transaction cost economics perspective (Menard,

2004). Oliver and Ebers (1998: 550) note that the concept has produced some

ambiguity in the literature. Similarly Menard (2004: 347) observes that the

vocabulary contained in this literature includes clusters, networks, symbiotic

arrangements, supply-chain systems and administered channels among others.

However, others view this ambiguity as a necessary early stage of theory

development in hybrid forms and that this proliferation of interest in hybrid

theory reflects the increasingly complex realities of how economic activity is

being organised (Makadok & Coff, 2009).

Although the literature is diverse, scholars have contributed to knowledge by

noting how hybrids can be distinguished from market or hierarchical forms, why

firms choose hybrid forms, their defining characteristics and what governance

mechanisms apply to make them workable. Makadok and Coff (2009) draw

from a number of theorists (e.g. Bradach & Eccles, 1989; Holmstrom &

Milgrom, 1994; Williamson, 1991) to distinguish markets from hierarchies on

the dimensions of authority, ownership and incentives. They propose that there

exists a taxonomy of hybrid forms which permutate these three elements.

21

Intermediate forms, they argue, exist between market and hierarchy on all three

of these dimensions, while true hybrids can be defined as being market-like on

some dimensions while simultaneously hierarchy-like on others. Among this

taxonomy include arrangements such as franchising, consortia arrangements and

autonomous profit centres within hierarchical firms.

Theorists observe a number of forces which propel firms toward hybrid forms.

Williamson (1991) observes adaptation, or the need to efficiently adjust

production as a result of changes in conditions, as a central economic problem

driving a shift to hybrids from market forms. Powell (1988) equally claims

simultaneous pressures toward efficiency and flexibility are leading firms to

experiment with hybrids. Borys and Jemison (1989) theorise that hybrids are

being adopted to avoid disadvantages of hierarchies, such as resource scarcity,

lack of facilities for economies of scale and inability to spread risk. Menard

(2004) also identifies the limitations of hierarchies as a factor, but also identifies

that markets have the limitation of perceived inability to adequately bundle the

relevant resources and capabilities.

Hybrid forms have been observed to exhibit some regularities or common

characteristics, despite representing a large and heterogeneous set of

arrangements. Most prominent among these is a tendency towards instability.

Williamson (1985: 83), in a publication pre-dating his seminal 1991 paper,

reflected on his view that hybrid forms were difficult to organise and ‘hence

unstable’ but acknowledged their prevalence. This instability has been explained

as resulting from the ‘distinctive duality’ (Borys and Jemison, 1989: 235) of

hybrids. A hybrid is simultaneously a single organisational arrangement (and

therefore possessing an incentive to cooperate) and a product of sovereign

organisations (with an incentive to compete). This is seen as a fundamental

source of tension, producing highly discrepant incentives. For example, Menard

(2004) notes that the ability of partners within a hybrid form to make

autonomous decisions as a last resort leads to a dynamic which can derail the

cooperation required for a hybrid to function effectively.

22

Accepting this characteristic tension in hybrid forms, theorists propose

governance mechanisms which can reconcile and mitigate the risks of

opportunism. Both Williamson (1991) and Menard (2004) note the role of

reputational effects in stabilising the inherent risks of hybrids. Opportunistic

behaviour creates a reputation for a firm which is quickly communicated around

the network. Menard (2004) notes that reputation effects are the least formal of

the governance mechanisms applied to regulate hybrids. More formal are

negotiating devices to ensure sufficient incentives are maintained for each party.

More formal again is the creation of an authority, sitting outside the hybrid to

rule on conflicts as they arise.

As previously observed, the economic analysis of hybrids, which views the form

as a structure to organise transactions between rational organisational actors,

underpinned the development of alliance theory in the strategy literature. This is

outlined in the next section.

The Strategy Literature: Change and Development as One of Five Key

Research Issues in the Study of Alliances

Gulati (1998: 293) identified the five key issues for the study of alliances as: (1)

the formation of alliances, (2) the choice of governance structure, (3) the

dynamic evolution (or change and development) of alliances, (4) the

performance of alliances, and (5) the performance consequences for firms

entering alliances. Of these, the most attention has been paid to formation,

governance and performance, with the most popular theoretical perspectives

being transaction cost, resource-based view and resource-dependency (Oliver &

Ebers, 1998). Empirical studies of the evolution of alliances, or how alliances

change and develop, are limited relative to the other four areas of inquiry (Reuer,

Zollo, & Singh, 2002). Doz (1996: 55) argues that “the growing literature on the

strategic alliance phenomenon suffers from imbalance” with relatively little

emphasis on change and development.

23

Explanations as to why firms enter into alliances focus on both internal and

external factors (Faulkner and de Rond, 2000). Among a wide range of firm and

industry level factors proffered, theorists suggest that firms need to acquire

specific assets or capabilities or reduce costs (e.g. Contractor & Lorange, 1988;

Harrigan and Newman, 1990; Stuckey, 1983). Externally, globalisation and the

increased pace of technological change require firms to seek resources and

capabilities, and to buffer uncertainty (e.g. Kogut, 1988). A more complete

review of factors which lead firms to form alliances is provided by Harrigan and

Newman (1990).

The literature on governance issues describes and explains the choices made by

partners in structuring their alliance. A strand of this literature extends the work

of Williamson (1985, 1991) and others by describing the extent to which an

alliance demonstrates hierarchical or market characteristics (e.g. Teece, 1992).

We know from this literature, based in transaction cost theory, that the

coordination and control mechanisms built into alliances are a response to the

level of appropriation risk and other behavioural uncertainties envisaged at the

formation of an alliance (e.g. Casciaro, 2003; Oxley, 1997; Pisano, Russo &

Teece, 1988).

Alliance performance and the performance outcomes for firms participating in

alliances is less studied than formation and governance concerns (Gulati, 1998).

Much of the performance literature examines the high failure rate of alliances,

prescribing management formulas for success (e.g. Kanter, 1994), as well as

predicting alliance outcomes from initial conditions (e.g. Harrigan, 1986). Gulati

(1998) observes the problem in the strategy and organisation literature of

defining alliance success and failure, and that termination does not always serve

as a useful proxy. However, from this literature we know the range of factors

which can contribute to explanations of alliance outcomes, including industry

and competition factors (e.g. Dussauge & Garrette, 1995) as well as more

endogenous factors such as partner characteristics and the nature of the venture

(e.g. Kogut, 1989). The literature which examines whether participation in

24

alliances impacts firm performance similarly suggests a range of possible

indicators of benefits received, such as stock market reactions (e.g. Anand &

Khanna, 1997) and contingency factors such as social networks and previous

alliance experience (Ahuja, 1996; Berg, Duncan & Friedman, 1982).

Similar to hybrid organisational theory, we can see that alliance theory within the

strategy literature holds similar ontological assumptions of alliances as economic

entities. The literature is informed strongly by economic theory, particularly in

regard to issues of governance and performance, with transaction cost analysis

being particularly prominent. Studies of alliance development and change, as

one of these five key research areas, also remain within this dominant paradigm,

as will be outlined in more detail in the subsequent section. The research

presented in this thesis contributes to the strategy literature by adding to the body

of process studies which are relatively under-represented. It also contributes by

extending our explanations for the phenomenon of alliance change by adopting a

social and individual analytical perspective outside the dominant economic

research paradigm and considering their relative and combined explanatory

contribution.

INTER-ORGANISATIONAL THEORY IN THE PUBLIC

MANAGEMENT LITERATURE

The case presented in this thesis is an alliance process between two government

organisations. The study therefore can be seen as an example of the phenomenon

of inter-organisational relationships (IOR) within the public sector and

contributes to this literature in exploring how individual actors within the

institutions of local and state government enact change.

While the HOUSCO study examines change, the literature on inter-

organisational forms in the public sector is concentrated on issues of formation

and governance, similar to the strategy literature. In reviewing this literature, it is

necessary to look beyond the more specific alliance form of organising to

examine the wider literature on public sector collaboration. Focussing only on

25

alliances within the public sector would draw the reviewer narrowly to the

literature which examines public private partnerships, being a specific

contractual arrangement where the private sector takes on some service

responsibility and risk from government, normally for infrastructure. This would

limit a wider consideration of the state of knowledge in this domain.

There is an extensive public sector literature which addresses the strategic intent

of government in moving away from organising through traditional hierarchies

toward more inter-organisational forms for policy development and service

delivery. Much of this literature is conceptual, with the most influential

theoretical movement documenting the reform ideas of New Public Management

(NPM), codified in the work of Hood (1991) and later the ideas of New Public

Governance (NPG) (Osborne, 2009). This reform agenda of government

commenced in the 1970s and continues to the present day with the intent of

efficiency, economy and effectiveness (Argy, 2000; Di Francesco, 2001). It is

manifest in a shift away from delivery through a single bureaucracy to more

hybrid organisational forms, particularly market models (Bogason, 2000;

Considine, 2001). Osborne (2009) comments that at the time of Hood’s

influential study, it seemed like the paradigm shift represented by NPM would

likely dominant theory and practice for some time. However, in the following

decade NPM drew criticism on a number of counts. Osborne (2009: 380) notes

that one of the most fundamental criticisms of NPM was its “intra-governmental

focus in an increasingly plural world.” Osborne (2009), in arguing for the

alternative paradigm of NPG, shifts the focus of delivery from intra-government

to inter-organisational relationships and the governance of processes, still with

the intent of service effectiveness. Osborne (2009: 380) argues that NPG “posits

both a plural state, where multiple inter-dependent actors contribute to the

delivery of public services and a pluralist state, where multiple processes inform

the policy making system.”

The reasons for formation of inter-organisational relationships have also been

examined in a range of more narrowly-focussed studies. These have included

26

cross-sectoral and collaborative policy development (e.g. Herrigal, 1993),

stimulating regional development (e.g. Bianchi, 1993), providing integrated

service delivery among different government agencies (e.g. Agranoff, 1991) and

funding major public infrastructure through partnering with the private sector

(e.g. Entwhistle & Martin, 2005; Joyner, 2007).

A strand of the public management literature examines and documents the

governance considerations emerging from this more plural approach to

government delivery. Analysts address the broad public interest issues

surrounding the move away from more centralised models of organising to

working through a range of inter-organisational forms. For example, the work of

Rhodes (1997, 2000) addresses the range of risks for government of working

through market forms of governance (Rhodes, 1997, 2000). Other studies have

examined the risk to the public from the difficulties of integration across multiple

contributing organisations (e.g. Kettl, 2001; Rhodes, 1997, 1998). Also at the

system level of analysis is the work of Klijn and Koppenjan (2000, 2006) on the

governance of the policy process, which propose that there is a set of institutional

rules that guide the behaviour of actors within networks and the particular roles

governance should play within a network. A theme in this conceptual work is a

shift away from conceiving government in a central controlling position to

notions of power sharing, exploring issues of accountability and fragmentation.

At the more micro level of governance studies, focussed on the inter-

organisational relationships themselves, we have a body of studies which

examine structuring arrangements and dynamics of network forms, noting their

tendency to resist formal mechanisms of control and accountability (e.g.

Machado & Burns, 1998; Taylor & Hoggett, 1994). Another body of studies

examines the structuring of public private partnerships, where control,

accountability and also strategies for risk allocation and management become

central concerns. In contrast to the network literature, which focuses on the

process of governance, the public private partnership literature is concerned

squarely with the models of governance, or how the arrangement should be

27

structured (for example, Becker & Patterson, 2005; Ewing, 2007; Grimsey &

Lewis, 2002; Shen et al, 2006).

Similar to the strategy and management literature, studies of the dynamics and

change within the public sector collaboration literature are more limited than

issues of formation and governance. However, as we have noted above, studies

of public sector network arrangements have noted their ‘fluidity’ and their

tendency to move away from original purposes (e.g. Rhodes 1996, 1997). The

studies of Huxham (1996, Huxham & Vangen, 2000a, 2004) focussing on public

sector collaboration broadly conceived, parallel the strategy literature in

assuming the manageability of collaborative forms, prescribing managerial

strategies for avoiding collaborative inertia. In the public private partnership

literature, we learn that these forms have a high probability of post-formation

adaptation (Jerzy Henisz, 2006), with a range of environmental and structural

factors leading to renegotiation or termination (e.g. El-Goahary et al, 2006;

Hodge, 2004).

We can see that there is no unified theory that governs this body of research in

inter-organisational forms in the public sector. Rather it is characterised by a

diversity of disciplines and theoretical perspectives depending on the sector of

interest and the agendas of the researchers. However, similar to the strategy

literature we can see that they are underpinned by assumptions of inter-

organisational forms as structural and economic events, rather than considering

their social dimensions.

While generally contributing to our knowledge of inter-organisational working

within the public sector, the HOUSCO study will specifically further the research

directions of Huxham (1996) and Huxham and Vangen (2000a, 2004) in

considering dynamics and process. The study will explain how this particular

alliance process moved passed periods of inertia to reach the milestone of

incorporation, in particular examining how individual actors within two levels of

28

government were able to work within their organisational and institutional

contexts to bring HOUSCO into being.

EXPLAINING ALLIANCE CHANGE AND DEVELOPMENT

The review has thus far positioned the study broadly within the literature of

hybrid and alliance theory and public management theory. The next section will

position the study within the narrower body of literature which examines alliance

process or alliance change and development.

As a study of alliance process, the HOUSCO case is informed by the broader

literature of organisational process research, the intent of which is to “provide

explanations in terms of the sequence of events leading to an outcome” (Langley,

1999: 692). Studies of process have been observed to apply one or more of four

ideal-type organisational process theories of Van de Ven and Poole (1995), being

life cycle, teleology, dialectics and evolution (De Rond & Bouchikhi, 2004). Van

de Ven and Poole (1995: 519-520) propose that:

(a) process is viewed as a different cycle of change events, (b) which is governed by a

different 'motor' or generating mechanism that (c) operates on a different unit of

analysis and (d) represents a different mode of change.

A summary of these theories, including their proposed generative mechanism of

change, is included in Table 1 below.

29

Table 1: Summary of Ideal-Type Theories of Social Change (Van de Ven & Poole,

1995: 514)

Family Life Cycle Evolution Dialectic Teleology

Key metaphor

Organic growth

Competitive survival

Opposition, conflict

Purposeful cooperation

Event Progression

Linear and irreversible sequence of prescribed stages in unfolding of imminent potentials present at the beginning

Recurrent, cumulative and probabilistic sequence of variation, selection and retention events

Recurrent, discontinuous sequence of confrontation and conflict and synthesis between contradictory values or events

Recurrent discontinuous sequence of goal setting, implementation and adaptation of means to reach desired end state

Generating Force

Prefigured program/rule regulated by nature, logic, or institutions

Population scarcity; competition; commensalism

Conflict and confrontation between opposing forces, interests or classes

Goal enactment, consensus on means Cooperation/ symbiosis

In turn, de Rond and Bouchikhi (2004) used the Van De Ven and Poole (1995)

typology of process theories to classify alliance process research studies. They

note that three of the four ideal-type theories — life cycle, teleology and

evolution — are well addressed in this literature (De Rond & Bouchikhi, 2004:

56). However, they note dialectical theory is relatively absent with the exception

of one study by Das and Teng (2000). The De Rond and Bouchikhi (2004)

classification of this literature is summarised below, with the contribution to

knowledge of each of these studies following.

30

Table 2: Ideal-Type Theories of Alliance Process (adapted from de Rond and

Bouchikhi, 2004: 60)

Family Life Cycle Teleology Evolution Dialectic

Examples

of alliance

studies

D’Aunno &

Zuckerman

(1987)

Achrol et al

(1990)

Forrest &

Martin (1992)

Murray &

Mahon (1993)

Kanter (1994)

Shortell &

Zajac (1988)

Zajac & Olsen

(1993)

Ring & Van

De Ven (1994)

Doz (1996)

Doz & Hamel

(1998)

Koza & Lewin

(1998)

Gulati (1993,

1995a, b)

Gulati & Gargiulo

(1999)

Reuer et al (2002)

Das &

Teng

(2000)

Life Cycle Studies

The life-cycle view of organisational change is predicative: studies of alliances

underpinned by this perspective present the development path of an alliance as a

linear sequence of generic phases from initial formation through to maturity or

decline. The life-cycle perspective views change as imminent (Van de Ven &

Poole, 1995). That is, the sequence of events within an alliance will play out

according to a pre-determined program or code that is present at alliance

formation. Each alliance phase is cumulative, building on the previous phase and

contributing to the final outcome. Alliance process theorists have labelled these

phases differently, but each share an assumption that an alliance will move

seamlessly and predictably from one to the next, through the rational planning

and operational tasks of managers. Several theorists have adopted a marriage

metaphor to describe these stages, including courtship, negotiation, start-up,

maintenance and ending (Forrest & Martin, 1992; Murray & Mahon, 1993).

Kanter (1994) extends this metaphor with the inclusion of partner selection,

setting up and housekeeping, learning to collaborate, and internal change.

Variations on these stages include the studies of D’Aunno and Zuckerman (1987)

31

who propose four developmental stages (emergence, transition, maturity and

critical crossroads) and Achrol, Scheer and Stern (1990) who also propose the

four stages of entrepreneurship, collectivity, formalisation and domain

elaboration. Faulkner and De Rond (2000) observe that this body of alliance

process studies is strongly informed by a ‘closed systems’ perspective of

organisational change: changes in the environment do not impact on the

progression through each of the stages. Equally, Bouchikhi, De Rond and Leroux

(1998) observe that this linearity and predictability in life-cycle studies has made

this perspective popular in the practice community, where managerial tasks can

be prescribed for each stage.

Teleological Studies

De Rond and Bouchikhi (2004) observe that studies emanating from the

teleological perspective retain an assumption of identifiable stages of alliance

development; however these stages can be more iterative and open-ended than

envisaged in life-cycle studies. Alliances are assumed to be purposeful, rational

entities which will develop and adapt, informed by an overarching agreed and

shared purpose or goal. Unlike the closed system view of the life-cycle

perspective, the teleological view of alliance change allows for adaptation based

on changing events and circumstances, with the presence of learning explaining

the progression of relationships toward a successful outcome and the absence of

learning to dissolution. The study of Doz (1996) in particular specifically focuses

on the explanatory role of learning between alliance partners. Alliances follow a

sequence of three iterative processes, with the learning dimension mediating

relationships toward a successful outcome. Learning is conceived as ongoing

assessments of equity and efficiency, in which managers play a critical role. The

later study of Doz (with Hamel 1998) also emphasises learning, placing more

predictive ability on its ability to progress an alliance to a more mature state. The

study of Ring and Van de Ven (1994) also foregrounds considerations of fairness

and equity as being explanatory of an alliance process. Similar to the study of

Doz, considerations of equity are seen as mediating recurring (or iterative)

process stages — in this case stages of negotiation, commitment and execution.

Change arises from actors acting rationally to rebalance the likely efficiency and

32

equity outcomes of the alliance. Ring and Van de Ven (1994) emphasise that the

outcomes of an alliance process cannot not be fully specified at formation, nor

can the achievement of equity be controlled by managers. The explanation of

alliance change advanced in the study of Zajac and Olsen (1993: 131) is

consistent with the studies of Doz (1996) and Ring and Van de Ven (1994) in its

focus on assessments of equity. They explain alliance change as the processes by

which exchange partners create and claim value. The alliance goes through

processes of initialising, exchange, processing and reconfiguring. ‘Processing’ is

conceived as joint assessments of how much value is being created by the

alliance and how it should be distributed. Faulkner and De Rond (2000: 26)

observe that these teleological studies, while adopting a less linear and more

open-systems perspective of change than life-cycle studies, maintain the

sequential focus, with an associated role for managers. They note, however, that

this role is now one of adaptation, rather than control.

Evolutionary Studies

Alliance process studies, underpinned by an evolutionary view of change,

assume that the sequence of change events will be determined by exogenous

forces. In this perspective, the environment is seen as the principal motor of

change, which retains only those alliances that survive competition with others

for scarce resources in a changing environmental field. Evolutionary theorists

look to the broader environment in which the alliances are embedded to explain

the change and adaptation process. In the study of Koza and Lewin (1998) this

determining environment is the strategic portfolio of each partner organisation.

An alliance will ‘co-evolve’ with each firms’ strategy, changing as the

commitment of each firm alters to adapt to a changing institutional,

organisational and competitive environment. While the Koza and Lewin (1998)

study explain change within a single alliance, other studies underpinned by an

evolutionary perspective explain change at the population or network level. Thus

the longitudinal studies of Gulati (1993, 1995a, 1995b) address the social and

strategic structures in which populations of alliances are embedded, explaining

formation patterns as being determined by patterns of repeated inter-firm ties.

Similarly, Gulati and Gargiulo (1999) explain patterns of alliance formation as

33

determined by the information of a firm based on their network of prior alliances.

New alliances then generate new information, which in turn modifies the

determining network structure for new alliances. While Gulati (1993, 1995a,

1995b) and Gulati and Gargiulo (1998) examine formation processes, the study

of Reuer et al (2002) explains post-formation processes. Alliances will adapt

their governance structures as a result of a mismatch with the nature of the

transaction and with changes in the strategy of a firm. De Rond and Bouchikhi

(2004) note that, unlike life-cycle and teleological perspectives, studies

underpinned by an evolutionary logic abandon managerial prescription.

Dialectical Studies

Dialetical theory is the least explored in the alliance process literature (de Rond

& Bouchikhi, 2004). Dialectical theory views change as arising from forces

either within the alliance or external to it. According to Van de Ven and Poole

(1995: 517), the dialectical perspective arises from a “Hegelian assumption that

an organizational entity exists in a pluralistic world of colliding events, forces or

contradictory values that compete with each other for domination and control.”

Change occurs when one dialectical force gathers strength and dominates over its

opposing force, pushing the alliance to evolve to a new state. There are two

studies adopting the dialectical perspective in the alliance process literature. The

earlier study by Das and Teng (2000: 94) explains alliance instability through a

dialectical lens, viewing alliances as “a system of multiple tensions” and “an

aggregation of three internal tensions, cooperation versus competition, rigidity

versus flexibility and short-term versus long-term orientation.” Das and Teng

(2000) argue that stability results from keeping these three sets of tensions in

balance, so that one end of a dialectical tension does not dominate. The authors

claim a normative value also of their theory, providing a guide to managers about

how to preserve balance over time, avoiding premature termination.

In their own study adopting the dialectical lens, De Rond and Bouchikhi (2004)

are critical of Das and Teng (2000), arguing that the study does not constitute a

process theory. They claim the study does not attempt to explain the necessary

34

‘how’ questions around the domination of some poles over others and the

reduction or intensification of tensions by actors. De Rond and Bouchikhi (2004)

address these limitations by suggesting that the continuous confrontation of a

wider range of conflicting forces brings about change, but there is no guarantee

that this will be positive from the point of view of the alliance actors. This

changing balance in dialectical tensions is argued to be brought about by the

unintended consequence of action and not through the rational attempts of

management to impose order and stability.

Structurationist Studies

While not included in the de Rond and Bouchikhi (2004) classification of

alliance process studies, it could be argued that a number of studies applying the

structurationist perspective equally take a dialectical view of alliance change.

These are the studies of Sydow and Windeler (1998, 2003), Osborne and

Hagedoorn (1997) and Philips, Lawrence and Hardy (2000). In applying the

structurationist perspective these studies apply the perspective of change of

Giddens in The Constitution of Society (1984). Institutions are in a constant

process of constitution and reconstitution, as actors negotiate, innovate and

translate the rules which govern the institutional context (Giddens, 1984;

Whittington, 1992). However, actors are viewed as constrained by the

institutional rules and structures in which they act. Action and structure exist in

‘duality’ and can only be understood with regard to the other.

In applying the structurationist perspective to inter-organisational forms, these

theorists are mostly interested in the potential of inter-organisational forms to be

a mechanism for broader institutional change. This contrasts with the other

theories of alliance change and development which explain change within an

alliance itself. However, these studies provide a useful view on the ontology of

inter-organisational forms, which leads to principles and concepts of

development and change. These studies underline the necessity to view inter-

organisational entities as heterogeneous in order to understand their processes

and dynamics. Sydow and Winderler (1998: 273) state that “structuration theory

35

does not conceptualise organisations, still less interfirm networks, as

homogenous and unitary entities, but as dispersed and fractured social practices.”

ADVANCING THE ALLIANCE PROCESS LITERATURE: TOWARD A

MORE SOCIAL AND INDIVIDUAL PERSPECTIVE

The structurationist studies represent an interesting development in the alliance

process literature, which, while proposing a range of different change

mechanisms, are underpinned by similar paradigmatic assumptions. In the

traditions of alliance research more generally, the first assumption is that

alliances comprise rational, unitary organisational actors and that alliances

change or progress as these rational organisational actors respond to their

economic and structural context. The second assumption is that the role of

alliance actors within a change process is functional, performing tasks prescribed

by organisational purposes. Each of these will be addressed prior to discussing

how alliance process theory can be usefully extended through embracing more

social and individual accounts of change.

Assumption of Rational Organisational Actors and Linear Processes

While the structurationist studies relax to some extent the idea of unity of

purpose within an alliance, the majority of alliance process studies are rooted in

an organisational logic which assumes administrative control and order, where

actors are assumed to act rationally to pursue joint interests and a shared,

objective view of alliance success or failure. While this logic may (or may not)

be appropriate for understanding a single-organisational entity, it is less useful

when considering the less unitary and homogenous inter-organisational forms, as

the structurationist literature observes. A paradox in the literature is that, while

the broader literature on hybrid organisational forms identifies their inherent

tensions and tendencies to instability, the alliance process literature is largely

rooted in an epistemological tradition seeking rational and linear predictions (de

Rond, 2003). Thus the process theorists would invite us to look past the disorder

and the definitely non-linear events and dynamics which often characterise

alliances to find sweeping patterns, rendering the complex unrealistically

generic. In short, the literature does not allow for the messier dynamics of these

36

more unstructured entities. The literature could benefit from studies that accept

rather than reduce alliance complexity, providing more sophisticated

explanations for causation.

Assumption of Functional Management

The majority of alliance process studies assume that the role of management is

determined a priori from organisational purposes within the alliance. Life cycle

theorists view the manager as performing a range of tasks determined by the

stage of the alliance. Management coordinates, but the alliance is driven by its

own predetermined organic forces. In contrast, teleological theory acknowledges

that managers make the judgements required to adapt an alliance to changing

circumstances, ensuring that equity and value are maintained. However,

managers’ actions are derived from organisational purposes and are seen as being

constrained by structural forces. This also accords with the constrained view of

agency of structuration theory.

The dialectical perspective, as interpreted by Das and Teng (2000: 85) has a

strongly functionalist and normative view of management:

We assume that one of the objectives in a strategic alliance is to secure the original

arrangement and prevent the alliance from an unplanned dissolution. To that end, the

partners should balance the contradictory forces that may work to unsettle the status

quo.

Thus, when the role of alliance actor is derived from the overarching change

theory applied, we are prevented from considering that the choices of actors

themselves may be a generative mechanism of change.

37

Why a More Socialised and Individual Account?

As a body of studies, the alliance process literature has produced an unbalanced

account of why events unfold the way they do, privileging a structural and

economic view. Even the structurationist approach, which has a stronger role for

the powerful actor, still views actors as inseparable from broader social

structures. The dominance of one particular paradigm of research has been

observed to be a limitation to theoretical development in studies of organisation,

as Gioia & Pitre (1990), with others, have noted. Gioia and Pitre (1990: 584)

argue that this dominance produces a narrow view of complex organisational

realities and advocates a multi-paradigmatic approach to theory building.

This paradigm dominance has also been criticised in the alliance literature as

leading to a generally under-socialised and dispassionate account (Gulati &

Zajac, 2000: 372). With Faulkner and de Rond (2000: 377) there is interest in

moving beyond viewing collaborations as “faceless abstractions.” The literature

is criticised as lacking empirical research linking individual behaviours to

collaborative outcomes, or as Doz (1996: 56) identifies, “a lack of integration of

individual behaviours in their organisational context.” Gulati and Zajac (2000)

also identify the need for more understanding of human action in bringing events

into being. Finally, as we have seen at the beginning of this chapter, De Rond

and Bouchikhi (2004: 59) question the dominant paradigm of alliance process

research and propose that the “mindsets, dynamics, and interests are likely to

shape an alliance at least as much as explicit organizational goals and strategies.”

In summary, theory building in alliance process would be extended and

strengthened by applying a range of perspectives. Specifically, there is a growing

consensus that theory would be enriched by considering social and individual

explanations. The next section will look to the alliance literature to begin the

process of building an IA analytical frame.

38

THE INDIVIDUAL ACTOR IN THE ALLIANCE LITERATURE

The previous section identified the range of current explanations for alliance

development and change, noting the bias in the literature towards viewing

alliances as economic or strategic forms. The review made the case that our

explanations would be enriched if we addressed the calls within the field for

more social accounts of alliance change. However, empirically, we know little

about how and why the agency of alliance actors shapes the alliance path.

The purpose of this section is to order and advance the conceptual and empirical

literature which focuses on the alliance actor and their contribution to alliance

outcomes. Based on a critical review of this literature I argue that, cumulatively,

the largely descriptive studies of leadership roles, practices and attributes in the

alliance literature do not provide an explanation of the role of IA in alliance

change and development. However, I argue that combining the nuanced and

context-sensitive alliance leadership literature with theories of agency from

social and organisational theory would provide an IA analytical frame

appropriate for exploring change within the context of an alliance or other inter-

organisational form.

The Alliance Leader and Alliance Performance

Alliance theory and research has largely overlooked the role of individuals in

explaining evolution and performance, relative to the literature on macro

concerns at network, alliance or firm level (Gulati & Zajac, 2000; Williams,

2002). Studies which focus on alliance leaders and managers have been mostly

conceptual, with empirical research of a descriptive and qualitative nature.

Empirical studies have tended to be field surveys, with findings describing the

characteristics of alliance leaders associated with successful alliance outcomes.

Influential in this literature are the studies of Spekman and Forbes (1998), and

Spekman, Isabella, MacAvoy and Forbes (1997a, b) examining the role of

alliance managers and the studies of Williams (2002) which dissect the skills,

competencies and behaviour of ‘boundary spanners.’ These theorists assert that

39

the manager is 'pivotal' in the alliance process (Spekman and Forbes III, 1998;

Williams, 2002), however more is needed to theorise how and why this is so.

The analyst can distil three broad themes from this literature. Firstly, that alliance

success is associated with individual actors performing distinguishing roles or

functions, often determined by the particular stage the alliance has reached in a

lifecycle. Secondly, that alliance success is associated with individual actors

demonstrating distinguishing business and relational practices. Finally, that

alliance success is associated with individual actors possessing distinctive

attributes, including a particular mindset or worldview. The following will

briefly summarise the findings in each of these three themes within the literature

prior to proposing some theoretical pathways which would advance the literature

beyond description to providing process explanation.

Alliance Roles/Functions

The alliance leadership literature demonstrates that alliances require actors to

fulfil a range of roles or functions particular to the process of bringing two or

more organisations together, working across boundaries and achieving outcomes

collaboratively. These roles are also deemed to vary according to stage in the

alliance life-cycle, by the form of the alliance or by its strategic purpose.

Research in alliance leadership has adopted and developed the 'boundary

spanning role' concept from organisational theory. Traditionally this was viewed

as the process of working between a single organisation and its external

environment. However, the boundary spanning role proposed originally in a

seminal work by Adams (1976) of filtering, transacting, buffering, representing

and protecting, are themes that can be recognised in the alliance and network

literature. The term has been adopted to refer to those actors in the alliance who

manage exchange relationships, (Seabright, Levinthal & Fichman, 1992) manage

within inter-organisational theatres (Williams, 2002) or who generally provide an

interface between the boundaries of independent firms (Wilson, 1995). The role

40

of context shaper or synthesiser from the network literature is similar (Agranoff

& McGuire, 2001; Dacin, Beal & Ventresca, 1999).

The literature suggests that different alliance roles are required for different

stages in an alliance process. This view would seem to accord with the dominant

‘life-cycle’ perspective of alliance process, which views alliances as moving

through a predictable sequence of stages. For example, the initial identification

and formation of the potential alliance partners is seen to require particular

'catalytic' agency (Dorado & Vaz, 2003; Rosenkopf, Metiu & George, 2001).

Over the whole life cycle, Spekman, Isabella and MacAvoy (2000: 749) suggest

that alliance managers move from initial roles of visioning and sponsoring to

advocating and networking within and across organisational boundaries, and

managing and mediating as the alliance reaches a mature phase.

While alliance roles can vary according to the maturity of the alliance, they can

also vary by the form of the alliance or the nature of the coordination required.

Grandori and Soda (1995) identify a comprehensive typology of ten network

coordination mechanisms that sustain and regulate inter-firm cooperation. They

suggest that the coordination processes that firms adopt may vary in 'mix and

intensity' according to the coordination mechanism chosen, suggesting a

contingent leadership approach. The different strategic purposes that alliances

fulfil also suggest different alliance roles. An international alliance may require

the role of 'host country advisor’ (Boyett & Currie, 2004; Yoshino & Rangan,

1995), while an alliance between competitors may require the roles of ‘strategy

setter’ or ‘competition coordinator’ (Yoshino & Rangan, 1995). Finally, alliance

roles may vary according to the structure or hierarchy of the alliance, with

different roles seen to be appropriate to either middle or executive leadership

(Bamford, Gomes-Casseres & Robinson, 2003; Boyett & Currie, 2004;

Rosenkopf et al, 2001).

41

Alliance Skills and Practices

Alliance leadership is generally considered to be a complex undertaking with

different practices and skill requirements from that of traditional management

through a single-organisation hierarchy (Isabella, 2002). Similar to the hybrid

organisational theory literature, this complexity is seen to arise from the inherent

difficulties of bringing together two or more sovereign organisations with

different interests and agendas, which in turn may change during the course of

the alliance (e.g. Tenbrunsel & Messick, 1999). Spekman et al (1998: 768) make

this clear in the following summation of their field study into alliance

competencies:

It is clear to us that it is risky to promote a successful line manager into a critical

alliance manager position. They possess skills and have a perspective that transcends

the capabilities needed to be a good line manager.

Theorists maintain that both business and relational practices are demonstrated

by the alliance manager and have produced comprehensive inventories of the

skill requirements (Bamford et al, 2003; Buckley, Glaister, & Husan, 2002;

Spekman et al, 1997a, 2000; Spekman & Forbes, 1998; Yoshino & Rangan,

1995). The following summarises findings from studies which identify

distinctive practices and skills.

Business/technical skills. Spekman et al (2000: 192) distinguish 'teachable'

alliance skills, which can be imparted through training, from 'unteachable' skills,

which describe a leader's thinking pattern and worldview. Among the 'teachable'

skills which Spekman et al (2000) identify are the functional skills of general

business knowledge and line manager skills. These would seem to be generalist

skills that are arguably indistinguishable from those required in any leadership

role, but perhaps place a greater emphasis on maintaining clear and frank

communication with partners (Buckley et al, 2002; Jarvenpaa & Tanriverdi,

2003), flexibility and improvisation (Isabella, 2002; Yoshino & Rangan, 1995).

The alliance leader is argued to differ from the leader in a single-organisation

42

hierarchy, however, by the necessity to operate in a 'boundaryless' manner,

championing the alliance agenda within their own organisation and managing

across partner companies (Williams, 2002). The leader achieves their outcomes

through their ability to tap into and leverage the resources of the network

(Agranoff & McGuire, 2001; Ibarra, 1992) and not solely through mobilising the

resources of their own organisation (Yoshino & Rangan, 1995). More

specifically, the leader may obtain alliance benefits with their own particular

professional or technical skills. In cooperative ventures for resource acquisition,

such as IT, functional experience and expertise may ensure benefits are realised

(McGee, Dowling & Megginson, 1995; Tyler & Steensma, 1998).

In addition, the leader must progress the alliance strategic agenda. This includes

scanning the environment for opportunities to ally (Rosenkopf et al, 2001)

linking alliance objectives with resource strategies (Pekar & Allio, 1994),

reassessing strategic visibility (Yoshino & Rangan, 1995) and broadening the

strategic agenda of the alliance as it matures (Huxham & Vangen, 2000a).

Relational skills. The alliance leadership research emphasises the importance of

the social and relationship building skills. This research has roots in social

exchange theory, which suggests that economic activity does not occur in a

social vacuum but is shaped by patterns of social relations (Cook, 1977;

Emerson, 1976). The requirement to build trust is integral to the social exchange

literature and is also represented strongly in the alliance leadership literature. The

leader builds trust aligning their personal actions with the values of the venture

(Arino & de la Torre, 1998) maintaining social norms and bonds (Larson, 1992)

and their ability to balance the interests of stakeholders, particularly through

conflict (Isabella, 2002; Jarvenpaa & Tanriverdi, 2003). The leader also builds

trust through the possession of 'earned' attributes (Spekman & Forbes, 1998)

such has credibility and respect (Buckley et al, 2002; Spekman & Forbes, 1998;

Isabella, 2002). Other general interpersonal skills identified include general

diplomacy (Buckley et al 2002; Isabella, 2002) and cross-cultural

communication (Boyett and Currie; 2004; Isabella, 2002).

43

The literature also identifies the ability to build social ties and social position as

being critical relational skills. This research introduces social network theory into

alliance leadership research. This perspective has underpinnings in the ideas of

social exchange theory, but also suggests that actions can be influenced by the

position of actors in the social context of the network (Gulati, 1998). Thus Ibarra

(1992) suggests that individuals have power in the network by virtue of their

position in the status hierarchy, as well as through their expertise and reputation.

Dacin, Beal and Ventresca (1999) similarly argue that relational advantages flow

from network position and also identify that the manager needs to understand the

social network to actively manage inter-actor ties. These inter-actor ties have

been argued to play a role in the maintenance of alliance relationships (Seabright

et al, 1992).

Alliance Attributes. In addition to what alliance leaders do, there is also a body

of studies which describe what distinctive attributes these leaders possess which

are important for alliance success. Much of this literature is based in managerial

and organisational cognition theory which suggests that individuals create

knowledge structures or schemas to help them process information and make

decisions (Walsh, 1995). The job of the leader in a group is one of interpretation

and translation of data from the environment to others (Weick, 1995). Similarly,

alliance theorists suggest that alliance leaders see the world differently from

leaders in a hierarchy (Isabella, 2002) and that there is a mindset which is

required for alliance success, distinguishable from that required for management

in single organisation forms. This is the realm of alliance leadership that

Spekman et al (2000) deem 'unteachable.' The shift required is one of getting

things done by influence rather than authority (Williams, 2002; Yoshino &

Rangan, 1995) and moving from a command and control mentality to a

cooperating mentality (Pekar & Alio, 1994). The leader needs to shift from a

firm centric to a network centric perspective (Jarvenpaa & Tanriverdi, 2003) and

be able to operate within dispersed configurations of power relationships in the

alliance (Williams, 2002) as well as within their own organisational hierarchy.

The mindsets which characterise the alliance leader are flexibility in outlook

(Buckley et al, 2002) and a collaborative understanding that recognises both

44

opportunities and costs in relationships (Dacin et al, 1999). The leader will

recognise the reality of mutual interdependence (Larson, 1992) and will possess

an outlook which embraces creativity, improvisation and learning (Isabella,

2002; Spekman et al, 1997a,b). Where required the leader will have a multi-

national understanding (Yoshino & Rangan, 1995; Spekman et al, 1997a,b).

Research suggests that the alliance leader will be able to develop ways to deal

with complexity and ambiguity (Agranoff & McGuire, 2001; Buckley et al,

2002; Williams, 2002) and be able to think outside prescribed routes and routines

(Ibarra, 1992). The leader will be both an expansive and synthetic thinker who

makes different cognitive connections (Isabella, 2002) being able to see patterns

in data and chaos in routine (Spekman et al, 2000). They will be able to

overcome cognitive biases (Dacin, 1999), be able to see multiple points of view

and be willing to change their own view (Spekman et al, 1997a).

Many of these capabilities align with literature on postmodern leadership as a

number of authors note (Spekman & Forbes III, 1998; Williams, 2002). For

example Snow, Miles and Coleman (1992) point to the need for a network

approach, even within single organisation forms, and the ability to operate across

functional boundaries as a requirement of twenty-first century leadership. Luke

(1998) also characterises postmodern leadership as being non-hierarchical,

facilitative and encouraging of collaboration.

Advancing the Alliance Leadership Literature from Description to

Explanation

The preceding section brought together the conceptual and empirical research on

the alliance actor, classifying this work into a framework of three emerging

themes. As the introduction to this review observed, the literature has offered a

comprehensive description of leadership requirements for successful alliancing,

highlighting the importance of technical and relational skills and arguing that

alliance leadership requires distinctive attributes. However, the literature

describes and prescribes these sets of competencies without a real questioning of

the nature of leaders to shape outcomes within a complex environment. These

45

roles, skills and attributes are assumed to matter in the calculus of alliance

outcomes. However, these studies have not generally employed methodologies

by which we can see how these are manifest in the day-to-day events of alliance

life within identified contexts, and how they then relate to decision events and

alliance outcomes. In short, we have little empirical evidence that leadership, or

agency more broadly defined, actually makes a difference in the developmental

path of an alliance. For example, we know that a range of different leadership

functions are required within an alliance process; however, we need an

explanation about what purpose these functions serve in mounting and sustaining

the alliance process, which actors within the alliance field are best placed to

perform which functions and how they go about performing them. Thus broader

questions of why, who and how remain unaddressed.

The building blocks of a theoretical view of individual actors and their role in

alliance change can be found in theories of agency and social practice from the

social and organisational studies literature. From these theories we can recast the

findings of the alliance leadership literature into explanatory constructs and

understand how and why leadership roles/functions, practices/skills and

attributes relate to alliance development and change. In order to establish this

relationship we need to introduce the concept of individual strategic choice — a

fundamental underpinning of theories of agency. In moving from description to

explanation our focus is not just the ‘what’ of these constructs, but rather how

and why these constructs contribute to individual strategic choice which moves

an alliance toward positive adaptation. Four concepts from social and

organisation theory can usefully bridge this gap from description to explanation:

(1) individual alliance actors exercise strategic choice, (2) alliance actors possess

institutional resources to enact change, (3) alliance actors form intentions and

strategies to act based on personal reflexivity, and (4) processes and practices of

skilled alliance actors influence the choices of the institutionally powerful. I will

briefly outline each of these theoretical concepts.

46

Individual Alliance Actors as Agents of Change: Strategic Choice

As De Rond (2003: 174) suggests “Our understanding of alliance life … may be

improved by examining … the role of human agency in authoring their various

plots.” Thus far, the alliance literature has stopped short of proposing that the

decisions and choices that leaders make are explanatory of the alliance path,

conceiving actors as managers of pre-determined organisational processes. When

individual actors are conceived as ‘authors’ of alliance events we assume

strategic choice and that this choice is explanatory of the path of an alliance. In

adopting theories of agency and change from social and organisational theory,

alliance events would be conceived less as the rational response of organisational

actors to their environment, but rather as the skilled accomplishments of

individual alliance actors. Individuals are seen to choose actions which serve

their particular purposes, interests or intent. Human capabilities and actions are

argued to have ‘causal efficacy’ (Archer, 2003) to bring about social change.

This perspective has its modern roots in social theory, with the work of Child

(1972, 1997) and strategic choice theory representing the perspective in the fields

of organisational studies and strategy.

Actors Possess Institutional Resources to Enact Change

The alliance literature identifies that certain functions are required to be

performed by alliance leaders, including such concepts as ‘boundary spanning’

or providing an interface between two or more organisations, as well as

sponsoring and mediating. It also suggests that the leader must build trust.

However, more powerful explanatory questions need to be framed to fully

understand what is required of an actor to mount and sustain the alliance process.

We need to understand which actors within the alliance field are powerful in

enacting change and why this is so. We need to know what they need to bring to

change opportunities as they arise. We understand from the alliance literature,

that relational advantages flow from network position (Dacin et al, 1999), but we

need to understand how that advantage is capitalised upon by the leader to

advance the alliance.

47

While organisational theorists differ as to whom within an institutional field may

be considered powerful, this is largely seen as a function of access to critical

resources such as formal authority (Giddens, 1984), legitimacy and credibility

(Scott, 1995). However Clegg (1989) also views power as resting in the skill of

the individual to give themselves more scope for action through their strategies.

By considering the theories of institutional power, we would then be able to

understand who is best placed to perform the interface or sponsoring function

and why, and how performing these functions moves the process to the next

phase of development.

Alliance Actors Form Intentions and Strategies from Personal Reflexivity

The alliance leadership literature suggests that a particular mindset is required on

the part of the leader or manager to ensure alliance success. For example that the

leader possesses a network or alliance perspective (Jarvenpaa & Tanriverdi,

2003) and can operate within dispersed configurations of power relationships in

the alliance (Williams, 2002) as well as within their own organisational

hierarchy. The review notes that these concepts are rooted in managerial and

organisational cognition or sensemaking theory (e.g. Walsh, 1995; Weick, 1995)

which suggests that individuals create knowledge structures or schemas to help

them process information and make decisions.

In theories of agency and change from the social and organisational literature

centrality is given to personal reflexivity. This is characterised not just as a

deliberating on context or a state of affairs as suggested by the alliance

leadership literature, but also how this relates to their own personal interests or

objectives (e.g. Archer, 2003). From this deliberation, the actor is able to see

alternatives for action and possibilities of realising personal and social goals,

from which an intent and personal strategy for enacting change is formed. Thus

reflexivity, as part of a broader theory of agency and change can usefully reframe

the ‘alliance mindset’ from the alliance leadership literature from a descriptive to

an explanatory concept.

48

Change Generated Through the Processes and Practices of Skilled Actors

The alliance leadership literature describes a range of distinctive leadership and

management practices which characterise a successful alliance. However there is

no particular explanation provided as to how or why these practices create this

success. Again we look to organisational theory to suggest this explanation.

Organisational theory suggests that, having formed an intention to act, the actor

engages in a range of processes which shape the relationships and choice of those

with power in the alliance (e.g. Sydow & Windeler, 2003). These processes can

be classified as strategising and evaluating, and persuading and enacting. As we

have seen above, strategising and evaluating (Levy & Scully, 2007: 974)

involves examining the possibilities within the social context of the alliance to

look for opportunities to act on their own intentions. This brings in the ideas of

the ‘alliance mindset’ from the alliance literature. The actor understands the

alliance context and the other actors sufficiently to know what actions will be

possible and powerful (Gadamer, 1979; Carr & Kemmis, 1986).

Persuading involves those relational skills and practices identified in the alliance

leadership literature, such as balancing the interests of stakeholders (Isabella,

2002; Jarvenpaa & Tanriverdi, 2003). The organisational literature suggests that

an actor persuades through dialogue with others, “connect[ing] their change

projects to the activities and interests of other actors in the field” (Levy & Scully,

2007: 981). A choice is then enacted with the actor ‘mobilising constituencies’

(Levy & Scully, 2007), skilfully coordinating and deploying resources at their

disposal (Maguire, Hardy & Lawrence, 2004). This ‘enacting’ construct then

encompasses the alliance leadership concept of leaders achieving their outcomes

through their ability to tap into and leverage the resources of the network

(Agranoff & McGuire, 2001; Ibarra, 1992) and not solely through mobilising the

resources of their own organisation (Yoshino & Rangan, 1995).

49

Thus the theoretical building blocks provided in organisational theory, ‘fused’

with the findings of alliance leadership literature, inform an IA analytical frame

appropriate for exploring change in the alliance context.

EXTENDING EXPLANATIONS FOR ALLIANCE DEVELOPMENT AND

CHANGE: INDIVIDUAL AGENCY PERSPECTIVE

This chapter has made two arguments. The first is that our current explanations

for alliance development and change would be enriched and extended by

considering social and individual factors. The review of alliance process studies

identified that a range of different theories were employed to explain the

different development paths of alliances, but most were underpinned by a single

research paradigm. Consistent with the broader field of alliance theory, the

process literature viewed alliances as strategic or economic phenomena,

comprising two or more unitary, rational and purposeful organisational decision

makers. In much alliance process theory, the choices of these organisational

actors in relation to the alliance result from a rational response to their strategic,

structural or economic environment and in turn shape the alliance path.

The review noted that paradigm dominance can be a limitation to theoretical

development in studies of organisation, as Gioia and Pitre (1990: 584), with

others, have noted. Gioia and Pitre (1990: 584) cite Burrell and Morgan (1979)

and Frost (1980) in stating that “The field recognizes that the use of any single

research paradigm produces too narrow a view to reflect the multi-faceted nature

of organisational reality” and advocates an approach to theory building that

accounts for differing paradigmatic assumptions.

The review also identified that alliance theorists have noted the dominance in

their discipline of this single structural/economic paradigm and have called for

more socialised accounts of alliance life, including accounts of alliance change.

According to Faulkner and De Rond (2000: 377) theory would not be progressed

by continuing to treat alliances as “faceless abstractions.” Rather they might be

viewed as “groups of cooperating individuals, with particular histories, loyalties,

50

abilities, ambitions, agendas and personalities.” They posit that such assumptions

may shed more light on questions of the path of the alliance: “Can one influence

the continuity and performance of an alliance by changing its social make-up?

Do some problematic alliances survive because of vested interests of certain

individuals?”

The second argument advanced in this chapter is that such a social, individual

frame by which to study alliance change cannot be built from the alliance

literature alone. The alliance literature has produced studies of alliance

leadership, the findings of which contribute to knowledge by describing the

roles, practices and attributes of individuals which are characteristic of alliance

success. The chapter argued that these findings provide a useful starting point for

building an IA frame that is sensitive to the alliance context. However, as these

studies are largely descriptive, the findings need to be folded into theories of

agency and change from the social and organisational literature in order that they

can contribute to explanation. The chapter argued that fundamental to a

socialised account of alliance change is the concept of strategic choice (e.g.

Child, 1997) and that the agency of individual actors can transform the

organisational context in which they operate. The alliance leadership literature

can usefully inform the development of an IA frame by suggesting the practices

and attributes which shape choice in an alliance context.

The study presented in this thesis will therefore extend alliance process theory by

exploring IA as an explanation of events within a case study of alliance change

and development. In doing so, it will address the opportunity identified by

alliance theorists to provide more social and individual explanations for alliance

change. It will also extend alliance theory by providing a theoretical bridge

between the currently separate literatures of process and leadership.

There is a range of epistemological, ontological and methodological

considerations required to advance this research agenda, which represent a

51

change from the current underpinnings of alliance process and leadership theory.

These are discussed below.

Multi-Paradigm Approach to a Complex Organisational Phenomena

The study presented in this thesis recognises, with Gioia and Pitre (1990), that a

multi-paradigm approach has benefit in theory building for multi-faceted

phenomena such as organisations. Moreover it recognises that alliances, as a

hybrid organisational form, have been argued to be more multi-faceted or

socially complex than single organisational forms. The complexity is seen to

result from the inherent difficulties of bringing together two or more sovereign

organisations, each comprising actors with different personal and organisational

interests and agendas, which in turn may change during the course of the alliance

(e.g. Tenbrunsel & Messick, 1999). A multi-paradigm approach would therefore

appear to have even more merit in extending alliance theory. However, in

proposing to extend theory through the deployment of another research

paradigm, it is important to be clear about how this will be achieved. This study

accepts that both the dominant structural/economic and IA paradigms will

produce explanation that is valuable, but partial. A more comprehensive

explanation is achieved through finding a means to link the two, or as Gioia and

Pitre (1990: 585) suggest a way to ‘at least juxtapose’. Thus this study does not

seek to find IA to be a superior explanation of alliance events, ‘trumping’

existing explanations. Rather the study holds that a superior explanation of

events will be achieved by considering an IA explanation in parallel and in

dialogue with the dominant structural/economic perspective, adding explanatory

horsepower to current theoretic armoury.

Alliances as Heterogeneous Forms

To more fully understand the dynamics of alliances and the role of agency in

their development, an IA frame will accept the premise of alliances as diverse,

heterogeneous forms, consistent with underlying theory of hybrid organisations,

as identified in the literature review. Denis, Langley & Rouleau (2007: 179) in

their study of pluralistic contexts observe that this concept presents a challenge

52

both for strategy theorists and strategy practitioners as “the very nature of

strategy as usually understood (an explicit and unified direction for the

organization) appears to contradict the natural dynamics of these organizations.”

These authors suggest that different, more social theoretical perspectives are

required to understand strategy formation and change in these forms in order to

add richness and depth to our more conventional understandings grounded in

assumptions of more unified organisations.

Analytic Separation of Agency and Structure

In viewing IA as a ‘generative force’ (Van de Ven & Poole, 1995) in its own

right, research would need to de-conflate agency and structure. The researcher

would be aligning herself with the views of Archer (2003) who perhaps alone in

theories of agency, analytically separates agency and structure. Archer (2003) is

critical of Giddens (1984), viewing agency and structure as separable and

ontologically distinct. This is a departure from most social theory which

conflates the two elements such that it withdraws autonomy or independence

from actors. Her theory holds that social systems are capable of radical

restructuring, which she views as ultimately due to human agency. She still

views structure and agency as being in constant interchange, but argues that they

can be held in ‘analytical dualism,’ with agency and structure as separable. This

contrasts with the notion of ‘duality’ (Giddens, 1984) or the inseparability of

agency and structure.

Fine Grained Process Analysis

A process theorist is seeking to understand the ‘how’ of alliance formation and

development (Langley, 1999) or why events unfold the way they do. As Van de

Ven and Poole (1995: 1385) make clear:

A process theory needs to go beyond a surface description, to penetrate the logic

behind observed temporal progressions. This explanation should identify the

generative mechanisms that cause observed events to happen in the real world, and

53

the particular circumstances or contingencies when these causal mechanisms

operate.

In exploring the contribution of the agency perspective to this understanding, the

researcher is seeking a fine-grained, first-principles understanding of the

practices and decisions of actors, and how at critical junctures these shape the

path of the alliance. In doing so the researcher is choosing to view process as

Van de Ven’s (1992: 169) ‘Approach 3’: “Process studies of organizing by

narrating emergent actions and activities by which collective endeavours unfold.”

The researcher seeks to extend process theory by testing the proposition that the

practices and decisions of individual actors contribute to this unfolding.

Methodological Implications: Historical Case Study, Alternative Templates

Strategy, Event Analysis and Micro-Level Data

As noted above, the researcher is adopting Van de Ven’s (1992:169) Approach 3

of process research; as such, this narration calls for qualitative, textual data,

using critical events (Edvardsson & Roos, 2001) within the process to structure

the analysis.

Around this scaffold of critical events, the researcher explores the IA perspective

through attention to micro-processes and detail. “Her focus would be squarely

on the actors involved — their interests, mindsets, strategies, loyalties, prejudices

and preferences” (De Rond & Bouchikhi, 2004:67). This can be achieved

through direct observation as an alliance unfolds, or through historical analysis

using detailed interviews and examination of archival process material.

The case study as a strategy has particular strength in exploring the IA

perspective as it allows the study of contextual factors and process elements in

the same real-life situation (Eisenhardt, 1989a; Halinen & Tornroos, 2005;

Pettigrew, 1992). While analytical separation of agency and structure has been

argued as necessary to advance the IA perspective, the actions of individuals still

need to be understood within their social and institutional context in order to

54

fully explore the constraints on agency as well as how actors are able to use the

resources available to them.

This research adopts Langley’s (1999) Alternate Templates Strategy of

sensemaking through process data in applying a number of theoretical frames in

parallel. The strategy supports analysis of two or more perspectives as a

complete framework. By comparing and contrasting with alternative

perspectives, analysis can examine IA as a discrete explanatory perspective or

propose an integrative framework by examining complementarities. In choosing

the Alternate Templates Strategy, the researcher can adopt a single, rich case

design. Degrees of freedom, Langley (1999) states, come from the application of

the different theoretical frames, providing the necessary basis for comparison

required in process studies (Pettigrew, 1997).

RESEARCH FOCUS AND QUESTIONS

The research agenda outlined above gives rise to the following research

questions.

The key research question this study seeks to address is:

� If alliances are socially complex, hybrid forms, what case can be made

for individual agency as an explanation of alliance change and

development in this case? What additional dimensions are illuminated by

the agency perspective which have otherwise been overlooked in the

alliance process literature?

This perspective will be juxtaposed with the existing and dominant explanation

for alliance process, being the more deterministic economic/structural

perspective. To apply further rigour to this analysis, an additional perspective

will also be put forward. De Rond (2005b) and De Rond and Thietart (2007)

propose that strategy outcomes can be understood as part choice (agency), part

55

chance, and part inevitability (or determinism). Accordingly, the perspective of

chance is also applied to the case, along with the dominant Environmental

Determinism perspective. Each focuses on a different element of the phenomena,

providing a different analytical lens. As such, the second question posed in this

study is:

� What dimensions are revealed through the interpretations provided from

the Environmental Determinism and indeterminacy/chance perspectives

that are lacking from the individual agency perspective?

Finally, in order to offer testable propositions regarding IA as a motor of alliance

process and outcomes, the final question addressed in this study is:

� How does individual agency interface with each of the perspectives of

indeterminacy/chance and Environmental Determinism as a framework

by which to understand alliance process and outcomes in this case?

CONCLUSION

Chapter One placed the research presented in this thesis within the field of

alliance theory, both in the strategy and organisation literature and in the public

management literature. The chapter also critically reviewed studies of alliance

change and development and also studies of alliance leadership. Two arguments

were put forward. The first was that current explanations for alliance change

could be usefully extended by employing an individual agency perspective,

either alongside or integrated with current structural and economic explanations.

The second was that an IA explanation sensitive to the alliance context could be

built by folding the findings from the alliance leadership literature into the more

explanatory theories of agency provided by strategy and organisation studies. A

research agenda and questions concluded the chapter. Chapter Two outlines how

these questions will be addressed by detailing the research design and methods.

56

CHAPTER TWO: Theoretical Framework:

Environmental Determinism, Individual Agency,

Indeterminacy/Chance

The previous chapter identified that theories of alliance development and change

are located within a broader literature of organisational process research. The

intent of process research is to “provide explanations in terms of the sequence of

events leading to an outcome” (Langley, 1999: 692). A process theorist is

seeking to understand the ‘how’ of alliance formation, change and development

(Langley, 2008) or why events unfold the way they do. The chapter quoted Van

de Ven and Poole (1995: 1385) who extend our understanding of process

theorising as follows:

A process theory needs to go beyond a surface description, to penetrate the logic

behind observed temporal progressions. This explanation should identify the

generative mechanisms that cause observed events to happen in the real world, and

the particular circumstances or contingencies when these causal mechanisms

operate.

The chapter reviewed the body of studies of alliance process, noting that the

sequence of events is largely explained through an ED perspective. That is,

structural and economic forces outside the control of individuals are viewed as

the generative mechanisms that shape the path of an alliance, with actors viewed

as mere ciphers of these larger forces. The dominance of this perspective has

been argued to lead to a generally undersocialised and ‘dispassionate’ account of

alliances (Gulati & Zajac, 2000). It has brought forth calls for more socialised

accounts of life within an alliance, including considerations of agency or choice

(Faulkner & de Rond, 2000; Gulati & Zajac, 2000). The chapter noted that while

there is a body of literature which describes the distinctive elements of alliance

leadership, there is little empirical evidence that the actions or practice of

individual actors actually shape the path of an alliance.

57

The chapter stated the goal of the study, which is to extend alliance process

theory by examining the IA perspective as an explanation of change and

development in a particular alliance case. The study proposes that an IA

perspective can add additional explanatory power to current theoretical resources

which explain alliance process. The study does this by analysing the case in

parallel, and in dialogue with, the dominant perspective in alliance process, being

ED.

The study also analyses the case through a third perspective of chance or

indeterminacy. The addition of this third perspective enriches the study both in

methodological rigour and theoretical contribution. Methodologically, a third

perspective provides additional strength to the claims made for IA as an

explanation of events in this case. The focal perspective, IA, will be explored as

an explanation in parallel with two theoretical legitimate alternative perspectives.

IA will be juxtaposed with these alternative explanations, ensuring that claims

made for the relative explanatory power of this perspective are robust. Also, the

inclusion of chance or indeterminacy as an analytic perspective is a useful

corrective to overly deterministic thinking. This perspective sensitises the

researcher to the possibility that the sequence of events and the outcome in this

case — as we know with the benefit of hindsight — could easily have been

different if plausible variations are introduced into the analysis at various points.

Dening (1996: 100) suggests, from the domain of historical methods, that we

must “return to the past the uncertainty removed by our privileged position of

hindsight.” Booth (2003) argues that this type of analysis sensitises the

researcher to the idea that outcomes may be contingent or probabilistic rather

than linear and determined. This adds additional strength to explanations of

causation which may be made for IA or ED.

Theoretically, the inclusion of I/C in parallel with the perspectives of IA and ED

provides a more theoretically comprehensive framework by which to study the

phenomenon of alliance change and development. De Rond and Thietart (2005:

1) synthesise a long and rich intellectual history in arguing that the explanation

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of organisational events, including alliance process (De Rond, 2003) is, in fact,

“part chance, part choice, part inevitability.” While these authors argue for these

three perspectives in the contemporary domain of strategy, this trilogy also has a

long history in philosophy (de Rond & Thietart, 2005). Finally, analysing these

three perspectives in parallel adds depth to the theoretic contribution of the study.

Hambrick (2004: 93) argues that theoretic insights and breakthroughs are more

likely when “multiple perspectives are reconciled or integrated.” By permitting

comparison and contrast between these perspectives “we see what each

magnifies, highlights and reveals as well as what each blurs or neglects”

(Allison, 1971: 32). Each individual perspective offers a distinctive lens by

which to understand alliance change and development. The comparison and

juxtaposition of explanations from these perspectives has potential to offer richer

insights than each perspective alone.

The purpose of this chapter is to explicate each of the three theoretical

perspectives applied in the analysis of the case study. For each I provide a

definition, underlying assumptions and the ‘motor’ or generative mechanism of

change and development each represents. I step through the conceptual roots of

each perspective in social and organisational theory and the range of theoretical

resources which informed its development. Based on these theoretical resources,

I then provide the concepts and questions which guide data gathering and

analysis in the case. Table 3 provides a summary of each of the three

perspectives.

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Table 3: Conceptual Framework

Environmental Determinism Individual Agency Indeterminacy/Chance

Basic unit of analysis

Alliance process events resulting from structural and economic forces (macro level)

Alliance process events resulting from individual actions and interactions (micro level)

Alliance process events resulting from the random confluence of organisational streams

Assumptions • Considers events as the rational decisions of organisational actors in response to their strategic and institutional environment

• Organisational actors share a unitary view of goals and purposes

• The alliance evolves when organisational actors determine that the alliance meets their purposes

• Considers events as the skilled accomplishments of individual actors

• Individuals choose actions which serve their particular purposes, interests or intent

• Agency and structure as analytically separate: actors are informed by structure but have freedom to choose among options for action

• Events in organisations do not proceed neatly from problem to solution

• Change occurs as the random or accidental confluence of organisational streams (problems, participants, solutions)

• Decision making arenas are highly fluid; events and outcomes are contingent and probabilistic

Theoretical Resources

• Rational Actor perspective • Ideal-Type Theories of Process (Life cycle

theory, Evolution theory, Teleology theory)

• Social theories of agency • Strategic choice theory • Institutional entrepreneurship • Strategy-as- practice perspective

o Actor-Network theory o Conventionalist theory o Social Practices theory

• Chance or luck in strategy • Stochasticism • Garbage Can Theory • Counterfactual reasoning

Organising concepts

• Social Structure: o Strategic environment o Social Ties o Institutional rules and processes

• Economic Structure: o Equity and Efficiency o Initial Conditions

• Agential choices • Agential motivation • Agential practices • Agential attributes

• Participants • Problems • Solutions • Random confluences

Assumptions of agency

Considers management as function of broader determining forces

Considers knowledgeable, reflexive actors as the transformers of social structures

Considers actors as carriers of solutions, but efficacy from timing and luck rather than skill

Generating force for change and development

Structural forces, social and economic Agential power of individuals

Random confluence of organisational streams

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ENVIRONMENTAL DETERMINISM PERSPECTIVE

Basic Unit of Analysis and Working Assumptions

From an Environmental Determinism perspective, an analyst would explain the

sequence of events of HOUSCO as emerging from the rational choices of unitary

organisational actors to forces in their structural and economic environment.

Organisational actors make the choice to form an alliance as a necessary

adaptation to emerging strategic opportunities or challenges. As the alliance

progresses and each actor learns more of the utility of this alliance for their

organisation, including considerations of efficiency and equity, these actors will

make rational choices. These choices will either progress the alliance further

along the development path, or down a path toward instability and termination.

This paradigm has a rich history in organisational theory and strategy, which I

will briefly overview prior to identifying the organising concepts to be found in

the alliance process literature.

Theoretical Resources: Organisational Theory and Strategy

The relationship between free will or choice, and determinism is an enduring

thread in intellectual history, where philosophers have tackled its inherent

complexities and puzzles (Dorato, 2002). It is also a fundamental tension in

organisational analysis, where the nature of causation is hotly debated (e.g.

Donaldson, 2005). The field has been characterised as 'dichotomised'

(Whittington, 1988: 521) into voluntarist and determinist orientations. The

voluntarist views organisational actors as autonomous and creative, whereas a

determinist will view actors as atoms in a social system (Dawe, 1978, “shaped by

and reacting to structural constraints” (Astley & Van de Ven, 1983: 247).

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Within the deterministic tradition in organisational theory, Whittington (1988)

referring to Elster (1984), identifies two forms: Environmental Determinism and

action determinism. Both deny the possibility of choice, although providing

opposite explanations for the behaviour of organisational actors. Theories of

Environmental Determinism focus on the structural context in which an actor

operates to argue that strategic choice is completely constrained by exogenous

forces: only one possible course is available in order to ensure survival. Action

determinism moves the locus of determinism from the environment to the actor,

however no real choice is seen as possible: the actor is a rational economic man,

who under any given conditions will select only one action (Whittington, 1988).

The market or economics are viewed as the driving force for the actor who is

seen to act to maximise personal wealth or the economic performance of the

firm. Thus action determinism emphasises instrumentalism and narrow exchange

approaches to behaviour. Instrumentalism is argued to dominate organisational

theory generally (e.g. Lounsbury & Ventresca, 2003), however Environmental

Determinism has dominated process theory (De Rond & Bouchikhi, 2004) and is

the focus in this study.

An environmental determinist directs their attention to the economic and social

structural context in which actors operate. Economic perspectives in

organisational theory and strategy have drawn from Darwin’s theory of evolution

and also theories of industry competition. Social perspectives have drawn from

Institutional Theory and also more general social theory focussing on culture and

power. Each will be briefly overviewed.

Darwin’s theory of natural selection and survival-of-the-fittest, while from the

field of natural science, has influenced economic theory (Whittington, 1988 cites

Alfred Marshall, 1890/1961 as the earliest economist adopting Darwinian ideas).

Organisational analysis has borrowed these concepts from economics to adapt

Darwin’s evolutionary theory. Firms are seen to be in constant competition for

scarce resources: markets act as selection vehicles which will ensure that the

‘fittest’ firms survive and the unsuccessful fail. Whittington (1988) points to

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population ecology theory as the most explicit adaptation of Darwin’s

evolutionary theory in organisational analysis. Population ecology uses insights

from both economics and biology to explain the conditions under which

organisations emerge, grow and die. A process similar to natural selection is said

to occur (Aldrich, 1979; Hannan & Freeman 1977) with some form of the market

as the environmental selection mechanism. Whittington (1988) notes the

complete indifference to the actor of population ecologists as distinguishing this

perspective from contingency theory. Contingency theorists acknowledge

organisational processes of learning and conscious adaptation, although

ultimately conceding the supremacy of the market (Whittington 1988 cites

Chandler, 1962; Williamson & Ouchi, 1981).

Within the field of strategy the competitive environment is viewed as a major

determinant of strategy formation and survival. Dominant among these are the

industry and competition theories of Michael Porter. Porter derived concepts

from by Industrial Organisation (IO) economics (see Schmalensee & Willig,

1989) to suggest that firm profitability will be determined by five competitive

forces which will select the fittest in a given industry. Porter's five-force model

(Porter, 1998) is still a dominant feature of the strategy literature (Grundy, 2006).

Institutional theory looks more to the social structures in which a firm is

embedded as explanation of organisational change and strategy formation.

Institutional theory suggests that these social structures reinforce particular

schemas, rules, norms and routines (Scott, 1995) which act as authoritative

guidelines for the behaviour of organisational actors within that institutional

field. Institutional theory emphasises the importance to a firm of institutional

legitimacy (Meyer & Rowan, 1977). Strategy selection can be understood as

adherence to institutional forces and the achievement of legitimacy (Scott, 1995).

This legitimacy ensures organisational success and survival (Aldrich & Fiol,

1994; DiMaggio & Powell, 1983; Oliver, 1991). Scott (2005) identifies two

institutional forces which confer legitimacy to a firm: regulatory forces and

normative forces. Regulatory forces recognise the organisation’s existence by the

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regulatory jurisdiction and allow the firm to function and operate. Normative

influences typically come from the industry and professional organisations that

establish standards for operations (Scott, 1995, 2005).

The broader field of organisational studies examines a wider range of social

structural forces as explanations of how organisations are shaped (e.g. Lounsbury

& Ventresca, 2003). These theories draw from social theories of culture, power

and politics and institutional analysis (Lounsbury & Ventresca, 2003 cite Mohr,

2004 for overview of the field). Broadly speaking, these theories characterise

actors as being embedded in a socially constituted structure and their actions are

constituted by this structure.

Organising Concepts: Economic and Structural Explanations of Alliance

Development and Change

The previous section placed the proposed Environmental Determinism frame

within the broader traditions of organisational theory and strategy. As we saw in

Chapter One, the alliance process literature is strongly informed by these

traditions.

Chapter One presented the analysis of De Rond and Bouchikhi (2004) which

mapped the alliance process literature against the four ideal-type theories of

organisational change and development of Van de Ven and Poole (1995). These

are the life-cycle, teleological, evolutionary and dialectical theories. De Rond

and Bouchikhi (2004) demonstrate that the alliance process literature fits well

within one of the four categories and that each is underpinned by assumptions of

linearity and environmental causality.

Based on the theories which underpin the literature identified by De Rond and

Bouchikhi (2004) (see Table 2 in Chapter One), I identify five organising

concepts which guide data gathering and analysis in my study. As dialectical

theory is underrepresented in the alliance process literature, this was omitted

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from analysis. Three are economic concepts and two are informed by theories of

social structuralism. The wider literature on alliance dynamics and stability was

also drawn upon to further develop each concept.

The five organising concepts and their relationship to the three process theories

are outlined in Table 4 below.

Table 4: Five Organising Concepts drawn from Alliance Process Theory

Teleology Evolution Life Cycle

Social Structure Social Ties

Institutional forces

Economic

Structure

Equity and Efficiency

Initial Design

Alliance Strategic Environment

Equity and Efficiency

From the review of the alliance process literature (see Chapter One) we

understand that the teleological perspective would explain the sequence of

alliance events as “a repetitive sequence of goal formulation, implementation,

evaluation and modification of goals based on what was learned of intended by

the entity” (Van de Ven & Poole, 1995: 514). In three of the five alliance process

studies which are informed by a teleological perspective (as characterised by De

Rond & Bouchikhi, 2004) the evaluation process is characterised by assessing

the efficiency and equity of the arrangement (Doz, 1996; Ring & Van de Ven,

1994; Zajac & Olsen, 1993) with the achievement of joint and/or individual

value being considered the goal.

The concepts of efficiency and equity emerge from the social exchange literature

(Blau, 1964; Homans, 1961) which focuses on the processes by which

individuals balance self-interest with the need to continue valuable relationships.

More particularly the alliance literature is seen to be informed by theories of

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relational exchange (Zajac & Olsen, 1993 cite Macneil 1986; Oberschall &

Leifer, 1986; Stinchcombe, 1986). These theories suggest that the norms that

govern commercial exchange behaviour in discrete or ‘one-off’ transactions are

markedly different from those in relational exchange, where the parties must deal

with each other over a longer period, such as in alliance processes. Accordingly,

Zajac and Olsen (1993: 134) view the pursuit of joint value maximisation rather

than individual value, as the end goal of an alliance. “Firms involved in a joint

venture … while obviously satisfying their own interests, are also interested in

maintaining the co-operative arrangement to satisfy these interests — which

require some consideration of the satisfaction of their partners’ valued interests.”

Joint value considerations include the efficiency of the alliance, defined by Ring

and Van de Ven (1994: 94) as “the most expeditious and least costly governance

structure, for undertaking a transaction.” Equity, they define as ‘fair dealing.’ In

line with principles of relational exchange, this is seen as different from strict

equality in the contribution to the alliance or distribution of the value created.

“Fair rates of exchange between costs and benefits are sufficient, but equality is

not necessary for fair dealing ... Fair dealing also implies that all parties receive

benefits proportional to their investments” (Ring & Van de Ven, 1994: 94).

The efficiency and equity of the alliance are seen to be in continual review, part

of the learning (Doz, 1996; Zajac & Olsen, 1993) and maturing processes (Doz

& Hamel, 1998; Ring & Van de Ven, 1994) of the alliance.

Alliance Strategic Environment

Sustained strategic compatibility between collaboration partners is viewed as

critical for the stability or robustness of the arrangement over time. Doz and

Hamel (1998: 93) suggest that collaborations are “hydra headed” with partners

agreeing on the value creation logic of the collaboration, but looking also to their

own self-interested goals and measures. These individual interests may shift with

environmental events, making alignment difficult to sustain. However a strong

perception of convergent business interests and a sense of urgency in addressing

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them are argued to provide for drive and commitment (Ring, Doz, & Olk, 2005:

138).

Research suggests a number of factors which impact sustained strategic

compatibility. One is the position of partner organisations in a broader network

or industry. Partner firms can be leaders, followers or newcomers/latecomers

(Doz & Hamel, 1998) with each having a distinctive logic or incentive for the

alliance. Different combinations of partner types give rise to different alliance

dynamics and tendencies toward stability or instability (Doz & Hamel, 1998).

Additionally, strategic compatibility is influenced by the relative scope of each

partner firm, or the opportunity set available to each firm outside the particular

collaborative arrangement (Inkpen, 2000; Khanna, 1998; Reuer et al, 2002).

These theorists propose that if one organisation has a large opportunity set, or

range of markets in which the firm is active, relative to its partner organisation,

this will influence the behaviour and incentives to cooperate at each stage of the

evolution of the collaboration giving rise to potential instability.

Studies have also recognised that partners will re-assess the strategic logic of an

alliance in relation to their individual business interests as a result of

environment change or exogenous shocks (Arino & de la Torre, 1998).

Macroeconomic, regulatory, technological and competitive forces that cannot be

controlled by partners may test the alliance. These exogenous events can affect

the logic of the alliance for either or all participating organisations, giving rise to

renegotiation of the structure of the arrangement, to a change in partner

behaviour in an attempt to restore balance to the arrangement, or to gradual

deterioration (Arino & de la Torre, 1998). Alliances are seen to be embedded

within the broader strategic interests of the partner organisation and co-evolve

with the interests of each as the environment changes (Koza & Lewin, 1998).

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Further, a number of theorists suggest that this broader environment is the

principal change agent for alliances. Theorists who subscribe to evolutionary

theories of collaboration process suggest that change is determined

predominantly by forces at the population level (Gulati, 1995b; Gulati &

Gargiulo, 1999; Reuer et al 2002). Alliances cannot be understood independently

from their broader context. They are diffuse and compete for scarce resources

with collaborations progressing from simple to fitter and more sophisticated,

with less fit collaborations dying out.

Social Ties

The social structure in which an alliance operates is argued to be explanatory of

the path and outcomes of the alliance. Gulati (1993, 1995a, 1995b, 1998) in his

evolutionary perspective on the change and development of alliance, argues that

the social networks in which alliances are embedded shape the formation,

processes and outcomes of the alliance. Gulati (1998) states that an

understanding of firms’ social connections enables examination of both the

incentives that lead firms into alliances and also how the firms behave over the

life of the alliance. The social network provides valuable information to a firm

considering an alliance about the capabilities of potential partners (Gulati, 1995a)

and thus influences the formation pattern of alliances. He also argues that

individual ties between partner firms through social networks can affect the

decision processes that may occur inside those firms (Gulati, 1998) throughout

the life of the alliance, shaping the alliance path.

Other theorists have employed similar social structure theories when explaining

the dynamics of an alliance, or its propensity for stability or instability over time.

Ring et al (2005) argue that the pre-existence of social relationships between

partner organisations at the time of formation conditions the dynamics and

stability of the alliance. The strength of congruent interests and of social and

strategic relationships are argued to produce particular patterns of managerial

activities and different outcomes. Strong social relationships are argued to

promote initial and sustained mutual understanding which is more likely to lead

to positive adaptation.

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Similarly, Hardy, Phillips and Lawrence (2003) suggest that the quality of these

pre-existing and embedded social relationships promote mutual forbearance and

a desire to search for common ground. They are also seen to reduce the

likelihood of opportunistic behaviour and are more likely to facilitate information

exchange (Mitsuhashi, 2003). Uzzi (1997) examining the way economic action is

embedded in social relations found that embedded relationships promote logics

of exchange leading to economies of time, integrative agreements and complex

adaptation.

Initial Design

Initial design describes the structural and governance choices made at the time of

formation. In their work employing an evolutionary perspective on alliance

change and development, Reuer et al (2002) state that initial design within the

alliance literature has mostly been seen as an economic choice, such as the

choice of an equity or non-equity arrangement. It can also be a choice between

dominant or shared control (e.g., Killing, 1983; Mjoen & Tallman, 1997; Parkhe,

1993). These initial choices are seen to imprint the relationship (Doz, 1996),

determining the subsequent path of the collaboration. The economic

considerations underpinning these choices are informed by equity, or perceived

distribution of costs and benefits, as well as control.

A stream of research suggests that it is vital to align individual partner incentives

with the joint purpose of the alliance (Berger, Cunningham, & Drumwright,

2004; Gulati, Khanna, & Nohria, 1994; Nault & Tyagi, 2001). The way the

partners conceive the pay-off of the alliance determines their incentives to

cooperate. The incentive or pay-off will be formalised into the structure or

contract of the arrangement, such as benefits to be delivered from an agreement

to commit specific assets into a joint vehicle (equity collaboration). Changes to

these perceptions of pay-offs can lead to loss of incentive to cooperate and can

destabilise the development of the collaboration (Berger et al, 2004; Hamel,

1991).

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Similarly, the partners’ perceptions of control will affect their incentives to

cooperate. These perceptions will flow from the governance structure of the

collaboration including decision-making, coordination and processes for transfer

of knowledge and learning. Formal control structures, along with the relative

bargaining power of partners affect their perceptions of control, which in turn,

affect the path and outcomes of an alliance over time (Parkhe, 1993; Yan &

Gray, 1994).

Additionally, design is seen to embody the dominant logic (Prahalad & Bettis,

1986) of the collaboration (Jones, Hesterly, Fladmoe-Lindquist, & Borgatti,

1998; Lampel & Shampsie, 2000). A move away from this logic is seen to result

in premature termination. These clear-cut strategic objectives (Hamel, 1991) are

seen as defining the alliance and determining the outcome (Lorange, Roos, &

Bronn, 1992).

Institutional Rules and Processes

The introduction to the ED perspective described how Institutional Theory and

the concepts of the embeddedness of firms within social structures has shaped

organisational studies. As we have seen, Institutional Theory suggests that

institutional rules and norms inform development of strategies and decisions.

Organisations choose a course of action that aligns them with prevailing

regulatory or normative forces, in order to sustain legitimacy.

Similarly, organisational change and development theory also explain a sequence

of events as being driven by institutional rules. In particular, Van de Ven and

Poole (1995: 515) suggest that the life-cycle perspective of change and

development — one of four identified ideal type change theories — sees the

generating force or motor of change as “a prefigured program/rule regulated by

nature, logic or institutions.” Institutional rules “require developmental activities

to progress in a prescribed sequence: A series of steps that all must follow.”

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These theorists also point to “the natural order of Western business practice” as

necessitating a certain sequence of events.

Analysis of the alliance process literature informed by the life-cycle perspective

(as classified by de Rond & Bouchikhi, 2004) demonstrates the influence of

Institutional Theory at several stages of the alliance life-cycle. For example, at

the early stage of ‘partner selection’ (Kanter, 1994) or ‘courtship’ (Forrest &

Martin, 1992) partner choice has been demonstrated to be informed by regulatory

forces, including anti-trust provisions (D’Aunno & Zuckerman, 1987). Murray

and Mahon (1993) speak of a ‘ritual’ courtship stage, suggesting protocols and

practices that are recognised as applying to an institutional field, such as the

industry or profession, or to Western business practice more broadly.

The negotiation stage (Forrest & Martin, 1992; Murray & Mahon, 1993) is

mostly viewed as involving a formal contract, which is governed by regulatory

forces and also by business practices associated with negotiating agreements in a

particular business culture, either Western or Eastern. The ‘formalisation’

(Achrol et al, 1990), ‘start-up’ (Forrest & Martin, 1992) or ‘setting up and

housekeeping’ (Kanter, 1994) stages are characterised by the establishment of

governance and operational structures. The choice of these structures could be

seen to be informed by accepted institutional practice, such as establishing a

Board and a project team, and assigning traditional roles such as Chair, or project

manager or coordinator.

At the ‘critical crossroads’ (D’Aunno & Zuckerman, 1987) or ‘ending’ (Forrest

& Martin, 1992; Murray & Mahon, 1993) phase of an alliance, a potential

termination is seen as being public, that is, viewed by current and potential

members of a network or institutional field (Murray & Mahon, 1993). The style

in which this ending is conducted is often made with the reputational status of

the departing partner organisation in mind (Murray & Mahon, 1993). Gulati

(1995a), in applying social network theory to the study of alliances, suggests that

the social network in which the alliance is embedded provides information

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regarding the partnering capability and reliability of potential partners. Messy

divorces (Murray & Mahon, 1993) can send negative information through the

network regarding a particular firm. This suggests that the way this is done will

be informed by considering normative influences of institutional rules that

maintain status and reputation.

This section has introduced the Environmental Determinism frame and identified

the five guiding concepts that will inform analysis. In summary, the proposition

of the Environmental Determinism perspective is that the decisions of

organisational actors resulting from environmental and social forces are the

motors of alliance process evolution.

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INDIVIDUAL AGENCY PERSPECTIVE

Basic Unit of Analysis and Working Assumptions

An IA analyst would explain the sequence of events in an alliance process as

resulting from the choices, motivations, practices and attributes of individual

alliance actors. In making these choices, actors are informed by organisational

strategic interests and institutional rules and norms, but choices are also shaped

by their own personal values and interests. Structure dictates the outer boundaries

of action, but within this scope actors have freedom to choose among a range of

options for action. The practices and attributes of actors within the alliance

influence the choices of those who have decision making power within partner

organisations. Human capabilities and actions are argued to have ‘causal

efficacy’ (Archer, 2003) to bring about social and organisational change.

Theorising the Relationship between Agency and Structure

This perspective has its modern roots in social theory, with the work of Child

(1972, 1997) and strategic choice theory representing the perspective in the fields

of organisational studies and strategy. Also within organisational studies,

Institutional Theory has recently explored the idea of institutional

entrepreneurship (Levy & Scully, 2007) claiming that the kernel of change can

rest with skilled institutional actors. More recently, the Strategy-as-Practice (S-

as-P) literature has developed and described the practices of actors at many levels

and suggested a range of explanations for how change emerges from everyday

routines and conversations.

In order to explicate the IA perspective used in this study, it is first necessary to

overview the body of theorising regarding the relationship between structure and

agency from social and organisational theory. The theorising of Child (1997),

Giddens (1984), Archer (2003) and Whittington (1998) present the analyst with a

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choice of working assumptions regarding how agency can be conceptualised.

Each theorist presents a distinctive perspective.

Social Theory: The Problem of Agency

Agency has been defined as the “power of individuals and groups to transform

the social contexts in which they find themselves” (Emirbayer & Mische, 1998:

962). Dawe (1979) states that this concept of agential power and human action

has been central to social theory since its inception. Interestingly, Dawe (1979:

398) characterises sociology as having no theories of social action, but rather

consists of “a vast body of theorizing about social action: its nature, its sources,

its consequences”.

This body of theorising on the concept of agency in social thought has been a

source of increasing strain and confusion as it has evolved. Emirbayer and

Mische (1998: 962) give us a sense of this conflicted history by observing that

“variants of action theory, normative theory and political-institutional analysis

have variously defended, attacked, buried and resuscitated the concept of agency

in often contradictory and overlapping ways.” At the root of this conflict are

arguments over the determining power of structure or the supremacy of agential

power to shape and control. At the heart of this debate are Child’s Strategic

Choice Theory (1972, 1997), Anthony Giddens’ Structuration Theory (1984),

Margaret Archer (2000, 2003) and her perspective on the ‘analytic duality’ of

agency and structure, and finally the Realist Sociology of Whittington (1988). A

summary of these perspectives will be presented so as to provide necessary

background to the choice of working assumptions guiding analysis in this study.

Voluntarism: John Child’s strategic choice theory and action theory. The

nature of the interplay between action and structure, or determinism and

voluntarism, as well as being an enduring theme in social theory has also been a

source of fierce debate in the field of organisational analysis and change (see

Reed, 1988 for overview). The voluntaristic end of this debate is most often

represented by strategic choice theory and the work of John Child and those who

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supported his call for more emphasis on agency as an explanation of

organisational change (including Elger, 1974; Pettigrew, 1985; Schreyogg, 1980,

cited in Reed, 1988: 33). Strategic choice theory (Child, 1997) argues for the

duality of structure and action, applying these to the context of organisations.

However, in contrast with Giddens (1984) and structuration theory, strategic

choice theory argues more forcefully for the transformative power of

organisational actors, noting that “actions taken in the name of organizations are

driven by individuals … Analytic centrality is given to organizational agents’

interpretations (their goals and the possibilities for realizing them)” (Child, 1997:

60).

Strategic choice theory further articulates the political process by which leaders

enact change in organisations. Key actors (Child, 1997) exercise democratic

control within the power struggle between coalitions of interests in

organisational decision-making processes. These powerful actors guide the

choice of structural options, ‘mobilising the bias’ that exists in political situations

according to their own goals and worldview.

Although Child (1972, 1997) brought the strategic choice perspective into

organisational debate, Whittington (1988) nominates Weick (1979) and

Silverman (1970) as more forcefully representing the voluntarist tradition or

action positions in organisational theory. He describes Action Theory as

emphasising the “actor’s capacity for independent action” (Whittington, 1988:

527).

Anthony Giddens’ structuration theory: Duality of structure and agency. The

work of Giddens (1979, 1984) and his theory of structuration were presented in

Chapter One. In Giddens’ view agency and structure cannot be conceptually or

analytically separated, being instantiations of each other. His theorem of duality

of structure maintains that “the structural properties of social systems are both

the medium and the outcome of the practices that constitute those systems”

(1979: 69). Critically, the structurationist perspective would also contend that

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human action needs to be seen as predetermined by the institutional context in

which it is performed. The institutional field provides the strategic opportunities,

which may be acted on by powerful, socially competent and reflexive actors.

Power is exercised by those with access to institutional resources such as formal

authority, control of critical assets or discursive legitimacy (Hardy and Phillips,

1998).

Margaret Archer: Structure and agency in analytic dualism. In contrast to

Giddens, Archer (1982, 1988) views agency and structure as capable of being

analytically separated. Archer is critical of Giddens, arguing that the ‘central

conflation’ of agency and structure, or viewing structure and agency as both

ontologically and analytically inseparable, withdraws autonomy or independence

from actors. She also maintains that the ‘transcendence’ of agency and structure

advocated by structuration theory precludes attempts to understand the interplay

between action and structure. She argues that social systems are capable of

radical restructuring, which is ultimately due to human agency. Structure and

agency are in constant interchange, but there is ‘theoretic usefulness’ in

maintaining analytic separation (1988, xiv). Her theory of morphogenesis, or

emergence over time, holds that current social structures emerged from the past

actions of individuals and cannot be viewed as the outcomes of the actions of

current actors. Determining causality is therefore problematic, but can be viewed

in alternating analytic phases.

In 2003 Archer expanded her concept of what constitutes voluntaristic personal

powers. ‘Reflexive deliberations’ (Archer, 2003: 20) or ‘internal conversations’

constitute the mediatory process between structure and agency. Archer maintains

that individuals, in the face of social situations, reflect upon their concerns and

form intentions to act. They also develop a social modus vivendi, (Archer, 2003:

27) or strategy to reconcile which concerns to prioritise and which to

subordinate. “This explains how all active agents achieve some governance over

their own lives in society” (Archer, 2003: 164).

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Richard Whittington: Realist Sociology — structure as necessary precondition

for agency. Whittington (1988) proposes yet another form of relationship

between action and structure, arguing that environmental structure acts as an

essential precondition to the exercise of agency. This perspective recognises

both structure and agency, however there are no inevitabilities latent in

environmental structures. “Structures merely provide the powers … which agents

must mobilize in their activities” (Whittington, 1988: 528). Structures are

transformable through the intentional exercise of human agency.

Similar to Archer (2000), Whittington (1988: 528) separates structure and action

ontologically and states that it is this ‘ontological gap’ that preserves the

possibility of agency. Drawing from the work of Bhaskar (1979) he argues that

social structures are deeper than events or actions that can be observed

empirically. However, structures are made real only by the actions they enable:

“they are present simply in their effects.”

Also similar to Archer, Whittington’s Realist Sociology views humans as

choosing their actions based on their own governing purposes: “Structures enable

actions, but not their contents … the agent independently constructs his or her

own purpose” (p529). However, like Giddens (1984), humans are unequal in

their ability to enact change: they have unequal access to the resources the

structures offer.

Working Assumptions of Agency and Structure in this Study

In order to present the range of theoretical assumptions available to an IA analyst

four perspectives of the relationship between agency and structure have been

presented. This study most closely aligns to the propositions of Whittington

(1988) and Archer (2003) in the need for analysis to consider both agency and

structure, however upholding the theoretic usefulness of maintaining analytic

separation. This separation enables the analyst to explore the interplay between

the actions and practices of individuals with the social and institutional structures

in which they operate. This study proposes that understanding the power of

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actors to shape the path of an alliance can only be gained through parallel

analysis of the institutional, political and economic constraints under which these

actors worked. This position is consistent with findings of a meta-analytic study

of Heugens and Lander (2009: 61) which examined the empirical evidence for

the central debates regarding organisational behaviour as the product of structure

or agency. They find that the “more temperate agency positions … appear to be

fully compatible with our findings.”

Theoretical Resources: The Key Actor and Social Practices

Having established the working assumptions of agency and structure which will

underpin IA analysis in this study, it is necessary to go to the social practice

literature in order to more fully develop guiding concepts of ‘key’ or

‘knowledgeable’ actors. While social and organisational theorists refer to

agential power as the motor of change, theorising about what practices comprise

this power exists at a high level. The S-as-P literature provides useful resources

to describe how actors engage with their social context to enact change. From

these resources three theories were chosen. Denis et al (2007) identify Actor-

Network Theory (ANT), Conventionalist Theory and Social Practice Theory as

particularly appropriate to pluralistic environments. Alliances, as hybrid

organisational forms demonstrate these characteristics of pluralistic

environments. These particular theories therefore were chosen as being most

sensitive to the context of the study. The work of Levy and Scully (2007)

regarding the agential power of the institutional entrepreneur was also drawn

upon, describing the practices that skilled institutional actors adopt to transform

their fields of operation.

Theorising the ‘Key Actor’

The previous section summarised the views of four social and organisational

theorists, noting variations in the way they theorise the relationship between

structure and agency. These theorists also vary on which actors within a social

context are capable of exercising power to enact change.

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Power. Both Giddens (1984) and Whittington (1988) maintain that not all

humans are equal in their capacity to bring about transformation. According to

structuration theory (Giddens, 1984), opportunities presented by the institutional

field can only be acted upon by those with access to critical resources, such as

formal authority or control of critical assets. Similarly, Realist Sociology

(Whittington, 1988) also holds that actors within a social context have unequal

access to the structural resources they need. In contrast, Child (1997) maintains

that power resides more in coalition or group rather than individual action,

although individuals can act to mobilise the bias that may exist in a group toward

a particular decision.

In contrast, Levy and Scully’s (2007) institutional entrepreneur can be any

skilled actor in the institutional field, not necessarily those possessed of formal

authority or material resources. They quote Clegg (1989: 32) in their concept of

power and where it resides:

Power is simply the effectiveness of strategies for achieving for oneself a greater

scope for action than for others implicated by one’s strategies. Power is not anything

nor is it necessarily inherent in any one: it is a tenuously produced and reproduced

effect which is contingent upon the strategic competencies and skills of actors who

would be powerful.

Processes. These theorists, among many others in social theory, describe a range

of agential processes by which transformation is brought about. Both Giddens

(1984) and Archer (2003: 135) argue for the centrality of reflexivity. Archer

(2003) characterises this as the ‘internal conversation’ by which an actor

deliberates upon how some item, such as a belief, desire, idea or state of affairs

pertains or relates to a particular personal intent. Through reflexivity, actors are

capable of acting 'so rather than otherwise', in the face of environmental

constraint or enablement (Archer, 2007:10). Giddens (1984) speaks of ‘socially

competent, reflexive actors’ with reflexivity here referring to the capability of

agents to monitor and rationalise actions, processes and contexts with respect to

what has happened, happens and will happen or has to be done. The ability of

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actors to think about their situation, to be capable of self-inquiry and adaptation

is seen as the key characteristic of social systems. Common to these schemas is

the concept of interpretation or sensemaking (Weick, 2005). To understand the

environment is to be able to see alternatives for action and possibilities of

realising personal and social goals. Levy and Scully (2007: 978) refer to similar

concepts of ‘strategising’ and ‘evaluating’ to identify and exploit critical

windows of opportunity.

Each maintain that the ‘key actor’ (Child, 1997) is purposeful, forming intentions

to act based on this reflexivity or interpretation of their context. Child (1997)

goes on to theorise about the enactment of these goals or intentions, stating that

‘key actors’ initiate, shape and direct strategic reorientations toward the

environment.

Child (1997), Giddens (1984?), Archer (2003) and Whittington (1998) have

conceptualised at high level how actors go about the process of social and

organisational transformation. In order to explicate further the concept of what

actors actually do to influence the strategic direction of a firm or, in social

theory, to transform the social structure in which they operate, we need to

consider theories that go to social practice. The following section overviews the

domain of the S-as-P field and summarises three particular theories of practice

which are useful for this study. It also further describes Levy and Scully’s

(2007) conception of the ‘Modern Prince’ or institutional entrepreneur. Together,

the S-as-P and institutional entrepreneurship literature provide the organising

concepts for the IA perspective.

Extending the Key Actor: Three Strategy-as-Practice Theories

In the growing S-as-P field (see Johnson, Melin, & Whittington, 2003) scholars

focus on the practices of skilled actors in the production and transformation of

social life. While the strategy literature views change as radical discontinuity, the

practice literature sheds light on how change emerges from the practices of actors

at many levels engaging in everyday routines and conversations (Denis et al,

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2007). Researchers under the S-as-P banner re-conceptualise strategy as a social

activity: “strategy is not something an organisation has but something that its

members do” (Seidl, Chia, & MacLean, 2006). Research focuses on details of

organisational life including the nature and location of strategic actors in the

firm, their engagement with the strategy process and how these actors make

sense of and use the tools of strategic infrastructure as well as tacit knowledge in

order to suggest a relationship of these practices with performance.

From these S-as-P resources three particular theories guide this study. Denis et

al (2007) identify ANT, Conventionalist Theory and Social Practice Theory as

particularly applicable to pluralistic environments. These particular theories are

chosen as being most sensitive to the context of the study. Table 5 below

summarises the three theoretical perspectives.

Table 5. Adapted from Denis et al, (2007) Strategising in pluralistic contexts: Re-

thinking theoretical frames

Actor-Network

Theory

Strategising as a translation process

Theory of

Conventions

Strategising as an accommodation process

Social Practice

Theory

Strategising as a social practice

Definition of strategising

Translation: the process of constructing networks (alliances) among actors in diffuse fields

Accommodation: the process of negotiating compromise among competing values

Practice: mobilising explicit tools and tacit knowledge in situations to produce strategies

Role of actors

Translators who enrol others in networks; Actants in networks that reciprocally construct organisational strategies

Critics of established compromises Negotiators of new compromises

Social actors at all levels inside and outside the organisation who through their practices and interactions contribute to enacting strategy

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Denis et al (2007) describe how each theory addresses a particular dimension of

a pluralistic environment. ANT goes to the issues of diffuse power, describing

the agential process of mobilisation of a heterogeneous network around an

organisational strategy, where multiple meanings and interests may be in play.

Conventionalist theory they argue, is relevant to understanding contexts where

multiple value systems are in play, illuminating the agential processes of

accommodation and criticism. Social Practice Theory invokes the pluralist

dimension of distributed organisational knowledge, arguing that through their

practice and particularly through their use of language, actors contribute to

formulating and enacting strategy.

We note that none of the three theories argues for the unfettered power of

agency: there are constraints on action. However, these three theories in

combination help to cast more theoretical light on what actors actually do to

enlarge the possibilities for organisational change and development.

ANT. This theory came to social science from the field of science (Callon, 1986;

Latour, 1987) as an explanation of how technological and scientific ideas emerge

and come to dominate. Technologies (‘artifacts’) and scientific discoveries are

seen to be socially constructed by actors who interact with each other and with

the artifact as a heterogeneous network. Central actors (‘translators’) interact

with others in the actor-network to mobilise support for their definition of the

technological artifact and also work to maintain (or ‘enrol’) the support of the

network. This network support then brings the technological artifact into a

position of dominance or irreversibility above other rival definitions that may be

held by other actors in the network. Actors become central or powerful,

according to their ability align other actors to their interests. In contrast to other

social theories, including structuration (Giddens, 1984), power is created by the

actor, rather than being defined by the pre-existing structure of the network.

ANT became popular as an analytical tool in a range of fields beyond science

and technology in the 1990s, including organisational analysis and strategy.

Denis et al (2007) note five illustrative applications of ANT in strategy (Demers

& Charbonneau, 2001; Ezzamel 1994; Hensman, 2001; Knights, Murray, &

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Willmot, 1993; Parker and Wragg, 1999). They demonstrate how ANT defines

strategising as a process of translation, with ‘organisational strategy’ substituting

for ‘technological artifact.’ Through translation, central actors enrol the support

of the organisational network around the meaning they attach to the strategy,

such that this meaning comes to dominate and become ‘irreversible.’ Denis et al

(2007) stress that the theory is dynamic: network support for a particular artifact

(e.g. organisational strategy) is capable of shifting over time.

Conventionalist theory. This theory explores the processes by which actors

achieve cooperation in the face of competing institutional values or logics (Denis

et al, 2007). The conventionalist school is a recent body of work by French

sociologists (Boltanskis & Chiapello, 1999; Boltanskis & Thevenot, 1991 in

Denis et al, 2007) which explores core values in the Western world and the way

they shape the nature and possibilities of action. Certain dynamics are created by

the co-existence of multiple logics or rationalities and particular agential

processes are seen to be able to achieve an accommodation among them. These

include processes of achieving compromise or negotiating agreements that

acknowledge and integrate competing values (Boltanski & Thevenot, 1991, 2006

quoted in Denis et al, 2007). Such an agreement would represent a ‘convention’,

being an artefact which makes the co-existence of multiple logics possible.

Denis et al (2007) note that while the field of organisational analysis has

explored the shaping of actor behaviour by competing organisational values

(Gioia & Chittipeddi, 1991; Townley, 2002 are cited, inter alia) Conventionalist

Theory goes further by proposing the agential processes by which

accommodation and reconciliation is possible. They extend the theory into the

field of strategy and strategy practice by suggesting that strategising can be seen

as accommodation and strategists or actors as ‘critics’. The strategist critiques or

questions the normative assumptions that drive current strategic directions and

becomes a ‘vector’ for considering other views — this may or may not result in

change, as value sets are highly institutionalised.

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Social Practice Theory. In contrast to ANT and Conventionalist Theory, Social

Practice Theory has a strong tradition in organisational analysis and strategy. The

growing S-as-P field (Johnson, Melin, & Whittington, 2003) has been noted

above and serves as a counterbalancing force to deterministic approaches that

dominate strategy thinking. This literature draws on social theorists such as

Bourdieu (e.g. 1977) and Foucault (e.g. 1970) to argue that social change is

enacted through the practices of skilled social actors (Denis et al, 2007: 196).

These skills can be seen in the concrete detail of daily life (Denis et al, 2007:

196) in which actors demonstrate their ‘practical rationality.’ Actors draw on

tools provided in their social environment as well as their own implicit

knowledge in order to enact change.

Extending the Key Actor: Institutional Entrepreneurship Theory

In presenting their argument for the power of the institutional entrepreneur to

transform the institutional structures in which they operate, Levy and Scully

(2007) describe a range of skills, practices and attributes which characterise their

‘Modern Prince.’ Some of these are similar to those presented in the three

theories above. For example, where ANT describes a process of translation and

enrolment, Levy and Scully (2007: 981) speak of the institutional entrepreneur

‘framing’ issues and problems, and “connect(ing) their change projects to the

activities and interests of other actors in the field.” They also speak about

‘mobilising constituencies’ around their change efforts.

However, Levy and Scully give the institutional entrepreneur a more political

and interest-based motivation for action than the other three theories presented.

The actor is seen to be interest-driven, aware and calculative, looking for

opportunities to break through structural pressures or hegemonies to exploit

windows of opportunity for change. The institutional entrepreneur seeks to shift

the asymmetries of resources and influence that exist in an institutional field

through explicitly strategic and tactical practices, exploiting tensions and

instabilities they find.

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Organising Concepts

The previous sections presented the theoretical resources which have informed

the development of the IA analytical frame. The following outlines each of the

organising concepts which guide data gathering and analysis in my study,

distilled from these theoretical resources. I propose that IA can be

operationalised as (1) agential motivation, or explanations as to why actors take

the actions they do; (2) agential practices, or what actors actually do within an

organisational or inter-organisational process; and (3) agential attributes, skills or

characteristics that actors posses in order to enact change. Each is further

described below.

Agential Motivation

As we have seen, Archer (2003), Child (1997), Whittington (1998) and Levy and

Scully (2007) view actors as highly intentional, driven toward certain actions by

their own internal cognitive processes. Some of these intentions will be particular

and personal to the actor. They may act on their own personal “hopes, fears and

desires for the future” (Emirbayer & Mische, 1998: 962). They may be politically

formed from a desire to pursue the interests of a less powerful group within the

institutional field (Levy and Scully, 2007). Other intentions may be formed from

interpretation of their context. They may subjectively choose particular projects

as an appropriate response to their objective circumstances (Archer, 2003), or

what they view as the interests of powerful actors (Child, 1997). They may also

form a view as to what will promote the common good (Aristotle, 1976), and

form an intention for change as a result.

More subliminal internal drivers may also drive actors to action. There may be an

element of path-dependency or being propelled by habit (Emirbayer & Mische

1998, Giddens, 1984) — we respond to a particular circumstance the way we

have responded in the past, based on reflections on the outcomes of such action.

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Agential Practices

Following formulation of an intention to act, the agency perspective views the

actor engaging in a range of processes to bring about the desired outcome.

Through each of these processes the actor endeavours to shape the processes and

relationships of the organisation, alliance or network (Syndow & Winderler,

2003). These processes can be described as strategising and evaluating,

persuading, enacting and transforming. Each will be briefly described.

The actor evaluates the institutional field to identify possibilities for agency

(Levy & Scully, 2007: 974). This involves mapping or critically analysing the

complex terrain of the economic and social forces and processes to identify and

exploit “critical windows of opportunity” (Levy and Scully, 2007: 976).

In evaluating these possibilities, the actor is seen to make conscious choices

within the institutional context in which these actions will be played out. They

are seen to be able to choose to act consistently with institutional scripts or those

aspects of institutional culture which would suggest a certain course, or to act

otherwise (Carr & Kemmis, 1986; Gadamer, 1979). The strategist is aware of

both his or her desired strategy and the strategic orientations of others, alive to

the different meanings that may exist in a network of actors towards a particular

‘object’ (Callon, 1986; Latour 1987). In this way, the actor is not seen to be

captured by their structures or institutions, but rather to enact their environment

through a continual process of decision making and negotiation (Child, 1997),

deliberation and practical judgement (Emirbayer & Mische, 1998).

In this process of evaluation, the actor is not seen to be forming a plan to ‘act

upon’ or ‘do unto’, rather they are seen to seek out and persuade others. Key to

the success of this persuasion process is the way actors “connect their change

projects to the activities and interests of other actors in the field.” (Levy &

Scully, 2007: 981). Persuasion involves dialogue with others regarding the action

possibilities within an institutional context (Giddens, 1984), engaging in

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“horizon-expanding discourse” (Weick, 1989, quoted in Child, 1997). The actor

is an active critic, (e.g. Gioa & Chittipeddi, 1991) contesting the dominant or

emerging logics (Denis et al, 2007) and questioning normative assumptions. The

critic is a ‘vector’ enabling new possibilities of action (Denis et al, 2007).

Through this dialogic process, the actor is seen to make sense of ambiguity (Levy

& Scully, 2007) and to “control zones of uncertainty” (Syndow & Windeler,

2003).

The choice is then enacted; the actor ‘mobilises constituencies’ (Levy & Scully,

2007) translating their own desired intention within the different meanings that

others in the environment may have, actively ‘enrolling’ others in a network to

bring about their strategic ends (Callon, 1986; Latour 1987). They skilfully

coordinate and deploy resources at their disposal and leverage the resources of

the institutional field (Maguire et al, 2004).

Agential Attributes

Actors are seen to possess particular qualities and resources that equip them to

make sense of their situation, to see possibilities for action and to have the

freedom to act. They are seen to possess ‘agential power’ which as Archer

(2003: 4) describes is the ability to act “so rather than otherwise”, in the face of

situations of environmental constraint or enablement.

Common to most of these schemas is the concept of interpretation or

sensemaking (Weick, 1995). In Child’s (1997: 52) view “analytic centrality is

given to organisational agents' interpretations: their goals and views of the

possibilities for realising them. The ways in which organisational actors

understand the environment affect the extent to which they believe they enjoy

autonomy of choice between alternatives.” Individual competence, especially the

ability to handle cognitive complexity (Streufert & Swezey, 1986, quoted in

Child, 1997) is seen to extend the boundaries on the exercise of choice by

organisational agents. This is seen to be particularly important in inter-

organisational domains, which have more complex relational dynamics. Actors

must take more factors into account and may develop greater capacities for

creative and critical intervention (Emirbayer & Mische, 1998: 1007).

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Similarly, Archer (2003: 135) argues for the centrality of reflexivity, defined as

the “internal conversation by which an actor deliberates upon how some item,

such as a belief, desire, idea or state of affairs pertains or relates to a particular

personal intent.” Reflexivity is also fundamental to the characterisation of agency

in the structurationist view of Giddens (1984). Reflexivity here refers to the

capability of agents to monitor and rationalise actions, processes and contexts

with respect to what has happened, happens and will happen or has to be done.

The ability of actors to think about their situation, to be capable of self-inquiry

and adaptation is seen as the key characteristic of social systems.

Theorists of agency have also embraced Aristotle's (1976) concept of practical

wisdom or phronesis, being the ability to think about why action is needed and

how to bring about change for the better of others. An actor makes a wise and

prudent practical judgement about how to act in a particular situation (Carr &

Kemis, 1986) involving normative judgements among alternative possible

trajectories of action. It involves “art, tact, discretion, application and

improvisation” (Emirbayer & Mische, 1998: 994).

Importantly, the knowledgeable actor has the power and autonomy to bring about

his or her desired ends. Actors are seen to enjoy a form of 'bounded autonomy'

(Child, 1997) or ability to make decisions within a broadly defined scope. Those

with formal authority and power (Giddens, 1984; Whittington, 1988), and also

those with skill, (Clegg, 1989) are able to access the critical resources in their

field. Powerful actors also enjoy ‘legitimacy’ (Scott, 1995), being able to be

perceived as credible within a number of different and often competing

environments.

This section has introduced the IA frame and identified the concepts that inform

analysis. In summary, the proposition of the IA perspective is that the agential

power of individuals is the motor of alliance change and development.

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INDETERMINACY/CHANCE PERSPECTIVE

Basic Unit of Analysis and Working Assumptions

Analysis from the perspective of I/C would view the sequence of events in

HOUSCO as the operation of random forces. While the IA and ED perspectives

ask us to see patterns and chains of causality in the sequence of events, the logic

of I/C would disabuse us of this notion, inviting us to consider that many events

are simply without precedent, undercutting the basis of causal reasoning

altogether. In the I/C frame and applying Garbage Can Theory (Cohen, March &

Olsen, 1972) each decision making event results from a random confluence at a

point in time of the independent streams of problems, solutions and decision

makers.

Theoretical Resources

Philosophy and Logic

Considering the provenance of indeterminacy and chance as explanation for the

sequence of events requires the analyst to look to ideas contained within the field

of philosophy of science and logic as well as discrete theories. The concept of

chance, luck or ‘fortuna’ has a long and rich history in classical thought (see De

Rond & Thietart, 2005), but more tentative treatment in the organisational or

strategy literature.

The idea that man is not fully in control of the events that shape the path of his

life has engaged the energies of philosophers for centuries. In the 16th century

Machiavelli claims than an omnipotent ‘fortuna’ cannot be denied, “… because

everyone is witness everyday to the great variation in things … outside any

human conjecture” (quoted in Vatter, 2000: 173). Plato (see Vatter, 2000) also

had high regard for the powers of chance, as did the Roman philosophers who

applied themselves to the question of whether the Roman Empire owed its

prodigious growth to virtue or fortune. Hajek and Hoeffer (2006: 2) overview the

vexed history of the idea of luck or chance in the 17th to 19th centuries. They note

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the tension between exponents of theories of uncaused indeterminate natural

events (for example Epicurus and Lucretius), with those such as Aristotle who

regarded all events that might be called coincidences as “intersections of

independent deterministic causal chains” (Hajek & Hoeffer, 2006: 2). Others,

such as Augustine, hold that nothing is chance; all is controlled by God’s will.

This is a theme which is embraced in a secular form by Hume and other

probability theorists of the 19th century, who expound the view that “‘tis

commonly allowed by philosophers that what the vulgar called chance is nothing

but a secret and concealed cause” (quoted in Hajek & Hoeffer, 2006: 2). That is,

with a ‘God’s eye view’ all patterns and determinant causes can be revealed.

More recently, Taleb (2007: 1) addresses the phenomena that humans are more

comfortable with rational explanation and overestimate causality. “We see

Mosques in the clouds instead of understanding that there are just random clouds

that appear to our eyes as Mosques.” He maintains that modern humans, engage

in ‘epistemic arrogance’ by claiming to see patterns rather than admitting the

possibility of mere random noise, or even being aware of the existence of

randomness. This tendency makes individuals and organisations more

susceptible to being blindsided by unexpected events, such as the 2008 global

economic crisis. In essence, he argues that humans tend to view the world as

more explainable than it really is. Taleb (2007) also argues that this tendency

means that we attribute success to skill rather than luck, as we find it hard to

think critically about the workings of probability.

Physical Sciences

The physical sciences have also struggled with the idea of chance. As The

Scientist (The Scientist, 1988: 10) points out, the concept of chance is “by

definition problematic, as science cannot readily accept luck.” The

predominantly rationalist field sees the belief in luck as a result of poor reasoning

or wishful thinking. However others in the field cannot discount the operation of

chance in many scientific discoveries (The Scientist, 1988: 12). Paschal

(Davidson, 1983) noted that while science shows that there is probability, there is

nothing in nature that could be called chance. Chance or luck is only what

appears when we observe circumstances at close range. But with sustained

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observation, we discern probability (Taleb, 2007). The example often used is the

flipping of a coin a hundred times: it will not be by luck that half of the times

will come up ‘heads’ and half will be ‘tails.’ As a famous quote by Einstein has

it: “I cannot believe that God plays dice with the universe.”

However, rationalists can accommodate the idea of luck as a contrast to the

concept of control or intentionality (Nadelhoffer, 2005). Luck is that which

happens beyond a person's control, either by factors you cannot change (such as

inherited biological features), factors that are randomly brought on, or factors

which are the capricious result of your actions. As Hájek and Hoefer (2006: 3)

observe, “Some authors believe that to posit chance is to abjure explanation; yet

others think that chances are themselves explanatory.”

Social Theory, Organisational Theory and Strategy

It is perhaps this same positivism in social science as in the physical sciences

(Burrell & Morgan, 1979) that has meant that the operation of luck or chance has

had relatively little attention from theorists in this field. Merton (1957) was a

pioneer in this area from the field of social theory. Merton (1957: 10) ‘stumbled

across’ the ‘outlandish’ term ‘serendipity’ in the Oxford Dictionary in 1945 and

borrowed it for his now famous concept, the serendipity pattern “the discovery,

by chance or sagacity, of valid results which were not sought for.” Merton’s

scholarly embrace of this term promoted interest in this concept.

In the also predominantly deterministic organisational theory and strategy, there

are some theorists willing to consider the role of luck or chance, or a stochastic

element, as a factor in organisational performance (Barney, 1986; Dierickx &

Cool, 1989; Jacobsen, 1988). The concept of luck is required to fully explain the

outperformance of one organisation's strategies, where another might possess the

same capabilities and resources. Also, similar to Merton's notion of unintended

consequences of purposive conduct, Perrow (1984) describes the concept of

normal accidents in examining the process that leads to new technologies. Trivial

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choices can be observed to generate significant unintended consequences, or

outcomes that could not have been predicted.

In the broader realm of economics, the chance element in the concept of path

dependency is the subject of debate. Path dependency describes a process by

which advantages are brought about by network externalities. This is sometimes

framed as 'increasing returns economics' and is the idea that random events can

give a technically inferior product an early lead in the market. The process of

positive network feedback and 'lock in' can turn this early lead into dominant

market share (Arthur, 1994: 2). However, the work of Arthur (1994) and the

theory of path dependence are controversial, with some economists arguing that

the effects of events in the path can be remediated by forward-looking economic

agents (Liebowitz & Margolis, 1995).

Organisation studies: Garbage Can Theory.

The Garbage Can Theory of strategic decision making, first articulated by Cohen

et al (1972) and modified by Kingdon (1995) introduced the possibilities of

chance into organisational theory. These theorists noted that existing rational and

political models did not sufficiently address decision making processes in highly

ambiguous environments ('organisational anarchies'). These environments are

characterised by a lack of clear organisational preferences and the fluid

participation of decision makers for any particular choice opportunity.

This theory is different from rational models of decision making which assume

boundedly rational individuals or political models which assumes a powerful

coalition. Rather, decision making occurs in a “stochastic meeting of choices

looking for problems, problems looking for choices, solutions looking for

problems to answer, and decision makers looking for something to decide”

(Eisenhardt & Zbaracki, 1992: 27). The 'Garbage Can' contains solutions which

an organisation may generate but are discarded when they fail to find appropriate

problems. Decision makers may later delve into the can when a problem later

arises for which the solution may be a good fit. As Eisenhardt and Zbaracki

(1992: 27) describes, the garbage can model calls attention to the importance of

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chance: “what gets decided depends strongly on timing and luck.” Choices are

made only when the shifting combinations of problems, solutions and decision

makers happen to make action possible (Cohen, et al, 1972: 16).

Generally, in the field of strategy and management, luck remains elusive.

However, Ma (2002: 525) challenges the view that chance should be dismissed

as being a- theoretical: “Elusive as a theoretical concept yet certain in its earthly

presence, luck, admit it or not, is a non-trivial determinant of performance, and

begs our further understanding.”

Organising Concepts: Participants, Problems, Solutions and Coupling

Informed by the elements of the Garbage Can Theory (Cohen et al, 1972) and

modified Garbage Can Theory (Kingdon, 1995) the focal decision events in the

HOUSCO case are seen to arise from a random confluence at a point in time of

independent organisational ‘streams’ of problems (concerns of people inside or

outside the organisations), participants (decision makers) and solutions (ideas

which ‘float’ in an organisation independent of a specific problem). These

elements form the organising concepts and the structure of the I/C study.

In explaining how change is brought about, the garbage can model describes the

‘coupling’ (Kingdon, 1995) or ‘chance intersection’ (Eisenhardt & Zbaracki,

1992) among these independent organisational ‘streams.’ Events in the two

HOUSCO organisations are not seen as proceeding neatly from problem to

solution. Rather, these streams of events follow through a system all at once,

each with a life of its own (Kingdon, 1995). Explanation is therefore a matter of

combination among the elements, rather than single explanatory origins

(Kingdon, 1995).

Processes are seen as highly fluid (Kingdon, 1995: 222). The decision making

‘arena’, of participants, problems and solution does not stay constant for long

and may change capriciously (Gibbons, 2004). As such, analysts cannot predict

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what may happen. However, the process is seen to be historically contingent:

what happens in one phase depends to some extent on what happened in the

previous phase (Kingdon, 1995: 224).

Organising Concepts: Counterfactual Reasoning

By virtue of the application of the concept of random ‘coupling’ of

organisational elements of participants, problems and solutions we can see that

the HOUSCO outcome could not have been predicted by rational analysis of

initial conditions. At each phase, a different turn of events or ‘twist of fate’ may

have changed the opportunity for the ‘coupling’ to occur. To evidence the

stochastic nature of the process, a further analytical step is required to make the

case that, were there to be an ‘easily imagined variation’ (Tetlock and Belkin,

1996) within one of the streams, the focal event would plausibly have not have

occurred, conceivably terminating the HOUSCO development process at that

point.

Counterfactual (‘what if?) reasoning and analysis invites us to think carefully

about our claims for causality in a narrative of events. Counterfactual methods

are widely adopted in history and political science as a method to sensitise

analysts to the possibility of probabilistic or chance outcomes and to be careful

about their claims to causality between an antecedent and a consequent. While

more a methodological approach rather than a theory, the philosophical

principles are outlined in order to understand how a process analysis might

understand the sequence of events in a case as probabilistic. The specific

analytical technique will be defended more extensively in the next chapter.

Counterfactual reasoning has been claimed to be a prerequisite for any form of

learning from history (Tetlock & Belkin, 1996). Tetlock and Belkin (1996: 4)

quote Skyrms (1990) to give the precise philosophical definition as

“counterfactuals are subjunctives conditionals in which the antecedent is known

or supposed for purposes of argument to be false.” Well known counterfactual

questions from the realms of political science include ‘What would have

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happened if Stalin had been replaced as General Party Secretary or the United

States had not dropped the bomb on Japan?’ Counterfactual analysts argue that

such questioning is not idle speculation, but rather necessary for drawing causal

inferences from historical data. Analysts focus on critical junctures and turning

points in a sequence of events and use precise techniques to question whether the

outcomes could have been different if ‘easily imagined variations’ are

introduced.

Counterfactual reasoning focuses on the nature of causation (Booth, 2003) and is

a useful corrective to simple deterministic forms of thinking. The use of such

analysis compels us to “abandon determinism by acknowledging the role of

chance or to abandon simplicity by acknowledging that factors outside our

purview of our deterministic models can alter the course of events” (Tetlock &

Belkin, 1996: 8). While not claiming to fully explain the past (Booth, 2003) such

an approach enables analysts to “make judgements both about the nature of

historical causes and events and their significance. Counterfactual analysis

allows a better understanding of which events and processes may be contingent,

probabilistic or deterministic” (Ferguson, 1997, quoted by Booth, 2003).

This section has introduced the I/C perspective and identified the guiding

concepts that will inform analysis. In summary, the proposition of the

Chance/Indeterminacy perspective is that events and outcomes are contingent

and probabilistic rather than linear and predictable.

CONCLUSION

This chapter has outlined the three perspectives which will be used to analyse the

case study including definitions, working assumptions, theoretical resources and

organising concepts. These were summarised in Table 3. The following chapter

outlines and justifies the methodology adopted to explore alliance development

and change through the lens provided by each of the three perspectives.

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CHAPTER THREE: Research Methodology

Chapter Two presented each of the three theoretical perspectives applied in the

analysis of the case study. Analysing the HOUSCO case through the lens of each

of the three perspectives provides different explanations as to how and why the

sequence of events in HOUSCO unfolded as it did, culminating in the coming

together of the two focal organisations in an incorporated joint venture company.

Comparison, contrast and integration of these explanations produce the findings

of the study. The purpose of this section is to outline the research methodology

used to arrive at these findings.

In overview, my research strategy was to conduct a qualitative analysis of

HOUSCO as a single explanatory case study (Yin, 1994) for the purpose of

extending alliance process theory. Findings and theoretical propositions were

developed through analysis of data from multiple sources. These included

primary archival sources, documents as well as semi-structured depth interviews

with all the actors with significant involvement in the case. The Alternative

Templates Strategy for theorising from process data (Langley, 1999) was

employed, generating three different explanations for the change and

development in the HOUSCO case. Cross-case comparison and synthesis were

employed to distil the distinctive explanatory contribution of the IA perspective

and to theorise the relationship of this perspective with the other two as a more

complete explanation for the sequence of events in this alliance.

I was guided by Yin (1994, 2003a,b), Stake (1995) and Eisenhardt (1989a) in

forming my research strategy and design, particularly in regard to case study

strategy. When considering the methodological traditions of process research, I

looked to Van de Ven (1992) and Van de Ven and Poole (1995), Pettigrew

(1992, 1997) and Langley (1999). Langley (2008,) in particular provided useful

guidance on developing theory through the single-case study and also the

Alternate Templates Strategy for sensemaking from process data. As

retrospective case studies share similar methodological challenges with

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comparative historical studies, I looked to the literature on historical methods for

guidance, particularly in dealing with recall and retrospective bias (e.g. Hoffman

& Hoffman, 1994). A strand within historical methods is counterfactual analysis,

which was employed when analysing the data through the I/C perspective. My

analytical procedure was guided by Tetlock and Belkin (1996).

The chapter is structured in four sections. The first section establishes the

epistemological orientation which guided the study, being critical realism. The

second section sets out the research strategy, in which I describe and justify the

choice of qualitative methods — a single, longitudinal and historical case study

as well as the Alternative Templates Strategy. The third section addresses the

research design, dealing with the choice of case, its scope and boundaries, the

sources of evidence, the data collection procedures, and how the data was

analysed and findings drawn. This section also includes an evaluation of the

design against commonly applied tests of the quality of qualitative research.

After summarising these methodological choices, I conclude by further justifying

the choice of case and providing the HOUSCO institutional and organisational

context, providing a foundation for the subsequent empirical chapters.

EPISTEMOLOGICAL ORIENTATION: CRITICAL REALISM

HOUSCO is an explanatory case study, in contrast to two other purposes which

case studies may serve, being exploration or description (Yin, 1994).

Explanatory cases develop and/or test theories based upon in-depth investigation

of the phenomenon (Yin, 1994). In this case the phenomenon of interest is the

incorporation of HOUSCO, representing the culmination of a lengthy

collaborative process. The research proposes explanation as to how and why the

early collaboration between the local government and state government

organisations changed and developed such that it culminated in the event of the

incorporation, representing a formal and significant joint venture agreement

between these two organisations. This objective is in keeping with traditions in

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process research, which seeks to “provide explanations in terms of the sequence

of events leading to an outcome” (Langley, 1999: 692).

However, how a researcher approaches such explanation and the broader

question of causality, depends on their epistemological orientation. This research

is guided by a critical realist epistemology. As such, the approach to explanation

will differ from that of a positivist. Case study research is enhanced by being

clear as to epistemology (Yin, 2003a). Therefore, I will firstly outline Critical

Realism, its tenets and proponents. I will then outline its principles as to

causation and explanation.

Critical Realism and Explanation

Critical Realism is most closely associated with Roy Bhaskar (A Realist Theory

of Science, 1979, 2008). Bhaskar proposed an ontology and philosophy of

science that critiqued the ‘rational’ and ‘positivist’ stipulations espoused in the

natural sciences, as well as much of the social sciences, as to what constituted

scientific knowledge.

Ontologically, critical realism is similar to positivism and different from

interpretivism, in that both conceive of a reality that exists: this reality can be

conceptualised and theorised. Epistemologically, the aim of Critical Realism is to

explain the relationship between experiences, events and mechanisms (Sayer,

2000). Critical Realism promotes questions of ‘how and why’ a particular

phenomenon came into being and attained its specific nature and character.

Critical Realism prescribes methods which seek to identify the mechanisms that

produce social events, but maintain that these social phenomena are in a much

greater state of flux than those of the physical world (Archer, 1998). As such,

critical realism has some distinctive points of departure from positivism as to

causation.

Bhaskar (quoted in Archer, 1998) maintains that causal laws are ontologically

distinct from the pattern of events or what we may observe empirically:

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Reality is constituted not only by experiences and the course of actual events, but also

by structures, powers, mechanisms and tendencies — by aspects of reality that

underpin, generate or facilitate the actual phenomena, that we may or may not

experience, but are typically out of phase with them (Archer, 1998: 5).

In contrast, reality for the positivist exists solely in these observable events. As

Sayer, 2000: 12) describes “Empirical realism treats the world as consisting of

observable atomistic objects, events and regularities among them. The empirical

realists assumes that what we can observe is all there is.” A positivist would seek

to explain by searching for regularities or patterns between successions of events,

looking for a direct and constant relationship between cause and effect. A

critical realist, in contrast, does not locate causal relationships at the level of

events, but rather at the level of the generative mechanisms. As Sayer (2000: 14)

explains:

For realists, causation is not understood on the model of regular successions of

events, and hence explanation need not depend on finding them or searching for

putative social laws … What causes something to happen has nothing to do with the

number of time[s] we have observed it happening. Explanation depends instead on

identifying causal mechanisms and how they work, and discovering if they have been

activated and under what conditions.

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RESEARCH STRATEGY

The previous section outlined the critical realist epistemology which informs the

approach to explanation in this case. This section outlines and justifies the

approach taken to address the research questions. My research strategy was to

conduct a qualitative analysis of this single explanatory case study (Yin, 1994)

for the purpose of extending alliance process theory. Findings were developed

through analysis of the data using Alternative Templates Strategy for theorising

from process data (Langley, 1999). The following will justify each of these

strategy choices.

Qualitative Approach

Both quantitative and qualitative approaches are employed within the process

research literature. According to Van de Ven (1992), a researcher will make this

choice according to their ontological view of an organisation as a ‘thing’ or a

collection of processes and the corresponding epistemological view of studying

change by focussing on variables or processes. In this study, I take the process

view, adopting Van de Ven’s (1992: 170) Approach 3:

[Process as a sequence of events or activities that describes how things change over

time … [this] third definition of process takes an historical development perspective,

and focuses on the sequence of incidents, activities and stages that unfold over the

duration of a central subject’s existence.

Taking this process view requires narrating emergent actions and activities by

which collective endeavours unfold, calling for qualitative, textual data (Van de

Ven, 1992).

Qualitative methods are also generally supported in the literature for studies of

organisational change and development. For example, Cassell and Symon (1994)

argue that qualitative methods alone provide the sensitive tools that can address

the questions of how or why change has occurred over time. This study is

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seeking to address the question of ‘how’ and ‘why’ the HOUSCO alliance

changed and developed. The study is interested in the dynamics of the

relationship between the two central organisations in the alliance and the

environmental circumstances in which the activities were conducted. As such,

the sensitive tools available to a qualitative researcher were deemed appropriate

to address the research questions.

Case Study Strategy

The focus on questions of ‘how’ and ‘why’, and also the desirability of analysing

the alliance within its organisational and institutional context also makes the case

study a preferred strategy. Yin (1994) notes that these types of questions can be

best addressed through a case study, as these require observation of linkages over

time. Yin (1994) also notes that case studies enable the researcher to study the

phenomenon of interest in the context in which it occurs, which is particularly

important for process research. Van de Ven and Poole (2005: 1385) stress that

process theory must be generated through analysis of a phenomenon in its

context:

This explanation should identify the generative mechanisms that cause observed

events to happen in the real world, and the particular circumstances or contingencies

when these causal mechanisms operate.

The ability to study contextual conditions is particularly important when “the

boundaries between phenomenon and context are not clearly evident” (Yin,

1994: 13). This blurring of boundaries is a consideration in this case, where the

alliance in question is embedded in a wider network embracing the two levels of

government, the community and private sectors. The scope and boundaries of the

case require careful judgment. The case is also blurred in time. Where the

process ends is clear: the signing of the documents of incorporation of the joint

venture marks the defining final event. Where a researcher starts the

investigation is less clear and requires a determination on the part of the

researcher.

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Yin’s (1994: 1) additional criterion for the selection of a case study, “when the

investigator has little control over events” is also applicable in this case. As an

historical study, the researcher had no control over events that had passed. Nor

was the researcher involved in the events as they were happening.

The case study strategy can also be justified as being consistent with

methodological traditions of process research. The case study is an established

strategy within this literature, strongly represented in the exemplar empirical

process studies presented by Van de Ven (1992) and Langley (1999). It has

strength in the study of change processes, as it allows the study of contextual

factors and process elements in the same real-life situation (Eisenhardt, 1989a;

Halinen & Tornroos, 2005; Pettigrew, 1988).

Finally, the case study has potential for contributing to the alliance literature. As

argued previously, contextual understandings of collaboration process are

lacking in the literature on collaborative process and evolution (Gulati and Zajac,

2000).

HOUSCO as a Single, Explanatory and Revelatory Case

HOUSCO has been chosen as a case with rich potential to extend current

explanations of alliance change and development, meeting all three of Yin’s

(1994) suggested rationales for conducting single-case designs.

Firstly, HOUSCO represented a critical test to existing theory. As identified in

the Literature Review, current explanations for alliance change and development

focus on broad determining social and economic forces. According to prevailing

theory, HOUSCO emerged from the rational choices of Council and the State

Housing Departments, according to their institutional logics, as a necessary

adaptation to emerging environmental challenges. As noted in the Introduction,

this perspective would seem limited in its power to explain the sequence of

events in HOUSCO. In particular, the prevailing institutional environment in

both partner organisations, was more likely to reject rather than accept the

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emerging HOUSCO proposal. This was an argument for exploring the strength

of other explanations, including individual agency.

Secondly, the HOUSCO process was chosen as an ‘extreme or unique’ case.

From tentative early beginnings the process moved through periods of inertia,

uncertainty and conflict, before finally achieving momentum with the joint

approval of a business model. In reaching this milestone, HOUSCO was more

the exception than the rule in alliance life. While alliances have proliferated,

research indicates that most will be terminated without their potential value being

realised, (e.g. Park & Ungson, 2001) or succumb to collaborative inertia

(Huxham, 2004). The positive change and development of the HOUSCO

process therefore presented itself as having rich potential for further inquiry.

Finally, HOUSCO was also potentially revelatory, being “a phenomenon

previously inaccessible to scientific investigation” (Yin, 1989: 48). The

successful negotiation of access to all the high-level actors in this case, both

political and bureaucratic, is difficult to achieve. This was the result of careful

and tactical planning in collaboration with a well-placed and influential ‘link pin’

informant. As such, it is a case which may not be readily accessible to every

alliance researcher.

Generalisation and the Single Case Study

Single case designs are frequently criticised as being limited in their potential for

theoretic contribution: critics maintain that they cannot be generalised to a

broader class of phenomena. There are several counterarguments to this assertion

(e.g. Langley, 2008) however this study claims theoretic rather than statistical

generalisation (Langley, 1999; Yin, 2003a). That is, generalisation comes from

the use of theories that have broad application (Langley, 1999). Yin (2003a) uses

the Allison (1971) study as an exemplary case of theoretic generalisation. He

argues that the three theoretical perspectives used and the extensive analysis

undertaken ensures the findings are applicable outside the immediate field of

political strategy to a broader class of organisational phenomena.

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To provide further explanation, it is useful to distinguish theoretic generalisation

from statistical generalisation, which is more commonly understood as the only

form of generalisation (Snow & Trom, 2002: 164). Framed another way, this can

be seen as the difference between enumerative and analytic induction.

Enumerative induction involves studying cases belonging to an identified class

of phenomenon to see if they share a characteristic (Seale, 1999: 109). In

analytical induction the purpose is not to enumerate frequencies (statistical

generalisation) but to “expand and generalise theories” (Yin, 1989: 21). The

cases are not taken to be examples of a class beforehand; the researcher makes

the choice of case based on its power to illuminate aspects of a general theory.

The ability to generalise to other contexts depends on the choice of a case with

rich explanatory potential (Mitchell, 1982; Yin, 1994), the strength of the

theoretical reasoning applied (Mitchell, 1956; Seale, 1999) as well as the

“compelling theoretical framework” in which the case is analysed (Yin, 1994:

13). Thus the basis of theoretic generalisation lies in logic rather than probability

(Seale, 1999: 109).

Longitudinal and Retrospective Approach

Van de Ven and Poole (2002: 875) define change as “an observed difference in

an organizational entity over time.” As such, a study must collect longitudinal

data, which may be conducted in real time or retrospectively. Most studies of

organisational change take the retrospective approach (Van de Ven & Poole,

2002). Van de Ven and Poole (2002) note that post-hoc knowledge enables

interpretation of events that have unfolded, and therefore enable the construction

of a narrative. This concurs with the aphorism, attributed to the philosopher

Kierkegaard, that while life must be lived forwards, it can only be understood

backwards. However, Van de Ven and Poole (2002) contend that a retrospective

approach has the potential to bias the study, particularly if a normative value is

placed on the known outcome, such as being successful or unsuccessful. The risk

is that the researcher may tend to filter out events that do not fit this narrative,

particularly minority perspectives (Van de Ven & Poole, 2002: 875).

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The other, similar, risks are ‘retrospective bias’ and ‘recall bias’ in interview

subjects. Retrospective bias is similar to that which can afflict the researcher

when an outcome is known: an informant may knowingly or otherwise misreport

their actions or decisions to appear to have contributed to a positive outcome, or

to have tried to prevent a negative outcome (Hoffman & Hoffman, 1994). Recall

bias, on the other hand, is an issue of memory and its reliability. Recall of

information depends entirely on memory which can often be imperfect and

thereby unreliable. All these risks represent a potential threat to internal validity,

which the researcher must address in the research design.

However, the additional steps taken in research design to counter these

methodological risks are warranted when there is the potential for significant

insight from a retrospective case. As noted above, classic studies have employed

retrospective approaches, notably Allison (1971), and more recently the study of

the Challenger Launch Decision (Vaughan, 1996). Methods exist to address these

risks from a number of disciplines. As Snow and Trom (2002) note, the line

between retrospective case studies and historical/comparative studies is blurred

and there is much overlap of methods. We can look to the more well-developed

historical methodologies to address these challenges.

Alternate Templates Strategy

Yin (1994: 13) suggests that a researcher may boost the contribution of the single

case by placing it within a compelling theoretical framework. He provides the

example of the classic Cuban missile crisis study (Allison, 1971; Allison &

Zelikow, 1999) as illustration of such a framework. This study analyses the

phenomenon with three models — rational actor, organisational behaviour and

governmental politics — demonstrating how different “conceptual lenses lead

one to see, emphasize, and worry about quite different aspects of an event”

(Allison 1971: 5). A single model, by contrast, “limits one’s grasp of other

dimensions of the phenomena” (Allison & Zelikow, 1999:8). Allison (1971)

demonstrated that using different yet complementary models offers a richer

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explanation by providing insights into dimensions that would otherwise remain

neglected.

The use of multiple theoretical models as a strategy to analyse a case is well

established in the process literature. Van de Ven and Poole (2005: 1385) stress

that the process analyst “needs to go beyond a surface description, to penetrate

the logic behind observed temporal progressions” and that this may involve a

number of theoretical perspectives in order to produce a more comprehensive

explanation. This is appropriate when providing explanation of a complex

phenomenon, where presenting only one explanation of the ‘motor’ (Van de Ven

& Poole, 1995) of process evolution would risk oversimplification. As argued

previously, inter-organisational collaborations represent such complex

phenomena. They span a number of institutional contexts, play out over space

and time (Van de Ven, 1995) and are influenced by a range of diverse actors with

different motivations and schemas. It is therefore unlikely that any one

perspective would capture all its dimensions.

Langley (1999) presents Alternate Templates as one of seven strategies for

theorising from process data. She describes the goal of the analyst as proposing

alternate interpretations of the same events based on different but internally

consistent sets of a priori theoretical premises (Langley, 1999: 698). “A

confrontation among different interpretations can reveal the contributions and

gaps in each”. Langley (1999) maintains that because the strategy draws theory

from outside the study, it is essentially deductive. However she suggests that

each interpretation does not have to be considered a true ‘test’ of each theory, but

rather ‘complementary readings’ that focus on different variables and levels of

analysis and therefore different dynamics. Similar to Yin (1994) she commends

the strategy for drawing theoretical insight from a single case, as the different

theoretical perspectives provide the basis of comparison which is often called for

in case study research (Langley, 1999 cites Lee, 1989 and Yin, 1994). She also

commends the strategy for providing both richness and theoretical parsimony as

it requires the analyst to decompose the problem:

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Theoretical clarity is maintained by keeping the different theoretical lenses separate

… Between them then different theoretical perspectives provide overall accuracy,

although each one is inaccurate on its own. Generality in this approach comes from

the use of deductive theories that have broad application. (Langley, 1999: 699)

RESEARCH DESIGN AND PROCEDURES

The previous section outlined the research strategy adopted to address the

research questions. In this next section, research design, I present the next level

of methodological choices of the thesis. This section presents the unit of analysis,

describes the data sources and how the data was collected and the analytical

strategy and procedures. In presenting the design, I am conscious of the

desirability of establishing an ‘audit trail’: ideally other researchers should be

able to replicate your research (Yin, 2003b). While this ideal is difficult to

achieve, the procedures are presented as explicitly as possible.

In essence, the research design is the logical sequence or chain of evidence that

connects the empirical data to a study’s initial research questions and

propositions and, ultimately, to its conclusions (Yin, 2003b). The design needs to

meet tests of construct validity, internal validity, external validity and reliability.

Unit of Analysis

The discussion of unit of analysis covers both the entity under investigation, in

this case the collaborative process from 1991 to 2002, as well as choices made as

to the length of the process and the breadth of the network included in the

analysis.

Process as Unit of Analysis

The unit of analysis should be consistent with the research questions posed. In

this research I seek to understand how and why this alliance changed and

developed such that it culminated in the event of formal incorporation into a joint

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venture enterprise on July 2, 2002. As such, the process itself is the unit of

analysis, a choice supported by the case study methodological literature (Yin,

1994: 22) and the strategy process literature (Van de Ven & Poole, 1995). As

such, an holistic approach is adopted, where one unit of analysis is adopted. This

contrasts with embedded designs where the case is split in multiple units of

analysis (Yin, 2003b). Events at the end of the three phases are used as a device

to structure the analysis.

Scope of Case: Length of Process, and Breadth of Network

It is also useful in a discussion of unit of analysis to consider issues of scope of

the case. Stake (1978: 7) notes that a case can be "whatever bounded system is of

interest." Establishing this boundary is an early design task for the researcher.

This involves judgement regarding the time period of interest, establishing a

boundary for the process, as well as the defining and delimiting the

organisational fields which will be studied, establishing the network boundary.

In establishing the time period of interest the end point is clear. The process ends

with the incorporation of the alliance into a formal joint venture company, an

observable and formally documented event indicating a ‘changed state.’ The

starting point is less clear and requires the researcher to establish a temporal

boundary. Rasmussen, Nixon & Warner (1990: 3) notes that no stop rules can be

devised to terminate this search. It is always possible to go one more step

backwards. In this case, I examined archival records and interview data to find

the earliest incident denoting intent on the part of one of the two focal

organisations to collaborate around the issue of social housing. I deemed that the

process started in 1991 with the establishment of a cross-sectoral taskforce to

consider urban regeneration in the inner city. As part of this process, issues of

social dislocation and housing in the inner city were formally considered by local

government and by the taskforce. The Lord Mayor sought representation and

involvement from the state government in this taskforce — the earliest formally

recorded incident that I could find of a stated mutual interest.

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Establishing organisational scope and boundaries also required some criteria. In

this case, there were clearly two focal organisations, being the local government

organisation including the elected arm and the bureaucracy and a state

government organisation, being the bureaucracy and the elected and appointed

Minister. However, full understanding of the event requires understanding of a

broader organisational and institutional context. The institution of state

government more broadly needed to be examined, including decision making at

the most senior levels. A range of actors from the community welfare sector were

also important stakeholders. Additionally, several individual actors from the

private property development sector were powerful agents. Also, the federal

government held key decision-making power around aspects of the proposed

joint venture. Decision making criteria needed to be developed to establish a

workable boundary to inform data collection and analysis.

Halinen and Tornroos (2005: 1287) note the research complexities of defining

and delimiting the boundaries of the case in research involving a network

structure, noting that often these can be arbitrary, as the network “extends

without limits through connected business relations.” He offers the researcher the

choice of defining the limits of the case a priori on a structural basis, or using the

perceptions of involved business actors as a guide in establishing the boundary.

He points out that if the unit of analysis is too small the researcher risks losing

the sense of the connectedness of the network.

The approach in this study was a hybrid of the options presented by Halinen and

Tornroos (2005). The researcher initially defined the limits on an a priori

structural basis, based on knowledge of the case at the beginning of data

collection, but allowed for the possibility that focal actors may draw the attention

of the researcher to other significant omissions of actors not currently considered.

An individual or organisation was included as part of the study if they were

deemed to have impacted on the process of interest. Interview informants must

have had first-hand and significant (more than 12 months) involvement in the

process during the time period of interest. Particular organisations or groups

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within organisations were included if their regulatory or decision making power

was deemed to have had an observable and significant impact on the process

along the process path.

Data collection began with two identified focal actors, one from the state

government organisation and one from the local government organisation. Three

interviews were initially conducted with these two (the second) of these three

included another senior bureaucrat from Council) and informed the choice of

individual and organisational actors for inclusion in data collection. From there,

the scope extended outwards to include all the senior political leaders and senior

executives from both local and state governments, as well as the newly formed

HOUSCO. Documentation and archival records were examined from these three

organisations. Data collection informed the choice of actors for the next stage:

interviews moved down a level within the two focal organisations to include

senior policy officers and middle managers whose actions impacted on the

development path. Finally, the scope extended outward to include senior

informants from the community and private sector organisations who at a certain

point in the path informed the policy decision.

Within these boundaries, the researcher took an exhaustive as possible approach

to data collection, as is required in case study research. All relevant

documentation and archival records known to the researcher and informants were

sought and all informants who met the criteria for inclusion were asked to be

involved in an interview.

Data Sources

Evidence for this case study came from three of six sources identified by Yin

(2003b), being archival records, documents and interviews. As this was a

retrospective study, Yin’s (2003b) identified sources of direct observation and

participant observation, being real time sources of data, were not applicable.

Physical artifacts as a data source were not relevant to the study.

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Case studies require such multiple sources of data in order to establish construct

validity (Eisenhardt, 1989a; Yin, 2003b). This is particularly important in

historical studies, to overcome validity issues in retrospective sensemaking (Van

de Ven and Poole, 1995). Also, particularly in historical studies, it is important

that primary documentation sources are employed to establish as objective a

record of events as possible (Hoffman & Hoffman, 1994). These issues as well as

other measures to address reliability and validity will be addressed as each

included data source is outlined.

Archival Records

As above, it was important to establish from primary sources a record of

incidents which then became the sequence of events which we can now see as the

development process which culminated in the event of incorporation into

HOUSCO. Yin (2003b) views archival and documentary sources as stable

because they can be reviewed repeatedly and have the advantage of recording

dates and incidents which can then be triangulated with other data sources.

This ultimate event is evidenced in the signing of documents of HOUSCO

incorporation in June 2002. This defining end-point was actually a brief and

largely ceremonial event; however it was the culmination of 10 years of smaller

actions and decisions. Discussions, actions and decisions are evidenced in formal

meeting records. In local government, meeting records included Council Minutes

of Meetings, including full Council and smaller committees, such as Council

Civic Cabinet. In the state government, records included State Government

Hansard, Minutes of a State Government Taskforce on Housing, and Minutes of

a Project Control Group where joint venture operating structure was worked

through. Additionally, although occurring after the date of incorporation, minutes

of the HOUSCO Board meetings for the first six months following incorporation

were sourced to provide additional contextual understanding of the period

directly before incorporation.

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Council minutes provided detail about dates and events, but also much rich data

on the political debate which surrounded the issue of social housing and how

different political actors were positioned around the issue. They also evidenced

how this debate changed over the 10 years of the process. State Government

Hansard concurred with Council minutes on dates of important incidents and the

nature of the issue and similarly provided narrative and contextual data. They

sometimes offered a different perspective from Council minutes in the way the

policy issue was framed and which actors were put forward as being worthy of

credit or political opprobrium. This did not necessarily contradict the Council

record, but reflected the state government institutional field in the way an issue

or decision was framed.

Documents

I collected a wide range of documentary sources. These included documents

illuminating the political and organisational contexts of the focal organisations,

including policy documents and annual reports, as well as newspaper and journal

articles. I also analysed major public speeches and presentations made by the

focal actors.

A particularly critical document was an extensive external evaluation of

HOUSCO undertaken by a well-known consulting firm. This evaluation outlined

the social housing context and the process of establishment for HOUSCO. It

included depth interviews with a range of stakeholders regarding the social

outcomes intended and their achievement. The document usefully provides

evidence from a source independent of the researcher, meeting Patton’s (2002)

criterion for triangulation of ‘different evaluators/investigators’. The range and

nature of these documents is evidenced in the Notes sections of each of the three

empirical chapters.

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Interviews

Depth interviews were a significant data source. One-on-one semi-structured

interviews were conducted with 22 individual informants, who included:

• 4 politicians (including the Lord Mayor, Deputy Lord Mayor, a

Councillor and the State Minister for Housing),

• 4 executive bureaucrats (including the CEO, Chief Financial Officer and

a Divisional Manager from Council, and the Director-General from the

State Housing Department)

• 7 senior bureaucrats (officer from Council and the State Housing

Department with significant policy responsibilities for developing the

HOUSCO proposal and two officers from Community Housing

Organisations who were also involved in the development process)

• 6 ‘technocrats’ (senior officers providing asset management, financial,

legal or town planning expertise during the HOUSCO development

process)

• 1 entrepreneur (the founding Chair of HOUSCO, a private business

owner from the private sector property development industry, who was

involved in the final process prior to incorporation).

A tabular representation of Key Informants is included below:

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Table 6: Key Interview Informants by Organisational Location

Council State

Government

Other

Politician 3 1

Executive Bureaucrat 3 1

Senior Bureaucrat 3 2 2 (Community Housing

Organisation)

Technocrat 3 3

Entrepreneur 1 (Private development

company)

Of these 22 informants, two were involved as key informants. That is, they

provided the initial objective information regarding the significant events, the

actors involved and critical contextual information. These two key informants

were interviewed together three times at the beginning of the data collection

process, in addition to individual interviews. One of the key informants had a

significant and central role in the State Housing Department during the

development of HOUSCO and subsequently took a senior role in HOUSCO

itself. The other key informant was a senior public servant in the local

government organisation. He was also significantly and centrally involved in the

development process throughout the time period of the case. The HOUSCO

informant also became my ‘linkpin’ contact, assisting with access to other

informants where requested by the researcher, particularly senior actors where

this was otherwise difficult to obtain. He was interviewed at another three points

in the data collection process to cross-check facts and provide additional context

information as the need arose. It should be noted here however, that the range

and final choice of interview subjects and other data sources was the decision of

the researcher alone.

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Interview Sequence

Interviews were conducted in three rounds. The three interviews with the two

key informants was the first round. A third informant, a senior public servant

from the local government organisation, was involved in the second these

interviews, which took the form of a public panel discussion. This first round

provided the initial objective timeline of events, much contextual data and a list

of actors from both the state and local government organisations who would be

key second-round informants. These interviews were exploratory and

unstructured.

The second round included actors who had close and significant involvement in

the decisions and processes that led up to the incorporation event. These included

high-level informants including politicians, executive bureaucrats and senior

bureaucrats public servants, as well as the founding private sector HOUSCO

Chair. These were very senior decision makers, including the Lord Mayor from

the local government as well as the relevant Minister from the state government.

It also included the CEO of the local government organisation and the Director-

General of the State Housing Department during the period of the case.

At the conclusion of the second round, the list of third-round interviewees was

identified. These included middle-level informants, generally senior bureaucrats,

and public sector officers who provided technical expertise to the HOUSCO

process (‘technocrats’).

Interview Protocol

Second and third round informants were formally invited to participate with a

letter or email from the researcher. The invitation stated the purpose of the

research and established the formal approvals by each of the local and state

government organisations, and by the Board of HOUSCO. The invitation also

provided the name of the ‘linkpin’ informant, should they have any further

queries prior to agreeing to the interview. The ‘linkpin’ was well known to all the

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potential informants and provided additional credibility and authority for the

study. I invited my identified informants to contact me to arrange an interview.

All those invited agreed to participate and all except one agreed to clear 60

minutes. Some interviews ran over the agreed time and as such, interview

duration was between 45 and 90 minutes, with the average time being 60

minutes. All second and third round interviews, with one exception, were

conducted in the informant’s office.

Second and third round interviews were semi-structured. Each followed a

consistent high-level structure:

1. Initial ‘positioning’ statement by the researcher, providing additional

information as to the purpose of the research.

2. ‘Global’ question regarding their reflections on HOUSCO as a business

model, its success at meeting its intended goals and the level of

innovation evident.

3. Reporting of their involvement at each stage of the process, using

prepared timeline of events to guide and prompt, focussing on objective

events.

4. Narrating the ‘story’ of HOUSCO in any way they chose, including their

own explanations for the critical events at the end of each stage and

observations and evaluations of others’ decisions and actions, which they

deemed critical to the realisation of the event of incorporation.

5. A ‘global’ question as to why they thought the two organisations were

able to come together as a joint venture on the HOUSCO initiative.

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Questions within Steps 4 and 5 invited an unstructured response but used the

objective time-line of key events as a focal point. Within these steps of the

interview protocol, the researcher probed for more detail on dates, actors and

context where the respondent’s narrative invited this. Additional questions were

asked as to specific incidents, where they had been raised by another informant.

Additional questions were also formed based on the archival records: where a

significant statement had been made in a meeting or a decision taken at a

particular point.

Also, within Steps 4 and 5 questions were asked regarding the dynamics of the

relationship between the two focal organisations (local government and state

government organisations). As Kumar, Stern and Anderson (1993) notes, it is

often necessary in inter-organisational research to use interviews to gather data

regarding the nature and quality of inter-organisational or inter-personal

relationships, as this kind of data cannot usually be found in archival records.

This kind of questioning does rely to some extent on interpretation by the

informant.

All interviews were recorded, with the permission of the interviewee.

Justification of Interview Strategy

The interview strategy and procedure outlined above represents choices as to

interviews as a data source in case studies, the number and nature of informants

and the interview protocol. These choices were made with the aim of maximising

the internal validity and reliability of the study.

Interviews are one of the most important sources of case-study information (Yin,

1993, Stake, 1995). Additionally, they have been argued to be particularly

important for inter-organisational case research, as likely constructs of interest

such as inter-organisational relationships, relative power and trust are not easily

found in archival documents (Kumar et al, 1993) and require more response

depth than can be achieved from surveying.

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The choice of informants was based on three considerations. Firstly, case studies

generally call for an exhaustive approach to data collection. That is, as far as is

practicable within the scope, all those involved should be interviewed. Case

study research is thus different from sampling research, a fact asserted by all the

major researchers in the case study field (e.g. Feagin, Orum, & Sjoberg 1991;

Yin, 1993; Stake, 1995). Thus the researcher sought to interview all the high-

level decision makers who were closely associated with the development

process. This was achieved. At the next level, a process was conducted with my

‘linkpin’ informant to identify all the middle-level public servants who had

worked full-time at some point on the development process, or who had a very

close association, such as providing critical advice at key decision-making

points. They all also accepted and were interviewed. Thus the criterion adopted

was close association with the development process and, as such, the case can

claim to be exhaustive as to interview subjects. Secondly, the exhaustive

approach, with multiple informants ensures that subject biases are mitigated,

(Golden, 1992) enhancing internal validity and leading to a richer account of the

phenomenon (Schwenk, 1984).

Thirdly, the researcher needed to maximise the number of perspectives that can

be brought to bear on the phenomenon. As many researchers have advocated, the

gaining of different perspectives in a case study strengthens the reliability and

validity of the research findings (Golden, 1992; Schwenk, 1984; Stake, 1995;

Yin, 1993). This consideration is particularly important in inter-organisational

research as the tension between two or more distinctive organisational and/or

institutional logics is one of the distinctive features of the form and needs to be

comprehensively explored. With this imperative in view, the informant group

was checked to ensure sufficient representation from both the local government

and state government organisations. Within each of these organisations,

informants included politicians as well as public servants. Additionally the case

embraces perspectives from different sectors: the informants come from

government, the community sector and the private sector. Finally, the informant

group includes two different hierarchical levels: high-level (political and

bureaucratic) and middle-level actors were included.

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A final consideration is that the informants must have close association with the

phenomena under investigation in order to ensure validity and reliability

(Golden, 1992; Schwenk, 1984). In this case all high-level informants had critical

decision-making responsibilities in the process and had been closely involved in

at least one of the three event periods included in the study. Most had been

involved for all four event periods, being the eleven years of the process.

The interview protocol was designed to ensure reliability and validity of

responses, minimising a range of biases, particularly retrospective bias as

responses required reporting on past events. Additionally, with the high-level

informants, attention had to be given to the style and conduct of the interviewer,

to ensure a full and frank account from the informant.

Firstly, the protocol adopted open-ended questioning, which has been shown to

lead to higher accuracy in retrospective reports (Lipton, 1977; Miller, Cardinal &

Glick, 1997). Participants were invited to provide their own narrative of events,

as far as possible unprompted by the interviewer. Secondly, much of the

interview was focussed on facts, guided by the objective timeline of events and

archival records. This approach minimises the risk of cognitive bias and

impression management (Golden, 1992; Huber & Power, 1985). Secondly, it was

necessary to ensure an appropriate relationship between the researcher and

informants, particularly where they were high-level informants. This was

necessary to ensure that informants were confidant in giving a full, rich and frank

account of the process and did not feel the need to withhold any information due

to lack of trust or credibility on the part of the researcher. King, Keohane and

Verba (1994) suggest a respectful but confidant approach will ensure a full

response from high-level informants and the researcher maintained this style

throughout all interviews. Additionally, the researcher ensured that archival

records had been sourced to find all the documented actions and decision of each

of these high-level informants, satisfying the informant that preparation for each

interview had been thorough and credibility thus enhanced.

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ANALYSIS

The overarching goal of the analysis stage in case study research is illumination

and understanding (Eisenhardt, 1989a). The researcher is looking behind the

ultimate event, in this case being the signing of the incorporation agreement that

created HOUSCO in 2002. The analyst looks for the logic behind the progression

from tentative beginnings in 1991, through the periods of exploration and more

formal development to agreement to the final model. As Eisenhardt (1989)

maintains, the task of the analyst is to search exhaustively for the ‘why’ behind

the relationships uncovered in the data.

Consistent with the critical realist approach and with the traditions of process

research, the explanation identifies the generative mechanisms behind the

observed events and the particular circumstances and conditions where these

causal mechanisms operate (Van de Ven & Poole, 2005: 1385). In this study, the

researcher is exploring the ‘why’ from three alternate perspectives with the goal

of illuminating the distinctive explanatory contribution of the IA perspective and

the collective explanatory contribution of the three perspectives as a complete

framework. The following outlines the stages of the analysis and describes and

justifies the procedures applied at each stage to draw the findings from the case.

Step 1: Description and Construction of Case Database

While the challenge of qualitative analysis is different from that faced by the

researcher dealing with statistics, a systematic approach to the analysis phase is

still important. Part of this approach is a clear separation of the stages of

description and analysis (e.g. Miles & Huberman, 1994; Stake, 1995).

My first descriptive step was to anchor my analysis onto as objective a record as

possible. Drawing from the archival documents, I further developed the

preliminary timeline of events that was used to structure the individual

interviews. From further interrogation of the archival documents, including Local

Government minutes, Control Group minutes, Stage Government Hansard and

the Review document prepared by independent consultants, I constructed a more

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detailed model of events. A second stage of this model-building requiring more

interpretation, was to determine the critical incidents or ‘turning points’ in the

process. These were those decision points where a decision was made by either

organisation to continue on the alliance path. The period from 1991 to June 2002

was broken down into three temporal phases, with a critical incident or ‘turning’

point at the end of each in order to structure the analysis.

Secondly, I established a case database, a procedure recommended by Yin (1994)

for case study data collection and analysis. I used the NVIVO software for

qualitative data analysis to support the analysis stage and entered all transcribed

interview data, archival and electronic documentary texts as NVIVO records.

Step 2: Coding

The second procedure was to code the data. I firstly prepared a coding

framework. As noted in the Research Strategies section above, the Alternate

Templates Strategy draws theory from outside the study. Three ‘a priori’

theoretical perspectives, or frames, are applied to the analysis of the qualitative

data. Each of these perspectives formed a separate study. Consistent with Yin’s

(1994) first strategy for deriving conclusions from case study data, I relied on

analytical questions developed for each theoretical perspective and the

‘Organising Concepts’ from the theoretical framework. Thus three coding trees

were developed as illustrated in Figure 2.1, 2.2 and 2.3 below (first three levels

only). The first three levels of this coding tree are included. I then coded all

interview transcripts, archival data and documentation pertaining to the case

against the coding framework. The data was coded three times with a separate

coding process for each of the three studies conducted. This is the equivalent of

‘pattern matching’ with the theoretical templates (Eisenhardt, 1989a; Yin,

2003b). This was an iterative process: the interview data in particular underwent

several rounds of coding. I then created a number of reports and displays, as

NVIVO allows, to support the subsequent case writing processes. This included

reports against major theoretical concepts, actors and temporal phases and

events.

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Figure 2 Coding Frames

Environmental Determinism Study

Phase

One Two Three Organisational Actors

State government Strategic environment

Purpose Challenge Opportunity

Institutional environment

Interests Rules Constraints Processes

Local government Strategic environment

Purpose Challenge Opportunity

Institutional environment

Interests Rules Constraints Processes

Critical Choice Event

Options Costs Benefits

Explanations Social structure:

Strategic environment Social ties Institutional rules and processes

Economic Structure: Equity and efficiency Initial conditions

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Individual Agency Study

Phase One Two Three

Individual Actors Organisation

State government Local government Other

Actor Type

Political Bureaucratic Technocratic

Act of Agency

Evidence of Choice Constraints Motivations

Personal Institutional

Practices Strategising Evaluating Persuading Enacting

Attributes Institutional

Power Source Legitimate Authority Technical Ability Expertise

Personal Indeterminacy/Chance Frame

Phase

One

Two Three

Elements Participants

Arenas Preferences Evidence of Receptivity

Problems Actor Attachment Problem Attention Nature of Framing

Solutions Indirection (Regulatory, Legislative)

Direct Provision of Housing

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Step 3: Within-Frame Analysis

As Langley (1999: 700) suggests for sensemaking with the Alternative

Templates strategy, the process data is subject to three ‘interpretive readings,’

each representing different levels and factors and revealing different dynamics.

These readings were developed as three separate studies and thesis chapters.

Each of these addressed the questions of ‘how’ and ‘why’, using the generative

mechanism pertaining to the theoretical perspective, looking for the evidence of

how this generative mechanism was activated as the process events unfolded.

Specifically, for each of the analyses drawn from the IA and ED perspectives the

analysis drew from the relevant NVIVO reports derived from all the case data.

This was an iterative process involving an initial scan of the NVIVO reports and

preparation of a list of questions and issues around the critical incidents. This

was followed by a second pass through the data informed by these initial

questions, looking for more connections and evidence. This tentative narrative

was then used for a third process of validating the narrative with the data. A core

process in the process of analysis and case writing was triangulation: at all times

interview data was checked and validated with archival sources (where possible)

to maximise the validity of the account.

Analysis and writing for the third case, employing the “I/C” perspective,

involved a variation on this process. Similar to the other two studies, the data

was coded using the Guiding Concepts in the Conceptual frame. However the

study also relied on the technique of counterfactual analysis. Counterfactual

analysis requires the analyst to consider the question: ‘What might have been?’

(Booth, 2003) or more commonly, ‘what if?’ This analysis sensitises the

researcher to the possibility that the sequence of events and the outcome in this

case — as we know it with the benefit of hindsight — could easily have been

different if plausible variations are introduced into the analysis at various points.

Counterfactual analysis is growing as a tool to strengthen the analyst’s claims to

explanation and causality (Tetlock & Belkin, 1996). As Ferguson (1997) argues,

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counterfactual thinking is useful firstly to test the logic of existing explanations

of causation by posing alternatives and secondly to estimate the value of our

explanations under other conditions. A number of well-known process studies

have employed this form of analysis, including the classic study of Allison and

Zelikow (1999) as well as the study of Friendly Fire by Scott Snook (2002).

In undertaking counterfactual analysis in this case, I drew from the

methodological criteria of Tetlock and Belkin (1996) for developing

counterfactual statements that are legitimate, plausible and insightful. The

analyst is focussing on conceivable causes that could have easily redirected the

path-dependent logic of events:

The investigator wants to know what was historically possible or impossible within a

circumscribed period of time and set of relations among political entities. To make

this determination they draw from … in-depth case specific knowledge of the key

players, their beliefs and motives and the political-economic constraints under which

they work (Tetlock & Belkin, 1996: 7).

Case study authors seem to agree that counterfactual statements should meet the

‘minimal rewrite of history’ rule that instructs us to avoid statements that require

‘undoing many events.’ By employing tests of clarity, logical consistency and

historical consistency (minimal rewrite) the historian is most likely to contribute

to the ultimate social-science goals of logically consistent, comprehensive,

parsimonious and rigorously testable explanations (Tetlock & Belkin, 1996: 17).

In applying counterfactual analysis in this case, I examined the three ‘turning

point’ events determined in the earlier stage of analysis. For each, I posed a

number of counterfactual arguments to conceptually isolate key factors. I

considered whether their absence or modification would have altered the course

of the event as it was recorded (Griffin, 1993). For each counterfactual posed, I

applied the tests of Tetlock and Belkin (1996) for clarity, logical consistency and

‘minimal rewrite’ to propose the most compelling counterfactual argument.

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These counterfactuals are argued through analysis of the data collected to be

plausible and logically consistent. Cumulatively, the three counterfactual

arguments presented and analysed enable the researcher to demonstrate the

probabilistic nature of the final event in HOUSCO.

Step 4: Cross-Frame Comparison

The fourth analytical step involved comparison of the findings using the focal

perspective, IA, with the findings from each of the other within-frame analyses.

The analysis first searched for the distinctive contribution to explanation that

each perspective offers. The analysis then focused on the explanation of

particular events the IA perspective enabled that would “otherwise remain

mysterious” (Langley, 1999: 699). The goal was not to assess whether the IA

perspective has superior explanatory power, rather to highlight what additional

dimensions of the case are illuminated by the application of this perspective.

Step 5: Cross-Frame Synthesis

The previous analytical process maintained separation of the three perspectives.

This next analysis looked across each of the three sets of findings to theorise the

relationship of IA within the three-perspective framework. The aim was to

address the third research question by examining the potential of an integrated,

dynamic explanation applying all three of the theoretical perspectives. As Snook

(2002: 179) explains, while we must acknowledge the parts, we must recognise

the whole, particularly in providing explanations of complex phenomenon. At

this stage I was looking at the interrelationship of each generative mechanism

and their relationship to the final event of the incorporation, involving more

inductive than deductive analysis. I was searching at a higher level of abstraction

for the ‘why’ of the case and a more integrated explanation as to the set of

conditions that brought about the event of the joint venture incorporation. This

process was highly iterative, involving several passes through the case findings

and back through the original data.

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Step 6: Generation of Propositions from the Analysis.

Based on the findings from the cross-frame comparison stages of analysis, I

developed a range of findings regarding IA as an explanation of alliance process

events in this case and the specific contribution this may add to current theory.

From the cross-frame synthesis I also developed two propositions as to how the

three perspectives as a whole can be integrated to understand the phenomenon of

change and development in this alliance.

EVALUATION OF RESEARCH STRATEGY AND DESIGN

Four tests are commonly applied to assess the quality of qualitative research and

in particular case study research. (Yin, 1998, 2003b) addresses the four tests of

construct and internal validity, external validity and reliability and suggests a

range of research strategies that may meet these tests. Table 6 lists the strategies

applied in this case study to address the issues of case study rigour.

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Table 7: Case Study Tactics and Responses

Tests Case Study Tactic

Research Phase

in which tactic

occurs

Action taken in this

research

Use multiple sources of evidence, (Yin, 2003b) different evaluators, multiple perspectives on data set (Patton, 1987).

Data collection. Use of depth interviews from informants from different organisations and hierarchical levels, documentary and archival sources. Evaluation document prepared by different evaluator.

Construct validity

Establish chain of evidence (Yin, 2003b)

Data collection. Interview data both taped and transcribed; multiple evidence sources entered into NVIVO software; coding frame matched to theoretical propositions.

Do pattern matching (Yin, 2003b).

Data analysis. Data matched to theoretical propositions.

Internal validity

Do explanation building (Yin, 2003b).

Data analysis.

Explanation built from theoretical propositions and cross-frame analysis.

Use rival theories within single cases (Yin, 2003b).

Research design. Employed three alternative theoretical templates to the data.

External validity

Use replication logic in multiple-case studies (Yin, 2003b).

Research design.

Theoretical generalisation as goal. Logic rather and probability as basis of generalisation.

Use case study protocol (Yin, 2003b).

Data collection. Consistent interview process applied.

Reliability

Develop case study database (Yin, 2003b).

Data collection.

Interview transcripts, field notes and all textual documents entered into database.

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SUMMARY

Chapter Three outlined and justified the research methodology. Table 8

summarises the most important decisions made for this research.

Table 8: Summary of Methodological Choices

Level of decision Choice

Epistemological orientation Critical Realist

Research goal Theory extension

Type of research Explanatory

Research strategy Single case study

Data collection Documentation, archival records

interviews

Data analysis Theoretical propositions/analytical

questions/pattern matching

Counterfactual analysis

Selected site HOUSCO

Unit of analysis Process/critical event

While each of the three empirical studies which follow this chapter approaches

the case through a different frame, each can be more fully understood with

reference to the institutional and social context in which HOUSCO developed.

The following provides this necessary context of HOUSCO as an exploratory

and revelatory case of alliance change and development.

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HOUSCO BACKGROUND AND CONTEXT

As argued earlier in the chapter, HOUSCO was chosen as a case with rich

potential to extend current explanations of alliance change and development.

While the HOUSCO case can be viewed as the rational choice of Council and the

State Housing Department to adapt to address a common strategic challenge, as

suggested by the majority of alliance process theory, this perspective would not

seem to address some aspects of the sequence of events in this particular case.

Some puzzles remain. Those with knowledge of HOUSCO’s institutional and

social context would have suggested that the premature termination of the

alliance would have been more probable than reaching incorporation, given the

preferences of the state for hierarchical approaches, and the Council for

remaining within a confined, traditional policy agenda for local government and

also given historical tensions between the two organisations. Thus HOUSCO

represented an organisational transformation for both organisations. For Council,

committing funds to direct provision of housing was a marked departure from its

traditional policy domain. For the State Housing Department, delivering outside

its centralised hierarchical structure at arm’s-length from the bureaucracy was a

significant innovation in delivery models. This case is therefore a ripe field in

which to explore different explanations regarding the ‘how’ and ‘why’ the

HOUSCO process moved forward, particularly the role of individual actors in

achieving this transformation. The following will supply this contextual

background for the case, including a description of HOUSCO, institutional

structures and inter-organisational dynamics in which HOUSCO was developed.

This provides a foundation for the process descriptions which precede the three

empirical chapters.

What is HOUSCO?

HOUSCO was incorporated in July 2002 as an independent, not-for-profit

organisation, delivering affordable rental housing in inner and middle city

locations in its city of operation. HOUSCO was jointly developed and funded as

a joint venture between two local and state government organisations, with these

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two entities remaining the ordinary shareholders of the company. There are also

15 organisations as community shareholders, a seven-member Board of Directors

comprising members from the private, public and community sectors, and a staff

of eight.

The business model of HOUSCO charges rentals for properties in the company’s

portfolio at discount rates to eligible applicants, who are low income individuals

and families in receipt of government benefits or income supplements, or on low

wages. Low-income tenants retain their eligibility for Commonwealth rental

assistance, increasing the affordability of HOUSCO apartments for tenants.

The incorporation of HOUSCO in 2002 was the final event in a development

process between the city (Council) and the State Housing Department which had

its early beginnings in 1991. From tentative beginnings, the alliance achieved an

early success in the joint development of one social housing development, but a

period of ‘collaborative inertia’ (Huxham and Vangan, 2004) followed. The

development process gained momentum and overcame significant hurdles before

budgets were committed by each organisation and HOUSCO as an independent

joint-venture entity was born.

HOUSCO and Adoption of Hybrid Organisational Forms in the State and

Council

When HOUSCO was incorporated in 2002 it represented an example of the

trend, noted in Chapter One, of public sector organisations in developed nations

adopting inter-organisational, hybrid forms for policy development and service

delivery, moving away from organising solely through traditional hierarchies.

HOUSCO can be seen as an example of this move to inter-organisational forms,

although through the 1990s (the period of this study) it can be observed that

hierarchy retained its pull for the State Housing Department. Council also

retained primarily a hierarchical model, although it was prepared to consider

more hybrid forms of organisation outside its formal governance structure.

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Keast (2003) notes that the state government through the 1990s was moving to

less hierarchical, more inter-organisational or network forms for policy

development and service integration. However Keast (2003) notes that often

these initiatives emerged and were coordinated by central state departments,

although they attempted to integrate the activities of other organisational actors.

Thus the preference for the control of centralised organisation remains. Similarly

Brown, Ryan and Parker (2000) note that through the 1990s the state government

had only adopted limited forms of market or hybrid models of delivery,

signalling a clear preference for in-house provision of services.

In the case of Council, the Lord Mayor elected in 1991 stated his preference for

in-house delivery of Council services, although structuring the organisation in

1996 on purchase-provider principles, a model which attempts to achieve some

benefits of market forms in the otherwise hierarchical structure. This choice of

hierarchy (in-house delivery) over market (outsourcing) for the majority of

Council delivery was a departure from local government practice in other states

at the time who embraced the market principles of New Public Management

(Hood, 1991) more zealously. However, Council demonstrated a preparedness to

embrace other forms of hybrid working, including public-private partnerships for

infrastructure delivery and joint venture vehicles for research and development.

Prior to HOUSCO incorporation, Council had also established a number of

incorporated special purpose vehicles or ‘spin-offs’ to address some areas of

interest that would be considered marginal to Council’s core policy and service

delivery areas. These were established and operated outside the formal

organisational structure and governance arrangements.

These features of Council and state traditional organisational responses

demonstrate that the HOUSCO model, as an incorporated joint venture at arm’s-

length from the organisation, was within the repertoire of Council’s responses at

the period of the study, but an innovation for the State Housing Department.

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HOUSCO in its Institutional Context

Council Power and Structure

While Caulfield and Wanna (1995) describe local government as the poor cousin

within the three-tiered federal system in HOUSCO’s nation of operation,

(federal, state and local governments) they note that in HOUSCO’s city of

operation, municipal governance had been consolidated in the 1920s into one

sizeable Council with 26 electoral wards, making it the largest municipality in

the nation. The scale of Council’s operations is large enough to attract the formal

political parties operating across the nation. In additional to scale, this local

government is also distinguished by having its own legislative act, enabling

broader powers and a degree of autonomy from state government that other local

councils do not possess. Another significant feature, relevant to considerations of

power and autonomy to act, is the model of direct election of mayors. Caulfield

and Wanna (1995) note that election at large, a feature more common in US

cities, has produced a history of ‘strong’ mayors in this city and a characteristic

peculiar to the city’s governance. This characteristic has manifested generally in

a history of policy tussles and political power plays with the state premiers.

Mayoral populism was a political force that was used effectively by several

mayors to gain power against state governments.

Housing Policy

In the nation in which HOUSCO was developed, the state and commonwealth

levels have responsibility for housing policy, with the Commonwealth funding

the states for provision. The State Housing Department in this case is charged

under the Housing Act to provide services to people in the state as part of a

broader housing system that places reliance on market forces of supply and

demand.

As a post-implementation review of HOUSCO explains, the underlying policy

assumption in most states has been that private housing markets would supply

housing in response to demand, setting prices that reflect the consumer’s capacity

to pay. However, the state intervenes where markets fail, with the collaboration

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of not-for-profit organisations. In the city in which HOUSCO is located, market

failure had increased in the 1990s, due to rapid changes in the underlying

demographic, social and economic factors. These included fast growth in overall

population, high rates of homelessness, increasing poverty and the loss of

traditional affordable rental accommodation (ARA) due to urban renewal. 1

Also during the 1990s the capacity of the State Housing Department to respond

to these growing pressures for housing was constrained by a decline in the

available funds for housing assistance, due to changes in funding arrangements

from the Commonwealth and the introduction of a national consumption tax for

which the Commonwealth did not fully compensate the states.

Housing has not been part of the policy commitments of local government.

Wanna and Davies (1995) note that, until the 1990s, policy commitments had

been relatively focussed and narrow in the Council in this case study, reflecting

the role of local government historically and a limited revenue base comprised

mostly of property rates. Wanna and Davies (1995: 75) note that although their

enabling legislation (City Act) grants this Council a potentially wide scope of

responsibilities. In practice the allocation of resources had followed narrow

policy agendas, focussed on regulatory functions, infrastructure provision and

property-related services. Social policy, including the provision of ARA did not

fit within this historical role of Council. After the 1991 election a newly elected

Lord Mayor started to broaden this traditional role to address more social issues

in the city, although reluctant to apply Council resources in policy areas that

were primarily the responsibility of another level of government.

Thus in the domain of housing policy, HOUSCO was within the policy remit of

the state, but an innovation for Council.

1 Between 1987 and 1997 the inner city lost about 162 boarding houses or 48% of total boarding house stock (HOUSCO Post-Incorporation Review, 2003).

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HOUSCO and Inter-Organisational Dynamics

During any significant period of observation, an analyst will note that

relationships between the two organisations will vary widely as a result of the

combination at any time of political parties in office at each level, the

personalities of the Premier and Lord Mayor of the day and the fundamental

power dynamics between the two and how they play out on a given policy

agenda. Although this Council enjoys more scope and autonomy than many

local governments, the state can overrule the Council on some important

planning and development matters and also determine parameters of Council

activities, for example transferring control for utilities such as electricity and

water from Council back to itself (Tucker, 1995). However Council exercises

some political power with the state. As noted above, the scale of city operations

and the model of directly-elected mayors in the city give the mayor popular

political support which can be used effectively to galvanise community

opposition to proposed state projects and policy.

In the early period of HOUSCO development, tension was at a high level

between the two levels of government, a result of personal antagonism between

the Lord Mayor and Premier as well as adverse state government decisions on a

range of policy agendas of the Council. A change of state government during the

middle of the case study period changed the dynamics of the inter-organisational

relationship and provided a more fertile ground for HOUSCO, although

underlying tensions remained on a range of policy areas of mutual interest. Prior

to HOUSCO, Council had approached the state for support on a range of

ventures which the state had declined, leading to frustration on Council’s part.

Thus, for the institutional and social dimensions outlined, HOUSCO’s path to

incorporation could not have been reasonably predicted at the beginning of the

development process. The following empirical chapters will provide three

explanations for how and why the HOUSCO process did in fact reach this

milestone and become an organisational entity in its own right.

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TOWARD THE HOUSCO CASE STUDIES FINDINGS

This chapter has explained and justified the research strategy and design choices

of this study and has provided the background and context for the following

empirical chapters. Each of the following chapters (Chapters Four, Five and Six)

is a discrete study providing an analysis and explanation of the critical events

from one of three theoretical perspectives.

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CHAPTER FOUR: Study One — Environmental

Determinism Frame

The previous chapter outlined the research methodology used to arrive at the

findings presented in the next three empirical chapters. The methodology

described the Alternate Templates Strategy (Langley, 1999) adopted in this

study. The goal of the analyst in this strategy is to propose alternate

interpretations of the HOUSCO events based on different, but internally

consistent, sets of a priori theoretical premises (Langley, 1999: 698). “A

confrontation among different interpretations can reveal the contributions and

gaps in each.” In this chapter I analyse the three phases of the HOUSCO events

through the ED frame.

In this chapter, analysis seeks to explain the critical process events as the rational

decisions of organisational actors to adapt in response to changes in their

strategic environment. Organisational actors are assumed to share a unitary view

of goals and purposes. As each actor determines that the alliance, as a necessary

adaptive response, will realise their organisational purposes, the alliance

progresses onward. If purposes are not realised the alliance evolves downward

toward inevitable termination.

As outlined in Chapter Two: Theoretical Framework, the analysis in this study is

informed by the ideal type theories of organisational change (Van de Ven &

Poole, 1995) particularly co-evolutionary (Koza & Lewin, 1998) and teleological

theories of change. From these ideal type theories the concepts which guide

analysis are social structure and economic structure. Included in these concepts

are the strategic environment of each organisation, social ties between

organisations, institutional rules and processes, equity and efficiency, and the

initial conditions of alliance.

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The analyst is guided by the following questions when explaining the focal

events at the end of each of the three HOUSCO process phases:

1. Who are the organisational actors?

2. What are the objective circumstances in their environment that each

organisation conceives as challenges or attractors?

3. What is the unitary purpose or goal of each organisation?

4. How does an alliance with the other organisation meet the purposes of

each organisation and address challenges or opportunities?

5. What are the objective (or perceived) costs and benefits for each

organisation of the alliance proposition at each stage of the process?

What is the range of other options that exist to address the objective (or

perceived) challenge or opportunity?

6. What is the rational choice for each organisation given the costs and

benefits of all options?

7. What overall pattern can be distilled from the sequence of alliance

events?

Analysis of each process phase begins with a description of the sequence of

events in that period and then proposes explanation within the framework of

assumptions of the ED frame. The process phases are presented graphically

below. A cross-phase summary explanation concludes the analysis.

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Figure 3 Chronology of HOUSCO Alliance

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PHASE ONE: FALTERING COLLABORATIVE BEGINNINGS

Process Description

In 1991 a newly elected Council Administration announced the continuation of

urban regeneration as a major policy initiative.2 Urban regeneration is a strategy

of significant infrastructure spending in a concentrated area, designed to

redevelop previously industrial or underused areas of the inner-city in the

interests of sustainable urban development. Higher density residential

development in the inner-city is encouraged; urban sprawl on the fringes of the

city is minimised. The regeneration initiative announced in 1991 was

concentrated in the inner-north east area of the Local Government Area (LGA).

Governance of the initiative was established in July 1991 with the creation of a

Cross-Sectoral Taskforce, chaired by a prominent member of the property

development industry. This Taskforce was designed to work with and across the

three levels of government (local, state and commonwealth), and with the

community and commercial sectors.

This strategy of urban regeneration in the inner city, begun in the 1980s, had the

unintended consequence of a sharp decline in affordable housing in the areas

targeted.3 The loss of ARA such as boarding houses was particularly acute.

Significant government infrastructure spending had contributed to gentrification

of these suburbs, forcing those on low incomes out of these areas. Those

displaced often resorted to the streets, adding to an increasing homeless

population.

2 Formal announcement of Urban Regeneration Initiative in Council Minutes 1991-1992 (p2442), including the appointment of the Taskforce. That the Taskforce was intended to work across all levels of Government and with the community was indicated in a review of the Building Better Cities program. Nielson, L. (2008) The ‘Building Better Cities’ program 1991-96: a nation-building initiative of the Commonwealth Government in [the nation] under construction. (ed Butcher) ANU Press, Canberra; also in Council Minutes 1991-1992 3 The decline in affordable housing in this period is documented in the HOUSO Evaluation Report (December, 2005)

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Local government does not traditionally have a role in the provision of affordable

housing in HOUSCO’s country of operation. In the national institutional

arrangements, in which there are three levels of government, the legislative

responsibilities for addressing the issues of housing lie with Commonwealth and

the state. Prior to 1991, the Council administration had maintained a position that

involvement in the issues of housing was not the legitimate role of local

government. In 1991 this position changed as the social problems surrounding

homelessness and rental affordability grew. The Council administration now

argued that local government has a complementary role with the other levels of

government and that local governments needed to act where state and

commonwealth government initiatives were not meeting all needs.4 The effects

of homelessness, they argued, were an issue of legitimate local government

concern.

At this time the state government, as the level of government with direct

responsibility for addressing housing in the state, had also recognised the

problems surrounding the decline in affordable housing in the inner capital city

and beyond5. This recognition, however, did not immediately result in innovation

in their traditional models of delivery. The state government department

responsible for housing (henceforth referred to as the State Housing Department)

had a model of delivery that was essentially unchanged from the post World War

Two period. Unlike similar organisations internationally, the State Housing

Department maintained a ‘state-owned, state-managed’ model of public housing,

complemented by relationships with the community housing sector. This model

was becoming increasingly strained by rising land and building prices,

4 That this administration changed the traditional policy position on housing and homelessness at this time is evidenced by the comments of several informants, particularly Council politicians. One commented that ‘I remember [previous Lord Mayor] saying ‘we can be compassionate, but when it comes to providing money, that is not Council business.’ The changed position is evident in several exchanges documented in Council Minutes in this period (1991-1992) regarding responses to affordable housing and homelessness. 5 That state government was becoming increasingly concerned about the growing problem of lack of affordable housing is indicated in State Government Hansard in the period 1991 - 1996. As one example, in June 1992 one state Member commented that “Because so many people are seeking affordable housing, the government must admit that other ways of providing affordable housing must be found”.

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particularly in the inner-urban areas, and growth in demand as a result of

population growth.

The Council’s urban regeneration initiative provided an opportunity for the State

Housing Department to explore, among a range of policy objectives, additional

strategies that would result in more affordable housing on the ground in an area

that had been acutely affected by the process of gentrification. The Lord Mayor

approached the state about possible cooperation on the issue and was given an

indication of support. In seeking out the state, the Council envisioned that their

combined resources would deliver “high quality, low-cost public and private

housing” to the area (Council Minutes, 1991-1992).

In late 1991 the Commonwealth Government also announced a shift in policy to

encourage infrastructure expenditure to support urban regeneration.6 Under a

scheme entitled Building Better Cities, the Commonwealth Government invited

proposals from the states which would demonstrate “better urban planning and

service delivery as well as co-ordination within and between the various levels of

government.” The Council and State Housing Department prepared a joint

submission to this program and received, amongst other funding, $7.5 million

specifically for the urban regeneration in the Inner North Eastern suburbs, for the

period 1992-1996. Part of the funding submission was for the delivery of a social

housing initiative in one part of the urban regeneration area.

While there was a joint funding submission, the State Housing Department and

Council maintained separate administrative and governance arrangements. The

Building Better Cities funding was administered from within the State Housing

Department.7 The Council Urban Regeneration Taskforce supported the work of

the State Housing Department by coordinating Commonwealth-funded programs

in the Inner-North Eastern suburbs. The Council restructured the Urban

6 Details of this Building Better Cities program initiative indicated in Note 2 above, include full details of all funding initiatives. 7 The separate administration of the Building Better Cities funding is stated in Council Minutes 1991-1992.

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Regeneration Taskforce to include representation by the federal and state

governments and the private sector. Four Director-Generals from the state

government accepted the invitation to be part of the Taskforce; these included

those with responsibilities for planning and transport as well as housing.

The urban regeneration program explored a range of strategies that would deliver

more housing in the Inner-North Eastern area, including more affordable

housing. Town planning perspectives and mechanisms were adopted, being the

realm in which the Council could see their legitimate role.8 For example, the

Council worked with the State Housing Department to change regulations such

that more medium density, and therefore more affordable, housing could be built.

They also started the discussion on requiring contributions to affordable housing

from property developers operating in the urban regeneration area. They also

began to explore various commercial models for the delivery of affordable

housing, although these were not progressed.9

The social housing development (Chapel Street) proposed as part of Building

Better Cities funding was constructed. This initiative involved contribution of

land owned by Council; construction and operating costs were provided by the

State Housing Department. This example of local and state government

cooperation was celebrated by the state Premier in parliament.10 However,

following this tangible example of cooperation on social housing, Council and

the State Housing Department did not continue to deliver similar initiatives and

joint working on housing affordability slowed. Each organisation pursued

separate affordable housing strategies. Council established a Social Policy Unit

in 1994, which had an affordable housing brief and appointed a number of senior

8 This focus is evident in Taskforce minutes and informant comments on this early development phase. 9 That this early discussion canvassed commercial delivery models was reported by a senior SGO informant. 10 The State Premier announced this example of cooperation in 1992 with “The sum of $8.1m has been allocated to affordable housing for the four years to 30 June 1996. A number of projects are being planned, with the most advanced being a joint State Government/[LGA] City Council venture to provide 40 public housing units in [Chapel] Street, [City Suburb] at an estimated cost of $2.1m. Construction is expected to begin early in 1994.” He thanks Council for their support.

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officers.11 The State Housing Department continued to deliver social housing

within its traditional organisational model.

The Council officers within the newly-formed Social Policy Unit, encouraged by

their political leaders, sought again to look at strategies which would have the

outcome of ‘more housing on the ground in the city.’ They did this in the

context of Council policy, which was Council as a complement rather than the

lead agent in the delivery of affordable housing. The Social Policy officers

sought permission from the Council Cabinet to establish an officer-level

committee with the State Housing Department to explore potential areas of

collaboration, including the establishment of a charitable organisational entity.

In 1997 Council Cabinet approved the proposal.12

Process Explanation

The following analysis focuses on two events in this first phase of the HOUSCO

process: the decision to deliver jointly the Chapel Street social housing

development (Chapel Street development) and the decision to form a joint officer

committee with the State Housing Department to examine affordable housing

options. While the Chapel Street event is not directly on the ‘critical path’ to the

HOUSCO incorporation, understanding how and why Council and the State

Housing Department first collaborated in the social housing domain and why

momentum stalled following its delivery provides necessary context for the

subsequent phases. The decision to form a joint officer committee substantively

changed the nature of the alliance and set the HOUSCO process in train. Earlier

collaboration activity had explored changes to urban planning mechanisms as the

strategy for delivering more affordable housing. That is, the collaboration

remained firmly in the legitimate policy realm for local government in the area of

housing. Forming a new organisational entity potentially represented a step away

from legitimate policy responses for Council.

11 That the newly formed Social Policy Unit had an affordable housing brief was reported by the Social Policy officers interviewed, as well as by a senior Councillor. 12 Reported by Council Social Policy officers; also in Council Cabinet Minutes 1997-1998.

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The analysis addresses the questions of why the two organisations sought each

other out in 1991, why this momentum faltered after the delivery of the Chapel

Street development and why it gathered pace such that the two organisations

could agree to a joint officer committee to look at structural options.

An ED analysis would look to the environment in which the Council and State

Housing Department operated to provide explanation. Within evolutionary

perspectives of organisational change, the theory of strategic co-evolution (Koza

and Lewin, 1998: 255) would suggest that alliances must be viewed in the

context of the adaptation choices of a firm. They suggest “alliances are

embedded in a firm's strategic portfolio, and co-evolve with the firm's strategy,

the institutional, organizational and competitive environment. The environment

is the principal change agent.”

The following provides the evidence which supports this explanation of events in

Phase One.

Strategic Co-evolution: Alliance as Strategic Adaptation

In Phase One, an environmental change — being the significant deterioration in

available ARA in the inner city — represented a challenge requiring response

from both organisations. The housing decline necessitated change to traditional

business models of each organisation and provided incentive to seek out the

resources of the other. However, the ‘push’ factor of housing decline alone

cannot fully explain the sequence of events in Phase One. While there is

evidence that each organisation was sufficiently exercised by ARA decline to

move out of traditional policy positions and delivery models, and seek to work

collaboratively with the other, the attraction of additional resources from the

environment, in this case the Commonwealth Government, could be argued to

more fully explain the successful collaborative effort which is the Chapel Street

development. Thus the environment threw up both challenge and attraction, and

the two critical events can be understood as an organisational adaptation in

response to each.

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The analysis will provide the evidence that (i) the loss of affordable housing

represented a strategic challenge requiring an adaptive response from both

organisations, (ii) that an alliance with the other was viewed as the necessary

adaptive response, and (iii) that the attraction of resources from the

Commonwealth Government provided the necessary attractor to adapt

sufficiently to collaborate on the delivery the Chapel Street development and

(iv) following the delivery of the Chapel Street development and the end of

Commonwealth funding, further environmental change in the form of declining

state housing resources again provided the generative momentum to renew

attempts at an alliance.

State Housing Department: Why loss of Affordable Rental Accommodation

(ARA) Required an Adaptive Response

The State Housing Department is charged under the Housing Act of the state to

deliver affordable housing to those in the community who cannot access the

private housing market. The delivery model for this purpose to this point was

largely one of state-centralised ownership, construction and management. This

model was not going to meet the demand for ARA in the inner-city, as the cost of

land in the area on which to build units of ARA was prohibitive — being a result

of urban regeneration.13 As the Director-General reflected on this period the old

model of delivery was “just not a good fit any longer.” The option to relocate

lower-cost rental housing to the outer-ring of the city, where land costs were

cheaper, was considered by the State Housing Department (and Council) to be an

undesirable option: “creating pockets of disadvantage and isolating marginalised

members of the community” (Council Report to Productivity Commission, 2003:

5).

However housing within the inner-city could be delivered through leveraging the

resources of others. Council had a range of resources of use to the State Housing

Department: they owned land in this area which could be used to build affordable

housing and also had the power to adjust development regulations to enable the

13 Post-Incorporation Review of HOUSCO (2003).

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housing densities which would make an ARA project economical. These

resources were felt to be desirable. The Director-General made the desirability of

local government involvement clear: “local government is essential, because it

has so much influence over planning schemes, local approvals and density

arrangements for properties.”

Incentives to collaborate with the Council needed to be sufficiently strong to

overcome traditional antipathy and mistrust between the two levels of

government14, which had previously presented a significant obstacle to joint

action on a range of issues of mutual strategic interest and was quite heated on

the issue of housing.15 However, the State Housing Department did work to find

areas on which the two levels of government could come together over the issue.

The State Housing Department appointed four Director-Generals to the

Taskforce established to oversee the process of urban renewal in one of the

inner-city suburbs in this period. Part of the business of this Taskforce was

examining the issue of affordable housing, including the modification of

planning regulations to accommodate greater housing density. At the officer

level there is substantial evidence of close working, canvassing a wide range of

planning mechanisms for the delivery of more affordable housing.

Council: Why loss of Affordable Rental Accommodation (ARA) Required an

Adaptive Response

Although the federal and state governments have the legislative responsibility for

addressing the issue of housing, local government has pressure applied to them

by the community to deal with the social problems that result from a lack of

housing. A Council statement on affordable housing indicates that the social

problems created by housing dislocation “create additional issues in the

community and consequently greater criticism and pressure on local government

for responses” (Council Report to Productivity Commission, 2003: 7).

14 Mistrust by the two levels of government is evidenced by a later quote of the Director-General of the state department regarding ‘trust’, also by comments of nearly all informants. 15 The heated nature of debate between the two levels of government is indicated in comments made by the Lord Mayor about a range of exchanges.

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The loss of ARA in several inner-city suburbs was the result of a process of

gentrification, or the displacement of ARA by more expensive private housing.

In part, Council themselves had accelerated this process through policies of

urban regeneration. The success of these strategies, the attraction to the area of

several thousand new residents and hundreds of businesses, had the unintended

consequence of accelerating the loss of boarding houses and other forms of

ARA.16 Council felt the responsibility of more directly addressing the housing

shortfall that resulted from this initiative than would normally have been the case

for local government. The following three Council responses evidence this sense

of responsibility.

Firstly, the Council responded by including the development of policy responses

to affordable housing as part of the brief of the Urban Regeneration Taskforce,

established by the Council in 1991 to oversee this urban regeneration project. An

early report on this issue was tabled by the Council in 1993.17 Secondly, at this

time, the Council also began to advocate strongly for property developers, who

would benefit from the urban renewal policies of government, to contribute part

of the profits from their ventures to the delivery of affordable housing in the area.

They would pursue this argument throughout the period of the development of

HOUSCO. Finally, the Council established a Social Policy Unit within the

hierarchy of the Council, to address a range of issue pertaining to inclusion and

justice in the city. As a senior Councillor reflected on the period:

All our team [Labor Councillors] supported the establishment of the … Social Policy

Unit … one of the things they should particularly look at was issues of affordable

housing in inner city areas for people who rented.

At this time, the Council viewed their authority over planning and development

regulations as their principal role in delivering more affordable housing. As the

same senior Councillor, who was also Chair of the Urban Planning Committee of

Council at the time, reflected:

16 Loss of ARA up to this period is indicated in the HOUSCO Evaluation Report (December 2005). 17 Council Minutes July 1992 – June 1993 (p2591) Councillor indicated affordable Housing Discussion Paper had been tabled in Cabinet as part of the work of the urban regeneration project.

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The principal mechanism they viewed as their role in the issue was town planning and

development regulations. In 1991 … we started to look at what changes needed to be

made to the town plan to try and free up housing affordability generally across the

city. The aim was, right across the city within the town plan, to provide for greater

flexibility in terms of provision of housing.

While the Council started to realise and exercise their regulatory power in the

affordable housing area, institutionally they could not be seen to commit

ratepayer funds to the direct provision of housing, as this was strongly felt to be

the responsibility of the state. They needed the State Housing Department to

spearhead any program which was directed toward the supply of housing.

However, as evidence of their interest they frequently attempted to engage the

state about different strategies for the delivery of affordable housing and

persuade around strategies and options. The Council tried to persuade around

“fiscally responsible ways to invest in housing … We had super funds ready to

invest significant money in housing stock in [the state] but because [the State

Housing Department] hadn't thought of it, they weren’t interested” (Council Lord

Mayor).

There is also evidence of work by the Lord Mayor to deliver social housing,

using the developer contribution mechanism:

At the [previously light industrial] site, one of the big successes up there was a

supportive housing project, and to give the state credit they finally got involved and

on board. So there’s 65 units of supported accommodation up there. No one knows

they’re there, but they were done in partnership. [Chair of the Taskforce] pulled it

together with the developer and the state to actually make it happen. But that was a

very significant addition. When we sold the 21 riverfront blocks down there, the

winning bid was they had to provide 21 affordable housing units somewhere else

nearby. So in those days even though there was not a lot of support, we were trying

to package up those things to continue to get affordable housing in this part of the

city, and I think we were successful.

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In these initiatives Council demonstrated a role as facilitator and broker of

affordable housing initiatives, backing away from being seen as the provider or

lead agent.

Chapel Street Development as Adaption in Response to Attractor of Additional

Resources

The foregoing analysis provides evidence that there was a strong logic, or pull,

for a joint approach to the affordable housing issue. However, given that the

Council viewed its responsibility as facilitating the delivery of housing through

planning mechanisms and not becoming directly involved in provision of

housing, it is not likely that further action would have been taken on joint

initiatives which “delivered housing on the ground” (Council informant) at this

time, without additional incentive. This incentive came from stimulus from the

Commonwealth Government. The Commonwealth provided a pool of funds in

their 1991-92 Budget (for the period December 1991 to June 1996) to state

governments for programs which improved the quality of urban life (Nielson,

2008). Part of the aim was better co-ordination within and between the various

levels of government, including state and local coordination.

Joint working around the urban regeneration project at this time, with the

attraction of additional resources, provided sufficient momentum for the State

Housing Department and Council to prepare and submit a successful joint

application for funding under this scheme.18 $31 million was granted for the

“Inner North Eastern Suburbs Conversion of former industrial sites for

residential housing; higher density housing, including low cost housing and

public housing; improvements to public transport; cycle path network and public

footpaths” (Nielson, 1998). One of the funding criteria was that programs must

deliver on social justice, in particular addressing the problem of housing

affordability. The successful proposal included the delivery of low-cost medium

density housing on the Chapel Street site, which was owned by the Council.

18 Funding amounts are outlined in the Building Better Cities program overview (see Neilson, 2008

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The federally-funded program was managed and monitored through the State

Housing Department hierarchy; the Council component of programs in the urban

regeneration area of the ‘Inner North Eastern suburbs’ were coordinated by a

Council group who liaised with and supported the State Housing Department

committee. Thus the two organisations maintained structural separation and

worked together through coordinative mechanisms. However through these

mechanisms the Chapel Street development was delivered in 1994.

Several Councillors indicated that this federal funding was the primary attractor

for joint working around the social housing issue. As one reflected:

One of the principles of urban renewal was to consider issues of affordable housing.

I think frankly it was driven most strongly from the Commonwealth at the time, as a

principle. So there were some measures taken with the construction of public housing

… in [Chapel] Street.

Another mentioned ... “The federal government started down here by giving us

some better cities funding, which actually began to trigger all this stuff here …”

Joint Officer Committee as Strategic Adaptation of Council

Following the delivery of the Chapel Street development, momentum for a joint

approach to the housing affordability issue diminished. The projects committed

as part of the Commonwealth funding had been delivered. Additionally there is

evidence of an outbreak of traditional local and state tensions. As one Council

officer reflected:

There had been a breakdown in the relationship, before they actually got to doing

anything. So you ended up with actually two affordable strategies, one from the state

government which involved building public housing … we ended up concluding as an

organisation that there really wasn’t much we could do … Yeah, it wasn’t our

business to be involved so we wouldn’t stand in the way and we would use our

[planning and development] processes try to facilitate the development of affordable

housing, but it was really the state government [‘s] responsibility.

The most senior Council politician confirmed that tensions had arisen at a senior

level at this time over the issue of property developer contributions to affordable

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housing initiatives — an issue which was to continue as a source of tension

through the HOUSCO process.

However, the Social Policy Unit formed within the Council still had affordable

housing as a priority within their policy portfolio and strong urging from the

political level to develop responses. Thus, there is evidence that the lack of ARA

still posed sufficient challenge to Council to warrant the attention of politicians

and bureaucrats. This group had more incentive to look to a range of policy

responses beyond planning and regulation. Their wide brief, according to a

senior Council politician was “to come up with ways how we could achieve

something.” They realised that any policy response would necessarily have to

involve the State Housing Department, as making an argument for direct Council

involvement was not going to gain traction. Council policy officers sought out

their policy officer counterparts in the State Housing Department and began joint

discussions at that level. Part of these joint discussions focused on options or

legal mechanisms for attracting additional resources to the affordable housing,

such as charitable trusts.

In 1997 the Council officers put forward a proposal to the Council political

executive body that they approve the formation of a joint officer-level committee

to explore such options. The Council political executive was still keen to achieve

in this area, however needed to be persuaded that the proposal did not represent

institutional risk of overstepping their role as local government.19 While not

completely persuaded on this point, they were sufficiently exercised by the need

for delivery options to consider the proposal. At this point only a limited

commitment of resources was requested. The Council approved the proposal and

the State Housing Department, who still had responsibility for housing delivery,

approved the commitment of State Housing Department staff to the working

group.

19 Reporting of comments by Cabinet by Council informant who presented the proposal.

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PHASE TWO: FROM FALTERING BEGINNINGS TO FIRMER

FOOTINGS

Process Description

The State Housing Department and Council renewed efforts to address jointly the

significant loss of affordable housing in the LGA in 1998. A senior level Joint

Inner City Affordable Housing Taskforce (referred to from here as the Joint

Affordable Housing Taskforce) was established including two of the most senior

Council politicians and the Director-General of the State Housing Department.

This represented an innovation for both the State Housing Department and

Council. For the State Housing Department, it was unusual to have any

committee that included both bureaucrats and politicians. It was also unusual to

be working at a senior level with local government. For the Council it was an

innovation to be working directly on the issue of housing, as institutionally it

remained the responsibility of the State Housing Department.

Concurrently, the lower-level joint State Housing Department and Council

officer committee, formed in 1997, continued their efforts to generate a range of

options to address the issue of affordable housing provision. They further

developed the relatively modest idea of a charitable housing trust, which the

Council could seed with a financial contribution used to attract contributions

from private and charitable organisations as an additional source of funding for

existing housing organisations. The officer committee presented their charitable

trust proposal, which was a Council-lead initiative, to the Joint Affordable

Housing Taskforce. The Director-General of the State Housing Department, who

was the taskforce Chair, requested more work on the concept underpinning the

proposal. In 2000 she established a State Housing Department working group to

further develop structural options for social housing delivery.20 Through this

process, the ‘trust’ concept changed to an incorporated entity, at arm’s-length

from government, which would have charitable status. As a charity, it would be

20 Timeline of formation of HOUSCO working groups detailed in HOUSCO Post-Implementation Review Report, 2003.

153

exempt from the consumption tax, which imposed a 10% tax on building inputs.

It would also change the traditional model of subsidy: residents would pay 75%

of a commercial rent (rather than a percentage of their income) and would be

eligible for Commonwealth Rent Assistance.

The proposal to fund further feasibility work into this new proposal was put to

the State Cabinet by the State Housing Department. They were sufficiently

interested to request that the funding proposal be put to the Council Cabinet to

gauge interest in a joint feasibility study. Council Cabinet approved funding for

a joint feasibility study in late 2000. A Feasibility Study working group was

convened within the State Housing Department and a Council officer was offered

as part of the resourcing contribution to the feasibility study.

Process Explanation

The following analysis focuses on the final event in this phase: the State Housing

Department and Council joint agreement to fund a feasibility study into an

incorporated charitable social housing entity that would be independent of both

levels of government. The analysis provides answers to the question: “What

explains the change from faltering and tentative beginnings to firmer footings, in

which HOUSCO as a joint Council and State Housing Department venture

started to look like a reality?”

Again, applying our ED perspective we look to the change in the environment for

our explanation. Co-evolutionary theory would suggest, as for Phase One, that

Phase Two events represent a necessary adaptation to external economic events,

which present a challenge to the purposes of each organisation. As the alliance

— as the necessary adaptive response — develops and gains form, teleology

theory invites us to consider how the events demonstrate the State Housing

Department and Council moving toward their end purposes, adapting as each

learns more about the efficiency, equity and viability of the proposed venture.

Lifecycle theory would also point us to the institutional rules which provide

forward progression, order and sequence to the Phase Two events.

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In Phase Two, we need to draw on each of these theoretical resources to explain

how the State Housing Department and Council reached the final event of the

joint feasibility funding decision. The explanation has four component

arguments. Firstly, that it was even more critical in Phase Two that the State

Housing Department adapt its delivery models as they were facing more critical

resource shortages. Secondly, that the State Housing Department taking the lead

gave institutional legitimacy to a senior-level Joint Affordable Housing

Taskforce to address the inner-city affordable housing issue. Institutional rules of

regular meetings and actions enabled the issue to maintain momentum. Thirdly,

that, as the alliance process moved forward, each organisation learned of the

other’s funding intentions, signalling their willingness to ‘put money on the

table’ in equitable proportion. And finally, that the alliance gained momentum as

each organisation learnt how their purposes would be realised in the design of the

venture.

The following provides the evidence which supports each component argument.

Collectively this provides the ED explanation for Phase Two.

Organisational Adaptation: Resource pressures for the State Housing Intensify

Need for Adaptive Response

While in Phase One there is evidence that the State Housing Department was

realising that their traditional models of delivery were not going to meet growing

demand for ARA, this was not sufficient incentive at the time to accelerate a

process of organisational adaptation. One State Housing Department manager

succinctly phrased the comments of several other informants: “It’s very hard to

drive radical solutions particularly if the system is limping along.”

However in 1998 the State Housing Department was faced with what one

informant described as “a constraining and depressing financial situation.”

Declining funding for housing provision was a result of a number of factors.

Chief among these was reduced funding from their primary funding source, the

Commonwealth Government. The Commonwealth State Housing Agreement

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(CSHA) funds had declined in real terms since 1996, as a change in

Commonwealth Government policy directed more funds to individuals through

rent assistance rather than through allocations to the state. Additionally, costs of

maintenance were rising due to a number of factors, meaning that reduced funds

were available for capital investment in new stock. Additionally, government

itself, both local and state contributed to the cost of housing through rigorous

‘user-pays’ policies for infrastructure and services, and high development

standards required. 21

The Director-General of the State Housing Department, appointed in 1998,

reflected on her assessment of the situation when she assumed the role:

I just knew that where we were travelling at that time was not going to lead to

providing more people in [the state] with affordable housing options. It was just

getting more and more expensive to produce additional public housing and it was

becoming a more and more residualised sector. So we had to … take on board a

broader affordable housing approach.

The Minister at the time similarly commented “we were just getting nowhere

with the Commonwealth” in the attempt to find more funding from their

environment to inject into a declining system. (Interview with Minister)

Both the Director-General and the Minister evidenced the criticality of the

situation and the need to find new approaches by embarking on a study tour of

the UK, Europe and the US in 1999 to examine a range of affordable housing

delivery models. It is evident, however, that an alliance with local government

was already shaping up as a critical element of any model. The Minister

commented on his examination of international models:

21 Cost drivers contributing to the cost of public housing provision at this time are detailed in the State Housing Department’s “Affordable housing in sustainable communities: A discussion paper” November 2000.

156

There wasn’t one model that stuck out. I looked at ones that — like the old co-ops

and so on. There wasn’t any that really partnered with another level of government

… because they — by and large, my experience with local government is that they can

make or break you … We did have at that stage a Council that was interested in

housing … so I thought getting them as a partner in it was critical to the process.

Also, there was no real alternative partner organisation for the State Housing

Department so the scope for potential alliances was limited. The Minister

commented that:

I wanted something different than what we were doing. I was increasingly frustrated

at the lack of action from the [community housing sector]. My aim … was to get some

critical mass into those organisations and quite frankly we just met with enormous

resistance … I need[ed] a model that would go over the top of that. I sort of basically

gave up in trying to form a model with them.

Thus the environmental conditions were increasingly pointing the State Housing

Department in the direction of the Council as a potential alliance partner.

Institutional Rules Provide Legitimacy and Forward Progress to Joint

Affordable Housing Taskforce

As we saw in Phase One, while the Council had a strong strategic interest in

ensuring more affordable housing was delivered, particularly in the inner-city,

they were institutionally constrained from taking a lead in a policy area that was

deemed the domain of the state government. As one State Housing Department

informant commented, the Council at that time could not “make affordable

housing happen.” However, as we have seen in the previous section, the

conditions were ripe for the State Housing Department to move out of their own

organisational boundaries and seek out partners — particularly local government

and particularly in the inner city — as land costs in the area were making

provision unviable.

At this time also, a change of state government meant that the Labor Party was in

power in both levels of government. The Labor party had their own institutional

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structures, which included a state housing policy committee including senior

Council and State Housing Department politicians.22 Social ties formed through

this political institution were translated into the Departmental organisational

structure at the change of government. In order to achieve a ‘breakthrough’ in the

area of social housing in the inner city these senior politicians agreed to set up a

taskforce that dealt with the provision of housing in the inner city. The senior

Council politicians were Councillors in these inner-city wards and as such could

legitimately participate in the taskforce, both because the State Housing

Department was taking the institutional lead and also on the basis of their

legitimate concerns for their particular constituency. One Council politician

commented that:

Yes, I chaired the Labor Party housing, and planning, local government sort of policy

committee for a few years and obviously knew and I think established a relationship

of trust with a number of people through that, that’s true.

This taskforce itself was a governance innovation, as not only did it include both

Council and State Housing Department representatives, it also broke institutional

norms by combining bureaucrats and politicians. The inherent tensions created

by these elements were manifest in a number of reported outbursts of

frustration.23 However, as social ties theorists would argue (for example Ring et

al, 2005) the pre-existence of those social relationships made through the Labor

political institution at the time of the formation of the taskforce promoted the

stability and longevity of the taskforce, which met from 1998 until the HOUSCO

incorporation in 2002. Strong social relationships are argued to promote initial

and sustained mutual understanding which is more likely to lead to positive

adaptation responses. 22 Details of representation in the Labor Housing Policy Committee are detailed in Labour Times 1997 23 These frustrations generally emanated from Council regarding the slowness of State Government processes. Indicative of these comments are from one of the Councillors in the Taskforce I am always sort of really surprised how slow things can take at State government and the layers of bureaucracy it has to go through and often that the processes are really formalised...Whereas the way [Councillor] and I and [Lord Mayor] certainly were used to working … just pick up the phone and talk to the officer responsible.

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The longevity and adaptation of this taskforce was an important element of the

sequence of events in Phase Two. As one Council politician reported, the early

agenda of the taskforce was to “work through a number of options about

changing planning schemes to allow for affordable housing contributions by

developers”. This was an issue of particular interest to the Council as this was

one mechanism over which they had some control and which they felt would

create a sustainable revenue flow for social housing, while not directly involving

the Council in provision. This issue took some while to work through, as the

State Housing Department Director-General remembers “… [Council politicians]

were quite frustrated that the state was not moving quickly enough on this whole

development contribution issue.” However this issue was of sufficient strategic

interest to the Council to keep them at the table for a considerable period. As the

taskforce moved slowly through this policy work on developer contributions and

other changes to planning schemes, they were available as a governance vehicle

to which the idea of the charitable housing trust (proposed by the Council at the

end of Phase One) could be presented for deliberation. The Council officer

responsible for this proposal remembers the idea as:

… a relatively modest idea, what we wanted to do was establish a charitable trust, get

[Council] to seed that with a financial contribution, and use that to attract

contributions from private and charitable organisations to develop housing. The idea

was that it would be an additional source of funding for existing housing

organisations … We weren’t all that positive about getting charitable donations. So it

wasn’t you know … exactly a glowing possibility … We just presented it as ‘this is a

way we could go to improve affordable housing’.

Although undeveloped, there were elements in the proposal that were appealing

and palatable to both the Council and State Housing Department in the taskforce

and developing the model became the core part of the taskforce’s agenda. What

was important about the taskforce at this time, as the Council officer remembers,

was that unlike previous faltering attempts at State Housing Department and

Council collaboration, “these people had the potential to make or get close to

making some key decisions.” Another Council manager reported that “there was

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actually a reporting relationship back in the structure and that was really

important throughout the whole project.”

… there was actually substantial involvement from the then [senior Council

politicians] on that [taskforce] so again there was direct political involvement in

watching the process and keeping it moving. And also from the Director-General of

the [State Housing Department] as well.

Thus institutional structure and rules gave legitimacy to joint State Housing

Department and Council working and created an orderly structure and sequence

for their discussion. This structure and sequence in turn created the institutional

space to plant the seed of the HOUSCO concept as a joint initiative, which could

then be promoted by a powerful joint and socially-connected decision making

group.

Equity: The Alliance Progresses as Each Organisation Signals Their

Willingness to ‘Put Money on the Table’

Following the presentation of the charitable housing trust proposal to the Joint

Affordable Housing Taskforce, the State Housing Department established its

own working group to further develop the concept and invited participation from

Council officers.

As more development work progressed and the model for an incorporate entity at

arm’s-length from government began to emerge, it gained momentum when each

organisation gave early signals that they were prepared to commit funds. It was

critical for the Council that their contribution be equitable: that is, that it reflect

the fact that the state had the lead responsibility for this policy area and they had

a secondary role.

As one Council manager reflected of this particular phase in the development:

Well firstly in social policy we knew that if we didn’t get the partnership, we didn’t

have the project. So basically, we either got the state on board, because it wasn’t

considered to be our core business. So the only way [Council] would put the money in

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was if we actually got a substantial contribution from the state government. That had

to be 1:5 so we were pretty lean and hungry for that partnership otherwise the whole

thing fell over.

The reluctance of the Council to step into the territory unless the State Housing

Department demonstrated their financial commitment was evidenced by the

comments of the Council Lord Mayor:

I just continued to say no, get stuffed, it’s not our jurisdiction, it’s their jurisdiction.

And when we see some sense from them, we’ll be happy to cooperate. But in the end I

relented and said okay, well let’s see if we can break the nexus … So once … we

committed $10 million over five years, then it started to happen.

For the State Housing Department, leveraging additional dollars from other

sources was critical to arguing for the benefits of the new model with their

powerful stakeholders in state government. As one senior State Housing

Department manager reflected:

the Minister is saying well how can we leverage with other people? And the Mayor at

the time, … saying we’ll put some money on the table … Oh look, it was, if the

Council hadn’t come with something, I’m not sure it would’ve happened. [Premiers’

Department] were saying ‘What’s different about it? Why is it different? Why would

we do that?’ … one of the key things was we were leveraging $10 million from

[Council.] So there was another $10 million on the table that wouldn’t have been

there otherwise. So that obviously assisted the outcome.

That this financial contribution from the Council was seen as a key benefit of the

model was evident also in formal submissions to State Cabinet, in which a key

reason for urgency around approving the HOUSCO project were, “The benefits

to be derived from acting now whilst there is the opportunity for a joint initiative

with the [LGA] City Council.” 24

24 HOUSCO 2nd Cabinet Submission 2000.

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Teleology: Alliance Progresses as Emerging Model Realises Organisational

Purposes

A common theme throughout nearly all interviews was that contributing funding

for an independent housing entity represented a ‘big leap for Council’. While

legislatively responsible for social housing, the emerging proposal was also a

‘big leap’ for the State Housing Department, as the innovation represented in the

model carried institutional and political risks. However, the emerging design

demonstrated sufficient merit and enough risk mitigation to be politically and

institutionally possible. The Working Group convened by the State Housing

Department Director-General prepared a submission to State Cabinet (the highest

decision making forum in the state) who then suggested putting a proposal to the

Council for joint funding of a further feasibility study.

The following demonstrates why the proposal presented to each of the State

Housing Department and Council decision makers was politically and

institutionally possible and why it was approved to go to the next stage of

feasibility analysis.

Purposes of the State Housing Department. Most informants spoke of the

tendency of the State Housing Department to be ponderous in their internal

processes and slow to innovate. One State Housing Department informant put

this succinctly:

Yeah but relative to the [State Housing Department] it was a pretty rapid thing. You

know something as radical as that [HOUSCO proposal] normally a) wouldn’t go

anywhere but b) wouldn’t happen.

The emerging HOUSCO proposal therefore had sufficient attractors and risk

mitigators for the State Housing Department to receive approval from their

Cabinet (or senior decision making body). The primary attractor was the

potential to leverage money from outside the State Housing Department. There

was, as one informant commented “more value to be grabbed from another

model.” The value, as another State Housing Department manager framed it, this

was:

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Getting charitable status is very important to the financial viability [for consumption

tax avoidance] and rent assistance. Then getting initially what was a 20 per cent

contribution to the initial funding from [Council]. So those three things were really

what made this model that much better than doing it in-house.

Another attractor was the ability to work outside the State Housing Department

bureaucracy. The model presented itself as a ‘middle-way’ between the “large

bureaucracy, the clumsy giant type issues … (and) community housing (with)

small inefficient people doing their own thing.” Similarly another senior State

Housing Department manager reflected that:

that was that attractiveness, I think, about setting it up clean to start with, you know,

as an alternative sort of — not burdened by some of the public sector administration

which definitely has some advantages by being able to work in that not-for-profit

charitable area.

With these attractors, there was still institutional risk. That is, for the State

Housing Department this represented a significant departure from the prevailing

‘orthodoxies’ in social housing delivery in that it was a commercial model that

did not target the most needy, but rather the ‘working poor’ who could afford to

pay rent supported by Commonwealth Rent Assistance. As the Minister

reflected:

Was the model too expensive for the battler out there to live in? That was the doubt

that I had. I still have that a bit. It is not the fully subsidised public housing model.

A significant part of the State Housing Department was similarly doubtful about

the viability of the model. As one State Housing Department officer reflected:

It did have some radical components … rent policy was quite different from the [State

Housing Department’s] own rent policy. Some people regarded it as extremely

suspicious.

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The Director-General also confirmed that the State Housing Department

perceived risk:

… they were pretty good at finding out reasons why it was not a good idea, why it was

a risky thing to do and government shouldn’t be going down this track, particularly

when we started talking about shelf companies and subsidiaries and that sort of thing.

However, as the Director-General also commented, the way this risk was

addressed was making the case that the proposal represented something

additional in the affordable housing sector, rather than taking something away

from what was currently happening. The case was made that the traditional

clients of the State Housing Department would continue to be served, as well as

the ‘next level’ of those in need. “I think the secrets really to getting this going

were one, good research in that it was quite clear we had to do something in

addition to what we were doing.”

The Director-General summarised the key test regarding the decision to fund a

joint feasibility study: “That [for the most senior decision makers] it would

deliver more housing for more people at a cheaper price is the bottom line and

that it did not present any undue risk exposure for the state is the final test.” At

this stage the most prevailing idea of risk at this level was that a political mess

did not have to be cleaned up; that the state would not have to prop up the

enterprise on an ongoing basis. 25

These risks were not fully addressed at this stage of the process, but the emerging

model had sufficient ‘attractors’ to overcome the risks presented. There was

sufficient merit for Cabinet to seek to take the idea to the next level.

Purposes of Council. For the Council the attractors were similar, although as one

informant commented “there was great trepidation about getting involved in

this.” However, the emerging model for them also represented a ‘middle way’:

25 The risk of ‘political mess’ and having to give further funds was indicated by both Council and State Housing Department informants

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The possibility… was that it was an independent vehicle, where Council could get

involved in where it wasn’t getting directly involved in something where it was

directly providing housing. It was pretty clear that that was just a step too far for

Council into something that was just not its territory. So this was just a kind of middle

way, where we could keep the faith going, on the possibility of Council involvement.

The Council were more comfortable with the arms-length corporate structure

proposed in the emerging HOUSCO model, having established several similar

enterprises. The greatest risk expressed by the Council informants was that the

State Housing Department would at some stage act opportunistically. That is that

they would back away from their responsibilities toward the new entity. The

Director-General commented from the State Housing Department perspective:

I think the biggest issue from local government is always having the trust that the

state government will deliver what they say they’re going to deliver. I think that’s the

biggest thing about that.

From the Council perspective:

Part of the thing for Council to get involved in an area like affordable housing was …

there’s always the fear that we’ll end up holding the baby … it’ll suddenly become

our responsibility … the ‘[State Housing Department’s] pissed off and here we are’

responsible for solving [city]’s affordable housing problems.

However, the Council were satisfied that the state was committing to be the lead

agent.

So the fact that the state was in the front, that they were promising the bulk of money,

that it was their staff … it really was a sense of comfort that we were really just a

supporting player …

These understandings were formalised in a Deed of Cooperation for work to

progress [HOUSCO]. The wording of this agreement evidences the Council’s

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need for the State Housing Department to take the lead, and for the Council to

remain within its own policy domain:

[Council’s] intent is to:

… Play a supportive role to the state government in delivering affordable housing in

the city and

Contribute to this objective through the conduct of its own core business including the

generation of appropriate developer contributions.26

The agreement also specifies the resources to be committed to the feasibility

project, ensuring clarity and equity. As these understandings were clearly

documented and the project did not yet legally commit significant funds, the

decision to fund the study was politically and institutionally possible.

26 Deed of Cooperation between [Council] and [State Housing Department] for work to progress [HOUSCO] 2001

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PHASE THREE: FROM FOOTINGS TO FRAME AND FITOUT -

HOUSCO INCORPORATED AND FUNDED

Process Description

In late 2000, following approval by the executive of both the State Housing

Department and the Council to fund a feasibility study for the proposed

HOUSCO model, a small coordination group of both State Housing Department

and Council officers was established. This phase involved exhaustive financial

and legal development and modelling, as well as extensive consultation and

briefings with senior decision making groups from both the Council and State

Housing Department. The goal was to establish to the satisfaction of both

organisations that HOUSCO was a viable commercial model and that, most

importantly, risks for both organisations were mitigated.

In April 2001, the results of this feasibility study were presented to State Cabinet

and Council Cabinet. At this point “In principle” approval was granted to the

proposed HOUSCO. The Council went as far as to announce the commitment of

$2 million in their 2001-2002 Budget. 27

Having obtained this approval, the process entered the establishment phase in

June 2001. A team was appointed within the State Housing Department to set up

the company. A Council officer worked within the team to coordinate the

Council involvement. Detailed establishment tasks including an exhaustive

consultancy review of financial models, development of detailed company

documents, engagement of senior decision makers and stakeholders in the

community housing sector who would be involved as shareholders in the

community and also in the operational management of the social housing

developments.

27 2001-2002 Council Budget announced $2 million in this budget and $10 million over five years (Council Minutes 2001-2002) .

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These establishment tasks were complete by March of 2002. The Council

formally agreed the budget commitment for HOUSCO after intense debate in the

Council Chamber over their financial role. The Chair of HOUSCO, a high-

profile member of the property development industry, accepted the position in

May of 2002. HOUSCO was formally incorporated in July 2002, with initial

chairperson and government board members in place and community

shareholders appointed. 28

HOUSCO funding was formally agreed by both governments in June budgets,

but a period of tension ensued after incorporation, in which the State Housing

Department delayed signing the funding agreements while elements of the

agreement underwent further rounds of legal scrutiny. The Council enabled the

HOUSCO team to begin operations by providing funds through the mechanisms

of an interim funding agreement. The State Housing Department, in turn also

provided interim funding. The formal funding agreements were not signed until

December of 2002. The event of this signing was announced in state parliament

by the Minister.

Process Explanation

The following analysis focuses on the final events in the phase, being also the

ultimate events in the HOUSCO process: the HOUSCO incorporation in June

2002 and the signing of the Council and State Housing Department funding

agreements for HOUSCO’s operation. The analysis provides answers to the

question: “What explains the adaptation of the alliance from the foundational

stage to the legal commitment to an incorporated joint venture? Again, applying

our ED perspective to the sequence of events in this third stage we look to the

structural environment for our explanation. The strategic co-evolution

explanation remains constant from Phases One and Two: the need to adapt

organisationally by seeking out partners to address the shortage of ARA in the

inner-city. However, in Phase 3 the teleology explanation is fore grounded. That

28 HOUSCO incorporation announced in State Government Hansard 2002.

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is, while the logic of an alliance structure to address the social housing purpose

remains compelling for both organisations, each organisation must learn and be

satisfied at each of the decision-making points in Phase Three that the proposed

HOUSCO will meet their needs for efficiency, equity and viability, such that the

purposes of both organisations are realised. These tests are sufficiently critical

that, if not met to the satisfaction of both organisations, they would negate the

strategic logic of an alliance. That is, the strategic co-evolutionary explanation

would seem necessary, but not sufficient to explain the final HOUSCO events.

The following provides the evidence which supports each component part of the

efficiency, equity and viability explanations for Phase Three. As above, the

strategic co-evolutionary argument remains constant from Phases One and Two.

Efficiency: The Working Model ‘Ticks All the Boxes’

Within the institutional field in which the HOUSCO model was being developed,

the state Treasury was a powerful actor, making ultimate funding decisions for

both the local and state levels of government for initiatives such as HOUSCO.

Treasury had a strict efficiency test that had to be met for the HOUSCO project

to be approved. Equally the ability to deliver on a requisite number of units of

affordable housing for the funding committed was an important test for Council.

The criticality of Treasury approval in order for the HOUSCO proposal to

progress further along the decision making path was evident from all State

Housing Department and several Council informants.

When people look at how [HOUSCO] started, the big factor there is always

Treasury, crucially getting Treasury on-side … there is another one to think

about, which is why did Treasury view this thing as being appropriate? …

nothing gets up in [the state] unless the Under-Treasurer is willing to let it

happen.

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This approval was the catalyst for several months of intensive development work

on financial and asset management analysis that would make a business case that

would satisfy Treasury. One respondent referred to the fact that it was “critical to

get Treasury onside” another mentioned that “making a case that appeals to

Treasury” was the primary objective of the development phase. Following this

process, there was yet another test, as the Director-General of the State Housing

Department commented:

Then of course, once you get through that hurdle, it’s then got to go through the

Cabinet Budget Review Committee process and also the Cabinet process. So it’s a big

hurdle.

The primary economic test that Treasury applied was that the commercial

HOUSCO proposal could deliver an outcome that was not possible through the

hierarchy of the State Housing Department. As one State Housing Department

financial analyst commented:

Their biggest concern was, why are we giving all this money away? … Because the

money comes off the state’s balance sheet you see. So it’s like, we’ve spent money. So

they [Treasury] were saying, what’s the justification? So what’s the business

outcome? Or what’s the outcome in the market that you the [State Housing

Department] can’t do? So it came back to the, they can run a model that’s different to

the [State Housing Department]. But also they can do things cheaper than the

department can.

An important element of persuading the Treasury was establishing from a

credible source that all the financial assumptions were valid. This credible

source was an internal corporate advisory service commissioned in October 2001

by the HOUSCO Steering Group to undertake a validation and quality audit of

the cost assumptions, sensitivities and key risks of the proposed model and

business plan for HOUSCO.

As part of this process, the auditors established that, for the expected level of

input, “the housing company was able to produce 600 homes where public

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housing would produce 200.” This was a key argument made to Treasury and

also to State Cabinet.

Meeting this efficiency test was a result of a number of features of the model.

Part of this was being able build more cheaply than the State Housing

Department as a result of efficiencies in design (for example minimising the use

of lifts and restricting the number of car parks). Additionally, achieving

charitable status in the eyes of the federal Tax Office meant that building inputs

would be consumption tax exempt. Also, working closely with the Council on

development codes for affordable housing would allow densities that would

make a development more commercially viable.

Among these, achieving charitable status, and through this consumption tax

exemption, was a turning point. As the Minister reflected:

One of the things we thought — it could not fly if we did not get tax exemption and we

got that. That was the Commonwealth, Commonwealth’s Treasury. That was a very

lengthy process but having achieved that was hugely successful. That is what made a

difference to making it work. We had to find a company that would attract in a no tax

status plus at the same time attract rent assistance.

Equity and Fair Dealing: Council Satisfied that State Funding is Not ‘Three

Cup Trick’

The efficiency and equity of the alliance are seen to be in continual review, part

of the learning (Doz, 1996; Zajac & Olsen, 1993) and maturing processes (Doz

& Hamel, 1998; Ring & Van de Ven, 1994) of the alliance.

While the State Housing Department was committed to an 80% proportional

contribution to the proposed HOUSCO initiative, the Council held reservations

that this commitment of State Housing Department funds would represent a net

gain for housing in the inner-city area. That is, the Council was not yet convinced

that the State Housing Department was committed to fair dealing. According to

Ring and Van de Ven (1994: 94) this means that “all parties receive benefits

proportional to their investments.” For the Council the potential $10 million

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budget contribution was ‘new money’ or money that was not already committed

to housing in the inner-urban areas, and therefore a significant signal of

commitment. They needed to be convinced that the State Housing Department

was equally committing ‘new money’ to inner-city housing, and would not “give

with one hand and take away with the other.” That is, that the State Housing

Department would not later withdraw an amount equal to the HOUSCO

commitment from money that was already programmed for housing in the inner-

city. As one Council politician put it, they had to be convinced that the State

Housing Department was not offering a “three-cup trick.”

As indicated earlier, this issue stemmed from a more deep-seated mistrust

between the two organisations. The Lord Mayor of the Council framed this

mistrust in a direct manner:

It was very clear in my mind the state government at the time was abrogating its

responsibilities everywhere and expecting the Council to pick up matters that were in

their jurisdiction … no matter what it was, the state was withdrawing.

The Council needed to be convinced that this would not be yet another example

of this withdrawal. As the HOUSCO initiative came closer to being finalised,

this issue surfaced. As one State Housing Department manager commented “we

nearly came undone over the issue.”

A letter from the Council was sent formally to the Director-General of the State

Housing Department in August 2001 evidences this concern. The Director-

General wrote a letter in response:

I refer again to the [HOUSCO] and concerns expressed by [Council] over the last

few days that this proposal may result in a reduction of existing effort by the [State

Housing Department] in the [Council] area. The [HOUSCO] proposal does not seek

to abdicate existing state government responsibility or shift responsibility for the

provision of social housing from the state government to the [Council]. The proposal

will not impact on the equitable distribution of state housing resources to inner and

near city areas of [the LGA].

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As for Phase Two, equity and fair dealing was clearly a prime consideration for

the Council and an issue on which the alliance could have potentially de-railed,

given the history of dealings between the two organisations.

Viability: Both Organisations Satisfied that Risks are Mitigated

As the HOUSCO project moved closer to being a reality, and therefore a

financial commitment, the hurdles grew. Many stakeholders, political and

bureaucratic sought to ensure that the risks they saw from their perspective were

addressed. Even following incorporation in June 2002, a hurdle involving legal

concerns regarding the assets of the state delayed the signing of the State

Housing Department funding agreement.

Both the State Housing Department and Council needed to be satisfied that

HOUSCO would be viable. The modelling proposed that at four years into the

five year funding agreement, that HOUSCO would be self sufficient. Both

organisations needed to establish that this modelling was sound. Each was

concerned that, should any element of the HOUSCO business model not hold,

that additional contributions would be needed to prop up the company. This

would be a significant political risk for what was essentially an untried, and

therefore controversial, approach. As the most senior State Housing Department

financial analyst commented:

That’s where and that’s the point where I got involved. Which was how do we make

this thing financially viable because there’s no point pouring, us or the [Council],

pouring money into an organisation that at the end of the day can’t sustain itself. So

the objective was in the modelling, can it sustain itself if it’s getting enough capital to

start with?

That convincing decision makers of this viability was perceived as a significant

hurdle was again evidenced through the commissioning of a credible auditing

and reviewing body to undertake a validation of the modelling that the HOUSCO

Project Team had undertaken. The importance of credibility in this exercise was

underscored by one of the State Housing Department analysts. From his point of

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view, it was important to be able to say “Here’s the model that has been QA’d

through [Auditing Group] so … Treasury accepted the model.” This validation

was positive, indicating that:

In general, based on our review and identified key performance indicators, the

[HOUSCO] financial model appears financially viable and sustainable. Sensitivity

analysis indicates that only in the extreme circumstances could there be potential

concerns as to [HOUSCO’s] ability to meet its’ financial obligations. Where

exposure to key financial risks has been identified, appropriate risk mitigation

measures appear to have been considered.

The review report was included in all final submissions to individual senior

decision-makers as well as the Cabinets of the Council and State Housing

Department.

However, evidencing their own concern for the viability of the proposal, the

Council sought out their own internal financial and legal departments to go over

the modelling themselves, even with the validation work largely completed. As

one Council officer on the HOUSCO Project Team commented, the Council had

to “put their own stamp on it.” Another Council senior bureaucrat reflected that

persuading the Council Chief Financial Officer was a difficult process:

[CFO] took a bit to bring around. She didn’t really like it for some reason. We had

to work very hard with her ... we just kept calling her business – you know, answer

another question, tell her to go and talk to Treasury … or being seen to have the

experts to come to be developing the models.

Decision makers were satisfied with viability such that the process continued to

the next decision point. This was the question of the appointment of the

inaugural HOUSCO Chair and Board. That the Board was critical to the viability

of HOUSCO was evidenced by the communication surrounding these key

appointments, including a dedicated submission to State Cabinet. This risk was

flagged in the Validation Report:

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However, the financial model will only be as good in assisting [HOUSCO] to achieve

its financial outcomes, as the Board and management who are in place. It is essential

that the [HOUSCO] have Board members and management who are skilled and

experienced in directing and managing such social housing schemes. Core areas of

expertise and management are required with respect to property construction,

development and management, resident asset management and property management,

overlayed with expertise of operating in a social housing context. Overall, these skills

have to be balanced with the appropriate financial management and expertise.

Several informants commented that the expertise-based board and a

commercially focussed Chair were the priorities of senior decision makers in

both the State Housing Department and Council, in order that they ‘make it

work.’ The inaugural HOUSCO Chair reflected:

I’ve got to say this … the people they picked to go on the Board right were people

who were going to minimise that risk. They were prudent performers, good reputation

and if anyone was going to make it work, but the members of the board were those

sort of people that their reputations were at stake as well.

Formal budget commitment was one of the final hurdles prior to HOUSCO

Incorporation but, this was not without tension for the Council even following

the long development and consultation process. The Council only agreed to the

$10 million (over five years) commitment “after intense debate over our financial

role”. (Council officer). However, having made the case in principle the

previous year, the budget was committed.

HOUSCO was formally incorporated in July 2002. Following this, it was

necessary for each of the Council and State Housing Department to sign separate

funding agreements with the newly incorporate HOUSCO. As one HOUSCO

Project Team member commented.

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… and that’s where we started having fun and games. So we got through this entire

process, but then it’s like ‘now we actually have to sign the funding contract and hand

over some money’ and we got stuck … and then suddenly the legal people were back

in, wanting to build back in controls.

HOUSCO was forced to start operations without operational funding while this

issue was sorted out to the satisfaction of the lawyers. The substantive issue on

which the process became ‘stuck’ was control over the housing assets which

were transferred to the new entity. The Minister elaborated the risk that was

being addressed:

Basically what their concern and my concern was that … you could lose that money

and it never comes back. If the [HOUSCO] went bust we want to make sure that the

assets returned in a good shape … I think at the end of the day our legal people and

Treasury’s legal people found a way to get around it.

‘Finding a way’ was a process that took six months, during which the new

company became extremely frustrated. The newly appointed CEO commented:

I mean we weren’t getting the money; we couldn’t address the business planning. I

said, well if we weren’t getting the money by such and such a date we should wind up,

wind up the company it was just a waste of time.

Operational funding for this period was made possible through an Interim

Funding Agreement, initially from the Council. This device was then extended

also by the State Housing Department. The formal funding agreements were

finally signed on December 2002, “… and we were still thrashing out the final

agreement at 7 pm the night before” (State Housing Department Manager).

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CROSS-PHASE SUMMARY: HOUSCO RESULTING FROM

STRATEGIC CO-EVOLUTIONARY AND TELEOLOGICAL

MECHANISMS

The foregoing analysis has provided the ED explanation of the focal events of

each of the three phases of the HOUSCO process. This frame explains the

critical process events as the rational decisions of organisational actors to adapt

in response to changes in their environment. As each actor determines that the

alliance, as a necessary adaptive response, will realise their organisational

purposes, the alliance progresses onward. The analysis provided evidence that

loss of ARA generated an adaptive response from both Council and the State

Housing Department. As an adaptive response, an alliance had both benefits and

risks for both organisations. For the State Housing Department, an alliance with

Council offered the opportunity to share costs, which itself provided institutional

leverage to argue the business case within their institution of state government. It

also offered the opportunity to access the institutional power held by the Council

over local development regulations, which would be critical in providing

affordable housing in the inner city. For Council, an alliance with the State

Housing Department offered an institutionally legitimate means to address the

challenge of loss of ARA. For both organisations an alliance presented risks of

loss of control over responses in the policy area and potential inequity and

inefficiency of the alliance. Council had an additional perceived risk of the State

Housing Department acting opportunistically after resources had been

committed. As the process evolved and risks were sufficiently addressed to the

satisfaction of both organisations, final decisions were made and budgets

allocated.

Thus the generative mechanisms of HOUSCO process change were strategic co-

evolution (Koza & Lewin, 1998) particularly in Phases One and Two, with an

additional teleological motor operating in Phases Two and Three. That is, an

alliance was generated as an adaptive choice of both Council and the State

Housing Department, and had a stronger logic for the state as their strategic

environment threw up more resource challenges in Phase Two. As the process

progressed, HOUSCO had to meet the purposes of each organisation in terms of

equity, efficiency and viability, with Council having an additional hurdle of fair

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dealing. HOUSCO progressed as each assessed that their purposes were being

met. Other institutional factors were also at play in conjunction with the

evolutionary and teleological motors. The following summarises the analysis

presented in the chapter.

What Environmental Change is Driving Organisational Adaptation? Why

Does the Change Require an Adaptive Response?

The Council strategy of urban regeneration in the inner city had the unintended

consequence of shared decline in affordable rental housing in the inner city. This

decline threw up a strategic problem for both Council and the State Housing

Department for different reasons. While not institutionally responsible for

housing provision, Council had the responsibility to address the social

dislocation that attended the loss of lower-rent boarding houses and hostels in the

urban regeneration area. However, they were institutionally constrained from

engaging directly in housing provision as this was not seen as the role of local

government.

The state government was institutionally responsible for providing ARA,

however could not easily replace the lower-cost housing stock in this area due to

rising land and building costs. Nor were they inclined to build additional stock in

areas away from the city, as this has been demonstrated to create the social

problems which attend marginalised communities. As the process progressed in

Phase Two, the problem of provision through their traditional central funding

models exacerbated when the Commonwealth Government changed its funding

model such that direct revenues for housing provision declined.

An additional change in the strategic environment in Phase One for both

organisations was the availability of additional Commonwealth resources for

specific social housing projects. This was an attractor for both organisations

which lead to the joint delivery of the Chapel Street development, an early

indication of an intention to consider a joint organisational response to ARA.

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What are the Perceived Benefits and Risks of the Alliance Proposition as

Adaptive Response?

An alliance between Council and the State Housing Department had the benefit

of cost sharing and also of each being able to access the institutional power of the

other. Council had the power to change development regulations which would

facilitate the provision of lower cost housing products. They also owned land in

the inner city which could be used for lower cost housing. The State Housing

Department was institutionally charged and resourced for the provision of ARA.

They were also able to legislate for changes to the Planning Act. Such changes

potentially included changes to land use which would facilitate lower cost

housing. Council also identified that changes to the Act could enable Council to

levy developers to create revenues for lower cost housing.

However, throughout Phases Two and Three as a potential alliance option started

to gain substance, each organisation was vigilant in ensuring its own

organisational purposes would be met. The HOUSCO option gained momentum

when each organisation indicated that they would ‘put money on the table’ in

equitable proportion. Council had an additional concern that the state may act

opportunistically after the HOUSCO deal had been agreed, possibly withdrawing

other funds that would otherwise have been committed in HOUSCO’s potential

area of operation. Thus fair dealing was a significant test that, when addressed,

ensured that Council was satisfied that their purposes within HOUSCO would be

realised.

The state government raised significant questions regarding whether this alliance

would deliver its own purposes in this policy area. Proposals were scrutinised to

ensure that the model would deliver outcomes that would not be possible through

the traditional hierarchical model. The test of benefit and efficiency of the

proposed alliance model was strictly applied. While the state was ultimately

satisfied that its purposes for efficiency would be realised, the Council then

applied its own efficiency tests to the proposal, not satisfied to accept the state

evaluation.

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What Other Institutional Factors are Explanatory of Adaptation through an

Alliance?

In Phase One, analysis identified that the proposal to initiate a joint officer

committee to generate ARA solutions was made by the newly-formed Council

Social Policy Unit. This unit was institutionally charged with the responsibility

to generate Council policy responses to the ARA problem in the inner city. An

alliance option with the state was one of these proposed responses. Thus

institutional rules and processes applying within Council (that is, organisational

units having the responsibility to achieve their stated goals for the organisation)

can be seen to be a contributing factor in generating change (Council agreeing to

joint action) at this time. However, the proposal needed to have strategic logic,

which can be understood as Council adapting to an environmental change.

In Phase Two, the creation of the Joint Affordable Housing Taskforce in the

inner city resulted from social ties from the institution of the Labor Party. This

joint local-state taskforce was an important development arena for the HOUSCO

model. Having been formed, institutional rules around committee processes

ensured that all actors stayed at the table long enough for the ARA problem to be

approached in a number of ways, some of them unfruitful, before the HOUSCO

proposal was ready to be put forward by the officer-level committee. The

proposal then gained the interest and engagement of the group. Thus these

institutional processes were a contributing factor in keeping the HOUSCO

process moving forward, although ultimately the proposal had to meet the

separate tests of strategic logic, equity and efficiency of each funding

organisation.

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What are the Generative Mechanisms of Change? What Patterns Can Be

Distilled from the Events?

While institutional factors contributed to the forward momentum, change and

development of the HOUSCO process can be explained as the operation of co-

evolutionary and teleological motors. Thus, as Koza and Lewin (1998) would

suggest, the alliance option as an adaptation choice of each organisation co-

evolved with changes in the environment of each. Thus in Phase One, the

alliance was a rational choice for each, given the attractor of additional resources

from the Commonwealth. The alliance choice declined in appeal when the initial

joint initiative was delivered and each pursued its own solutions to ARA. The

alliance choice again became a rational adaptive choice for the state when their

traditional source of revenue for housing delivery declined and costs grew.

When a tangible model for an alliance gained substance in Phases Two and

Three, the process developed when each organisation was satisfied that its

purposes (equity, efficiency and fair dealing) would be met, as teleology theorists

would suggest. Table 9 illustrates this summary.

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Table 9: The Environmental Determinism Explanation for HOUSCO

State Housing Department Council

What

environmental

change is driving

organisational

adaptation?

Declining affordable rental accommodation (ARA) in inner city.

Rising building costs.

Decline in traditional (Commonwealth) source of funding.

Declining affordable rental accommodation (ARA) in inner city.

Why does the

change require an

adaptive response?

Institutional requirement to address ARA with declining resources.

Political pressure to address social issues created through loss of ARA.

What are the

perceived benefits

of the alliance

proposition as an

adaptive response?

Share rising costs of provision.

Institutional leverage of Council involvement.

Access Council’s institutional power to expedite change to planning provisions.

Institutionally legitimate response to declining ARA — no unilateral response institutionally possible.

Access state’s institutional power to legislate for developer contributions to affordable housing.

What are the

perceived risks of

the alliance

proposition to each

organisation

Political gain sharing.

Ceding power and control.

Efficiency and equity considerations.

Risk of state opportunism — efficiency and equity.

What else is

explanatory of

adaptation

through

alliancing?

Institutional factors:

• Joint taskforce formed from policy party membership (institutional and social ties).

• Joint taskforce requirement to produce a vehicle or solution.

• Institutional rules keep taskforce wheels moving.

Institutional factors:

• Requirement in Phase One for Social Policy Unit to generate change propositions.

What finally are

the generative

mechanisms of

change?

Strategic co-evolution & teleology (satisfaction of equity and efficiency considerations at several points) mediated

by institutional factors.

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CHAPTER FIVE: Study Two — Individual Agency

Frame

The previous chapter explained the sequence of events in the HOUSCO process

as resulting from the responses of rational unitary organisational actors to their

economic and structural environment. The study reported in this chapter

challenges the assumption of the unitary organisational actor. The IA frame starts

from the premise that organisations are more pluralistic than the majority of

alliance process studies assume. As one informant to this case commented

himself, “I mean the organisation’s not monolithic …”

As De Rond and Bouchikhi (2004: 59) assert:

Strategic alliances do not involve multiple abstract entities. If organizational

sociology has taught us anything, surely it must be that organizations are socially

complex organisms, comprising concrete individuals and groups whose mindsets,

dynamics, and interests are likely to shape an alliance at least as much as explicit

organizational goals and strategies.

In this chapter, explanation focuses squarely on these ‘concrete individuals.’ The

focal events in the HOUSCO process are conceived as the skilled

accomplishments of individual actors within Council and the State Housing

Department. As the theoretical framework outlined (see Chapter Two),

individuals are assumed to be free to choose from alternatives, informed by their

own purposes, intents and interests, dispositions or habits, but also by social rules

and institutions. But importantly they deliberate on these alternatives, choose a

course of action and bring their own personal practices and attributes into play to

bring their intent into effect.

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The analyst is guided by the following questions when explaining the focal

events at the end of each of the three HOUSCO process phases:

• Who are the individual actors of interest within the institutional field?

• What acts of agency of these individuals were critical in explaining the

sequence of events?

• Why were these particular acts of agency explanatory?

• What were the motivations, interests or purposes of these individuals that

can explain these acts?

• How significant are external and impersonal forces in conditioning and

limiting the decisions of these actors?

• What attributes and processes of these individuals are important in

understanding how these individuals were able to effect change?

Consistent with Institutional Theory, the focal events in the HOUSCO case can

firstly be explained as the choices and decisions of the most dominant

individuals in the institutional field. That is, without the endorsement of the Lord

Mayor and Minister, the agency of other individual actors would be irrelevant.

However, the actions of these individuals alone provide insufficient explanation.

Another level of analysis is required to fully explain how and why these political

leaders came to make these choices and decisions. The analysis will put the case

that, without the agency demonstrated by other actors in each organisation, both

political and bureaucratic, the Lord Mayor and Minister could not have made the

choices which cumulatively brought HOUSCO into being. For reference, Table

10 lists these key actors.

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Table 10: HOUSCO Key Actors

Council State Housing Department

Politicians James Shaw – Lord Mayor

David Finn – Councillor and

Chair, Planning and

Infrastructure Committee

From 1998, Deputy Lord

Mayor

Tim Heath – Councillor and

Chair, Community Policy

Committee

Ron Smith – Minister,

Housing

Executive

Bureaucrats

Pam Neal, Divisional Manager,

Community Development

Lyn Appleton, Director

General, Housing

Senior

Bureaucrats

Jim Westphal, Senior Policy

Officer, Social Policy

Simon Canterbury, Senior

Policy Officer

Technical

Officers

Dick Alan

Steve Ferguson

David Bilson

This study will argue that the agency of those actors listed in Table 10 was

directly explanatory of the HOUSCO events in the time period of the study.

Their names have been changed as was indicated to them at the time of

interview. In most cases only an indication of their role title is provided. Many

other actors were involved in the development of HOUSCO and were included in

the study as informants.

Similar to Chapter Four, analysis of each of the three process phases begins with

description. However, by virtue of the different frame applied, what is described

is not the economic and structural context of HOUSCO (as in Chapter Four), but

the social order which prevailed during the period, including the individuals

within Council and the State Housing Department, the dynamics within each

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organisation and between the two organisations. This is the context which forms

the backdrop for the IA explanation which follows. Similar to the previous

chapter, a cross-phase summary explanation concludes the analysis.

PHASE ONE: FALTERING COLLABORATIVE BEGINNINGS

Process Description

In 1991 a new and virtually unknown Labor Lord Mayor was voted into office in

the LGA. This result was narrow and unexpected, as the previous Liberal Lord

Mayor was perceived to be popular.29 The LGA has a system of direct-election

for the Lord Mayor, conferring political power and mandate to this position. The

Lord Mayor brought with him to office a concern for social justice, manifest in

the initiation of new programs addressing issues such as drug use, homelessness

and domestic violence, as well as a suite of employment programs for

marginalised sectors of the community.

In 1991 a majority of Labor Councillors were also elected, resulting in a Labor

Lord Mayor and Administration. The Lord Mayor selects his executive Cabinet,

who in 1991 included Councillors Finn and Heath, seen as the two most

powerful Councillors in the Cabinet.30 As well as constituent representation, Finn

chaired the Council Planning and Infrastructure Committee, while Heath chaired

a Social Policy committee. These two newly-powerful Councillors also brought

with them from opposition a concern for the social issues that were resulting

from a sharp decline in affordable housing in their inner-city constituencies.

These Councillors had argued consistently over the period from 1987 for Council

NOTES 29 That the local government election was an ‘upset’ win for Shaw is evident from the local press coverage of the event. A scholarly article from the period (Tucker & Neylan, 1994) records that “her (previous Lord Mayor’s) defeat … was generally viewed as a major electoral upset”. 30 Relative power of Finn and Heath within Council Cabinet, was self-reported by Finn “I mean, certainly after James himself, both Tim and I would not have seen anybody else as being senior to us in terms of anything really.” The relative power of these Councillors also reported by Westphal, Neal and a senior State Bureaucrat informant. Finn became Deputy Lord Mayor in 1997, being formally second in the political hierarchy.

186

attention to affordable housing31; however the previous conservative Lord Mayor

had argued that this was a policy area outside the legitimate responsibility of

local government. In the national institutional government arrangements, the

Commonwealth and the state governments held formal responsibility for

housing.

The Lord Mayor announced in his first budget speech his vision for urban

regeneration, committing $6 million for a renewal program for suburbs in the

inner north-east of the city, an area largely in the constituency of Councillor

Heath.32 This urban regeneration program was intended as a joint initiative with

state government, and a high-level taskforce was established to work with and

across the three different levels of government, with the community and the

commercial sector. The Chair of the Joint Affordable Housing Taskforce was a

prominent member of the property development community. The Lord Mayor

approached the State Premier for representation on the taskforce, and four

Director-Generals (state executive bureaucrats) were appointed, although the

Lord Mayor would later report that these four were “reluctant starters”.33

This reluctance was emblematic of the dynamics which characterised the state-

local government relationship. In particular, the relationship between the Lord

Mayor and the Premier in the period to from 1991 to 1996 (when the Premier

was electorally defeated) was particularly strained. Although of the same

political persuasion, these individuals were often publicly critical of each other

and were reported to also to be personally fiercely antagonistic34. At the

31 Of Finn and Heath’s advocacy of Council’s role in affordable housing: self-reported by Finn, also evidenced by speech by Heath in Council Minutes, 1991. Of the previous Lord Mayor’s reluctance to become involved in the issue: reported by Heath “I remember [previous Lord Mayor] saying “we can be compassionate, but when it comes to providing money, that is not Council business.” 32 Formal announcement of Urban Regeneration Initiative in Council Minutes 1991-1992 (p2442), including the appointment of the Taskforce and the commitment of state government representatives. 33 ‘Reluctance’ of the state government to become involved reported in interview by the Lord Mayor. 34 Personal antagonism between Lord Mayor and Premier reported by several informants. Heath: State government HATED James Shaw, didn’t want to have anything to do with him. Hated with a visceral passion. Relationship with Premier was awful. Finn reflected that the new Labour Premier elected in 1998 represented the opportunity for a fresh start, after the previous poor relationships between the Lord Mayor and

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bureaucratic level, the urban renewal project generated collaborative activity and

‘cross-pollination’ of policy ideas such as planning and development codes.35

Among a range of renewal initiatives, there was a joint investigation of

affordable housing in the urban renewal area and two joint development

initiatives which provided social housing. However tension at the senior political

level meant that further collaborative efforts were not immediately forthcoming

after these joint achievements. Each organisation then pursued separate

affordable housing strategies.

In 1994, consistent with the social justice direction, the Lord Mayor established a

Social Policy Unit within the Council’s organisational structure. The unit was to

focus on the provision of affordable housing in the city as a priority among other

social issues, particularly rental accommodation. Several new senior policy

officer appointments were made: Jim Westphal was appointed to the unit in

1994. With encouragement from Cr Heath, Westphal proposed to Council

Cabinet that revenue for the development of affordable housing may be attracted

through the establishment of a charitable housing trust. Westphal sought

approval to approach the state government to form an officer-level committee to

develop the idea. While Council was institutionally constrained from taking a

lead in the provision of housing, it was the view of the Lord Mayor as well as

Councillors Heath and Finn that Council could legitimately act as a broker to

facilitate and encourage other levels of government, community organisations

and the private sector to address the issue of affordable housing. Other members

of Council Cabinet did not unanimously support this view and were reluctant to

Premier. Shaw’s relationship with two Premiers was described by a leading Australian journalist: Shaw has never been part of the [State] Labor machine. He fought [Premier], just as he did [his] successor … He has always run his own "progressive Labor" agenda, as he called it. He told [Premier] to bugger off after he won in 1991, just as he did the [next Premier] machine from 1996 onwards.” Of the general tense dynamic between the two levels of government, the following quotes from three informants are examples of the insights of most interviewees: “Feds kick the states, who kick local government … that’s how it goes” “Because we’re (state) forever telling them (Council) off. They might not like it …” “I mean, everything that I did with the state government, which was quite a bit, had strain.” 35 That the urban regeneration initiative lead to cross-pollination of planning ideas was evidenced by the comments of two senior state bureaucrats.

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endorse the proposal. Despite this reluctance the Lord Mayor approved the

formation of the joint local-state committee.36

Process Explanation

Consistent with Study One, the following analysis focuses on the two focal

events in this first phase of the HOUSCO process: the decision to deliver jointly

the Chapel Street development, and the decision to form a joint officer

committee with the State Housing Department to examine affordable housing

options. The focus in this phase is on the agency of Council actors as being most

explanatory of these events. In each case, the high-level explanation from the IA

frame is that the Lord Mayor supported the decisions. Evidence is provided that

he had the discretion and the incentive to not provide support: were this support

not present at this phase, the development path of HOUSCO would have been

different, conceivably not producing a product such as HOUSCO at all.

The analysis addresses the questions of why the Lord Mayor sought out the state

political leaders during the early period of the urban regeneration strategy to

1996. It also addresses why the Lord Mayor endorsed the proposal put to him

and Cabinet that Council approach state to establish a the joint officer committee.

In providing explanation to the second question, evidence is presented that the

agency of other actors, both political and bureaucratic, was critical to securing

this endorsement.

The following provides the evidence which supports this explanation of events in

Phase One.

36 Decision process for HOUSCO, including presentations to Council Cabinet and Affordable Housing Taskforce documented in a ‘Post Implementation Review of [HOUSCO], 2003; Council Cabinet’s discussion of the joint committee proposal reported by Jim Westphal.

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Political Agency: Lord Mayor Delivers Joint Social Housing Development

and Endorses Proposal to Form Officer-Level Committee with State

Government

The first of these two acts by the Lord Mayor planted the seeds of joint local and

state working on the delivery of social housing37. The second was necessary for

the HOUSCO process to be set in train. Both evidence the interest of the Lord

Mayor in effecting change in this policy area.

Each of these events can be seen as the exercise of individual strategic choice.

While the inner city, and in particular the area subject to Council’s urban

regeneration strategy was experiencing a critical shortage of affordable

accommodation, this did not necessitate action from the Lord Mayor or from

Council more generally. This issue had emerged during the term of the previous

conservative Lord Mayor, who was strongly of the view that a response to the

issue was not in the scope of local government. Indeed several members of the

current Lord Mayor’s own Cabinet held the same view.38 The decisions can then

37 That the two joint social housing projects delivered in this period were significant to the HOUSCO process, particularly the Chapel Street development, are evidenced in the comments of several informants that Council was beginning to realise its influence in the process of affordable housing delivery, through both provision of land and introducing flexibility into planning provisions. Two quotes from two state informants are illustrative of several others: A couple of reasons Council was easy at that stage to deal with, is that it had had a strong sense of itself in terms of doing a whole lot of things that Councils, even if they say they do, often don’t do. So I think having had that sense of their broader capacity and role to influence.” … A bit of a precedent was set for the Council to think in terms of using its planning powers... it was a bit of a legitimacy-establishing sort of thing. 38 That the Council was divided throughout the process on the issue of becoming involved in direct provision of housing was evidenced by all Council informants. A quote is provided from each of the Lord Mayor, two Councillors and a senior bureaucrat: That was the only anti-argument, so the thing is can we make a difference, and that was Tim and David very strongly, and the rest of us saying look, it’s not our space, we’re not going in there. We don’t have the money to go there.

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be seen as resulting from the individual choice of the Lord Mayor and in the case

of the social housing developments also from the institutional resources, personal

attributes and practices be brought to the problem.

The Lord Mayor’s motivation in acting can be seen as both personal and an

objective response to the Council context. His stated intention was to bring a

social justice perspective to all his work during his term in office.39 This

perspective was formed from early study in philosophy and theology. It was

manifest in his early decision to form a Social Policy Unit within the

organisational structure to address a range of social issues such as drug use,

domestic violence and homelessness. This was a departure from the policy

priorities of the previous and subsequent conservative Lord Mayors.

Some members of civic cabinet would have felt it wasn’t the legitimate role of local government. Other members would have felt that we were simply picking up responsibility which was that of the state government. … I think really right until maybe 2001, something like that … No doubt it was only David and myself who used to continue to argue the case as we could. I think it is probably fair to say that the majority of civic cabinet needed convincing. Yes there was some resistance. Shaw and others were of the view that we didn’t go into areas that belonged in other spheres of government. So they (Finn and Heath) were really looking to ‘well what can Council do?’ But, you know, they had to, it wasn’t a generally felt thing among the Labor Councillors, I don’t think, you know because it really was affecting those two inner city areas. The rest didn’t really think there was much in it for them. 39 That Shaw had an intention to bring a social justice perspective to his term as Lord Mayor is evidenced from his self-report as well as the comment of a senior bureaucrat: My strong social justice perspective was brought to the whole totality of the council, and it certainly had significant impacts on all those decisions … We were lucky that the cabinet was pretty much on board with that agenda. I joined the Council in about May 1994 and we had a strong social justice brief from the then Lord Mayor … One of the key issues … we identified from the beginning was that access to affordable and appropriate housing is one of the critical issues in being able to manage in the city. It is also manifest in the Lord Mayor’s actions in initiating Council involvement in a range of social issues such as drug use, youth job training and homelessness. These policy initiatives are reported throughout Council Minutes (1991 – 2002).

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Objectively, the sharp decline in affordable accommodation across the city, but

particularly in the inner city, was giving rise to a range of social problems of

legitimate concern to local government. That the decline in the inner-city was a

result of Council regeneration policy added to the case for a Council response, as

the Lord Mayor attests:

… we wanted to try to make sure that there was not the pushing out of the community

type housing, so one of [the] strengths of [inner-city suburb] is there’s still a

significant amount of boarding houses and community housing here and it still works.

You see [unclear] all around the place and that adds to the energy and I think the

diversity.

The Lord Mayor could not however, legitimately apply Council budget directly

to this issue, as institutionally it was the responsibility of state government. He

was additionally constrained in bringing about change in this area by a tense and

often antagonistic relationship with state government political leaders and the

institutional power relationship which characterised the local-state relationship.40

To act on his intention to increase the supply of affordable housing he worked

tactically, evaluating the institutional field and ‘enrolling’ and persuading others

to bring about the two social housing developments. In dialogue with senior

political and bureaucratic leaders in the State Housing Department he critiqued

current policy approaches in social housing delivery, attempting to demonstrate

that a more commercial approach was required:

They’ve got this huge capital stock literally around Australia, billions of dollars in

housing capital and they refuse to leverage off it and to use it to develop new housing

choice. We had super funds ready to invest significant money in housing stock in [the

state], because those fools up there hadn't thought of it, they weren’t interested.

However, he successfully persuaded individuals in the state government to put

forward a proposal for federal grant funding for the urban renewal project, part of

which was committed to the Chapel Street development, built on land owned by

Council. He also persuaded the private sector and the State Housing Department

to deliver another social housing development in the urban regeneration area. In 40 On local-state antagonism, see Note 34.

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calculating how this change could best be brought about, he sought out the Chair

of the Urban Regeneration Taskforce, someone separate from the two-levels of

government with legitimacy and credibility across the institutional field to act as

broker between the private sector and the state. 41

At the [site within the urban regeneration precinct], one of the big successes up there

was a supportive housing project and to give the state credit they finally got involved

and on board… [The taskforce Chair] pulled it together with the developer and the

state to actually make it happen. But that was a very significant addition

As the process description recounts, following these two successes the Lord

Mayor pulled back from further joint delivery projects with the state, following a

further outbreak of tensions between individual state political leaders.42

However, he later supported the proposal for a joint local-state committee to

explore structural options for further affordable housing delivery, overcoming

reluctance on the part of several of his Cabinet.43 This evidences his intent to

continue to explore opportunities in this policy area.

His ability to effect change in this area can be seen as resulting from the

legitimate authority and power given to the Lord Mayor in this particular

municipality. While his stated policy was to work as a ‘cooperative team’ with

41 The intention for the Chair of the Urban Regeneration Taskforce to work across all three levels of government and with the private sector is evidenced by a quote from the Deputy Secretary of the Department of Housing and Regional Development, who lead the Building Better Cities Program. Nielson, L. (2008) The ‘Building Better Cities’ program 1991-96: a nation-building initiative of the Commonwealth Government in [the nation] under construction. (ed Butcher) ANU Press. Intention was also expressed by Lord Mayor in Council Minutes 1991-1992. 42 That tensions cut short further joint initiatives was evidenced by both Jim Westphal and the Lord Mayor respectively: So they did an affordable housing strategy and it was intended to be a joint one [state and local government]. But at some point the politics went wrong. Shaw and [Minister for Housing] who was the minister at the time had some sort of fall out over it ... But so they ended up actually being two strategies: a state strategy and a local strategy. … [developer contributions] But they had to give some of the bonus back to affordable housing, that was the big brawl between [Minister] and myself. 43 On Council continuing to be divided on the housing provision issue see Note 10.

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his Cabinet, if the Lord Mayor strongly argued a position, it was likely to

prevail.44 However the evidence suggests he also brought personal attributes to

the issue, being an ability to see possibilities for action from in the whole

institutional field — including all levels of government and the private sector. He

also brought a practical wisdom, interpreting what was the ‘common good’ for

all sections of the community, particularly in the urban regeneration areas and

how it could be best achieved.

Political Agency: Councillors Finn and Heath Make the Case for Council to

be Involved in Affordable Housing

In regard to the decision to form the joint state-local committee, the Lord

Mayor’s endorsement is a necessary precondition for the initiative to go forward.

However, the advocacy of the two senior Councillors Finn and Heath was

necessary for the proposal to be presented to Council Cabinet, including the Lord

Mayor as Chair, for endorsement. As Westphal, the bureaucrat who brought the

proposal, explained:

There were two Councillors who were very keen to see it happen. And I think, like if

[Cr] Heath hadn’t been there constantly talking about affordable housing, I wouldn’t

have bothered, even though he couldn’t necessarily get it through the organisation at

that point.

Similar to the Lord Mayor, these Councillors’ interest in the provision of

affordable housing arose from personal motivations and from an objective

44 On the dynamics of decision making within Council Cabinet and the dominance of the Lord Mayor, a quote from the Lord Mayor and Finn: We were a cooperative team, so I did the budget so if I wanted to I could say get stuffed, here’s my budget, defeat it in the chamber if you want to, but we didn’t operate like that. We were very much a cooperative team. But when we – we would argue about all sorts of things, but when we came to the conclusion and I said okay, well let’s see how we go, there was no real further debate. But apart from that if the Lord Mayor was opposed to it and put some strong financial arguments for not doing it then the rest of civic cabinet would certainly have, apart from Tim and myself, certainly would have fallen in behind that and said yeah, yeah, that’s right, that’s what we think too.

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interpretation of their context. While the Lord Mayor’s context was necessarily

the city as a whole, these Councillors were particularly aware of the needs of

their own inner-city wards.45 These areas had both experienced the process of

gentrification, including the decline of affordable housing and the loss of

boarding houses: in the case of Heath’s ward this was a result of Council’s policy

of urban regeneration. The issue of affordable housing was becoming a ‘hot

issue’ with the community. Additionally, Finn in his role as Chair of the

Planning and Infrastructure Committee was closely aware of the consequences of

Council’s urban regeneration strategy.46

Personally, the interests of each Councillor were informed by the ideology of the

Labor party, but also by direct political interests. Heath stated that his actions

were informed by a combination of “Ward issues and party political issues.” Finn

stated that the commitment to an initiative such as HOUSCO would not have

come from a conservative administration, “I am not condemning them for that, it

is just not in their philosophical sort of field, that’s all.”

However, both Councillors needed to persuade the Lord Mayor to pursue further

joint working with the state on the affordable housing issue. The Lord Mayor

was reluctant at this point, not wanting to step in where he saw the state as

45 That the Lord Mayor’s interest in social housing was more expansive that Finn or Heath is evidenced by his comment: Tim and David were serving the interests of their constituency – [I was interested in] in 10,000 units of housing in [LGA]. 46 That Finn’s close interest in the issue of the provision of housing was heightened by the perspective he gained as Chair of Council’s Planning and Infrastructure Committee was noted by Pam Neal: … because of his particular, well, his portfolio which was about urban planning and he could see the impact of development and so on of affordable housing. … Tim also had a big interest in it but David was very relevant because he was coming at it from an infrastructure perspective or point of view. This is also evidenced by a detailed report to the productivity commission on local government’s role in the provision of housing, (authored by Finn) noting the negative impact of urban renewal on the levels of affordable housing.

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abrogating their responsibilities.47 These Councillors persuaded through a

number of tactics. One was to critique the dominant logic within Council; that is

that Council had no legitimate role in affordable housing. Both had argued in

opposition and now in administration for attention to the issue.48 Finn in

particular argued that Council had a moral responsibility to act: given the income

that was generated through urban regeneration it was incumbent on the

organisation to deal with the consequences.49

These Councillors were senior members of the Cabinet, which assisted in

persuading the Lord Mayor to support the joint-committee proposal. As Finn

explained:

I suppose one thing that was a bit fortunate for the issue I think was that David and I

were senior members of [Council Cabinet] so that was really helpful. I mean after,

certainly after [Lord Mayor] himself, I think both [Heath] and I would not have seen

anybody else as being senior to us in terms of anything really. In terms of thinking

through a position in terms of coming up with possibilities, that is really helpful.

Obviously if you were a really junior member of [Cabinet] or felt yourself to be one I

presume that would have made it a bit difficult.

While possessing sufficient authority within Council Cabinet to achieve

endorsement of the joint committee decision, these Councillors needed the state

to become involved to bring any effect to their desire to see more affordable

housing in their wards. For the next few years, they would use their skills in

47 On the Lord Mayor’s view that to act in the area of direct provision of housing was to allow the state to abrogate its responsibility, the Lord Mayor: It was very clear in my mind the state government at the time was abrogating its responsibilities everywhere and expecting the council to pick up matters that were in their jurisdiction. Now housing was not our jurisdiction, it’s the state jurisdiction … I was always reluctant to rescue it. I don’t believe you should rescue another level of government for their lack of responsibility. 48 On Finn and Heath’s advocacy of Council attention to affordable housing, see Note 3 49 That Finn used the argument that Council had a moral responsibility to deal with the consequences of urban renewal was reported by Jim Westphal: And I remember … when we went to this presentation at Civic Cabinet, and Shaw was going on with this crap, ‘nothing to do with us’. And Tim Heath was saying ‘on this side we are encouraging all this redevelopment and on this side affordable housing is going down as a result of all these things we are approving so maybe we should just balance that up ..’ and I could see Tim’s hands moving. And we’re just watching Tim and going ‘yeah, all right!”

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persuasion to effect change both within Council and outside the arena of their

legitimate authority.

Bureaucratic Agency: Westphal “Steers a Path”

While political leadership is essential for any initiative to progress through a

public sector organisation, politicians themselves cannot do what is necessary to

develop a loose policy direction into a fully argued proposal. As Councillor Finn

observed:

It seems to me that for a project to happen, particularly if it involves some significant

change of direction, two things have to happen. You have to have some people who

are prepared to lead the case politically and say look it is something that needs to be

done. You need that. Then secondly you need …people who are prepared to put their

mind to what are some ways in which it could be done. So you need the ‘why’ and

you need the ‘how.’

Westphal was the key member of the Social Policy Unit, formed in 1994, who

would lead Council’s involvement in the HOUSCO process for five years. His

involvement here was driven not just from the bureaucratic duty to do political

bidding. As Finn states, “you need people who are prepared to put their mind [to

the issue]” indicating the voluntarism which characterised Westphal’s

involvement in the HOUSCO process.50

At this early stage of the process, Westphal was motivated to seek out his

counterparts in the State Housing Department to fulfil the policy direction of his

unit to address declining affordable housing in the city. Although there was

50 That Westphal’s involvement represented ‘volunteerism’ rather than being a direction of those in higher positions in the hierarchy is evidenced by his comment: JW: Well it was about the inner city stuff … what might [Council] do? About the trust ... they were working on a proposal to morph that into the housing company. Interviewer: And were you [JE] getting riding instructions from anyone? JW: From Council? No not really.

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leadership from Finn and Heath, there was not unanimous support for

involvement in this policy area across the members of Council Cabinet. Westphal

had to work tactically to achieve sufficient support to move ahead in this area.

From his evaluation of the institutional rules, he knew that to achieve anything in

housing he would have to involve the state, as Council involvement would be “a

bridge too far.” He also knew that within Council Cabinet, opinions were divided

about getting involved at any level:

So that was kind of the starting point. But what was going on in Council, there was

some political leaders who were of that view, but there were some who believed

Council should do more, because they were seeing that in the community that it was a

hot issue in terms of the constituents. So what we had to do was kind of steer the path

between the ones in Council who believed we shouldn’t be touching it and ones who

believed we should be trying to find a way to deal with it.

His challenge at this first phase was to persuade the Lord Mayor and Council

Cabinet to form the joint local-state officer committee to explore structural

options for the delivery of affordable housing. In this, Westphal had the

institutional resource of strong political support from Finn and Heath, but was

constrained by lack of legitimate authority or as he framed it himself “not a lot of

access to senior Council” by virtue of his level in the bureaucracy. He strategised

that his relationships with the community housing sector would be a resource for

him, as they had more access to these decision makers and could “say what they

like”, holding a different position in the institutional field. Westphal used

individuals from these community groups to make the case for him. Thus his

entrepreneurship in effecting change was demonstrated at this stage by skillfully

using the resources available to him to persuade the dominant power group in

Council.

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PHASE TWO: FROM FALTERING BEGINNINGS TO FIRMER

FOOTINGS

Process Description

In 1998 the Labor Party were back in power in state government following a

two-year period of conservative government. James Shaw had been re-elected as

Lord Mayor in both the 1994 and 1997 local government elections. A new Labor

Premier meant the possibility of a ‘fresh start’ between local and state

governments, following the tension and hostility which characterised the

relationship between the Lord Mayor and previous Labor Premier in the period to

1996. 51

A state Labor government also brought Labor Ministers to key portfolios

including Housing and Treasury. These Ministers had relationships of trust with

Councillors Finn and Heath through the Labor Party, in which both Councillors

were influential. Cr Finn had headed the Housing Policy Sub-Committee and

through this Committee had a close working relationship with the Minister. With

this network of individuals in office, in Council and the state government, they

jointly decided to re-energise joint policy work at the senior level which would

progress the provision of affordable housing in the inner-city.52 They formed a

Joint Affordable Housing Taskforce to address the inner city ARA issue, with the

newly appointed Director-General of the State Housing Department as the Chair;

membership also included Councillors Finn and Heath. This taskforce

represented a ‘hybrid’ in a number of ways: as well as a joint local and state

committee, the membership included bureaucrats and elected officials. Tensions

resulted from the differences in culture between the two organisations as well as

51 On the personal antagonism of the Lord Mayor and Premier in this phase see Note 6. 52 That the Taskforce on Affordable Housing was formed through a network of Labor party politicians following the election of Labor in the state election of 1998 was reported by Westphal and then confirmed by Finn, who commented that he held ‘relationships of trust’ with the members of the Taskforce.

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differences in authority, however this taskforce met regularly for four years until

the incorporation of HOUSCO in 2002.53

The state-local officer level committee on affordable housing, which was

initiated by Council in 1997, finalised their feasibility study into a charitable

housing trust. Westphal presented the proposal to the Joint Affordable Housing

Taskforce in 1998.54 While not immediately supporting the proposal, the

Director-General stated that she would have the idea explored by her own

department. At this time, Simon Canterbury, who was the Director of a Social

Housing Association in Britain, made contact with the Director-General seeking

a temporary position within the department. The Director-General approved a

temporary appointment and Canterbury moved to the state from London. The

Director-General asked Canterbury to lead a team of departmental senior officers

for one month to examine the options, costs and benefit of a social housing entity

in the state. Westphal remained the Council liaison for this team. During this

process, the policy officers changed the nature of the proposed entity from ‘trust’

to a Company structure. This team prepared a presentation for State Cabinet,

requesting funding for a further feasibility study. The State Cabinet, with the

Minister leading the proposal, supported the proposal and asked that Council

Cabinet be approached to ask for their support and contribution to the feasibility

study.

Canterbury and Westphal had the support of Councillors Heath and Finn for this

proposal, but the Lord Mayor and other members of Council Cabinet remained

unconvinced. The two met with each member of Council Cabinet individually

prior to the proposal being debated by the whole Cabinet. Similar to the previous

decision in Phase One, the proposal did not meet with unanimous support,

however the Lord Mayor approved Council contribution to the feasibility study.

53 The dynamics of the Taskforce on Affordable Housing was reported by all senior members of this group, including Appleton, Finn and Heath. The agendas and timeframe of the Taskforce is a recorded in the minutes of their meetings during this period. 54 The date of the presentation of the trust proposal to the Taskforce is recorded in Post Implementation Review of [HOUSCO], 2003.

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Process Explanation

Similar to the previous study, explanation for this phase focuses on the event of

the approval of the HOUSCO feasibility study. In this study however, this event

is explained as the decision of the Lord Mayor and Minister, made possible by

the agency of Finn and Heath, the Director-General of the State Housing

Department, and the bureaucrats Canterbury and Westphal.

Political Agency: Lord Mayor and Minister Approve Funding of the HOUSCO

Feasibility Study

As indicated previously, the endorsement of the Lord Mayor and Minister is a

precondition for any initiative to progress. At this phase in the process these two

leaders needed to endorse the funding of a feasibility study into the emerging

HOUSCO model. As Cr Finn observed:

Certainly in the end that you have to convince the most influential people of all and

you know that of course is, in this situation, the Lord Mayor and the Minister.

Throughout this phase support from these two leaders was not assured. Both

leaders needed to be persuaded, evidencing that the decision to fund was a result

of choice. Consistent with his position to this point, as previously evidenced in

Study 1, Shaw had resisted involvement in what he saw as a state responsibility:

“I just continued to say no, get stuffed, it’s not our jurisdiction, it’s their

jurisdiction.”

Cr Finn’s observation of this time was that

I think Jim’s position was probably generally supportive but needing to be convinced

about the specific proposals put forward.

As the modelling for HOUSCO progressed, the Lord Mayor’s confidence in the

project grew, to the stage where he agreed to fund the feasibility study on the

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persuasion of the senior members of his team, Finn and Heath.55 His stated

motivation was that, by indicating that he would “put money on the table” he was

“breaking the nexus” that existed between Council and the State Housing

Department on this issue of responsibility for affordable housing.

The Minister’s tentativeness was of a different kind. While affordable housing

was legitimately the jurisdiction of his department, the HOUSCO model was a

departure from traditional practice. The model was designed to target not the

neediest in the community, rather those at the ‘next level’ of need, or the

‘working poor’, who could afford to pay a proportion of a market rent. As the

Director-General observed:

I think he took some convincing too at the time. I think it was a nervous thing for him

as a Labor Minister who was wedded to traditional Labor ideals about the public

housing system, you know a system that was there traditionally housing working

families.

The Minister himself reflected that:

The self-doubt I had about it was, were we putting a project together that would be

beyond the reach of people that I came into parliament to help?”

This last comment from the Minister is also an indication of his purposes and

motivations in ultimately advocating for the HOUSCO proposal within the senior

political levels of the state government. He was strongly motivated by ideals of

social justice, approaching the issue of social housing from an ideological rather

than a purely objective perspective.56 Another senior bureaucrat observed that:

55 That the confidence of the Lord Mayor grew as the modelling developed was the comment of Neal: So as the modelling grew then his confidence in it probably grew. So yes, that’s probably what I’d say. Similar comments were made by other informants that the Lord Mayor gradually became convinced that HOUSCO would be self sustaining and would not require additional funding from Council. 56 The strong social justice value base of the Minister is evidenced in the quotes included in the text, however is also in evidence in speeches to State Parliament. For example, in this speech of 2001 to the State Parliament he speaks of his provenance as a Labor leader:

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He’s a working class man and he probably could see the impact on affordable

housing and understand it and he does in a very sort of fundamental way, I suppose.

He was also motivated pragmatically by his assessment of the context. In order to

bring effect to his intent to increase the supply of affordable housing, particularly

at the low end of the rental market, the Minister was pessimistic about working

with the department’s traditional partners — the community housing sector —

and was looking for a different, more commercial model to bring more and

different resources into the system. 57

In this phase of the HOUSCO process, the agency of the Minister was required to

persuade powerful decision makers within the state government of the merits of

the HOUSCO proposal. These included the Premier, the Treasurer and other

Cabinet Ministers who would be required to support the funding proposal. Smith

brought to this task institutional authority. As a senior bureaucrat noted, Smith

was “number three in the hierarchy, a powerful Minister.” He also brought close

personal relationships with these key political figures. He commented that he

held lengthy discussions “over many beers” with the Treasurer, whom he

referred to by his Christian name, as he did other senior political decision-

makers:

I guess that is the other relationship. [Treasurer] and I have been mates for 30 odd

years. I had no resistance there from him at all. In fact a lot of support and I am sure

he drove it equally — in equal parts over there in Treasury.

I am indeed fortunate to be a third generation member of the Labor Party in my family … They are tireless workers—and have been all their lives—for justice. Both of them are very much involved on a day-to-day basis in ensuring that that aim is met … We are a product of our environment and our family has very much derived the benefit of the experiences of my parents. 57 The Minister reported his pessimism about achieving his outcomes through changing the model of engagement with the community sector: So it was very difficult to do something about them. I need a model that would go over the top of that. I sort of basically gave up in trying to form a model with them. As I say, the [community housing organisation], I have a very low view of it in [the state] and we have to fund it as a result of that.

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However, not all key stakeholders were easily persuaded. The Minister

approached the persuasion task with tenacity. He “kept Cabinet briefed on it” and

worked with the community sector to overcome their resistance and harness their

involvement. His personal reflection was that the task of persuasion was not

easy:

I don’t think I have faced as many challenges about most other things that I have

done in life than that, to come up with a model and build it from ground up and to tie

all the people around it.

Thus, even for the two actors with most institutional power in the field, their

ability to give effect to their purposes was not unconstrained. The Lord Mayor

and Minister needed the involvement of the other for the HOUSCO proposal to

succeed, yet this could not be commanded. The Minister also needed the

endorsement of other powerful state political actors, which could only be

achieved through persuasion, not fiat, whatever personal power he possessed.

Political Agency: Finn and Heath “Keep the Candle Flickering” Through the

Joint Affordable Housing Taskforce

The support of the Lord Mayor for the HOUSCO feasibility study was not gained

until 2000. In 1998 the Lord Mayor was still resistant to Council’s involvement

in the housing arena, beyond using its influence over planning schemes and

regulations. The Lord Mayor would not have been persuaded to overcome this

reluctance without a specific proposal that he felt would “make a difference.”58

That proposal for HOUSCO came to the Lord Mayor with the strong support of

Finn and Heath who had worked through the development of the proposal jointly

with the state Housing Department through the Joint Affordable Housing

Taskforce. The formation of this taskforce was an accomplishment of Finn and

Heath with the Minister, who when Labor was returned to state government in

1998, recognised that there was a renewed opportunity to progress this issue of

affordable housing in the inner-city at a senior political level.59

58 The Lord Mayor commented during the interview that his test for any Council involvement in direct provision of housing was “can we make a difference?” 59 See Note 24.

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This taskforce was chaired by the newly-appointed Director-General of Housing,

Lyn Appleton. Its formation as a joint local-state vehicle was a necessary event

in the HOUSCO development path. As Westphal commented, it was different

from the separate governance arrangements that had characterised previous

collaboration on the affordable housing issue, “… these people had the potential

to make or get close to making some key decisions…” It was through this

taskforce that Westphal’s initial trust proposal was presented and through which

Council’s involvement was maintained.

The intent of Finn and Heath in regard to the formation of this taskforce was to

“[put] a whole lot of housing issues on the table.” These included homelessness

which was starting to emerge at that time. Most particularly Finn and Heath were

“hot to trot” (State Housing Department Senior Executive) on the issue of

changing various acts of parliament such that developer contributions to

affordable housing could be levied.60 Their motivations were, as outlined

previously, both personal and objective — a combination of the needs of their

own constituencies as well as a broader ideological commitment. One senior

state bureaucrat who reported regularly to the taskforce, commented positively

on Heath’s motivation and contribution to the taskforce:

You know, in terms of seeing it through and being prepared to really go to the

nth degree and of being a big supporter in this, having an impact on those most

in need.

These Councillors were able to initiate this taskforce and through it the

involvement of Council in HOUSCO, by virtue of their institutional authority,

both within Council and within the Labor Party.61 As noted previously Finn and

Heath were the most senior members of Cabinet; their arguments for HOUSCO

60 That the possibility of raising revenue for affordable housing through levies on commercial property development was a key objective for Finn and Heath in their involvement in the Taskforce was reported by Appleton, Finn and Heath, as well as another senior state bureaucrat during interviews. 61 That Crs Finn and Heath were influential within the state Labor party was the comment of a senior state bureaucrat and several Council bureaucrats.

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carried weight with the Lord Mayor.62 Finn was also, in this second phase, the

Deputy Lord Mayor. They were both influential within the Labor Party, with

Finn having chaired the Labor Housing Committee and through this involvement

having a close association with Smith.

However, even with this institutional power, both had to exercise skill and

tenacity in ensuring the project maintained momentum. Finn commented that:

It is fair enough to say that Tim and I were the ones who felt a responsibility to keep

the candle going, you know, and there were plenty of times when the candle could

have blown out, but we…doggedly kept at it and on every opportunity that came up

we returned to it and I think we kept the candle flickering.

Executive Bureaucratic Agency: The Director-General Searches for “New

Ways”

Finn’s earlier comment was that, for an initiative to succeed, “you need the

‘why’ and you need the ‘how’.” Within the State Housing Department, Appleton,

appointed to the position of Director-General, supplied much of the ‘how’ to

Smith’s ‘why.’ Several informants described the pivotal nature of her role in

bringing the model into being.

On assuming the position in 1998, Appleton was given a broad direction from

the Minister that something different needed to be done to increase the resources

available in the housing system, given a decline in direct funding from the

federal government. As one informant commented Appleton faced “… a very

constraining and depressing financial position in her department … in a hole

basically.” To this challenge, Appleton applied her sensemaking and strategising

abilities, seeing the opportunities for action systemically:

It became increasingly apparent that the old post war model of public housing was

just not a good fit any longer. So there had to be a more I think systemic approach

from a national point of view on how does the nation influence housing affordability

to provide more options for people on an income continuum than what was being

62 That the arguments of Finn and Heath carried weight with the Lord Mayor were evidenced through the comments of the Lord Mayor in interview.

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provided at that time? … So I think the trilogy of the three levels of government plus

the community sector was always in my mind an essential equation.

As several informants noted, Appleton was someone with the capacity to expand

the horizon of possible solutions.63 In searching for these possible solutions,

Appleton applied her personal credibility and positional power to persuade the

Minister to undertake several study tours to the UK, Europe and the US to

examine other models of social housing delivery. Her intent was to find a model

that would suit or could be adapted to the state context. As such, she enacted

change through strongly critiquing the dominant logic of how the department

currently approached housing delivery and attempted to enrol others in the need

to change. The HOUSCO model as it emerged introduced a commercial logic to

the provision of social housing, to work alongside the dominant logic of a

centralised state-funded bureaucratic model. To persuade the institution of this

new approach required skill and tenacity as she experienced resistance from

several internal stakeholder groups and from the community housing sector:

In the first stage, the biggest hurdle was to argue the value of something new… Argue

it with the community housing sector. Argue it with bureaucracies just within the

[State Housing Department] and people who were wedded to the public housing

system and the asset management people who found it very threatening.

Appleton was attempting to broaden the thinking of the department but the

institution was hard to shift:

I recall it was quite a challenge just within the [State Housing Department] to try and

get people to see beyond the public housing system into a broader affordable housing

system.

63 That Appleton was a leader who had the attribute of looking past current practice was the observation of several informants; two quotes illustrate: The Minister: I saw the strength of somebody was prepared to look over the horizon to look over the fence a bit and see what was around. Canterbury: You can’t overestimate that leadership. Someone who’s got the vision got the capacity to look beyond where she is …

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The logic that underpinned her approach to institutional change was both to

“bring people into the fold” where this was possible, but also to forge ahead

where resistance could not be overcome:

I think it was also that at the end of the day the momentum just got going and people

seemed to realise we had to get on board or you get left out.

Her positional authority afforded her the ability to deploy resources. She

established an Affordable Housing Unit within the department and through this

resourced two project teams with the most skilled people in the department; in

this phase a high-level team for one month to examine the idea of the trust. This

bureaucratic and technical capability was vital to establish the business case for

HOUSCO.

Her positional power and ability to identify opportunity also enabled her to

employ Canterbury, initially on a short-term basis, when he approached her from

the UK toward the end of the second phase of the HOUSCO process.

Canterbury’s agency would prove critical in building the HOUSCO model and

persuading politicians:

I just thought at that time, he’s got the expertise that we need and the experience we

need to try and get something like the housing company up and going… With the

experience that he brought with him he could see — of all the options around for

models, what option might best fit the [state] environment.

Appleton’s purposes in engaging in these practices appear to arise from an

objective and professional response to her financially constrained context, rather

than from personal values or ideology. However, a personal purpose for her

agency was displayed in her pride in the professionalism and rigour of the

business cases put forward for Treasury approval.

So that took a lot of work but it was a real test of our expertise to be able to get

something that the Treasurer and the Under Treasurer were persuaded was a good

way to go.

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Senior Officer Bureaucratic Agency: Canterbury Brings the Know-How;

Westphal Keeps Council on the Path

Senior political and executive bureaucratic leadership enabled HOUSCO to have

its best chance at success. However funding approval for a feasibility study needs

painstaking and detailed policy work. In this phase the work was done by

Westphal in terms of Council support and Canterbury on behalf of the state. In

particular Canterbury’s arrival into the department brought with it the detailed

solution to the general policy problem of an appropriate model of housing

delivery. Prior to his arrival this solution had eluded both organisations.64 Having

lead a not-for-profit housing association in the UK for several years prior to his

arrival, Canterbury was able to provide momentum for the process by

immediately reviewing and providing advice on an appropriate model for the

state context and the costs and benefits of implementation. Pam Neal, Divisional

Manager of Community Programs (the Director-General’s counterpart in

Council), observed that:

There’d been a bit of thinking done about it but I think that the turning point was

when Simon Canterbury as an expert was brought in with his knowledge and his

history. So you know the people like James Shaw and so on could see okay, there is

some potential for this to work; there is some rationale, there is some expertise

around about it. So that was the role that I think Simon Canterbury played. No, it

wasn’t going to happen (from within the two organisations). We didn’t have the

knowledge or expertise … So it needed, you know, somebody like him to be brought

in.

As well as expert power, which brought with it institutional credibility and

legitimacy, Canterbury approached institutional change skilfully. He evaluated

the institutional context — which included three levels of government, the

private and community sectors — assessed the viability of several delivery

models and persuaded those in power of the benefits of the chosen model. The

model he proposed was much larger in scale than had previously been

64 That an acceptable model of housing delivery had eluded both organisations prior to the arrival of Canterbury was evidenced by comments from Neal (reported in the text), Appleton and the senior bureaucrats in interview.

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contemplated, enlarging the horizons for both Council and the State Housing

Department. He observed that this “changed what was going on. You know, tens

of millions of dollars.”

In persuading around this proposal he had the benefit of institutional autonomy.

He felt himself to be quite ‘de-risked’ about the proposal; someone from the

outside simply “telling it like it is.” Appleton commented that Canterbury had the

benefit of being “de-shackled,” not being linked in any career sense at the time to

the success of the proposal. That is, he was not constrained in his thinking and

action by previous institutional orthodoxies and relationships, and saw himself as

a ‘catalyst’ for institutional change by being somewhat apart from it.

Westphal was equally skilful and tactical in working with the senior political

leaders. For example, he demonstrated institutional understanding and judgement

as to how and when to present the HOUSCO feasibility proposal to Council

Cabinet for funding approval:

[Heath] saying ‘when is this housing trust thing going to come back to [Council]

Cabinet?’ And I kept saying ‘well I think we should wait and see what the state

government make of it. You know … because we want to rope them in’, and he agreed

with that ... and we did wait.

Westphal also had the benefit of some institutional autonomy, which he used to

the benefit of HOUSCO development. He observed that, among a number of

possible social policy initiatives, the HOUSCO project looked the most

promising and he personally made a decision to give it some priority in his

workload. He also stated that he “wrote his own job description” when the

possibility arose to join the HOUSCO development team.

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PHASE THREE: FROM FOOTINGS TO FRAME AND FITOUT:

HOUSCO INCORPORATED AND FUNDED

Process Description

In 2000 Shaw entered his final term as Lord Mayor, having announced he would

step down during this term. Councillors Finn and Heath continued to hold senior

portfolios, with Finn now Deputy Lord Mayor and Heath remaining Chair of the

Social Policy Committee. In 2000 a new Council CEO was appointed, who was

more supportive of Council involvement in the area of affordable housing than

the previous CEO.65

In the State Housing Department Canterbury was appointed to coordinate the

feasibility study into an affordable housing company. A team was convened

which included senior and experienced internal technical experts in financial

management, legal issues and property development and management. These

officers also sought expertise from the private sector to inform the study.

The State Housing Department Director-General maintained a close relationship

with the feasibility study and continued to chair the Joint Affordable Housing

Taskforce, with Councillors Finn and Heath still active participants. The

65 That the Council CEO up to 2000 was not supportive of Council’s involvement in affordable housing was the comment of Westphal: And [CEO], he had been a CEO of a housing authority in NZ so he knew a lot about public housing. And he just saw, if Council gets into this, all budget control goes out the window because it’s such as expensive issue. So he really didn’t want to go there at all … Personally, he’s obviously very strongly supportive of public housing, but it wasn’t Council’s role, he was very strong on that. He'd been away for a couple of weeks. So he hadn't seen a draft of this presentation, prior to it coming. So [Council Cabinet] on Monday morning, first day back at work and here we came with this presentation for putting $1million into this housing trust. He was really angry and banged the table! Because I think if he'd been there he would have … so I'm sure if he'd been there, we would never have got a proposal for a housing trust to [Council Cabinet]. He wouldn't have let us take it.

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feasibility team provided regular reports to this taskforce. The Minister

maintained consistent support during this period.66

The Director-General and her counterpart in Council, Neal, maintained a close

working relationship up to the period of incorporation.67

In April 2001 the results of the feasibility study were presented separately to

state and Council cabinets. From both groups, there was an overall finding that

there was value in the model proposed. Each provided ‘in principle’ approval of

the approach. From June the process entered the establishment phase, with

Canterbury and a team again appointed within the State Housing Department to

set up the company. Westphal was appointed on a short-term assignment to

coordinate Council involvement. Detailed establishment tasks during this period

included an independent review of the financial modelling, obtaining charitable

status from the Tax Office, the development of detailed company documents, and

engagement with a range of stakeholders, particularly the community housing

sector who would be shareholders in the new company.

These establishment tasks were completed by March 2002. The state committed

their budget to the HOUSCO project. Neal brought the proposal for HOUSCO

budget commitment to Council for endorsement. The Lord Mayor committed

Council funds to HOUSCO after intense Council debate over Council’s financial

role in this policy area.68 During this period a prominent, wealthy and successful

local property developer was approached by the Lord Mayor and accepted the

inaugural Chair of the HOUSCO Board. HOUSCO formally incorporated in July

2002, with initial chairperson and government board members in place and

66 That the Minister maintained consistent support during the last phase of the HOUSCO process was the comment of the Director-General. 67 That Neal and Appleton maintained a close working relationship during the final phase of the HOUSCO process was the comment of both. Their joint presence at meetings of the HOUSCO Control Group is recorded in the minutes of these meetings. 68 Debate on the appropriate financial role for Council during full Council discussion of the HOUSCO proposal is recorded in Council Minutes. The nature of this debate was also commented on by Westphal.

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community shareholders appointed. Funding was agreed by both governments in

June budgets, but funding agreements were not signed until December, following

a protracted period of legal re-writing.69

Process Explanation

Similar to the previous study, explanation for this final phase focuses on the

events of the incorporation of HOUSCO as a jointly funded venture and the

signing of the state funding agreement six months later. In this study, the first

event is again explained as the decision of by the Lord Mayor and Minister,

made possible in this phase by the agency of not just executive and senior

bureaucrats within both Council and the State Housing Department, but also the

agency of technical experts (‘technocrats’) within the State Housing Department.

The second event of the signing of the state funding agreement, which could

have potentially derailed HOUSCO even at this last stage, is explained by the

acts of the Minister.70

Political Agency: The Lord Mayor and Minister Commit to the HOUSCO

Budget and Endorse Incorporation. The Minister Breaks A Deadlock on the

State Funding Agreement

The Lord Mayor committed $10 million budget over four years in June 2001.71

As highlighted previously, this decision by the Lord Mayor was critical for

HOUSCO to proceed as a joint venture, although all his Cabinet were involved

in the discussion. As Council Minutes (July – Dec 2001) record, Cr Heath said

that both he and the Deputy Lord Mayor (Finn) had advocated for the HOUSCO

for a number of years, but it was the Lord Mayor who had “‘bitten the bullet’ and

provided the funds.” It was clear that individual choice was involved. As

Westphal commented, “The question … wasn't the amount, I think it was

whether they'd put money in at all.”

69 The nature of the legal ‘wrangling’ by state lawyers was on the issue of the return of assets to the state on the contingency of failure of the company. This was reported by the Minister. 70 It was Canterbury’s observation that the protracted process of legal negotiation over the state funding agreement could have potentially derailed the newly incorporated HOUSCO. 71 Council commitment of $10 million was announced in Council Minutes.

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As Cr Finn observed:

He could have gone either way on it. He had gone other ways on occasions before …

So yeah his decision was a crucial one.

The Lord Mayor’s motivations for this act can be seen, again, as arising from

both personal values but also as an objective response to the context of housing

in the city. Finn, who was at that time Deputy Lord Mayor and the Councillor

with whom he worked most closely72, felt strongly that:

The legacy issue was an important one … I think he was probably in a sense, it

sounds very banal, but kind of in a sense tidying up the books. There were a number

of things that might have been in his mind and on his agenda for a while and so I

think that being in his last term was in fact an influence because he wanted to tidy up

some of these things that he had been grappling with for a while. Secondly, that I

think he did want to leave behind some worthwhile projects to continue on with the

city.

The Lord Mayor himself reported that Finn and Heath had argued the case well

and he agreed, but indicated ‘reluctance’ even at this stage to have to pick up

what should have been a state responsibility. The promise of property developer

contributions to provide an additional revenue flow to add to Council and state

funding was also an incentive73:

72 That the Lord Mayor worked most closely with Finn was evidenced in the comments of Finn: Yeah, well I think I had a calmer relationship with [the Lord Mayor] than [Heath]did and I had been deputy mayor since I guess ’97 so for quite a few years we had a good relationship. We didn’t always agree, but we also had a good professional relationship. [Heath]would sometimes do things which were very courageous but risky and I think [Lord Mayor] could sometimes, [Lord Mayor]might find them a bit challenging, you know what I mean? I think I was more the ‘good child’. 73 As a matter of record, post HOUSCO incorporation, the state ‘blocked’ Council from being able to collect developer levies as revenue for social housing, Council was forced to return more than $4 million of developer contributions already raised. The local newspaper reported this change in state policy in relation to the matter on April 2, 2003.

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And it was in the context that we thought — we’d got an agreement around the extra

money from the development industry, so it was our $10 million, the extra money we

thought we could raise (developer contributions), which would have been another $10

million at least, and then we really had some momentum around it. So that’s all it

was and when we said well we’d go, there was no further debate … But it was when I

reluctantly sort of said well we can get this money together, let’s see if we can blow

this thing away after they had argued the case.

The Minister’s support for HOUSCO was more assured at this final stage,

however his agency was most critical for ensuring the support of State Cabinet

for the budget. His sustained support was also critical for the other key actors to

maintain the momentum required in this final stage.74 The motivation for these

actions remained both personal and objective, with a final, sharp, political edge:

The words I used at the time … I said, one way or another I will make that bastard

[Conservative Prime Minister] pay. Ha ha … That was one of the motivators. That

was one of the motivating thoughts. We just were getting nowhere with the

Commonwealth Government. A succession of federal housing ministers — they didn’t

have housing ministers, they were communities ministers. But they just sat there and

stonewalled us. It was not their fault. The Treasury federally had just — and the

[Prime Minister] Government, it was one of [Prime Minister]’s views that housing

was the responsibility of the states and he made bloody sure of it.

His agency was also explanatory of the final event in the HOUSCO process, the

signing of the funding agreement. To bring conclusion to the protracted process

of legal re-writing, the Minister announced he would sign the funding agreement

on December 5, 2002. His authority and political power was required to break

the nexus.75

74 That the support of the Minister was critical for the work of the other actors was reported by all the state informants. 75 That announcing he would sign the funding agreement on a certain date was a conscious intention of the Minister to break the nexus on this issue was the comment of Westphal and Appleton. The Minister also confirmed this:

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Executive Bureaucratic Agency: Appleton and Neal ‘Bolt the Pieces Together’

and Ensure the Confidence of Senior Decision Makers

Analysis has highlighted that the HOUSCO project was an innovation with clear

merit, but also risk, for both organisations. While there was political support

from the Minister and from Finn and Heath, at this final phase the proposal

needed the support of other key stakeholders in each organisation and in the

community sector for success. The engagement and decision-making processes

for Council and the state had to move together in step. To achieve this, the

leadership of executive bureaucrats was required. Political and bureaucratic

leaders seek out the most senior responsible person to provide answers and take

responsibility. As Cr Heath noted of Neal, the responsible executive bureaucrat

in Council:

She was the ‘consummate bureaucrat.’ I mean that in the best sense. She coordinated

all the pieces and bolted them together… To make it work.

Neal herself reflected:

You can’t underestimate that role … if we give up you know… at that senior level …

then it’s not going to happen … it won’t happen.

In this, as with Appleton in the previous phase, their expressed motivation was

professional rather than ideological, ensuring that this project, in their sphere of

responsibility, succeeded.

Neal and Appleton worked together through this final phase, both formally in the

Project Control Group which governed the process to HOUSCO incorporation,

but also regularly and informally. They worked to persuade powerful actors both

Interviewer: Was that a bit of a tactic of yours? Minister: Yes. At the end of the day the legal people are there to protect us and the

probity stuff was — they were a bit concerned about it.

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within their own hierarchies, but also across the two organisations. Appleton

commented that:

We used to tic tac regularly on strategy. Like, you know, I’d be able to say well these

are the hurdles that we’ve got at this point. What are the hurdles that you’ve got? …

how can we unlock this through our respective roles and responsibilities? So we had

a lot of just tic tacking with meetings over the phone.”

Neal noted that her role involved:

… just being beside staff when they had to go and present to Cabinet. So playing that

sort of leadership role as an intermediary … it was a project that came in under my

portfolio and if it was going to happen it needed somebody who was prepared to drive

it and persevere with it and go in in the hard times and sit around the table with

[Appleton] and whoever else was around that big committee.

Some of the ‘hurdles’ and ‘hard times’ involved overcoming resistance from a

number of organisational quarters. Neal commented:

My role was just talking and trying to get people in the tent. If they seemed to be

outside the tent, finding out why that was.

For example when the Council Chief Financial Officer expressed concerns, Neal

responded:

I think we just kept calling her business — you know, answer another question, tell

her to go and talk to Treasury or something. It was all of that and just coming back

with — or being seen to have the experts to come to be developing the models.

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Bureaucratic Agency, Senior Officer: Canterbury Secures the Trust of Senior

Actors

Several informants spoke of the importance of Canterbury’s role in bringing

HOUSCO to incorporation. Cr Heath’s observation was that

Babies have a thousand fathers … But it was really Simon Canterbury … Because he

came from ‘outside’. We can have all the ideas, but here was someone who had all

the experience from the UK and was from ‘outside.’

Another informant spoke of Canterbury’s arrival on the scene as “one of the

planets (that lined up).” As Neal, had commented previously “we didn’t have the

knowledge or experience … it wasn’t going to happen.” The credibility that

came with this knowledge and experience served to build the confidence of all

the key actors — most particularly the Lord Mayor, Appleton and the Minister.

As one state informant reflected, the emerging HOUSCO model was “all very

new and very different.” As previous analysis has highlighted, the adoption of

this new approach represented risk for all key decision-makers. They were being

asked to commit budget to something that was essentially untried. Canterbury’s

experience was able to mitigate much of this uncertainty and make commitment

easier. As Appleton commented:

He had the credibility or the ‘street cred’ if you like of having been there, done it. And

also being a good communicator so he was able to communicate the experience and

was able to allay a lot of the fears about risk that various people who didn’t know

what we were heading into were concerned about.

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Technocratic Agency: The Technocrats Make the HOUSCO Business Case

The approval of State Treasury and the Tax Office was essential to securing the

HOUSCO budget and HOUSCO’s status as a charitable enterprise. As Appleton

recalled:

It took a lot of development work because we had to get the approvals from the

Taxation Department. They had to be confident that we were genuine in setting up a

charitable organisation. Treasury needed to be confidant [and] competent about the

modelling. That we’d stacked this up so that we wouldn’t leave the state exposed.

This development work was undertaken by a range of technical managers, with

expertise in financial modelling and property (or project) development. While

this work could seem a straightforward, technical response to a given brief, the

key technical officers engaged in the HOUSCO process needed to engage in a

range of strategising, evaluating and persuading practices in addition to pure

technical analysis. It was by no means certain that the emerging idea for a

commercial approach for social housing delivery was going to ‘work’, or that

key decision makers would endorse the business case presented. These actors

were responsible for building a workable business case and persuading decision

makers that the case was robust.

In going about this task, it is evident that these actors were motivated by the

intrinsic challenge of the task. As Steve Ferguson commented:

We were inherently having people who were looking to work on the edges and

interested in the edges and whatever … See I never worry too much about my career.

If something’s a good idea I love to pursue it. I have a couple of other things at the

department … that some would perceive not quite as successfully but at least there

were new things being done. Things have been tried. That’s always interested me and

motivated me. I liked — I always find it boring to do routine stuff so I was into it.

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Dick Alan commented that these actors took the view: “let’s push it — see how

far we can go.” There was also the professional satisfaction in getting the best

technical result. Ferguson commented that:

I’m a financial analyst; I knew the numbers added up. One thing I did know was that

I’d win any argument on the numbers. That is my speciality.

Building a viable HOUSCO model initially involved evaluating the institutional

structure and understanding the hurdles they would face. Alan reflected:

We were trying to do something else in the market other than public housing, and

that’s a struggle … so the objective was in the modelling, can it sustain itself if it’s

getting enough capital to start with?

David Bilson, with property responsibilities, spoke of his evaluation of the

limited design expertise available to him internally in the department and how he

strategised about procuring outside of the government processes to obtain the

design expertise of the private sector. He noted that his team were “starting to

push boundaries…”

Additionally, these actors’ evaluation of wider institutional environment

identified benefits from achieving charitable status in the eyes of the Tax office.

Alan, the key financial expert, had previous experience in tax which was brought

to bear on the problem:

Oh I think right from the start I knew that that was there because I actually ran the

department’s [consumption tax] project in terms of putting [consumption tax] in. So

we knew what those provisions were, the key was actually saying it was a charity. If

you were a charity you would … get the concession.

Bilson identified that obtaining certain exemptions from planning regulations

would be required and how that might be brought about.

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These actors were involved for lengthy periods in the process of persuasion, both

of the Treasury and the Tax Office.76 Both processes required understanding and

connecting to the interests and language of these stakeholders. Ferguson

commented:

You know I’d never worked in Treasury but I worked closely with them … I do know

what pushed their buttons ...

Several spoke of their strategy to include these stakeholders early in the process

of development. Alan explained:

One of the things that housing has done for a long time is that when they’re

examining new things, they make sure that they get someone from Treasury and

Premiers involved early on so that they’re walking the journey with you. Not just

lobbing something on their desk at the end and they go oh I don’t like this.

Bilson also reflected that:

I had Treasury sitting on my panel. So I pulled them in so they could see what this

project was, what it looked like. So I had them inside.

Bilson, responsible for property development, reflected on how he considered his

language carefully in the effort to persuade. He coined a new measurement tool

that he believed would make his case:

I’ve got that social bent as well. But I need to talk the same language. One of the new

words of language that I came up with to convince Treasury is ‘cost per tenant

housed’ … so if you get two beds or three beds, you say, this is the price per unit. But

if you get ‘cost per unit tenant housed’, you can see the economies of return. So the

dearer project is actually giving a cheaper return on cost per tenant housed. That’s

how I converted it around. Then I started to swing Treasury into it and say, okay, cost

per tenant housed.

76 That these ‘technocrats’ were involved in protracted processes of negotiation is evidenced through the minutes of the Project Control Group.

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The persuasion of the Tax Office to grant charitable status was a difficult

undertaking. The Minister commented that:

It was a very lengthy process but having achieved that was hugely successful… Full

marks to … our people in the department who pursued that. That was the hardest

pitch to get over.

Alan also commented that this process was:

“VERY difficult … But from the time we actually lodged it with the Tax Office, to the

time we actually finally got them to agree and that took a number of meetings … We

actually worked it all through and said well this is why we believe it’s a charity.

In going about this process, these actors evidenced evaluation and judgment

about their political context at each stage. In particular Alan knew that timing

was critical. Given that Council was at that stage willing to contribute and Labor

was in power in the state, he knew he had to act swiftly:

It was ... all of a sudden they were there and you either had to do it now or … two or

three years later it wouldn’t have happened. It was just one of those things.

These actors brought to their task their expert power and the resources that were

available to them through their professional networks. While providing an

expected service to those with legitimate decision-making power, they exercised

choice in becoming involved in the project, among other professional

opportunities available to them and demonstrated their willingness to use the

resources at their disposal creatively to the purposes of the initiative.

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CROSS-PHASE SUMMARY: HOUSCO RESULTING FROM

CUMULATIVE, COLLECTIVE AND COMPLEMENTARY AGENCY

The foregoing analysis has provided the IA explanation of the focal events of

each of the three phases of the HOUSCO process. The analysis provides

evidence that, at each phase, the collaboration between Council and the State

Housing Department could have been halted by the decisions of the most

powerful actors in both organisations: the Lord Mayor and Minister. Each was

tentative about the emerging venture: the Lord Mayor from a concern that the

initiative would overstep the legitimate role of local government, the Minister

from concern about the targeting of the business model away from the traditional

recipients of social housing. The Lord Mayor’s decision to provide the budget in

2001 “could have gone either way.” The analysis has demonstrated also that

different individuals in these institutional roles, from a different ideological base

and with different personal interests in the proposed venture, would most likely

have taken different decisions at the same point.

This provides evidence for the De Rond and Bouchikhi (2004) proposition,

quoted at the beginning of this chapter, that “the mindsets and interests of

alliance actors can shape an alliance at least as much as explicit organisational

goals and strategies.” Additionally, the analysis found that the decisions of these

two powerful alliance actors, while preconditions for the process to change and

develop, did not fully explain the process from recognition of an affordable

housing problem to the incorporation of HOUSCO. These decisions could not

have been made without the agency of other actors in different locations in the

institutional field. Each brings a different, necessary piece of the complete IA

explanation.

The following summarises the IA explanation for HOUSCO from across the

three process phases. The summary identifies which acts were explanatory and

why. It also presents the evidence that these acts constitute strategic choice on

the part of these individuals. The summary then unpacks these acts of agency,

explaining the motivations for these acts and how the practices and attributes of

these individuals enabled the Lord Mayor and Minister to make their critical

decisions. This explanation is summarised in Table 11.

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Table 11: The Individual Agency Explanation for HOUSCO

Which acts of agency were explanatory?

Cumulative effect of decisions of support by senior political actors at critical events at the end of each phase. Decisions made possible by the acts of others in the institutional field.

Who were the key actors?

HOUSCO outcome resulting from collective agency of political, bureaucratic and technocratic actors in both organisations: • Agency of political actors in both organisations the precondition

for HOUSCO incorporation. • Agency of executive bureaucrats in both organisations to bring

the acceptable solution to the political actors. • Agency of senior bureaucrats and technocrats in both

organisations to build the solution for the executive bureaucrats and political actors.

Why were these actors powerful?

HOUSCO outcome resulting from access to complementary institutional resources: • Lord Mayor and Minister: formal political (policy) authority;

control over resources (Council budget). • Executive bureaucrats: formal organisational authority; control

over resources (organisational budgets and staff deployment). • Senior bureaucrats: autonomy; credibility. • Technocrats: expert power; legitimacy and credibility.

What is the evidence of strategic choice?

Politicians: deliberation around plausible decision alternatives (support or not support).

Executive bureaucrats: deliberation around viability of range of possible policy projects.

Senior bureaucrats and technocrats: deliberation around range of desirable policy projects; professional autonomy to choose.

What were the purposes or motivations of these actors?

Political actors: personal (ideological) motivations and objective response to context (effect on wards and city of lack of affordable housing).

Bureaucratic and technocratic actors: personal (professional challenge); objective response to policy context (bureaucratic role to find solutions to a policy problem).

How did these actors bring about change?

What is particular about bringing about change within a hybrid

organisational

form?

HOUSCO resulting from actors employing different ‘strategic repertoires’ from different positions in the institutional field. Senior political figures can use repertoire of ‘dominants’ within their hierarchy and ‘challengers’ within the broader institutional field.

Change arising from actors practicing both within organisational hierarchies, across the two hierarchies and across the wider institutional field using formal and informal inter-organisational coordination mechanisms and individual processes of strategising, evaluating, persuading and enacting.

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Who Were the ‘Institutional Entrepreneurs?’ Why Were They Able to

Exercise Power?

Institutional entrepreneurship represents the activities of actors who have an interest

in particular institutional arrangements and who leverage resources to create new

institutions or to transform existing ones (Maguire et al, 2004: 657 quoted by Levy

and Scully, 2007).

HOUSCO represented an institutional transformation, representing a significant

departure from previous routine, or traditional policy responses for both

organisations. This study demonstrated that the HOUSCO entrepreneurs were

not merely the two most powerful, or institutionally dominant actors in the field

(the Lord Mayor and Minister), although their decisions were preconditions for

the process to change and develop. Rather, HOUSCO was the accomplishment of

a range of entrepreneurs at different locations in the HOUSCO institutional field.

HOUSCO relied on the collective and complementary agency of these

individuals. Each relied on the institutional power and strategic choice of the

others for their own agency to be given effect.

As has been argued, both the Lord Mayor and the Minister were ultimately

required to endorse the budget allocations in their particular organisations to

bring HOUSCO to incorporation. However those in bureaucratic roles, both

executive and at policy officer level, as well as technical officers were

responsible for bringing about that decision. In the State Housing Department,

Appleton had to put forward to the Minister a workable, robust and risk-

mitigated model that he could support and with which he could garner the

support of others. In order for the Minister to support the model, Appleton

needed the model to be supported by others in the institutional field of social

housing, including staff in her own department, senior decision makers in the

state government, the local government partners and the community housing

sector. In order to build this support, Appleton relied on the agency of those who

could build the solution and engage with these stakeholders around it. Most

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explanatory among these actors were Canterbury as a key bureaucrat, as well as a

range of ‘technocrats’ responsible for the HOUSCO model. Each of these actors

were able to ‘leverage the resources’ (Levy and Scully, 2007) available to them

to bring the model into being.

Within Council, the Lord Mayor would not have made his decision to commit

significant ‘new money’ to HOUSCO without the advocacy of Councillors Finn

and Heath, who had argued the case for several years and had worked closely

with Appleton and other state government actors during the development

process. In turn Finn and Heath relied on the development and engagement work

of the bureaucrat Westphal. Westphal worked within the Council organisation

and with the state government to bring the solution to a form that they could

advocate confidently.

The finding that entrepreneurship was demonstrated from a range of actors with

access to complementary resources can be understood from within Institutional

Theory, which as Levy and Scully (2007) state, has at its core a structural theory

of power (Levy and Scully, 2007 cite Clemens and Cook, 1999; Jepperson, 1991;

Sewell 1992). Power theorists view power as located with ‘field dominants’ who

have an unequal claim over the rules of the institution through “formal authority,

the control of critical resources and discursive legitimacy” (Hardy and Phillips,

1998: 219). Those who are able to bring about change will generally be those

who have superior access to these resources. In the HOUSCO case, the key

actors were able to achieve institutional change by drawing on the institutional

power of others in the HOUSCO ‘coalition.’ Not one of the actors held all the

required power, but each held a vital part. The Lord Mayor and Minister

accessed the critical formal authority to propose the HOUSCO budget allocation.

The Minister also held the necessary legitimacy within the institution of state

government to advocate the initiative to important state power brokers. As the

inaugural chair of HOUSCO commented, the Minister put his reputation on the

line with these actors to make sure it happened. This legitimacy was the power

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that was bestowed on him by the institution through long service in the housing

ministry.

However, in order to enact this power he needed the power that Appleton could

bring. Appleton also leveraged formal organisational authority and control over

internal organisational resources, such as departmental staffing budgets and

power to direct the deployment of staff. Additionally, her legitimacy was evident

in her engagement and persuasion efforts with her department, with senior

decision makers and with Councillors Finn and Heath. (“You can’t overlook that

leadership”). In turn, Appleton relied on the power of her bureaucrats and

technical experts. Canterbury brought legitimacy and credibility, garnering the

confidence of all in the HOUSCO field through his evident experience and

ability to communicate to win confidence. The technocrats were also able to have

decision makers won over by their technical arguments, through legitimacy

achieved through technical expertise and knowledge of the institutional field and

its dynamics.

In a mirror image, the Lord Mayor could be seen to exercise his formal authority,

his control over the Council budget and his ability to lead the decision making

within his Council Cabinet. To enact this power he was persuaded by Finn and

Heath, who were able to persuade through their own powerful structural

positions within Council Cabinet. To do this they relied on the power of

Westphal, who was able to leverage the power of autonomy to work on the

HOUSCO project and the institutional legitimacy within Council which comes

from his long years of association with the project and social issues generally.

Thus the institutional entrepreneurs in the HOUSCO case were key actors from

across both organisations, each leveraging critical institutional resources which

they were able to access from their own location in the institutional field. The

agency of each in relation to the other is required to understand the institutional

change of HOUSCO.

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What is the Evidence the Acts of These Individuals Constitute Strategic

Choice? Was Deliberation Among Alternatives Evident?

An IA explanation for the HOUSCO process relies on establishing that the key

actors were exercising strategic choice. That is, within the institutional structures

in which these actors operated, each had some scope for individual autonomy. It

must be demonstrated that the decisions of the political leaders were not in fact

pre-packaged by their institutional or economic environment, nor were the

bureaucratic and technocratic actors merely the obedient ‘arms and legs’ of their

political masters. Each must be shown to have options for action before them and

to have chosen a course which ultimately contributed to moving the process from

problem to joint solution. Within the same institutional context and presented

with the same problem or opportunity it must be reasonable to assume that

another actor may have chosen another course of action. Deliberation among

plausible alternatives for action and commitment to a chosen action is the

hallmark of strategic choice (de Rond and Thietart, 2007).

In the case of the pivotal political actors, the Lord Mayor and Minister, the

analysis demonstrated that each was initially equivocal in their support for the

emerging HOUSCO. At different points each was clearly grappling with a

legitimate alternative. The Lord Mayor’s alternative at each phase of the process

was to veto any venture into the direct delivery of affordable housing: “it’s not

our jurisdiction, it’s their jurisdiction.” The Minister was also “nervous” about a

model that was a move away from the delivering housing to the neediest (“Was

this going to be too expensive for the battler out there?”). His clear alternative

was to stay within existing models of delivery. Appleton evidenced this by

indicating that she had to “keep the confidence of the Minister.” Deliberation and

choice were thus in evidence in the decisions of both politicians.

In the case of the executive bureaucrats, Appleton and Neal, the choice was there

to continue to leverage their power to persuade their nervous political and

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organisational stakeholders of this untried and therefore risky venture, or give

way to the forces of stability and inertia. As Neal commented:

… if we give up, you know, at that senior level then it’s not going to happen, it won’t

happen… and if it was going to happen it needed somebody who was prepared to

drive it and persevere with it and go in in the hard times.

Equally, Appleton reflected on the preconditions for her getting behind the

venture:

The first thing is to make sure that the idea is a good idea and that the idea is a good

idea if it has been thoroughly researched and you’re absolutely confident about the

conclusion…. That’s how I felt anyway about [HOUSCO]. Then secondly, you have to

make sure that the key stakeholders that are going to be your allies in this have got

the strength and the tenacity to hang in there.

Clearly, Appleton deliberated on the merits of the venture before lending her

power and agency to the difficult process of persuasion. Thus both Neal and

Appleton, while taking necessary cues from their political leadership, were not

merely the ‘front people’ for these leaders. HOUSCO was a deliberate choice for

each.

In the case of the senior bureaucrats and ‘technocrats’, they too needed cues not

just from the political leadership but from their executive bureaucratic leaders in

order to act. But, for each, their actions can be seen to be resulting from a clear

choice. Within the state organisation, Canterbury had the option to discontinue

his short-term engagement at several points in the process. The senior technical

officers indicated that it was their choice and preference to be involved in

projects that were ‘pushing the boundaries’ of traditional practice, indicating the

discretion to choose among a range of initiatives. Considerable commitment was

required from these officers over a long period; more than mere obedience to a

directive was required to undertake the difficult tasks of persuasion required of

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each of them. Within the Council, analysis demonstrated that involvement in

HOUSCO was a clear choice among a range of initiatives for Westphal. He

indicated that this project “looked like the one with the best chance of success”

and gave it the priority for his time and attention.

Thus, at each level, choice among alternatives was evidenced. These actors

exercised the discretion afforded to them within their institutional field.

How Can We Understand the Choices These Individuals Made? What Were

Their Motivations or Interests?

The previous section provided evidence that the key actors in the HOUSCO

process exercised deliberation and choice. To provide a full explanation of the

agency of these actors we need to account for the motivations for these choices.

Our theoretical resources guide us to both personal and objective motivations for

choices. These individuals may act on their own personal “hopes, fears and

desires for the future” (Emirbayer & Mische, 1998: 962) or may choose

particular projects as an appropriate response to their objective circumstances

(Archer, 2003). Both of these types of motivation were in evidence.

For the political actors their motivations can be understood as a combination of

both personal values and ideology and an objective response to the problems of

both their ward and their city. Each of the Lord Mayor, the two Councillors and

the Minister were of the Labor Party. Regarding ideological motivations, each,

when separately asked, were vehement in their negative response about whether

the HOUSCO initiative would have come to fruition from a conservative Council

(“I think it absolutely would not have happened”) or state government.

At the bureaucratic and technical level, the actors indicated a desire to achieve

both personal and professional satisfaction from the challenge of something new

that had the potential to make a tangible difference in their area of policy

responsibility. While they may well have held personal ideological views of the

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‘common good’ that was being served by the HOUSCO project, these were not

in evidence. Their responses indicated they were energised by using their skills

and resources to make the project happen.

How Did They Go About the Process of Institutional Change?

Each of the key actors in the HOUSCO process evidenced deliberation and

choice to exercise their power in relation to the change project. However the

choice alone does not bring the change into being. Agency which brings about

change is in the activities of these actors. Our theoretical resources (see Chapter

Two) guide us to look at individual practices including strategising, evaluating,

persuading and enacting. Additionally, Levy and Scully (2007: 976) suggest that

these practices bundle into different ‘strategic repertoires’ depending on the

location of the actor in the institutional field. They categorise these as

‘institutional defenders’ or ‘dominants’ who have superior access to resources

and act to maintain the institutional rules, and ‘challengers’ who seek to change

institutional rules but must rely on more social skills of framing, persuading and

alliance building to bring about this change.

Different strategic repertoires

In this case the analysis demonstrates that the key actors did indeed employ

different repertoires depending on their location in the institutional field. The

analysis demonstrates also that actors could be characterised as institutional

defenders or challengers, but could also be seen to be playing both roles at

different times in the process.

The Lord Mayor and Minister were both institutional ‘defenders’ within their

own hierarchies and ‘challengers’ when working outside their sphere of

legitimate authority. Both the Lord Mayor and Minister defended the institutional

‘status quo’ at certain points in the process. The Lord Mayor ‘resisted’ for

several years the arguments of Finn and Heath that Council should be more

directly involved in the delivery of affordable housing, maintaining the more

dominant view in Council that “it’s not our jurisdiction.” The Minister was

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‘nervous’ about the new model of delivery proposed, representing as it did a

move away from the traditional focus on the most needy (the ‘battlers’).

However at different points in the process they each took the role of institutional

challenger and it was in these acts that the HOUSCO process changed and

developed. The Lord Mayor in Phase One had the strategic purpose of “getting

more housing on the ground” without Council being involved in direct delivery.

He needed to persuade the state government and the private sector of

opportunities and leverage the resources of both. These acts were to bear fruit in

the subsequent phases of the HOUSCO process. The Minister in Phase Two

recognised that he needed to effect change in the whole system of housing

delivery and needed change from the community sector and from the federal

government, both of which were outside his sphere of formal authority. In this

‘challenger’ role, each employed a strategic repertoire characterised by looking

outwardly and broadly across the whole sector: they demonstrated strategising

and evaluating that encompassed the whole institutional field to identify where

change was possible. Their repertoires were also characterised by leveraging

powerful personal relationships within their own organisations and across the

institutional field.

In Finn and Heath we see the repertoire of the challenger. While hierarchically

powerful within the Council Cabinet, on the issue of delivery of affordable

housing they were operating outside the Council’s institutional rules. They

needed to seek out and persuade by means other than formal authority. Levy and

Scully (2007) suggest that challengers need to rely on social skills of framing and

alliance building. Each of these is in evidence. These two actors framed the

HOUSCO initiative to the Lord Mayor and Cabinet using language that was

designed to appeal (e.g. Council’s moral responsibility to replace affordable

housing lost in the regeneration process). They formed an alliance with key

Labor figures in the state government who would share the issues of housing in

the inner city; when similar allies did not exist in Council.

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The executive bureaucrats (Neal and Appleton), while leveraging their formal

organisational authority to deploy resources and persuade senior decision

makers, also needed to rely on the social skills of framing and alliance building

to overcome strong resistance to the HOUSCO initiative from several quarters in

their own organisations and in the community housing sector. In this sense they

used the repertoires of both the ‘dominant’, in their ability to control and direct

resources, and the ‘challenger’ in their need to persuade.

The senior bureaucrats and technocrats also needed to employ the repertoire of

the challenger. The technocrats framed their language and their analyses in terms

that they knew would persuade. Canterbury and Westphal built coalitions with

those political actors who they knew were ‘onside’ in Council and framed their

presentations with a tactical view of how best to persuade (e.g. putting the most

acceptable propositions first and the least last).

Actors operating both within hierarchies and across the institutional field

Bringing about institutional change required all actors to ‘strategise, evaluate,

persuade and enact’ (see Conceptual Framework, Chapter Two) both within their

organisational hierarchies, across the two organisational hierarchies of Council

and the state government, and also across the institutional field more broadly

including the federal government, the community housing sector, the property

industry peak bodies, the private sector design firms and individuals in the

private sector who would form the board. Significantly for alliance theory, this

‘boundary-spanning activity’ can be seen to be part of the repertoire of all actors

at every level — rather than being a set of distinguishing behaviours of a

particular role (for example Tushman & Scanlan, 1981; Williams, 2002).

Inter-organisational working involved designing and engaging in a number of

coordination mechanisms (Grandori & Soda, 1995) both formal and informal.

Formally, there were a range of joint working groups, taskforces and project

control groups at different phases of the process. Informally, actors worked

behind the scenes to ensure that organisational blockages were unlocked. This

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dimension of agency, the need to understand and work within a wider field

through mechanisms of inter-organisational coordination, can be seen to be

characteristic of hybrid organisational forms.

Also particular to these forms, is the nature of strategising and evaluating about

change. Bringing about change in affordable housing delivery required actors to

have a thorough knowledge of their own organisational rules and boundaries, but

critically also those of the partner organisation and the rules of the institutional

field as a whole. This is evident in the Lord Mayors’ attempts in Phase One to

gain change through leveraging the resources of the financial sector, the

commercial sector including the property development sector, the community

housing sector and the state government. This is also evident in the strategising

of Appleton, who knew that any affordable housing solution would involve a

“systemic approach from a national point of view” and Smith’s evaluation of the

capability of the community sector and the strength in involving local

government.

Additionally, the actors could not confine their persuasion efforts to their own

hierarchies. These actors had to persuade within their own hierarchies, within the

hierarchies of their partner organisation, and within other organisations including

the Taxation Office and the community housing sector. This required knowledge

not just of the power structures, rules and language of one organisation, but

several.

CONCLUSION

This chapter has explained the HOUSCO case through the IA frame, finding that

HOUSCO resulted from the collective and complementary agency of actors,

whose choices, motivations, practices and attributes over the three process phases

cumulatively brought HOUSCO into being. The next chapter presents the third

and final empirical study, analysing the HOUSCO events through the frame of

I/C.

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CHAPTER SIX: Study Three — Indeterminacy/Chance

Frame

“It was like… the planets lined up.” (Council Manager)

“… it was like … it just all came together” (State Housing Department Manager)

This third study approaches explanation of the focal decision events in HOUSCO

through the frame of I/C. This frame is premised on a different set of

assumptions from the previous two studies and therefore approaches explanation

of the focal events differently. The ED frame explains the decision events as the

outcome of rational processes of evaluation and calculation of a unitary group of

organisational actors. The IA frame explains the event as the accomplishment of

skilled and powerful individual entrepreneurs. In contrast with these two frames,

the I/C frame tempers claims that we may make for causality. From a given

starting point (in this case 1991), the movements of both organisations toward

the final incorporation and funding of HOUSCO in 2002 are viewed less as a

linear, purposeful progression, but rather as a ‘random stochastic walk’ (Garson,

2008). By applying these assumptions, we can see that at several points in the

chronology, one or other or both of the organisations could have stopped moving

in the direction which culminated in HOUSCO, but for a fortuitous turn of

events. As such, this perspective views strategy process as the workings of

timing and luck (Eishenhardt & Zbaracki, 1992).

As outlined in the Conceptual Framework, the I/C perspective is underpinned by

Garbage Can Theory (Cohen et al, 1972) and modified Garbage Can Theory

(Kingdon, 1995). As such, the focal decision events are seen to arise from a

random confluence at a point in time of independent organisational streams:

participants (decision making groups), problems and solutions. The perspective

also incorporates a counterfactual reasoning approach (Tetlock & Belkin, 1996)

to illustrate the play of ‘timing and luck’ (Eisenhardt & Zbaracki, 1992: 27) in

understanding why events unfolded the way they did in the HOUSCO case. I

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will briefly re-introduce these theoretical and analytical tools prior to presenting

the findings from their application.

Garbage Can Theory explains decision making within the more “complex,

unstable and ambiguous” (Eisenhardt & Zbaracki, 1992: 27) realities of

organisational life. In this theory, organisations can be characterised better as

‘organised anarchies’ (Cohen et al, 1972) than the rational, unitary decision

makers assumed in the ED model. The ambiguity is manifest in three ways.

Firstly, these organisations have problematic preferences: decision makers’

preferred solutions may be inconsistent or not clearly defined. Secondly, anarchic

organisations have unclear technology: actors only demonstrate a tentative

understanding of the how means and ends are related and may go about this

understanding through trial and error. Thirdly, organisational anarchies have

fluid participation, where participants come and go from the decision making

‘arena.’ In explaining how change is brought about, the garbage can model

describes the ‘coupling’ (Kingdon, 1995) or ‘chance intersection’ (Eisenhardt &

Zbaracki, 1992) among independent organisational streams of choice

opportunities, solutions, problems and participants at critical junctures in

organisations.

In this chapter, explanation focuses on this ‘coupling’ or ‘intersection’ of the

organisational streams at the focal event at the end each phase. We seek to

understand why the streams came together at that particular point in time. To

evidence the stochastic nature of this ‘coupling’, a further analytical step is

required to make the case that, were there to be an ‘easily imagined variation’

(Tetlock & Belkin, 1996) within one of the streams, the focal event would not

have occurred, conceivably terminating the HOUSCO development process at

that point.

This counterfactual analysis uses the methodological criteria of Tetlock and

Belkin (1996) for developing counterfactual statements that are legitimate,

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plausible and insightful. The analyst is focussing on conceivable events that

could have easily redirected the logic of events.

The investigator wants to know what was historically possible or impossible within a

circumscribed period of time and set of relations among political entities. To make

this determination they draw from … in-depth case specific knowledge of the key

players, their beliefs and motives and the political-economic constraints under which

they work (Tetlock & Belkin, 1996: 7).

Tetlock and Belkin (1996) direct the analyst to counterfactual propositions that

meet the ‘minimal rewrite of history’ rule: Propositions should not require

‘undoing many events.’ They should also meet tests of clarity and logical

consistency.

For each focal event, one counterfactual proposition is presented. It is not

necessary to establish the multiple ways that the focal event may not have

eventuated: making the case for the indeterminate or stochastic nature of the

‘coupling’ that brought about the event requires evidence of only one such

variation. This counterfactual analysis is presented as part of the cross-phase

summary which concludes the chapter.

To summarise then, in the I/C perspective adopted in this study, the analyst is

guided by the following assumptions:

• Events in organisations do not proceed neatly from problem to solution.

Rather, independent streams of events follow through a system all at

once, each with a life of its own (Kingdon, 1995). These streams are

problems, (concerns of people inside or outside the organisations)

participants (decision makers) and solutions (ideas which ‘float’ in an

organisation independent of a specific problem (Cohen et al, 1972), or

arising from a search of existing options related to a problem (Kingdon,

1995).

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• Change occurs around a ‘choice event’ or decision point in the

organisation, as the random or accidental confluence (Eisenhardt &

Zbaracki, 1992) or ‘fortuitous coupling’ of one or all of these streams at a

critical juncture. Explanation is therefore a matter of combination among

elements, rather than single explanatory origins (Kingdon, 1995).

• Processes are highly fluid (Kingdon, 1995: 222). The decision making

‘arena’, of participants, problems and solution does not stay constant for

long and may change capriciously (Gibbons, 2004). As such, analysts

cannot predict what may happen. However, the process is seen to be

historically contingent: what happens in one phase depends to some

extent on what happened in the previous phase (Kingdon, 1995: 224).

With these assumptions as a point of departure, the analyst is guided by the

following questions when explaining each of the focal events at the end of each

of the three HOUSCO phases:

• What do we need to understand about each of the three streams

(problems, participants, solutions) running independently through the

HOUSCO system in order to understand the focal event?

• What was the necessary coupling or confluence of events or

circumstances at this time which explains the positive outcome of the

‘choice event?’ How did these streams come together?

• How could an ‘easily imagined variation’ (Tetlock & Belkin, 1996)

within one of the streams changed the opportunity for this ‘confluence’

and plausibly have changed the subsequent sequence of events? What is

the evidence for this counterfactual proposition?

Somewhat differently from the previous two studies, analysis within each stream

begins with a combination of both necessary description and partial explanation.

This analysis is structured around each of the organisational streams of

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participants, problems and solutions. Explanation for the focal events then

focuses on the ‘coupling’ or ‘chance intersection’ of these streams which brought

about the decision event. Similar to the advice Kingdon (1995: 20) provides his

readers, I signal that this frame does not lend itself to straightforward narrative

and can seem untidy. Kingdon (1995: 20) uses the metaphor of the juggler: the

analyst must necessarily concentrate on one ‘pin’ at a time to step out the

explanatory components, but the explanation itself relies on seeing ‘all the pins

in the air at once’, in order to view the fortuitous confluence among them. A

summary table (Table 12) is included at the beginning of the study as an aid to

following the argument.

To further evidence the workings of timing or luck, a counterfactual argument is

presented for each phase to demonstrate that a plausible variation in one of the

streams (participants, problems or solutions) would have changed the

opportunity for ‘coupling’, altering the outcome at this phase and therefore for

subsequent phases. This counterfactual analysis is included with the cross-phase

summary explanation which concludes the chapter.

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Table 12: Indeterminacy/Chance Explanation for HOUSCO

Participants Problems Solutions Confluence Explanation

Phase One Receptive Council: problematic preferences

State: preference for traditional policy approaches

Taskforce as joint decision making arena; inner city focus

Council: problem not widely owned – only Finn and Heath ‘attached’

State: problem generally recognised but no particular actors ‘attached’

From town planning solutions to direct provision solutions Commonwealth funding on offer

Event One: temporary alignment of participant groups around taskforce in confluence with availability of Commonwealth funds for specific solution

Event Two: Receptive decision makers in Council - acceptable partial solution emerges

Counterfactual: Conservative Lord Mayor returned at 1991 Council election

Phase Two Receptive Council continues: problematic preferences remain

Receptive state: government elected

Affordable Housing Taskforce as joint arena:

Homeless Shelter as ‘focussing event’ – garners more problem attention

‘Attachment’ of powerful actors in both Council and state

Divergence to convergence: from trust to company

Arrival of Canterbury with acceptable solution

Council: receptive participants — increased problem attention – emerging acceptable solution

State: receptive decision makers— increased problem attention through financial constraint —Canterbury brings solution

Counterfactual: Conservative state government returned in 1998

Phase

Three Receptive Council continues

Receptive state government continues

Continuity of influential ‘attached’ actors

Expanded problem attention

Powerful political actors pay attention

Convergence of two organisations on solution: HOUSCO as amalgam of ‘preferred solutions’ of key actors in both organisations

‘Planets Line Up’: Confluence of confluences

Alignment of receptive participants – problem garners attention of Lord Mayor and state decision makers – solution ‘clears the hurdles’ and appeals to both key actors in both organisations

Counterfactual: Lord Mayor says ‘no’ to HOUSCO

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PHASE ONE

Introduction

In this initial phase of HOUSCO, as for the previous two studies, we focus on

explaining two focal events: the decision to deliver jointly the Chapel Street

development and the decision of Council to seek out the state to form a joint

committee to generate affordable housing solutions. As outlined in the

Introduction to this study, explanation rests on identifying the confluence

between two or more of the elements of participants (or decision making groups),

problems and solutions, which are seen to be independent streams of events and

activities within an organisation. The decision event arises from the fortuitous

combination of these elements, evidencing the workings of timing and/or luck,

rather than resulting causally from one element.

An additional complexity of HOUSCO, as a hybrid organisational form, is that

rather than the one participant stream envisaged by the theory, there are multiple

participant groups, each with their own problematic preferences and each

characterised by fluid participation. Analysis must then also address the

necessary confluence between the two organisations. In this initial phase of

HOUSCO, there are three significant participant groups: analysis must consider

the processes within Council, the State Housing Department as well as the Urban

Renewal Taskforce.

Explanation for the first event focuses on a temporary confluence among

participants and a time-limited solution, and also between the two organisations.

This confluence between the two organisations fell away fairly shortly after this

event: the decision to from a Joint Officer Committee decision is explained as a

confluence of elements within Council alone. The fictionalised names for the

HOUSCO key actors used in the IA frame are retained in this study.

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Participant Stream

Receptive Local Government Administration — but Problematic Preferences

In Kingdon’s (1995) application of Garbage Can Theory, policy ideas ‘take hold’

and progress where decision makers are generally ‘predisposed’ or ‘receptive’ to

paying attention to the problem as a result of values or ideological frameworks.

In this initial HOUSCO phase, a Labor Council Lord Mayor and administration

enters the arena, more disposed to paying attention to the condition of ARA than

their predecessors.

Councillors Finn and Heath had advocated for Council’s attention to the

worsening condition in the inner city during the period of Conservative

administration.

We argued the case in opposition and we continued to argue it in administration, that

all levels of government needed to do more about housing affordability.

The condition had been acknowledged by Council during this pre-1991 period.

An inner suburbs study was established, which noted that there were issues of

housing affordability77, but “no particular measures were taken” (Finn

interview). At that time the Conservative decision makers, particularly the

Conservative Lord Mayor, held strongly to the view that the provision of housing

was the domain of the state government.

I remember [Conservative Lord Mayor] saying ‘we can be compassionate, but when

it comes to providing money, that is not Council business.’ (Heath interview)

77 The commissioning of the Inner Suburbs study was referred to in the Cr Finn interview. The study was also referenced in the study of politics in the city by Wanna and Davies (1995:152), noting that the study recommendations did not become city policy.

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However, 1991 brought an upset election win for a Labor Lord Mayor and the

climate for policy action around a range of social issues became more

favourable78. However, although predisposed to consider taking action on issues

of housing affordability in the inner city, the nature of the policy response was

problematic within the Council decision making group. The executive group was

divided on policy preferences, with Finn and Heath in favour of Council doing

more in the area of housing provision and most of the other Councillors of the

view that policy action in this area would overstep the role of a local

government. The Lord Mayor was supportive of Council having a role in this

policy area, but “needed to be convinced about specific proposals” (Finn

interview). In particular, the Lord Mayor needed to be convinced that the state

government were taking the lead role in this area and not abrogating

responsibility to the Council.79

State Government Problem Ownership, but Preference for Traditional Policy

Approaches

In the State Housing Department, as participant group, receptivity or climate for

policy action in the area of affordable housing in the inner city was of a different

order from Council. That the state was responsible for policy responses to

affordable housing was not in contest, as the provision of housing for those who

could not access the private rental housing market was the espoused mission of

78 That Shaw had an intention to bring a social justice perspective to his term as Lord Mayor is evidenced from his self-report as well as the comment of a senior bureaucrat: My strong social justice perspective was brought to the whole totality of the council, and it certainly had significant impacts on all those decisions, no matter what they were … We were lucky that the cabinet was pretty much on board with that agenda. I joined the Council in about May 1994 and we had a strong social justice brief from the then Lord Mayor, James Shaw … I guess we identified from the beginning was that access to affordable and appropriate housing is one of the critical issues is being able to manage in the city. 79 On the Lord Mayor’s view that to act in the area of direct provision of housing was to allow the state to abrogate its responsibility, the Lord Mayor: It was very clear in my mind the state government at the time was abrogating its responsibilities everywhere

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the department.80 However, the nature of the response to the particular

‘condition’ which was unfolding in the inner city was problematic. The decision

makers at this time demonstrated reluctance to move away from the traditional

model of delivery, which was a centralised state-owned and constructed model.

The idea of alternative approaches to housing in the inner city had arisen, but had

not gained momentum.

The Council Lord Mayor had attempted to persuade state decision makers of the

viability of commercial approaches to affordable housing delivery, using debt

rather than state capital, however he noted the reluctance of the decision makers

to entertain these options at the time.81

Taskforce as Joint Local-State Decision Arena: Inner City Focus

In 1991 the newly-elected Labor Lord Mayor established a taskforce to progress

their vision of urban renewal in the inner-north of the city.82 The Council

appointed a prominent member of the commercial property industry to chair the

taskforce and invited participation from the senior bureaucrats in the state

government to jointly address issues of planning, transport and housing.83

Focussed on decision making around a particular geographic area, the taskforce

effectively became a participant stream in the HOUSCO process. It created a

joint process of decision making and choice events which ran in parallel and in

dialogue with the ‘mainstream’ decision making processes of the two principal

organisations.

80 The Housing Act establishes the state’s role in providing housing assistance to people with a housing need. The State Housing Department is the administrative arm of this legislative requirement. 81 Lord Mayor interview noted that “So they’ve got this huge capital stock literally around Australia, billions of dollars in housing capital and they refuse to leverage off it and to use it to develop new housing choices.” 82 Formal announcement of Urban Regeneration Initiative in Council Minutes 1991-1992 (p2442), including the appointment of the Taskforce and the commitment of state Government representatives. 83 Formal announcement of Urban Regeneration Initiative in Council Minutes 1991-1992 (p2442), including the appointment of the Taskforce and the commitment of state Government representatives.

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Particular to this phase was the choice of the taskforce to focus attention on the

issue of housing affordability in the urban regeneration area. The taskforce was

particularly receptive to policy ideas on the issue and commissioned a Discussion

Paper, which was subsequently tabled in a meeting of full Council in 1993.84

This was the first formal appearance of the problem within the formal Council

processes, as a transfer from the taskforce process to the mainstream

organisational stream.

The Urban Regeneration Taskforce as a joint decision making arena also

progressed the Chapel Street development between the two principal

organisations. The joint working at this time for urban renewal enabled the

submission of a successful joint bid for available Commonwealth urban renewal

project funding for affordable housing. However, this joint approach to decision

making around affordable housing fell away shortly after the delivery of the

Chapel St development. Rather than joint strategy for affordable housing, each

organisation prepared its own policy statement.85

Problem Stream

In Kingdon’s (1995) usage there is a difference between a condition and a

problem. A condition — in the HOUSCO case a sharp decline in affordable cost

rental housing in the inner city — may not necessarily be defined as problem. It

becomes a problem, according to Kingdon (1995:109), when somebody decides

to do something about the condition. In this change from condition to problem

there is a perceptual, interpretive element. One actor’s ‘condition’ may be

another’s ‘problem’ depending on values and interests. Once defined as a

problem, there needs to be sufficient attention given to the problem for policy

and political momentum to gather. That is, a critical mass of actors needs to be

84 Formal announcement of Urban Regeneration initiative in Council Minutes 1991-1992 (p2442), including the appointment of the Taskforce and the commitment of State Government representatives 85 The falling away of cooperation on housing following the Chapel Street development was indicated in the interview with bureaucrat Westphal. The development of parallel, rather than joint, housing policy documents is evidenced in Council Social Policy Working Papers developed at this time.

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‘attached’ to the problem before there is support for its remediation. In this initial

phase of HOUSCO, this critical mass had yet to build.

Council: Condition Not Widely Accepted as ‘Problem’ — but Finn and

Heath ‘Attached’

Prior to 1991, where the HOUSCO process begins, the affordable housing

condition in the inner city had already been flagged as a problem in the local

government arena for some years by Finn and Heath. These two actors firmly

attached themselves henceforth to its remediation. Their argument to their fellow

decision makers was based on a moral proposition: that the social dislocation

caused by the declining ARA had largely resulted from Council’s directions in

urban regeneration and was the legitimate concern of local government, working

as a complement to state government initiatives.86

However other Council decision makers did not readily accept the condition as a

problem. Or, as Kingdon (1995: 111) highlights, they did not frame the condition

as a problem “appropriate for government action.” While Finn and Heath argued

the legitimacy of Council attention to the condition, the other Councillors

remained opposed to action.

The Lord Mayor at this time was prepared to tentatively accept the condition as a

problem, interpreting the condition from an urban planning perspective:

86 That Finn used the argument that Council had a moral responsibility to deal with the consequences of urban renewal was reported by Westphal: … we went to this presentation at Civic Cabinet, and Shaw was going on with this crap, nothing to do with us. And Heath was saying ‘on this side we are encouraging all this redevelopment and on this side affordable housing is going down as a result of all these things we are approving so maybe we should just balance that up ...’ and I could see Tim’s hands moving. And we’re just watching Tim and going ‘yeah, all right!”

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We wanted to try to make sure that there was not the pushing out of the community

type housing, so one of strengths of [inner city suburb] is there’s still a significant

amount of boarding houses and community housing here and it still works. You see

[it] all around the place and that adds to the energy and I think the diversity.

However, he was reluctant to fully attach himself at this stage to proposals for

action, viewing the condition, on balance, to be a problem more ‘appropriate’ for

the state than local government.

State: Problem Owned but No Particular Actors ‘Attached’

For the State Housing Department the condition of a sharp decline in ARA in

these inner city areas was defined as a problem. That is, it was given attention by

a number of political participants and by several senior bureaucrats.87 These

actors recognised however that remediation was not easily tackled.

During this phase, several state participants gave attention to the problem

through the Urban Regeneration Taskforce and gave their support to a joint

proposal with Council for funding for housing projects through a funding

initiative sponsored by the Commonwealth Government — Building Better

Cities. Following the delivery of this housing project, they continued to give

attention to the problem with their own Affordable Housing Strategy, although

there was not a particular political or bureaucratic actor ‘attached’ to the problem

at the time and attention was episodic.88

87 Interview data with a number state government informants referred to several different approaches to inner city housing, including planning solutions and purchase of boarding house accommodation. The second solution was not actioned; the former did not deliver change in the first phase, but was more fully developed in subsequent phases. 88 As for Note 11, informants described the range of policy initiatives during this period, noting that several ‘failed to gather momentum.’

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Solution Stream

In Garbage Can Theory (Cohen et al, 1972) solutions put forward at various

times may not be the direct result of a rational deliberation of a problem at hand.

Rather, ideas ‘float’ in an organisation independent of a specific problem (Cohen

et al, 1972), and may be presented at different times as the proposal for the

remediation of a range of problems.

In this first phase of the HOUSCO process, actors mooted and worked through

with others a range of ideas generally related to the condition of the availability

of affordable housing in the city generally. These solutions were floated by a

range of actors, with different participant groups and at different times during the

five years of this phase. The trust model emerged from Council at the end of this

phase. This was to begin a process of convergence among actors in the

subsequent phases, although other ideas continued to ‘float.’

From Town Planning to Direct Provision Solutions

In this early phase the actors ‘attached’ to the problem of affordable housing

availability, were also attached to their own preferred approach to its

remediation. These represented different framings of the source of the problem.

In this early phase, the problem was largely framed as one of town planning and

the flexibility mechanisms which would permit more low-cost housing to be

built. Council technical officers from the town planning area drafted several

papers as to the options for Council to become involved in the affordable housing

area. The tools or solutions proposed at the time were those of local area plans

and development codes89, pursued largely in the arena of the Urban Regeneration

Taskforce. However, this proved a fairly difficult route to pursue change, as one

Council officer reported of the period:

89 Several policy papers were developed by Council officers, with urban regeneration sponsorship, on the planning options for Council to facilitate affordable housing.

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Up until the late 90’s in [Council] housing was looked on as something that the town

planners looked after. And the thing about the 1994 paper [see note 90], was we took

it and it had all these ideas in it, but not really concrete proposals. Part of it was the

town planners were seen as being responsible for this. And the result was it tended to

get pushed into ‘what’s the town planning [solution].’ And that’s always been the

trouble in [the state], you are planning legislation and you haven’t got the flexibility.

And the planners weren’t really thinking outside the planning discipline. And so they

weren’t able to really go anywhere with it.

However, through the Urban Regeneration Taskforce process there was joint

working on a range of planning mechanisms including statutory covenants90

which would continue into the subsequent phases of the process.

In parallel with the town planning solutions, which sought to indirectly enable

more affordable housing, ideas were put forward about how to directly provide

more such product in the inner city areas. Two related solutions were floated, one

emanating more from Council and one from the State Housing Department. At

this time, Council’s approach, lead by Heath and Finn, but also the Lord Mayor,

was to ‘broker’ the involvement of other organisations and sectors to bring in

more resources to address the issue. There were four strategies pursued. One was

to start the lengthy process with the state through changes to the Planning Act of

raising contributions from property developers who were benefiting from urban

renewal to contribute to affordable housing.91 As Finn illustrates, there was an

ideological or values component to this solution.

90 State Housing Department Manager (Bilson) identified that work had been done on statutory covenants. “That was to, in some respects, assist government, be it local or state government, that if they supported concessions, what legal mechanism was in place to protect that.” 91 The developer levy solution was first raised formally in the Inner City Affordable Housing Taskforce. A State Housing Department Manager noted that Council “was very hot to trot on it.”

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What preceded that, in my mind, was actually a really strong philosophical

view, which I still hold to, that if developers are making super profits simply as

a result of planning decisions that are made by Council and the state the public

is entitled to some share in those super profits. So the proposal I put forward

was that, I knew that that was a controversial idea, so the idea that I put

forward was that we would confine it, we would absolutely guarantee it was

confined to future urban renewal areas, so it wouldn’t apply across the city.

While the long process of advocacy and development of this solution was in

train, the Lord Mayor embarked on a second approach in collaboration with the

Chair of the Urban Regeneration Taskforce and directly sought out particular

property developers who wished to build projects in the inner-city suburbs,

encouraging their contribution to a social housing development.92

Thirdly, Council sought out the resources of the State Housing Department to

build affordable housing on land owned by Council in the inner city:

I think there were about five early sites down in the [inner city suburb] that the

Council very actively encouraged us to put social housing on (State Housing

Department Manager).

Commonwealth funding became available for such projects at the beginning of

this phase, (the Building Better Cities program) and was expeditiously pursued.

The Chapel Street development was the product of this funding, built on land

owned by Council.

Finally, the Lord Mayor strongly advocated his preferred solution of a more

commercial approach to the provision of social housing, creating independent

organisational entities that were able to raise capital from commercial entities.

92 The solution of brokering the contribution of the property development community was indicated by the interview with the Lord Mayor, as quoted previously “[Chair] pulled it together with the developer and the state to actually make it happen.“

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Consistent with the Cohen et al’s (1972) theory, the solutions of developer

contributions and commercial models arose from the philosophical views and

preferences of their proponents and were ‘floated’ at different times as applicable

to a range of problems, rather than being a specific solution to the discrete

problem at hand.

In the state arena, there was some tentative investigation of the solution of

purchasing existing low-cost housing in the inner city to ensure that they were

preserved for that purpose:

We did do a bit of work then around, just some modelling around what if we went and

bought up a whole lot of the cheaper accommodation ... that idea that perhaps just

buying something to preserve its form was an idea and that did have a little bit of

work internally but never really got the momentum up (State Housing Department

Manager interview).

At the end of this phase, local government had cycled through a range of varied

ideas and had delivered the Chapel Street development. The organisation had

reached something of a ‘cul de sac’ in terms of further progress on solutions.93

However, from Council’s standpoint, any solution would necessarily involve the

state government and the idea was put forward by a Council senior bureaucrat,

Westphal, that a joint committee be formed to pursue solutions.

93 See Note 13. Westphal also comments that, at this stage, “We decided there was nothing much we could do …”

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Phase One Coupling Explanation

The I/C perspective draws from Garbage Can Theory to make the case that the

explanation of events is less about a single origin or factor, rather the ‘coupling’

(Kingdon, 1995) or ‘chance intersection’ (Eisenhardt & Zbaracki, 1992) among

several relatively independent organisational elements of decision making

participants, problems and solutions. Using again Kingdon’s (1995) useful

metaphor of the juggler, the preceding Phase One text has stepped through each

of the ‘pins.’ Each is made up of necessary description and partial explanation,

however no single ‘pin’ can form the explanation for the focal decision events in

Phase One. To build this explanation we must throw these three ‘pins’ in the air

at once such that they may be considered simultaneously. It is in highlighting the

fortuitousness of this intersection that we explain how the decision events at the

end of each phase came to pass.

In Phase One there are two focal decision making events: the decision to deliver

jointly the Chapel Street development, and the decision to form a joint officer

committee with the State Housing Department to examine affordable housing

options.

Chapel Street Social Housing Development: Temporary Alignment of Participant Groups through Taskforce Coupling with Time-Bound Availability of Commonwealth Funds for Solution

The decision on the part of both Council and the State Housing Department to

deliver jointly the Chapel Street development can be seen as a confluence of

participant and solution streams. That is, we cannot understand the decision to

jointly propose the development for available Commonwealth funding without

understanding that the receptive Council decision makers which came to power

at the beginning of this period happened to coincide with a readily available

‘solution’ provided ‘on a plate’ by the Commonwealth Government in the

‘Building Better Cities’ funding.

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We saw in the participant stream, that prior to 1991, there was little or no

receptivity within the predominantly conservative Council and Lord Mayor for

proposals which addressed the declining affordable housing condition. The Labor

Lord Mayor and administration, elected in 1991 changed the receptivity for

social policy initiatives. The State Housing Department, as we saw, were

institutionally required to be ‘attached’ to the problem, but attention to solutions

was sporadic. However the state was receptive to a joint approach to issues of

urban regeneration, evidenced by the participation of state actors in the Urban

Regeneration Taskforce, a decision making group initiated by Council.

However, while predisposed to consider solutions that might address the decline

in affordable housing in the urban regeneration area, it was the Commonwealth,

rather than local or state government, who were more firmly ‘attached’ to the

problem and generating solutions in this early part of Phase One. As the Lord

Mayor commented on this period:

the bureaucracy had been trying bits and pieces …The [Commonwealth] Government

started down here by giving us some Better Cities funding, which actually began to

trigger all this stuff here.

Cr Finn equally commented:

One of the principles of urban renewal, which at the time was Commonwealth and

state and council partnership, was to consider issues of affordable housing. I think

frankly it was driven most strongly from the Commonwealth at the time, as a principle

Thus we understand the decision to jointly deliver the Chapel Street development

through identifying the timing (and luck) of the election of the ‘receptive’ Labor

Council in 1991, the confluence within the two Council and state participant

groups to address urban renewal policy, with the timing of the availability of

Commonwealth funding — solution — for affordable housing. It was evidenced

that a similar affordable housing solution was not in the solution stream of either

the Council or State Housing Department organisations at this time.

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Decision to Form a Joint Officer Committee with the State Housing

Department to Examine Affordable Housing Options. Receptive Decision

Makers in Council – Acceptable Partial Solution Emerges

While the Chapel Street development decision needs to be understood with

reference to two organisational streams, this second decision making event in

Phase One can be understood as the ‘coupling’ of the streams within the Council

only. In particular, the joint committee decision emerged through the ‘coupling’

of the Council participant stream (again receptive Council decision makers) with

the problem stream.

As we have seen, following the delivery of the Chapel Street development,

receptiveness to joint working between the two organisations declined,

decreasing the amount of joint attention from decision makers that the problem

of declining affordable housing was receiving. However, within the ‘problem

stream’ in Council, the problem was receiving more attention following the

establishment of the Social Policy Unit. As we have seen, a strong brief of the

unit was to address the affordable housing problem. On joining the unit,

Westphal became firmly ‘attached’ to the problem. Solutions were not close at

hand however, due to the institutional difficulties presented by Council becoming

involved in this area. As we saw, the solution stream to date had generated only

town planning solutions, which as Westphal described “were not going

anywhere”. Westphal as the bureaucratic actor ‘attached’ to the problem, with

the support of Finn and Heath as the political actors ‘attached’ to the problem,

generated enough attention from the ‘receptive’ Lord Mayor in power at this time

for a decision to seek out the state government once again to address solutions.

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PHASE TWO

Introduction

In this second phase of HOUSCO, as for the previous two studies, analysis seeks

to explain the decisions of Council and the state to jointly fund a feasibility study

into the emerging HOUSCO model. As for Phase One, explanation rests on

identifying the fortuitous combination, or confluence between the elements of

participants (or decision making groups), problems and solutions. Different from

Phase One, which identified a confluence between two streams for each focal

event, the Phase Two decision events (Council and state) begin a process of

coupling of all three streams. As an additional complexity of HOUSCO as an

alliance process, explanation also necessarily identifies confluence not just

among the three streams within each organisation, but also between the two

organisations.

Participant Stream

Similar to Phase One, analysis of the participant stream considers not one but

multiple streams. In Phase Two, the participant stream is characterised by

continuation of a receptive Council, although still undecided as to policy

responses to affordable housing, a state government more receptive of innovative

policy responses, changed preferences in both organisations to joint working, and

the emergence of the joint local and state Joint Affordable Housing Taskforce as

a decision making arena.

Receptive Council Continues — but Problematic Preferences Remain

In the period from 1998 the Labor Council administration continued, with

continuing support and expansion of a range of social policy initiatives. The two

senior Councillors, Finn and Heath, continued to advocate for Council’s

involvement in the affordable housing arena throughout this phase but the

Executive decision making group remained divided on the issue. As Finn

observes:

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I would say in fact that I think it would be fair to say that probably at pretty well all

stages, because it was particularly [Heath] and I in Civic Cabinet. A number of

members of civic cabinet represented middle or outer suburban areas where the issue

wasn’t so acute. Some members of civic cabinet would have felt it wasn’t the

legitimate role of local government. Other members would have felt that we were

simply picking up responsibility which was that of the state government. So there

were a whole range of arguments put forward. I think really right until maybe 2001,

something like that. No doubt it was only [Heath] and myself who used to continue to

argue the case as we could. I think it is probably fair to say that the majority of civic

cabinet needed convincing.

The Lord Mayor continued to be sceptical of the state government’s intentions in

seeking Council involvement in the policy area. Finn would describe the Lord

Mayor as being a ‘third category’ within the decision making group.

I mentioned [Heath] and my position, which seems pretty consistent and arguing the

case all along. Then other people who were… agnostics. I think [Lord Mayor’s]

position was probably generally supportive but needing to be convinced about the

specific proposals put forward.

Thus the policy choice of involvement in the delivery of housing remained a

problematic preference among the decision making group. In the face of this

divisiveness on the issue, Heath decided to ‘go it alone’ without the support of

his executive group, to establish a homeless shelter to meet a need in his own

Ward. This trial stirred up much negative community sentiment and had to be

disbanded. This created additional tension within the Council executive group

and enabled the Council opposition to make political capital from the event.

Heath indicated that the Lord Mayor was not supportive of the experiment. “He

hated the idea, HATED it.” However the debate that ensued around the issue

enabled Heath to put the issue ‘front and centre’ within the Council decision

making group.

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Well it was a ‘pricking’ point. We said ‘we have this issue, if you don’t want this (the

trial) what DO you want?

The preferences were not immediately forthcoming, indicating the problematic

nature of initiating responses in this area in local government. However, toward

the end of this phase, Finn and Heath advocated for the HOUSCO model, whose

development they had worked through on the taskforce. Although the executive

group remained divided on the issue, the Lord Mayor was prepared to break the

divide and give his support.

Receptive State Government Elected in 1998

The victory of the Labor party at the state election of 1998 brought a government

more predisposed to considering and responding to the issue of affordable

housing in the inner city, where the previous government had been reluctant.94

This receptivity at the state level aligned with a similar receptivity at the local

level to consider policy solutions. The Minister commented that this confluence

of policy interest, both between governments as a whole and between powerful

politicians, is necessary for joint working:

At the end of the day if you have got two people who don’t particularly like one

another and don’t share any commonality of interest and they happen to be in one

level of government, in two levels of government, the chances are you are not going to

get this to fly.

While the state government were predisposed to consider the problem,

alternative policy solutions had to run a gauntlet of different decision making

stakeholders within the state government, including State Treasury, the Office of

the Premier (leader of the elected state government) as well as staff internal to

94 Noted in State Hansard (2000) Minister for Housing ‘Under the previous government, people in public housing and community housing were pushed to the outer limits of the city as occurred during the [Premier of the day] government. Those people were pushed out to areas where there were no services. I note that one of the first actions of the previous Minister for Housing was to overrule Mr [Minister of the Day’s] plans on the [coastal region of the state]. He scrapped those spot purchases the member signed when he was the Minister. The first thing he did was knock it on the head, because he said, "We don't want those glamour sites." That is the way it was viewed’.

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the State Housing Department. There was a strong preference among internal

housing policy officers and asset managers for the state to retain the traditional

centralised state-owned and built model of housing provision. There were also

strong preferences, to which even the Housing Minister was sympathetic, that

policy solutions remain directed to the traditional user of state housing, the

‘battler’ (State Housing Minister interview). As HOUSCO departed from this

traditional model of delivery, those state actors ‘attached’ to the problem of

declining housing affordability and the decline in state resources to deliver faced

a long process of persuasion with multiple internal groups.

Affordable Housing Taskforce as Joint Decision Arena

The alignment of political and policy interest in affordable housing in the inner

city was manifest in the establishment of the joint local and state Joint

Affordable Housing Taskforce to explore joint solutions to the problem of ARA

in the inner city. The taskforce created an additional stream of choice

opportunities for specific housing solutions which may not otherwise have arisen

in the decision processes of the Council and the state. Importantly for HOUSCO,

the formation of this group fortuitously created a decision arena where the initial

proposal for a charitable trust could be considered.

The taskforce itself was a hybrid organisational entity in two senses. Not only

did it comprise both decision makers from state and local government, but it also

had political and bureaucratic representatives. Councillors Finn and Heath

represented Council’s interest, while the Director-General of Housing — an

executive bureaucrat — was the Chair of the committee. This created certain

decision making tensions between the participants.95 However, when the trust

idea was brought to the Committee by Council and was subsequently developed

within the State Housing Department, there was a clear preference within the

taskforce to provide the full support of the taskforce members to gaining the

required political support.96

95 Tensions noted by Director-General (Chair of the Taskforce), who indicated that the Councillors would become frustrated by what they perceived as slowness on the part of the state. 96 Indicated by interviews with all Taskforce members.

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Problem Stream

This second phase of the process is characterised by more problem attention from

the state government, from both the housing policy and political stream. It is also

characterised by a convergence of attention from both Council and state

government on the condition of declining ARA in the inner city, although the

condition represents a different problem for each organisation.

The Homeless Shelter as ‘Focusing Event’: More Problem Attention Ensues

Kingdon (1995: 95) notes that although indicators may note a worsening of a

problem, they may:

need a little push to get the attention of people in and around government. That push

is sometimes provided by a focusing event like a crisis or disaster that comes along to

call attention to the problem, a powerful symbol that catches on, or the personal

experience of a policy maker.

The four-month homeless shelter trial, initiated by Cr Heath was such a focusing

event. Cr Heath used ward funds at his discretion to establish the shelter in a park

in one of the inner city suburbs affected by the decline in ARA. He claimed that:

the Park trial was not ideological, it was intensely practical. We needed

to ensure these people were sheltered, so we had to address the issues of

the community, including the ‘visual’. It all fell over in three months and

raised a huge problem.

However, while ‘intensely practical’, Heath indicated his intention of awareness-

raising in the establishment of the shelter. Heath stated that that it was necessary

to ‘awaken other levels of government’ when addressing a problem that spans

levels of government.

You have to raise the community consciousness… things like the Choir of Hard

Knocks… you have to make the community see that there is not one face of

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homelessness. You can write papers all you want, but people have to see, including

decision makers.

While both local government and state government opposed the shelter trial,

there is evidence that the focus given to the issue started to garner the attention of

decision makers from both levels of government:

[Lord Mayor] HATED the idea… All sorts of episodes down there, but the fact is that

all of the people that were there, after the trial was completed, in a blaze of publicity,

the state government changed its policy in relation to readmitting people who had

previously run up bills and paid debts with state housing. They changed their policy.

Officially the state government opposed the shelter, even though I had support from

individual ministers, privately, and from policy officers…. the failure of the trial was

the tipping point in terms of raising the profile of these issues of homelessness and

affordable housing. …well it was a ‘pricking’ point. But there were things sort of

bubbling beneath the surface. The homeless shelter brought it right out on the table.

Government policy started to change.

‘Attachment’ of Powerful Actors in Both Council and State

More attention was being paid in the period after the 1998 state election to the

problem of the decline of ARA in several parts of the city. The problem was

identified and owned jointly by both the Minister and Director-General. This

problem attention arose from several ‘focussing events’ including the media

attention to the issue of homelessness which arose from the shelter, but also the

issue of community welfare. The Director-General framed the problem in a

similar way to the Lord Mayor and Councillors Finn and Heath. She spoke to the

change in urban character that the loss of affordable housing would mean to the

character of the inner-city suburbs:

…the loss of affordable housing in that area would have been quite detrimental for

the community, for [the city], for people who had been living over there for some

time. What an enormous influence that would have made on the change of identity for

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that area. It would progressively push not only low income people but just ordinary

working people out of that suburb.

Thus there was a convergence by several actors from each organisation on the

problem, each framing the problem from a similar values perspective. However,

the state had an additional overarching economic problem: the declining financial

ability of the state to deliver housing.

It was just getting more and more expensive to produce additional public housing and

it was becoming a more and more residualised sector. I just knew the way we were

travelling was not going to lead to providing more people in [the state] with

affordable housing options.

In relation to the provision of affordable rental housing in the inner city, there

was the additional problem of prohibitively high land costs that would place a

high burden on the state if the traditional state-owned and built model of delivery

was retained.

Solution Stream

This phase is characterised by moving from divergence (many possible and

‘favoured’ solutions being proposed and pursued) to convergence on the

emerging HOUSCO model. The arrival of Canterbury in 2000 gave momentum

to this process of convergence: his knowledge and experience with social

housing in the UK gave form and substance to earlier, more tentative proposals,

which brought wider political acceptance from both organisations.

Officer-Committee Solutions

At the end of Phase One Council had agreed that Council senior bureaucrat

Westphal should approach the state about forming a joint officer-level committee

to generate solutions to the provision of ARA. This started with a divergent

process, with the individual preferred solutions of each officer being raised:

“they all try out their 'pet thing' about what they want to get out of it,” to a more

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focused process of “what are some realistic options” (Westphal interview).The

end of this process was the solution of a charitable housing trust to which both

organisations would contribute.

Councillor Solutions

The recently formed Joint Affordable Housing Taskforce, which was chaired by

the Director-General, with participation from the two Councillors — Finn and

Heath — was also pursuing solutions, mostly again of a town planning nature:

… we were looking at land supply and looking at planning mechanisms, and

covenants, a range of things they were working on in the inner city.

Additionally, Councillors Finn and Heath continued to pursue their solution of

developer contributions, as the Director-General observed:

But at the time it was very controversial. [Finn], myself and Tim Heath did a lot of

policy work about how you might be able to adjust the Planning Act or indeed the

Housing Act to basically introduce development contributions to affordable housing.

Minister and Director-General Solutions

The Minister and Director-General had earlier jointly undertaken a study tour to

the UK, US and Europe to identify possible models or ‘template solutions’ which

would address their problem of declining financial capacity to deliver social

housing. It is clear that each of these actors had a preferred solution in mind

when they embarked on the trip, which may have been further refined by

examining the templates internationally. For the Director-General this was about

a network approach:

…the trilogy of the three levels of government plus the community sector was always

in my mind an essential equation and particularly after having seen how things

operate in North America and throughout Europe.

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For the Minister, the preferred solution was also cross-government, but also

about a preferred governance model:

There wasn’t one model that stuck out [of the international models]. I looked at ones

that — like the old co-ops and so on. There wasn’t any that really partnered with

another level of government. There wasn’t one that had a commercial board that sat

over the top of it. I basically thought they were the absences out of any models that I

looked at. So pretty much, that model is my own design.

The solution process for these actors therefore did not end with adopting an

international template. The preferences of these actors, informed by personal

values as well as interpretations of their political context, were important in

understanding the convergence on the HOUSCO solution.

However, following presentation of the trust proposal by Westphal to the

taskforce, this solution of an independent housing entity gained traction and

quickly became the predominant purpose of the taskforce.97 Although an early

‘prototype’, the trust proposal had features which made for political

acceptability. The Director-General took the fledgling concept and established an

internal working group in the State Housing Department to examine the idea.

Arrival of Canterbury with a Solution

At this point Canterbury, with long experience in the UK social housing sector,

happened to join the department on a temporary basis, seeking a professional

career change or sabbatical. Canterbury contributed to the generation of solutions

by bringing templates from the UK, but adapting to the political and cultural

context of the state. This greatly expanded the range and scope of the options

being considered:

I think in the very first we were trying to push for 1, 000 units because that's the

minimum in the UK. I mean, in the UK there are a lot of housing associations…

there’s really 30 years of major recent activity that you can draw on. So much of what

97 See Note 20 above.

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we were doing was in my mind quite familiar. It was doing a feasibility study for a

small housing association in [the city] … what would be the economics of scale

subsidy. So I came into this little exercise with immediate assumptions about the

scale. Which, on reflection, changed what was going on … You know, tens of millions

of dollars.

To this threshold understanding of scale, other elements of the HOUSCO model

emerged as the creative contribution of other technocratic actors, including the

proposal of a company structure rather than a charitable trust and the distinctive

features of goods and services tax exemption and Commonwealth rent assistance.

The initial financial modelling of this larger scale housing entity grew the

proposed Council contribution from an originally envisaged $1 million to $10

million. A request to directly fund a further feasibility study into the proposed

company was put to Council by the state government. This request was

approved. As one Council informant commented, participants started to converge

on the HOUSCO solution as “they were hungry for something that had the smell

of success. After a number of false starts around other solutions and a deluge of

talk the decision makers were backing the best-looking horse.”

Phase Two Coupling Explanation

In Phase Two explanation focuses on the decision of both Council and the State

Housing Department to jointly fund the feasibility study into the emerging

HOUSCO model. We can understand this choice event as the beginning of the

process of coupling of all three streams, participants, problem and solution within

each organisation, as Garbage Can Theory suggests. However, we need to

understand it also as a confluence or ‘chance intersection’ (Eisenhardt &

Zbaracki, 1992) between the two organisations on each of these independent

elements. There is therefore an additional dimension of complexity, or

randomness as Garbage Can Theory would suggest, that arises through the need

for a decision from two organisations rather than one, that needs to be considered

when presenting an explanation for the focal event in this Phase.

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State Housing Department Confluence

Again, we consider the workings of timing and luck when understanding how

and why the funding choice came to be made by the state government,

considering each of the three streams of participants, problem and solution. We

look to the timing of the election of the receptive Labor decision makers in 1998

and its coincidence with the severe reduction in traditional sources of housing

funding from a conservative Commonwealth Government, elected in 1997. The

receptive participants brought more attention to the problem of affordable

housing in the inner city, with the Director-General and Minister becoming

‘attached’ to the problem. The election of the conservative Commonwealth

Government, and with it, the change in funding arrangements for housing created

a “…constraining and depressing financial position” (Housing Department

Senior Manager) for the State Housing Department. This confluence of

participants and problem attention created a ‘policy window’ (Kingdon, 1995)

where new solutions to a problem of interest were possible, where previously

there was a reluctance to change the traditional centralised model of state

housing delivery which had been in place since the post-war period. Into this

‘policy window’ we then must consider the ‘fortuitous timing’ of the arrival of

Canterbury from the UK, at a critical juncture in the state’s solution stream.

While a solution search had been conducted by the Director-General and

Minister, and the trust model had been brought to the Joint Affordable Housing

Taskforce by Council (specifically by Westphal), it took Canterbury’s arrival,

with his extensive knowledge of social housing models in the UK to finally

deliver a viable and politically acceptable model — solution — in the emerging

HOUSCO. Additionally, we consider the timing aspect of being able to leverage

funds from a ‘receptive’ Council which happened to be in office at this time.

This leverage was an essential part of the solution in the eyes of key decision

makers.

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Council Confluence

In understanding the Council’s — particularly the Lord Mayor’s — decision to

fund the feasibility study in the emerging HOUSCO model, we look to timing

again in having the Labor administration in office (participant stream), the timing

of the event of the closing of the homeless shelter in bringing more attention and

political awareness to affordable rental housing (problem) and the emergence at

this time of a model which was politically acceptable (solution) which had

previously been elusive. To understand the choice of Council decision makers at

this time is to understand the coupling of these three elements.

Confluence of Two Organisational Participant Streams

The choice to fund the feasibility study for HOUSCO as a joint venture needed

to emerge from the streams of both Council and the state. Therefore an analyst

must consider an additional dimension of confluence, which is the timing which

brought two receptive decision making groups into office during the same period.

This alignment was critical for HOUSCO to be created as a joint venture. As we

saw in the participant stream, this alignment brought the Joint Affordable

Housing Taskforce into being, which in turn brought decision making

momentum to the development of the model. As the Minister commented, it is

unlikely that HOUSCO was going to ‘fly’ without this ‘commonality of interest.’

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PHASE THREE

Introduction

In this final phase of HOUSCO, as for the previous two studies, analysis seeks to

explain the final decision of Council and the state to jointly fund HOUSCO as a

joint venture company. Analysis makes the case that these decisions represent a

‘confluence of confluences.’ That is, explanation focuses on the continuing

‘fortuitous alignment’ of all three streams: participants, problem and solution

within each organisation. But, importantly for HOUSCO as a joint venture, the

alignment between the two organisations continued, with receptive participants in

power in each organisation remaining in their positions. As several participants

independently suggested, seemingly the planets were in alignment.

Participant Stream

In Phase Three the participant stream is characterised by continuation of

receptive decision making governments at both local and state level, although

approval for the emerging HOUSCO policy response was not unproblematic. It

is also characterised by more receptivity at both levels to working together on

this specific affordable housing initiative, with these choices informed by the

decisions of the Joint Affordable Housing Taskforce as the third, joint decision

making arena.

Continuity of Receptive Participants in Council, but Problematic Preferences

until the End

The Labor Party continues to retain power in Council during this final phase.

Importantly for HOUSCO, the key proponents of this initiative, Finn and Heath

also continue in office. Thus the receptivity to this form of policy initiative

continued within Council, however the path to approval remained problematic.

Opposition for the HOUSCO initiative within the Council executive group was

overcome when the Lord Mayor indicated his support for HOUSCO. However,

the Council opposition party mounted intense debate in the Council Chamber

over Council’s legitimate financial role in housing at the time the HOUSCO

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proposal was put for budget consideration.98 Internally with the Council

organisation, there was opposition from several bureaucratic quarters who raised

concerns that Council’s interests were at risk with this untried model.99 The

HOUSCO model was scrutinised closely by the financial, asset and legal

functions of Council, notwithstanding that these assessments had been

undertaken by their state counterparts.

Continuity of Receptive Participants in State Government, but Multiple

Hurdles

Receptivity among participants continued also at the state level, with the Labor

government remaining in power and the HOUSCO proponents also remaining in

their roles. However, similar to the local government decision making processes,

the path to final approval was set with hurdles. The Director-General gave an

indication of the multiple decision points of this final phase:

So that took a lot of work but it was a real test of our expertise to be able to get

something that the Treasurer and the Under Treasurer were persuaded was a good

way to go. Then of course, once you get through that hurdle, it’s then got to go

through the Cabinet Budget Review Committee process and also the Cabinet process.

So it’s a big hurdle.

Most uncertain and problematic of all was the necessity to engage the

Commonwealth government, as an additional participant group, in order that they

make a choice in favour of HOUSCO obtaining charitable status. This was an

important element of the model. This was not guaranteed, as the Minister

comments, and chance played a part:

I just legitimately put a model to them that they basically in the finish could not

say no to. That was the hardest pitch to get over … They certainly did not have

to do it. As I understand it, they have not necessarily gleefully embraced

98 Indicated in Council Minutes 2001-2002, also referenced in joint interview with Westphal and Canterbury. 99 Interview with Neal regarding “bringing people inside the tent …” and the reluctance of the CFO and others for Council to become involved.

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anybody else trying. I understand [another state government] tried to and

didn’t meet with the same level of success.

This phase was also characterised by a joint Council and state decision making

forum, dedicated to progressing the HOUSCO proposal through each of the

formal Council and state decision making processes. This control group oversaw

the final development of the model and ensured coordination of decision making

processes through the Council and state organisations. Executive bureaucrats

worked closely with decision makers in each of their organisations to turn

tentative receptivity into approval for the specific HOUSCO solution being

proposed.

Problem Stream

This third phase of the process is characterised by key actors continuing to be

‘attached’ to the problem and the problem benefiting from expanded technical

attention from the policy stream and interests from stakeholder groups. This

convergence of policy attention finally garners the attention of powerful political

actors.

Continuity of Key Actors ‘Attached’ to the Problem

In the final phase of the process there was continuity of the key actors ‘attached’

to the problem, including Finn, Heath and the Minister from the political arena

and the Director-General from the policy arena. Each of these actors continued to

advocate for policy attention to the issue of affordable housing in the inner city.

On the Council side, the case to be made was that Council had a legitimate role

in housing delivery and that Council involvement could ‘make a difference.’ In

the realm of the state government, the Minister and the Director-General had to

continue to advocate for alternative policy approaches to the issue of housing

provision. As the Director-General commented, the argument had to be made for:

…the value of something new… Argue it with the community housing sector. Argue it

with bureaucracies just within the [State Housing Department] and people who were

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wedded to the public housing system and the asset management people who found it

very threatening.

As Finn phrased this, in the Council arena he and Heath:

… felt a responsibility to keep the candle going, you know, and there were plenty of

times when the candle could have blown out.

Expanded Problem Attention

In this final phase the amount of attention given to the problem was expanded to

include a range of senior bureaucrats from the State Housing Department and

other departments working with the Minister and Director-General on the

problem. Additionally, in the Council arena the executive bureaucrat, Neal,

joined forces with the Director-General to continue to make the case for problem

attention. Neal commented on the sustained attention such a problem requires to

gain the support of decision makers:

… it required an incredible amount of tenacity on the part of the bureaucrats that

were involved in it and the politicians ... It’s something about the ability of leaders to

persevere with an idea and not to give up when there’s an obstacle … they (the

political decision makers) have no patience …

Powerful Political Actors Pay Attention

At the end of this process of sustained problem attention and advocacy the key

decision makers on the part of the state and Council were brought into the fold.

As the Lord Mayor commented:

It was Tim and David who used to harass me and I used to say no, I’m not putting the

money on the table. But when we — we would argue about all sorts of things — but

when we came to the conclusion and I said okay, well let’s see how we go, there was

no real further debate. People like [another Councillor] – it wasn't her domain and

jurisdiction but she was very supportive. But there was this thing, it’s not our

jurisdiction, keep out of it.

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In the state government, the key decision makers in the powerful portfolios of

Treasury and Premiers lent their support after sustained advocacy from the

Minister:

I kept the Cabinet briefed on it with regular Cabinet submissions on it about it and

lengthy discussions over many beers with [Treasurer] I am sure he drove it equally –

in equal parts over there in Treasury. By the end of it, it was [Treasurer] shelling the

money out.

Solution Stream

In Phase Two of the solution stream the organisational actors were starting to

converge on the developing HOUSCO model as a solution that would be

endorsed for political support. This solution emerged at the end of a lengthy

period where a number of potential solutions had failed to gain sufficient

momentum. These included solutions around adjusting planning regulations,

attracting additional revenue streams, Council providing shelters in parks and the

state buying up low cost accommodation in the inner city areas to retain their

purpose. It was suggested by one informant that the actors were “hungry for a

solution with the smell of success.”

As Ferguson noted, the HOUSCO model presented a “concrete vision that

actually tick(ed) the right boxes.” For both Council and the state, the ‘box’ they

had in common was that the HOUSCO solution had to be financially and

commercially viable such that it mitigated potential political risk. However other

‘boxes’ that the HOUSCO model ‘ticked’ were particular to each of Council and

the State Housing Department, and also powerful departments within the state

government. Each of these organisational actors saw their preferred solution

represented within the overall HOUSCO solution. HOUSCO was in fact a

composite of the partial solutions to which key actors were ‘attached.’

For Council a ‘deal-making’ feature of HOUSCO, as well as the institutional

benefit of being at ‘arms-length’ from Council, was the potential for a revenue

stream from the contributions of developers from levies imposed on

developments in the inner-city area. This was a favoured solution of both Finn

and Heath. It was also clearly in the mind of the Lord Mayor, as evidenced by his

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deliberations at the time of deciding to include the required $10 million in

forward budgets:

And it was in the context that we thought — we’d got an agreement around the extra

money from the development industry (contributions), so it was our $10 million, the

extra money we thought we could raise, which would have been another $10 [million]

at least, and then we really had some momentum around it.

For the State Housing Department a key attractor was that HOUSCO would be

an entity independent of the department, able to have more flexibility in its

revenue raising and modes of delivery. As one Housing Department Senior

Manager explained:

Yeah, and that was that attractiveness, I think, about setting it up clean to start with,

you know … really as an alternative model not burdened by some of the public sector

administration which definitely has some advantages by being able to work in that

not-for-profit charitable area.

This ability to deliver low-cost housing more efficiently and flexibly than could

be delivered internally was a strong preference of several State Housing

Department bureaucrats.100

Additionally HOUSCO had the attractive feature for the Minister of being

delivered in partnership with local government rather than the traditional partner

of the HOUSCO department — the community housing sector:

I guess the other reason that it came — I wanted something different than what we

were doing. I was increasingly frustrated at the lack of action from the [community

housing associations]. My aim …was to get some critical mass into those

organisations and quite frankly we just met with enormous resistance … I need a

model that would go over the top of that.

100 Interviews with all State Housing Department interviewees mentioned that efficiency was a key test for any model. This is evidenced in Study One.

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Phase Three Explanation

Explanation for the final and definitive decision making event — the decision by

both organisations to incorporate and fund HOUSCO — focuses on the strong

alignment in this period of all three organisational streams (participants, problem

and solution) within each organisation and between the two organisations.

Several informants independently observed the strong confluence which occurred

during this period, with a number of these using the metaphor of the

‘stars/planets lining up.’ Another spoke of recognising at the beginning of this

period the rare window of opportunity that was opening through the confluence

of receptive decision makers at both levels and that this was the time that a

breakthrough was possible. “It was, all the sudden they were there and you

either had to do it now.”

Again, as identified in the Phase Two analysis, explanation must look to

confluences within the streams of Council and the state, but also between the two

organisations. We must look to the workings of timing (or luck) (Eisenhardt &

Zbaracki, 1992) which brought these two groups of receptive Labor politicians

into alignment at the same time in 1998 and kept them in power and alignment

through Phase Three — long enough for the acceptable solution to emerge and

be developed. This alignment is key to understanding how the incorporation and

funding decisions from each organisation came to pass.

However, while we can see that this alignment was necessary to make the

‘window of opportunity’ open for the HOUSCO (as joint venture) decision, other

fortuitous elements, involving the elements of problem and solution, need to be

considered to provide a more complete account of how and why the decisions

came to be made. Specifically, we also need to understand the timing and luck

involved in the Lord Mayor finally giving his attention to the problem of

affordable housing. We also need to consider the timing and luck involved in the

acceptable solution — the HOUSCO model — coming together at that point.

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As we saw in the problem text, the Lord Mayor remained unconvinced until the

final phase of the process that the condition of the decline in affordable housing

was a problem ‘suitable for [local government] attention’ (Kingdon, 1995). That

is, he declined to ‘attach’ himself to the problem and it was a long process on the

part of those Councillors close to him, Finn and Heath, to bring him into the

problem stream. He did finally agree to commit local government budget to the

problem, after strong persuasion. However, as several informants independently

commented, this was by no means inevitable. As Cr Finn, as Deputy Mayor and

the Cr who worked most closely with the Lord Mayor, commented “it could have

gone either way. He’s gone the other way on other things.” The Lord Mayor

himself commented that in the particular year that the HOUSCO funding was

committed “I had a good budget” and also that there was at the time of his

decision being made the possibility in the HOUSCO solution of substantial

revenue flows from developer contributions. The decision can be understood

through the timing of these particular elements of the solution.

Additionally, explanation must also consider the timing and luck involved in all

the necessary elements of the HOUSCO solution coming together. Critical to the

model, particularly from the point of view of the State Housing Department, was

the charitable status of HOUSCO which needed to be conferred by

Commonwealth taxation.101 The necessary decision by the Taxation Office to

confer charitable status in some respects appears to be the rational outcome of

the strong case that was made (“I just legitimately put a model to them that they

basically in the finish could not say no to ... [the] Minister”). However, the

Minister identifies a timing aspect of this event. “They certainly did not have to

do it. As I understand it, they have not necessarily gleefully embraced anybody

else trying. I understand the (another state government) tried to and didn’t meet

with the same level of success.”

101 That the Tax Office would grant charitable status to HOUSCO was never guaranteed. Correspondence between the Tax Office and Alan details a range of issues on which the Tax Office needed to be satisfied. Minutes of the October 12, 2001 Project Control Group detail a list of actions to be taken assuming charitable status was not granted.

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Thus, when explaining the ultimate joint decision to incorporate and fund

HOUSCO, we look to all three ‘juggling pins’: the chance alignment of receptive

Labor politicians which opened the window of opportunity, the luck and timing

involved in the Lord Mayor owning the problem and funding the solution, and

the timing involved in that acceptable political solution coming together at this

critical juncture. We find not just a confluence of participants, problem and

solution within one organisation, but two. This might be deemed a ‘confluence of

confluences’.

“Suddenly … it just all came together…” (State Housing Department Manager)

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CROSS-PHASE SUMMARY: CONFLUENCES AND RANDOM WALKS

This study has examined the workings of timing and luck at each of the three

phases of the HOUSCO process. By applying this frame, we can understand the

final decisions on the part of Council and the state less as the outcome of an

orderly process of rational deliberation, but rather, as an unpredictable and

somewhat random sequence of events which could easily have moved the

HOUSCO process in another direction. As Garson (2008) states, the movements

of an organisation toward a solution may (in the Garbage Can Theory) be

described as a random, stochastic walk better than as linear progress.

This final summary will draw together these themes identified in the I/C study of

the HOUSCO process. Firstly, discussion will focus on the findings of the study

as an application of Garbage Can Theory within alliance processes. Secondly,

underscoring the indeterminate nature of the HOUSCO outcome, a short

counterfactual analysis will demonstrate the ‘random walk’ nature of the change

and development process. The analysis will demonstrate that the HOUSCO

outcome could easily have not occurred, by considering a few ‘easily imagined

variations’ to events at each phase.

HOUSCO Decision as ‘Confluence of Confluences’

The study has made the case that the focal decision events at the end of each

Phase of the HOUSCO process emerged from a fortuitous ‘coming together’ of

two or more of participants (decision makers), problems or solutions. Table 12

outlined each of these ‘coupling explanations’, arguing that finally, in Phase

Three, that ‘the stars lined up.’ That is, that there was a coming together of

participants, problems and solutions, not only within each of the organisational

arenas, but also between the two organisations. At the end of Phase Three, both

Council and state decision makers were predisposed toward acting on affordable

rental housing. The problem was owned by a critical mass of decision makers

and bureaucrats from both organisations and a politically acceptable solution for

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both organisations had emerged. (“Suddenly it all came together”, State Housing

Department Manager Interview).

This need for ‘coupling’ internally within each participant organisation and also

between organisations seeking alliance, adds another dimension to Garbage Can

Theory, which was designed as an explanation for decision making within single

organisational decision ‘arenas.’ While decisions within organisations are

subject to the workings of ‘timing and luck’, this indeterminacy is compounded

when two organisations must be aligned. This sheds additional light on the

phenomenon of alliance instability or fragility. Kingdon (1995:195) notes that

“windows (of opportunity) close quickly… if a chance is missed, another must

be awaited.” In an alliance process, this ‘window’ where conditions are ripe for

the alliance ‘solution’ may be briefer if both organisational streams must be

receptive to making that choice. Having made the alliance choice, fluid

participation of decision makers and changing preferences within each

organisation party to the alliance may mean that the alliance ‘solution’ may

quickly fall out of favour. As Gibbons (2003: 766) reminds us the decision

making arena does not stay constant for long and may “change capriciously.”

Analysis of an alliance process then needs to consider that the alignment of two

decision making ‘arenas’ may be yet more ‘capricious.’

Therefore, HOUSCO, as an alliance process can be explained not just as

‘confluence of participants, problem and solution’ but as a ‘confluence of

confluences’ where there must be coupling both within Council and the state of

these streams, but an alignment between the two.

Change and Development Process as ‘Random Stochastic Walk’

The I/C frame sensitises the analyst to the probabilistic nature of the HOUSCO

outcome. Applying this frame is a useful corrective in historical studies, where

the outcome can appear logical and inevitable with the benefit of hindsight. As

the Minister commented:

…I think it will be looked back upon as being something that was very innovative for

its time… I think people will also say, it was so bloody simple, why didn’t someone

think of it before? [But] I don’t think I have faced as many challenges about most

other things that I have done in life than that.

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By virtue of this frame we can see that the HOUSCO outcome could not have

been predicted by rational analysis of initial conditions. At each phase a different

turn of events, or ‘twist of fate’, may have turned the process in a different

direction. To evidence the stochastic nature of the process, a further analytical

step is required to make the case that, were there to be an ‘easily imagined

variation’ (Tetlock & Belkin, 1996) within one of the streams, the focal event

would plausibly have not have occurred, conceivably terminating the HOUSCO

development process at that point.

This counterfactual analysis uses the methodological criteria of Tetlock & Belkin

(1996) for developing counterfactual statements that are legitimate, plausible and

insightful. The analyst is focussing on conceivable events that could have easily

redirected the logic of events:

The investigator wants to know what was historically possible or impossible within a

circumscribed period of time and set of relations among political entities. To make

this determination they draw from … in-depth case specific knowledge of the key

players, their beliefs and motives and the political-economic constraints under which

they work (Tetlock & Belkin, 1996: 7).

Tetlock & Belkin (1996) direct the analyst to counterfactual propositions that

meet the ‘minimal rewrite of history’ rule: Propositions should not require

‘undoing many events.’ They should also meet tests of clarity and logical

consistency.

For each focal event, one counterfactual proposition is presented. It is not

necessary to establish the multiple ways that the focal event may not have

eventuated: making the case for the indeterminacy or stochastic nature of the

‘coupling’ that brought about the event requires evidence of only one such

variation. The counterfactual propositions are summarised below, with argument

and evidence following for each.

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Counterfactual Propositions

Phase One Counterfactual Proposition: Had the conservative Lord

Mayor and administration been returned to Council office in 1991, each

of the focal decision events of Phase One would not have occurred.

Phase Two Counterfactual Proposition: Had the conservative party been

re-elected to government in the state election of 1998 the choice of

funding of the feasibility study into the emerging HOUSCO would not

have arisen.

Phase Three Counterfactual Proposition: Had the state communicated

earlier to Council that they would not approve the application of a levy on

new property developments, the Lord Mayor would not have committed

Council budget to the HOUSCO initiative.

Phase One

The counterfactual proposition is put that, had the conservative Lord Mayor and

administration been returned to Council office in 1991, each of the focal decision

events of Phase One would not have occurred. That is, there would have been no

joint Chapel Street housing development, and no decision to form a joint

committee with the state to explore options for affordable housing. The re-

election of the incumbent conservative Lord Mayor is an ‘easily imagined

variation’ on actual events in the participant stream in Council: the 1991 election

was an upset win for the new Labor Lord Mayor.102

102 That the local government election was an ‘upset’ win for Shaw is evident from the local press coverage of the event. A scholarly article from the period (Tucker and Neylan, 1994) … records that “her (previous Lord Mayor’s) defeat … was generally viewed as a major electoral upset”

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That the conservative Lord Mayor would not have given attention to the problem

of declining rental affordability is evidenced from her actions and statements to

Councillors Finn and Heath who argued the case for Council involvement for

several years prior to 1991, as indicated in the participant stream analysis.

Finn: “We had argued the case in opposition and we continued to argue it in

administration, that all levels of government needed to do more about housing

affordability”.

Interviewer: When you said you were arguing it in opposition, were you getting much

traction on that issue at the time?

Finn: No. Not at all

Cr Heath indicated that this lack of attention to the arguments for Council

involvement were a matter of political principle and therefore unlikely to have

altered as the conditions worsened:

I remember (conservative Lord Mayor) saying ‘we can be compassionate, but when it

comes to providing money, that is not Council business.’

Moreover, when several informants were independently asked the direct question

about whether a social housing initiative would have been supported under a

conservative administration, all responses were immediate and vehement:

Heath: DEFINITELY NOT! Definitely not.

Finn: Absolutely not … I am not condemning them for that, it is just not in their

philosophical sort of field, that’s all. I think it absolutely would not have happened

and my memory, is in Council they [conservative opposition] frequently argued that it

shouldn’t happen, that Council should not be doing it, that you know we were being

duped by the state and various other things is my memory.

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It is probable therefore that, when Commonwealth money became available in

this period for an affordable housing initiative as part of a broader strategy of

regeneration, that a conservative Council would not have put up a joint proposal

with the state for a development such as Chapel Street. While the conservative

Lord Mayor had started a process of urban regeneration, it is highly improbable

that she would have initiated a process of collaboration with the state to attract

funds for an affordable housing initiative. It is also highly unlikely that she

would have approved the use of Council land (such as the Chapel St property) for

use in a social housing initiative.

Thus the solution provided by the Commonwealth funds would still have

emerged, but would not have been ‘coupled’ or would not have intersected at that

time with receptive Council participants to enable the Chapel Street

development. It is also improbable that a solution stream would have developed

in Council around the affordable housing condition such that a proposal would

have come forward to form a joint committee with the state on the issue. The

solution stream may have conceivably been centred around town planning

solutions which might have enabled more density in the inner-city suburbs

affected, as this represents an arms-length approach in keeping with the

traditional remit of local government. However, it is not probable that any

proposal, however indirect, regarding the provision of housing would have been

generated from Council at this time. Thus, neither solution nor receptive

participants would have emerged.

Phase Two

Explanation for Phase Two highlighted the ‘coupling’ of receptive participants in

the Labor state government, elected in 1998, with a receptive Labor

administration in Council, and also with the arrival of an expert in social housing

who was to bring the ‘missing piece’ in the form of an acceptable model of social

housing that would garner the confidence of all actors. To absent one of these

elements would be to change the trajectory of HOUSCO. In the previous phase

the argument was put that a conservative win at the Council elections of 1991

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would have cruelled the possibility of the Chapel Street development and further

collaboration with the state government on affordable housing options. This

counterfactual holds equally for Phase Two for the reasons presented in Phase

One: it is improbable that a conservative administration at the local government

level would have made the decision to commit Council budget to a social

housing company.

However, at this phase we propose the counterfactual that re-election of the

conservative party at the state government elections of 1998 would have meant

that the choice event of the funding of the feasibility study into the emerging

HOUSCO would not have arisen. A conservative election win is again an ‘easily

imagined variation’ on actual events, as the conservatives were the incumbent

government with more probability of electoral success than an opposition

government.103

While a conservative state government would have faced a similarly

“…constraining and depressing financial position” (State Housing Department

informant) as a result of declining Commonwealth funding to the state for

housing, it is improbable that a solution would be developed that involved

collaboration with the Council to deliver affordable rental housing in the inner

city. Most directly, the Joint Affordable Housing Taskforce — the vehicle

through which the HOUSCO model as a joint initiative was born and developed

— was brought about by the confluence of a social network of Labor actors in

power at both levels at that time.104 Had the conservative party been re-elected to

the state government in 1998, it is improbable that an actor from either level of

government would have initiated such a decision-making vehicle.

103 ‘Incumbency advantage’ of governments is a widely held tenet of politics. For example “Incumbency is a major advantage in political campaigning”. (The Australian, March 3, 2010). 104 Indicated in the interview with Westphal and Finn. Strong social ties between Labor actors through the state Labor party.

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Moreover a conservative state government would have been unlikely to initiate

development of a model which sought to increase the supply of affordable rental

housing in the inner city. Evidence suggests that developing in the inner city was

not their policy preference.105 As such there would be little of the ‘commonality

of interest’ with Council that the Minister identified as being vital for such a

project to succeed.

Again, informants, this time from the state government, were asked if they

thought HOUSCO would have been funded under a conservative state

government. Again they were definitive in their view that it would not. As one

example the Minister, when asked:

Interviewer: I think had you been also a conservative state government at the time …

Minister: It wouldn’t happen

Phase Three

Counterfactuals presented in Phases One and Two demonstrate that the

alignment of ‘receptive’ participant groups (Labor governments in both local and

state governments) which occurred at the beginning of Phase Two could easily

have been otherwise, underscoring the workings of timing and luck in reaching

Phase Three of the process. In the HOUSCO case, not merely one decision

making arena may change ‘capriciously’: two arenas must line up around

participants, problems and solutions as the Phase Three explanation

demonstrated. However, the fortuitous nature of this alignment is demonstrated

when considering the ‘easily imagined variation’ that the Lord Mayor may not,

in the final assessment, have committed Council budget to the HOUSCO

initiative. This counterfactual is certainly ‘easily imagined’ as the problem

stream analysis in Phase Three evidences that ‘he could have gone either way.’

That this would have stopped HOUSCO in its tracks as a joint venture does not

require much evidencing: Council budget is proposed by the Lord Mayor and

funding decisions are his.

105 See Note 17.

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This is a self-evident counterfactual, however it is worth considering why the

Lord Mayor may not have, in the final phase have approved the budget and

consider another level of ‘easily imagined variation.’ As the problem stream

analysis demonstrates, the Lord Mayor in making his decision had factored in the

revenue stream which would flow from property developers being levied on new

development, with the revenue then being used to fund affordable housing

developments in the area. That this was always considered a fundamental and

necessary element of the HOSUCO model at the time is evidence by Finn:

Finn: Well I think they (developer contributions and HOUSCO) were parallel ideas

in a sense at all stages.

Interviewer: It was all part of the model in your view, the developer…?

Finn: It was a part of the model, yeah. I mean, as we know it wasn’t, as we have

known since, it wasn’t a necessary or essential part of the model but I saw it as part

of the model because obviously all the time we had to argue support for the project on

financial grounds, so I guess what I was looking for was some ongoing revenue

support, revenue streams to support the project.

This ability to apply a levy was always dependent on the state approving this

change to the Planning Act. However that this approval would be forthcoming

was always a strongly held assumption of Crs Finn and Heath, and the Lord

Mayor.106 However, in April 2003, nearly one year after the incorporation of the

HOUSCO joint venture, the state government, through the Deputy Premier,

announced that they would not be supporting this change to the Act: Council

would not be allowed to collect developer levies and Council would have to

return monies (several million dollars) already collected. This event raised a

106 Interview with Finn indicates that there was an assumption that the levy would be supported “I will never know what eventually changed their ideas on that. It had support of the Joint Affordable Housing Taskforce. We were told it had the Minister’s support.” The Lord Mayor would in all probability have ‘gone another way’ on the HOUSCO decision, had this decision of the state been made prior to 2002. The Lord Mayor was distrustful of the state (Lord Mayor interview) that they would abrogate their responsibilities to funding social housing in the inner city. This decision regarding the levy would both have reinforced this view, and have meant that the business case, assuming revenues from the levy, would be less convincing.

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great deal of anger from Council, directed at the state political actors. Had this

decision been taken prior to HOUSCO incorporation, it is probable that the Lord

Mayor would have taken this as confirmation of his view that the state would

abrogating their commitment and responsibility for social housing. This, and the

fact that this anticipated source of revenue for HOUSCO would not be part of the

model, would likely to have meant he would not have given his support and

budget approval for HOUSCO.

CONCLUSION

The chapter has explained the HOUSCO case through the I/C frame. The study

found each decision along the HOUSCO path needed an extra dimension of

timing or luck (Eisenhardt & Zbaracki, 1992), in that ‘coupling’ needed to occur

both within each organisation, as well as between the two organisations. The two

organisations needed to be in alignment, with the decision making arena of each

containing receptive participants, sufficient problem attention and a solution

acceptable to that group of participants. This ‘confluence of confluences’

occurred in the final phase of the process, offering a brief window of opportunity

for HOUSCO to be funded and incorporated, and henceforth become an entity in

its own right, at arm’s-length from the decision making arenas of each

organisation.

The study also found that the general movement of each organisation toward

HOUSCO could easily have been different. Plausible variations to events could

have removed the opportunity for the ‘coupling’ of streams at each phase. Thus

the study found that the HOUSCO process of development and change

resembled more a stochastic or random walk, with the process path having the

potential to take a different turn at each phase.

Having explained the HOUSCO process through each of the three perspectives

of ED, IA and I/C, the next chapter addresses the research questions, comparing,

contrasting and critiquing the explanations provided through each perspective.

Chapter Seven argues for the distinctive explanatory contribution of the IA frame

and provides two propositions for how IA can be theorised in relation to the

other two perspectives.

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CHAPTER SEVEN: Cross-Frame Comparison and

Multi-Frame Synthesis

In each of the previous three chapters, the sequence of events in the HOUSCO

case was explained through one of three theoretical frames. The first study

explained change and development from the perspective of ED, the basic tenets

of which have underpinned most alliance process research. The second study

applied the IA perspective: evidencing the additional explanatory power

provided by this frame is the primary contribution of this research. The final

study applied a perspective of I/C to the events of this case: this frame has rarely

been applied in studies of alliances or alliance process, although as the literature

review (see Chapter Two) reveals, theorists have observed the stochastic nature

of strategy and organisational change.

Analysis through three separate frames allows comparison and contrast of the

different explanations provided by each; confrontation between the three

uncovers the distinctive strengths and weaknesses of each in understanding how

and why the HOUSCO events unfolded the way they did. This confrontation is

one of the strengths of the analytical approach, offering the possibility of both

revealing the relative explanatory contribution of the IA frame and providing a

theoretically rich account of the case. Additionally, while enabling comparison

and contrast of each of the three frames in turn, using multiple frames also

enables consideration of the relationship between the three frames. Propositions

can be made as to how the three combine to build a more powerful explanation

of causality in the HOUSCO case.

In this chapter, analysis addresses the three research questions. The first two

research questions are addressed by a cross-frame comparison, contrasting and

critiquing the explanations provided by each of the three frames:

• If alliances are socially complex, hybrid forms, what case can be made

for IA as an explanation of alliance change and development in this case?

What additional dimensions does the agency perspective illuminate which

have otherwise been overlooked in the alliance process literature?

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• What dimensions are revealed through the interpretations provided from

the ED and I/C perspectives?

The third research question asks:

• How does IA interface with each of the perspectives of I/C and ED as a

framework by which to understand alliance process and outcomes in this

case?

Two propositions are outlined to address this question, each theorising the

relationship of IA to the other two perspectives differently.

CROSS-FRAME COMPARISON

The analyst has particular challenges when comparing the explanations provided

by the three frames of this study. As Allison and Zelikow (1999: 379) observed

of their own classic multi-frame study of the Cuban missile crisis, the conceptual

models employed are:

…more than simple angles of vision or approaches. Each conceptual framework

consists of a cluster of assumptions and categories that influence what the analyst

finds puzzling, how he formulates the question, where he looks for evidence and

what he produces as an answer.

In this study the frames of ED, IA and I/C are not mere theoretical variations of

each other underpinned by similar assumptions. Each represents a major and

quite distinct research paradigm. The role and merits of each for strategy

research have been debated extensively. It is not useful here to merely repeat or

summarise this debate (for overview see Heugens & Lander, 2009). Rather, this

cross-frame comparison presents the distinctive explanations which each frame

provides for this particular case of alliance process. This frame comparison in

summarised in Table 13 and discussed in the text which follows.

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Table 13: Comparing the Three Frames as Explanations of HOUSCO

Environmental

Determinism

Individual

Agency

Indeterminacy/Chance

HOUSCO

‘story’

Linear, purposeful and rational progression: HOUSCO develops as it is shown to meet the strategic interests of organisational actors.

Institutional transformation resulting from the power, interests and practices of individual HOUSCO actors.

“The planets lining up.”

Evidence

required

Structural forces, both economic and social required a joint venture response from both organisations.

Individuals had legitimate choice to act or not act: these choices shaped the HOUSCO path.

Fortuitous couplings of organisational ‘streams’ opened windows of opportunity for the HOUSCO decision.

Assumptions Organisational actors — unitary, shared view of interests.

Individual actors — contested views

Fluid participation in decision making — shifting preferences

Role of

Managers

Managers as functionaries of the Council and state interests.

Individuals whose personal interests and choices drive the HOUSCO path.

Individuals ‘attach’ to problems and solutions: efficacy only if circumstances open a ‘window of opportunity’

View of

decision

making

events

Aggregate act of senior decision making groups in Council and the state.

Coalitions within the decision making groups win the argument.

Confluence of receptive participants, problem attention and politically acceptable solution converge in the decision ‘arena.’ Also alignment of ‘arenas’ of both Council and state.

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What is HOUSCO a Case Of, According to Each Frame?

In broad terms, each study offers a different ‘story’ of the HOUSCO case,

emphasising quite different factors in explaining how and why the events

unfolded as they did. Consistent with most alliance process research, the ED

study produces a HOUSCO story of a linear, purposeful and rational (if not

totally unproblematic) progression of events to a predictable conclusion. For the

ED analyst, explanation arises from the need of each organisation to address

declining housing affordability. The interests of each organisation drove

adaptation, through creating a new joint structural entity. Meeting the rational,

strategic interests of each organisation provides the overarching ‘generative

mechanism’ which propels the HOUSCO initiative from tentative beginnings

through to a fully developed and endorsed business case. Along the path,

decision points arise as to the efficiency and equity of the various proposals. In

this particular case, a high weight was also placed on organisational risk as a

potential threat to continuation of the process. Consistent with teleological theory

however, as each organisation learns more about the proposal and applies the test

of their own organisational interests, each organisation acts rationally to approve

the proposal and the process moves forward.

In contrast to this orderly narrative, the IA study presents a far ‘messier’ account

of events. Rather than a story of unified, rational organisational purposes in

relation to emerging HOUSCO, the IA story is one of a plurality of individual —

often competing — interests and motivations, changing inter-personal dynamics,

power structures, and the potential for organisational and institutional

transformation. It is also a story of and how actors achieve this transformation.

The same decision points arise, however whether the process depends on the

power and interests of a few key individuals, principally the Lord Mayor and

Minister, each of whom had legitimate alternatives than to provide their support.

In our third study, the I/C frame yields yet another account of events. We are

made conscious of the fluidity and stochastic nature of strategy: at each process

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phase a different ‘roll of the dice’ would quite plausibly have changed the

HOUSCO path. While a decline in housing affordability in the city may have

remained a constant, changes in political and social structures through different

electoral outcomes or through ‘easily imagined’ changes in the decisions of key

individuals would most probably have meant that HOUSCO as a joint strategy

response would not have emerged, or having emerged, would have ‘withered on

the vine’ due to lack of expertise or political support. As several informants

independently observed, this was a story of ‘the planets lining up.’

Evidence Required

Each frame requires different forms of evidence to support the explanation of

events. In the ED study, the analyst is focussed squarely on the economic and

structural environment as the motor driving adaptation choices for each

organisation — Council and State Housing Department. The analysis seeks to

establish that exogenous forces — in this case the decline in housing

affordability in the city — resource scarcity (a shortfall in traditional

Commonwealth funding) and institutional factors necessitated a joint venture for

both organisations, and this stayed constant throughout the seven years of the

HOUSCO process. Additionally, the analysis established that at each process

phase, organisational decision makers were conscious of the strategic interests of

their own organisations. The analysis delved into the institutional context of each

organisation, its rules and constraints and demonstrated that the HOUSCO

proposal was tested against these when ‘turning point’ decisions were made.

IA analysis, in contrast, required evidence that at each decision point, individual

rather than organisational strategic choice decided whether the collaboration

process continued rather than terminated. The Lord Mayor and the Minister were

demonstrated to have a legitimate choice to decline to support the emerging

business model for HOUSCO and that this lack of support would have cruelled

the proposal. Additionally, for a full account of agency as an explanation of

events, analysis needed to demonstrate why these key individuals chose to

support the proposal and how the proposal was able to garner the support of

other critical actors at each stage to develop from a tentative idea to a fully

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developed and established new entity. The analyst needed to find which actors

were powerful in this process, why their agency was explanatory of events, what

their interests and motivations were in relation to HOUSCO and how they went

about the process of bring about a quite significant change in both the policy

scope of Council and the traditional delivery models of the State Housing

Department.

For an I/C analysis, evidence must establish that at each stage of the process, it

was plausible that ‘easily imagined’ variations (Tetlock & Belkin, 1996) in

events would have meant that the decision point did not arise or would have been

decided otherwise. Rather than organisational or individual choice having direct

causal effect on outcomes, the analysis seeks to demonstrate that a favourable

‘window of opportunity’ must arise from the unpredictable alignment of different

organisational streams before agency can have effect. The analysis sets outs the

logical and historical consistency of the argument that a different electoral

outcome, a different complement of individuals in key roles in both Council and

the State Housing Department, or a different final decision made, would have

significantly altered the final outcome.

Different Assumptions

As stated in the introduction to this section, the story that each frame produces

will necessarily be different, as each is predicated on a different cluster of tenets

and assumptions. As the Conceptual Framework (see Chapter Two) outlined,

each frame a priori has a different ontological view of organisation, of the role of

individual actors and how events emerge. In the HOUSCO case, the ED study

features two organisational actors as the key characters of the story. Council and

the State Housing Department each have a single, unitary view as to

organisational purpose and the strategic logic of the HOUSCO proposal in

relation to this purpose.

In contrast, the organisation of the IA frame is more fragmented. We see that,

rather than HOUSCO having a strong logic for all of Council, there is a small

coalition of politicians and bureaucrats who have a strong strategic interest in the

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proposal, emerging from both their personal as well as political and institutional

motivations. While the proposal must be somewhere within a legitimate

boundary of action for Council in order for it to be given any consideration, the

two Councillors are the ‘challengers’ as Institutional Theory would see it, who

must use their power and skill to persuade the more powerful and numerous

institutional ‘defenders’ of the argument for this legitimacy. Similarly in the

State Housing Department, rather than a unitary view of HOUSCO as a strategy

to address the affordable housing problem, there is strong opposition in many

bureaucratic quarters to the commercial model proposed; this opposition is not

completely overcome, although power structures ensure that the proposal is

developed and endorsed. Strategic logic and purpose in the IA frame is contested

within a social order rather than uniformly held.

In contrast with both these frames, the I/C perspective does not see ‘organisation’

itself as a configuration with either shared or contested views regarding

particular projects for any significant length of time. The fluid participation

envisioned in the ‘garbage can’ model of organisational life, including alliance

life (de Rond & Bouchikhi, 2004) means that “audiences and decision makers for

any particular choice change capriciously.” (Gibbons, 2003: 766). As we saw in

the I/C study, the ‘audience and decision makers’ that would have eventuated

from a change in political leadership at either Council level or state level would

have made a far different choice in regard to HOUSCO, should it have emerged

at all.

Role of Managers

The three frames can also be contrasted in relation to the role they see for

managers, or other alliance actors. As we saw in the Literature Review (see

Chapter Two) the ED frame envisions alliance change as relying on ongoing

assessments of equity and efficiency, with ‘middle managers’ in particular

playing a critical role in making these assessments in their organisations’ interest

(e.g. Ring and Van de Ven, 1994). Managers are the functionaries of their

organisation, with a set of tasks prescribed for them in relation to the alliance. In

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the HOUSCO case we can see senior managers making economic and strategic

assessments as to the logic of an alliance between Council and the State Housing

Department, undertaking the operational activities of commissioning economic

viability studies, participating in working groups and taskforces, and presenting

proposals to decision making bodies.

By contrast, in the IA study, individual actors have purposes and motivations

which, while they may be informed by the organisational and institutional

context, may also be personal. Rather than being ‘faceless abstractions’

(Faulkner and de Rond, 2000: 377), in the IA frame alliances are populated by

men and women whose own particular and individual interests and choices (De

Rond and Bouchikhi, 2004) drive the course of events, rather than being

administrators of a process determined outside themselves. Among a range of

examples, in HOUSCO we see the interests and entrepreneurship of the two

Councillors (with others) as ensuring Council’s sustained involvement in the

HOUSCO process and ultimately the decision of the Lord Mayor.

In the I/C frame, individual actors are seen to ‘attach’ to ideas or solutions, either

personally or on behalf of the organisation, but, unlike the IA frame, they are not

seen to be able, by force of will, to shape the decision making process around

this. Their idea or solution may or may not rise to the top of an organisation’s

agenda depending on an unpredictable flow of multiple streams of problems,

interests and options and the fluid participation of decision makers in

organisational life. Should these streams happen to converge to consider their

solution, decision making will be unpredictable and will depend on the mix of

individuals who exist at that time in the decision making ‘arena.’ In the

HOUSCO case, we can see that ultimately, “it just all came together” as one

informant observed. Circumstances allowed the individuals ‘attached’ to the

preferred solution of HOUSCO to remain in the decision making arena long

enough that the affordable housing problem and political interests of decision

makers converged to make a decision in their favour more probable.

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View of Decision Making Events

In each study the focal event to be explained is labelled consistently (i.e. decision

to jointly develop the Chapel Street development, decision to form officer level

committee, decision to jointly fund a feasibility study, decision to establish and

fund HOUSCO as a joint venture). However, there are distinctive differences in

the way each frame perceives and explains these events. In the ED analysis, these

decisions are the aggregate act of the senior decision making groups of both

Council and the state. No member of the group is perceived to have a greater

interest in the outcome than another. The ED analyst explains this decision by

setting out the rational organisational argument, from which the decision making

event is seen to follow inevitably. In the HOUSCO case, the compelling strategic

case for joint action on affordable housing for each of the two organisations

mounts, backed up with analysis that identifies how the organisational risks of

action would be mitigated.

In contrast, an IA analysis suggests that, rather than an aggregate act, each

decision making event is the result of the acts of a handful of individuals within

the senior decision making group, particularly within the Council. Rather than

each having an equal organisational interest in the decision, analysis focuses on

differing interests and views which surround the decision and explains the event

by establishing why individual actors were able to gather support for their

argument. For example, in the HOUSCO case we saw that the arguments of the

two Councillors in advocating for funding of HOUSCO were privileged by their

senior positions within the Council Cabinet.

By contrast again, the I/C frame would not see the decision making event as

resulting from either individual or organisational interests, or the product of a

readily identified decision making structure. Rather the decision is made from an

‘organised anarchy’ (Cohen et al, 1972). In the I/C frame, each decision making

event is a choice resulting from a random confluence at a point in time of

problems, solutions and decision makers. For example, in Phase Two of

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HOUSCO, the solution (an acceptable model of affordable housing delivery)

entered the decision making arena, through the random occurrence of Canterbury

appearing on the scene at a time when a group of decision makers were in place

who were inclined to make a choice that would favour it. The choice to fund the

feasibility study emerges from the confluence of multiple processes.

CROSS-FRAME CRITIQUE

The analysis above demonstrates that the application of each theoretical frame

produced a different ‘reading’ of the events in the HOUSCO case. The

comparison described the way each frame shaped the explanation, requiring the

analyst to ask a different set of questions in each study and requiring different

types of evidence. In doing so, the analysis has provided partial answers to the

first two research questions which seek to distil the particular dimensions

revealed through each frame. The analysis identified the distinctive explanations

and types of narratives that emerge through a different cluster of assumptions

regarding organisations, individuals and change processes. In fully addressing

the first two research questions, analysis should also question and critique the

explanatory strengths of each frame. While each has a particular utility as an aid

to understanding the case, each also has its limitations. This next analysis seeks

to identify these particular strengths and weaknesses. That is, were explanation

for the HOUSCO events to rely solely on the ED or I/C perspective what would

be ‘revealed’ and ‘neglected’ in the explanation? This analysis then allows the IA

frame — the focal theoretical perspective in this thesis — to be juxtaposed,

allowing its distinctive contribution to explanation to be distilled.

Environmental Determinism Frame: What it Reveals and What it Neglects

as an Explanation of HOUSCO Events

Similar to the majority of studies of alliance process, the application of the ED

frame to this study has illuminated the broad economic and social drivers behind

the sequence of events from early tentative attempts at collaboration between two

independent hierarchies, to an incorporated joint venture housing company.

Emanating from an epistemological tradition which seeks rationality, order,

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stability and progress (de Rond, 2003), the frame draws our attention to issues of

resource dependency and scarcity, the strategic interests and legitimate

institutional scope of each organisations, and the tests of efficiency and equity

that the proposal had to meet to the satisfaction of each organisation. According

to this frame, these environmental forces themselves are sufficient to explain

change in the HOUSCO collaboration.

In Phase One the ED frame is well placed to help us understand why institutional

inertia regarding inter-organisational cooperation was overcome, such that the

Chapel Street development became a reality and other models of affordable

housing delivery were explored. The need of both organisations to address the

looming problem in housing affordability provided momentum to move out of

traditional policy positions and delivery models, and also traditional mutual

antipathies, to work collaboratively with the other. Perhaps more explanatory

however, was the attraction of additional resources from the environment, in this

case the Commonwealth Government offering funding for urban initiatives in

social housing. Without this incentive, it is plausible that this early tangible

success in collaboration around the housing policy issue would not have

eventuated; such were the institutional constraints on the part of Council and the

general institutional inertia which characterised the State Housing Department at

that time.

In general also, the ED frame in this phase is powerful in explaining why the

rapid decline in affordable housing was seen as a problem to be addressed by

both organisations. Through this lens we focus squarely and with some depth on

the institutional purposes of each organisation and the economic and strategic

case for adaptation.

Similarly in Phase Two, through the ED frame it becomes clearer why the state

was particularly receptive to the initial concept of a housing trust, put forward by

Council. Given the traditionally strained relationship between the two

organisations, and also the record of reluctance to innovate on the part of the

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State Housing Department, it could be expected that such an idea would more

probably ‘wither on the vine.’ Analysis which reveals the resource dependency

at that time of the state on traditional commonwealth sources of funds and the

decline of this funding tells us that the state was more receptive to alternative

models of delivery that offered the possibility of more and different resources for

housing. In Phase Two the frame also illuminates the criticality of organisational

equity considerations: the process seemed only to gain momentum when there

was a real indication that both organisations would ‘put money on the table’ and

that this would be proportional to their strategic interest in the venture.

In Phase Three, ED analysis sheds light on the real economics of the proposed

new HOUSCO, why it would be more efficient as a delivery mechanism than

traditional models of delivery and why it had the potential to be self-sustaining.

Analysis demonstrates that these factors were critical to sustain the support of

both organisations. Similar to Phase Two, the analysis reveals that equity

considerations could potentially have derailed the alliance process: Council had

to be satisfied that the state was demonstrating ‘fair dealing’ in relation to the

funds that they were committing.

Clearly these economic and structural factors loom large in any analysis of

organisational change. What is particular about process explanation involving

two or more organisations are that economic drivers and strategic interests

around a project must align and that there is an additional inter-organisational

dimension of the relative contributions or equity of the proposed venture.

However, were we to rely on this frame alone, as has been characteristic of

alliance process research, several aspects of the HOUSCO case would remain

unexplained. For example, the need to address the growing crisis in housing

affordability in the inner city was strongly in Council’s strategic interests prior to

1991, yet the organisation did not initiate any response to the issue. During Phase

One, the issue was assessed as strategically important to both Council and the

State Housing Department as evidenced by their early collaborative activity. This

being the case, it is puzzling to an ED analyst why the process of finding joint

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solutions or at least committing to a joint strategy, would lose momentum

following the delivery of the Chapel Street development. Additionally, the frame

does not account for the length of time required for development: from

presentation of the Trust idea in 1997 HOUSCO took five years to bring to

incorporation. Why would a proposal that progressed the strategic interests of

both organisations need this long to realise? These are questions that the ED

frame is not well placed to address. As such, we can accept that, while it is a

powerful tool to suggest the ‘broad outlines’ of alliance change, the explanation

of alliance life may at best be partial.

Additionally our ED study provided a representation of alliance life — stable,

predictable, dispassionate, rational and ‘bloodless’ — that may not ring true to

the ‘lived reality’ of the HOUSCO actors as they worked within the process.

While success, (HOUSCO moving to incorporation as a joint venture), seemed

predictable in the ED study, any alliance practitioner would know that many

alliance ventures have strong logic but don’t eventuate, or 'die by accident' (Doz

& Hamel, 1998) defying rational explanation. Nearly all the HOUSCO actors

reported that their role involved making the business case for the proposed

alliance within their own hierarchy and that widely disparate views were held as

to the merits of the proposal — not all of which were rational. They would know

also that the support of some decision makers was more important than others

and how this support was to be won. In short, they would find perhaps that the

ED study, while revealing many relevant factors of the HOUSCO process, ‘stood

too far away’, representing the view of change provided by the lens of a

telescope rather than a microscope, and suggesting more certainty of the final

outcome than was the case as they saw it at each phase.

Indeterminacy/Chance Frame: What it Reveals and Neglects as an

Explanation of HOUSCO Events

The idea that chance or indeterminacy may be a useful frame to understand

alliance events has been little explored (see Kent and Hellriegel, 1991; Sydow

and Windeler, 1998) although as De Rond (2003: 4) observes “there is a ‘garbage

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can’ (Cohen et al, 1972) element to alliance life: lack of clarity of preferences,

ambiguous technologies and serendipity and relatively fluid participation.” De

Rond (2003) also observes “these … traits alone may not tell the whole story, but

the story cannot properly be told without them.”

In this case, the application of the I/C frame draws our attention to how plausible

variations in events could have changed the decision making ‘arena’ for

HOUSCO. These variations in events would have meant that the ‘windows of

opportunity’ for HOUSCO decisions would not have opened. Consistent with De

Rond’s (2003) observation however, this frame perhaps serves best as a useful

corrective to the overly causal reasoning of determinism and agency approaches,

rather than being a frame from which a complete explanation of events can be

expected. However, given that in this process, as with all alliance processes,

there were multiple groups of decision makers who needed to ‘line up’ around

proposals as they emerged, this frame also usefully draws attention to how

narrow a ‘window of opportunity’ can be for an alliance proposal and how

swiftly this window can close for proposals that may have a degree of risk for

either organisation. ‘Fluid participation’ (Cohen et al, 1972) suggests that the

confluence of predisposed decision makers in both Council and the state, which

meant that the proposal “all came together” (State Housing Department

informant) at the end of Phase Three, was a matter of luck. As Eisenhardt and

Zbaracki (1992: 27) describe in their overview of the Garbage Can Model of

decision making, “what gets decided depends strongly on timing and luck.”

The frame can also shed light on a question that the ED frame could not.

Council’s problem of declining housing affordability had been raised by the two

Councillors prior to 1991, yet the Lord Mayor of that period declined to commit

Council to action. The ED frame would puzzle as to why, given that the problem

was a constant in the period pre-1991 and post-1991, that this would be the case.

The I/C perspective would suggest that action was not ‘made possible’ pre-1991,

(Cohen et al, 1972) as problem, solution and sympathetic decision makers did

not converge.

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A question also puzzling to the ED frame was why the collaborative process

started to derail at the end of Phase One, but started to gain some traction in

Phase Two. A state election outcome at the beginning of this period changed the

government and put a Labor government in power at state and local government

levels. As a result of this confluence of events, a number of politicians at both

levels who were ‘attached’ to the issue of providing more affordable housing in

the inner city, were in power and able to legitimately join forces. While this helps

to explain growing energy around the proposal, an acceptable solution (a

workable model) was, at this stage, still elusive.

At the end of Phase Two Canterbury’s arrival into the ‘arena’, an event which

could not have been predicted at the beginning of the process, brought with it the

final part of this equation. His knowledge produced an acceptable solution: a

model of an affordable housing company which could be jointly supported. Thus,

the ‘solution’ part of the equation combined with ‘problem’ and a supportive

confluence of decision makers, the result of two elections which delivered Labor

decision makers. An organisational (or two-organisational) choice was made

possible. “It all came just came together.”

In summary, the I/C frame revealed to us that timing was a critical element at

play throughout the HOUSCO process, as Cohen et al (1972) would suggest to

us. This frame demonstrates how HOUSCO events were linked by the timing of

the intersection of the various ‘streams’: the problem of declining housing

affordability, the solutions (the trust proposal in Phase One and the HOUSCO

model which emerged in Phase Two and was perfected in Phase Three) and

participants (the alliance ‘entrepreneurs’ and decision makers). As such, the

frame thus sensitises us to the probabilistic nature of the HOUSCO outcome and

ensures we are careful with our claims as to causality.

As De Rond (2003) suggests, the HOUSCO story would not be properly told

without seeing the random workings of timing, however it cannot be the whole

story. Consistent with critiques of Garbage Can Theory, (see Bendor, Moe &

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Shotts, 2001) we would lack an understanding of the social order, hierarchy and

institutional rules of both organisations and how this informed the emergence of

choice possibilities. We would lack an understanding of the problem of housing

affordability and why this was interpreted as requiring remediation by both

organisations. Organisations in this frame do not act to realise discrete goals or

purposes: action arises only from individual participants who, at any given point

in time, carry with them problems and solutions. Yet, given this core

preoccupation with individual participants, analysis through this frame does not

help us understand how some individuals come to ‘attach’ to these problems and

why others in the same organisation do not. As Bendor et al (2001) note, there is

no real treatment of individuals within Garbage Can Theory. Why, for example,

was the issue of housing affordability of strategic interest to two Councillors and

not all the Councillors? And how, having ‘attached’ to the problem of housing

affordability, did they go about the process of persuading the decision makers

that were in the ‘arena’ at that time? Does the skill of the individual matter in this

outcome? Thus, there is something of a ‘black box’ which surrounds the process

from solution to choice in this frame.

Also, it is interesting to note that a manager from the State Housing Department,

Alan, was alive to the idea of timing and organisational decision making (“you

either had to do it now or it may … two or three years later it wouldn’t have

happened”). The I/C frame would suggest that individuals cannot order the

sequence of events to their will, as much is unpredictable. However, consistent

with the notion of ‘prepared luck’ in our Conceptual Framework, cannot an

alliance actor recognise that luck, or timing, is favouring his ‘prepared mind’ (or

prepared business case?). Or in this case, that HOUSCO was an idea whose ‘time

had come?’ Seeing all as anarchy and randomness would mean we miss seeing

how actors can recognise such windows of opportunity and, with their own

personal intentions, exploit them.

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What Case Can Be Made For Individual Agency as an Explanation of

Alliance Change and Development in this Case? What Additional

Dimensions Did the Agency Perspective Illuminate that Were Neglected by

the ED and I/C Frame?

The ED and the I/C frames were each demonstrated to have strengths and

weaknesses as an explanation of how and why the HOUSCO events unfolded as

they did. The strength of the ED frame was the analysis of structural

determinants, both economic and social: the necessary building blocks of change.

Yet the frame leaves some events unaccounted for. Firstly, the process

experienced ebbs and flows of commitment, even as the problem of housing

affordability grew. Secondly, the process took five years from proposal to

incorporation even though it was in the strategic interests of both organisations.

What accounts for this lengthy development period?

The frame is also weak in explaining HOUSCO as a process of organisational

transformation. We know that the proposal represented a significant change in

both policy scope (for Council) and traditional delivery models (for the state).

However, given the level and nature of ED analysis, we are given no sense of the

political contestation that surrounds ideas that are intended to transform, who and

how engaged in this contestation and how they came to prevail.

The ED analysis suggests that the outcome of HOUSCO incorporation could be

reasonably predicted, should the proposal meet the tests of efficiency and equity.

In marked contrast, the I/C upturns this suggestion of predictability,

demonstrating that much cannot be known about how exogenous events will

change the decision making ‘arena.’ The strength of this frame was the

illumination of the importance of timing: a series of fortuitous events along the

path finally brought the problem, solution and a group of predisposed decision

makers at both levels into alignment at the end of Phase Three (“the planets lined

up”). It also illuminates how fragile and temporary these ‘confluences’ can be.

What the frame cannot speak to, however, is why the HOUSCO individuals, as

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‘carriers’ of solutions come to be so. Why did some individuals ‘attach’ to

HOUSCO as a solution and some did not? By what processes did their solution

finally come into the decision making ‘arena’ at a particular point? How and why

did the decision makers come to make the ‘choice’ of HOUSCO once a choice

was there to be made? What were the deliberations? Similar to the ED frame, the

I/C frame does not seek to capture data at this level.

The distinguishing contribution of the IA frame in this case is to provide a fine-

grained explanation of the ‘who, why and how’ of HOUSCO as a contested

process of organisational and institutional transformation, that benefited from

favourable winds. While the ED frame illuminates structural determinants, both

economic and social, and suggests that these alone are explanatory of change, the

IA frame suggests that these are a necessary precondition for choice, but do not

guarantee choice. It was necessary that housing affordability was a problem of

strategic interest to both organisations and that institutionally it was in their

scope to act (although this was choice for Council, not a clear institutional

responsibility as for the state). It was also a precondition for a joint response that,

strategically, each needed the other for a new venture to be approved. However,

the IA frame shows us that these preconditions enabled choice but did not

themselves bring about action or change into being. This relied on a range of

individuals themselves making strategic choices. Similarly, while the I/C frame

would posit that the each decision can be explained as the random confluence of

process ‘streams,’ the IA frame would suggest that, while timing is relevant and

luck plays its part, these ‘random confluences’ were in fact ‘windows of

opportunity’ that the knowledgeable and skilled HOUSCO actors could

recognise and exploit with skill and intent. The frame would suggest that the

actors were, in fact, what Denis et al (2007: 208) describe as “active node(s) in a

multifaceted constantly shifting network.” As these ‘active’ agents, they were

capable of “redesigning strategic projects that can slide through windows of

opportunity where interests converge long enough to ensure irreversibility.” In

short, the IA frame would suggest that while each of these frames provides a

partial explanation, a more comprehensive explanation can be achieved by

additional analysis which comes ‘up close and personal.’ This will be

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demonstrated further through stepping through each phase of the HOUSCO

process, ‘overlaying’ the IA frame onto the foundation of explanations provided

through the ED and I/C frames.

Phase One

In Phase One, we understand from the ED analysis that the issue of affordable

housing was of sufficient interest to warrant both the state and Council initiating

joint action in the form of the Chapel Street development — with perhaps the

added incentive of federal funding for this joint action facilitating the process.

We also learn of the institutional constraints for Council around entering directly

into this policy arena, although their strategic interest was signalled through

initiating a Social Policy Unit as part of the organisational structure, and giving

priority to affordable housing policy. We understand from this frame’s

perspective that the proposal to fund the joint officer committee with the state to

explore possible solutions to the affordable housing issue, arose from this unit

from a need to fulfil the brief they were given, and an inability to pursue

strategies in affordable housing unilaterally due to Council’s institutional

constraints. While this seems a rational and predictable progression of events and

decisions, the I/C analysis shows us that much hinged on the ‘upset’ outcome of

the 1991 Council election, where the incumbent conservative Lord Mayor was

replaced by the socially progressive Labor candidate. Where two Labor

Councillors who were ‘attached’ to the issue of affordable housing had

previously not found decision makers willing to make the choice to address the

problem, the turn of events of the election opened a new avenue of organisational

choice with a different social order and a different key decision maker. The

choice to fund the joint officer committee can be understood as the intersection

of the streams of affordable housing problem, the two Councillors as

‘participants’ attached to a solution (or at this phase at least attached to finding a

solution) and a different complement of organisational decision makers.

When we add the IA explanation and come up closer to the process detail, we

add another layer of understanding. We see why the two Councillors had strong

interests and motivations in the provision of affordable housing. This problem

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was particularly acute in their wards, so there was a political motivation, but the

evidence suggested also that these two individuals had strong personal

convictions regarding social issues such as homelessness. This analysis explains

more why this issue entered the Council decision making ‘arena’ on a number of

occasions over several years: it was brought into the arena by the Councillors.

The I/A analysis also sheds light on the Lord Mayor as a decision maker likely to

make a choice to commit resources to affordable housing. The analysis

demonstrates that he was also motivated by strong social justice values, which he

applied to all Council policy matters. We know that he approached the state

directly to seek innovative approaches to the issue of affordable housing,

independent of the two Councillors. We see that the Chapel Street development

was a direct outcome of his entrepreneurship, rather than the agency of ‘faceless’

organisational actors. We also know that as Lord Mayor he was constrained by

the boundaries of institutional convention: he could not commit to any initiative

where Council alone delivered affordable housing. We know that, as such, he

was wary of making choices which had the suggestion that Council might be

taking a role in affordable housing that more rightly belonged to the state.

However, we also know that he was prepared to be creative about how to

approach the issue, within this constraint.

We see also that, rather than Council being a unitary rational organisational

actor, the politicians in the decision making ‘arena’ were strongly divided on the

issue of becoming involved in affordable housing. The IA frame demonstrated

how the two Councillors were able to persuade that action (the formation of an

officer level joint committee with the state) could be legitimised as being within

the strategic interests of Council. We see also that this ability to persuade

benefited from the positions of seniority and power within Council Cabinet. To

add another level to the IA explanation, we learn that it is not just the most senior

in a hierarchy who are powerful. The Council bureaucrat, Westphal,

demonstrated choice in ‘attaching’ himself to a possible solution to the

affordable housing problem. His agency provided much of the ‘how’ to the

Councillors’ ‘why.’

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Thus, the ED and I/C frames supplied the pre-conditions for organisational

choice, but the actors had to make and shape these choices. Affordable housing

was demonstrated to represent a problem for remediation by both organisations

and we saw that a favourable turn of events in the 1991 election outcome made

the Phase One choices possible, but that the two Councillors and Westphal, with

the Lord Mayor as decision maker, provided the last piece of the explanation.

Motivation, coupled with skill and power was able to bring about change from

the ‘window of opportunity’ that arose at this time.

Phase Two

In Phase One, the choice was made to approach the state to form a joint

committee to explore options for the delivery of affordable housing. In Phase

Two, through the ED frame, it becomes clearer why the state was particularly

receptive to the initial concept of a housing trust put forward by Council as the

product of this joint committee activity. While traditionally reluctant to pursue

joint policy action, and generally reluctant to innovate, ED analysis demonstrates

that resource constraints were making adaptation by the state more urgent. The

possibility of more and different resources for housing through working with the

Council was strategically appealing. We also understand through this frame that

any contribution from Council to HOUSCO was contingent on equity and fair

dealing: both organisations had to contribute in fair proportion.

When the I/C frame is overlayed, we see again that timing and a turn of fate had

a hand in ensuring that the HOUSCO trust proposal had a joint decision making

‘arena’ to enter and that the choice by both organisations to jointly fund a

feasibility study into the joint HOUSCO solution would be made. The 1998 state

election returned Labor to power. This turn of events brought different issues

into focus, as different political ‘participants’ were attached to different

problems and proposed different solutions. We learn that a different,

conservative Minister, with a different Director-General would have been

unlikely to progress such an initiative as HOUSCO to feasibility stage. We learn

also that the Joint Affordable Housing Taskforce in the inner city, as a joint

local-state decision making ‘arena’ arose from the confluence of Labor

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politicians being in power at both levels: the existence of this taskforce was

explanatory of joint development of HOUSCO in this Phase. The arrival of

Canterbury into the arena, a random event, was also explanatory. Canterbury

brought with him the ‘solution’: a model of affordable housing delivery that both

organisations would support. Problem, participants, solution and decision makers

were aligned.

By the application of the IA frame, we learn that, while the ‘turn of fate’ of the

1998 state election outcome made a joint local-state Joint Affordable Housing

Taskforce more of a possibility, it was the two Councillors with the Minister who

made the individual choice and took action to make change ‘capital’ from this

event. We learn more of how the persistence and skill of the two Councillors

within this taskforce and within Council kept the HOUSCO ‘candle’ flickering

through this period, how they were supported in this by the choice of the

bureaucrat Westphal to commit his skill and energy. We see that without this

individual strategic choice, the Council choice to fund the feasibility study would

not have been made.

We learn also how contentious, and potentially risky, the emerging HOUSCO

service delivery model was internally within the State Housing Department. We

see that the persuasive skill and power of the Director-General was critical to

keep the HOUSCO process moving during this period. We also see the skill and

political power of the Minister in persuading senior decision makers was

explanatory and that his support was driven by both personal and pragmatic

interests. Finally, we also see that while ‘bringing’ the solution was important,

Canterbury ‘selling’ the solution was actually the more critical part of the

explanation. Again, the elements of individual strategic choice, power and

persuasion skills contribute to the more complete explanation of HOUSCO.

Phase Three

In Phase Two, the choice had been made to fund jointly a feasibility study into

the proposed HOUSCO as solution to the joint problem posed by declining rental

housing affordability. In Phase Three, the ED analysis sheds light on the

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importance of the economics of the proposal to the progression of the initiative

and how tough tests of efficiency were applied by decision makers. As with

Phase Two, we see also that the test of equity and fair dealing is a hurdle to a

joint venture initiative.

By applying the I/C frame, we see that although meeting these rational tests of

efficiency and equity was a pre-condition for success in this final phase, the

choice of the Lord Mayor “could have gone either way” at this point. The

evidence demonstrates the plausibility of a negative decision on funding

HOUSCO, which would have stymied the process of HOUSCO taking the last

step to incorporation as a joint venture company. Luck and timing played its

part.

The IA frame gives the final piece of the explanation. The business cases which

demonstrate the necessary efficiency are not effortlessly plucked from the air:

technical skill, creativity and persuasion on the part of a number of ‘technocrats’

was required to build the case for this efficiency. The Tax Office also had to be

persuaded of the charitable status of the proposed venture, which also required

technical and political skill of the highest order.

Executive bureaucrats from both Council and the state each needed sufficient

credibility and skill to persuade the senior decision makers of their risk-averse

organisations, even given a robust and water-tight business case demonstrating

the efficiencies to be had. Finally, the Minister and the two Councillors needed

to advocate and persuade within their own political decision making arenas,

which in the case of Council was still divided over the issue. While the I/C frame

pointed out that the probability of the Lord Mayor supporting the HOUSCO

proposal was about ‘50/50’ at this point, without the agency of the two

Councillors, the choice would not have arisen at all.

Analysis has outlined the explanatory contribution of the IA perspective at each

Phase of HOUSCO. A summary of this contribution is provided in Table 14

below:

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Table 14: Explanatory Contribution of Individual Agency Frame

Environmental

Determinism

Indeterminacy/

Chance

Individual Agency

Phase One Institutional challenge of provision of ARA invokes a joint response (Chapel St).

Changed environmental conditions (decline in affordable rental housing) sufficient institutional challenge for Council to seek out the state after social structures derail initial collaborative momentum.

‘Upset’ 1991 Council election opened new avenue to pursue solutions to affordable housing: timing matters.

Choice of Lord Mayor to deliver Chapel St jointly with the state.

Choice of Lord Mayor to support the decision to seek out the state for joint committee on ARA.

Why and how these actors came to make these choices and who was involved in shaping these choices.

Phase Two Resource constraints add urgency to state’s need to explore joint models of working.

Importance of equity and fair dealing.

Luck and timing: turn of events brought ‘receptive’ decision makers to power at both levels of government. Timing also brought the politically acceptable solution into the ‘arena’.

Choice of Lord Mayor and Minister to fund a feasibility study into the emerging HOUSCO model.

Why and how these actors came to make these choices and who was involved in shaping these choices.

Phase Three HOUSCO represented an efficient and equitable solution: met strategic interests and institutional needs to mitigate risk.

Confluence of confluences: both decision making ‘arenas’ in alignment.

Choice of Lord Mayor, Minister and other state decision makers to fund HOUSCO.

Why and how these actors came to make these choices, and who was involved in shaping these choices.

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This section addressed the first two research questions through a comparison of

the HOUSCO explanations provided by each of the three frames of ED, I/C and

IA. The differences in approach to explanation were first described, outlining

differences of assumptions and approach to explanation. The ED and I/C frames

were then critiqued, examining their strengths and weaknesses as explanations of

the HOUSCO sequence of events. The additional and distinctive contribution of

the IA explanation was then explicated, demonstrating that the strategic choice,

motivations, practices and attributes of the individual HOUSCO actors fill in

much of the explanatory detail neglected by the other two frames. It was argued

that this frame provided much of the ‘who, why and how’ of the HOUSCO

process as a contested process of organisational and institutional transformation.

In this first multi-frame comparative analysis, the separateness of the three

frames was maintained such that the unique dimensions of each can be

demonstrated. In the next section, the final research question is addressed,

providing two propositions as to how the three frames, taken together, can

provide a more complete understanding of the HOUSCO case than any single

frame.

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MULTI-FRAME SYNTHESIS

The previous discussion addressed the first two research questions, comparing,

contrasting and evaluating the explanatory power of each of the three

perspectives and distinguishing the explanatory contribution provided by the IA

perspective. In this discussion the final research question is addressed, namely:

RQ3: How does Individual Agency interface with each of the perspectives of

Indeterminacy/Chance and Economic Determinism as a framework by which to

understand alliance process and outcomes in this case?

The question of building theory from Alternate Templates analysis is

problematic, as Langley (1999: 699) observes:

... despite its advantages, the use of this strategy often leaves researcher and reader

puzzled as to how the various theoretical strategies can be combined; almost

inevitably, each explanation alone is relevant but insufficient. Yet any theory that

attempted to integrate the different perspectives would become unwieldy and

aesthetically unsatisfying.

Attempts at integration are even more problematic when the perspectives

employed are not mere theoretical variants underpinned by common

paradigmatic assumptions. Chance, choice (individual agency) and structuralism

or determinism represent major paradigms within strategy. Their relationship or

relative contribution to strategy (particularly choice and determinism) represent

one of the most intense debates in the field. Thus to attempt a novel integration

of the three perspectives as explanation for this case is to wade into this much-

contested space, with the risk of the ‘aesthetically unsatisfying’ result of which

Langley warns.

However, while a completely novel treatment may be unwise, there are two

potentially fruitful approaches to building explanation from the three

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perspectives employed in this case. Each is proposed as equally powerful for

understanding the contribution of IA in this case, each suggesting a different

relationship with the two other perspectives employed. These approaches provide

the theoretical tools by which this third research question can be addressed;

however discussion considers also the extensions or modifications which might

be made to these theoretical tools to consider the explanatory role of IA within a

hybrid or alliance form.

The two propositions are as follows:

1. Development and change in the HOUSCO case can be explained though

adopting a multiparadigmatic approach. Choice and IA is theorised as

one of three separate paradigmatic worldviews, each explanatory in itself,

but considered in parallel produce a more comprehensive explanation of

the HOUSCO process through their juxtaposition and reconciliation.

2. Development and change in the HOUSCO case can be explained as the

interaction of complex processes represented in the three perspectives.

Choice and IA is theorised as one of three inextricably interwoven strands

which brought HOUSCO into being, causally insufficient in itself.

Both propositions are put as equally useful approaches to theorising the

contribution of IA in the HOUSCO case and also of building theory in alliance

process. As de Rond and Thietart (2007) observe in their theory of strategic

choice which informs the second proposition, epistemologically we cannot claim

their theory to be true. Evidence and proof is elusive, existing more in the realms

of philosophy and intellectual thought than normal science. Equally, we cannot

consider one proposition to be more ‘true’ than the other. De Rond and Thietart

(2007) rather claim meaningfulness for their theory, and one which makes a

contribution to the fragmented field of strategy and also strategy process. This

thesis would claim that both approaches are meaningful to understanding the

‘totality’ (Snook, 2002) of the phenomenon of HOUSCO. We accept that a

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uniquely correct perspective cannot exist (Bochner, 1985), and therefore put

forward both as paths to understanding the multi-faceted reality of HOUSCO as a

process of change within a hybrid organisational form across a ten year period.

In the following section, each of these propositions is outlined, describing the

theoretical tools which inform each and discussing the HOUSCO findings

through each.

Proposition One: Multi-Paradigmatic Approach — Individual Agency as

One of Three Paradigmatic Worldviews

In the previous section the separateness of the three perspectives was maintained,

such that the distinctive explanatory dimensions of each could be demonstrated.

By examining each of the three in parallel, analysis could highlight the different

assumptions and what each ‘revealed and neglected’ (Allison, 1971) as an

explanation for the HOUSCO events. As a result the explanatory contribution of

the IA perspective was able to be distilled, through juxtaposition with the

explanations provided by each of the other two perspectives. This analysis served

the purpose of partially addressing the first research question, illuminating the

additional explanatory dimensions offered by the IA perspective that have largely

been overlooked in the alliance process literature, which focuses largely on

economic and structural explanations of alliance process.

This cross-frame analysis can also serve to address the third research question,

which seeks to define the relationship of IA with the other two perspectives, and

how they work together as an explanation of HOUSCO events. This analytical

separation of the three perspectives, but consideration in parallel and in

juxtaposition, is advocated by a number of theorists as having strength in theory

building across different paradigms. Gioia and Pitre (1990: 585), for example,

argue that an approach that accounts for differing paradigmatic assumptions,

while acknowledging the difficulties of integration, can be a route to a “more

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comprehensive view of organisational phenomena.” He argues that research that

remains within the tenets of one major paradigm will necessarily continue to

produce incomplete views of organisational knowledge if there cannot be a way

to bridge or link with research emerging from a different paradigm. Multi-

paradigmatic considerations, which bring several paradigmatic assumptions to

bear on a topic, build theory than can “account for the multi-faceted nature of

organizational phenomena.” Gioia and Pitre (1990) argue that in adopting this

approach to theory building, theorists are not seeking the truth, rather attempting

to produce more complete views of organisations and events.

Gioia and Pitre (1990) are not alone in advocating that completeness in

explanation arises from the simultaneous application of multiple viewpoints.

Process theorists also support the application of multiple frames. As identified in

the Methods Chapter, Van de Ven and Poole (1995) advocate for process theory

that “go[es]) beyond a surface description, to penetrate the logic behind observed

temporal progressions” and that this may involve a number of theoretical

perspectives in order to produce a more comprehensive explanation. This is

appropriate when providing explanation of a complex phenomenon, where

presenting only one explanation of the ‘motor’ (Van de Ven and Poole, 1995) of

process evolution would risk oversimplification. As argued earlier in the thesis,

alliances, with other hybrid organisational forms, represent such complex

phenomena. They span a number of institutional contexts, play out over space

and time (Van de Ven, 1992 and are influenced by a range of diverse actors with

different motivations and schemas. It is therefore unlikely that any one

perspective would capture all its dimensions. Langley (1999: 698) also finds

maintaining ‘theoretical clarity’ through separation of the frames to be a benefit

within process research, with theoretical contribution to be built from the

“…confrontation among different interpretations (which) can reveal the

contributions and gaps in each”.

Between them then different theoretical perspectives provide overall accuracy,

although each one is inaccurate on its own.

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Also in the process literature, the approach of analytical separation but improved

explanation through the contrast, comparison and confrontation of alternate

theoretical lenses, was famously used in the classic analysis of the Cuban missile

crises of Allison (1971).

In practice, Gioia and Pitre (1990) advocate a process similar to the

methodological process of triangulation. While being grounded in a particular

paradigmatic worldview, a theorist would account for alternative worldviews

through the process of ‘argument, counter-argument and accommodation, despite

fundamental differences … without violating their own tenets.” As Allison

(1971) notes, “it helps to have one or more conceptual frameworks that remind

the questioner and the answerer what is omitted.” That is, as Gioia (1990) notes,

we may agree to disagree, but we at least know how and why the disagreement

exists.

In understanding HOUSCO events through application of the three perspectives,

we would, in Gioia and Pitre’s (1990) view, be ‘anchored’ in one paradigm, but

from this vantage point we would recognise and accommodate the claims to

explanation of the other two paradigms. For example, being ‘anchored’ in the IA

perspective we would have as a point of departure that the exercise of strategic

choice was the ‘generative mechanism’ of the change process in each phase. By

application of a multi-paradigmatic approach with the other two perspectives, we

would be forced to ask firstly the extent to which this choice was constrained or

informed by the economic or social environment in which the choice was being

exercised. Would other actors have made identical choices in the same context?

Why or why not? Additionally, by virtue of the I/C paradigm being applied in

parallel, we would be lead to question the claims to causality of choice and

agency, and ask whether a different ‘turn of events’ would have rendered the

same choice ineffectual. By accounting for each of these competing perspectives

in turn we develop a deeper and more rigorous explanation for HOUSCO.

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Proposition Two: Integration — Individual Agency as One of Three

Inextricably Interwoven Strands

An alternative, and equally valuable, theorising of IA in relation to the

perspectives of ED and I/C in this case can be developed from the work of De

Rond and Thietart (2007). These theorists have, somewhat boldly, proposed a

“theory to manage the uneasy relation between strategic choice, chance and

determinism (or inevitability)” (535). One of the aims of the 2007 paper is to

propose “philosophically sustainable theory of strategic choice.” They claim their

‘principal task’ as “formulating a theory of strategy that affords freedom of

choice and grants human agency a constructive role” (2007, 537).

This theorising of agency is therefore different from Proposition One. Both

propose that a complete explanation of the HOUSCO events comes from

application of the three perspectives. De Rond and Thietart (2007: 538) argue, in

the application of their theory to their own case, that “to omit any of these would

be to tell a misleading, or at best incomplete plot.” However in this second

approach, a relationship is proposed between IA and the other two perspectives.

In the first proposition, these three perspectives retained their theoretical

separateness.

De Rond and Thietart (2007: 544) apply tenets of philosophy and intellectual

thought to give ‘precision’ to a theory on the nature and role of strategic choice

within strategy, which they argue the strategy discipline itself has struggled to

produce. Following lengthy consideration of these traditions and also the

strategy literature, they propose four ‘conjectures:’

1. Causality is a necessary condition for freedom of choice. So as to make

strategic choices we must believe them (when acted upon) to be able to

change the course of events.

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2. Chance coincidences can open up new avenues for future choices.

3. Strategic choice is itself insufficient to account for strategy. Choice, like

chance is a contributing, background dependent factor.

4. Causal backgrounds (economic events, institutional structures, evolving

state of the economy) are necessary in order for us to interpret and exploit

chance events. After all, chance coincidences are only ever meaningful in

the context of a particular casual background.

Some definitions are required. These theorists refer to determinism ‘in its weaker

sense’ as it is generally used in strategy scholarship, and in this thesis, describing

‘that which constrains and informs choice.’ (De Rond & Thietart, 2007: 536).

They substitute the term ‘causal background’ to refer to the kinds of general

states used in the ED perspective in this thesis, such as “institutions and social

structures … the properties of markets and industries, and the evolving state of

technology and that of the economy” (De Rond & Thietart, 2007: 536). Choice,

they define as “the freedom of organizational actors to choose and act of their

own will.” Chance is defined for their purposes as “an event happening in the

absence of any obvious design, or randomly” (De Rond & Thietart, 2007: 536).

Their theory is dense and precisely drawn: summary does not serve their

argument well. However, some paraphrasing will distil the essence of their

theory of the relationship of agency (choice) as it relates to ‘causal background’

and chance.

In their theory, causal background provides the necessary ‘social and material’

context for choice, but does not of itself fully account for that choice. They argue

that:

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… in management research we may have taken it for granted that such background as

industry structure, firm capabilities or network characteristics themselves account for

organisational strategizing ... these at best provide the necessary background for

making choices.

However, causal background is central in their model, seen as a necessary

condition not just for strategic choice but also for exploiting chance coincidence.

Causal backgrounds supply the ‘raw materials’ for choice, as organisational

actors “rely on it for interpretation, prioritization, legitimization, explanation and

sanctioning or discarding alternatives” De Rond & Thietart, 2007: 546).

However, these ‘raw materials’ are not sufficient to account for strategy:

… something else is required, namely deliberation and commitment. It is here – in the

gap between the context for choice and choice itself — that freedom is expressed.

Strategic choice, they argue, “can only ever be understood in terms of its relevant

social and material context.” Moreover, “given the multiplicity of interactions it

is unlikely that one particular course of action, taken twice will produce the same

result.” An action that produces success one day may produce failure the next.

Therefore choice, according to this model, is a contributing factor, interwoven

and interacting with other factors and cannot alone determine strategy.

Chance coincidences can supply an avenue for alternative choices. The theorists

cite Cohen et al’s (1972) Garbage Can Model to illustrate their argument that

chance “can draw together problems and solutions in waiting, and can be

sufficient in opening up alternatives for future actions.” Equally with choice,

causal background and context is necessary to give meaning to the chance event.

Strategy is thus theorised as “emerg[ing] from multiple, complex, interacting

processes, only some of which are under managerial control.” Choice, chance

and causal background are inextricably intertwined in the production of a

strategic event (De Rond & Thietart, 2007, 538). This theory of strategic choice

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and its relationship to chance and causal background, they argue, has relevance

to process research, which attempts explanation of “how various different

actions, events and backgrounds are necessarily interconnected and

interdependent and will, by its very nature address multi-level issues”(De Rond

& Thietart, 2007, 548).

In viewing the HOUSCO case through this second ‘complex interacting

processes’ approach, we would see that the ‘causal background’ of changing

economic and strategic environment, institutional and social structures provided

the context for the choices of the individual actors; chance opened up new

‘avenues of opportunity’ for choice. Thus in Phase One, the ‘fortuitous’ event of

the election of the Labor administration brought together receptive decision

makers with attention to the problem of affordable housing. This opened up new

avenues for opportunity for choice for the Councillors and the Lord Mayor which

had not been available previously. These choices are given meaning by the

‘causal background’: institutional structures of the Council and the state

government which actors can interpret to provide the boundaries for legitimate

action and a sense of priority. Thus, in Phase One, the Lord Mayor and several of

his executive group, through their interpretation of the ‘causal background’,

initially decided attention to the provision of affordable housing was outside the

boundaries of legitimate action by Council, but joint action with the state was

institutionally desirable and legitimate. Thus the ‘opening of the new avenues for

choice’ and the institutional and social structures provided context and

preconditions for choice. But as De Rond and Thietart (2007) state “something

else is required — deliberation and commitment.” The IA study demonstrated

that each of the powerful actors in Phase One had choice in regard to their

involvement and their decisions in the affordable housing problem and evidenced

deliberation on that choice. The IA analysis also sheds light on why they made

this choice (motivations) and how they went about shaping the choices of others

in their institutional and social structures. However, this ‘intertwined’ frame puts

these choices and practices in a larger causal framework: these choices were able

to move the process in the direction of the HOUSCO outcome at this time and in

this context. Change these preconditions and change the context, and the choices

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and practices will not necessarily have the same outcome. As we saw, the

Councillors exercised the same choice and engaged the same practices in the

period prior to 1991 without success. Choice, or agency, is however an

‘inextricable’ causal strand, with the other two strands in explaining the Phase

One outcomes: the Chapel Street development and the joint local-state housing

committee.

In Phase Two the ‘turn of fate’ that brought Labor into power at both local and

state levels ‘opened new avenues for choice’ for both organisations (Council and

the State Housing Department) to act on the problem of ARA. A wider group of

actors from both organisations were now ‘deliberating and committing’ (de Rond

& Thietart, 2007) to new courses of action, including new, commercial joint

models of delivery. These choices were given meaning, priority and legitimacy

by the ‘causal background’ of institutional, environmental and social structures.

The declining financial resources of the state gave institutional priority to the

choices of the state actors; the ability to work jointly with the state gave

institutional sanction to the choices of the local government actors. The social

structures between the sets of organisational actors also provided the ‘raw

material’ for individual choice to work collaboratively. Again, chance (alignment

of Labor government) provides the preconditions, ‘causal background’ provides

the necessary decision making context. But to these pre-conditions and in this

context, actors deliberate on options and commit to a path with freedom of

choice.

In Phase Three, the ‘confluence of confluences’ that brought alignment within

the decision making group together with requisite problem attention and an

emerging acceptable solution, made the conditions ripe for the actors to choose

to commit to HOUSCO. This ‘avenue of choice’ was available to them. The

‘causal environment’ continued to suggest to state actors that this new approach

to the provision of affordable housing was an institutional priority, given

declining resources in their environment. The HOUSCO solution, including

majority state revenue and commitment continued to be institutionally possible

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for Council (even though the legitimacy was still questioned by some decision

makers). However, ‘deliberation’ and choice were still required at this last phase

on the part of several powerful decision makers. The preconditions and context

made the choice possible, but in the final analysis these actors had to say ‘yes’

rather than ‘no’ and had the freedom to do so. But again, we are reminded

through this ‘interaction of complex processes’ model, that choice is but one

causal strand among several.

Extensions to De Rond and Thietart (2007) Theory

Extending Individual Agency Perspective

De Rond and Thietart’s (2007) theorising of choice and its relationship to

strategy is a valuable basis for understanding the relationship between the three

perspectives used in this thesis, and how they combine to provide a more

complete account of the causal factors in the HOUSCO case. As these theorists

state, “to omit any of these would be to tell a misleading, or at best incomplete

plot” (De Rond and Thietart, 2007: 538). However, theorising a relationship

between the paradigms of choice, chance and (soft) determinism necessitates a

high level of abstraction. Much of the IA explanation at the more organisational

and individual level would be lost if this high-level model were relied on solely.

The argument of the IA study was, indeed, that the choices of the most powerful

actors in the HOUSCO case (the Lord Mayor and Minister) were explanatory of

the focal decision event at the end of each phase. The ‘interaction of complex

processes’ framework of de Rond and Thietart (2007) adds depth and causal

logic to this singular explanation. However, the IA perspective also provides the

next level of explanation, which was why and how these powerful actors came to

make these choices. As we saw in the IA study, both the Lord Mayor and the

Minister had to be persuaded to make the choices they did at each critical

juncture. This underscores the point that, because causal background and chance

provide the preconditions for choice, that choice opportunity may not be enacted.

More explanation is required to understand the choices of these powerful actors.

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The more complete IA perspective helps us see that these choices were shaped

by the complementary agency of a range of other individuals, each with their

own freedom of choice, motivations, attributes and skilful practices.

In summary, to leave the account of individual agency at the level of ‘choice’,

would be to obscure this necessary explanation of the ‘who, why and how’ of

this choice. While de Rond and Thietart (2007) state that their task or goal is to

“grant human agency a constructive role” (537) the full nature of this

constructive role can only be fully revealed through supplementing their

relational theory of the three paradigms, with the additional dimensions and

theoretical tools of the IA perspective.

Strategy Process within Hybrid or Alliance Forms

De Rond and Thietart (2007) propose a theory to manage the ‘uneasy

relationship between strategic choice, chance and determinism’ in strategy and

argue that strategy can be understood as the ‘interaction of complex processes.’

In making their argument, they provide examples of strategy and its formation

from single organisational forms, although De Rond has contributed significantly

to the alliance literature (de Rond, 2003, 2005; De Rond & Bouchikhi, 2004). It

is useful therefore to consider if their theory obscures any significant element of

strategy formation within HOUSCO as a hybrid, or alliance organisational form,

and if their theorising on the role of choice or agency requires modification or

extension in this context.

Two modifications seem worthy of consideration. The first is drawn from

institutional and S-as-P theory and suggests that, in a hybrid or more plural

organisational context, the causal background may not represent a fixed,

objective consistent set of rules or logics which would uniformly suggest the

choice options of actors. The inherent tensions created through hybrid forms

(see Chapter Two, Literature Review) create ambiguity in terms of the

boundaries or possibilities for action. A hybrid does not have the same explicit

logic or rules of a market or a hierarchical organisational form: what is to be

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achieved and how it is in a more ambiguous ‘middle ground’ and is therefore

argued to be more open to agency. As Levy and Scully (2007: 974) suggest:

Institutional scholars locate agency and dynamics in the interstices and

contradictions of plural, overlapping, and incomplete logics (Barley and Tolbert

1997; Clemens and Cook 1999; Phillips et al, 2004).

The more competing logics exist in an organisational or institutional field, the

more opportunity exists for actors to exercise agency. Pluralism, or multiple

logics are therefore argued to increase the possibilities of agency to effect

institutional change. As De Rond (2004: 174) suggests “within a pluralist

perspective, human agency takes centre stage.”

As an example, we can see that in the HOUSCO case, whether Council deemed

HOUSCO involvement as legitimate for local government was contested. While

direct delivery of housing by Council alone was uncontroversially outside the

bounds of institutional legitimacy, when they became involved in a possible

alliance with the state, these ‘rules’ became more blurred: the logic was

incomplete. The institutional context could not then be relied on for clear

“interpretation, priorization, legitimization … or sanctioning.” (De Rond &

Thietart, 2007: 547). The Councillors and the Lord Mayor had the opportunity to

persuade based on their own logics for action. The first possible extension of De

Rond and Thietart’s (2007) relational framework therefore is that, in plural or

hybrid organisational contexts, strategic choice may play a stronger role in

accounting for strategy.

The second consideration when considering this framework in a hybrid or

alliance context is the role of chance. De Rond and Thietart (2007) conjecture

that “Chance coincidences can open up new avenues for future choices.” While

we demonstrated this in the HOUSCO study, equally we saw that those

‘avenues’ had to open for not one, but two organisations. De Rond and Thietart

(2007) use examples where a decision maker unilaterally acts to exploit an

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opportunity presented by a chance event (i.e. Andy Grove and Intel). However in

a hybrid context, this unilateral action is not possible: actors from different

organisations must multi-laterally make the choice to exploit the opportunity

presented. The possibilities of ‘confluence’ then become somewhat slimmer and,

as we saw, can close more quickly if the decision ‘arena’ alters for only one of

the two participating organisations. The second possible extension to de Rond

and Thietart’s framework therefore, is that in plural or hybrid organisational

contexts chance may open up new avenues for future choices for both

organisations, but actors must make the choice to exploit these promptly.

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SUMMARY OF RESEARCH QUESTIONS AND FINDINGS

Cross-frame comparison and multi-frame synthesis addressed each of the three

research questions. Comparison and critique distilled the distinctive explanatory

contribution of the IA perspective in the HOUSCO case, neglected in

explanations for alliance process. Multi-frame synthesis theorised the

relationship of IA to the frames of ED and I/C. A summary of findings against

the three research questions is provided below:

RQ1: If alliances are socially complex, hybrid forms what case can be made for

individual agency as an explanation of alliance change and development in this

case? What additional dimensions does the IA perspective illuminate which have

otherwise been overlooked in the alliance process literature?

Three strong claims are made for the explanatory contribution of the IA

perspective:

• The most senior alliance decision makers exercised choice among

legitimate options in relation to the decisions which shaped the path of

HOUSCO. The choices of these actors were partially explanatory of

HOUSCO change and development and were shaped by both personal

and institutional motivations.

• The choices, motivations, practices, attributes and institutional resources

of other individual actors in Council and the state were explanatory of the

choices made by the most powerful decision makers. HOUSCO outcome

resulted from the concerted and complementary agency of political,

bureaucratic and technocratic actors in both organisations.

• All actors demonstrated practices particular to effecting change in a

socially complex, hybrid form. Actors strategised, evaluated, persuaded

and enacted both within their own organisational hierarchies, across the

two hierarchies and across the wider institutional field.

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An additional, weaker claim is that:

• IA, or strategic choice may have a stronger role in explaining HOUSCO

as a socially complex, hybrid form. The multiple logics (i.e. multiple

ideas about what is legitimate and possible outside the constraints of

hierarchy) within the alliance created opportunities for action.

RQ2: What dimensions are revealed through the interpretations provided from

the Environmental Determinism and Indeterminacy/Chance perspectives?

• Environmental change (declining ARA, rising costs and declining

financial resources) generated organisational adaptation from both

Council and the State Housing Department and was partially explanatory

of HOUSCO change and development.

• Luck and timing are partially explanatory of change and development in

the HOUSCO case.

RQ3: How does Individual Agency interface with each of the perspectives of

Indeterminacy/Chance and Environmental Determinism as a framework by

which to understand alliance process and outcomes in this case?

IA may equally be theorised as:

• One of three separate paradigmatic worldviews which collectively

provide overall accuracy in the explanation of HOUSCO, although each

taken separately is partial.

• One of three strands which were inextricably intertwined in the

production of HOUSCO.

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CHAPTER EIGHT: Conclusions and Implications

This thesis explored IA as an explanation of change and development in a single

rich case of alliancing in the public sector. In doing so, the thesis aims to

contribute to alliance process theory, which provides explanation for “the

sequence of events leading to an outcome” (Langley, 1999: 692) or why events

unfold the way they do. The case contributed to both theory and practice by

demonstrating empirically the utility of the IA perspective as an explanation of

alliance events and the explanatory strength of a multi-frame approach for

understanding and explaining alliance outcomes. The case also provided new

insights into the contingent nature of alliance outcomes.

The previous chapter addressed the three research questions, comparing and

critiquing the explanatory contribution of each of the three perspectives,

distilling the distinctive contribution of the IA perspective and theorising the

relationship between the IA perspective with the other two perspectives.

This final chapter discusses the findings regarding IA as an explanation for

HOUSCO. The key findings generated from the study were:

• Choices made by HOUSCO actors were partially explanatory of change

and development in the HOUSCO case.

• The IA perspective was not sufficient to explain the HOUSCO process:

the ED and I/C frames provided explanatory dimensions missing from the

IA explanation.

• The concerted and complementary agency of all HOUSCO actors from

both organisations and at multiple levels was explanatory of the choices

made by decision makers.

• The nature of agency demonstrated in the HOUSCO case, as a hybrid or

alliance form, has distinguishing characteristics.

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Discussion of these key findings also includes implications for alliance process

theory, alliance leadership literature and for alliance practitioners. The chapter

therefore begins by considering of the limitations of this particular case study for

theorising and developing broader lessons for practice. The chapter concludes by

addressing the original contribution to knowledge of this research and

implications for future research.

LIMITATIONS OF THIS STUDY

The implications for theory and practice of the key research findings of this study

are offered in the context of the inherent limitations of single case studies and of

this particular case study in the theorising process. Firstly, our empirical

illustration, a case study of alliancing between two public sector organisations,

may have accentuated the stochastic nature of change: elected governments as

decision making ‘participants’ — and with them their decision making

preferences — have the risk of changing according to a regular electoral cycle. It

could be argued also, that decision making preferences may be more unclear and

problematic in these public sector organisations. A characteristic of the public

sector is the multiple outcomes that an organisation needs to take into

consideration when considering potential solutions, rather than the single

unambiguous logic of the potential for investment return. Thus, decision making

arenas may well be more ‘anarchistic’ for these reasons than for market-facing

firms, making a potential alliance process more subject to luck and timing than

market-facing firms. This would therefore be interesting to explore in future

research.

Agential practices may also have played a stronger role in HOUSCO as a public

sector case, also for the reasons of problematic preferences in the public sector.

While it could argued that generically, strategising, evaluating and persuading

are practices in which all alliance actors may need to engage, in the public sector

there is no single ‘logic’ on which the actor must base their strategy and

persuasive argument. Actors have space within this ambiguity to strategise and

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persuade decision makers to a particular end. Again, whether agency is more

explanatory of change in different contexts would be an interesting avenue for

future research.

There must also be a statement of the inherent limitations of single case studies

for theorising. While this is recognised, this study has applied a rich theoretical

framework which can have broad application beyond this single case. The

analysis conducted could also be usefully applied in many strategy contexts.

From each of the three theoretical frames, core analytical questions were drawn

which guide the analyst to explore different aspects of the case study

phenomenon. This analytical frame could well be used for many types and

classes of alliance process. Therefore, as Yin (2003b) and Langley (1999) would

contend in relation to Alternate Templates Strategy for single case study

research, the theoretical perspectives used and the analysis undertaken suggest

that the researcher may offer some limited theorising and drawing of

implications beyond this time-bound and context-specific case.

STRATEGIC CHOICE, AGENCY AND ALLIANCE PROCESS

Studies of alliance process have been mostly underpinned by life-cycle,

teleological and evolutionary theories which locate the ‘motor’ of process change

in the initial design of the alliance or in the economic or institutional

environment. The role of actors is derived from these theories: actors are agents

of these determining forces. Tasks are prescribed for the actor, but the alliance is

driven by external or internal forces over which the actor is seen to have little

control.

The case study evidenced that decision making actors in the alliance field had

legitimate choice in regard to each decision event in the HOUSCO process, and

that these choices were partially explanatory of the alliance path. Moreover,

while these choices were informed by the organisational and institutional rules

and interests, they were also shaped by the personal values and interests of these

actors. The study therefore provides empirical support for the conjecture of De

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Rond and Bouchikhi (2004: 59) that the “mindsets, dynamics, and interests are

likely to shape an alliance at least as much as explicit organizational goals and

strategies.” The case study also demonstrated that choice was demonstrated by a

range of alliance actors at various levels, informed by personal as well as

organisational values. The case showed that these actors, far from having a pre-

defined organisational purposes and pre-determined tasks, ‘strategised and

enacted’ new institutional responses, persuading decision makers over a long

period of the institutional legitimacy of what was proposed. The case study

demonstrated that this fine-grained individual-level analysis of the practices and

decisions of actors at critical junctures provides understanding of the role of

agency as a generative mechanism of change in its own right, rather than

refracted through the lens of another process theory.

In summary, the study demonstrates that the IA perspective can add additional

explanatory power to current theoretical resources which explain alliance

process.

Implications for Alliance Process Theory

The finding in this case that the choices of alliance actors are partially

explanatory of alliance process, confirms the recent tentative, but untested

propositions of a range of alliance theorists (Faulkner & de Rond, 2000; Gulati &

Zajac, 2000; Hardy & Phillips, 1998), suggesting that actors may have a stronger

role in alliance outcomes than the literature currently allows. This case has

demonstrated how explanation is enriched when analysis can view an alliance as

being more than a ‘faceless abstraction.’ (Faulkner & de Rond, 2000: 377).

We observe that some collaborations adapt and are deemed successful, while

others appear to 'die by accident' (Doz & Hamel, 1998) defying rational

explanation. The alliance process literature will continue to provide somewhat

impoverished accounts of this phenomenon without enlarging the lens with

which it is examined to include consideration of the choices and practices of

actors. The analytical frame provided in the IA study in this case provides a

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theoretical and analytical tool for researchers to consider individual-level factors

when explaining an alliance process outcome. As the study demonstrated, this

level of theorising does not have to supplant or negate traditional economic and

structural accounts, or organisation-level theorising, but rather be considered

simultaneously or in juxtaposition to uncover what would otherwise be

overlooked in a more ‘telescopic’ view of alliances.

INDIVIDUAL AGENCY AS PARTIAL EXPLANATION: MULTIPLE

PERSPECTIVES REQUIRED TO EXPLAIN ALLIANCE PROCESS

The HOUSCO study demonstrated that, in this case, the choices and practices of

actors were partially explanatory of HOUSCO events. However, the multiple

frames analysis evidenced that this agency was made possible by various

contextual factors: the same choices and practices may not have resulted in

HOUSCO in another time or place. This finding supports Reed’s (1988: 42)

admonition to all theorists of human agency that we accept the “necessarily

ambivalent and contingent nature” of our intellectual practice, and also to be

sensitised to the “ineradicable degree of ‘organised anarchy’ (Cohen et al, 1972)

that pervades all complex organisations.” De Rond (2003) equally cautions

alliance process theorists to be careful in assuming “management to be the

primary force in alliance process … alliances may well be impacted by events

that are difficult to anticipate … things happen to it.”

This contingent nature of agency was illustrated through parallel analysis of IA

with the I/C perspective, demonstrating that windows of opportunity for

HOUSCO actors to effect change opened and closed within the fluid and

dynamic decision making arenas of the two organisations. Moreover, for the joint

decision from two organisations which was required for the process to progress,

there had to be overlapping windows of opportunity where agency was enabled

(“The planets lined up” Housing Department Manager). When and how these

two windows would overlap could not have been predicted at the beginning of a

process and had an element of randomness.

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Thus this case study evidenced that, while the explanation for the HOUSCO

events would have been diminished without the IA perspective, equally the other

two frames provided explanatory dimensions that would be neglected if we relied

solely on the IA perspective. By the same argument, the HOUSCO study

suggests that the economic and structural explanations for alliance process which

have dominated the literature may be limited. The analytic approach applied in

this case demonstrated the explanatory strength of “dialogue between the full

range of theoretical approaches” as Reed (1988: 42) advocates.

The study evidenced the strength of the multi-perspective approach to provide

the opportunity for ‘holistic theorising’ — which process theorists such as

Pettigrew (1992: 183) have strongly advocated — and provided two possible

approaches. By introducing chance into the calculus with agency and

determinism, De Rond and Thietart’s (2007) ‘interaction of complex processes’

theory provides not only a synthesis of these multiple perspectives, but also an

accommodation of contingency where choice can be enabled. The study also

demonstrated the utility of the multiple paradigm approach of Gioia and Pitre

(1990), which argues that unifying theory among different paradigms may not be

possible or useful. Through this lens, IA stands paradigmatically apart, alongside

but not in theoretical relationship with the other two perspectives.

In summary, Hambrick (2004: 93) argues for strategy research that theoretic

insights and breakthroughs are more likely when “multiple perspectives are

reconciled or integrated.” The HOUSCO case was able to demonstrate the merit

of an approach which reconciled and one which attempted integration. Both were

demonstrated to strengthen the explanatory reach of the analyst in the HOUSCO

case.

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Implications for Alliance Process Theory

Again, the current alliance process literature strongly favours the ED

explanation. However, as several strategy theorists have suggested (e.g.

Hambrick, 2004; Van de Ven & Poole, 1995) with complex organisational forms

we need to accept that each theoretical frame will be partial and that “multiple,

overlapping, competing” (Allison & Zelekow, 1999: 401) frames may come

closer to providing accurate explanations. A framework which enables analysis

from a range of alternate perspectives in parallel may be a step toward a more

complete understanding of the phenomena of alliance process and change. It may

be interesting to revisit the extant studies in alliance process, which are grounded

in the ED perspective and apply an IA or I/C analysis, thus leveraging the

existing literature to build theory from the juxtaposition of these frames.

Implications for Organisations

Rethinking Alliance Capability

While strongly informing research, ED thinking has also dominated practice.

This is evidenced by studies which find that the majority of time invested in an

alliance is spent on the design of the arrangement (e.g. Doz, 1998). If IA thinking

were encouraged, we would consider the possibility that some of the locus of

successful adaptation may be with individual actors. This would make us think in

a different way about alliance capability, what it is, where it resides and how it

can be developed. It may also lead us to consider carefully the staffing of

significant or complex alliances, ensuring that actors who are capable of a high

level of reflexivity (strategising and evaluating) are part of an alliance team.

Additionally, engaging in I/C thinking may lead organisations and alliance teams

to consider how their current or potential alliance can best act to make capital

from changing events.

333

Models as Tools of Practical Analysis

Alternative frames thinking may also assist the day-to-day practice within an

alliance. For example, should inertia take hold, if there is a high level of conflict

or an unexpected event potentially derails an alliance, applying the different

frames may assist analysis of issues and solutions. For example, is this issue

arising from weak strategic logic (ED)? Are we as individuals considering the

problem too narrowly? Are there more and different options for moving ahead?

(IA). Is this alliance impacted by pure, unavoidable bad luck which materially

affects the possibilities for the alliance? (I/C).

CONCERTED AND COMPLEMENTARY AGENCY REQUIRED TO

SHAPE DECISION CHOICES

The required functions that actors need to perform to initiate and develop an

alliance have been given somewhat fragmented treatment in the literature.

However, as we saw in the literature review, the alliance leadership literature

assumes a designated and dedicated role of ‘alliance manager’ who will perform

different functions at different stages of an alliance lifecycle; from being a

‘catalyst’ at opportunity identification stage (Dorado and Vaz, 2003; Rosenkopf

et al, 2001), to ‘visioning and sponsoring’, advocating and networking within

and across organisational boundaries, and managing and mediating as the

alliance reaches a mature phase (Spekman, Isabella & MacAvoy, 2000). The

literature has also suggested that organisations engaged in alliance arrangements

have a nominated ‘boundary spanner’ role, who manages exchange relationships,

(Seabright, Levinthal & Fichman, 1992) manage within inter-organisational

theatres (Williams, 2002) or who generally provide an interface between the

boundaries of independent firms (Wilson, 1995). The literature has also

suggested that different alliance roles are seen to be appropriate to either middle

or executive leadership (Bamford et al, 2003; Boyett & Currie, 2004; Rosenkopf

et al, 2001).

The case study has provided empirical support for these fragmented propositions

that a range of functions is required to initiate, develop and establish an alliance.

334

All the agency functions nominated above were present in the HOUSCO case.

However, HOUSCO evidenced that these functions were not centred on one or

two nominated ‘boundary-spanners’ or alliance managers, nor did functions

change as HOUSCO moved from tentative beginnings to incorporation. Rather,

all alliance actors at all levels needed to perform ‘boundary-spanner’ functions of

managing within ‘inter-organisational theatres’ (although these ‘theatres’ were

different for politicians, executive bureaucrats, senior bureaucrats and

technocrats). HOUSCO demonstrated that the functions of visioning and

sponsoring, advocating and networking within and across organisational

boundaries, and managing and mediating as the alliance reaches a mature phase

were all present, but one function did not disappear as HOUSCO approached

incorporation. Rather all of these functions were present at all stages and were

again performed in different ‘theatres’ by all actors.

HOUSCO provided empirical support for the tentative proposition that different

alliance roles are seen to be appropriate to either middle or executive leadership,

however the HOUSCO analysis unpacks this further to fully understand what is

required from the different levels in each of the two organisations and how these

functions relate to each other.

The case demonstrated that HOUSCO resulted from collective and concerted (or

simultaneous) agency of political, bureaucratic and technocratic actors in both

organisations:

• The agency of political actors in both organisations was the precondition

for HOUSCO incorporation.

• The agency of executive bureaucrats in both organisations was required

to bring the acceptable solution to the political actors.

• The agency of senior bureaucrats and technocrats in both organisations

was required to build the solution for the executive bureaucrats and

political actors.

335

The case demonstrated that the HOUSCO outcome required actors from different

levels to bring to the persuasion process the different institutional resources

available to them by virtue of legitimate authority or institutional reputation.

Change resulted from the complementarity of these institutional resources: each

level relied on the resources of actors at other levels.

Lord Mayor and Minister brought formal political (policy) authority and control

over resources:

• Executive bureaucrats brought formal organisational authority and

control over resources (organisational budgets and staff deployment).

• Senior bureaucrats brought their autonomy and credibility.

• Technocrats brought expert power, legitimacy and credibility.

Implications for Alliance Leadership Theory

The alliance leadership literature explores what kind of actors need to be

involved in an alliance, why and when (‘alliance roles’ in the literature review)

could be usefully progressed if there is recognition that nominated inter-

organisational functions (e.g. visioning and sponsoring, advocating and

networking, mediating) have the purpose of shaping the choices of decision

makers at each stage of an alliance process. If this is accepted, it would then be

helpful to draw from Institutional Theory to understand what institutional

resources are required to build the case for the alliance and to persuade decision

makers.

The HOUSCO case demonstrated that no one nominated alliance actor or

‘manager’ would have all the institutional resources (e.g. legitimate authority,

power to deploy staff or approve a budget, expert power) to build a substantial

alliance business case (or ‘solution’) that would appeal to the multiple interests in

multiple organisations and to mount and sustain a campaign of persuasion around

this case. A coalition of actors with complementary resources to bring to the

persuasion exercise, acting in concert may be a more powerful explanation of

which actors need to be engaged in an alliance, why and when. However, the

variety and depth of institutional resources may vary according to the alliance

solution proposed. For example these propositions may be on a spectrum of

336

strategic benefit and risk: alliance propositions that have more obvious strategic

benefit to all parties and carry a low risk may not require much persuasive

‘firepower’ or fewer institutional resources applied. This would be an interesting

extension to progress this part of the alliance leadership literature.

DISTINCTIVE SKILLS AND PRACTICES OF ALLIANCE AGENCY

The literature has offered a comprehensive description and prescription of

leadership requirements for successful collaboration, arguing that alliance

leadership requires distinctive attributes. Alliance leadership is generally

considered to be a complex undertaking with skill requirements different from

that of traditional management through a hierarchy (e.g. Isabella, 2002). The

complexity is seen to result from the inherent difficulties of bringing together

two or more sovereign organisations with different interests and agendas, which

in turn may change during the course of the alliance (e.g. Tenbrunsel & Messick,

1999). This is consistent with the literature on the theory of the hybrid

organisational form, which highlights the inherent tensions present in this

‘middle form’ of organising.

This case study provides empirical support for the implicit but untested

proposition of this literature that the skills, practices and attributes of alliance

actors matter in the calculus of collaboration performance, and that they can be

distinguished from leadership required to effect change in a single, hierarchical

organisation. In order to demonstrate between alliance practices and change, it

was necessary to look beyond the descriptive alliance leadership literature to

more theoretic views of agency from social theory and organisational theory. The

study synthesised the organisational literature which addresses the social

practices through which human agents transform their situational contexts in

which they act (Reed, 1988). These practices were operationalised as

strategising, evaluating, persuading, enacting and transforming. While these

practices are equally associated with change in a single organisation, the

HOUSCO case demonstrated that the actors were required to employ these

practices across a wider field: within their own organisational hierarchies, across

337

the two hierarchies and across the wider institutional field. The contribution of

the HOUSCO study was framing the distinguishing processes of alliance agency

as strategising and evaluating with an understanding of the dynamics of several

contexts, persuading multiple decision makers across the institutional field with

diverse personal and strategic interests and motivations, and enacting and

transforming in multiple decision arenas.

In summary, the case study provided empirical support for the argument of the

alliance leadership literature that there is distinctiveness to the practices of actors

in alliance contexts. However the study also went further, demonstrating that in

this case these practices shaped the choices of decision makers and therefore the

development path of HOUSCO.

Implications for Alliance Leadership Theory

As was observed in the literature review, studies of alliance leadership and

management have produced comprehensive alliance leadership taxonomies,

taking a normative approach to prescribing what leadership skills and practices

are associated with alliance success. This prescription is underpinned by

assumptions about the ‘ideal state’ of alliance life — one that is stable, linear and

predictable, and driven by explicit organisational goals and purposes — which

theorists have critiqued (e.g. De Rond and Bouchikhi, 2004). This study

demonstrated that taking the hybrid organisational literature, and the literature on

pluralistic context, as a point of departure, leads us to different assumptions

about the ontology of alliances and the dynamics of alliance life. This literature

leads us to assume that alliances are likely to experience tension and instability

as a natural state, and that rather than being driven by unitary, explicit

organisational goals, the path of alliances are shaped by multiple interests,

individual, organisational and institutional. The question about alliance

leadership is then less about what specific skills and practices can be prescribed

for alliance stability and the fulfilment of organisational goals, but rather how

actors shape the agenda and the choices of decision makers in a dynamic, shifting

environment of multiple interests, organisational contexts and decision making

arenas. This questioning can be informed by tools provided by organisational and

social theory, such as used in this study, and also by the literature on strategy

practice in pluralistic contexts (e.g. Denis et al, 2007).

338

CONTRIBUTION TO KNOWLEDGE

The research presented in this thesis has made three contributions to knowledge

of alliance process and alliance leadership.

The primary original contribution of the research is to demonstrate empirically

the utility of the IA perspective as an explanation of alliance events. This extends

alliance process theory by providing a more individual-level account of the

factors which shape the path of an alliance. Two theoretical contributions made

this analysis possible. Firstly, the research synthesised the human agency

literature from social and organisational theory and used this as a theoretical

frame by which the choices and practices of actors and their contribution to

alliance events could be analysed. This provides new research paths for alliance

leadership literature by linking this largely a-theoretical literature, which

describes the skills and practices of alliance actors, with theories of human

agency and change, thus bringing this under-studied dimension into the calculus

of explanations for alliance process. Secondly, the research demonstrated the

utility of two approaches (Gioia & Pitre, 1990 and De Rond & Thietart; 2007) to

theorising the role of IA within the three perspective framework. Each of these

approaches can extend alliance process theory by enabling IA to be integrated, or

analysed in dialogue, with existing theories of alliance development and change.

Secondly, the research also provides new insight into the contingent nature of

alliance outcomes by demonstrating empirically the workings of ‘timing and

luck’ (Eisenhardt & Zbaracki, 1992) in opening limited ‘windows of

opportunity’ for agency. This extends alliance process theory by sensitising the

claims to causality that might be made for economic, structural or individual

factors, demonstrating that much in alliance life depends on fortuitous ‘turns of

events.’

Finally, the research also contributes to knowledge by demonstrating the

explanatory strength of a multi-frame approach for understanding and explaining

339

alliance outcomes —, and of these three frames in particular. The theoretical

framework, initially informed by De Rond & Thietart (2005), and the working

model of ‘core analytical questions’ developed for this study, contribute to a

broadening of approaches to analysis in studies of collaboration process,

currently dominated by economic and structural theories. The multi-frame

approach was shown to produce a more comprehensive (Gioia & Pitre, 1990) and

‘accurate’ (Langley, 1999) account of this complex phenomenon, than would

have been possible with any single paradigm. The core analytical questions,

developed for this study are provided below, complementing the Conceptual

Framework provided in the Chapter Two, and can be used to inform similar

multi-frame theorising.

The core questions that the ED perspective leads the analyst to ask include:

1. Who are the organisational actors?

2. What are the objective circumstances in their environment that each

organisation conceives as threats, challenges or opportunities?

3. What is the unitary purpose or goal of each organisation?

4. How does an alliance with the other organisation meet the purposes of

each organisation and address the conceived threats, challenges or

opportunities?

5. What are the objective (or perceived) costs and benefits for each

organisation of the alliance proposition at each stage of the process?

What are the range of other options that exist to address the objective (or

perceived) threat, challenge or opportunity?

6. What is the best choice for each organisation given the costs and benefits

of all options?

7. What overall pattern can be distilled from the sequence of alliance

events?

340

IA questions include:

1. Which acts of agency were explanatory?

2. Who were the key actors?

3. Why were these actors powerful?

4. What is the evidence of strategic choice?

5. What were the purposes or motivations of these actors?

6. How did these actors bring about change? What practices were

demonstrated?

I/C questions include:

1. What do we need to understand about each of the three ‘streams’

(problems, participants and solutions) running independently through

each organisation in order to understand the focal event or outcome?

2. What was the necessary ‘coupling’ or confluence of streams at this time

which explains the positive outcome of the ‘choice event?’ How did these

streams come together?

3. How could an ‘easily imagined variation’ (Tetlock & Belkin, 1996)

within one or more of the streams have changed the opportunity for this

‘confluence’, and plausibly have changed the subsequent sequence of

events? What is the evidence for this counterfactual proposition?

341

IMPLICATIONS FOR FUTURE RESEARCH

The discussion of research findings above has highlighted three areas which

would benefit from replication studies.

Firstly, our understanding of the contribution of individual actors to alliance

change and development would benefit from studies in other contexts. This

thesis accepts with de Rond and Thietart (2007: 547) that choice and human

agency can only be understood in terms of its social and material context. This

thesis has tentatively conjectured that the ‘problematic preferences’ and

‘incomplete logics’ in decision making arenas may be more characteristic of the

public sector context than market-facing contexts and that this creates more

space for actors to persuade and effect change. Whether agency has equal, less,

more or different explanatory power in different contexts would usefully extend

our understanding of the theoretical contribution of agency to alliance process.

Secondly, replication could assess whether the number and type of actors

needing to be involved in effecting change within an alliance, why and when,

may be contingent on the nature of the alliance proposition and the institutional

context in which the choice is being made. Discussion in this thesis tentatively

conjectured that alliances may differ in terms of the intensity of institutional

resources required to shape the choices of decision makers. The findings of this

study were that a coalition of actors with complementary resources to bring to

the persuasive exercise, acting in concert, was explanatory of the choices made.

However other alliances, with change propositions that may carry more or less

perceived benefit or risk, may have a requirement for less or more institutional

resources, deployed at different stages.

Finally, how actors go about the process of shaping the choices of decision

makers within alliances may differ in different contexts. While the findings of

this research were that the broad theoretical construct of strategising, evaluating,

342

persuading, enacting and transforming enabled analysis of the practices of

alliance actors in HOUSCO, useful fine-grained analysis might uncover whether

the nature of these practices differ in different alliance contexts. For example,

HOUSCO was an alliance between two organisations both in the public sector,

although each was responding to different economic and structural factors. The

practices of actors demonstrated evaluation of both social and environmental

contexts prior to strategising change possibilities. However, do these evaluation

practices qualitatively differ when the alliance brings together organisations from

two different sectors, for example public sector and private sector? Do these

practices differ when multiple sectors are attempting to engage in an alliance?

Replication studies conducted using similar theoretical constructs would add

useful depth and detail to our understanding of these and other practices of

alliance actors and their role in shaping the path of alliances.

343

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