Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
The Role of Relationship Capital in Malaysian Public Sector
Collaboration Outcomes
Shila Devi Ramadass, Murali Sambasivan and John Antony Xavier
The topic of public sector collaboration (PSC) is at the forefront for prominent
scholars in recent years as a vehicle in solving atrocious social problems.
Despite the value of PSC to the improvements in the real world, PSC
processes have remained conceptually obscure which is known as the „black
box‟. In this paper, the authors brings together theoretical and empirical
literature, references to secondary data combined with a Malaysian case
study of public agencies involved in PSC to better understand the role of
relationship capital in shaping successful PSC outcomes. The paper reveals
that relationship capital is a crucial factor in PSC process for fulfilling national
priority areas by solving complex social problems in Malaysia. It is also found
that relationship capital contributes towards value creation as well as positive
re-evaluation of collaboration partners.
Field of research: Public sector collaboration management
1. Introduction
Malaysian Government started realizing that the nation was facing some salient issues
(Ramadass et al., 2012). Significant efforts were taken as a response to this problem to
improve the efficiency of public service delivery and Government Transformation
Programme (GTP) was introduced in year 2010. Under the GTP, the nation‟s priority areas
known as National Key Result Areas (NKRAs) were identified which requires collaboration
between public agencies to fulfil demands of society ("GTP: The Roadmap," 2010).
2. Literature Review
New Public Management (NPM) produced many specialized and fragmented authorities
which retarded efficiency within the public sector (Christensen and Lӕgreid, 2007,
Siddiquee, 2006, Callaghan, 2006, Davies, 2009). Thus, the concept of public sector
collaboration (PSC) was introduced as a reaction to NPM to overcome this problem as well
as to solve complex social issues (Christensen and Lӕgreid, 2007, Barber, 2007). PSC
means that there is aspiration to coordinate horizontally as well as vertically, better use of
scarce resources, create synergies by bringing together different stakeholders, and to
avoid fragmented services to citizens (Christensen and Lӕgreid, 2007, Huxham and
Macdonald, 1992, Pollitt, 2003).
Shila Devi Ramadass, Graduate School of Management, Universiti Putra Malaysia, Malaysia. E-mail:
shi1019@yahoo.com
Murali Sambasiva, Global Entrepreneurship Research and Innovation Center, Universiti Malaysia Kelantan,
Malaysia. E-mail: murali@umk.edu.my
John Antony Xavier, Graduate School of Business, Universiti Kebangsaan Malaysia, Malaysia. E-mail:
john@ukm.my
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Scholars believe an important part of the PSC topic is lost by failing to explore the
multidisciplinary literature on collaboration, as this broader scan yields valuable insights
about what public managers need to know in order to manage collaboration (Thomson and
Perry, 2006). It is also argued that there is much to be learnt about PSC and there are
many questions unanswered such as management principles of PSC (Bingham and
O„Leary, 2006, Dawes et al., 2009, Greasley et al., 2008, Gray and Wood, 1991). It is
stated that theories of organizing PSC must be rewritten and updated (McGuire, 2006).
Hence, this paper applied three elements of relationship capital – communication,
commitment and trust which was utilised to explain collaboration processes in the private
sector strategic alliance (Kale and Singh, 2009, Loke et al., 2009, Sambasivan et al., 2011,
Mitsuhashi and Greve, 2009) as a basis to explain the role of relationship capital as a
critical success factor in PSC.
2.1
Personal Relationship Theory
The study on personal relationships was originally conceptualised for scientific analysis
through the publication Personal Relationships: Their Structures and Processes (Kelley,
1979). Kelley (1979) believes that interdependence, responsiveness and attribution are
crucial concepts in understanding long term relationships between people (Loke et al.,
2009, Sambasivan et al., 2011). These concepts of “interdependence” and
“responsiveness” are relevant for understanding relationships in collaborations. In this
case, the outcome of collaboration depends not only on what each of the partner does
individually, but also on the joint decision and action of the collaboration partners.
Interdependence in a relationship exists in relation to outcomes such as rewards and costs
controlled by individual partner as well as jointly by partners (Kelley, 1979). The mutual
responsiveness includes interaction between partners that displays sensitivity and
considerateness to one another‟s outcomes (Kelley, 1979). The attribution of interaction
events to disposition of partner comprises of compatible preferences, interests and
attitudes of love to each other that permits greater interdependence of partners (Kelley,
1979). Hereby, the concept of interdependence in Kelley‟s (1979) personal relationship
theory expresses vital features required to stimulate communication, trust and commitment
in collaboration outcomes (Loke et al., 2009, Sambasivan et al., 2011). It is also noted
from previous studies that cooperative interdependence between collaboration partners is
a concrete basis for partners to rely on each other and to promote activities that results in
mutual success (Loke et al., 2009, Sambasivan et al., 2011).
This study will be incorporating personal relationship theory to explain the role of
relationship capital in achieving successful outcomes in PSC. Social bonds are identified
as crucial in ensuring successful outcomes from collaboration (Bercovitz and Feldman,
2011, Dawes et al., 2009, Kale and Singh, 2009). Basically, the maintenance of good
relationship known as relationship capital in collaboration is better explained through
personal relationship theory which includes elements of commitment, communication and
trust (Sambasivan et al., 2011). Besides that, past studies identified elements of
communication, trust and commitment between partners that affect outcomes of
collaboration as the resultant from interdependence in personal relationship theory
(Sambasivan et al., 2011). It is argued that one partner‟s behaviour is dependent on the
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
anticipation of other partner‟s behaviour in a given situation (Sambasivan et al., 2011).
This matches personal relationship theory which describes interdependence in a
relationship that exists in relation to outcomes such as rewards and costs controlled by
individual partner as well as jointly by partners (Kelley, 1979). This aspect can be applied
to explain the existence of relationship capital within PSC which encompasses
interdependent environment.
Past literature has also identified that collaborations are successful due to the cyclical
relationship between communication, trust and commitment: (1) trust and commitment are
affected by communication whereby frequent communication allows for greater trust and
commitment or vice versa; (2) trust affects communication and commitment whereby
partners are willing to communicate information and be committed when they trust each
other; and (3) commitment affects trust and communication whereby partners are willing to
communicate and trust their partners when they have commitment (Sambasivan et al.,
2011, Davis and Love, 2011, Claro and Claro, 2011). In short, relationships in
collaboration represents a major contributor to successful performance such as creating
value throughout collaboration (Davis and Love, 2011). Relationship capital which includes
trust, commitment and communication is said to be maintained when managing
relationships in collaboration for favourable outcomes (Sambasivan et al., 2011, Davis and
Love, 2011). Principally, communication of information shows that willingness of
collaboration to share important information and avoid releasing on need-to-know basis
practices of information sharing (Daugherty, 2011). This will create mutual trust which
enables freer exchange of information between partners (Daugherty, 2011) and thus
develop commitment among them to achieve the common goals (Sambasivan et al.,
2011). Furthermore, past literature described that organizations seek closer relationships
in order to achieve lower costs, faster deliveries and improved quality (Daugherty, 2011).
On the other hand, PSCs are established to achieve social goals and the achievement of
these goals must be done in efficient, most economical and effective use of public funds
(Ramadass et al., 2012). This is in line with personal relationship theory that view that
outcomes will be a function of the strength of PSC (Try and Radnor, 2007). This is also in
line with past literature that measures the success of collaboration using financial and nonfinancial measures which includes goal achievement, value creation and re-evaluation
(Sambasivan et al., 2011, Stalebrink, 2009, Lewis et al., 2009). The goal achievement or
goal realisation (Sambasivan et al., 2011) is the most important aspect in PSC because
the main aim for public agencies is to solve complex social problems that cannot be
achieved by an individual organization (Huxham and Macdonald, 1992, Ryan and Walsh,
2004, Huxham, 2000, Weber, 2009). Besides that, value creation is more of the value that
is captured or created from the collaboration through creating skills, advantaged networks,
cutting down costs and improving productivity (Sambasivan et al., 2011). The re-evaluation
refers to the level of satisfaction of the collaboration partners towards the relationship,
either it is supportive or destructive, to ensure the attainment of outcome performance
(Sambasivan et al., 2011).
The outcomes or performance measurement are objective and quantitative indicators of
various aspects of performance for public programmes such as value creation aspects,
operating efficiency, productivity, service quality, customer satisfaction, and cost
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
effectiveness (Poister, 2003). Hence, personal relationship theory can be used to explain
the outcomes in PSC which values cost effective provision of high quality services,
achievement of desirable end results such as solving social problems, and to gain
confidence from citizen in government (Try and Radnor, 2007, Young, 2010, Sambasivan
et al., 2011, Kelley, 1979). The collaboration partners also re-evaluate the relationship with
partners to ensure the attainment of goals in the collaboration (Sambasivan et al., 2011).
3. The Methodology and Model
The research planning started with a thorough literature review combined with relevant
secondary data references comprising of government documents which highlighted that
there is lack of literature on how to manage a successful collaboration. This study attempts
to apply the personal relationship theory so far discussed to explain the role of relationship
capital in PSC research framework as in Figure 1.
Figure 1: Research Framework
Commitment
Communication
Trust
Relationship
Capital
Public Sector
Collaboration
Outcomes
P (+)
Value creation
Goal attainment
Re-evaluation
Stronger relationship capital between collaboration partners allows them to achieve
favourable outcomes (Sambasivan et al., 2011, Davis and Love, 2011). This is because
they communicate frequently to resolve any hindrances in achieving the targets. Besides
that, the collaboration partners can better achieve the outcomes of the collaboration when
they trust each other and have more commitment. Communication not only allows partners
to understand the collaboration goals, roles and responsibilities for all the actors but also
helps them to coordinate activities in the collaboration (Try and Radnor, 2007, O‟Flynn,
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
2007). This also indicates that the partners share confidential information because they
have mutual trust (Sambasivan et al., 2011, Davis and Love, 2011).
The collaboration partners also rely on other partners in PSC with the expectation that the
partner will act according to the common agreement (Jones et al., 2010). This element of
trust based on goodwill of the partners is important in achieving improved collaborative
performance (Jones et al., 2010). Furthermore, collaboration partners‟ commitment is
relevant to the bonding in a marriage as supported in personal relationship theory (Kelley,
1979, Sambasivan et al., 2011). This is due to the fact that collaboration partners have
duties that need to be performed accordingly since failure to do so will result in tarnished
image and reputation of these partners in the eyes of the citizen (Barber, 2007, Ling,
2002). Furthermore, higher commitment levels from the collaboration partners can lead to
more value creation such as operating efficiency, productivity, service quality, customer
satisfaction, and cost effectiveness (Poister, 2003, Hammervoll, 2011). The collaboration
partners with high level of commitment can also achieve goals of solving complex social
problems (Barber, 2007). The collaboration partners also will measure the relationship in
the collaboration based on commitment and trust levels of the other partners which
determine the successful outcomes in the collaboration (Sambasivan et al., 2011,
Hammervoll, 2011). This suggests that successful outcomes in PSC require effective
information sharing, trust building and high commitment between partners (Try and
Radnor, 2007, O‟Flynn, 2007). Hence, it is proposed that:
Proposition:
The higher the relationship capital between PSC partners, the greater
is the achievement of successful outcomes in the collaboration.
Thus, role of relationship capital as a critical success factor in PSC was identified and
utilised to develop a research framework that yielded the above proposition. This was
followed with a case study to demonstrate the proposition. Twenty six officers in the
federal agencies with majority of them holding senior positions and are involved in the
NKRAs, GTP were interviewed using semi structured interviews focusing on role of
relationship capital on the outcomes in PSC.
4. Findings from Case Study
The aim of this section is to provide results of the case study of public agencies involved in
NKRAs, GTP that has formed collaboration with other public agencies within GTP in order
to solve complex social problems. The proposition arising from the research model was
tested against the findings by selecting some examples which is evident in the
implementation of NKRAs under Malaysian GTP context:
4.1
The Case Study: NKRAs, GTP in Malaysia
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Seven NKRAs under GTP were identified as most important priorities including: (1)
Reducing Crime; (2) Fighting Corruption; (3) Improving Student Outcomes; (4) Raising
Living Standards of Low-Income Households; (5) Improving Rural Basic Infrastructure; (6)
Improving Urban Public Transportation; and (7) Addressing Cost of Living ("GTP: The
Roadmap," 2010). The Malaysian Government realized that these national priority areas
need integration policies or what this paper focuses on, PSC (Ling, 2002; Christensen &
Lægreid, 2007) to enhance government‟s capacity for delivery of these targets. Thus,
collaboration prevails as the choice of implementation for achieving obligation of public
sector, which is to achieve favorable outcomes by solving complex social problems for the
benefit of the citizen (Ramadass et al., 2012).
4.2
The Case Study Results
Majority of the interview respondents informed that there is relationship capital in PSC and
described its role in achieving PSC outcomes in Malaysia. Respondent 1 involved in the
NKRAs highlighted that relationships within PSC are beyond working relations: “We went
beyond working relations you know. We try to make sure that we have good relations.
Besides having working relations, we wanted to have personal relations as well.”
Respondent 1 also added that: “It involves a lot of communication and of course being
sympathetic to them [partners].” Respondent 14 described partners in the PSC as a
community and they take care of each other: “NKRA is like a community. We have to take
care of each other.” The element of sensitivity towards partners is exhibited in the above
responses. The considerateness to one another‟s outcomes is important to maintain long
term relationship which contributes towards positive outcomes in PSC. Communication
which is crucial for PSC to be successful is also specified in the response above by
respondent 1. This was also indicated by respondent 15: “When we have discussions with
them, then it gets things going smoothly. For instance, the entire federal projects are given
over to the State Development Office. Even though there were problems initially, but there
is an improvement after interacting with them frequently.” This shows that the frequent
communication between the public agencies is said to resolve deterrents in achieving the
NKRA targets.
The partners are also said to better achieve the outcomes when they have trusting
behaviours. Respondent 3 said that his department has to rely on their partners to achieve
successful outcomes in NKRA, and thus involves a great deal of trusting behaviours: “We
really have to trust them…because implementation actually depends a lot on the
agencies.” Positive outcomes from the collaboration also require commitment from all the
partners as well which was highlighted by respondent 25: “The commitment is very
high…very good. Their spirit is very high…This is because NKRA is a very well planned
kind of initiative and everybody is so involved in this. Therefore, everybody is very excited
to work together to achieve our targets. The commitment is actually very good.” According
to this respondent, the PSC members commit themselves towards implementation of
NKRA to achieve the NKRA targets which is a national initiative and thus is given the top
priority.
Evidently, it is reported for year 2010 and 2011 that the overall composite scoring
achievement exceeded the targets. The overall performance of targets for NKRAs scoring
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
is determined by a simple comparison against 2010 and 2011 targets. The collaboration‟s
overall composite scoring of 112% and 131% for year 2010 and 2011 respectively ("GTP:
The Annual Report 2010," 2011; "GTP: The Annual Report 2011," 2012) shows that the
collaboration is successful in solving complex social problems. Some of examples given by
respondent 16 for goal attainment in year 2010 include improving urban public
transportation, rural basic infrastructure and education in Malaysia: “Here we are talking
about two million increases in ridership, two million people have enjoyed rural basic
infrastructure in the rural areas, and parents for 55,000 children who benefited from preschool admission.”
Besides that, the PSC creates value such as cost efficiency because the collaboration
partners utilized only 79% and 92% of the budget in year 2010 and 2011 respectively to
achieve the NKRA targets. Thus, it is evident that the PSC was able to ameliorate internal
process which leads to cost efficiency. Besides that, PSC was able to achieve fast results
in a short period of time as highlighted by respondent 4: “Even the International Team from
United Kingdom was surprised we [PSC in Malaysia] achieved fast results in just a year…”
It is also noted that PSC embraced the use of technology to increase the cost
effectiveness as highlighted by respondent 2: “PSC offers technological advancements
which leads to lower costs or faster service delivery.” Besides that, respondent 8 displayed
satisfaction of the PSC outcomes and showed a supportive attitude towards the
relationships between the PSC partners: “Today, we managed to streamline the functions
of ministries and agencies. PSC also managed to streamline the budget for ministries and
public agencies. It is good because ministries and public agencies do not have to work in
silo anymore”.
The improvement in efficiency simultaneously improves the image of public sector in the
eyes of the stakeholders especially the citizen. Notably, the citizens have gained
confidence towards the public sector. This is because the citizens are satisfied with the
high quality services received from the public agencies as indicated in GTP Annual Report
2011 (2012). It is reported that there was 70.5% increased public perception on police
performance as in December 2011 based on a survey. In fact, the image of the nation has
also improved among recognised expert from abroad as highlighted in GTP Annual Report
2010 (2011), pg. 206: “In relation to what we are doing in Korea, I am equally impressed
by the results of the GTP. The NKRAs have showed very positive outcomes, specifically in
fighting crime and corruption, improving urban public transportation, reducing poverty and
rural infrastructures (H.E. Sueng Jun Kwak, Chairman of the Presidential Council for
Future and Vision of the Republic of Korea.”
Overall, relationship capital - communication, trust and commitment influenced goal
attainment, value creation and positive re-evaluation in PSC as illustrated in the
proposition of this study.
5. Summary and Conclusions
This paper has presented a case study of implementation of NKRAs, GTP in Malaysia
which involves efforts in intensifying collaboration across ministries and agencies to solve
complex social problems. Basically, it was found that higher level of relationship capital
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Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
contributes not only to overall performance and positive re-evaluation of partners but also
to the inter-organizational value creation. The findings from this study will be utilised for the
development of the implementation framework to deepen understanding on how to make a
PSC succeed.
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