5th international strategic management c

THE PROCEEDINGS OF 5th INTERNATIONAL STRATEGIC MANAGEMENT CONFERENCE Striking the Right Balance Between Existing Strategy and New Opportunities with Special Emphasis on Turbulent Markets July 2-4, 2009 Stellenbosch, South Africa 5th INTERNATIONAL STRATEGIC MANAGEMENT CONFERENCE “Striking the Right Balance Between Existing Strategy and New Opportunities with Special Emphasis on Turbulent Markets” July 2-4, 2009 Stellenbosch, South Africa Honorary Presidents Ali AKDEMøR (Ph.D.) Cuma BAYAT (Ph.D.) Alinur BÜYÜKAKSOY (Ph.D.) Russel BOTMAN (Ph.D.) Chairman Erol EREN (Ph.D.) Co-Chair Oya ERDøL (Ph.D.) Ali AKDEMøR (Ph.D.) Johan HOUGH (Ph.D.) Typesetting Mehtap ÖZùAHøN ISBN 978-605-60771-0-4 Organizing Institutions Beykent University Gebze Institute of Technology Canakkale Onsekiz Mart University Stellenbosch University Statements of facts or opinions appearing in Proceedings of the 5th International Strategic Management Conference are solely those of the authors and not imply endorsement by the Organization Committee or publisher Print: Pozitif Printinghouse / Ankara / Turkey - e-mail: pozitif@pozitifmatbaa.com TABLE OF CONTENTS CRISIS MANAGEMENT & GOVERNANCE The Changing’s Of Share Price In The Financial Crisis: A Comparative Study For Auto Makers (EROL EREN,SERDAR ALNIPAK, METIN UYAR) Global Economic Crisis Management From Strategic Management And Marketing Perspectives: The Case Of Textile Industry (ESIN BARUTÇU, CELALETTIN SERINKAN, SÜLEYMAN BARUTÇU) 15 Nightmare Of Insurance Directors: Effects Of Global Crisis On Turkish Health Insurance Business (AYÇA TÜKEL, ONUR YARAR, UZ ƯZYARAL) Changes In Economy Policies After Global Financial Crisis And Their Effects on Developing Countries : The Case Of Turkey( ENGIN ERDOöAN, MELIHA ENER) 23 33 Performance Measures Along The Relational Continuum In A Bilateral Governance Structure(QUAMRUL ISLAM) 41 The Forms Of The EU Governance And Construction Of The EU Borders (FILIZ COBAN) 49 Corporate Governance: Problems And Relationship Between Board Of Directors, The Chief Executive Officer, And Top Management Integration To European Banking Legislation (GÜRAN YAHYAOöLU) 55 STRATEGIC LEADERSHIP & STRATEGIC ALLIANCES - AMBIDEXTERITY Hosting Strategic Conversations: Some Alternative Approaches For Leaders (MARIUS UNGERER) 69 The Relationship Between The Strategic Influencing Skill And Intra-Organization Communication In Leadership And A Chain Store Application (MEHMET TIKICI,SELMA KARATEPE,MEHMET DENIZ,SINEM GÜRAVùAR GƯKÇE) 83 Creativity For Gaining And Sustaining Competitive Advantage: The Role Of Leadership Styles (A Quantitative Research In Turkey’s Top 500 Industrial Enterprises In Iron And Steel, Automotive And Textile Industries)( F OBEN ÜRÜ,UöUR YOZGAT) 93 The Effects Of Leadership Styles And Organizational Culture On Firm’s Innovativeness (ETHEM DUYGULU, EMIR ÖZEREN) 109 A Qualitative Study Of Key Success Factors For Multinational Corporations Operating In SubSaharan Africa (A.C PARKER, J HOUGH, E.W NEULAND) 123 Strategic Alliances And The Impacts Of Star Alliance Network On Turkish Airlines (ÖZLEM ATALIK, ALI HALICI) 135 Attitudes Towards Strategic Supplier Alliances In The Natural Stone Supply Chain: The Case Of Global Companies (SÜLEYMAN BARUTÇU, MUSTAFA TANYERø, ùÜKRÜ GÖREN) 147 An Investigation Of Centrality In The South African Company Network (HAMIEDA PARKER, IAN DURBACH) 159 Working With Multiple Partners: Balancing The Efficiency – Flexibility Tension (MARIANA DODOUROVA) 169 Organizational Ambidexterity: An Empirical Examination Of Organizational Factors As Antecedents Of Organizational Ambidexterity (ùÜKRÜ AKDOöAN, ASUMAN AKDOöAN, AYùE CøNGÖZ) 183 Ambidexterity: The Combination Of Seemingly Conflicting Priorities (LÜTFIHAK ALPKAN, SELIM AREN) 191 RESOURCE BASED VIEW & CULTURE - STRATEGY Resource Based View Of Intangibles On ERP Systems Implementation And Organizational Performance In China (JO RHODES, MARY BAMBACAS, PETER LOK) 199 The Effects Of Generic Strategies And Business Capabilities On Business Performance (A.ZAFER ACAR, CEMAL ZEHIR, MEHTAP ÖZùAHIN) 211 Strategic Concerns Of Competence-Based Risk Perception In Service Projects (ZOLTAN VERES) 225 Resource Based Analysis Of The Growth Of The Yacht Building Sector At Antalya Free Trade Zone (FULYA SARVAN, ONUR DIRLIK,EREN DURM ARICI,TBA GÜRÇAYLILAR YENIDAN ) 235 The Impact Of Cultural Values On Marketing Of Chinese National Parks: An Exploratory Research For Communication Strategy (CATHERINE SARLANDIE DE LA ROBERTIE, BAIFANG CHENG) 251 The Importance Of Constructing Effective Corporate Culture For Global Workforce: A National And Organizational Culture Perspective (TIJEN ERSOY HARCAR) 261 The Impact Of Empowerment And Quality Culture On Job Satisfaction (HAKAN KITAPÇI, METIN ATEù, SULTAN SÜLEYMAN ÖKTEN) 271 Re–Discovery Of The Civil Society Organizations In The World, And Turkey: A Fieldwork In Üsküdar, A District In østanbul (SÜLEYMAN ÖZDEMIR, ZEKI PARLAK) 279 Linking Performance To Strategy In The Public Sector (BILGE TERKEN ATAOöLU) 293 TOTAL QUALITY MANAGEMENT & SERVICE QUALITY MANAGEMENT TQM In New Car Dealerships: It May Be Considered Strategic But Is It Practiced? ( KYM FRASER) 307 The Relationship Between The Total Quality Management Practices And Performance: An Empirical Study Of Turkish Firms(ESIN SADIKOGLU, CEMAL ZEHIR) 323 The Relationship Between Business Process Reengineering And The Performance Measurement Systems :An Empirical Study In Turkey (ERKUT ALTINDAö,HALUK TANRIVERDI,CEMAL ZEHøR) 337 Effects Of Total Quality Management Practices On Organizational Performance Of Hospital(CEMAL ZEHøR,ƯZLEM ARACI,ESIN SADIKLU, MEHTAP ƯZùAHIN) 347 Measuring The Pre-Flight, In-Flight And Post-Flight Service Quality Of Airlines: A Research At Domestic Flights (MEHMET ERKAN DURSUN , VILDAN DURMAZ) 361 Value Add Logistics Service Quality In Strategic Logistic Management: Case Study Of Halley Logistics (PINAR ÖZTÜRK) 367 The Relationship Between The Strategic Planning (Strategic Management System) And Quality Improvement In Universities (ABDULLAH KARAKAYA) 377 Hospitality Management From A Strategic Perspective (øGE PIRNAR,RUHET GENC) 385 STRATEGIC MARKETING The Marketing & Instrument Study Of Development Of A Company’s Competitive Tactics In The Turbulent Market Of The Mobile Communication Services (MOSTOVAY I.V/.,MURAVYOVA N.N., YASKO M.) 397 The Impact Of Technology On Competitive Marketing By Banks: A Case Of Standard Bank In King-Williams Town, Eastern Cape Province, South Africa (REGINALD MASOCHA, NORMAN CHILIYA, STANSLOUS ZINDIYE) 405 Brand Marking Works In Private Hospitals (SELMA SÖYÜK, ONUR YARAR, MELIH EROL) 415 International Market Segmentation Paradox For Strategic Management: Purely Logical Or Highly Intuitive (MELIS ATTAR, EMINE ƯưÜT, METIN KAPLAN) 421 Strategic Brand Management In Hospitality Sector: How To Manage Co-Branding In Hotels And Restaurants (RUHET GENÇ) 427 Investigating Drivers Of Choice Behavior: Corporate Image, Perceived Risk And Trust Interactions Through Reputation Management (HUSEYIN A KANIBIR, SIMA NART) 435 The Impact Of Green Supply Chain Management Practices On Business Performance: The Case Of Chemical Industry (ADEM ƯưÜT, D MEHMET BøÇKES, METIN KAPLAN, EMINE ƯưÜT) 453 Loyalty Exists In Fuel Consumption Or Does Not? ( CEYDA AYSUNA, SAHAVET GÜRDAL, UöUR YOZGAT) 461 The Effect Of Word Of Mouth Communications On Consumers’ Purchasing Decisions: In A Globalized World A Case Study From Turkey (RUZIYE COP, FATIH SEN, NIYAZI GUMUS) 473 Social Responsibility Projects Of The Service Firms Which Are Traded In Istanbul Stock Exchange’s (Ise) Services Index (NILSUN SARIYER, SERHAT HARMAN, EBRU KANYILMAZ POLAT) 481 INTERNATIONAL INTEGRATION & FOREIGN DIRECT INVESTMENT China-Africa Cooperation In The 21st Century: Analysis Of The Obstacles And Challenges To Good Cooperation (KIERAN E UCHEHARA) 493 Management Of The Governmental Support Of Russian Agro-Industrial Complex On Entering The World Market (KUZNETSOV N.G., OVCHINNIKOV V.N., SOLDATOVA I.Y., CHURIKOVA K.S.) 503 Effective International Expansion Strategies Of Developing Countries: Some Preliminary Evidence From The Turkish Manufacture And Export Of Television Sets (TANSES GÜLSOY, ÖZLEM ÖZKANLI, RICHARD LYNCH) 511 Turkey’s Role In Process Of Eurasian Economic And Strategic Integration (SEFER ùENER, MESUT SAVRUL, CÜNEYT KILIÇ, YEùøM KARADAö) 533 Purchasers’ Involvement In Sustainable Development: Great Expectations And Various Realities (FABIENNE FEL) 545 Policies And Strategies For The Promotion And Attraction FDI In Services (VESNA BABIû-HODOVIû,ELDIN MEHIû) 555 The Relationship between Subsidiary Size And Subsidiary Autonomy In Turkish Outward Foreign Direct Investments (øBRAHIM ANIL,BINALI DOöAN) 567 STRATEGIC HUMAN RESOURCE MANAGEMENT & ORGANIZATIONAL BEHAVIOR The Relationship Between Strategic Management, Human Resource Management And Knowledge Management In Higher Education Institutions (LOGANATHAN NARAYANSAMY GOVENDER) 583 The Employee Satisfaction In Banking Sector: The Differences Between The Employees In Virtual Banking And In The Branches (FATMA ZEHRA SAVI, MÜRTAZA ÖNAL) 597 Strategic Human Resource Information Systems (SIAMAK AZADI) 607 Emotional Human Resource Management (TANJU ÇOLAKLU) 613 The Moderating Role Of Formalization In Determining The Effects Of Strategic Flexibility And Perceived Risk On Affective Organizational Commitment (MEHMET ùERIF ùIMùEK, ùEVKI ÖZGENER, METIN KAPLAN, ASLI KAPLAN, GÖKùEN TOPUZ) 619 Are The Workers And Managers Having Same Level Commitment To Organization? A Research In Organizational Echelons With Logistic Regression Model With Implication Of Quasi Variance(ASLI EKMEKCI, NILAY YUCEL, MURAT KASIMOGLU) 629 The Process Of Cross-Cultural Business Negotiations: A Comparison Of American, Japanese And Turkish Approaches (SIBEL NITELIK) 637 A Research To Determine The Stress Factors On The Employees That Are Dismissed Due To The Downsizing Strategy (BÜNYAMIN AKDEMIR, SINEM GÜRAVùAR GƯKÇE) 647 SUPPLY CHAIN MANAGEMENT & INNOVATION MANAGEMENT Agile Supply Chain: Strategy For Competitive Advantage (INTAHER MARCUS AMBE) 659 The Usage Of Rfid (Radio Frequency Identification) In Supply Chain Management (ESRA ERZENGIN,METIN UYAR, SERDAR ALNIPAK, SUDI APAK) 671 Strategic Approaches To Logistics Management (RUHET GENC, øGE PIRNAR) 683 Lean Philosophy In Strategic Supply Chain Management And Value Creating (BÜLENT SEZEN,SEMA ERDOöAN) 695 The Relationship Between Firm Intellectual Capital And The Competitive Advantage (øPEK KLU, SALIH ZEKI øMAMOöLU,HÜSEYIN øNCE) 701 The Effects Of Organizational Politics And Strategic Posture On Innovation Performance (SEVKI OZGENER, ADEM OGUT, METIN KAPLAN, D MEHMET BICKES) 723 The Effects Of Organizational Factors On R&D Capability (ALI E AKGÜN, HALIT KESKIN, AYùE GÜNSEL, EVREN ÖZTÜRK) 733 STRATEGIC INTENTIONS –ORIENTATIONS & STRATEGIC DECISION MAKING Cognitive Plasticity And Strategic Change (GEOFFREY LEWIS, TATIANA ZALAN) 743 Measuring The Levels Of Strategic Orientations And Their Effects On Firm Performance In Turkish Family Firms : An Empirical Study (CEMAL ZEHIR, ERKUT ALTINDAö) 757 A Study On The Causes Of Strategies’ Not Leading To Success (MEHMET ALI KÖSEOGLU, MEHMET BARCA,KEMAL KARAYORMUK) 765 A Content Analysis For Vision And Mission Statements Of Turkish Universities (HULUSI DOöAN, HASAN øBICIOöLU) 777 Climate Change As An Important Contemporary Strategic Management Issue (EROL EREN, PINAR BAL) 787 Strategy-Making Approaches For A Changing Environment (RACHEL MARITZ, MARIUS PRETORIUS) 797 Board Composition Of Turkish Listed Companies: Is There Any Difference Between Industries?( øRGE ùENER, MERAL ELÇø) 813 FINANCE, ENTREPRENEURSHIP & SMES The Stock Market Efficiency And Investment Strategies During Global Financial Crisis: A Comparison Of Developed Countries And Turkey (SUDI APAK, KAMER HAGOP TAùCIYAN) 825 Pension Funds And World Financial Crisis In The OECD Countries (SUDI APAK, KAMER HAGOP TAùCIYAN) 839 Explanation Of Interaction Of The Assets Of Organizations Which Are Determinant In The Survival And Growth Of Them (ALI SAYILIR, SERKAN DIRLIK) 851 Is Intellectual Capital Antecedent Of Entrepreneurship Orientation (EROL EREN, EBRU BEYZA KOCAPINAR) 863 Social Entrepreneurship: Is It Valid For Corporations? ( SENEM BESLER, AYTÜL A ÖZDEMøR, MUAMMER SARIKAYA) 875 Strategies For Developing The SMEs Business And Entrepreneur Opportunities In Pakistan (F.M.SHAIKH, M.SALEEM RAHPOTO) 887 Knowledge Transfer (KT) Practices In Small And Medium Enterprises (SMEs) Of Turkish Textile And Apparel Industry (DABABRATA NARAYAN CHOWDHURY, LYNNE BUTEL , I HAKKI ERASLAN AND ISMAIL BAKAN) 893 Cluster-Based Strategies For Competitive Advantage Of Small And Medium Enterprises (Smes) (ø HAKKI ERASLAN, MELIH BULU, øSMAIL BAKAN, DABABRATA NARAYAN CHOWDHURY) 907 Public–Private Partnerships: Theory And Practice In Global Perspective (M TURAN ÇUHADAR) 917 ORGANIZING COMMITTEE x Erol Eren (Chairman, Beykent University, Istanbul-Turkey) x Oya Erdil (Co-Chair, Gebze Institute of Technology, Kocaeli-Turkey) x Ali Akdemir (Canakkale Onsekiz Mart University, Canakkale-Turkey) x Johan Hough (Stellenbosch University, Stellenbosch - South Africa) x Lütfihak Alpkan (Gebze Institute of Technology, Kocaeli-Turkey) x Cemal Zehir (Gebze Institute of Technology, Kocaeli-Turkey) x Ali E Akgün (Gebze Institute of Technology, Kocaeli-Turkey) x Halit Keskin (Gebze Institute of Technology, Kocaeli-Turkey) x Tanses Gülsoy (Beykent University, Istanbul-Turkey) x Güngör Tuncer (Beykent University, Istanbul-Turkey) x Fuat Oktay (Beykent University, Istanbul-Turkey) x Gülruh Gürbüz (Marmara University, Istanbul-Turkey) x Irem Erdo÷muú (Marmara University, Istanbul-Turkey) x Esin Sadıko÷lu (Gebze Institute of Technology, Kocaeli-Turkey) x Mehtap Özúahin (Gebze Institute of Technology, Kocaeli-Turkey) x Meral Elỗi (Gebze Institute of Technology, Kocaeli-Turkey) ADVISORY BOARD & REVIEW COMMITTTEE ƒ A Asuman Akdo÷an (Erciyes University, Kayseri-Turkey) ƒ Abdurrahman Benli (Canakkale Onsekiz Mart University, Canakkale-Turkey) Adem ệữỹt (Selỗuk University, Konya - Turkey) Adnan ầelik (Sỹtỗỹ ứmam University, Kahramanmaraú-Turkey) ƒ Adnan Ceylan (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Ahmet Kesik, Ph.D., Associate Professor (President of Strategy Development Unit, Ministry of Finance, Republic of Turkey) ƒ Alain Crochet (University of Sorbonne Nouvelle - Paris 3, France) ƒ Alexander Egorshin (The Nizhny Novgorod Institute of Management and Business, Russia) ƒ Ali Akdemir (Canakkale Onsekiz Mart University, Canakkale-Turkey) ƒ Ali Ekber Akgün (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Ali Halıcı (Baskent University, Ankara-Turkey) ƒ Alistair M Brown (Curtin University of Technology, Western Australia) ƒ Amar KJN Nayak (Xavier Institute of Management, Orrissa-India) ƒ Andrei Burenin (Irkutsk State University, Russia) ƒ Andrey Dashkov (Moscow State University, Russia) ƒ Asım ùen (St John Fisher College, USA) ƒ Atilla Dicle (Yeditepe University, østanbul-Turkey) ƒ Aurea Helena Puga Ribeiro (Fundacao Dom Cabral, Brazil) ƒ Ayten Akatay (Canakkale Onsekiz Mart University, Canakkale-Turkey) ƒ Bahadır Akın (Selcuk University, Konya-Turkey) ƒ Birol Bumin (Gazi University, Ankara-Turkey) ƒ Borisas Melnikas (Vilnius Gediminas Technical University, Lithuania) ƒ Branko Bucar (Pace University,USA) ƒ Bülent Sezen (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Canan Çetin (Marmara University, Istanbul-Turkey) ƒ Catherine Sarlandıe De La Robertıe (l'Association Des Formations Universitaires De Défense, France) ƒ Celso ClaudioHildebrand Grisi (University of Sao Paulo,Brazil) ƒ Cemal Zehir (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Cengiz Yılmaz (Bogazici University, Istanbul-Turkey) ƒ Cevat Gerni (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Ceyhan Aldemir (Dokuz Eylül University, øzmir-Turkey) ƒ Chien-Chung Nieh (Tamkang University, Taipei Country- Taiwan) ƒ Con Korkofingas (Macquarie University,Sydney-Australia) ƒ Dursun Bingöl (Atatürk University, Erzurum-Turkey) ƒ Dzevad Sehic (Faculty of EconomicsUniversity of Sarajevo, Bosnia) ƒ Ebru Kabadayı (Gebze Institute of Technology, Kocaeli-Turkey) Ekrem Tatoglu (Bahỗeỳehir University, Istanbul-Turkey) Enver ệzkalp (Anadolu University, Eskiúehir-Turkey) ƒ Erol Eren (Beykent University, Istanbul-Turkey) ƒ Esin Can Mutlu(Yıldız Technical University, østanbul-Turkey) ƒ Esin Sadıkoglu (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Eyüp Aktepe (Gazi University, Ankara-Turkey) ƒ Fahri Karakaya (University of Massachusetts, Dartmouth-USA) ƒ Feyzullah Ero÷lu (Pamukkale University,Denizli-Turkey) ƒ Fuat Oktay (Beykent University, østanbul-Turkey) ƒ Garry L Adams (Auburn University, USA) ƒ Gưkhan Ưzer (Gebze Institute of Technology, Kocaeli-Turkey) ƒ Gönül Budak (Dokuz Eylul University, øzmir-Turkey) ƒ Gülruh Gürbüz (Marmara University, Istanbul-Turkey) ƒ Gültekin Yıldız (Sakarya University, Sakarya-Turkey) ƒ Güneú Berbero÷lu (Anadolu University, Eskiúehir-Turkey) ƒ Güven Alpay (Boữaziỗi University, ứstanbul-Turkey) Gỹven Murat (Karaelmas University, Zonguldak-Turkey) Hakan Kitapỗ (Gebze Institute of Technology, Kocaeli-Turkey) Halil Çivi (ønönü University, Malatya-Turkey) ƒ Halim Kazan (Gebze Institute of 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Province, Turkey ABSTRACT This paper aims to investigate public–private partnerships (PPPs) theory and practice in global perspective Public–private partnerships are now a common strand of third way government policy, with better efficiency promised from the private funding of public infrastructure through the transfer of risks to private parties (Australia 2004) In the past, it was observed that most countries spent their valuable but limited resources on unproductive and misdirected populist policies Meanwhile, various investment models have been tried by the democratic and developed governments around the world to tackle the problem of funding in the infrastructure sector Moreover, deep economic crises forced these developed countries to restructure their economies with vital emphasis on fiscal discipline and strategic investments PPPs represent a new form of network governance, potentially offering flexibility, economic efficiency, deciding together- acting together and non-governmental participation in policy development Key words: PPP, public private partnership, governance, infrastructure investment, privatisation INTRODUCTION PPPs have enjoyed a global resurgence and have become icons of modern public administration This paper looks at the PPP phenomenon and the global experience of one type of partnership arrangement – that of long-term infrastructure contracts The objective of PPPs is to establish a partnership between the public and private sectors to deliver services to the public In recent decades local/state governments in most countries promote co-operation between the public and private sectors in providing public goods Governments realise that their limited financial resources are not sufficient to cover the required expansion of some infrastructure services such as motor/doubled way, dam, airport, sanitation, energy and other services Local governments are finding that their tax revenues are not providing sufficient resources to meet these needs, and official development assistance has not been able to fill the gap One of the most viable options is to involve PPP which describes a spectrum of possible relationships between public and private actors for the cooperative provision of infrastructure services This cooperation takes the form of PPP arrangements, in which the functioning principles of private firms are implemented in public administration Such PPP arrangements were driven by limitations in public funds to cover investment needs but also by efforts to increase the quality and efficiency of public services PPP IN THEORY Even though PPPs have a long history in Anglo-American countries, especially in the UK and USA, there has been a surge in their number all over the world since last two decades According to Pongsiri, PPP is an appropriate institutional mechanism for correcting market failures by introducing ‘equity, and mutual accountability’ (Pongsiri, 2002) Especially, this corrective understanding of PPPs is used by ‘Third Way’ governments in Germany and Britain to underpin such ‘collaborative’ arrangements (Linder and Rosenau, 2000) This policy change aims at reducing the opposition at local level as well as at national level (Mcquaid, 2000) It is claimed that these are different from privatizations in 1980s since risks and responsibilities are diffused to each participator of partnership In that sense, this is cooperative inter-organizational form in which the differences between public and private become blurred (Linder and Rosenau, 2000)  917 From 1992 onwards, the Conservative Government, ruling in the UK at those times, set out to promote the use of private finance in public sector projects, with private investors expecting to take on as much risks as possible From 1994, local authorities were encouraged to use private finance for their capital projects In 1995, some of -the restrictions in the 1989 legislation were lifted for this type of Project Outsourcing, privatisation and partnerships between business and government transfer cost and risk from the public to private sector The adoption of PPPs raises several significant issues for public affairs First of these issues relates to the proper place and role of business in the political environment The second relates to the potential that PPPs have for undermining public confidence in the independence of government from the private sector (Leitch, Motion, 2003) The meaning of partnership is ‘deciding together’ and ‘acting together’ as stated in the saying of Franceys and Weitz (2003) interpretation They have also accentuated that “the internationally promoted ‘vehicle’ for reform and institutional development for the past decade has been ‘privatization’ (though there it could be questioned whether in previous times ‘nationalization’ had served a similar role in needed reform or not)” Some writers advocate that partnerships as a new form of governance representing a third way to govern relations in society (Hofmeister and Borchert, 2004; Klijn and Teisman, 2000; McLaughlin and Osborne, 2000; Teisman and Klijn, 2003) Stephen Linder and Pauline Rosenau identify six forms of PPPs, but they look at the rationale behind their use rather than analysing their structure Figure Governance Continuum Power sharing A form of joint decision-making (2) Risk shifting and (3) restructuring public services Forms of delegation In risk shifting, the private sector assumes some financial risks for a project in exchange for profit (some argue that businesses, with their specialized knowledge, can adopt a project at a lower cost, so risk transference ends up costing the government very little; others disagree) Public-service restructuring generally involves contracting out services and giving government more ‘flexibility’ with its workforce (4) Management reform, (5) problem conversion, and (6) moral regeneration Forms of consultation These three rationales involve changing the way bureaucracies approach policy problems Whether it means an ideological change (use of more market-based principles of management, as implied in New Public Management) or refocusing on new types of problems, the structure of bureaucracies remains relatively consistent (Linder and Rosenau, 2002) PPPs are loosely defined as co-operative institutional arrangements between public and private sector actors, but few people agree on what a PPP actually is So what are PPPs, and if governments have long had a relationship with business, what is really so different about today’s version of PPP? To answer these questions requires an understanding of the PPP as a phenomenon rather than a single technique In fact, the PPP phenomenon is a set of governance tools as well as a set of language games, and both have long historical pedigrees History indicates that there has always been some degree of public sector and private sector co-operation (Hodge and Greve; 2009) In literature, various models or instruments of privatization are stated Privatization can be used by constituting a scale classifying from ‘strong’ to ‘weak’ one The first one is sale of assets to private sector via ‘restitution, give away or liquidation’ (Weizsacker et al, 2005) The second one is ‘build-operate-transfer’ in which ownership is temporarily transferred to private company The last one is the PPPs in which ownership remains in public but responsibilities, risks, gains and duties are shared among participators 918 Table 1: Selected PPP evaluations over the past decade  919 Figure Theoretical Foundations of PPPs PPP arrangements have become widespread for the last two decades all over the world These arrangements today are widely used in technology, energy, education, transportation (especially motor/doubled way), dam, airport, sanitation,….and the like Partnerships are collaboration between parties rather than competition among them to achieve mutual benefit and this mutual benefit can be achieved by trust (Mcquaid, 2000) In that sense, it is claimed that the theoretical foundations of principal-agent theory and transaction cost economics for competition are not appropriate for PPPs (Entwistle and Martin, 2005) Osborne and Gaebler claimed that states are better than private sector at ‘policy management, regulation, ensuring equity, preventing discrimination or exploitation, ensuring continuity and stability of services, and ensuring social cohesion’ Private sector is better at ‘performing economic tasks, innovating, replicating, successful experiments, adapting to rapid change, abandoning unsuccessful or obsolete activities, and performing complex or technical tasks’(Osborne and Gaebler, 1993) Partnerships are not zero-sum game but instead, they are win=win games, according to its proponents PPPs are composed of ‘formally autonomous but functionally interdependent organizations’ (Radin, 1998) For some scholars, such a complexity of service also led governments to find private partners in order to benefit from their expertise and skills (Keating, 1998) It is claimed that public administrators should learn these abilities from their business partners (Linder, 2000) PPP, Why? In the past, it was observed that developing countries spent their valuable but limited resources on unproductive and misdirected populist policies Political and administrative immaturity was also effective in nonproductive investment Deep economic crises forced these developing countries to restructure their economies with vital emphasis on fiscal discipline and strategic investments One of the strategic and most important investment areas was infrastructure development Today, with the continuing drive to a global economy, democratic governments are trying to link more closely their public and private corporations in an effort to make their infrastructures more effective This activity has been referred to as centripetal politics that occurs with a centrifugal (or complexifying) society To this, they look toward joint ventures that bind the two types of organizations together as PPPs (Yolles and Iles 2006) As they experience social complexification, governments tend to perceive that they are not able to run their state infrastructure adequately This inadequacy is illustrated by Savas (1982) who argues that the infrastructure and distribution of social goods is performed by inefficient, inflexible and irresponsible public corporations For Claver et al (1999), public corporations have a tendency for pathological ailments that inhibit effectiveness, and these include: 920 x x x x x x x x authoritarian management style with a high degree of control; little communication; univocal top–down management; limited scope for individual initiative, with an orientation towards obedience and the provision of orders; centralized decision-making process that tends to be repetitive; reluctance to start innovative processes; high degrees of conformity; high level of resistance to change Contrary to popular belief, saving money is not the main reason behind public sector's attraction to PPPs Respondents to the survey cited access to market skills and expertise as the most important reason Clearly, the partnerships are not only driven predominantly by cost considerations but also reasons for public sector entering into partnerships are improved quality, cost savings, managing demand fluctuations innovation and technological change and better accountability (Domberger and Fernandez 1999) Partnering adds value PPPs enable society to create superior solutions to many complex problems than could ever be achieved by the individual sectors separately The value that is created accrues to each of the collaborators individually and to society collectively It makes business sense to collaborate, and we turn next to the motivation that makes this idea reality We consider first the special historical case where urban governance partnerships were forced into existence by urban crises, then the more regular experience of strategically motivated alliances (Austin, J., Mccaffrey, A 2002) The most common motive cited in the literature for the genesis of modern PPPs in American cities is economic development, particularly in cities with a deteriorating inner core, or suffering the decline of de-industrialization (DiGaetano, 1997; Dowding, et al., 1999; DiGaetano & Lawless, 1999; Kantor, et al., 1997; Keating, 1993; Stone, 1993) According to Keating (1993), the drivers for this alignment of interests include the need of private sector for public powers in order to develop in cities, dependence of cities on the availability and mobility of capital, and the need of a development coalition to attract private investment capital With regard to sustainable development, PPPs can help in cases here more groups are involved in the political process – this means PPPs involving network governance However, it remains unclear whether developing countries such as Hungary can successfully adopt the types of partnership necessary to break down hierarchies and bring about more dynamic government or not Arguably, the national government does not yet have the strength to initiate network governance properly Perhaps for this reason, partnerships between government and industry are formal and contractual, without much leeway for joint decision-making (Regéczi, 2005) Steps to reach to PPP? Citizen participation approach development will help to reach to PPPs The power structures in society will interact it Figure Eight rungs on the ladder of citizen participation (Arnstein, 1969) (1)Manipulation and (2) Therapy: These two rungs describe levels of "non-participation" that have been contrived by some to substitute for genuine participation Their real objective is not to enable people to  921 participate in planning or conducting programs, but to enable powerholders to "educate" or "cure" the participants Rungs and progress to levels of "tokenism" that allow the have-nots to hear and to have a voice: (3) Informing and (4) Consultation When they are proffered by powerholders as the total extent of participation, citizens may indeed hear and be heard But under these conditions they lack the power to insure that their views will be heeded by the powerful When participation is restricted to these levels, there is no follow-through, no "muscle," hence no assurance of changing the status quo Rung (5) Placation is simply a higher level tokenism because the ground rules allow have-nots to advice, but retain for the powerholders the continued right to decide Further up the ladder are levels of citizen power with increasing degrees of decision-making clout Citizens can enter into a (6) Partnership that enables them to negotiate and engage in trade-offs with traditional power holders At the topmost rungs, (7) Delegated Power and (8) Citizen Control, have-not citizens obtain the majority of decision-making seats, or full managerial power Obviously, the eight-rung ladder is a simplification, but it helps to illustrate the point that so many have missed - that there are significant gradations of participation Knowing these gradations makes it possible to cut through the hyperbole to understand the increasingly strident demands for participation from the have-nots as well as the gamut of confusing responses from the power holders Different Types of Partnerships There are different types of contracts for establishing a partnership in the infrastructure sector The type of the contract determines the responsibilities of each partner These contracts are service contracts, management contracts, lease contracts, and concessions Nevertheless, every service, management, lease contract or concession may not be a form of PPP but they can be contracting outs PPP contracts have other characteristics such as sharing of responsibility and risk, and negotiating for the contract Unlike the emphasis on competition as in contracting outs, public-private partnerships highlight cooperation and trust between the parties The features of each contract may vary in different contexts due to distinct economic, institutional, social and, political background peculiar to the contexts Service Contracts This type is the least risky for private sector one among the others It involves the short term contracts that have duration of one or two years (McDonald and Ruiters, 2005) The public authority has the responsibility for operation and maintenance of the network Only a specific part of the system is contracted out Therefore, private sector involvement is very limited such as ‘reading meters, repairing leaks, and mailing statements for payment’ since these contracts are performed for short-lived issues (Water Deregulation Report, 2006) The public authority has the responsibility for operation and maintenance of the network Management Contracts In management contract, private sector has more responsibility Private sector maintains and operates the system Usually, management contracts not require private sector investment; therefore, there is no commercial risk (Water Deregulation Report, 2006) The central or local government takes the financial responsibility for the system Also, there is no ‘direct legal relationship’ between citizen and private operator There is no reimbursement if private operator does not collect fees from the citizens (Water Deregulation Report, 2006) Public authority monitors the private operator The time duration of management contracts is between two and ten years (McDonald and Ruiters, 2005) Lease Contracts In lease contract, private operators rent the facilities owned by the public authorities The ownership belongs to the public authority and public authority is also liable for ‘system finance and expansion’, whereas private operator is ‘responsible for financing working capital and accepts some commercial risk in the day-to-day operation of the system’ (Water Deregulation Report, 2006) The operator tries to maximize fee collection so as to pay its rent fee, and make profit Its time-span is more than ten years (McDonald and Ruiters, 2005) 922 Concessions Concession is a long term contract covering a period of twenty five to thirty years (McDonald and Ruiters, 2005) In this contract, private contractor investments in the system Concessionaire has overall responsibility about the system, ‘including operation, maintenance, and management as well as capital investments during the concession period’ (McDonald and Ruiters, 2005) Concessionaire takes the payment directly from the citizens and takes the risk that costs will not be more than revenues (Water Deregulation Report, 2006) Partnerships are the organizational form of networks in which public and private actors come together for delivering a service Besides, as a policy instrument partnership is the mixture of public and private sector tools Types of PPPs arrangements Several types of contracting arrangements are used around the world to finance and deliver highway-related infrastructure projects, including roads, bridges, and tunnels The PWF database lists various contracting approaches used or proposed for each project Figure The Spectrum of Public-Private Partnerships Public DesignBidBuild Private Private Contrac t Fee Service s DesignBuild DesignBidBuilt Long Term Lease DesignBuildFinance Operate DesignBidBuilt Source: FHWA PPP website www.fhwa.dot.gov/ppp/ These contracting approaches generally fall into the following seven categories: Build-Operate-Transfer/Build-Transfer-Operate (BOT/BTO) – This is a project delivery method typically involving the design, construction, finance, and operation of a facility whereby the contract team acquires ownership of the facility until the end of the construction period or the contract term, when ownership of the facility is returned to the original public sector sponsor Build-Own-Operate (BOO) – This is a project delivery method similar to BOT where the contract team both owns and operates the facility Concession – This is a contract arrangement which grants the contract team full responsibility to finance, build, operate, and/or maintain the facility as a franchisee for a specified period of time, whereby the private sector team takes most of the project and financial risks and potential rewards for the term of the Concession contract In some cases, Concessions have been granted for the operation and maintenance of facilities built by others, as a comprehensive form of Management Contract Design-Build (DB) –The contract team is responsible for both design and construction phases of a project as part of a single contract This is in contrast to the traditional project delivery approach used for highway projects in the United States, Design-Bid-Build (DBB), in which the design firm and the construction contractor are separately responsible for the design and construction phases of a project Design-build contracts typically not involve the use of private financing However, they are still considered PPP projects because of the added responsibility and risk assumed by the private sector Design-Build team Design-Build-Operate-Maintain (DBOM) – the contract team is responsible for design, construction, operation, and maintenance of the facility for a specified period of time, where payment beyond project completion is predicated on meeting certain prescribed performance standards relating to physical condition, capacity, congestion, and/or ride quality This is an extension of Design-Build that provides an inherent incentive for the design-builder to provide a better quality plan and project by creating a lifecycle responsibility and accountability of the performance of the facility by the design-builder  923 Design-Build-Finance-Operate (DBFO) - This is an extension of the DBOM project delivery method in which the contract team is also responsible for financing the project and takes the risks of project financing during the contract term This contract approach is similar to BOT/BTO becomes a Concession when the private sector team acts as a franchisee with most of the project and financial risks and potential rewards Management Contract – this is a contract arrangement under which the contract team manages the provision of specified functions at certain performance standards over a pre-identified period of time, often with the provision of subsequent time extensions to the contract Like Design-Build, these contracts typically not involve the use of private financing but represent additional responsibilities and risks for the private sector asset management team In addition to the above terms, two more contracting approaches are noted in the PWF (Public Works Financing) database These include: Asset Sale – when the facility is sold to a private sector team which holds full responsibility and liability for the project and its risks and returns There are very few true Asset Sales involving highway-related facilities, so this contracting approach is included in the Concession category defined above Joint Development Agreement (JDA) – This is a contract arrangement where both the public sector sponsor and the private sector contract team enter into a joint agreement to share responsibilities for developing, financing, operating, and preserving the facility This contract approach is used where there is strong interest by the sponsoring agency to retain a substantial portion of control over the project and interest in the proceeding of the project  PPP IN PRACTICE However PPP is more than a UK policy, and has been supported in other countries around the world (Broadbent and Laughlin, 2003) PPPs have become increasingly common mechanisms deployed by governments in a variety of areas including international trade (Schuster and Lundstrom 2002) and infrastructure development Substantial financial investment is needed to create additional infrastructure, these partnerships have been referred to as Private Finance Initiative (PFI) in the UK, as Build-OperateTransfer (BOT) in Australia and Asia, and more generally as Project Franchises in the United States (Hall 1998, Prager 1997, Domberger and Fernandez 1999) In France, the PPP approach is called "delegated management of public services", reflecting the long held view there that public authorities and private companies should enter into a partnership for the management of safe, regular and reliable public services for citizens/consumers (Levy 1998, Domberger and Fernandez 1999) Figure PPP around the world in 1999 924 Figure PPP around the world in 2007 Figure Global PPP Lending by Sector PPPs may have the potential to provide infrastructure at more reasonable prices than comparative delivery through either the public sector or traditional contract arrangements, but experience to date has been mixed in some countries Governments have tended to view the use of PPPs as a purchasing device, and with the objective of quick delivery, have risked due process and adequate public policy consideration in doing so  925 CONCLUSIONS Today, with the continuing drive to a global economy, democratic governments are trying to link more closely their public and private corporations in an effort to make their infrastructures more effective This activity has been referred to as centripetal politics that occurs with a centrifugal (or complexifying) society To this, they look toward joint ventures that bind the two types of organization together as PPPs (Yolles and Iles 2006) The range of typical risks encountered in public infrastructure projects is specially considered, and differences to traditional project delivery arrangements are articulated Some empirical experience on the transfer of risks under PPPs is then outlined through a case study This analysis shows the extent to which risks were shifted to the private parties as planned, or whether risks remained with government It is argued that while commercial risks were largely well managed, governance risks were not It is critical to understand better the nature of risk transfers in PPPs in view of the large financial implications of these deals along with long contract terms For both private and public sector, the first conclusion is that opportunities for collaboration will continue to grow in the future These partnerships are two-edged swords Both contractors benefit if requirements are clearly specified and expectations well managed through the whole life of the relationship But if these issues are not given the importance they deserve, the partnerships are likely to amplify overall dissatisfaction, particularly among the citizens/consumers they are designed to benefit PPP as a managerial and fiscal strategy to solve the problem of the developing countries formidable need for infrastructure development is still in a nascent stage, but it is clear that the government has to lead the way ( i.e legal arrangement) if anything worthwhile is to happen The level of investment required for infrastructure is so significant that strong, aggressive government advocacy should see it through It can be said that there is an increased interest in PPPs as a method of procuring public assets throughout the world, but actual use of PPPs remains limited Adequate management of fiscal risks from PPPs is a key challenge Doing them for the right 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