Privatizing the blame game: corporate reputation in the outsourced state

ABSTRACT

Outsourcing to the private sector is sometimes thought to be an effective way for politicians to shift blame. This paper presents four case studies of problems with large UK government contracts, it describes the strategies used by contracting parties to manage public blame and media coverage and financial market data are used to analyse the reputational and financial consequences of problems for the firms. Large outsourcers can be damaged by problems with public contracts and that damage is more than temporary, in the long run this will limits the scope for blame shifting.

IMPACT

The analysis in this paper is relevant to practitioners and researchers who are interested in the strategic direction of outsourcing and government-market relations.

KEYWORDS:

• Blame
• contracting problems
• G4S
• outsourcing
• public service conglomerates
• Serco
• share prices

Disclosure statement

No potential conflict of interest was reported by the author(s).