How do Belgian public services decide to internalize or outsource activities in different areas through consultancy?: The case of the Brussels region

Details

Supervisors

Decaux, Loïc

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée
Master [120] en sciences de gestion, à finalité spécialisée

Abstract

enThe aim of this thesis is to explore the decision-making process that takes place when Belgian public services have to choose whether to internalize knowledge or use external consultants, concentrating specifically on the Brussels-Capital Region. Although the conventional approach towards make or buy strategies focuses on such aspects of decision-making as cost, efficiency, risk and internal competences, public administrations act under more restrictive institutional conditions. Hence, this thesis analyses the factors that affect the process of decision-making as well as the potential impact of artificial intelligence on this internal/external balance. Qualitative research methodology is employed using a multiple case study design based on semi-structured interviews conducted with fifteen managers, administrative staff and consultants who work in the context of the Brussels regional public service ecosystem. It is evident from the results of the study that these decisions are not influenced so much by strategic optimization but rather by structural constraints. Limitations related to recruitment processes, financial issues, rigid salary structures in public sector organizations and complicated procurement practices may prevent development of expertise in-house. Hence consultancy becomes a means of retaining the capacity to work. On the other hand, strategic planning, ownership and decisions are usually made in-house while technical aspects, short-term expertise and tasks that require special expertise or neutrality of an organization are usually outsourced. At the same time, this process is accompanied by substantial risks including knowledge loss, external dependencies and vendor lock-in. All in all, the results of the research demonstrate that the decision to internalize or outsource in Brussels public services is a strategically adapted rather than optimized choice between make and buy. Development of internal capacities and knowledge transfer seem to be crucial for maintaining organizational autonomy.