The costs of the exchange relationship and the need to reduce these costs are the main drivers of coordination mechanisms.

Efficiency

High transaction costs are associated with negotiating, monitoring and enforcing a contract.

Opportunism of actors is reinforced by uncertainty and environmental complexity because of the bounded rationality of the options and scarcity of alternative actors.

Transaction attributes (assets specificity, frequency of transactions, measurement needs and uncertainty) determine mechanisms.

Hierarchy-type mechanisms (HTMs) for frequent and costly transactions with specific assets.

Market-type mechanisms (MTMs) when transaction costs are low, and transactions are less frequent,not asset-specific and with predictable outcomes.

Coordination of MSAs requires overcoming low organisational motivation. Principals apply external controls and contracts to create incentives for agents to coordinate.

Incentives

Bounded rationality and opportunism of actors and complexity in the environment lead to uncertainty over outcomes.

Conflicting goals and interests between the principal and the agent.

Different attitudes toward risk between the principal and the agent.

Choice of the contract is influenced by outcome uncertainty, risk aversion, goal conflict, information systems, task programmability, outcome measurability and length of the relationship.

Behaviour-based contracts consistent with HTM.

Results (output/outcome)-based contracts are consistent with MTM.

Strengthen information systems to reduce information asymmetry.

Organisations seek to find mechanisms to ensure the smooth and predictable flow of resources under other entities’ control. The coordination is driven by acknowledgement of interdependence that arises because each actor possesses resources needed by another.

Stability of resource flow

Asymmetrical control under uncertainty

Interdependence/reciprocity when benefits are mutual

Limited acknowledgement of interdependencies.

Asymmetrical control logic promotes competition instead of cooperation.

Power-based considerations lead to contingent mechanisms.

Interdependence leads to mainly NTMs.

Asymmetrical control is associated with HTMs.

Coordination dynamics and mechanisms evolve because of a political (contested and negotiated) process.

Internal politics of coordination unfolds within the dynamic interactions between actors and context.

Actors exercise agency to manoeuvre through a complex power, institutional and ideational context.

Necessity in response to regulatory instruments

Legitimacy in response to normative elements

Any other contingency through framing based on cultural cognitive elements

Conflicting institutional logics and interests promote organisational silos.

Multiplicity of power centres arising from institutions, ideas and agents.

Contingent and dynamic mechanisms as institutional arrangements.

Strategic framing, socialisation (such as a transfer of staff within public/civil service) and organisational culture.

Formal and informal institutional arrangements such as coordination structures and processes.