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Management & Marketing no. 4/2014

Improving performance in for-profit contracts: a study of buyer-seller communication and red tape

Kathleen Welsh VOGES,
Texas A&M University-San Antonio, San Antonio, United States of America

Abstract. The use of for-profit contracts remains a popular privatization choice for public sector organizations in the United States. However, challenges with quality service delivery ensue prompting a better understanding of how best to deliver services. Based on the results of a study of 58 buyer (public sector)-seller (private for-profit sector) dyads, the findings suggest that the seller’s level of communication quality is positively related to end-user consumer’s level of customer satisfaction. However, the presence of red tape in the seller’s organization has a moderating and negative impact. Discussion of the findings provides insight into how private sector business organizations can improve performance outcomes with its important public sector customers.

Keyword: information exchange, red tape, buyer-seller dyad, privatization, for-profit contracts, performance outcomes.

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