Managing information asymmetry in public-private relationships undergoing a digital transformation: The role of contractual and relational governance

Tom Aben*, Wendy van der Valk, Jens K. Roehrich, Kostas Selviaridis

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

57 Citations (Scopus)


Purpose: Inter-organisational governance is an important enabler for information processing, particularly in relationships undergoing digital transformation (DT) where partners depend on each other for information in decision-making. Based on information processing theory (IPT), the authors theoretically and empirically investigate how governance mechanisms address information asymmetry (uncertainty and equivocality) arising in capturing, sharing and interpreting information generated by digital technologies. Design/methodology/approach: IPT is applied to four cases of public–private relationships in the Dutch infrastructure sector that aim to enhance the quantity and quality of information-based decision-making by implementing digital technologies. The investigated relationships are characterised by differing degrees and types of information uncertainty and equivocality. The authors build on rich data sets including archival data, observations, contract documents and interviews. Findings: Addressing information uncertainty requires invoking contractual control and coordination. Contract clauses should be precise and incentive schemes functional in terms of information requirements. Information equivocality is best addressed by using relational governance. Identifying information requirements and reducing information uncertainty are a prerequisite for the transformation activities that organisations perform to reduce information equivocality. Practical implications: The study offers insights into the roles of both governance mechanisms in managing information asymmetry in public–private relationships. The study uncovers key activities for gathering, sharing and transforming information when using digital technologies. Originality/value: This study draws on IPT to study public–private relationships undergoing DT. The study links contractual control and coordination as well as relational governance mechanisms to information-processing activities that organisations deploy to reduce information uncertainty and equivocality.
Original languageEnglish
Pages (from-to)1145-1191
Number of pages47
JournalInternational Journal of Operations & Production Management
Issue number7
Early online date10 Aug 2021
Publication statusPublished - Aug 2021


  • ditigal transformation
  • information asymmetry
  • contractual governance
  • relational governance
  • public-private relationships
  • Information Processing Theory


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