Culturally and Politically Embedded Management Controls in Innovation Transitions of PPPs: Comparative Cases from a Developing Economy

Purpose This study aims to explore how culturally and politically embedded management controls influence innovation transitions of public–private partnerships (PPPs) in a developing economy. Design/methodology/approach The study relies on the cultural political economy perspective of management controls. Data were collected through in-depth interviews with senior executives from three knowledge-based PPPs operating in telecommunications, power and energy and high-tech research industries in Sri Lanka. Findings The authors demonstrate how cultural political economy factors (e.g. semiotic and cultural; political and institutional; economic and structural) have influenced Western-led, formal management controls across various PPP models (e.g. labour, leadership, innovation, operational, market, neoliberal and bureaucratic controls), both enabling and obstructing the shift towards the state’s professed “knowledge-based economy” discourse. Management controls within telecommunications-based PPPs tend to be receptive to political interference, often supported by powerful, party-based trade unions and primarily focus on innovation to cater to the local market. In contrast to traditional norms, both energy- and high-tech PPPs leverage management controls to resist political interference, promoting a strong, market-oriented approach to knowledge-driven innovation. Practical implications PPPs with solid professional and managerial backgrounds are more likely to initiate innovation transitions through bottom-up approaches, whereas PPPs with considerable state and political influence tend to be predominantly driven by both top-down and bottom-up approaches. Nevertheless, evidence indicates a dialectical relationship between top-down and bottom-up approaches in all PPPs. Originality/value Cultural political economy redefines the complex interplay among the state’s knowledge-based economy discourse, the innovation transition in PPPs, management controls and development priorities as a co-evolving, politically negotiated process rather than a linear policy implementation. The findings suggest that the success or failure of implementing a knowledge-based economy state project through PPPs depends not only on political policy priorities but also on the interaction of political power, professional leadership and management controls in practice.