Beyond the balance sheet: the public value of hybrid organizations

In Lombardy,  there are at least 35 ASCs owned by a number of different municipal governments.  ACSs are created to provide welfare services to the residents in their communities.

One of these, ASC Comuni Insieme (Municipalities Together), is owned by seven communities in the northern area of Milan. This organization serves 200,000 residents, with special focus on children, seniors, disabled people, and marginalized adults. In 2023, revenues for ASC Comuni Insieme totaled around €18 million.

In 2019, the legitimacy of ASC Comuni Insieme was called into question, with some of the participating municipalities pointing to higher costs compared to other service delivery schemes. As is often the case with hybrid organizations, the ASC had no metrics to demonstrate the public value it generated for the communities it served, beyond the traditional balance sheet parameters.

These circumstances set the stage for action research, which ran from 2019 to 2021, enabling us to co-design a model for measuring public value for this class of organizations for the first time ever. Our work offers insights for the scientific community and for practitioners, both of whom seek to define and measure the concept of public value.

Through interviews and focus groups with personnel from ASC Comuni Insieme, we first mapped out the dimensions of public value in the context in question and then identified the relative delivery strategies. After interviewing local stakeholders (participating Municipalities, third sector organizations), we validated and integrated what we found, and ultimately came up with seven dimensions of public value generated by the ASC:

1. Ensuring fair use of public resources.
2. Reaching and serving a higher number of beneficiaries.
3. Guaranteeing an equitable system.
4. Fostering skill sharing in the community.
5. Going beyond the mission of traditional social services.
6. Dealing with social crises.
7. Promoting trust and social cohesion in the local welfare system.

We then operationalized these seven dimensions and the delivery methods for each one in a dashboard of quali-quantitative indicators, which again local stakeholders validated. Our project supported the ASC in dialoguing with participating Municipalities to bolster the legitimacy of the organization, offering never-before-seen data on the financial and non-financial value produced by the agency.

The figure below sums up how to define and measure public value.

Our work offers useful suggestions to help managers recognize and understand how to deal with the innate peculiarities and contradictions of hybrid organizations. We propose a linear method that can be duplicated in other settings to reflect and substantiate the public value generated for the territory.

In this sense, ours isn’t a one-size-fits-all solution, but a method that can be adapted to the specific features of different contexts in which thousands of hybrid organizations operate today, in Italy and beyond. The aim is to consolidate the legitimacy of these organizations and to shine a brighter light on the social value they can create.

Eleonora Perobelli, Elisabetta Notarnicola, Elio Borgonovi, “Grasping public value in welfare services: evidence from hybrid organizations,” in The multi-dimensional nature of public-private hybrid organizations: conceptual advancements and empirical analyses, doctoral thesis by Eleonora Perobelli, for her PhD in Management and Innovation, Università Cattolica, Milan. This study will be published in Perobelli, E., Notarnicola, E., Borgonovi, E.  (forthcoming) “Grasping public value in welfare services: evidence from hybrid organizations,” in Klenk, T., Noordegraaf, M., Notarnicola, E., Vrangbaek, K. (Eds), The Societal Value of Welfare Politics, Policies, and Services. Palgrave Macmillan.

More from Eleonora Perobelli on hybrid organizations:

• Fosti, G., Perobelli, E., & Saporito, R. (2021). “L’irresistibile fascino delle organizzazioni ibride nel contesto pubblico.” Economia e Management, (3), 58-63.
• Perobelli, E., Cappellaro, G., & Saporito, R. (2024). “Public–private hybrid organisations in the public sector: Evidence and future directions from a systematic literature review.” Public Management Review, 1-28.
• Perobelli, E., Giacomelli, G., Cappellaro, G., & Saporito, R. (2024). “Steering or Drifting? Reviving Social Equity Through Performance Measurement in Hybrid Organizations: A Case from Italy,” in Kimberly Wiley, Sarah Young, & Denita Cepiku (Eds.) Social Equity and Public Management Theory (pp. 57-77). Routledge.