Key sustainable success factors and peculiarities of publicly owned utilities: Multiple case studies in Italy

Abstract

Local public services are central to the collective well-being and community development. Identifying sustainable success factors in managing public services is crucial. Drawing on Public Value Theory, this study investigates the key factors enabling public service operators to produce value simultaneously for citizens (social value), the environment (environmental value) and themselves (economic value), as well as the elements that make the management of public services unique to companies with entirely publicly owned capital. Through an in-depth analysis of four Italian, fully municipality-owned public service companies operating in different sectors, we found that four interconnected key success factors enable the production of such a multi-dimensional value: responsible corporate governance, high-quality and stable management, commitment to research and innovation, and stakeholder engagement. Moreover, two elements seem to distinguish the management of public services offered by companies with wholly publicly owned capital from those with mixed or entirely private capital: lower pressure for dividends, which supports investments through self-financing, and the lack of perceived competition, which fosters knowledge sharing beyond the served territories.

Points for practitioners

This study provides useful suggestions to policymakers and public managers on how to enhance public value creation for citizens and stakeholders, the environment and the company itself through municipally owned corporations offering public services. This is expected to occur through pursuing responsible and cohesive forms of governance, hiring high-quality, autonomous managers, engaging citizens and stakeholders and making a commitment to innovation, as well as having a parsimonious dividend policy aimed at internal funding of investments and fostering openness to knowledge sharing beyond the served territories.