Journal of Accounting & Organizational Change

Purpose – The purpose of this paper is to provide insights into the workings of the internal specifier/provider arrangement, a new organizational form that is not required by government mandate but has become common place in the Australian public sector.

Design/methodology/approach – The case study empirics take place in a large local government water authority. Data were collected from face-to-face interviews with 26 managers using a semi-structured interview schedule and from internal and public documents relating to the case.

Findings – The following five “so what” lessons are identified: private sector co-ordination and management mechanisms such as transfer pricing can be relied upon to help reduce the ambiguity surrounding the specifier/provider model; the providers are likely to be more anxious about the introduction of the model because poorly perceived performance may result in outsourcing; to improve the ability of the organization for co-ordinating activities the model requires clearly defined specifier and provider roles and tasks; the service level agreement is an important communication device for clarifying roles and expectations; and increasing the number of sub-divisions complicates the ability of the organization to access suitable human resources and to communicate effectively with their employees and minimize employee stress.

Practical implications – The findings of this paper are likely to be useful for other organizations faced with similar pressures as to deal with those pressures require new and innovative ways of working.

Originality/value – This paper contributes to our understanding of the new organizational forms emerging in the public sector and the issues surrounding their implementation. The main contribution of this paper is a discussion of the lessons that were learned from the employees in the case organization in their attempt to change the organization from its traditional bureaucratic operational procedures to cost center structures using the internal specifier/provider model.