Decoupling in hybrid arrangements: Insights from the Australian defence industry

The Australian Industry Capability (AIC) program presents an example of hybridity where national security interests are served through a complex partnership between the Department of Defence, global prime contractors, and small and medium‐sized Australian companies. Through a qualitative interview study of stakeholders in the defence industry by and triangulating findings from publicly available defence industry documents, this study aims to document the decoupling associated with the AIC program. We find that complexity and opacity, stemming from hybridity, create decoupling in the implementation of the AIC program. We also find that a lack of accountability and monitoring contributes to decoupling. We advance the literature on hybridity into the context of multi‐organisational arrangements in a unique industry and identify how decoupling can impede the achievement of policy objectives in the context of complex hybrid arrangements. The Australian Industry Capability (AIC) program represents a case of complex hybrid arrangement in public sector management involving the defence industry. Hybridity of AIC arrangements creates challenges of complexity and opacity, creating conditions that give rise to decoupling. Lack of accountability and monitoring exacerbates these challenges. Potential for coupling is identified with recommendations provided.