IT impact sourcing (ITIS) is a socially-responsible business model and a growing phenomenon in developing countries, seeking to drive the benefits of IT outsourcing to marginalised groups. Inherent to many impact sourcing initiatives is a tension between social and commercial objectives, and this might be particularly apparent where the ITIS initiative is a public-private partnership (PPP); yet both ITIS and PPP are relatively little-researched in a developing country context. This paper uses qualitative field data from a Malaysian ITIS case study that was a public-private partnership, viewed through the lens of institutional logics and conflict management strategies. Analysis of three vignettes during the negotiation of the initiative shows that one partner always used a competitive approach to conflict management, something which led issues to remain unresolved and which led the partnership arrangement to steadily loosen. The outcome was always a domination of private logic over public logic. As a result, and lacking an overt advocate, the welfare goals of impact sourcing were somewhat sidelined. Our paper contributes by showing a) how institutional logics helps explain the outcome of development-oriented IT partnerships with hybrid goals, and b) how the framework of conflict management strategies helps explain the practice of institutional logics.