Managing third-order change: the case of the Public Power Corporation in Greece

Abstract

To understand the management of strategic change, organizations must be situated in their broader institutional contexts. This article focuses on ‘state-political firms’, companies owned or heavily influenced by the state and operating in state-dominated business systems, and explores the management of third-order change in the Greek state-owned electricity utility, the Public Power Corporation (PPC). Managing change in such firms is highly recursive, in that organizational change involves simultaneous change to the broader institutional environment, and the firm becomes both the focus of change and a medium for broader cultural change. The article argues that a successful change process must first disrupt the self-referentiality typical of state-political firms, and that such disruption happens mainly through externally-generated behaviour-shaping information. In the case of PPC, market liberalization (externally mandated by the EU) prompted a stock market floatation to seek fresh capital. Properly handled, such external and apparently technical mechanisms can have considerable discursive potential, helping to create momentum for change and to extend it throughout the organization. Insights from the effective management of strategic change in PPC are of relevance to other state-political firms worldwide.