Reinventing Hollands Kroon: Dynamics of Strategic Change and Legitimacy in Public Sector

Abstract

Managers of public organizations face cutting-edge technological opportunities and management practices that may enable their organizations to provide substantially higher value to citizens. However, in the absence of financial incentives and strong institutional pressures to sustain status quo attempts for strategic change are likely to face legitimacy challenges and fail. Using a multi-year qualitative study, we show how a Dutch municipality managed to undertake a major strategic change initiative while navigating legitimacy issues that emerged in relation with internal and external stakeholders. Taking a ‘legitimacy-as-process’ - perspective we offer a temporal model that explains how strategic change can endogenously happen in a public sector organization. We describe how evolving combinations of strategy, identity and institutional work where used by senior managers to kick-start, execute and preserve the change by securing legitimacy in relation with different audiences across time. We complement the strategic change research that is often focused on for profit private organizations by incorporating the unique challenges of change in public sector organizations and propose a multi-stage process model for navigating legitimacy issues during strategic change. Rather than taking an incremental approach towards change to minimize tensions, we suggest how a multi-stage, non-linear approach may be applied that 1) initially focuses on creating acceptance for a new philosophy among local stakeholders, hence creating receptiveness towards a major change, 2) then it moves to implementation of distinctive strategic initiatives based on liminal legitimacy risking issues and backlash, and 3) curbing the scope of the change initiative to satisfy the broader institutional audience while maximally using the space that is created in the previous steps.