Reform and change are not new phenomena for public organizations, since many of them have been experiencing attempts to bring about change and reorganization for a long time. For example, the question of delegation of central authority for public services from a ministry to an autonomous agency has been a central controversy in many countries such as Sweden or Australia for a century.What is new is that since the early 1980s administrative policy has grown into a separate policy area with its own discourse and administrative units, and reforms are now often launched under the auspices of more comprehensive reform programmes.
It is important to distinguish between reform and change in public organizations.
By reform, we mean active and deliberate attempts by political and administrative leaders to change structural or cultural features of organizations;changeis what actually happens to such features. Change is often a gradual process in organizations,
Reform and change
Chapter 7
LEARNING OBJECTIVES
By the end of this chapter you should have a clear understanding of how the institutional, cultural and myth perspectives can be used to:
■ analyse general and specific reform programmes and reform initiatives;
■ analyse the course and outcome of general and specific processes of change;
■ analyse the relationships between reform programmes and the course, and the outcome of specific processes of reform and change.
taking place in the course of routine activities and in small increments, but sometimes it can take the form of abrupt and powerful upheavals, the potential for which has built up over a longer period of time. Indeed, many gradual changes have no background in reforms. Hence, it is a myth that public organizations do not change even while remaining robust and stable. Examples of continuous change can be the adoption of information and communications technology, such as the Internet and e-mail, or the gradual adaptation to external pressure through increased integration in the European Union, which influences organizational forms in public admini- stration.
A hierarchically based instrumental perspective would expect there to be a close connection between reform and change.The point of departure here is organizational reform in the sense of a planned attempt by leaders to bring about change.
Nevertheless, it is possible to think of situations where reform does not lead to change, for example where it fails to be implemented and remains a reform on paper.
Reform and change in public organizations can occur simultaneously, yet be partially decoupled from one another, in the sense that reforms may be based on initiatives from the top, while change can occur continuously at lower levels of the organization.
Viewed from a negotiation-based instrumental perspective, deficiencies in carrying out reforms may stem from resistance to leaders’ plans for change from actors inside or outside the organization. A cultural perspective usually uses as its point of departure the actual organizational changes or the element of stability over time, where the degree of change and stability is measured against the existing cultural characteristics of an organization.A myth perspective focuses on the symbolic aspects of reform and change.
What precisely are leaders attempting to change when they decide to carry out organizational reforms, and what happens to structural or cultural features when organizational change occurs? Chapter Four mentioned six categories of reform recipes for different aspects of public organizations: leadership, the design of formal organizational structure, human resource management, organizational culture and work environment, the organization of work processes, and financial control. The three perspectives outlined in the first part of the book emphasize different types of reform and change.An instrumental perspective, for example, will usually focus on reforms connected to structural features, while a cultural perspective will more often focus on stability and change in cultural features. Just as important is that these perspectives offer different conceptions of the course and outcome of processes of reform and change and of whether these processes can be controlled, and, if so, how.The three perspectives also offer different views of the connections between how reform processes and changes are organized and their actual content, that is, the organizational solutions employed.
One aspect of organizations as instruments is expressed in the notion that hierarchically responsible leaders implement reforms in an instrumentally rational way; another instrumental aspect is that leaders organize reform processes on the REFORM AND CHANGE
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basis of means–ends considerations.There will also be a connection between how a reform process is organized and what course it takes and what the outcome is, because organizing creates capacity for analysis and action. In addition to this, conceptions of the existing organizational structure may help to determine how problems and solutions are defined. From a negotiation-based instrumental perspective, existing organizational structures and ways of organizing the reform process may be the result of previous bargaining and compromise. Just as important will be that existing organizational structures and ways of organizing the reform process provide directives for the course and outcome of reform processes, because there are vested interests in these structural features. Reform processes may therefore create conflicts because they revive old conflict patterns and may lead to changes in these.
From a cultural perspective, it will be important to clarify how the course and outcome of processes of change will be influenced by an organization’s established cultural features. Informal norms and values will be relatively stable over time and may determine the reform method (i.e. ways of organizing the process of change, such as which actors should be involved) and, to some extent, the organizational solutions (i.e. the content of change) regarded as appropriate in the light of tradition.
Similarly, from a myth perspective, there may at all times be recipes for organizing reform processes and for reform content, but these institutional standards may fluctuate over time. Public organizations attain legitimacy by deploying organiza- tional reform methods and solutions regarded as modern and acceptable by the environment at a given period in time.
From the three general perspectives, moreover, there will be different ways of understanding the connection between reform initiatives directed towards a wide range of organizations and what happens in specific organizations, as well as different ways of understanding the varying content of reforms and changes over time. From the standpoint of hierarchically based analytical problem-solving, these connections and variations are closely tied to how leaders formulate their goals and define their problems. If these are consistently the same for all organizations, the outcome of reforms will be the same in different organizations regardless of the time period, whereas differences in goals and problem definitions over time will produce variations in what kinds of organizational solutions are used. Here negotiation features may entail modifying how reform initiatives are implemented, based on the existing distribution of interests and resources in individual organizations at various points in time. From a cultural perspective, reforms may vary immensely across organ- izations.There may be loose coupling between general reform initiatives and what happens in specific organizations, but within each organization there may be a great degree of stability over time. From a myth perspective, however, a similarity or isomorphy between organizations will occur, expressed either in general similar features based on widespread myths, or similar features within families of recipes, and if prevailing doctrines change there will be corresponding changes in the institutional standards.
REFORM AND CHANGE
In this chapter we will first outline central aspects of how reform processes in public organizations are organized.Thereafter, we will take as our point of departure reform programmes and initiatives directed towards a wide set of public organizations and will discuss their origins and fates. We will also discuss how the course and outcome of processes of reform and change in specific public organizations can be analysed in the light of the three perspectives. Here the most pertinent example will be the history of how the central authority for the Norwegian police force is organized.
ORGANIZING THE REFORM PROCESS
In Chapter Two we saw that the design of a formal organizational structure depends on the degree and form of specialization and coordination and that bureaucratic organizational forms involve hierarchy, routines and divisions of labour. Such structural features may also apply to ways of organizing the reform process within and between public organizations.As for specialization, organizational questions may be allocated to positions and units specifically designed for organizational tasks, for example units for organizational development, or positions and units whose tasks concern selected parts of society, for example units that organize contact with specific user groups. How specialized this work is depends on how many such positions and units there are and how many organizations they serve.Coordinationmeans linking organizational reforms to other types of tasks and decisions within an organization or with organizational reforms in other organizations.
The reform process also entails vertical coordination– that is, elements of hierarchy within and between public organizations involving superior and subordinate ordering.
In central government, for example, the political and administrative leadership of a ministry will take charge of organizational design for all levels of that ministry and may influence the organizational design of its subordinate agencies as well. In many countries, it is more common for organizational questions to be dealt with via vertical coordination of this kind than for these to be assigned to, say, a ministry or government administration that is hierarchically superior to ministries focused on specific fields of expertise.What is more, a hierarchy also implies vertical special- ization because different types of tasks are placed at different levels. For example, there may be organizations at a subordinate level routinely focused on reform issues, such as special units for organizational questions in a ministry or a separate agency giving advice to other public organizations. Setting up individual units for dealing with organizational questions or issues is more characteristic of horizontal specialization, and the relationship between these and other units on the same level may be regulated through various forms of horizontal coordination.
There may also be other organizational forms for designing the reform process that are alternatives or supplements to a hierarchy. Experts on organizational REFORM AND CHANGE
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questions – be they from private consulting firms or from public consulting agencies – can be directly involved in reforms, by participating in public commissions or by producing tailor-made organizational reports commissioned by an organization’s leaders. If reforms are to be wide-ranging, if patterns of interest and conflict are particularly complex, or if the reforms necessitate changing laws, the practice in many countries is for the proposed reform to be reviewed by a public commission, consisting of representatives from a wide range of stakeholders, which formulates recommendations for the political and administrative leadership. Participation by actors other than leaders involves negotiatory features that are expressed in participatory arrangements for employees.For example, in the Scandinavian countries such participation often happens through union spokespersons, who have extended rights to take part in negotiations and discussions. In addition, they have the right to information about plans and resolutions that are important for government employees. In particular internal organizational changes of a more or less permanent character, which involve a reshuffling of manpower and equipment, are often the subject of negotiation within the guidelines drawn up through political prioritization.
While from an instrumental perspective structural features of organizations and reform processes are critical, from a cultural perspective it is the cultural features tied to these issues that are most central. Special units dealing with organizational questions will, in the same way as other public organizations, be characterized by their own informal norms and values. Some methods of implementing reforms will be considered appropriate, while others will not be as relevant because they break with the existing culture. In Scandinavia, for example, it has been traditional for government employees’ unions to be involved when a ministry or agency undergoes reorganization, even beyond the bounds of their formal rights of participation in such cases.
Likewise, from a myth perspective, the special units dealing with organizational questions will be relevant interpreters of popular recipes for what organizations should look like and how they should function. Such units will usually be among the foremost interpreters of key international trends, and they can indicate how the trends should be translated to national and organizational contexts, as well as the possible outcomes.This interpretation often has clear symbolic overtones: the prom- ising aspects of relevant reforms are over-emphasized while counter-arguments are devalued and labelled as old-fashioned and regressive.
How and to what degree is it possible to design reform processes? From an instrumental perspective it is important to organize systematic attention around organizational reforms. From the leadership’s vantage point, this can be done by setting up separate units for organizational questions, building a knowledge base in these and influencing their horizontal and vertical placement within public administration. Civil servants and their unions can be drawn into a reform process if they are perceived as having important knowledge or insight into the consequences of actual reform initiatives, or if their participation is perceived as facilitating the REFORM AND CHANGE
implementation of reform initiatives leaders deem desirable.A consequence of setting up commissions for organizational reforms is that their composition determines who has the right to participate, and its mandate specifies which goals, organizational solutions and consequences are relevant. In this phase of the reform process actors whose points of view support the leadership can be included, while dissenters can be excluded. Alternatively, in order to increase the legitimacy of the reform processes, the process of determining alternatives for reforming an organization can be made to include many different interests.As a rule this will facilitate implementing reforms and increase the legitimacy of the leadership, but it will also make them less radical. Participatory agreements with employees and diversely composed commissions will necessitate modifying hierarchical control. Such negotiatory features allow actors with goals and interests that do not necessarily harmonize with those of leaders to voice their views.
From a cultural perspective, reform happens slowly and in increments. It is evolution rather than revolution, a process where traditional norms and values are balanced against new ones, through a process of adaptation to internal and external pressure. From a myth perspective, it will be seen as necessary to develop and spread recipes for ways of organizing reform processes and to gain legitimacy from the environment by using generally accepted methods. Imitation, in the sense of using models from other countries or advice from international organizations, may be such a method.Another method, already mentioned, might be public commissions whose composition cuts across ministries.These may have a symbolic role because they are tightly controlled by political and administrative leaders.
How then will the course and outcome of reform processes be influenced by how they are organized? From an instrumental perspective, the way capacity for analysis and action is built into units responsible for reform-related tasks is important because this capacity can be used by the hierarchical leadership.A negotiation-based instru- mental perspective is concerned with how interests and resources are built into individual organizations and how organizing the reform process constrains and enables the articulation of interests and the use of resources. Such negotiatory features can be deliberately exploited by political leaders in order to control the reform process. Moreover, reforms can often be easier to carry out if the affected parties in an organization, such as employees and their unions, participate in the process prior to actual reform implementation. Nevertheless, other actors can exploit negotiations too, for, by engendering conflicts, they can influence the outcome of reform pro- cesses, even to the extent where the reforms turn out differently to how the leaders desired.
From a cultural perspective, the links between formal aspects of preliminary reform work and actual outcomes will not be entirely clear.The way reform processes are organized will provide the basis for coming up with good solutions and determining appropriate action. Nevertheless, it is the informal norms linked with organizational forms and organizational methods for change that are the most important. A myth REFORM AND CHANGE
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perspective allows formal structural features to be decoupled from concrete action linked to reforms to an even greater degree.The goal of reform processes may very well be to achieve political gains without having to make substantial changes, but by organizing the reform process in a particular way, this goal can be presented so as to give the impression of a modern political leadership open to change.
REFORM PROGRAMMES AND REFORM INITIATIVES
Many organizational reforms in the public sector in the last two decades can be related to NPM. As outlined in Chapter One, NPM plays down differences between the public and private sectors and instead emphasizes the great benefits of adopt- ing the organizational models and forms of control used by private organizations for public organizations.The theoretical underpinnings of NPM are rather mixed, combining elements of both new institutional economicsand managerialism.The main tenets of organizational economics, such as Public Choice Theory,Principal Agent Theory and Transaction Cost Theory,presuppose actors trying to maximize self-interest.
As in the older theories mentioned in Chapter Two, here, too, the emphasis is on controlling public organizations. Structural features within and between organizations (e.g. specialized structures based on Public Choice Theory, contracts and delegated authority based on Principal Agent Theory, and the market as an alternative to hierarchy based on Transaction Cost Theory) can be used as tools by top-level leaders for influencing the work of subordinates via a system of rewards and sanctions.
As we saw in Chapter Six, new management theories contain structural as well as cultural aspects. Here revised versions of Taylorism are supplemented with ideas and initiatives such as Service Management and Value-based Management. Compared with economically based organization theories, service- and value-based management theories place stronger emphasis on giving organizations more autonomy and flexibility.While concern for commercial freedom and the efficient use of resources points in the direction of increased autonomy for public organizations, concern for control points in the opposite direction. NPM is, in other words, not a consistent and integrated theory for modernizing the public sector, but is better characterized as a wave of reforms composed of some principal reform ideas together with a loose cluster of reform initiatives pointing in various directions.Thus, NPM constitutes a set of organizational recipes that can be translated and spread to numerous public organizations, as described in Chapter Four.
According to recent comparative studies of public-sector reforms, there have been some similarities as well as differences in reform types over time and across countries. For example, in comparing Norway, Sweden,Australia and New Zealand, the political scientist John Halligan distinguishes between four main types.The first type is the reluctant reformer (e.g. Norway), who implements some reform principles but is essentially old-style (or in slow transition) and carries out reform on a sectoral REFORM AND CHANGE