UNIVERSITEIT
LEIDEN
Managing change in hard
times
A study on how public managers act on
organizational change success conditions
during cutbacks
Student: Niels Honders
Student number: s1277901
Supervisors: Prof. dr. S.M. Groeneveld and J.E.T. Schmidt, MSC
Date: 9-6-2016
Content: Master thesis
1
Foreword
Dear reader,
I hereby present my master thesis that I wrote for the master Public Administration at Leiden University. I would like to thanks several people, without whose help and support this thesis would not have been possible. Firstly, I want to thank my supervisors, Eduard Schmidt and Sandra Groeneveld for their help in writing this thesis and the valuable feedback they gave. I further want to thank Maurits Meerkerk and Jeroen Nederpelt for reading my thesis and giving constructive comments. Also, a special thanks to Leendert van der Plas for proofreading my thesis several times. It has been a great help. Finally, I want to thank my parents for their constant support during the time I studied at Leiden University.
I hope this thesis will give you, as a reader, new insights into how public managers act on organizational change success conditions during cutbacks. I also hope you enjoy reading this thesis as much as I enjoyed writing it.
Niels Honders
Katwijk, June 9th, 2016
2
Summary
Due to the financial crisis a lot of public organizations had to deal with cutbacks. Public organizations can use different strategies to realize cutbacks. However, pursuing these strategies often requires an organizational change. Public managers have an important role in pursuing these organizational changes and theoretical insights have led to the following eight success conditions that managers must pursue for successful organizational change: (1) Ensure the need, (2) provide a plan, (3) build internal support, (4) ensure top management support, (5) build external support, (6) provide resources, (7) institutionalize change and (8) pursue comprehensive change. However, during cutbacks, a tension can exist on how public managers can act on these success conditions. Therefore, it is important to gain insight in how public managers act on these tensions and whether they are able to pursue the success conditions during times of cutbacks. Therefore, the research question of this thesis is the following: How do public managers act on organizational change success conditions during cutbacks?
To answer this research question, a case study has been conducted. Through interviews and document analysis, the way public managers act on these success conditions has been researched. The results show that public managers act on three of the eight success conditions. Firstly, public managers clearly tried to ensure the need for change by using the cutbacks as an explanation. Secondly, public managers tried to build internal support. This was done by taking the employees along in the change process within the framework that was established by the top management. Thirdly, public managers tried to institutionalize the change by giving the right example and by making sure employees followed the new working principles. The other five success conditions were not acted upon by public managers. Firstly, public managers did not provide a specific change plan, since an organization wide change plan was already set up by the top management. Secondly, public managers did not try to secure extra resources as they received enough resources to implement the organizational change. Thirdly, public managers sought little to no external support, because they thought that the organizational change was an internal matter. Fourthly, public managers did not try to secure top management support to implement the change, for they did not see the added benefit of this. Lastly, public managers did not actively pursue comprehensive change, as this was initiated by the top management.
3 Table of Contents Foreword... p.1 Summary... p.2 1. Introduction... p.4 1.1 Justification... p.5 1.2 Reading guide... p.6 2. Theory... p.7 2.1 Literature Review... p.7 2.2 Theoretical model and propositions... p.12 3. Research design... p.18 3.1 Research approach... p.18 3.2 Causal mechansisms... p.19 3.3 Data collection... p.21 3.4 Data analysis... p.23 3.5 Reliability and validity... p.26 4. Case description... p.28 5. Results... p.31 5.1 How public managers implemented the organizational change... p.31 5.2 What public managers did not do and why... p.37 5.3 The context of cutbacks... p.43 6. Conclusion... p.45 7. Discussion... p.47 7.1 Limitations... p.49 7.2 Agenda for future research... p.50 8. Bibliography... p.51 Appendix I Interview topic list... p.59 Appendix II Coding scheme... p.60
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1. Introduction
In the last couple of years, government organizations were forced to cut back costs on a lot of their finances. One of the main causes was the financial crisis that started in 2008. This had an enormous negative effect on the financial position of a lot of public organizations (Raudla, Savi and Randma-Liiv, 2013). Many governments were forced to implement several reform programmes, which inevitably contained cutbacks (Posner and Blondal, 2012). The crisis and the resulting cutbacks also paved the way for a new wave of cutback management-related research. This wave is referred to as the second stream of cutback management literature (Cepiku and Savignon, 2012: 430). As the word 'second' implies, there is also a first stream. This first stream started in 1978 with an article from Levine (1978), which focused mostly on the contents of cutbacks (Cepiku and Savignon, 2012). The third stream that is also present consists more of generic literature on organizational decline (Cepiku and Savignon, 2012). Together, these three streams have offered valuable insights in cutback management. One area which it offered important insights into are strategies that public managers can take when implementing cutbacks. According to Pollitt (2010), the three strategies that managers can take are: cut-across-the-board, targeted cuts and realizing efficiency gains. However, pursuing these strategies often requires an organizational change. For example, according to Van der Voet and Van de Walle (2015), increasing productivity requires large-scale organizational changes. Furthermore, cutting across the board can threaten government services as they have less resources to deliver the services. However, according to Levine (1979), it is not easy for public organizations to stop the services they provide. To be able to still deliver the services with less resources, an organizational change might be necessary. This already shows that, to gain more understanding on cutback management, it is also important to look at change management. That cutback management and change management are related is not a new concept. During the first stream of cutback management research, cutback management was defined as "the management of organizational change towards lower levels of resource consumption and organizational activity" (Levine, 1979: 180). One specific area of research in which this relationship is clearly seen is leadership. Both in cutback management and change management processes, the role of the public manager is seen as highly important. According to a literature review on change management by Kuipers,
5 Higgs, Kickert, Tummers, Grandia and Van der Voet (2014), leadership is one of the five factors of change management that helps in identifying specific characteristics of change processes. Charlesworth, Cook and Crozier (2003:15) further states that "effective leadership is the key to leading effective change". One article that shows the important role of managers in change management is an article by Fernandez and Rainey (2006) on success conditions for organizational change. In this article, they give eight success conditions for organizational change that managers must pursue. The success conditions that they state are: (1) Ensure the need, (2) provide a plan, (3) build internal support, (4) ensure top management support, (5) build external support, (6) provide resources, (7) institutionalize change and (8) pursue comprehensive change (Schmidt, Groeneveld and Van de Walle, 2015). However, it remains an open question to what extent public managers are able to act on these success conditions for organizational change during cutbacks. For example, one success condition is to ensure that enough resources are available (Fernandez and Rainey, 2006). However, during times of cutbacks, available resources are limited. Another success condition that Fernandez and Rainey (2006) give is building internal support. This can be realized by letting members of the organization actively participate in the change process. However, as Levine (1979) points out, letting members of the organization participate in change processes could lead to a participation paradox. This means that when employees participate in the change process, they are closer involved, but are also better able to hinder the organizational change. During cutbacks, this participation paradox can be even more prominent, as cutbacks often have negative consequences for employees (Kiefer, Hartley, Conway and Briner, 2014). These two examples show that there are possible tensions in how these success conditions can be achieved during times of cutbacks. This shows that it is important to gain insight in how public managers act on these tensions and if they are able to pursue the success conditions during times of cutbacks. Therefore, the research question of this thesis is the following: How do public managers act on organizational change success conditions during cutbacks?
1.1 Justification
Gaining more insight in how public managers act during organizational change processes can be very useful for public organizations. Gaining more insights into how public managers can act on
6 success conditions during times of cutbacks can help them identify which success conditions can be achieved, how they can be achieved, which are more difficult to achieve and what possible solutions there are. Gaining information on this may prevent a waste of time and resources. This is especially important as public organizations work with public funds and are responsible for using resources effectively and efficiently. Also, public organizations can gain insight from a ministry on how they deal with change processes and, on basis of this research, may fine-tune their own organizational change processes and increase their capabilities of achieving a successful organizational change.
The scientific relevance of this research is that it will give new insights in how public managers act on organizational change success conditions during times of cutbacks. According to Schmidt et al. (2015), there is almost no research on this topic. They also specifically call for research into organizational change success conditions and how managers deal with them in times of cutbacks (Schmidt et al., 2015). This call was already done by Fernandez and Rainey (2006). They state that the success factors and proposition of organizational change that they offer must be tested against rival propositions. This research will investigate this by looking at propositions that the cutback management literature offers. Kuipers et al. (2014) also call for more research in change implementation in a variety of contexts. This research contributes to this by looking at an organizational change from the context of cutbacks.
1.3 Reading guide
The remainder of this research will consist of seven chapters. In chapter two, the current literature on change management and cutback management is discussed. Also in this chapter, the theoretic model and propositions of this research are explained. In chapter three, the research design of this research is addressed. Chapter four describes the case of this research. After this, in chapter five, the results of the research are analyzed. Then, in chapter six, the answer to the research question is given and further conclusions stated. Lastly, in chapter seven the results of this research are discussed.
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2. Theory
In this chapter the theoretic framework of this research is discussed. First, the existing literature on change management and cutback management is described. This will give insight into the current literature of the topic of this research. In the second part of this chapter, the eighth success conditions of implementing organizational change are presented. These success conditions are then compared with theoretical insights from cutback management literature. From this comparison, eight propositions are derived that are investigated in this research.
2.1 Literature review
Change management is one of the most important perspectives of this research. However, because this research focuses on change management during times of cutbacks, it is also important to look at the literature on cutback management, as that stream of literature can be seen as related to change management literature. As was already discussed in the introduction, the early cutback management researchers already saw organizational change and cutback management as highly related (Levine, 1979). Still, there is almost no literature on cutback management from a change management perspective (Schmidt et al., 2015) According to Schmidt et al. (2015) this can be seen as a surprise, as cutback management and change management are connected with each other. Therefore, in this literature review, the most important aspects of change management theory and cutback management theory related to the research topic will be discussed.
2.1.1 Cutback and change management literature
As was mentioned in the introduction, according to Cepiku and Savignon (2012), there are three streams of cutback management literature. The first stream started with Levine in 1978, when he published an article on organizational decline and cutback management. In this article, he offers cutback management tactics to resist or smooth organizational decline (Levine, 1978: 321). With this article Levine started a stream of articles about cutback management. According to Scorsone and Plerhoples (2010), most of the studies of this stream focused on the content of cutbacks. Also, a major focus lay on the cutback strategies: targeted cuts, cut-across-the-board or a mix of them (Raudla, Savi and Randma-Liiv, 2015).
8 The financial crisis that started in 2008 caused another stream of literature to emerge, which focused on targeted cuts and proportional cuts (Schmidt et al., 2015). One of the scholars that belongs to this stream is Pollitt (2010). He identified three basic approaches of cutback management strategies. These are cut-across-the-board, targeted cuts and productivity gains. Cut-across-the-board strategies often consist of equal cuts for all institutions. With targeted cuts, some institutions or sectors are facing higher cuts, often because of political deals. Lastly, productivity gains consist of reforming the organization by building new relationships or using new technologies (Ongaro, Ferre and Fattore, 2015). Overall, this approach takes a more pluralistic view and is more future-oriented than the first stream, which is seen as more reactive (Cepiku and Savignon, 2012).
The third stream is the generic literature on organizational decline. This stream focuses on a lifecycle approach of organizations (Schmidt et al., 2015). According to Cepiku and Savignon (2012), this stream focuses on long-term strategies and not only on decline but also on revitalization of organizations.
When looking at change management literature, it is often stated that there are two kinds of change processes (Kuipers et al., 2014; Greenwood and Hinings 1996; Weick and Quinn, 1999). The first type of process is continuous change, which is incremental and evolving (Weick and Quinn, 1999). It consists of endless adaptations of work processes and practices. Each of these adaptations are not abrupt or discrete events. Fundamental change is rather achieved over time when sufficient modifications have occurred. Also, there is no start or end point in the continuous change process (Orlikowski, 1996).
The second type of change process is planned change, which is episodic, intentional and linear (Weick and Quinn, 1999). This type of change happens when organizations start diverging from their equilibrium positions. This divergence is the result of a misalignment between the organization and its environmental demands. Planned change is also called episodic change, because it often occurs during distinct periods. It is also often precipitated by external events such as new technologies or other internal events in the organization (Weick and Quinn, 1999). Success conditions of organizational change are based on this second type of change processes. Success conditions such as 'providing a plan' and 'pursue comprehensive change' clearly show a
9 planned approach for organizational change.
2.1.2 Success conditions of organizational change
When looking at success conditions of organizational change, according to Schmidt et al. (2015), one article of success conditions of change management is often applied within the change management literature, which is the one of Fernandez and Rainey (2006). The success conditions that they state are: (1) Ensure the need, (2) provide a plan, (3) build internal support, (4) ensure top management support, (5) build external support, (6) provide resources, (7) institutionalize change and (8) pursue comprehensive change (Schmidt et al., 2015). However, there are more authors that offer conditions for successful change. One known success condition model for change management are the 'ten commandments' for implementing change by Kanter, Stein and Jick (1992). A few examples of these success conditions are: Analyze the organization and its need for change, create vision and common direction and create a sense of urgency. Another model of success conditions for organizational change was developed by Kotter (1996). He offers an eight-step model for successful organizational change. This model starts with developing a vision and strategy and ends with consolidating gains and producing more change. A third model is offered by Luecke (2003). He gives seven steps such as focusing on short-term results or identifying the leadership. According to Luecke (2003), if managers follow these seven steps they can realize successful change. These are just three authors that constructed models for successful organizational change. A few others are Judson (1991), Galpin (1996) and Armenakis, Harris and Feild (1999). When looking at the success conditions that all these authors offer, it is striking that there is a lot of overlap between them. To show this, five well known success conditions models are compared in table 1.
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Table 1: Five models of success conditions
Kanter et al. (1996) Kotter (1996) Fernandez and Rainey (2006)
Judson (1991) Armenakis et al. (1999)
1) Analyze the organization and the need for change
1) Establish a sense of urgency
1) Ensure the need 1) Analyze the change 1) Persuasive communication
2) Create a vision and a common direction
2) Create a guiding coalition
2) Provide a plan 2) Plan the change 2) Active participation by those affected 3) Separate from the past 3) Develop a vision and
strategy
3) Build internal support 3) Communicate the change 3) Human resource management practices 4) Create a sense of urgency 4) Communicate the change vision 4) Ensure top management support 4) Gain acceptance of new behaviours 4) Symbolic activities 5) Craft an implementation plan 5) Empower broad-based action
5) Build external support 5) Change from the status quo to a desired state
5) Start change at the periphery, then let it spread to other units without pushing it from the top
6) Develop enabling structures
6) Generate short-term wins
6) Provide resources 6) Consolidate and institutionalize the new state
6) Institutionalize success through formal policies, systems and structures
7) Reinforce and institutionalize change
7) Consolidate gains and produce more change
7) Institutionalize change
8)Develop enabling structures
8) Anchor new approaches in the culture
8) Pursue
comprehensive change 9) Communicate,
involve people and be honest
10) Reinforce and institutionalize change
When comparing the success conditions above with those of Fernandez and Rainey, it is clear that they have a clear resemblance, which is also stated by Kickert (2014). However, this is not
11 strange. Fernandez and Rainey (2006: 168) took all these earlier success conditions into account when constructing their eight success conditions. This is one of the reasons why these success conditions will be used in this research, as it, as Fernandez and Rainey (2006: 169) point out, "draws on points of consensus among researchers and experienced observers...". Therefore, the success conditions that they offer can be seen as the summary of these earlier models. This makes these success conditions highly useful for research. Also, Fernandez and Rainey (2006) refined Kotter's (1996) success conditions for the public sector, which is the focus of this research. However, there is also criticism on these models of success conditions. The criticism mainly comes from contingency theorists. For example, Dunphy and Stacy (1993) state that there is no change model that fits for every situation. They argue that organizations are operating in an ever-changing environment and that there are several ranges of approaches to achieve successful organizational change. One would therefore need a 'one best way for each’ approach, rather than a 'one best for all' approach. However, the contingency theory has been criticized on the fact that it suggests that organizations or managers cannot influence situational variables (Burnes, 1996). According to Burnes (1996), there is evidence that, for example, using a certain managerial style can influence situational variables. This means that more general success conditions can be applied by managers to influence external variables and that it is not necessary to have a specific approach for each organization. Therefore, more general success conditions, such as those of Fernandez and Rainey (2006), can be applied during organizational change processes.
A second form of criticism that can be given, is that if these success conditions would work, why do 70 percent of the organizational changes still fail (By, 2005; Kotter, 2008)? These success conditions are already around for several years, so if they had worked, they should have had some impact on the percentage of organizational changes. This is also underlined by Hughes (2011: 462) who states that "there is no empirical support for polarized preoccupations with either the best way to manage change (success) or the worst way to manage change (failure)." Following this, one could argue that using these success conditions for organizational change for research, would not be very useful. However, Hughes (2011) also shows that there exists no reliable evidence in support of the belief that 70 percent of the organizational changes fail. Therefore, this criticism has no empirical basis. Furthermore, as Fernandez and Rainey (2006)
12 state, the factors and propositions should serve as a compass and not as a roadmap. Also, they explicitly call for more research into these success factors and rival propositions. This research will answer this call, by researching how public managers act on these success conditions during times of cutbacks.
2.2 Theoretical model and propositions
For the theoretical model, the success conditions from Fernandez and Rainey (2006) is used. As was already mentioned above, they state eight success conditions in their article. The eight conditions that they present do not follow a linear process, as they can influence the organizational change at every point of the change process (Fernandez and Rainey, 2006). Although the eight conditions might seem open doors, they are often underestimated, ignored or overlooked and therefore important to take into account (Fernandez and Rainey, 2006). In this theoretical framework, the eight success conditions are presented. These success conditions are then compared with theoretical insights from cutback management literature. From this comparison, several propositions are stated, which are investigated during this research.
The first condition that Fernandez and Rainey (2006) give is driving the need for change. According to research from, among others, Burke (2002), Laurent (2003) and Nadler and Nadler (1998), it is extremely important that leaders drive the need for change and bring other members of the organization along with them. They therefore need a driving factor or create a vision (Fernandez and Rainey, 2006). According to Bingham and Wise (1996), it is important that the top management can convince members of the organization of the urgency of change to successfully implement changes. A crisis can be seen as a good driving factor for change, as the crisis and the resulting cutbacks can clearly show the urgent need for change to all employees in the organization. The public manager might use this to explain the driving factor, but also to create a vision for the future. Because the cutbacks present a real threat to the organization, it forces the members of the organization to look to the future and think about where they want to go and where they want to be, if they want to deal with the cutbacks effectively. This essentially forces the manager to construct a clear vision on where he wants to go. This leads to the
13 proposition that during cutbacks, public managers will use the cutbacks as a means to communicate the need for change.
The second condition is to provide a plan. To successfully change the organization, a clear plan with goals and actions on how to achieve them must be set up (Fernandez and Rainey, 2006). This plan must act as a roadmap on how to arrive at the preferred end state. According to Kotter (2005) this is important, as the organizational change can quickly fall into a set of complex and unconnected directives and actions if there is no plan with a vision. According to Fernandez and Rainey (2006), it is crucial that the plan has specific goals, which ensure that policy implementers have less ability to change the policy objectives. If there are no clear goals, it can sow confusion and allow public managers to reinterpret the policy and implement it differently then what the policy makers wanted. During cutbacks, it can be expected that public managers make use of the organizational change plan that was set up by the top management and do not get the freedom to change the policy objectives of the organizational change plan. There are three reasons for this. Firstly, during a crisis period, decision making is likely centralized to the top management, because often, a bird's eye view of the organization is needed to implement cutbacks (Levine, 1978). Therefore, middle managers do not have the opportunity to make a change plan for themselves. Secondly, cutbacks often need to be implemented within a certain time period, as politicians want to see the results of the cutbacks within a certain time frame (Boyne, 2002). Organizational change processes that are initiated bottom up often take a lot of time, as it takes a while before an idea makes it up in the hierarchy of the organization. It usually first needs to be developed in a department before it is implemented organization wide, making it unlikely to occur in times of crisis (Weick, 2000). Thirdly, the political environment will demand a detailed implementation plan with a clear time schedule (Van der Voet, 2014). Also, the top management will control whether the public manager reach the objectives, making it harder for the managers to change the policy objectives. The proposition is therefore that during cutbacks, public managers will make use of the organizational change plan and do not get the freedom to change the policy objectives of the change plan.
14 overcome resistance to change. Resistance to change can take many forms. One tactic that civil servants can use to resist organizational change is to delay the change until a new government comes into power (Warwick, 1975). Another tactic consists of convincing others that the changes are bad and/or commit actions against the change (Oreg, 2006). Furthermore, according to Raudla et al. (2013), the organizational climate during cutbacks is not very supportive for changes. This occurs because the organization’s capabilities of rewarding employees, innovation or involving employees are diminished due to the organization's focus on the cutbacks. Public managers can deal with this sort of resistance to change by actively letting employees contribute to the change process (Fernandez and Rainey, 2006). It is however important for public managers to commit enough time and resources into the participations process, otherwise it can be counterproductive (Bruhn, Zajac and Al-Kazemi, 2001). This point is especially noted by Levine (1979). During times of cutbacks, letting employees participate in cutback management could lead to a participation paradox. This paradox entails that employees who participate in the change process could show resistance and protective behavior, because they do not want the organizational change to affect them. Because they are closely involved, they are able to effectively hinder the organizational change and the cuts. This leads to the proposition that during cutbacks, public managers are not inclined to reduce resistance by letting employees participate in the change processes.
The fourth condition is ensuring top management support. According to Fernandez and Rainey (2006), this means that an individual or group from the top management should champion the cause for change. An idea champion, for example, is someone who maintains the momentum of change and has a high commitment to the change. (Fernandez and Rainey, 2006). O'Toole (1989: 333) shows an example of what an idea champion can do when he describes a public official who was "... meeting frequently and informally with design engineers and the contractors to assist in a bit of informal "fast tracking," and lobbying local politicians to pressure state regulators...". Idea champions can therefore really make a difference. As reported by Berman and Wang (2000), top management support is critical, because it legitimates reforms and helps in funding the change. It also helps in opening backchannels. In the public sector, this fourth condition can be even more challenging, because of the relatively frequent changes of the top management (Fernandez and
15 Rainey, 2006). Also, because the cutbacks are the result of political decisions in which the top management of a public organization cannot participate, it could negatively impact their enthusiasm, as they might not agree with the cutbacks and have a negative attitude towards carrying them out. Therefore, there could be less top management support and enthusiasm for the organizational change when this is a result of cutbacks. This insight leads to the proposition that during times of cutbacks, public managers will have difficulties with ensuring top management support.
The fifth condition is building external support. This means that managers must gain support from political overseers and key external stakeholders (Fernandez and Rainey, 2006). This success condition can be difficult to pursue in the public sector. Public organizations can have several political overseers that pursue different objectives. Furthermore, career civil servants can have poor relationships with politically appointed executives (Fernandez and Rainey, 2006). Nonetheless, research from for example Chackerian and Mavima (2001) shows that it is critical to have political support. However, according to Lodge and Hood (2012), public managers must become more aggressive and competitive during cutbacks to protect their department and employees from the cuts. This makes them less cooperative and less focused on key external stakeholders. This could hinder their ability to build adequate external support. The proposition that is derived from this is that during times of cutbacks, public managers are not able to secure adequate external support for the organizational change.
The sixth condition is that sufficient resources are made available to support the change process to, for example, develop plans, train personnel or develop new processes (Fernandez and Rainey, 2006). A failure to provide enough resources for an organizational change can lead to an inefficient implementation or even a neglect of core functionalities of the organizations (Fernandez and Rainey, 2006). That adequate resources for organizational change are necessary, is also shown by Beer, Eisenstat and Spector (1990). They show that organizations, when organizational units do not have enough resources, cannot make the necessary changes. However, this success condition may be very difficult to accomplish during times of cutbacks, as available resources may be low and difficult to acquire (Pollitt, 2010). Furthermore, when the
16 organizational change is part of a larger reform agenda, it can lead to trade-offs. This is often the case when large resource inputs are needed in different policy areas. This can lead to winners and losers in the struggle for money. (Chackerian and Mavima 2001). This means that, due to political preferences, some organizations have to deal with larger cutbacks than others. If an organization ends up at the losing end of a trade-off, it can have be even harder for public managers to secure resources. This leads to the proposition that during times of cutbacks, public managers are unable to secure enough resources for successful change management.
The seventh success condition is institutionalizing change. This means that the changes must be embedded in the organizations. This entails that employees of the organization, for example, must integrate the new policies in their routines (Fernandez and Rainey, 2006). However, it takes a lot of effort to institutionalize change. It is, for example, important to collect data on the progress of change, use ceremonies or conduct pilot projects (Fernandez and Rainey, 2006). Another method is letting employees participate in the change process (Judson, 1991). As is shown above, it takes a lot of resources to institutionalize change. However, due to the lack of available resources, such as finances, time and personnel, it can be very hard to institutionalize change during times of cutbacks (Schmidt et al., 2015). Furthermore, if the organizational change takes a long time, the commitment for the change can diminish. This is especially a problem in the public sector, as frequent shifts in political leadership can occur. It can therefore happen that a new political leader comes into power who is less committed to the change and who might not try to pursue the changes any further (Fernandez and Rainey, 2006). This, in combination with the lower resources, can make it very hard for public managers to institutionalize change. The proposition that is derived from this is that during times of cutbacks, public managers have much difficulty in institutionalizing change.
The eighth success condition is to pursue comprehensive change. This entails that public managers must also make changes to the subsystems of an organization. To be able to accomplish comprehensive change, it is necessary to change more than only one or two subsystems (Fernandez and Rainey, 2006). This is also stated by Shareef (1994), who found that strategic change was highly linked with the aligning of subsystems during an organizational change
17 process. However, in the public sector, pursuing comprehensive change may be harder, because change agents have less freedom to affect changes in other subsectors than change agents in the private sector (Fernandez and Rainey, 2006). Also, Robertson and Seneviratne (1995) show that systems such as formal structures, goals, procedures and reward systems are harder to change in the public sector, due to its bureaucratic nature. To change this, a lot of resources are needed, such as money and time. However, as was stated above, organizations have fewer resources during times of cutbacks. Therefore, due to the lack of available resources during times of cutbacks, achieving comprehensive change can be very difficult (Schmidt et al., 2015). The proposition that is derived from this is that during times of cutbacks, public managers have difficulties to pursue comprehensive change. For an overview, the eight propositions that will be researched are shown in table 2 below.
Table 2: The theoretical propositions of this research
Success conditions Propositions
1) Ensure the Need During cutbacks, public managers will use the cutbacks as a means to communicate the need for change.
2) Provide a Plan During cutbacks, public managers will make use of the organizational change plan and do not get the freedom to change the policy objectives of the change plan.
3) Build Internal Support for Change and Overcome Resistance
During cutbacks, public managers are not inclined to reduce resistance by letting employees participate in the change processes.
4) Ensure Top Management Support and Commitment
During times of cutbacks, public managers will have difficulties with ensuring top management support.
5) Build External Support During times of cutbacks, public managers are not able to secure adequate external support for the organizational change.
6) Provide Resources During times of cutbacks public managers are unable to secure enough resources for successful change management.
7) Institutionalize Change During times of cutbacks, public managers have much difficulty in institutionalizing change.
8) Pursue Comprehensive Change During times of cutbacks, public managers have difficulties to pursue comprehensive change.
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3. Research design
In the following chapter, the research design of this case study research is explained. Firstly, the research approach is explained. Secondly, the causal mechanisms of this research are discussed. Thirdly, the evidence collection and evidence analyses are addressed. Lastly, the reliability and validity of this research are discussed.
3.1 Research approach
To give an answer to the research question a research design had to be chosen. As the research question is a ‘how-question’, the best research design would be a qualitative case study. According to Babbie (2003), this research design is best suited to research the context of cases and behaviour of people, which are central concepts in this research. The next step was to determine what kind of case study approach should be used for this research. According to Blatter and Haverland (2012), there are three approaches for case study analysis. These are the co-variational approach (COV), causal-process tracing approach (CPT) and the congruence analysis approach (CON). The COV approach mostly aims to research if a specific variable made a difference in reaching a certain outcome. In contrast, the CPT approach tries to find out what factors lead to a specific outcome or how a certain process unfolded. Lastly, the CON approach is used to compare the explanatory merits of competing or complementary theories. Therefore, to find out which approach my thesis followed, it was important to look at the goal and research question of my thesis.
The research question of this research is the following: How do public managers act on organizational change success conditions during cutbacks? As was described above, a research question and goal like this fits with the CPT approach. Blatter and Haverland (2012: 27) describe the research question and goal of a CPT approach as: "Revealing the temporal interplay among conditions that lead to specific outcomes." This description fits perfectly into the research question and goal of my thesis. Therefore, the CPT approach was chosen for this research.
After the research approach was chosen, a case to answer the research question needed to be found. According to Blatter and Haverland (2012), the selection of cases is not as important in the CPT approach as in the COV approach. However, there are still some important considerations. The first consideration is the accessibility of the case in order to get the
19 information that is necessary to make causal claims. Secondly, the case selection depends on the specific goals of the research. Also, case studies that follow the CPT approach contribute to specifying the set of proven causal configuration of a certain type of outcome or event (Blatter and Haverland, 2012). Therefore, case selection is not based on the sampling logic that is used in Large-N studies or the most similar or most different case selection of the COV approach. Instead, selection is based on the specific goals of the research. In the CPT approach it is, for example, more important to look at the social or practical importance of a case and if the case can provide the information that is needed to answer the research question.
Taking this into account, a case was identified on the basis of the ongoing change process and the social relevance and not on the basis of Large-N sampling logic or on a most similar or most different research design. Therefore, the first step was to look at cases in which an organizational change had taken place during cutbacks or was still taking place. Also, the possible role of public managers in this change process was analyzed. Furthermore, the social and practical importance of the organization was mapped. After this, the accessibility for the kind of information that was needed to answer the research question was analyzed. This was mostly done through an internet search and via documents about organizational changes and cutbacks on the central government. The ministry of Education, Culture and Science (OCW) ultimately provided a good fit. Firstly, the introduction of alternative working practices required such an organizational change that it affected the entire organization. Secondly, the organizational change was organization-wide, which ensured that each public manager had to act on the change. This provided an ideal situation to study the actions of these public managers. Furthermore, the ministry was a frontrunner in implementing these alternative working practices. In combination with the implementation of alternative working practices, the ministry also had to deal with cutback programme of 13.3 percent of its budget. Also, in the years prior to this, the organization had already dealt with several other cutback programmes.
3.2 Causal mechanisms
The goal of this research was to identify causal mechanisms that made a certain outcome possible. A causal mechanism is the process through which an outcome was made possible. Haverland and Blatter (2012: 95) view causal mechanisms as "configurational entities combining
20 three different types of social mechanisms: ‘situational mechanisms’, ‘action-formation mechanisms’, and ‘transformational mechanisms’". According to Haverland and Blatter (2012), the situational and transformational mechanism link different levels of analysis. Action-formation mechanisms, on the other hand, looks at the behaviour of individuals based on theoretical assumptions, such as rational choice theory. The mechanisms are shown in figure 1.
Figure 1: Different types of social mechanism that together form a causal mechanism (Blatter and Haverland, 2012:
95)
When translating these concepts to this research, the following figure can be drawn:
Figure 2: causal mechanism
The model starts with the initial condition. In this research, this was the situation of the ministry of OCW in 2012, at the end of the cabinet of Rutte I. This is before the cutback programmes that were started by the cabinet of Rutte II in November 2012. Then, the situational mechanism sets in, which, in this research, are the cutbacks. These cutbacks are the causal mechanism that causes the need for an organizational change that has to be implemented by the public managers in the ministry of OCW. This brings us at level 2 of the model, where one must look at the actions of individuals. In this level, the way public managers act on organizational change success conditions can be seen as the action formation mechanism. The way public managers deal with
21 these success conditions causes a certain organizational change process, which can be seen as the transformational mechanism. This organizational change process then causes the outcome of the change. However, as the organizational change is still going on, it is not possible to research the transformational mechanism and the outcome. Even so, this is not the focus of this research.
As the action formation mechanism is the focus of this research, it is important to have a closer look at it. According to Blatter and Haverland (2012), researchers that are interested in tracing causal mechanisms must collect information about the perceptions and motivations of individuals, collective or corporate actors. They state that this can be done through interviews. In this research, the causal mechanisms that are researched are the organizational change success conditions that were described by Fernandez and Rainey (2006). The mechanisms work in the following manner: Cutbacks have an effect on the presence of success conditions. This effect of cutbacks on the success conditions goes via the behaviour of public managers, as cutbacks affect the behaviour of public managers. This then affects the way they act on these success conditions. These mechanisms are visualized in figure 3.
Figure 3: Action formation mechanism
3.3 Data collection
To make sure that this case study was as robust as possible, multiple sources of evidence were used. This is also known as the concept of triangulation. Interviewing was used to collect the primary data with document analyses as a complement to confirm or reject findings from the interviews. Interviews provided the main source of data, as they were needed to identify the success conditions and how managers acted on them.
For this research, fourteen interviews were conducted with public managers and employees of the ministry of OCW. Twelve of these interviews were with (former) public
22 managers that work or worked as a public manager at the ministry of OCW. Two interviews were with employees who were closely involved in the change process. These two interviews were conducted to gain more information on the context of the cutbacks and organizational change and how they were implemented.
The interviews were held between March 23rd, 2016 and April 29th, 2016. Eleven of the interviews were held at the Ministry of OCW and three of the interviews were held at alternative sites. All interviews were conducted face-to-face and lasted between 34 and 57 minutes. Furthermore, all interviews were recorded and transcribed, with approval of the participants. Also, full confidentiality of respondents was ensured.
For the interviews, a semi-structured approach was used. Before the interview started, the goal of the research was explained to the participants. After this, the interview was started. During the interview, open-ended questions were asked, which were grouped in several topics1. Firstly, several introductory questions were asked about the function and tasks of the interviewee. Secondly, questions were asked about cutbacks in general and how the public manager was confronted with cutbacks. The third topic consisted of questions about the decision-making process of the cutbacks and about what role the public managers played in this process. Lastly, questions were asked about how the public manager implemented the cutbacks. During the interviews, the decision was made to not ask for the success condition explicitly, but they were more or less concealed behind general questions. This was done to prevent socially desirable answers, but also to see if the public managers would mention aspects of the success condition themselves, without any steering from the interviewer. This was done to limit the influence of the researcher on the given answers by the respondents. For an overview, the functions of the interviewees are depicted in table 3.
Table 3: Overview of conducted interviews
Function Number of interviews
(former) Secretary General 2
Director 8
Department Head 2
Other 2
1
23 Furthermore, internal documents about the organizational change were researched. Specific documents were, for example, the organizational change plan and evaluations of the organizational change. These documents were required to gain more insight into the organizational change process, as information was very limited from public sources. Also, these documents were needed to describe the context of the organizational change. To gain access to these documents, the interviewees were asked for them. In most cases, they were willing to send the documents by e-mail for further research. The documents that were used in this research can be seen in table 4.
Table 4: Overview of used documents
Title Year of
publication
Type of document
OCW Verandert! - Kanteling en Bundeling- Plan van aanpak 2006 Change plan Flexibilisering volgens SG-DG-model 2006 Change plan
Taakstellingsplan OCW 2007 Cutback plan
HET NIEUWE WERKEN BIJ HET RIJK Een handreiking Tijd- Plaats en Apparaatonafhankelijk Werken voor Rijksorganisaties
2012 Change plan Uitvoeringsprogramma Compacte Rijksdienst 2012 Change plan
Presentatie huisvesting 3e verdieping Hoftoren- FEZ 2016 Presentation on the floor renovation at OCW
Streefbeeld TPAW 2017 2016 Target image of TPAW
Handreiking Tijd, Plaats- en Apparaatonafhankelijk Werken Voor leidinggevenden, medewerkers en
bedrijfsvoeringspecialisten van rijksorganisaties
2016 Change plan
3.4 Data analysis
Once the data collection process was finished, the data that was gathered needed to be analyzed. As this research follows a CPT approach it was important to also follow the data analysis methodology of this approach. According to Blatter and Haverland (2012), there are three types of observations that can serve as evidence in a CPT approach. These are the comprehensive storyline, smoking gun observations and confessions.
Comprehensive storylines are narratives that describe the development of potentially relevant causal conditions and usually gives a bigger picture of the situation (Blatter and Haverland, 2012). It is used to identify the major sequences of the process and the critical moments. For this research, this meant that it was required to first form a broader picture of the organizational change at the ministry of OCW. Therefore, information on the process of the
24 organizational change needed to be gathered. Secondly, information needed to be gathered on the contextual conditions of the change. Why was it started, was there internal and external support, what was the situation of the organization at the time the change started and what was the situation at the end of the change process? To do this, the documents that were given by the interviewees were analyzed. Also, as mentioned above, two interviews were conducted with two employees and two with old secretary generals of the ministry of OCW who were closely involved in the change process. This gave enough information to identify critical moments and construct a narrative about the organizational change process at the ministry of OCW.
The second important concept are smoking guns. These are observations that reveal a central piece of evidence within an array of observations. However, a smoking gun type of evidence is not enough to make causal claims. The reasoning behind this is that even a smoking gun in the hands of a suspect is not enough to determine what has happened. You need to have further observations to conclude if the person was killed with a gun or that the suspect was at the crime scene. Therefore, the smoking gun observation must be complemented by other pieces of evidence. A second requirement is spatial contiguity. This means that the observation must take place at the same time and place of the outcome. In this research case, this means that the observations took place during the change process and not before or after. For this research, a smoking gun observation would, for example, have been an observation that employees did not participate in the change process. This is an important piece of evidence that the third success condition, building internal support, was not acted on. However, additional evidence would be needed, as public managers might have tried to let employees participate, but were confronted with a lack of interest from employees or the public managers did not have enough resources. Without this kind of extra information, only observing that employees did not participate (smoking gun) would not be enough. Another smoking gun in my research would be, for example, the presence of an organizational change plan. This would indicate that the success conditions ‘provide a plan’ is apparent. However, the presence of a plan on its own does not indicate that public managers acted on this success condition, as it could be the case that they only made the change plan as a standard procedure and did not follow this change plan. To find the smoking guns, the documents and interview transcripts were analyzed for certain pieces of
25 evidence that would signal that a success condition was apparent.
The third important concept are confessions, which are explicit statements of actors on why they acted the way they did (Blatter and Haverland, 2012). According to Blatter and Haverland, confessions can “contain information about all elements of a full-fledged mechanism-based explanation” (2012: 117). However, the confessions should not be taken on face value. It is also important to consider the context of the confession, as the actor can have a hidden agenda with the information they give. Despite this, confessions are an important complement to smoking guns. For this research, the confessions are the most important observations. To find out what success condition of organizational change public managers can act on, their statements have the most crucial information. To find these statements, the transcripts of the interviews were analyzed for statements that public managers make about how they implemented the organizational change. However, their statements alone would not have enough value, as they can have a hidden agenda by giving certain information, as was discussed above. Therefore, the statements needed to be complemented by the comprehensive narrative and smoking gun observations.
Coding
To analyze the observations and find comprehensive narratives, smoking guns and confessions, a coding scheme2 was used. Each theoretical success condition was coded with a label. This means that data that, for example, fell within the success condition ‘ensuring the need’ was coded with a EN. If findings were found within the transcript, which could not be placed within a success condition, they also received a new code. Furthermore, findings with the same content received the same code.
Each transcript was reviewed for the theoretical success conditions and labeled accordingly. The second step was compiling all the labels with the same code in one data file. The content of the data file was then summarized.
2
26
3.5 Reliability and validity
When evaluating the measurements, it is important to look at two important components of scientific research, namely the validity and reliability.
Validity
The concept of validity can be separated into internal and external validity. Internal validity is about how accurately the concept is measured through the measurement method that is used (Babbie, 2013). External validity, on the other hand, is about to what extent the results of the study can be generalized to other cases.
According to Boeije (2005), collecting data through interviews can have a positive effect on the internal validity of the study. Through interviews, the attitudes of the interviewed persons can be taken into account. Also, interviews can get to the core of the research question which increases the internal validity (Babbie, 2013). By using interviews, the validity of this study will be high, because, through the interviews, the actions of public managers can be described in great detail. Furthermore, the internal documents that will also be studied will strengthen the internal validity even more, as it can be used as an instrument to check the stories of the interviewed persons.
The external validity of this research will be lower than the internal validity. The reason is that only a single case is studied. The specific context of this case makes it unique. Therefore, the results of this study cannot be statistically generalized to the larger population. However, the finding may be generalized to a group that is sufficiently similar. This is especially the case if the case that is selected is a representation of a larger group (Seawright and Gerring, 2008). The ministry of OCW fits this description, as most ministries often have the same organizational structure and procedures. Therefore, the results of this study can be generalized to that group.
Reliability
The concept of reliability also consists of internal and external reliability. Internal reliability is about the extent to which a measure is influenced by the researcher itself. External reliability refers to the extent to which a measure differs from one use to another. In other words, to what extent can you replicate the research and get the same results (Van Thiel, 2007)?
27 As this research makes use of a case study design, the internal reliability is influenced by the researcher. As the interviews were semi-structured, another researcher might have asked different questions at different points during the interview. Also, as multiple interviews are conducted, there can be differences between interviews. To deal with this, during the interviews, a topic list was used. This made sure that the same topics were addressed in each interview, which made the interviews more comparable. In this way the internal reliability of this research was strengthened. Another problem might be that the researcher is biased towards the organization that is researched and wants to achieve certain results. However, this problem is addressed by the fact that I, as a researcher, am not part of the researched organization. Also, I did not try to steer the research in such a way that it would provide certain results.
The external reliability is a weakness of this study, because interviews have problems with replicability. The interviewed persons can give different answers when given the same questions at a different point in time. This research will try to increase the replicability as much as possible by documenting each step of the research process. This will help other researchers in replicating this study as much as possible, if they desire to do so.
28
4. Case description
In the Netherlands, the economic crisis forced the government to set up several reform agendas. One of these reform agendas was for the state service (Rijksdienst). The three goals of this reform agenda were to achieve optimal services for citizens, businesses and institutions, a greater effectiveness of the state service, to reduce unnecessary bureaucracy, and lastly, a reduction in cost for personnel and material of the state service3. The total amount of cutbacks would be around four billion euros. A specific measure of this reform agenda was to reduce the office space of the civil service, as it was expected that the civil service would become eight to twelve percent smaller in the future. An important tool to work with the reduced office space are alternative working practices (In Dutch: 'Het Nieuwe Werken'). One important element of this is flex working. This entails that employees do not have their own workplace anymore, but that there are flexible workspaces where everyone can work. The current plan is that for every 100 full time employees, only 90 workspaces will be available4. This forces civil servants to, for example, work at home, which reduces the need for office space. To realize this, in 2012, a plan was set up to implement alternative working practices in all ministries. This plan was called: Working Time-Place and Device Independently. In Dutch this was called: Tijd-Plaats en Apparaatonafhankelijk Werken (TPAW).
The ministry of Education, Culture and Science was one of the ministries in the Netherlands that started with the introduction of alternative working practices. This ministry is responsible for all policies concerning education, culture and science in the Netherlands. The organization consists of three Directorate Generals, such as Primary and Secondary Education or Culture and Media. Furthermore, the Education Implementation Service also falls under the control of the ministry. Also, several smaller organizations, such as the National Archive and Education Board, fall within the jurisdiction of the ministry. In 2014, the amount of full time employees (fte) in the organization was 3.920. However, this number also included the number of
3
Rijksoverheid. (n.d.). Hervorming rijksdienst. Retrieved from
https://www.rijksoverheid.nl/onderwerpen/rijksoverheid/inhoud/hervormingsagenda-rijksdienst, at February 8, 2016
4
Personeelslog. (2013). Kabinet omarmt Het Nieuwe Werken om te bezuinigen. Retrieved from
https://www.personeelslog.nl/2013/06/29/kabinet-omarmt-het-nieuwe-werken-om-te-bezuinigen/, February 8, 2016
29 fte outside the core department, such as the Education Implementation Service. Around 900 employees work at the core department in The Hague, where this research has taken place.
The top management combined the implementation of TPAW with a cutback programme of 13.3 percent of their budget that the ministry had to implement as a result of cutbacks that were introduced by the cabinet of Rutte II. However, these were not the first cutbacks that the ministry had to implement. In the years prior to the Rutte II cabinet, several other cutback programmes were implemented by the ministry. The main way how the goals of these cutback programmes had to be reached, was by reducing the amount of employees and stopping several policy programmes. In 2012, the top management of the ministry did not want to reach the goals of the cutback programme by reducing the amount of employees again. Therefore, solutions were sought in the organizational side of the ministry, such as the amount of office space that was used. For example, before 2012, the ministry occupied around fifteen floors in the building the Ministry was housed in. However, due to the decreasing amount of employees the occupancy rate of most floors was relatively low. Also, the cost of hiring one floor per year is around one million euros. Therefore, it was decided to reduce the number of floors that were being used. The plan was to remove the amount of working places to 0.7 per fte, down from 0.9 fte.5 This meant that several departments had to move floors. Furthermore, the ministry used this removing of floors in combination with the introduction of TPAW. All floors will be renovated to accommodate new departments but also to make them suitable for TPAW. The introduction of TPAW also required a behavioural change from employees. Most employees were used to having their own office space. Due to the change they now lost their own working space and it was expected of all employees that they adapted flexible working principles, such as working flexibly in the office by constantly switching to working places according to the activities of the day, but also working from home. After this was decided by the top management, the directors and department heads of all directorates departments were tasked in carrying out this organizational change, within the framework that was established by the top management. This meant that the public managers did
5
Ministerie van Binnenlandse Zaken en Koninkrijksrelaties (2014) Jaarrapportage Bedrijfsvoering Rijk. Den Haag: Ministerie van Binnenlandse Zaken en Koninkrijksrelaties.
30 not have complete freedom to implement the change. In the next chapter the way these directors and department heads dealt with this organizational change is discussed.
31
5. Results
In this chapter, the results of the study will be presented. The interviews that were conducted present a narrative on how public managers implemented the changes. For an overview, this narrative has been divided in three phases, namely the confrontation and planning phase, the informing and participating phase and the implementation phase. In the first paragraph, these phases are explained with the success conditions that become salient in each phase. In the second paragraph of this chapter, the success conditions are discussed that public managers did not act upon. Furthermore, the theoretical propositions are answered in this chapter. In the third paragraph, the causal model is given of the effects of cutbacks on how public managers act on organizational change success conditions.
5.1 How managers implemented the organizational change
Based on the data, the actions of public managers can be divided in three separate phases. These phases are: confrontation and planning, informing and participating and implementation. In this paragraph, the actions of public managers in each phase is explained first. Also, for each phase, the success conditions that became apparent are discussed and the proposition that was set up for the corresponding success condition is confirmed or left unconfirmed.
Phase 1: confrontation and planning
The public managers within OCW were confronted with the task to implement TPAW in combination with a possible reduction of office-floors or the renovation of their existing floor to make the introduction of TPAW possible.
The reaction of public managers on the impending changes differed. Some were really positive about the changes and clearly saw the benefits of it. Others had a more negative attitude toward the changes. However, the change had to be implemented, so resistance would be futile. As one public manager put it:
"it is forced. It is just imposed"6 (respondent 2).
6
