Global reform meets local context: cultural compatibility and practice adoption in public sector reform

Purpose: The paper proposes that public sector organizations facing institutionalized reform pressure may not only integrate the reform into their operation when it fits but also pace the integration while undergoing organizational cultural transformations to fit with the reform. The newly cultivated cultural characteristics, nonetheless, need to be compatible externally with the ideational basis of the reform and internally with existing values and beliefs embodied by the organizations. Design/methodology/approach: Building on a neo-institutionalist perspective, the paper develops a model which considers the possibilities and conditions that local cultural change in the reforming organizations may facilitate reform integration. To test the model's analytical potential, the paper analyzed reform responses of semi-autonomous agencies from Denmark, the Netherlands and Sweden under the New Public Management (NPM) reform. Ordinary least square (OLS) regression models were performed on the survey data collected from agency heads (or representative) during the peak of the reform trend. Analyzing this sample of later adopters whose government generally enjoyed high degrees of capacity and autonomy provided a preliminary test to the model's potential. Findings: Significant statistical relations were found between the adoption of operation-level NPM practices and the extent that an agency's cultural characteristics fit with both the ideational basis of NPM and the exiting value-belief mix the agency embodied. Agency characteristics of “proactive responsiveness” and “goal-oriented cooperation” were found significantly related to adoption of NPM practices, showing the possibility of cultivating local cultural changes in reforming organizations. Originality/value: While compatible with neo-institutionalist emphasis on local continuity, the paper describes an alternative scenario of reform integration for public managers.