Case Study on Organizational Change Right in Public Services

Description
Case Study on Organizational Change Right in Public Services: European Higher Education:- Change management is an approach to transitioning individuals, teams, and organizations to a desired future state. [1] In some project management contexts, change management refers to a project management process wherein changes to a project are formally introduced and approved.

Case Study on Organizational Change Right in Public Services: European Higher Education
ABSTRACT The purpose of this article is to instigate further debate on why organizational change is currently being initiated and how it is being managed in European Higher Education. It provides suggestions on how to avoid major downsides that come with managerialism and how to enable managers and academics in the sector to concentrate on what Higher Education should be all about: to contribute to the further development of society through knowledge generation and transfer. The article is based on observations of the current developments triggered by the rise of the audit culture and adoption of managerialism. It suggests that not all change currently initiated in Higher Education is required - or indeed in the best interest of the sector or wider society - but rather, based on personal interests resulting in less efficiency and a waste of resources. Furthermore, the article argues that the audit culture and managerialism have created an environment that encourages opportunistic behaviour such as cronyism, rent-seeking and the rise of organizational psychopaths. This development will arguably not only lead to a waste of resources, change for the sake of change, further centralization, formalization and bureaucratization but, also, to a disheartened and exploited workforce, and political and short- term decision-making. The article proposes ways of managing organizational change in Higher Education successfully by providing a new conceptual change management model and a decision-maker's change manifesto. KEY WORDS: Audit culture, change capacity, change management, change readiness, higher education, managerialism

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Introduction

The European Higher Education (HE) sector is currently experiencing tremendous pressures on resources. This has mainly been triggered by the introduction of an escalating number of rigid systems of performance measurement, control and accountability, which have given rise to an audit culture, and the requirement of catering for an ever-increasing number and diversity of students. Simultaneously, the sector is expected to generate more external income as governments fail to fund this situation adequately. According to Apple (2005), this combination of marketization and centralization of control is a worldwide phenomenon in public services. Undoubtedly, the HE sector has to change. There are several factors highlight- ing the need for universities to embrace such change proactively. According to Kezar and Eckel (2002) and Newton (2002, 2003), some of these factors are a lack of funding; changing funding criteria; increasing student numbers; higher student-staff ratios; growing competition; new teaching and learning practices including new mechanisms and modes of delivery; changing student profiles; and new technologies. However, some of the change currently initiated within HE is not necessarily leading to better results nor is it always implemented for the right reasons. 'Right reasons' would mean initiatives aimed at improving HE organizations without privileging any individual or group of individuals. In doing so, the change initiated is advancing the sector's overall capabilities of assisting the further development of a society that is both competitive and just, thus providing equal opportunities to everyone. 'Wrong reasons', on the other hand, are those initiatives which sole purpose is to improve the situation of individuals or groups of individuals involved with HE (e.g. politicians, regulatory and funding bodies, management and academics) regardless of what is best

for the sector and wider society. In response to the challenges facing the sector, many European HE institutions have adopted, or are about to adopt, managerialism, which is the application of private sector principles and practices to public service organizations. However, the adoption of managerialism has arguably led to academic values being replaced with more managerial aims and objectives (Deem, 2004). For example, Chaharbaghi (2007) notes that the rise of managerialism has ironically not made the management of public services more effective. It has instead 'added a costly administrative burden that is undermining the morale, motivation and goodwill of public sector professionals. . .destroying accomplishment, satisfaction and motivation, and in the end, is destroying performance (Chaharbaghi, 2007, pp. 319- 320). Baert and Shipman (2005, p. 168) further argue that the audit culture, which comes with managerialism, is anything but positive for the sector. They comment that as a consequence of managerialism, less and less time is now being spent on teaching and research because ever more time is being spent on form-filling and attention-seeking behaviour (rent-seeking).

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The rise of the audit culture and managerialism have arguably been exploited by some individuals in the sector for purposes of self-promotion and preservation as it has created an opportunity for cronyism, rent-seeking and organizational psycho- pathic behaviour. In this sense, the main purpose of managerialism is to increase the authority, privileges and in?uence of power- and career-oriented managers. The mismanagement coming along with managerialism has resulted in serious negative consequences for the sector. For example, Chaharbaghi (2007, p. 320) argues that the rise of managerialism in public services 'can lead to a chronic ineffectiveness and inefficiency that distorts the doctrinal claims of managerialism'. Against this backcloth, this article instigates further debate on why organizational change is currently being initiated and how it is being managed in Euro- pean HE. It also provides suggestions on how to avoid major downsides that come with managerialism. First, the article explores the nature of managerialism, cronyism, rent-seeking and organizational psychopaths, before moving on to highlighting some of the current changes in the HE environment and potential negative consequences of changing for the wrong reasons. Second, the article adopts and further develops By's (2007) conceptual model of conscious versus unconscious change manage- ment to public services management; and suggests HE institutions are obliged to make a decision of changing for the right reasons. Finally, the article suggests a decision-maker's change manifesto. Consequently, the article provides explanations on how to avoid the corruption of managerialism, how to put HE back on track, and how to enable managers and academics to again concentrate on what the sector is all about: to participate in the generation, dissemination and application of knowledge which contributes to the further development of society.
Managerialism, Cronyism, Rent-seeking and Organizational Psychopaths in Higher Education

According to Deem (2004, p. 109), managerialism is 'a set of ideologies about organisational practices and values used to bring about radical shifts [change] in organisation, finances and cultures of public services such as local government, health and education'. These ideologies imply that public services will benefit from employing practices and principles developed for and by the private sector, and enhance the role and importance of the manager (Anderson, 2006). However, the proponents of managerialism often seem to ignore the differences between the public and private sectors. According to Dixon et al. (1998), these sectors are managed differently because of the different external environments, regulatory regimes and stakeholders. In the case of HE, 'managing academic knowledge work is not remotely comparable to managing retailing or industrial production. . .' (Deem, 2004, p. 111). Worse still, managerialism can be perceived as yet another tool to pursue group interests and to grant individuals privileges they could not get otherwise. Princeton

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University (2007) defines cronyism as 'favoritism shown to friends and associates (as by appointing them to positions without regard for their qualifications)'. Examples of such behaviour in HE, as in any other sector, can be individuals employed and promoted based on friendship, loyalty and personal history rather than relevant academic and management qualifications and experience. Hence, organizations are not necessarily employing or promoting the best individuals available, but rather, securing positions for friends and acquaintances of the decision-makers. Arguably linked to cronyism is rent-seeking. Buchanan (1980, p. 4) defines rentseeking as 'behaviour in institutional settings where individual efforts to maximise value generate social waste rather than social surplus'. Dixon et al. (1998) state that rent-seeking is opportunistic, self-serving and, even, dishonest and deceitful behaviour which aims, according to Gregory (1991, p. 308), to increase and ensure 'power, income, perks, public reputation, prestige, patron- age, ease of making change, ease of management, convenience and security'. What can arguably be observed in HE is the emergence of some individuals, groups and roles that are in a privileged position of being able to transform organizations into markets while not actually operating in a market environment themselves. Consequently, what arguably takes place in some institutions is pol- itical subordination expressed as conforming to a market. Boddy (2006, p. 1461) provides a useful description of the type of person who cannot only survive but thrive in such organizations:
A key-defining characteristic of [organisational] psychopaths is that they have no conscience and are incapable of experiencing the feelings of others. Their other characteristics however make them appear very hireable and worthy of promotion; they are smooth, adroit at manipulating conversations to subjects they want to talk about, willing to put others down, are accomplished liars, totally ruthless and oppor- tunistic, calculating and without remorse.

Current Change in Higher Education

Following the UK Dearing report in 1997, the Institute for Learning and Teaching (now part of the Higher Education Academy) and the Quality Assurance Agency (QAA) were established. According to Shore and Wright (2000) and Newton (2003), both these agencies embrace managerialism with their establishment of pseudo markets. Consequently, what is occurring is a worrying trend; managerial- ism is identified as the 'silver bullet' expected to solve all problems and challenges currently experienced by the HE sector. However, there are major concerns regarding why and how the changes are currently initiated, implemented and managed (Meyer, 2002; Newton, 2002). Apple (2005) states that the actual effect of these changes, often labelled as reforms, have either been negative or negligible.

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Managerialism has arguably become largely an end-in-itself with its own agenda of survival and struggle for domination over the professional and bureaucratic dimensions of HE (Chaharbaghi, 2007). As a consequence, this develop- ment has replaced the former 'high trust' relations characterizing previous collegial forms of governance with 'low trust' relations (Anderson, 2006). Sub- sequently, managerialism encourages and facilitates cronyism, rent-seeking and the rise of organizational psychopaths. More layers of management and bureauc- racy are introduced to support attempts of individuals to primarily pursue their personal interests, and to increase their power and in?uence via bureaucratic means (Anderson, 2006) - even though European universities already experience unnecessary bureaucracy (Jacobs and van der Ploeg, 2006a, p. 289). This is yet another inconsistency of managerialism. If private sector principles and practices were to be adopted by HE, as implied by managerialism, bureaucracy and manage- ment structures should be reduced and streamlined - not increased and enlarged. The reason why exactly the opposite is happening in places is because it serves the privileged group of the 'New Leadership'; the growing group of individuals obtaining prominent positions in HE without meeting the relevant academic and management criteria. Allowed to play the 'turf' game (Buchanan and Badham, 1999), these individuals spend most of their time auditing the 'doers' without contributing to organizational performance. Consequently, HE can increasingly be seen as a playground for individuals looking to secure the four Ps of position, power, prestige and pension without producing. Jacobs and van der Ploeg (2006b), therefore, claim that universities must '. . .ban cronyism and. . . reduce rent- seeking activities of university managers' (Jacobs and van der Ploeg, 2006b, p. 558) as it is counterproductive and will only result in a waste of resources. As long as contemporary change initiatives in HE primarily privilege personal agendas and the interests of the chosen few, there is a real danger that the change necessary to truly meet the requirements posed by society will either not happen or will not last. This is an increasingly pressing problem. By observing the current ongoing academic debate it seems that many academics in UK universities are becoming noticeably demoralized and demotivated. They lose their belief in academia and its leadership, and are even questioning their motivation for working in HE. In just one issue of The Times Higher Education Supplement (April 13, 2007a- g), there were no fewer than seven articles and letters exploring the issues and consequences of managerialism, with headlines such as 'Staff "swotted" by man- agement'; 'Waste of a great tutor' (two letters of support for a professor who resigned after having his marks overturned by management); and 'I refuse to jump through hoops'. These articles and letters all highlight some of the negative consequences of managerialism ranging from an institution identifying its own aca- demic staff as the biggest single threat to its strategic direction, the difficulty to fight plagiarism as senior management is more concerned with student numbers than academic standards and quality, the decreasing autonomy of academics, and the increasing standardization of how to execute the academic profession.

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Possible Negative Consequences of Initiating Change for the Wrong Reasons

The consequences of initiating change for the wrong reasons (change based on individual and group interests rather than institutional and societal requirements) can be severe, as it facilitates and encourages cronyism, rent-seeking and the rise of organizational psychopaths. As demonstrated above, some of these conse- quences include the wasting of resources; change for the sake of change; further centralization, formalization and bureaucratization; disheartened and exploited workforce; and political and short-term decision-making. The following figure (Figure 1) shows the linkages between those aspects and issues previously addressed.

Figure 1. Negative consequences of initiating change for the wrong reasons

Waste of Resources

The HE sector is arguably not only under-funded, but the funds that are being allocated are in some instances wasted through mismanagement (e.g. cronyism; lack of senior management accountability and transparency; constant restructuring; high salary costs for non-producing members of staff; increasing numbers of man- agers and levels of bureaucracy; poor treatment of staff leading to poor staff reten- tion). Furthermore, academics are required to spend an increasing proportion of their time conforming to guidelines and practices (such as, quality assurance; monitoring of outputs; income generation; administration) preventing them from focusing on the core product of HE - teaching and research. The more time spent on administrative tasks and bureaucratic procedures, the less time spent on doing the 'real' job.
Change for the Sake of Change

Proponents of managerialism will not only argue that change is a force of nature and required, but also that their approach to managing such change is the only way, implying that there is no real choice (Diefenbach, 2007). However, these

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decision-makers often have vested interests in change situations and they have the opportunity of initiating change for the sake of position, power, self-promotion and preservation. The nature of cronyism, rent-seeking and psychopathic beha- viour arguably encourages some of these decision-makers to introduce the same change initiatives that have previously proved successful in reaching their per- sonal goals. These change efforts are then often implemented without necessarily exploring the exact need for change in their current organization.
Further Centralization, Bureaucratization and Formalization

There is another inconsistency of managerialism: rather than streamlining HE by improving organizational processes and structures, reducing red-tape and decentralizing, the introduction of managerialism has increased the levels of centralization, bureaucratization and formalization in many HE institutions (see Considine, 1990; Politt, 1990; Hellawell and Hancock, 2001; Sanderson, 2001; Diefenbach, 2005). Courpasson (2000) argues that what is occurring is a concentration and centralization of power. This situation is again resulting in further bureaucratization and formalization (Hoggett, 1996; Protherough and Pick, 2002), leaving frontline staff, such as academics, with less and less time to engage in those tasks which serve the society directly (Butterfield et al., 2005).
Disheartened and Exploited Work Force

There is also an increasing tendency of academic members of staff being deskilled. Lecturers in several institutions are now expected to deliver modules and sessions in areas that are outside their field of expertise. This is accompanied by increasing internal and external monitoring and, a growing number of regulations that academics now have to follow in order to do their job. Together, these developments arguably lead to academic deprofessionaliza- tion (Newton, 2003). These practices are often introduced under the banner of quality assurance and accountability. However, such initiatives often contribute to a decrease in quality as they reduce the actual time spent on teaching and research. Furthermore, the academic freedom to initiate and engage in different approaches and methods of learning and teaching are inhibited as managerialism is facilitating standardization.
Political and Short-Term Decision-Making

An increase of cronyism, rent-seeking and the rise of organizational psychopaths will also eventually lead to political and short-term decision-making. By initiating change, decision-makers create an opportunity to make their employers believe inputs, processes and outputs are improving: change becomes a tool of selfpromotion and preservation.

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Conscious versus Unconscious Change Management

Adopting By's (2007) model of conscious versus unconscious change management is one possible way of facilitating successful organizational change in HE and avoiding the major downsides of managerialism. According to the initial model there are only two approaches to managing organizational change: the conscious, where clear decisions are being made regarding how to manage change (e.g. continuous versus discontinuous change; change method- ology) and the unconscious, where there is a lack of awareness and clear decisions being made. However, the model can be further developed in order to re?ect that there may be different reasons for adopting the conscious approach. Figure 2, therefore, accommodates options that perhaps re?ect reality more accurately. This new model suggests the options of managing conscious change for the right or wrong reasons: the right reasons being what is the best alignment and discursive co-ordination of individual, group, organizational, sector and societal interests on the basis of procedural justice (democratic decision-making) and distributive justice (equal rights and equality); and the wrong reasons being what is best for an individual or a group of individuals in the sector. Hence, the model now explains that changing for the sake of improving individuals' circumstances is an actual option for those in positions of power. Such behaviour is closely

Figure 2. Conscious versus unconscious change management. Source: Adapted from By, 2007.

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linked to cronyism and rent-seeking, and there is the clear option of choice for organizational psychopaths as they are primed to do what is best for them disregarding what is their mission or best for the organization they are employed by. The model also indicates that adopting the unconscious approach, or the conscious approach for the wrong reasons, will increase the barriers to change and weaken the change message, and consequently lead to a greater probability of change failure than adopting the conscious approach for the right reasons. The rationale for this is that most subordinates and professionals will realize that change initiatives are driven more by personal interests, self preservation, indeci- sion, lack of knowledge and incompetence rather than by requirement, knowledge, choice, competence, awareness and what is in the best interest of the sector and its stakeholders. The model advocates the need for continuous change readiness. Such readiness has been defined by Jones et al. (2005, p. 362) as 'the extent to which employees hold positive views about the need for organisational change (i.e. change accep- tance), as well as the extent to which employees believe that such changes are likely to have positive implications for themselves and the wider organization'. Change readiness is a requirement for creating organizational capacity to change, which has been defined as an 'organization's ability to develop and implement appropriate organizational changes to constantly adapt to environ- mental evolutions and/or organizational evolutions in either a reactive way of by initiating it' (Klarner et al., 2007, p. 12 ). Change capacity does not only describe the ability to constantly adjust to changing contingencies, thereby enhan- cing the probability of succeeding in the long-term (see Staber and Sydow, 2002) but also the ability to implement a series of changes over time. According to Klarner et al. (2007), organizational change capacity is enhanced if the perceived value of change is high, that is if employees believe in the necessity of change for their organization as well as being willing to actively change their behaviour in order to initiate and implement changes. Moreover, each change project has to be perceived as legitimate, as organizational actors only commit themselves to projects which they consider justified. Both the value of change and the perceived legitimacy increase change readiness. Therefore, if continuous change readiness is ingrained in the organizational culture and structure, facilitating a higher change capacity, there is a much greater probability of change success. Change readiness and capacity can be created, enhanced and sustained by utilizing, e.g. Armenakis et al. (1993) and Armenakis and Harris' (2002) change message, which identifies five fundamental questions that should be answered: discrepancy (is organizational change required?); appropriateness (is this the right change option?); efficacy (is this change realistic?); principal support (are senior stakeholders committed to this change?); and personal valence (what is in it for the individuals in the organization?). Armenakis et al. (1993), Armenakis and Harris (2002) and By (2007) further suggest four ways of conveying this message. It could be relayed through a mix of: a. direct communication;

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b. attitudes, behaviour and actions; c. by providing the view of others; and d. empowerment.
A Decision-Maker's Change Manifesto: Lead by Example

In addition to the measures explained above, organizational change readiness and capacity can be achieved and strengthened by implementing the decision-maker's change manifesto. Decision-makers cannot lead by rhetoric alone, but must put words into action and lead by example. In doing so, the level of organizational change readiness and capacity will increase. The overall message is that managers and other decision-makers should base their decisions and actions on value systems that ascribe great importance to the ideas of the common good, just distribution, equal opportunities, co-operation and participation. The following few examples shall shed more light on this.
Work and Remuneration Towards What is in the Best Interest of the Organisation, the Sector and Wider Society

It is essential that the organization's employees at all levels genuinely care for the sector, its purpose and stakeholders. Therefore, politicians, members of funding and regulatory bodies, as well as academics and academic management must acknowledge their responsibilities not only to themselves, but to all stake- holders. For example, senior management should be encouraged to let academics get on with their job and ensure that academic appointments and promotions are based on agreed and transparent academic and management achievements and criteria. Furthermore, HE management should not offer, demand or accept any form of special treatment or rewards. The culture of special perks for management only must be abandoned as it arguably encourages an unhealthy culture of greed. It is highly questionable if such a policy of rewarding management without any real links to individual performance actually attracts the kind of individuals required by HE. The ongoing argument that management are to receive extra rewards, on top of their base salary, in order to perform to their full potential is ?awed by the notion that management would not accept the same argument from any other employee. Rewards for any change success should be distributed amongst all stakeholders involved in the change effort according to their contri- butions. Moreover, the tradition of offering unsuccessful managers golden handshakes must be abolished, as this is a system of rewarding failure and incom- petence, which only encourages more unnecessary, self-promoting change and further failures.
Commit to Change for the Right Reasons

Diefenbach (2007, p. 137) argues that people in organizations are not against organizational change per se. However, they are opposed to managerialistic

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change initiatives that primarily serve the personal or group interest of a few. According to Diefenbach, people are tired of ambitious managers, 'who are only interested in furthering their own career and market-value, mess around for a couple of years with several change management initiatives, and then leave the organisation in a state worse than before. . .with a golden handshake'. Decision-makers must restrain from initiating change for the sake of power, position and self-promotion as this can damage the organization. Furthermore, they must be held accountable for their change initiatives. Change management is not a blame-game. Although resistance to change will occur in any organization and may be the reason for failure in many cases, the decision-makers must not forget their own responsibilities and willingness, or lack of, to change and do things differently. Senior management must resist from automatically implement- ing the same management concepts generated by the fads-and-fashion industry for all organizations. In contrast, decision-makers must acknowledge the very specific and individual purposes, history, culture, people and other characteristics of their own organization before making rushed decisions or changes. They need to spend time observing the organization, its business environment, exploring and building awareness of different change alternatives before fully committing to change when and where necessary for the right reasons. Decision-makers also have interests of self-preservation in many change scenarios. Due to their position, they have the powers to prevent or resist changes that have adverse implications on their role, and can thereby become the single greatest barrier to organizational change. This must be refrained from as such behaviour will lead to individual and group considerations being prioritized on the cost of organizationwide considerations. Facilitating positive change empowerment may prevent this kind of behaviour to some extent.

Facilitate Positive Change Empowerment

Positive change empowerment can be defined as when organizations encourage, acknowledge and facilitate employees' in?uence, choice and implementation of organizational change. What arguably often occurs in HE, as in other sectors, can be labelled as negative change empowerment where top-down approaches are being presented as bottom-up: employees' responsibilities and workloads are increased without being re?ected in acknowledgement, salary, status, in?uence or choice. Facilitating positive change empowerment requires a mixed bottom-up, top- down approach. As argued by advocates of the emergent approach to change management, the pace of change is too rapid for senior management alone to identify, plan, implement, manage, monitor and evaluate. Thus, the responsibility for change and its management could be devolved. In order for such an approach to work, some change responsibilities may be handed over to other change agents in the organization who are better placed and skilled to deal with certain aspects of change than management. Although managerialism has been known for

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adopting less consultative management styles (Anderson, 2006), it is important for management to avoid mock-consultancy and provide stakeholders with a real opportunity of having an impact on change initiatives before implemen- tation: the only thing worse than not listening to your employees is pretending to listen to them.

Conclusion

There is no doubt about it. Organizational change is required in European HE. However, as long as most change is based on managerialism it will continue to provide the opportunity for cronyism, rent-seeking and the rise of organiz- ational psychopaths. Such a development is clearly not in the best interest of the sector, the majority of people working in the sector or the wider society. HE cannot afford such a poor solution to its challenges in the medium- to long-term as it will drain its resources and weaken the quality and reputation of the sector. Managerialism will ultimately lead to a less effective, less purposeful, unproductive and weaker HE where few will be left to actually perform those functions required by society. Instead of trusting managers and academics doing their job, time and resources are now spent auditing and supervising them. By motivating or failing to discourage cronyism, rent-seeking and psychopathic behaviour, HE is arguably wasting resources; changing for the sake of change; increasing centra- lization, formalization and bureaucratization; demotivating staff; and encouraging political and short-term decision-making. Another serious consequence of man- agerialism is a demoralized workforce with a lack of trust in, and commitment to, academia as a whole. As long as cronyism and rent-seeking is allowed, and organizational psychopaths are applauded for their ruthlessness (often mistaken for effectiveness), managerialism is arguably counterproductive and will lead to a weaker and not a stronger HE sector. The purpose of managerialism cannot be seen as that of securing the four Ps (position; power; prestige; pension) without producing for an elitist group of individuals who have been allowed to play the turf game in HE. The conscious versus unconscious model of change management, with its focus on change readiness and capacity, is one way of facilitating successful organiz- ational change in European HE. The advice is simple, executing it is not: minimize cronyism and opportunities for rent-seeking, do not provide organizational psychopaths with a platform for taking advantage of their position, and abandon the control and audit culture. However, such radical change will need the support of those very politicians, funding and regulatory bodies, and senior managers within HE who have imposed managerialism and the audit culture on the sector in the first place.

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Notes on Contributors

Rune Todnem By is a lecturer at the School of Business, Enterprise and Management, Queen Margaret University, Edinburgh, UK and Associate Editor of Journal of Change Management. Rune delivers sessions on organizational change management at both undergraduate and postgraduate levels. His research interest is change management focusing on change readiness and capacity, public services management and sustainable development. Thomas Diefenbach is a lecturer in Management at University of Strathclyde Business School, Glasgow, Scotland. Previously, he was working as a lecturer and researcher at several UK and German universities. Before he joined academia, Thomas had been working for 14 years in industry and service organizations, as a selfemployed consultant and freelance lecturer. His main teaching areas and research interests are: management, strategy, change management and critical management studies - all as socio-philosophical interrogations into the relations between individuals, organizations, and society with the focus on power, interests, and ideology. Patricia Klarner is a doctoral candidate and teaching and research assistant at the Chair of Organization and Management at the University of Geneva, where

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she teaches courses in change and knowledge management at both undergraduate and graduate levels. Moreover, Patricia works as a Research Associate at the Centre for Organizational Excellence (CORE) at the Universities of St Gall and Geneva. She has published in the field of corporate growth strategies and organ- izational change capacity. Her current research interests include the rhythm of organizational change, change management, organizational ambidexterity and sustainable corporate growth strategies.



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