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EXTERNAL PRESSURES FOR ORGANISATIONAL CHANGE: The Case of Sustainability in Local Government Buying in England L UTZ P REUSS School of Management Royal.

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Presentation on theme: "EXTERNAL PRESSURES FOR ORGANISATIONAL CHANGE: The Case of Sustainability in Local Government Buying in England L UTZ P REUSS School of Management Royal."— Presentation transcript:

1 EXTERNAL PRESSURES FOR ORGANISATIONAL CHANGE: The Case of Sustainability in Local Government Buying in England L UTZ P REUSS School of Management Royal Holloway, University of London

2 The importance of local government procurement economic role: annual expenditure £40 billion but fragmented among 410 Councils in England type of goods and services: social services, spatial planning, waste disposal local democracy: wide variation in approaches to sustainability and procurement

3 Research question what range of pressures for sustainability do local government procurement managers perceive?

4 Methodology pilot studies benchmarking (Department for Communities and Local Government, Regional Centres of Procurement Excellence; Society of Procurement Officers) study of leading authorities

5 Sources of external pressure Political pressure from the EU Handbook on Green Public Procurement but also: EU public procurement directives applicable to all contracts above € seen as barrier in the past but no longer the case = major framework but no direct pressure

6 Sources of external pressure Political pressure: Central Government UK government sustainability strategy, 2005: “embedding sustainable development considerations into spending and investment decisions” DCLG: National Procurement Strategy for Local Government, 2003 ‘milestones’ local government Tony Blair: be among the EU leaders in sustainable procurement by 2009

7 Central Government stringent targets for reducing local government expenditure 2004 Spending Review: annual savings of 2.5% of council expenditure Procurement manager of a district council saw: “a fascinating division in government thinking between the efficiency agenda, which is all about Gershon and all of this, and the stuff that David Milliband and others are talking about in terms of localism. The two aren’t compatible.”

8 Sources of external pressure Political pressure: Members of the Council Councillor interest in sustainability Procurement officer, a London Borough: “I would say, at least half of the Members that are on the Executive Committee are fairly committed to sustainable community issues.”

9 Yet wide variety of performance reflecting party-political and demographic issues Procurement Manager, a District Council: “We [concentrate] probably less on economic development, a bit more on sustainability now than we were under the Tory Administration. We are now Liberal Democrat. They are more mindful of environmental issues. … But, I guess, it is a balance between that and all the other pressures.”

10 Sources of external pressure Advisory and professional bodies Improvement and Development Agency, IDeA -training -tools, e.g. for environmental risk assessment expertise of IDeA is generally acknowledged Procurement Manager, a District Council: “I think IDeA is useful as a source of advice and good practice. Their website is quite a useful thing.”

11 Sources of external pressure Advisory and professional bodies Regional Centres of Excellence, set up in 2004 national forum for improving service delivery across local government example: RCE funding to map potential voluntary sector suppliers but: RCE focus on efficiency gains direct work on sustainability issues only where opportunities for a ‘win-win’ situation

12 Sources of external pressure Advisory and professional bodies Society of Procurement Officers in Local Government, SOPO issues guidance notes on sustainability steering group on sustainable procurement Chartered Institute of Purchasing and Supply, CIPS guide on environmental purchasing in conjunction with the NHS Purchasing and Supply Agency

13 Sources of external pressure Economic pressure Cost savings from environmental initiatives Procurement Manager, a London Borough: “The green aspects are not driven by the top-level Council policy, but again the total cost aspect is important. … When you look at an area like recycling, it is quite clear that landfill tax over the tender period is going to go up significantly; therefore we could weigh much more highly the recycling impact.”

14 Sources of external pressure Economic pressure proactive suppliers Procurement Manager, a London Borough: “Suppliers are very rapidly catching on to the fact that this is a commercial issue. It is not an ethical issue, it is a commercial issue. They know it is in their commercial interest to sell environmental products.”

15 Efficiency-based pressures -cost savings in ‘win-win’ cases -proactive suppliers

16 Legitimacy-based pressures DiMaggio and Powell (1983) - coercive isomorphism pressure from Central Government - mimetic processes ‘best practice’ advice by IDeA - normative pressures professional advice from SOPO and CIPS

17 Central government, e.g. DCLG Agencies sponsored by central and local government (IDeA) Elected Members of the Council Local situation Professional bodies, CIPS, SOPO Public opinion Greening local government procurement Cost savings Supplier know-how Legitimacy-based factors Efficiency factors Direct pressure Indirect influence

18 Competing sources of legitimacy Central Government versus distinct identity of Council Procurement Manager, a District Council: “You get external pressures obviously, but this Council has not always paid much attention to those. And I think the way it has picked up the sustainability agenda is less to do with government pressure than with the sense of local need.”

19 Competing sources of legitimacy leading to symbolic action and a degree of de-coupling from the Central Government agenda Procurement Manager, a District Council: “We have a very box ticking culture and if there is a box there to tick, we’d like to be able to tick it. How well the performance is that actually underlies that tick I’d sometimes have a question, but we want to be able to say we’ve done it, tick the box and move on.”

20 Competing sources of legitimacy symbolic action and a degree of de-coupling room for individual commitment Procurement Manager, a London Borough: “I am personally committed, but I think, you have to be, don’t you, particularly in this field, because it is never going to be easy. In the last year we’ve heard that climate change is something the Government talks about, but … I would say that most people aren’t thinking that sustainability and environmental issues are their number one priority. It’s jobs and taxes, schools and health. ”

21 Legitimacy-based pressures Competing sources of  Coercive legitimacy  Mimetic  Normative Efficiency-based pressures Interpretation and implementation in the organisation  Symbolic implementation  De-coupling Organisational culture and values as catalyst An extended model of pressure for organisational change


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