Understanding the Role of Legitimacy During Strategic Change in Public Organizations: A Review and Research Agenda

Abstract

Strategic change in public organizations has attracted scholarly attention, recognizing the distinctive characteristics of the public sector. Despite important contributions, the existing literature on strategic change within public organizations is still constrained, necessitating further systematization and conceptualization of its theoretical foundations. We argue that strategic change in public organizations is a unique multistakeholder, multigoal process characterized by legitimization challenges and dynamics. Employing a literature review, we reveal the three dominant theories that have thus been used—institutional, sensemaking, and stakeholder, to understand the process of strategic change in the public sector. We further uncover the focal points of legitimation—strategy formulation, strategy selling, and strategy execution—and the distinct types of change—exogenous, autonomous, and endogenous—associated with public organizations. We discuss promising avenues for future research, especially in the areas of autonomous and endogenous change, the orchestration of legitimacy over time, and the role of leaders, tactics, and interactions between political and administrative leadership.