The impact of a market system on the public sector: A study of organizational change in the NHS

Abstract

The research on which this article is based has been carried out over a period of five years (1992‐1997). It focuses on the management of change in the National Health Service (NHS) since the reforms introduced in the 1990 NHS Act. The research comprises four case studies: two NHS Trusts providing mental health services and two colleges of nursing and midwifery. All four bodies have experienced major changes brought about, in the main, by the creation of the NHS internal market. The article attempts to map the process of managing change in these four organizations. It outlines the difficulties encountered by managers in designing and implementing effective strategies for their organizations. In particular, the article: highlights major discrepancies in linking strategic plans with the reality of managing public services and the complexities of planning for large‐scale changes in the 1990s; shows that although leadership is important, it must be appropriate to an organization's situation; argues that organizations can make false assumptions about the immutability of the environment in which they operate and the degree of choice available. The article concludes by presenting a model of change which incorporates environmental conditions, internal cohesion, management styles and approaches to change.