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Cutback management and financial crisis


Overview

The current financial crisis has resulted in a situation of financial austerity for many public administrations. As a result, public organizations are attempting to cut back on expenses, while simultaneously maintaining or even improving public service delivery. Many government organizations attempt to ´do more with less´. While cutback management has traditionally been defined as “managing organizational change toward lower levels of resources consumption and organizational activity” (Levine, 1979: 180), the need to do more with less shows that cutback management in the public sector is inherently connected with innovation. In my research, I focus on what strategies public organizations use to implement cutbacks, and to what extent (the different strategies for implementing) cutbacks affect public sector organizations’ capacity to innovate. Special attention is focused on the wellbeing of employees, the role of leadership in implementing cutbacks and innovation, and differences between public organizations in different countries.

 


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