This doctoral thesis concerns the transformation of publicly owned organisations into municipal enterprises during the 1990s and late 2000s, with specific reference to the bandwagoning effect. The aim is to explore the decision-making processes behind the phenomenon in three case organisations, all of which are publicly owned healthcare providers. The focus is on the reasoning and rationale behind the choices, the core goals of the adoption of the municipal enterprise form, and the extent to which the transformation met the expectations of the three organisations. Thus, it is the outcomes of earlier decision-making and change processes in terms of attainments and failures that are under explicit scrutiny. The results are further scrutinised and discussed from the three research perspectives.

In order to give a rich description of the decision-making in the three organisations, the reasoning and rationale related to the choices made, and how the transformation met expectations and goals, it was essential to construct a multi-dimensional interlocked analytical framework comprising interdependent elements. The research questions require the integration of theory and practice in recognising the significance of the major theoretical issues and concerns, while also addressing practical arrangements. This blending of theory and practice, as manifest in the findings of the study, is essential to the structure and efficacy of the research and analysis. The theory is presented as an integrated framework that serves to structure, guide and inform the empirical analysis. The interdependent theoretical elements of this integrated framework relate to institutions, institutionalism, legitimacy, reputation, dilemmas, and public- sector branding. The thesis comprises two parts: the synthesis (Part I) and four original research articles (Part II).

Article 1 investigates the reasoning behind the decision to transform into a municipal enterprise. Article 2 establishes the theoretical background on which Articles 3 and 4 are based, defines the municipal enterprise form and introduces dilemma reconciliation as an approach. Article 3 builds on the analyses in Articles 1 and 2, and develops them further by mapping the principle reputation risks and threats to legitimacy that arose in connection with the identified core dilemmas. Article 4 further develops the empirical analysis by combining branding theory with the dilemma approach and discursive institutionalism and discourse analysis.

The choice of qualitative methods and the data analysis applied in Articles 1, 2, 3 and 4 is in line with the philosophical background assumptions of the study. In ontological terms, reality is a result of social interaction thorough which meanings are given to things. The interest is in the issues the informants talk about. Further, on the epistemological level which relates to grounds of knowledge, the study is positioned as interpretivist.

The main contributions of this thesis to the academic discourse are the following. 1) It delineates the tensions within institutional isomorphic forces and shows how the tensions between the various forces (mimetic, normative and coercive) of institutional theory operate. The addition of the dilemma approach to institutional theory illustrates the competing pressures that are at work. 2) The study contributes to the discussion on institutional organisational theory in suggesting that institutional forces diminish and strengthen one another, and thereby create tensions that may end up as dilemmas posing reputation risks. 3) Although institutional isomorphic forces may have an existing legitimating status, the ultimate outcome may be the opposite: failure to gain normative and coercive acceptance. 4) The novel interlocked framework for exploring decision-making and transformation in organisations. In terms of managerial implications, managers and leaders responsible for organisational change would benefit from knowing how intended outcomes may differ from actual outcomes, and from understanding why this happens. A further practical contribution relates to the organisational learning aspect of change, which could be enhanced by internal branding in connection with the adoption of new organisational forms.