Clashes as potential for innovation in public service sector reform

Purpose - The purpose of this study is to examine the ongoing dynamics of the public service sector reform through an embedding process of a municipal enterprise from the field of basic social and health care services - a pilot model in Finland.Design methodology approach - The framework of a multi-level perspective on transitions is used to describe the change process. At the lowest level of this perspective are the experimental niches acting as "seeds of change" represented by the case organisation, a municipal enterprise operating in the basic social and health care sector. The data consist of 16 thematic interviews with the key persons of the operating system, analysed with the principles of content analysis.Findings - The examination uncovers diverse pressures affecting niche level innovations and manifesting as clashes and controversies between old and new ways of thinking, but these clashes can also act as a platform for innovations when opened up, analysed and facilitated.Practical implications - Clashes that appear in societal transition processes and regime changes, both in the regimes and also on the organisational level, should not be seen solely as bottlenecks, because they can act as innovation potential when opened up and facilitated. This implies the need for not only new technological, service-related and organisational innovations in the public sector reform, but also innovative practices, "second level innovations".Originality value - This paper contributes to the discussion on the ongoing change processes in the reform of the social and health care sector, emphasising emerging clashes not only as obstacles but opportunities.