Capabilities for living with paradox in hybrids: the case of innovation in public service spin-out

Abstract

Processes of change and innovation within organisations have long been recognised as involving tensions between competing interests and cultural logics. This paper contributes to the understanding of such dynamics by focusing on how newly emergent public service spin outs operating with hybrid governance structures, have capabilities that allow them to operate at the interstices between the public, private and non profit sectors. Case study evidence from recent UK public sector spin-out organisations is used to explore how leaders, staff and other stakeholders make sense of and respond to the challenges and tensions involved. Although such tensions can be found in many different organisations, the hybrid nature of social enterprises means that paradoxes and multiple tensions are confronted more explicitly than elsewhere. Three paradoxical tensions are examined in detail: creativity versus resistance to change, democratic versus hierarchical decision making, social mission versus commercial objectives. The...