Service Innovation in Not-for-Profit Care Providing Organisations: an Absorptive Capacity Perspective

This study explores how not-for-profit (NFP) organisations adopt service innovation as a response to reforms in the Australian aged care sector. The increased commercialisation and marketisation following new public management in the public sector required NFP organisations to pursue a competitive posture in their operations and behave more like for-profit organisations. An exploratory case-study research design was applied to help collect data from five leading NFP organisations in aged care. The findings indicate the role of external knowledge in NFP innovative practices in aged care and highlight how frontline managers acquire, assimilate, transform and exploit external knowledge about service innovation.