Managing Value Conflicts Through Formal and Informal Institutions: A Longitudinal Case Study in Local Government Service Reform

When governments adopt private‐sector techniques to reform public services, a tension arises between efforts to improve administrative efficiency and to secure democratic values. While scholars acknowledge this tradeoff, the specific institutional processes through which managers resolve these competing values in practice remain a puzzle. To bridge this gap, this study presents a longitudinal case study of Lean Government initiatives, based on 2.5 years of ethnographic fieldwork in an Ohio municipality. Using Constructive Grounded Theory, the analysis reveals that public managers are not passive executors of efficiency mandates; rather, they actively reconstruct public values through sophisticated social and institutional interactions. This research introduces a conceptual framework for the dynamic construction of good governance, demonstrating how value conflicts are mitigated via meso‐level institutional processes. By illustrating how good government and equity are operationalized in managerial decision‐making, the research findings offer a practical roadmap for maintaining democratic legitimacy amid administrative reform.