Non-technological innovation as a research area are underrepresented in relation to technological innovation. The dominant aspect of technological innovation encounters much criticism, because it does not fully include innovation in the service sector and ignores many important non-technological elements of innovative organizational activities. Management innovations as a special type of non-technological innovation represent the creation and implementation of new management practices, processes, structures or techniques. The current literature in the field of innovation emphasizes the importance of management innovation for organizational performance, but it is necessary to conduct more empirical research to make this claim even more "strengthened" and verified, and that particularly refers to research in the public sector. The purpose and objectives of the doctoral thesis are to explore the concept of management innovation in public sector organizations with particular emphasis on determining the impact of the implementation of management innovations on effectiveness and the factors of the achieved level of management innovation implementation. The research is focused on the context of local government, whose role is recently further accentuated by actual public administration reforms aimed at increasing the efficiency and effectiveness of public services, often through the implementation of new methods and management concepts. A conceptual model of the implementation and effectiveness of management innovation has been proposed. The model was tested on a sample of local government units in Croatia. The total model was observed and tested in three interrelated parts. The relationships between variables in the model have been tested by hierarchical regression analysis and logistic regression. Obtained results have confirmed the positive impact of the implementation of management innovations on the success, ie. the effectiveness of local government units, which has further highlighted the importance and need for more intense study of these innovations. Also, when achieving maximum level of management innovation implementation the following factors have been confirmed as crucial: the support of a higher management, absorption capacity, implementation climate, and innovation-values fit. The obtained results indicate the importance of cooperation and sharing of knowledge in organizations seeking to implement management innovations. The disposal of substantial financial resources is not critical in creating a positive implementation climate and thus a higher degree of implementation of management innovations. Also, management innovations are an important complement in the implementation of other types of innovations, such as service and process innovation.