The demands placed on governmental organizations by society have become increasingly diverse, unpredictable and interconnected with the rise of complex societal problems. The failure of traditional forms of government to manage the diversity of citizens’ needs has led to calls for more adaptable and networked forms of governance. While public sector organisations increasingly engage in networked governance of complex societal problems, these collaborations are often hindered by the inability of public sector organisations to adapt and innovate. This is connected to incompatibility between the hierarchical and market institutional logics and network governance. This thesis paper is a qualitative study case study that delves into this incompatibility by exploring how they affect networked governance within a Swedish municipality through the lenses of structure and culture. It also identifies ways these hinders are managed. The key findings of this paper illustrate that while many of the logics connected to the hierarchical and market system make it difficult for the municipality to enter in open and innovative collaborations, civil servants seem to have a key role in building up the capacity of municipalities to engage in networked governance. The following strategies used by civil servants to manage the tension between the conflicting logics were identified: 1) fostering intrapreneurship through creativity and adaptability; 2) fostering linking capacity; 3) fostering systemic thinking; 4) fostering learning; 5) redefining roles in collaborations; and 6) building commitment.