Advancing Research on Social-Business Hybrid Organizations Social-Business Hybrids
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Transcript of Advancing Research on Social-Business Hybrid Organizations Social-Business Hybrids
PDW Submission #13975
1
Title: Advancing Research on Social-Business Hybrid Organizations:
Emergence and Internal Dynamics Primary sponsor: Organization and Management Theory Potential co-sponsors: Social Issues in Management, Organizations and the Natural Environment, Public and Nonprofit
Abstract
Social-business hybrid organizations combine market and social welfare logics: they pursue a
social mission while engaging in commercial activities to generate revenues. Although they offer
a promising way to create both social and economic value, hybrids face challenges as they must
simultaneously attend to potentially competing logics, identities, goals, and metrics. As hybrids
are on the rise, organizational researchers have started to examine the challenges they face and
strategies and practices by which they attempt to manage these challenges. Yet, in order for
research on hybrids to continue to make significant theoretical and practical contributions,
scholars need to address several important questions. First, what makes hybrids different from
typical for-profits, not-for-profits and public sector organizations? Second, under what
conditions do hybrids emerge? Finally, how do the internal dynamics of hybrids, including
structures, practices, and processes, enable them to avoid mission drift and retain their hybrid
nature over time? The purpose of this PDW is to advance research on hybrids by providing a
forum for exploring these issues. The PDW builds on and extends the learning and community
developed at last year’s well-attended and lively PDW sponsored by OMT on the same topic. It
includes contributions from leading scholars engaged in research on hybrids, a large group
question and answer session, and smaller roundtable discussions. By facilitating conversations
about common challenges and opportunities, the PDW seeks to enrich research on hybrids.
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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Workshop Overview
Research streams on corporations and not-for-profit organizations have evolved in
parallel, but mostly separate tracks. Scholars who have studied both sectors have so far focused
on comparing and contrasting their functioning (Ben-Ner, 2002; DiMaggio & Anheier, 1990;
Hansmann, 1987). These comparisons have led to a growing reflection not only on what not-for-
profit organizations can learn from corporations (Dart, 2004; Dees, 1998; Dees & Anderson,
2003; Eikenberry & Kluver, 2004; Foster & Bradach, 2005) but also on what corporations can
learn from not-for-profit organizations (Drucker, 1989). Other studies have described how
organizations in these two different sectors can collaborate with one another (Austin, 2000). This
extant research emphasizes how each sector can work across their differences to benefit from
their distinct value. However, none of these studies have looked into the specificities of social-
business hybrid organizations that are neither typical for-profit corporations nor typical not-for-
profits.
Social-business hybrid organizations combine social welfare and market logics: they
pursue a social mission while relying on commercial activities to generate revenues in order to
sustain their operations. In the last ten years, these hybrid organizations, which used to exist
mostly in the education and healthcare sectors, have spread across industries such as financial
intermediation, retailing, consumer products, apparel, food processing, and software
development (Battilana, Lee, Walker, & Dorsey, 2012a; Dorado, 2006; Hoffman, Gullo, &
Haigh, forthcoming; Tracey, Phillips, & Jarvis, 2010). They have also spread throughout
developed and developing countries (Global Entrepreneurship Monitor, 2010). Commercial
microfinance organizations, which provide loans to the poor under market conditions, are one
example. They combine a social welfare logic, which guides their mission to help the poor, and a
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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market logic, which dictates that the interest rates they charge generate sufficient profits to fulfill
their fiduciary obligations and sustain their activities. Other examples of hybrid organizations
include workforce integration enterprises that are prevalent around the world. These
organizations strive to help long-term unemployed people transition back into the workforce. To
do so, they train and employ these people to produce goods and services, which are in turn sold
on commercial markets. Workforce integration enterprises are simultaneously guided by a social
logic, which prioritizes their workforce integration mission, and a market logic, which demands
that they provide competitive products to the commercial market, in order to sustain their
organization (Battilana, Pache, Sengul, & Model, 2012b; Pache & Santos, forthcoming).
Social-business hybrid organizations confront different, and potentially incompatible,
prescriptions from the market and social welfare institutional logics that they combine (Besharov
& Smith, 2012; Kraatz, 2009; Kraatz & Block, 2008; Pache & Santos, 2010). The market logic
dictates that they generate revenues to sustain their activity, whereas the social welfare logic
dictates that they focus primarily on the accomplishment of their social mission. As a result, their
members and especially leaders of social enterprises (i.e., Smith, Besharov, Wessels, & Chertok,
2012) must grapple with institutional complexity. This entails coping with multiple institutional
logics, each prescribing different and sometimes contradictory beliefs and work practices
(Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011). Research is needed to help us
understand the nature and management of these complex challenges.
The different beliefs and work practices prescribed respectively by market and social
welfare logics are such that combining and sustaining them within a single organization is a
significant challenge. Indeed, recent empirical studies highlight the risk of rising tensions
between organizational members due to these competing logics, which potentially lead to
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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organizational instability (e.g., Tracey, Phillips & Jarvis, 2010). Confirming this risk, some
social-business hybrids have recently been criticized for drifting away from their social mission,
thereby becoming typical corporations (Strom, 2010; Weisbrod, 2004). Even the Bangladesh
Rehabilitation Assistance Committee (BRAC), one of the largest and most respected
international development NGOs in the world, has recently been targeted for focusing on profits
over the needs of their clients in their microfinance operations (IRIN, 2011).
In spite of the challenges facing social-business hybrid organizations, a few qualitative,
inductive studies (Battilana & Dorado, 2010; Battilana et al., 2012b; Jay, forthcoming; Pache &
Santos, forthcoming) suggest that some have been able to combine the market and social welfare
logics in a sustainable way and even excel. Yet we still know little about the conditions under
which social-business hybrids are likely to emerge and survive. In particular, what institutional
and legal structures promote the emergence of these hybrids? At the individual level, what
experiences and characteristics lead actors to initiate social-business hybrids? Under what
conditions can social-business hybrids retain their hybrid nature over time? What are the factors
that influence their social and economic performance? Addressing these questions is crucial at a
time like now when hybrids, which provide alternative models of organizing in the aftermath of
the 2008 financial crisis, are on the rise (Davis, 2010; Golden-Biddle, Dutton, & Feldman, 2012;
Sabeti, 2011). They are considered by some observers to be a promising fourth way of
organizing (as opposed to typical corporations, not-for-profit, or public sector organizations)
(Strom, 2007), but it is now time to open up the black box of hybrids in order to understand their
specificities.
The purpose of this PDW is to help scholars studying social-business hybrids advance
their conceptual and empirical research projects by providing a forum to discuss these issues and
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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to stimulate novel ideas for future research questions, theoretical positioning, study design and
analysis, and publication strategies. Because they diverge from both typical for-profit and not-
for-profit organizations, social-business hybrids force us to rethink traditional categories of
organizations and thus require new management theorizing. By facilitating a collective
discussion on the common challenges and opportunities in studying social-business hybrids, the
PDW will help build a community of scholars focused on this topic and will help advance their
research.
Relevance to OMT
This PDW will provide a forum for the expanding group of scholars who study social-
business hybrids to develop theoretical frameworks and methodological tools for studying an
increasingly important type of organization. In this way, the PDW furthers OMT’s mission to
“advance robust theoretical understanding of organizations, organizing, and management.” In
addition, the topic of this PDW also fits this year’s conference theme on “Capitalism in
question.” Indeed, social business hybrids are neither typical for-profits nor typical not-for-
profits. Rather, they offer an alternative promising way to create both social and economic value.
Format
The co-organizers—Julie Battilana (Harvard Business School), Marya Besharov (Cornell
University), and Wendy Smith (University of Delaware)—will introduce the PDW with an
overview of critical questions for research on social-business hybrids. The four panelists will
then offer distinct, empirically grounded perspectives on social-business hybrids. Filipe Santos
(INSEAD) will speak about the key theoretical challenges and knowledge gaps in studying
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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social-business hybrids and discuss how his research addresses these challenges. Jill Kickul
(NYU) will offer thoughts on the key challenges facing practitioners within social-business
hybrids, discuss how research to date has addressed these challenges, and suggest next steps for
better connecting theoretical with practical concerns. Matt Lee (Harvard Business School) will
summarize his empirical research on the antecedents of performance in social-business hybrids
and will comment on challenges and next steps in advancing our understanding of internal
dynamics and organizational outcomes. Finally, Helen Haugh (University of Cambridge) will
discuss her empirical research on community interest companies (CIC), the new legal form for
social-business hybrid organizations in the UK. Drawing on her analysis of the creation and
adoption of the CIC, she will suggest directions for future research on how regulatory change
affects the creation of social-business hybrids. Our discussant, Jim Walsh (University of
Michigan), will then comment on and respond to the panelists’ presentations, and the panelists
and discussant will field questions from participants. Next, we will break up into roundtable
discussions in which participants will have the opportunity to discuss research questions,
theoretical positioning, study design and analysis, and publication strategies. Roundtables will be
facilitated by the PDW co-organizers and panelists. Each roundtable will then report to the full
group their key insights, and the PDW will conclude with a brief conversation about the next
steps for research on hybrids.
• Introduction by the co-organizers (10 min.) • Remarks from panelists and discussant (50 min.) • Large group question and answer session with panelists and discussant (30 min.) • Break (15 min.) • Roundtable discussions (45 min.) • Insights from roundtable discussions (20 min.) • Concluding thoughts and next steps for hybrid research (10 min.)
Advancing Research on Social-Business Hybrid Organizations PDW Submission #13975
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