Naturally, governance structures and processes will be determined, at minimum, by the legal form and reporting obligations of the SE Mason , but SE dual mission means that board members are simultaneously exposed to institutional pressures to achieve financial sustainability, generate social value and build and maintain close relationships with a range of different stakeholder groups. As with the review of literature on mission and financial resources, this section has reviewed how SE hybridity impacts on the management processes related to managing relationships with a range of stakeholder groups.
Of particular importance is the impact of the respective values and approaches of different stakeholder groups, whether employees, volunteers or board members. Different stakeholders hold their own views concerning the appropriate balance between commercial and social mission. Managing internal and external governance tensions and ensuring accountability to stakeholders is thus a key management challenge faced by managers of hybrid organizations.
Hybridity emerged from our review as fundamental to SEs and thus an appropriate and useful lens through which to critically analyse the challenges associated with managing conflicting institutional logics. In hybrid organizations, previous research has noted that strategies to respond to competing external demands include compromising, avoiding, defying and manipulating Jay ; Pache and Santos , and deleting, compartmentalizing, aggregating and synthesizing to cope with internal identity struggles Jay ; Kratz and Block Find optimum conditions where social value creation leads to profitability and competitive advantage.
Investors persuaded to accept a lower and slower rate of return in exchange for social value creation. Cross subsidization by targeting income sources that generate a surplus for reinvesting in social mission. Higher SE salaries and wages reduce the attractiveness of SE to donors, volunteers and other stakeholders. Secondly, SE hybridity impacts on the acquisition and mobilization of financial resources.
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This creates tensions in relation to the prioritization of commercial over social objectives. Thirdly, hybridity also provides an important avenue to advance understanding of SE management of human resources. Many SEs also rely on the efforts of volunteers and trustees who donate their knowledge and skills free of charge. Although volunteers may provide important skills, Liu and Ko noted that tensions existed between employees and volunteers, particularly if SE social mission has drifted towards greater commercial focus.
This leads to tensions in securing the appropriate board representation of commercial and stakeholder engagement expertise. This review of the literature has investigated the implications of hybridity for SE mission, finance and people, and in doing so has highlighted several gaps in knowledge concerning the enactment of SE management processes. We now build on the review by proposing four research questions that offer opportunities for theory development.
Entrepreneurs And The 'Hybrid' Organization
The persistent global problems of poverty, inequality and development suggest that demand for hybrid organizations that successfully pursue the dual mission of achieving financial sustainability and social value creation are likely to increase. Yet, knowledge of SE management internationally is, as yet, partial. We encourage scholars to gather more information about SE and social entrepreneurship in countries and contexts about which we know relatively little, e. African nations, China, countries in the Middle East and Russia. Specifically it would be worthwhile to investigate the institutional conditions that promote the establishment and growth of SEs, and those that hinder their creation and growth.
What lessons can be learned from successful and impactful SEs in different countries and contexts that would inform our understanding of the influence of institutional conditions on the emergence of hybrid organizations? Theory development to explain and predict the conditions under which SE dual mission can be achieved would enhance knowledge of how, why and where hybrid organizations are most effective.
The dual mission also raises challenges for measuring performance and impact. There is, therefore, a need for greater understanding of how organizations account for both social and financial value. The inward flow of resources is essential for SEs to achieve financial sustainability and generate social and environmental value.
Social enterprises exploit commercial opportunities to develop revenue streams and create a surplus that can be reinvested in their social aims. However, little is known about how SEs create and sustain a balanced income portfolio and how they decide on the appropriate level of surplus or profit. There is also a need to examine how SEs continue to use grants, philanthropic funding and unrestricted donations to give them time to establish commercial sources of income. Social enterprise with a mixed income portfolio might simultaneously be endeavouring to balance receiving donations and generating a profit.
Social enterprise involvement in different markets creates opportunities for investment from internal surplus and external financial resources, whether in the form of grants, loans or even equity investment. While there is much attention to the supply of such external finance, evidence of the location of the demand for different types of loan finance is lacking.
Where SEs take on loan finance and equity investment, there may be an effect on the organizational values and culture, yet little is known of such consequences. Social enterprise hybridity means that employees, volunteers and board members face the challenge of trying to achieve a balance between pursuing and satisfying multiple organizational and personal goals. When working for a hybrid organization, SE staff and volunteers also seek to combine multiple shared values related to competition in the private sector, the collaborative ethos of cooperatives, the social values of charities and the public service ethos of the state.
Social enterprise hybridity also creates challenges related to establishing effective governance structures and accountability processes to report to multiple stakeholder groups. Research that explored how a functioning balance is achieved between governance and accountability would provide insight into the cultural environment of SEs, their propensity for culture change when working in partnership with other organizations — e.
The pursuit of dual mission requires SEs to navigate between the demands of different stakeholder groups who each make claims on the organization's objectives. Wider stakeholder involvement may engender increased accountability, but little is known about the effect of consultation processes, which may be lengthy and combative, on strategy development and implementation. Research that investigated the processes adopted for securing stakeholder support at the same time as protecting organizational ability to respond swiftly to conditions in competitive markets would be of theoretical interest to scholars interested in the processes and dynamics of flexibility and legitimacy in hybrid organizations.
This review is at a point in time when SE research has matured beyond definitional debates and embraced the analysis of institutional and organizational processes associated with their creation and management. Social enterprise research is characterized by approaches that have bridged organization theory, management practice, social policy, sociology, geography, political science, environmental science and economics. We adopted an interdisciplinary approach in this review to bring together contributions from across these domains. The eclectic disciplinary approach is reflected in the recent diversity of theories employed by scholars as SE research matures.
Although much attention in the leading academic journals has focused on advancing institutional theory, other relevant areas for theory development include social innovation, value creation, ethics, power and social finance. Three broad themes were investigated: mission, financial resources and human resource mobilization. In each theme, we reviewed the main debates and identified the key question that remains unanswered in each domain.
More generally, we find that: the SE literature contributes to important debates concerning the role of markets, government and civil society in the provision of public goods around the world; there is an emerging evidence base concerning SE establishment and growth in many, but not all, countries; and SE discourse in different countries and contexts is closely linked to policy debates and interventions.
By exploring the concept of hybridity in organizational behaviour, management and entrepreneurship, wider theoretical implications can be drawn for management studies. As the boundaries between organizational forms become increasingly blurred, there is a need to understand how dual, or multiple, mission affects organizational processes. This review has critically analysed much of the literature on this emerging area of management studies; however the process of identifying the relevant literature has three limitations.
The review approach included papers in more highly cited journals, and not all the literature in other publications has been included. Secondly, the articles are dominated by qualitative studies, several of which have advanced new theoretical contributions. Quantitative SE research remains rare and is a major priority for developing statistically robust national and international analyses.
Hybrid Organizations in the Arts: A Cautionary View
Literature on SE is largely Western and, given the importance of SE developments in Africa and Asia, this is a gap that future studies should aim to address. This review provides insights into both SE theory and practice. First, we build on previous SE reviews and develop a framework to explain the tensions and their resolution that are created by the pursuit of dual mission.
Our review clarified the need to consider the development of a wider range of human resources, competences and skills in SE management.
Social enterprise managers face challenges in managing the identity of a hybrid organization, responding to market pressures from customers and competitors, and integrating the typical mix of employees and volunteers. The hybrid form both creates tension and allows the space to cope with competing logics. This paper shows how there is a need to build on existing research distinguishing SE as an organizational form, and to draw on recent theoretical developments in the field that have examined how SE organizations have found ways of balancing the positive and negative effects of hybridity, such as mission drift and challenges to legitimacy.
The review provides evidence that hybrid organizations develop management processes to respond creatively and innovatively to conflicting logics. In this regard, SEs provide examples of the potential benefits of managing the tensions associated with bridging institutional fields. In practice, the challenges summarized need to be addressed at the same time as maintaining commitment to social mission and nurturing relationships with stakeholders.
Social enterprise managers also need to be skilled in acquiring and leveraging resources, and developing and enhancing organizational capabilities. The evidence informs us that most SEs tend to be a coalition of multiple stakeholder groups, each with their own, often diverging, priorities. In practice, this means that the strategy development process will involve time and resources devoted to networking, communicating, lobbying and negotiating with stakeholders to achieve a consensus on key issues to avoid mission drift, build and retain legitimacy contemporaneously with developing new approaches to mobilizing financial resources and managing people.
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But recently hybrid organizations have sprung up to address other issues including the environment, food security, economic development, governance, and housing. These new hybrids are finding homes in sectors like retail, information technology and even catering. So what we see is really the rise of hybrids across sectors and across the world. In the aftermath of the financial crisis, hybrid organizations have been a source of increased interest because they are a promising vehicle of both social and economic value creation. For this reason, it is worth thinking about how we can create the type of ecosystem that will enable them to flourish.
These organizations have to walk a very fine line. If they lose sight of their social mission, they fail.
follow link And if they do not generate enough revenue to sustain their operations, they fail as well.