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Balancing Competing Logics in For-Profit Social Enterprises: A Need for Hybrid Governance

Author

Listed:
  • Johan Bruneel
  • Nathalie Moray
  • Robin Stevens
  • Yves Fassin

Abstract

This paper reports a case study of a for-profit award-winning social enterprise that faced bankruptcy two years after founding. The findings show that the firm's overemphasis on the social employment logic and the increasing disregard of the commercial market logic led to the failure. This imbalance in response to the two competing logics was fuelled by the entrepreneurs’ strong social values, stakeholder reinforcement, and lack of appropriate governance. This study shows that hybrid organizations need to pay attention to the governance of the tension between competing demands inside as well as outside the organization. Hybrid organizations therefore require a hybrid governance model. By presenting a case of failure of a social enterprise, the paper counterbalances the dominance of optimistic idealism in social entrepreneurship literature.

Suggested Citation

  • Johan Bruneel & Nathalie Moray & Robin Stevens & Yves Fassin, 2016. "Balancing Competing Logics in For-Profit Social Enterprises: A Need for Hybrid Governance," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 7(3), pages 263-288, September.
    • Handle: RePEc:taf:jsocen:v:7:y:2016:i:3:p:263-288
    DOI: 10.1080/19420676.2016.1166147
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    Cited by:

    1. Theodor Vladasel & Simon C. Parker & Randolph Sloof & Mirjam van Praag, 2024. "Revenue drift, incentives, and effort allocation in social enterprises," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 33(3), pages 630-651, August.
    2. Wai Wai Ko & Gordon Liu, 2021. "The Transformation from Traditional Nonprofit Organizations to Social Enterprises: An Institutional Entrepreneurship Perspective," Journal of Business Ethics, Springer, vol. 171(1), pages 15-32, June.
    3. Haugh, Helen M., 2021. "The governance of entrepreneurial community ventures: How do conflicting community interests influence opportunity exploitation?," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    4. Matthias Staessens & Pieter Jan Kerstens & Johan Bruneel & Laurens Cherchye, 2019. "Data Envelopment Analysis and Social Enterprises: Analysing Performance, Strategic Orientation and Mission Drift," Journal of Business Ethics, Springer, vol. 159(2), pages 325-341, October.
    5. Samantha Ragot & Blanche Segrestin, 2019. "Profit-with-purpose companies and institutional logics' dynamics: lessons from a public service company," Post-Print hal-02445262, HAL.
    6. Slitine, Romain & Chabaud, Didier & Richez-Battesti, Nadine, 2024. "Beyond social enterprise: Bringing the territory at the core," Journal of Business Research, Elsevier, vol. 176(C).
    7. Michele Bianchi & Michael J. Roy & Simon Teasdale, 2022. "Towards a Multi-Level Understanding of the Strategies Employed in Managing Hybridity: A Systematic Review," Sustainability, MDPI, vol. 15(1), pages 1-12, December.
    8. Christine Lambey-Checchin & Matthieu Lardeau, 2019. "In search for balanced management of tensions: a comparison of two nonprofit back-to-work organizations [A la recherche d’un équilibre dans la gestion des tensions : comparaison de deux association," Post-Print hal-02372339, HAL.
    9. Chong Kyoon Lee & Johan Wiklund & Alejandro Amezcua & Tae Jun Bae & Almantas Palubinskas, 2022. "Business failure and institutions in entrepreneurship: a systematic review and research agenda," Small Business Economics, Springer, vol. 58(4), pages 1997-2023, April.
    10. Fehrer, Julia A. & Wieland, Heiko, 2021. "A systemic logic for circular business models," Journal of Business Research, Elsevier, vol. 125(C), pages 609-620.
    11. Weerawardena, Jay & Salunke, Sandeep & Haigh, Nardia & Sullivan Mort, Gillian, 2021. "Business model innovation in social purpose organizations: Conceptualizing dual social-economic value creation," Journal of Business Research, Elsevier, vol. 125(C), pages 762-771.
    12. Paolo Esposito & Emanuele Doronzo & Spiridione Lucio Dicorato, 2023. "The financial and green effects of cultural values on mission drifts in European social enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 1-29, January.
    13. Tae Jun Bae & James O. Fiet, 2023. "Intra-Stakeholder Heterogeneity Perspective on the Hybridity of Competing Institutional Logics for Social Enterprises," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    14. Michele Bianchi, 2021. "Hybrid Organizations: A Micro-Level Strategy for SDGs Implementation: A Positional Paper," Sustainability, MDPI, vol. 13(16), pages 1-14, August.
    15. Syrus M Islam, 2022. "Social impact scaling strategies in social enterprises: A systematic review and research agenda," Australian Journal of Management, Australian School of Business, vol. 47(2), pages 298-321, May.
    16. Malu Villela & Sergio Bulgacov & Glenn Morgan, 2021. "B Corp Certification and Its Impact on Organizations Over Time," Journal of Business Ethics, Springer, vol. 170(2), pages 343-357, May.
    17. Rosaria Ferlito & Rosario Faraci, 2022. "Sustainable Hybrid Business Model of Benefit Corporation: The Case of an Italian Film Production Company," Sustainability, MDPI, vol. 14(10), pages 1-17, May.

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