Examining the Interplay of Social and Market Logics in Hybrid Business Models: A Case Study of Australian B Corps

Traditional approaches to sustainabilitySustainability Sustainable business Values Business models , such as philanthropy, corporate social responsibility, and product innovationInnovation are insufficient to radically transform business and society toward genuine, substantive sustainable development. New hybrid business models are emerging that employ market tactics to address sustainable development issues. B Corps are a hybrid organizationHybrid organization exemplar, blending traditionally for-profitFor-profit practices with traditionally non-profit practices to address social and/or environmental issues. This chapter provides insights into how B Corps integrate for-profitFor-profit (market logic) and for-purposePurpose For-purpose (social logicSocial logic) considerations into their business models, drawing on interviews with 15 Australian B Corps. The research study found that social and market logics are strongly integrated in some areas (e.g., mission, recruitment and marketing) but trying to balance these two logics has created tensionsTensions and conflict in other areas (e.g., ownership structure, performance measurement, sales and distribution, product designDesign and development). The findings emphasize the importance of creating a common organizational identityOrganizational identity that strikes a balance between the logics to moderate conflict and one logic dominating over another. The B Corps are attempting to do this by instantiating the market and social logicsSocial logic in their missionsMission, recruitment and socialization practices (remuneration, communication and training practices).