Inside the hybrid organization: An organizational level view of responses to conflicting institutional demands

This paper explores organizational responses to conflicting institutional demands. An inductive comparative case study of four social enterprises that scaled their organization while embedded in competing social welfare and commercial logics suggests that, when facing competing organizational templates imposed by their institutional environment, organizations attempt to strike a balance at the organizational level by adopting a combination of intact practices from both logics instead of balancing at the practice level by resorting to strategies such as decoupling. In addition, we find an important legitimating effect of founding origins: in a sector where the social welfare logic is ultimately predominant, organizations originating from the social sector benefited from an a priori legitimacy capital, which allowed them to borrow freely from both social and commercial practices. In contrast, organizations emanating from the commercial sector, suffering from an a priori legitimacy deficit, had to display their conformity with social templates in order to secure their acceptance in the field and therefore adopted predominantly social practices. Our findings contribute to a better understanding of hybrid organizations and point to the founding origins of organizations as an important determinant of the pattern of hybridization strategies.