IDEAS home Printed from https://ideas.repec.org/a/taf/jsocen/v7y2016i3p263-288.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/19420676.2016.1166147
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/19420676.2016.1166147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Khaled Elsayed, 2007. "Does CEO Duality Really Affect Corporate Performance?," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1203-1214, November.
    2. Andrew M. Pettigrew, 1990. "Longitudinal Field Research on Change: Theory and Practice," Organization Science, INFORMS, vol. 1(3), pages 267-292, August.
    3. Karin Berglund & Birgitta Schwartz, 2013. "Holding on to the Anomaly of Social Entrepreneurship Dilemmas in Starting up and Running a Fair-Trade Enterprise," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 4(3), pages 237-255, November.
    4. Ana M. Moreno & José C. Casillas, 2007. "High-growth SMEs versus non-high-growth SMEs: a discriminant analysis," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 19(1), pages 69-88, January.
    5. M. Tina Dacin & Peter A. Dacin & Paul Tracey, 2011. "Social Entrepreneurship: A Critique and Future Directions," Organization Science, INFORMS, vol. 22(5), pages 1203-1213, October.
    6. Smith, Wendy K. & Gonin, Michael & Besharov, Marya L., 2013. "Managing Social-Business Tensions: A Review and Research Agenda for Social Enterprise," Business Ethics Quarterly, Cambridge University Press, vol. 23(3), pages 407-442, July.
    7. Mark K. Fiegener, 2005. "Determinants of Board Participation in the Strategic Decisions of Small Corporations," Entrepreneurship Theory and Practice, , vol. 29(5), pages 627-650, September.
    8. Paul Tracey & Nelson Phillips & Owen Jarvis, 2011. "Bridging Institutional Entrepreneurship and the Creation of New Organizational Forms: A Multilevel Model," Organization Science, INFORMS, vol. 22(1), pages 60-80, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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).
    3. 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.
    4. Samantha Ragot & Blanche Segrestin, 2019. "Profit-with-purpose companies and institutional logics' dynamics: lessons from a public service company," Post-Print hal-02445262, HAL.
    5. 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.
    6. Vladasel, Theodor & Parker, Simon C. & Sloof, Randolph & van Praag, Mirjam C., 2022. "Revenue Drift, Incentives, and Effort Allocation in Social Enterprises," IZA Discussion Papers 15716, Institute of Labor Economics (IZA).
    7. 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.
    8. 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.
    9. Fehrer, Julia A. & Wieland, Heiko, 2021. "A systemic logic for circular business models," Journal of Business Research, Elsevier, vol. 125(C), pages 609-620.
    10. 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.
    11. 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.
    12. 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.
    13. Michele Bianchi, 2021. "Hybrid Organizations: A Micro-Level Strategy for SDGs Implementation: A Positional Paper," Sustainability, MDPI, vol. 13(16), pages 1-14, August.
    14. 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.
    15. 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.
    16. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cecilia Rossignoli & Francesca Ricciardi & Sabrina Bonomi, 2018. "Organizing for Commons-Enabling Decision-Making Under Conflicting Institutional Logics in Social Entrepreneurship," Group Decision and Negotiation, Springer, vol. 27(3), pages 417-443, June.
    2. Jeffrey G. York & Isobel O'Neil & Saras D. Sarasvathy, 2016. "Exploring Environmental Entrepreneurship: Identity Coupling, Venture Goals, and Stakeholder Incentives," Journal of Management Studies, Wiley Blackwell, vol. 53(5), pages 695-737, July.
    3. Tina C Ambos & Sebastian H Fuchs & Alexander Zimmermann, 2020. "Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 906-932, August.
    4. Ji-Hoon Park, 2020. "Chasing two rabbits: how social enterprises as hybrid organizations manage paradoxes," Asian Business & Management, Palgrave Macmillan, vol. 19(4), pages 407-437, September.
    5. Philip T. Roundy & Michaël Bonnal, 2017. "The Singularity of Social Entrepreneurship: Untangling its Uniqueness and Market Function," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 26(2), pages 137-162, September.
    6. Adélie Ranville & Marcos Barros, 2022. "Towards Normative Theories of Social Entrepreneurship. A Review of the Top Publications of the Field," Journal of Business Ethics, Springer, vol. 180(2), pages 407-438, October.
    7. Klein, Sascha & Schneider, Sabrina & Spieth, Patrick, 2021. "How to stay on the road? A business model perspective on mission drift in social purpose organizations," Journal of Business Research, Elsevier, vol. 125(C), pages 658-671.
    8. Thomas André, 2015. "Managing Societal Performance of Impact Investing: An Action Research Inquiry," Working Papers hal-01211725, HAL.
    9. Paola Bernardi & Alberto Bertello & Canio Forliano & Ludovico Bullini Orlandi, 2022. "Beyond the “ivory tower”. Comparing academic and non-academic knowledge on social entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 999-1032, September.
    10. Tyler Wry & Eric Yanfei Zhao, 2018. "Taking Trade-offs Seriously: Examining the Contextually Contingent Relationship Between Social Outreach Intensity and Financial Sustainability in Global Microfinance," Organization Science, INFORMS, vol. 29(3), pages 507-528, June.
    11. Ji-Hoon Park, 0. "Chasing two rabbits: how social enterprises as hybrid organizations manage paradoxes," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-31.
    12. Chris Mason & Bob Doherty, 2016. "A Fair Trade-off? Paradoxes in the Governance of Fair-trade Social Enterprises," Journal of Business Ethics, Springer, vol. 136(3), pages 451-469, July.
    13. Tommaso Ramus & Antonino Vaccaro, 2017. "Stakeholders Matter: How Social Enterprises Address Mission Drift," Journal of Business Ethics, Springer, vol. 143(2), pages 307-322, June.
    14. Giustina Pellegrini & Maria Carmela Annosi & Francesco Contò & Mariantonietta Fiore, 2020. "What Are the Conflicting Tensions in an Italian Cooperative and How Do Members Manage Them? Business Goals’, Integrated Management, and Reduction of Waste within a Fruit and Vegetables Supply Chain," Sustainability, MDPI, vol. 12(7), pages 1-15, April.
    15. Wry, Tyler & Haugh, Helen, 2018. "Brace for impact: Uniting our diverse voices through a social impact frame," Journal of Business Venturing, Elsevier, vol. 33(5), pages 566-574.
    16. Vladasel, Theodor & Parker, Simon C. & Sloof, Randolph & van Praag, Mirjam C., 2022. "Revenue Drift, Incentives, and Effort Allocation in Social Enterprises," IZA Discussion Papers 15716, Institute of Labor Economics (IZA).
    17. Luca Mongelli & Francesco Rullani & Tommaso Ramus & Tomislav Rimac, 2019. "The Bright Side of Hybridity: Exploring How Social Enterprises Manage and Leverage Their Hybrid Nature," Journal of Business Ethics, Springer, vol. 159(2), pages 301-305, October.
    18. Pradeep Kumar Hota & Balaji Subramanian & Gopalakrishnan Narayanamurthy, 2020. "Mapping the Intellectual Structure of Social Entrepreneurship Research: A Citation/Co-citation Analysis," Journal of Business Ethics, Springer, vol. 166(1), pages 89-114, September.
    19. Ruchita Pangriya, 2019. "Hidden aspects of social entrepreneurs’ life: a content analysis," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-19, December.
    20. Thomas André, 2015. "Institutionalization Of Impact Investing Through Societal Management Pressures: An Action Research Inquiry," Working Papers hal-01180070, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jsocen:v:7:y:2016:i:3:p:263-288. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJSE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.