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

Author

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  • 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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    File URL: http://hdl.handle.net/10.1080/19420676.2016.1166147
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Khaled Elsayed, 2007. "Does CEO Duality Really Affect Corporate Performance?," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1203-1214, November.
    4. 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.
    5. Andrew M. Pettigrew, 1990. "Longitudinal Field Research on Change: Theory and Practice," Organization Science, INFORMS, vol. 1(3), pages 267-292, August.
    6. 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.
    7. 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.
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    Cited by:

    1. 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.

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