This article possibly contains original research .(October 2020) |
A hybrid organization is an organization that mixes elements, value systems and action logics (e.g. social impact and profit generation) of various sectors of society, i.e. the public sector, the private sector and the voluntary sector. A more general notion of hybridity can be found in Hybrid institutions and governance.
According to previous research hybrids between public and private spheres consist of following features:
Value creation in hybrids proceeds through three mechanisms
Mixing distinct value categories may take several forms. One common feature of these forms is the act of combining existing value categories to contribute novel variants of value. Compromising concern solving grievances among the interacting parties. From the legitimization point of view, hybrids are attuned to catering to the demands of multiple audiences: the government, citizens and clients, as well as the competitive markets. [4]
The discussion of relational aspects of hybridity among nodes, dyads and networks raises number of questions. Sometimes governing hybridity necessitates a balancing act among parallel and opposing forces. In other instances, hybridity represents an effort to build genuinely new interaction patterns to settle the issues at hand, but it is also the case that hybridity brings out restrictions on interaction patterns. [5]
The hybridity can be studied across levels of society in micro, meso and macro settings. However, aggregation of institutions follow different patterns within government, business and civil society [6] The relational aspect appears as integration and separation (node), in dyads between e.g professionals and managers and between providers and beneficiaries, and within networks as actors with different attributes [7]
Hybrid organization can achieve a competitive advantage because it can easily adapt into rapidly changing business environment. Organizational hybridity refers to an ability to blend features from different organizations or cultures to create solutions which suits organization's needs. [8] In addition, hybrid organizations can achieve long-term sustainability by blending social and economic imperatives and engaging with diverse stakeholder groups. [9]
In hybrid organizations there are private, public and non-profit organizations collaborating together. All these organizations have their own knowledge strategies and the hybrid organization needs to manage a comprehensive knowledge strategy of the entire hybrid organization. This makes the challenges of the hybrid organizations interdependent and multidimensional. In order for a hybrid organization to succeed in creating a knowledge strategy, it must pay attention to the following three things in particular:
Hybrid organizations are found in both the private and public sectors, but there may be differences in their goals and governance structures: private and public organizations all in all usually have different drivers and organizational structures. [10] Basically public and private sector organizations differ from each other from the point of view of their environment, organization-environment transactions and organizational roles, structures and processes. [11] [12]
In private sector, hybrid organizations are often motivated by profit and create social or environmental value, as a means to achieve financial goals. In contrast, public sector hybrid organizations usually prioritize social or environmental objectives and use financial sustainability as a means to achieve their mission.
Furthermore, public sector hybrid organizations may be subject to more strict regulatory frameworks and may be required to report on a broader range of standards than private sector hybrid organizations. [10]
Borys and Jemison [13] introduced the concept of "hybrid organizational arrangements", aligning the concept with strategic alliances, R&D partnerships, joint ventures and licensing. The authors reviewed prior research and provided a qualitative framework for classification of different types of hybrid organizational arrangements consisting of breadth of purpose, boundary determination, value creation and stability mechanisms. [13]
Later, Oliver Williamson [14] introduced the concept of a "hybrid form" in transaction cost economics. [14] A hybrid form can be defined as "a set of organizations such that coordination between those organizations takes place by means of the price mechanism and various other coordination mechanisms simultaneously" [15]
As hybrid organizations combine diverse stakeholder groups, the potential for conflict within them might be greater. This is the challenge of stakeholder management. [16] In addition, conflicts can occur because hybrid organizations need to balance between institutional demands and stakeholder interests [17]
This problem is similarly emphasized from the perspective of agency theory. The so-called 'multiple principal problem' combines various collective action problems that can occur with hybridity. [18] Free-riding or duplication in steering and monitoring procedures can result in high costs. Similarly, directive ambiguity or lobbying of the corporations by individual stakeholders can induce inefficiency. [18]
Any tensions can have positive and negative economic, performance related, cultural and governance related effects for the organization, its principles, and its customers. For instance, for state-owned enterprises, Schmitz [19] argues that the combination of public and private interests brings an optimal combination of incentives for reducing costs and improving quality in comparison with pure production forms. [20] In contrast, Voorn, Van Genugten, and Van Thiel [21] hypothesize that diversity of ownership may lead to benefits such as specialization and increased efficiency, but also downsides such as increased failure rates. [21]
Examples of hybrid forms of organization include:
Not all hybrid forms are intentional as their value creation may take place 'by default'. [26] Hemingway's ethnographic study of a British-based multi-national corporation, where corporate social responsibility was found to be practised informally by some employees, in addition to their formal job roles, pointed out that unless a corporate employee was given dispensation from the profit motive in order to specifically create social value, even the most hybrid of corporations could not be described as a social enterprise staffed by social entrepreneurs (although employees' activities outside of the workplace might be). However, she did find evidence of corporate social entrepreneurship, where some employees had enlarged their own job roles to encompass social responsibility, in one or more forms. [27]
Corporate governance are mechanisms, processes and relations by which corporations are controlled and operated ("governed").
Governance is the process of making and enforcing decisions within an organization or society. It encompasses decision-making, rule-setting, and enforcement mechanisms to guide the functioning of an organization or society. Effective governance is essential for maintaining order, achieving objectives, and addressing the needs of the community or members within the organization. Furthermore, effective governance promotes transparency, fosters trust among stakeholders, and adapts to changing circumstances, ensuring the organization or society remains responsive and resilient in achieving its goals. It is the process of interactions through the laws, social norms, power or language as structured in communication of an organized society over a social system. It is done by the government of a state, by a market, or by a network. It is the process of choosing the right course among the actors involved in a collective problem that leads to the creation, reinforcement, or reproduction of acceptable conduct and social order". In lay terms, it could be described as the processes that exist in and between formal institutions.
In a corporation, a stakeholder is a member of "groups without whose support the organization would cease to exist", as defined in the first usage of the word in a 1963 internal memorandum at the Stanford Research Institute. The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR). The definition of corporate responsibilities through a classification of stakeholders to consider has been criticized as creating a false dichotomy between the "shareholder model" and the "stakeholder model", or a false analogy of the obligations towards shareholders and other interested parties.
Environmental resource management is the management of the interaction and impact of human societies on the environment. It is not, as the phrase might suggest, the management of the environment itself. Environmental resources management aims to ensure that ecosystem services are protected and maintained for future human generations, and also maintain ecosystem integrity through considering ethical, economic, and scientific (ecological) variables. Environmental resource management tries to identify factors affected by conflicts that rise between meeting needs and protecting resources. It is thus linked to environmental protection, sustainability, integrated landscape management, natural resource management, fisheries management, forest management, and wildlife management, and others.
A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners.
The social economy is formed by a rich diversity of enterprises and organisations, such as cooperatives, mutuals, associations, foundations, social enterprises and paritarian institutions, sharing common values and features:
Social entrepreneurship is an approach by individuals, groups, start-up companies or entrepreneurs, in which they develop, fund and implement solutions to social, cultural, or environmental issues. This concept may be applied to a wide range of organizations, which vary in size, aims, and beliefs. For-profit entrepreneurs typically measure performance using business metrics like profit, revenues and increases in stock prices. Social entrepreneurs, however, are either non-profits, or they blend for-profit goals with generating a positive "return to society". Therefore, they use different metrics. Social entrepreneurship typically attempts to further broad social, cultural and environmental goals often associated with the voluntary sector in areas such as poverty alleviation, health care and community development.
Sustainability reporting refers to the disclosure, whether voluntary, solicited, or required, of non-financial performance information to outsiders of the organization. Generally speaking, sustainability reporting deals with information concerning environmental, social, economic and governance issues in the broadest sense. These are the criteria gathered under the acronym ESG.
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, often simply shortened to GIZ, is the main German development agency. It is headquartered in Bonn and Eschborn and provides services in the field of international development cooperation and international education work. The organization's self-declared goal is to deliver effective solutions that offer people better prospects and sustainably improve their living conditions.
The Global Reporting Initiative is an international independent standards organization that helps businesses, governments, and other organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption.
Management cybernetics is concerned with the application of cybernetics to management and organizations. "Management cybernetics" was first introduced by Stafford Beer in the late 1950s and introduces the various mechanisms of self-regulation applied by and to organizational settings, as seen through a cybernetics perspective. Beer developed the theory through a combination of practical applications and a series of influential books. The practical applications involved steel production, publishing and operations research in a large variety of different industries. Some consider that the full flowering of management cybernetics is represented in Beer's books. However, learning continues.
Network governance is "interfirm coordination that is characterized by organic or informal social system, in contrast to bureaucratic structures within firms and formal relationships between them. The concepts of privatization, public private partnership, and contracting are defined in this context." Network governance constitutes a "distinct form of coordinating economic activity" which contrasts and competes with markets and hierarchies.
A corporate social entrepreneur (CSE) is someone who attempts to advance a social agenda in addition to a formal job role as part of a corporation. It is possible for CSEs to work in organizational contexts that are favourable to corporate social responsibility (CSR). CSEs focus on developing both social capital and economic capital, and their formal job role may not always align with corporate social responsibility. A person in a non-executive or managerial position can still be considered a CSE.
Sustainability standards and certifications are voluntary guidelines used by producers, manufacturers, traders, retailers, and service providers to demonstrate their commitment to good environmental, social, ethical, and food safety practices. There are over 400 such standards across the world.
The term ‘hybrid institution’ is not yet well-established or clearly defined in academic literature. German and Keller possibly introduced the term in 2009, describing it as "an institutional arrangement governing the interdependencies among discrete property holders and regimes". Abbot and Faude have suggested more recently that most areas in world politics today are governed "neither by individual institutions nor by regime complexes composed of formal interstate institutions. Rather, they are governed by “hybrid institutional complexes” comprising heterogeneous interstate, infra-state, public–private and private transnational institutions, formal and informal." Whether they are anything more than euphemisms for public-private partnerships, which are nothing new, is yet to be firmly established.
Environmental certification is a form of environmental regulation and development where a company can voluntarily choose to comply with predefined processes or objectives set forth by the certification service. Most certification services have a logo which can be applied to products certified under their standards. This is seen as a form of corporate social responsibility allowing companies to address their obligation to minimise the harmful impacts to the environment by voluntarily following a set of externally set and measured objectives.
Multistakeholder governance is a practice of governance that employs bringing multiple stakeholders together to participate in dialogue, decision making, and implementation of responses to jointly perceived problems. The principle behind such a structure is that if enough input is provided by multiple types of actors involved in a question, the eventual consensual decision gains more legitimacy, and can be more effectively implemented than a traditional state-based response. While the evolution of multistakeholder governance is occurring principally at the international level, public-private partnerships (PPPs) are domestic analogues.
In business, a B Corporation is a for-profit corporation certified by B Lab for its social impact. B Corp certification is conferred by B Lab, a global nonprofit organization. To be granted and to maintain certification, companies must receive a minimum score of 80 from an assessment of its social and environmental performance, integrate B Corp commitments to stakeholders into company governing documents, and pay an annual fee based on annual sales. Companies must re-certify every three years to retain B Corporation status.
Julie Battilana is a scholar, educator, and advisor in the areas of social innovation and social change at Harvard University. She is the Joseph C. Wilson Professor of Business Administration at Harvard Business School and the Alan L. Gleitsman Professor of Social Innovation at the Harvard Kennedy School.
Chao Guo is a public administration scholar. Currently, he is Professor of Nonprofit Management in the School of Social Policy and Practice at the University of Pennsylvania. He is also Associate Faculty Director of Fox Leadership International at Penn. His research focuses on technology and nonprofits, representation and advocacy, nonprofit governance, social entrepreneurship, and collaboration within and across the nonprofit, private, and government sectors. His research has been cited 4,371 times according to Google Scholar, with an h-index of 22 and an i10-index of 31.
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