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

Abstract

Traditional approaches to sustainability, such as philanthropy, corporate social responsibility, and product innovation 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 organization exemplar, blending traditionally for-profit practices with traditionally non-profit practices to address social and/or environmental issues. This chapter provides insights into how B Corps integrate for-profit (market logic) and for-purpose (social 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 tensions and conflict in other areas (e.g., ownership structure, performance measurement, sales and distribution, product design and development). The findings emphasize the importance of creating a common organizational 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 logics in their missions, recruitment and socialization practices (remuneration, communication and training practices).