Cracking the organizational challenge of pursuing joint social and financial goals: Social enterprise as a laboratory to understand hybrid organizing

Abstract

While in recent decades the social and business sectors have evolved on fairly separate tracks, today companies are increasingly expected to generate social value in addition to profit. As a result, they also increasingly face the distinct challenge of pursuing social and financial goals at the same time. Social enterprises have a great deal of experience dealing with this challenge, as hybrid organizations that combine aspects of typical businesses (undertaking commercial activity) and not-for-profit organizations (pursuing a social mission). In this essay, I discuss my research, as well as that of others, on social enterprises, with the objective of tracing my perspective on the current state of knowledge regarding social enterprises and their capacity to pursue joint social and financial goals over time. I start by discussing how exposure to diverse organizational contexts and gender affect the founding of social enterprises, before presenting the distinct tensions of hybrid organizing and how social enterprises overcome them. In doing so, I suggest that we consider these challenges in terms of internal and external pressures related to both identity and resources. Building on existing research, I then identify four pillars that seem to play a critical role in enabling organizations to pursue joint social and financial goals over time-specifically, how organizations set goals, structure activities, select members and socialize those members. In my own research, I see that these four pillars both shape and are shaped by the culture of the organization. While they might configure these organizational elements differently, I observed that the organizations able to pursue both social and financial goals over time seem to share a commonality: they maintain a hybrid organizational culture that holds and balances tensions between creating social and economic value. In conclusion, I discuss areas for future research on the joint pursuit of financial and social goals in organizations.