From Logic Acceptance to Logic Rejection: The Process of Destabilization in Hybrid Organizations

Abstract

We study the introduction of the private logic into a mature Italian hospital that was governed previously as a hybrid of professional and public logics. Intriguingly, the reconstituted hospital was for several years widely praised for its strong clinical and financial performance, but quickly and with little warning became riven by political differences that led to its demise. Through our case analysis, we develop a multi-level model that reveals the destabilizing process that can unfold when a new logic enters an established organization. We contribute to the hybrids literature by explaining the puzzle of how a new logic can become accepted and then rejected in organizations, emphasizing the critical importance of the interaction between the audience, organization, and practice levels. Crucially, we reveal that positive feedback from multiple audiences may be a mixed blessing for hybrids: while it offers resource and legitimacy advantages, it can induce internal tensions with severe destabilizing consequences. Our findings and model also run counter to two core assumptions within the institutional literature: that social endorsement is advantageous, and that alignment with institutional expectations results in stabilization. We qualify these assumptions and indicate the circumstances under which they are unlikely to hold.

Institutional Translation Gone Wrong: The Case ofVillages for Africain Rural Tanzania

“…From success to failure: the reactance effect. Our thesis is that failure arises because cultural detachment followed by cultural assimilation invokes a sense of local ownership and 'hubris' (Cappellaro, Tracey, & Greenwood, 2019). The success of cultural detachment combined with the success of cultural assimilation means that recipients see the adopted idea and its outcomes as 'theirs'.…”

Toward an institution-based paradigm

“…Likewise, informal institutions can also affect and eventually change formal institutions (North, 1990). Several studies have endeavored to unveil the complex relationships between informal institutions and organizations (Cappellaro et al, 2020;Smith & Besharov, 2019). Overall, how to creatively capture informal institutions and untangle their distinctive impact is challenging, and remains a future research direction.…”

“…While critics associated with Criticism 2 complain about arguments from incompatible logics within the same study, many organizations increasingly grapple with hybridity, featuring a combination of institutional logics that traditionally do not go together (Cappellaro et al, 2020;Pache & Santos, 2013;Smith & Besharov, 2019;Sun & Liang, 2021). Institutional logics are "overarching belief systems that provide rationales for organizational goals, underpin identities, and shape behaviors" (Wang et al, 2022: 5; see also Thornton, 2004).…”

Health Care Research and Organization Theory

“…This finding advanced knowledge about institutional logics because it highlighted the potential for actors to change their interpretation of logics, paving the way for further research focusing on sensemaking as an important component of change processes. A recent article by Cappellaro, Tracey, and Greenwood (2020) examined how the introduction of a new logic could initially be well accepted, but then later be firmly rejected by field actors. They studied an Italian hospital that adopted a private logic in contrast to the previous guiding arrangement of hybrid professional and public logics, showing how interactions among the audience, organization, and practice levels can lead to internal tensions that overturn previous "success."…”