The Failure of Hybrid Organizations: A Legitimation Perspective

Abstract

Organizational hybridity refers to the combination of multiple institutional logics and identities that, within an organizational setting, do not conventionally complement one another. In such conditions, organizations must develop strategies to combine logics and sustain their hybrid forms. Success, however, is not inevitable. In this article, we take a legitimacy-as-process perspective to focus on a failed Microfinance Organization (MFO) in the African context of Zambia. MFOs represent a fascinating context because of their hybrid nature and need to balance several competing institutional demands. We utilise field interviews to analyse the process through which MFOs fail, analysing actor legitimation responses to emerging hybridity demands. We identify three phases associated with these changes: 1) dependent coupling, (2) misaligning legitimation, and (3) circumnavigating over conformity. Our findings emphasise that legitimation efforts in a failed hybrid are not simply the reverse of those that succeed. We observe adaptive processes consistent with successful hybrids but that ultimately sow the seeds of eventual failure. This demonstrates the need to re-think the role of legitimation strategies in hybrids alongside their potential deleterious consequences.

Financing innovation for sustainable supply chain management in social business: a case of Qurban rituals in Indonesia

“…A social enterprise is a business organization whose main investment objective is not to maximize profits for shareholders but to achieve social and environmental goals, especially pressing community needs (Battarai et al, 2019;Amit and Zott, 2001). If the firm pays insufficient attention to financial viability, then it will fail and be unable to achieve its social goals (Siwale et al, 2021). This implies that social and environmental sustainability benefits should remain a priority for social enterprises, but by improving their financial sustainability, social enterprises will be more likely to endure on the market, increase their social impact and attract potential investors, as they create a more JIABR 15,2 financially viable profile (Smith and Besharov, 2019).…”

Leveraging Logics to Address the Paradox: Commentary on ‘The Failure of Hybrid Organizations: A Legitimation Perspective’

“…Comparing the field condition in China (Liu et al, 2016) and Zambia (Siwale et al, 2021), we could understand why in the latter, over-conformity to the banking logic took place. In Africa, the state is often absent, and its capability is weak.…”

“…In their study, Siwale, Kimmitt, and Amankwah-Amoah (2021) demonstrate that blending the two field-level logics does not always promise success. The authors challenge the assumption in previous studies that ‘once they adopt hybrid strategies, they either perform well or instantaneously fail’ by studying a failed MFO in Zambia.…”