The Governance of Social Enterprises

Alnoor  Ebrahim; Julie  Battilana; Johanna  Mair

Article | Research in Organizational Behavior | 2014

The Governance of Social Enterprises: Mission Drift and Accountability Challenges in Hybrid Organizations

by Alnoor Ebrahim, Julie Battilana and Johanna Mair

Abstract

We examine the challenges of governance facing organizations that pursue a social mission through the use of market mechanisms. These hybrid organizations, often referred to as social enterprises, combine aspects of both charity and business at their core. In this paper we distinguish between two ideal types of such hybrids, differentiated and integrated, and we conceptualize two key challenges of governance they face: accountability for dual performance objectives and accountability to multiple principal stakeholders. We revisit the potential and limitations of recently introduced legal forms to address these challenges. We then theorize about the importance of organizational governance, and the role of governing boards in particular, in prioritizing and aligning potentially conflicting objectives and interests in order to avoid mission drift and to maintain organizational hybridity in social enterprises. Finally, we discuss future research directions and the implications of this work for rethinking traditional categories of organizations, namely business and charity.

Keywords: social enterprise; governance; hybrid organizations; nonprofit; performance measurement; legal form; agency theory; stakeholder management; Mission and Purpose; Social Enterprise; Corporate Accountability;

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Ebrahim, Alnoor, Julie Battilana, and Johanna Mair. "The Governance of Social Enterprises: Mission Drift and Accountability Challenges in Hybrid Organizations." Research in Organizational Behavior 34 (2014): 81–100.

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The Governance of Social Enterprises: Mission Drift and Accountability Challenges in Hybrid Organizations

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