Cracking the Organizational Challenge of Pursuing Joint Social and Financial Goals: Social Enterprise as a Laboratory to Understand Hybrid Organizing

Julie  Battilana

Article | M@n@gement | 2018

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.

Keywords: hybrid organizations; hybrid organizing; multiple goals; Social Enterprise; Goals and Objectives; Organizational Design; Organizational Culture;

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Battilana, Julie. "Cracking the Organizational Challenge of Pursuing Joint Social and Financial Goals: Social Enterprise as a Laboratory to Understand Hybrid Organizing." M@n@gement 21, no. 4 (2018): 1278–1305.

Brothers André and Daniel Albuquerque founded the company Terra Nova in 2001 to mediate land disputes between poor families illegally living in urban areas and the official landowners—with the aspiration to improve the lives of the poor. A business-led approach to the issue, like Terra Nova’s, was innovative and contested amid the widespread belief that land disputes fell solely within the public sector’s purview. After struggling to develop a viable business model, the company received support from impact investing firm MOV Investimentos. By 2019, Terra Nova finally broke even and was exploring opportunities for scaling. But its leaders had to decide the right expansion model for the social business.

Chapter | Handbook of Inclusive Innovation | 2019

Problem, Person, and Pathway: A Framework for Social Innovators

Julie Battilana, Brittany Butler, Marissa Kimsey, Johanna Mair, Christopher Marquis and Christian Seelos

As the appetite for learning about social innovation intensifies, how can we better prepare practitioners for the work of addressing the world’s pressing social problems at the relevant scale? This chapter presents the “3P” framework that we developed to help address this challenge, grounded in our experience researching, teaching, and advising social innovators around the world. In this framework, we propose three key lenses to help social innovators contribute to social change, unpacking the nature of: the problem at hand, the person pursuing change, and the pathway to change. Considering the alignment of these 3Ps provides an organizing template for social innovators to think about how they can effectively contribute to solving social problems. We illustrate how we engage new and experienced social innovators in this learning journey by discussing our pedagogical approach as educators. In conclusion, we discuss future research directions to help address unanswered questions.

Keywords: social innovation; Social Entrepreneurship; Social Issues; Change; Problems and Challenges;

Citation:

Battilana, Julie, Brittany Butler, Marissa Kimsey, Johanna Mair, Christopher Marquis, and Christian Seelos. "Problem, Person, and Pathway: A Framework for Social Innovators." In Handbook of Inclusive Innovation: The Role of Organizations, Markets and Communities in Social Innovation, edited by Gerard George, Ted Baker, Paul Tracey, and Havovi Joshi, 61–74. Cheltenham, UK: Edward Elgar Publishing, 2019. View Details

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Cracking the Organizational Challenge of Pursuing Joint Social and Financial Goals: Social Enterprise as a Laboratory to Understand Hybrid Organizing

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