1. Hybrid Social Ventures

In recent years, a wave of new organizations pursuing social missions has attempted to innovate by incorporating aspects of business. Such “hybrid social ventures” promise to address well-known deficiencies of the traditional charity form through financial self-sufficiency and the use of markets to address social problems at a broad scale. Although hybrid social ventures have gained wide public acclaim and captured the interest of policy-makers, previous research has provided little insight into the conditions under which they are created and the extent to which they are successful in building viable. My dissertation develops and tests several theoretical propositions about hybrid social ventures and their unique organizational characteristics. Because suitable quantitative data on social experiences has not previously been developed, I identified and tracked a sample of several hundred nascent social ventures to build a longitudinal database that integrates interviews, surveys, and archival data. Interviews with a sub-sample allowed me to identify key constructs. I then used multiple surveys with the same ventures over time to form the core of a multi-year database that grows annually with each additional cohort of applicants. Finally, I drew on detailed descriptions of each venture to code features of their organizational practices. My analyses are reflected in two research papers. In “Mission and Markets, the Organizational Viability of Hybrid Social Ventures” (job market paper), I develop and test the theory about how incorporating aspects of the business form influences the likelihood that early-stage social ventures will achieve key entrepreneurial milestones. Potential benefits of hybridity include the capacity to assemble new combinations of resources, generate creative frictions, and flexibly respond to complex, dynamic environments. However, pressures to conform to not one but multiple organizational forms give rise to organizational tension and instability. Building on previous theories from institutional sociology, I argue that hybrid social ventures will face challenges, including inattention or miscategorization on the part of resource providers, as well as internal ambivalence and uncertainty resulting from the presence of multiple organizational goals.

Empirical analyses confirm the significant consequences of these institutional pressures for the development of hybrid ventures. Comparing the progress of hybrid social ventures to that of traditional charities, I find evidence that hybrids are less successful on several measures of organizational viability, including the acquisition of external capital, legal incorporation, and delivery of an initial product or service. This finding raises further questions about how ventures might successfully navigate these pressures, thereby enabling access to the benefits of hybridity between multiple forms. I propose that the extent to which business and charitable goals are advanced through shared rather than separate practices (i.e., practice integration) may mitigate the obstacles that hybrid social ventures face. Additional analyses indeed show that practice integration diminishes the challenges hybridity poses for the achievement of key entrepreneurial milestones. Taken together, these findings contribute to emerging theories about the unique conflicts and ambiguities faced by hybrid organizational forms. A second paper based on this data, “How Did the Zebra Get its Stripes?: Individual Imprinting and the Antecedents of Hybrid Organizations” (with Julie Battilana, winner of the best paper award at the 2012 NYU Social Entrepreneurship Research Conference), takes on the question of how diverse life experiences imprint entrepreneurs, thus shaping the organizations they create. In particular, we explore whether multiple experiences can be creatively combined or whether they competitively “crowd out” each other. To address this question, we focus on two different types of imprinting mechanisms that might lead an entrepreneur to incorporate aspects of the business form in a social venture: the entrepreneur’s own direct work experience in business and indirect imprints received vicariously through their parents’ work experience in the business. Findings suggest that both direct and indirect business imprints increase the degree of incorporation of the business form in the new venture. Interestingly, non-profit imprints moderate these effects in different directions depending on whether the imprint is direct or indirect. An additional direct non-profit imprint increases the strength of the business imprint, whereas an additional indirect non-profit imprint has the opposite effect, a weakening effect. These findings suggest that direct imprinting, which is experiential and internalized, enables the combination of diverse experiences. In contrast, indirect imprinting, which is vicarious and symbolic, leads to competitive, “crowding out” effects between imprints. In other work in this area, I surveyed research on hybrid social ventures and analyzed its theoretical foundations. The paper “Social Enterprises as Hybrid Organizations: A Review and Roadmap for Organization Studies” (with Julie Battilana, conditionally accepted for publication at Academy of Management Annals) conducts a comprehensive review of organizational research on hybrid social enterprises. We introduce the concept of “hybrid organizing” – the routines, structures, and processes organizations use to manage tensions between their multiple logics – showing how this is a common and important theme for organizations that draw on aspects of multiple organizational forms. Finally, in “In Search of the Hybrid Ideal” (with Julie Battilana, John Walker, and Cheryl Dorsey, published in Stanford Social Innovation Review, 2012), we use qualitative interview data to develop a framework for hybrid social ventures and their supporters to think about the unique challenges of hybridity. Future research: I plan to continue my research on hybrid social ventures by exploring a range of questions: what is the long-term performance of hybrid social ventures? Do hybrid social ventures tend to experience “mission drift” that compromises their hybrid nature over time? How do hybrid social ventures develop practices of hybrid organizing that enable them to manage multiple pressures sustainably? How does the performance of hybrid social ventures compare with pure, for-profit ventures? To do this, I will continue to add observations to the longitudinal data collected for my dissertation while also incorporating new cohorts of social ventures into the panel. This fall, I began data collection for my next major project, a mixed-method study examining at the recent founding of non-profit health insurance cooperatives in 24 U.S. states. These new health insurance providers, financed through a quasi-random selection process with $500 million in federal loans under the Affordable Care Act, are an experiment in hybrid social venturing of unprecedented size and policy importance. My research seeks to understand how these organizations – which face extraordinary, conflicting pressures from their member-owners, federal and state regulators, and the competitive market for health insurance – organize to manage tensions between these demands. It will further seek to understand whether their introduction influences the organization and functioning of local markets for health insurance. To develop a deeper understanding of the mechanisms underlying resource acquisition by hybrid social ventures, I have also begun a field study that explores how early-stage “social business” entrepreneurs and their business plans are evaluated by potential funders and supporters. I am currently building a dataset in partnership with an incubator program that annually collects quantitative and qualitative feedback from over a thousand external reviews of social businesses. I have already begun data collection in collaboration with the incubator and will begin analysis in early 2014.