Taking Hybridity for Granted: Institutionalization and Hybrid Identification
Organizational Hybridity: Perspectives, Processes, Promises
ISBN: 978-1-83909-355-5, eISBN: 978-1-83909-354-8
ISSN: 0733-558X
Publication date: 7 December 2020
Abstract
As hybrid organizations become increasingly common, the authors observe that some hybrid forms are becoming institutionalized and legitimated. The authors explore the implications of the institutionalization of hybridity, addressing both the internal tensions that plague many hybrids and the external tensions stemming from evaluator assessments and stakeholder uncertainty. The authors propose that institutionalization can dampen internal tensions associated with hybridity and also facilitate legitimation and acceptance by external audiences. The authors present identity as a useful theoretical lens through which to examine these questions, as identities are born from, but also have the potential to modify, existing institutional arrangements. The authors present directions for future research at the juncture of identity, hybridity, and institutionalization, suggesting potential avenues of inquiry in this productive stream of research.
Keywords
Citation
Glynn, M.A., Hood, E.A. and Innis, B.D. (2020), "Taking Hybridity for Granted: Institutionalization and Hybrid Identification", Besharov, M.L. and Mitzinneck, B.C. (Ed.) Organizational Hybridity: Perspectives, Processes, Promises (Research in the Sociology of Organizations, Vol. 69), Emerald Publishing Limited, Leeds, pp. 53-72. https://doi.org/10.1108/S0733-558X20200000069003
Publisher
:Emerald Publishing Limited
Copyright © 2021 Mary Ann Glynn, Elizabeth A. Hood and Benjamin D. Innis.
License
Open access contract; Chapter 3 ‘Taking Hybridity for Granted: Institutionalization and Hybrid Identification’ © 2021 Mary Ann Glynn, Elizabeth A. Hood and Benjamin D. Innis. Published by Emerald Publishing Limited. This chapter is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial & non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode.
Amidst growing public attention to social issues such as climate change, poverty, and inequality, organizations increasingly seek to address these problems with their mission, purpose, and identity while still maintaining high performance. The result is that organizational hybridity – the combining of core organizational elements that potentially conflict with each other (Albert & Whetten, 1985) – is on the rise (e.g., Battilana, Besharov, & Mitzinneck, 2017). Theoretical perspectives which scholars have used to address organizational hybridity include categorization (e.g., Wry, Lounsbury, & Jennings, 2014), institutional logics (e.g., Battilana & Dorado, 2010; Pache & Santos, 2013), and – our focus here – organizational identity (e.g., Battilana & Dorado, 2010; Glynn, 2000; Golden-Biddle & Rao, 1997; Smith & Besharov, 2019). Cultivating a hybrid organizational identity that synergistically blends divergent practices, goals, and meanings is a challenge for organizations that strive to meet the needs of varied stakeholders and attend to multiple audiences (Battilana & Dorado, 2010). Although this challenge is ubiquitous among hybrid organizations, we posit that, as hybridity becomes institutionalized and thus legitimated at the field level, organizations may mitigate the challenges inherent in the construction and management of hybrid identities.
Our aim in this chapter is to explore how the institutionalization and legitimation of hybridity at the field level influences identity construction at the organizational level. As such, we begin by laying theoretical groundwork relating identity, institutions, and institutionalization. Institutions provide a set of logics, practices, symbols, values, and goals from which organizations construct identities; organizations are embedded in institutions and construct identities from the elements available to them in a given institutional context (Glynn, 2008). Furthermore, identity and institutions are both rooted in meaning. Scott defines institutions as “structures…that provide stability and meaning to social behavior” (1995, p. 33; emphasis added). Navis and Glynn (2011, p. 480, emphasis added) define identity as the “constellation of claims…that gives meaning to questions of ‘who we are’ and ‘what we do.’” Relatedly, Schatzki views meaning and identity as two sides of the same coin, describing meaning as “what something is” and identity as “who someone is”; he argues that “entities with an identity are entities that have an understanding of their own meaning” (2002, p. 47). In effect, institutions formalize systems of meaning and provide relatively concretized sets of resources – both tangible and ideational – from which organizations can construct coherent identities. As organizations craft their identities (or, as they negotiate and come to terms with their own meaning), they look to the institutional context for cues indicating the elements from which they can construct a legitimate yet distinctive identity (Navis & Glynn, 2011).
More than three decades ago, Albert and Whetten (1985, p. 270) offered an influential definition of hybrid organizational identities, as those “composed of two or more types that would not normally be expected to go together.” Hybridity, as it is typically conceptualized, involves managing inherent tradeoffs between a more economically oriented element of an organization’s identity and one oriented toward social benefit. This theme redounds in research on social enterprises (e.g., Battilana, Sengul, Pache, & Model, 2015; Golden-Biddle & Rao, 1997; Smith & Besharov, 2019; Wry & Zhao, 2018), including those that balance financial interests against social concerns as broad as community service (Almandoz, 2014), social interests (Yan, Ferraro, & Almandoz, 2019), and religious concerns (Gümüsay, Smets, & Morris, 2019). Given their apparent internal incompatibility, hybrid identities often cultivate conflict. For instance, Glynn (2000) shows hybridity-induced conflict in her study of the 1996 Atlanta Symphony Orchestra strike. Here, the inherent incompatibility of the organization’s utilitarian and expressive identity elements clashed, erupting in a battle between the symphony board and the musicians over the future of the orchestra. Relatedly, Wry and Zhao (2018) explored the tensions between social outreach and financial stability in microfinance, highlighting the cultural issues that amplify and/or dampen these tensions. Zuckerman’s (1999) notion of an illegitimacy discount, which occurs when analysts, evaluators or other audiences are unable to fit an organization cleanly into a single category to aid their assessment, speaks to the dilemma many hybrid organizations confront (Battilana et al., 2017).
In spite of the challenges associated with hybridity, however, many hybrid organizations thrive, enjoying distinct advantages over their non-hybrid competitors. For instance, Heaney and Rojas (2014) found that hybrid social movements may be able to attract a broader range of individuals to their cause. Additionally, hybrid organizations may have the benefit of developing more innovative solutions to complex problems (Jay, 2013). Not only do some hybrids thrive, but some hybrid forms are becoming more common, more readily recognized, and more widely viewed as legitimate – to the point that some hybrid identity markers are now institutionally sanctioned. For example, since 2010, 34 US states have passed laws allowing organizations to claim formal status as “benefit corporations” – organizations that make a commitment to upholding ambitious social missions while still maintaining profitability (https://benefitcorp.net/policymakers/state-by-state-status). Retailers such as Warby Parker and TOMS Shoes, among others, donate one product to a person in need for each product sold to consumers. Additionally, most organizations in cultural fields – such as symphony orchestras, museums, and theatres – are hybrids, serving both esthetic and instrumental purposes (Glynn, 2000, p. 296). Recent work by Wry et al. (2014, p. 1326) demonstrating that external stakeholders can “perceive meaningful linkages” between the multiple categories invoked by hybrids, offers a counterpoint to the illegitimacy discount imposed by external evaluators. Additionally, the classification systems used to categorize organizational identities evolve continuously, as categories emerge, decline, expand, or contract and new types of organizations emerge (e.g., Navis & Glynn, 2010; Rosa, Porac, Runser-Spanjol, & Saxon, 1999). Thus, the perceived conventionality of organizational “types that would not normally be expected to go together” (Albert and Whetten 1985, p. 270) may itself change over time, such that some hybrid forms may become institutionalized, taken-for-granted, and eventually even “expected to go together.” Institutionalization occurs when “actors…come to accept shared definitions of reality” (Phillips, Lawrence, & Hardy, 2004, p. 635), or as they come to agree on those elements that can be combined into a broad system of meaning. However, institutionalization does not necessarily eliminate the internal conflict that can be associated with hybrid identities, although it may normalize such conflict.
In sum, scholars tend to stress the unexpectedness of the combination of multiple identity elements in a hybrid identity, yet some modern forms of hybridity are far from unexpected. The two overarching questions we pose in this chapter are as follows: first, how and under what circumstances does hybridity become institutionalized or taken-for-granted in a given field?; and second, how does the institutionalization of hybridity affect processes whereby organizations construct and maintain hybrid identities? To explore these questions, we first examine the literature on organizational hybridity, paying special attention to those studies examining the dynamics of organizational identity creation and maintenance and to those studies that are cross-level, examining these dynamics in the context of field-level institutionalization. Next, we describe how the institutionalization of given hybrid elements in an organization can influence perceptions of that organization. We believe our work potentially forces us – as researchers – to reexamine how we conceptualize hybridity, extending existing theories beyond the organizational level of analysis to the field level. Additionally, we explore how institutionalization affects processes of identity construction at the organization level. Finally, we discuss the implications of our work, acknowledge our limitations, and suggest directions for future research.
A Review of the Organizational Hybridity Literature
We review relevant research on organizational hybridity, building on the robust review recently conducted by Battilana et al. (2017). Our aim differs from theirs in two key ways: first, we sought to explore hybridity at a higher level of analysis, moving beyond the organizational level to the field or institutional level; and second, we sought to explore the types of hybrid identities that are the most commonplace, looking for clues as to whether these identities are becoming institutionalized in taken-for-granted forms.
Battilana et al. (2017) conducted an expansive search of the hybrid organizations literature, using peer-reviewed journals from several disciplines, including management, organization studies, sociology, public administration, voluntary and non-profits, political science, and business history. Their search of words using hybrid as the root (e.g., hybridity and hybridizing) initially yielded 658 articles. After eliminating irrelevant articles, the authors finalized a sample of 254 articles, which they coded for the following: conceptualization of hybridity by the researcher, as organizational forms, rationales, or identities, and the theoretical approach used by the researcher, that is, transaction cost economics, institutional logics, organizational archetypes, network forms, transitioning economic regimes, organizational identity, culture, and categories. Battilana et al. (2017) found that hybridity was conceptualized in three main categories: identities, forms, and logics. The authors identified the importance of looking across the differing perspectives of hybridity, examining cases where there are more than two elements, and considering hybridity as a matter of degree rather than focusing on different types of hybrids. Battilana et al. (2017, p. 128) pointed out how hybrids pose a singular challenge for institutional theory, arguing that “hybrids seem to run counter to the core proposition of neo-institutionalism” (Battilana et al., 2017, p. 128). As anomalies, hybrids do not conform easily to institutionalized templates or established organization forms; however, we believe that this characterization of hybrids as counter-normative is limited to the nascent stages of hybridization and hybrid institutionalization.
Battilana et al. (2017, p. 136) hint at this in their speculation that “particular hybrid combinations may become seen as legitimate, institutionalized archetypes in themselves over time” (p. 136). Moreover, they recognize research by Rawhouser, Cummings, and Crane (2015) which emphasizes that there are fewer legitimation challenges for social enterprises as regulatory systems come to recognize hybrid legal forms such as the Benefit Corporation. Thus, we argue that, with institutionalization of the hybrid elements, hybrid organizations may come to be seen as legitimate and less of a challenge to institutional explanations. Institutions are not static, and the institutionalization of a hybrid form can transform previously unexpected combinations of identity elements into legitimate, accepted, and even expected identities. We investigate this proposal next. We begin with a brief look at the relevant literature, which we intend as a narrow supplement to the extensive review by Battilana et al. (2017) and which we offer simply for illustrative purposes.
Supplemental Literature Review
We searched the seven top journals in management and sociology, namely: Academy of Management Journal (AMJ), Academy of Management Review (AMR), Administrative Science Quarterly (ASQ), Organization Science (OrgSci), Organization Studies (OS), American Journal of Sociology (AJS), and American Sociological Review (ASR). We utilized the singular and plural search forms of the following terms to examine organizational hybridity at multiple levels of analysis: hybrid organization(s), hybrid category(ies), hybrid field(s), and hybrid industry(ies). In our search, we did not restrict the time parameters as we sought to examine how the interest in hybridity has ebbed and flowed over time.
Our initial search yielded 250 articles. Since not all of these articles were centered around hybrids, we took several steps to eliminate irrelevant articles. First, we removed articles that did not use some form of the word “hybrid.” Second, we eliminated those articles which only mentioned hybrids in the discussion, often alluding to potential future research. Third, we removed those articles that mentioned hybrids as a complementary topic, but did not focus on contributing to the hybridity literature. After removing these articles, our finalized list consisted of 52 articles; these are listed in the Appendix.
Similar to Battilana et al. (2017), we found that there has been an increasing number of studies surrounding hybrid organizations in recent years. The earliest article in our search on hybridity was Borys and Jemison’s (1989) theoretical article on hybrid arrangements as a form of strategic alliance. Following this, Golden-Biddle and Rao’s (1997) prominent article on Medlay, a non-profit organization, is the earliest empirical article on hybridity, in this case focusing on competing identities. Shortly thereafter, Glynn (2000) also examined hybrid identities in a study on the Atlanta symphony. Yet despite such prominent hybridity articles, the volume of articles contributing to hybridity literature remained sparse through the 2000s. From 1997 through 2009, there were at most two articles per year published on hybridity in these seven journals, with about half of those years seeing zero articles on hybridity. Up until 2010, there were a total of eight articles on hybridity; however, from 2010 through mid-2019, there was over a five-fold increase (44 articles). Clearly, scholars’ interest in organizational hybridity increased over the last decade (see Fig. 3.1). As we examined the articles, we focused on how researchers study hybrids in terms of three items: Theoretical Perspective; Level of Analysis; and the Competing Hybrid Elements.
Theoretical Perspective. Across the 52 articles, we found that the authors used a variety of theoretical perspectives to study hybrid organizations. While some articles focused entirely on one theoretical perspective, others included an additional perspective. Thirty-six articles utilized a singular perspective to examine hybridity. The most frequently used single explanations were: institutional logics (12 articles, 33.3%) and structure/forms (11 articles, 30.6%), followed by identity (5 articles, 13.9%), categories (3 articles, 8.3%), practices (3 articles, 8.3%), and frames (2 articles, 5.6%). Interestingly, only three of the five hybridity articles with identity as the primary theoretical perspective were published in management journals; the remaining two appear in sociology journals.
Almost a third of the articles (16 articles, 31%) contained an additional theoretical perspective; importantly, identity was paired with institutional logics in 11 of the 16 articles (68.8%) using two perspectives. Thus, despite early articles on organizational identity, such as Albert and Whetten (1985), hybridity scholars seem to have backgrounded identity, and foregrounded institutional logics and forms in explaining hybridity, particularly in more recent times. This coupling of logics and identity appears prominent in two main ways. First, identity enters consideration as one way the competing logics manifest themselves in the organization (e.g., Smets, Jarzabkowski, Burke, & Spee, 2015). Second, identity enters consideration as a “hybrid identity” which helps to lessen the conflict between the competing logics (e.g., Battilana & Dorado, 2010). This focus on logics and identity together is indicative of how some scholars have blended the logics and identity perspectives in their study of hybridity. Moreover, it highlights the promise of considering hybrid identity in the context of institutionalization.
Level of Analysis. Despite the frequency of using institutional logics to study hybrids, scholars have yet to explore field-level effects or the institutional origins of these logics. Of the 52 articles we examined, 28 (53.8%) focused solely on the organizational level of analysis, 21 articles (40.4%) included some cross-level analysis, and 3 articles (5.8%) did not speak to a specific level of analysis. Within the cross-level articles, 9 articles utilized the logics perspective and 8 articles utilized the forms perspective. Thus, it seems that there is still an opportunity to examine hybrids at higher levels of analysis such as the institutional or field level, and especially to focus on identity dynamics at these levels.
Competing Hybrid Elements. Almost half the studies we examined (n = 23, 45%) focused on the combination of the competing market/economic and social elements in hybrid organizations. Social elements included: the environment (York, Hargrave, & Pacheco, 2016), art (Dalpiaz, Rindova, & Ravasi, 2016), and community (Almandoz, 2014; Smets et al., 2015). Several scholars look to microfinance organizations (Battilana & Dorado, 2010; Canales, 2013; Wry & Zhao, 2018). Many studies justify this setting as an extreme case, that explicitly exposes the conflict and contestation between different hybrid elements. Although not the only research context for studying hybridity, it is nonetheless an interesting one, particularly for illuminating hybrid dynamics.
Additional Studies. We make note of additional important articles on hybridity that eluded our search. For instance, in the Academy of Management Annals, Greenwood, Raynard, Kodeih, Micelotta, and Lounsbury (2011) explore how organizations are impacted by, and respond to, institutional complexity due to multiple institutional logics at the field level. The authors highlight how organizations experience the multiplicity of institutional logics in a variety of ways and the particular type of response is dependent, in part, on the organizational identity. In another Academy of Management Annals article, Battilana and Lee (2014) focus on social enterprises to understand how organizations incorporate multiple organizational forms in hybridity; as well, they suggest social enterprises afford a rich context for studying hybrids. In their Research in Organizational Behavior publication focusing on social enterprises, Ebrahim, Battilana, and Mair (2014) propose two different types of hybrids – integrated and differentiated – which vary depending on the level of synthesis between the two hybrid elements.
In addition, several studies seem to address the dynamics of hybridity, but do not explicitly claim to research, or use the language of, hybridity. For instance, Besharov (2014) demonstrated how organizations can reap the benefits of multiple identities based on both top down and bottom up processes leading to identification and dis-identification. In a similar fashion, but focusing on multiple logics, Greenwood, Díaz, Li, and Lorente (2010) explore how organizations place emphasis on, and are impacted by, both regional and family logics in making decisions, noting specifically how family logics play a role in small firms’ decisions to downsize. In another example of examining multiple logics, Dunn and Jones (2010) explore the influence of care and science as distinct, and often competing, logics in medical education, noting how an emphasis on one yields to the other over time. Taken together, these articles reveal how hybrid organizational elements, particularly institutional logics and identities, can at times exhibit compatible or competing dynamics and do so in ways that fluctuate over time.
In summary, our search of the relevant management literature on hybrid organizations yielded several insights. From our review of 52 articles, we found that institutional logics were the dominant theoretical lens used by researchers, with organizational identity important, but found far less in explanations of hybridity. Additionally, the primary level of analysis was the organization, although there was limited cross-level research; and finally, we found that some forms of hybrids were becoming increasingly common as a subject of study by scholars, notably microfinance organizations.
Despite the growing literature on hybrid organizations, there has been limited research examining the institutionalization of hybrids, a perspective that can benefit from, and contribute to, our understanding of hybrid organizational identities. We see this oversight as due to two main factors: first, the disjointed state of the literature and proliferation of theoretical perspectives, with hybridity variously characterized in terms of logics, forms, identity, categories, practices, and frames; and second – and perhaps most critically – the limited number of studies investigating multiple levels of analysis, particularly those higher than the organizational level, at the level of field, industry or institutions. In order to advance research on the institutionalization of hybrid organizational identities, we advance a framework for addressing these concerns next.
A Conceptual Framework on the Institutionalization of Hybrid Organizational Identities
Extant research focusing specifically on the institutionalization of hybridity is limited, yet the few studies that have been published are provocative. For instance, Smets et al. (2015) examine the institutional complexity to which many hybrid organizations are subjected and show how the simultaneous enactment of multiple institutional logics becomes taken for granted. Importantly, their study suggests that the internal conflict associated with hybrid organizations can persist even post-institutionalization, as organizations hold competing logics in “dynamic tension” (p. 933). Rawhouser et al. (2015) demonstrate the regulatory sanctioning of a specific hybrid identity marker – the Benefit Corporation designation – offering further evidence of the institutionalization of hybrid identities. In an additional examination of the institutional acceptance of hybrids, Ansari, Wijen, and Gray (2013) show how actors operating under different logics negotiate shared, field-level hybrid logics, softening the boundaries between two previously opposing logics. As hybrid logics become accepted at the field level, as in the case of the climate change framing observed by Ansari et al. (2013), it may become easier for new organizations to claim and legitimate these hybrid identities. Because institutions “provide the raw material from which organizational identities are constructed” (Glynn, 2008, p. 420), institutionalization of hybrid logics at the field level may enable and even facilitate the construction of hybrid identities at the organizational level.
As previously noted, organizational identities articulate both what organizations do, and who organizations are – or at least who they say they are or claim to be. The institutionalization of a given hybrid form, logic, or category may affect either of these identity components. In doing so, institutionalization may affect both how intra-organizational actors negotiate the conflicts associated with and/or inherent in their hybrid identity, as well as how stakeholders and other external, extra-organizational evaluators perceive and assess a hybrid organization’s identity. We address each of these issues in turn.
Internal Challenges in Hybrid Identity Organizations
Hybrid organizations are marked by a tension which both enables and complicates their very existence. Post-institutionalization, these tensions do not typically disappear; however, when a given hybrid form is institutionalized, practices and processes for managing these tensions and potentially benefitting from them are also often institutionalized, potentially easing the management of hybrid identities. For example, consider healthcare as an institution. Most healthcare organizations are hybrids, in that they must balance profitability goals with values around patient care, well-being, and population health. Reay and Hinings (2009) describe how physicians and healthcare administrators developed collaborative practices for dealing with these tensions, involving, for example, forging common ground, maintaining the separation of logics when expertise is necessary, and creating spaces to facilitate experimenting with various combinations of logics. Often, when specific forms of hybridity – the combination of certain logics, categories, or forms that in some way conflict with each other – are institutionalized, so too are practices and processes that facilitate navigation of this conflict. For example, the modern music industry must balance artistic integrity and creativity with profitability and marketability. Both of these elements are readily recognized as meaningful and important to both industry insiders (musicians, producers, etc.) and consumers. Record producers must find ways to encourage innovation without alienating consumers; convincing artists to limit their creativity is inherently a tension-riddled process, yet this business model has persisted since the dawn of radio and other music distribution channels.
Although institutionalization does not necessarily resolve the tension inherent in many hybrid organizations, it often does provide tools organizations can use to manage these tensions. Recall that organizational identities are markers of meaning, and that institutions are systems of meaning. Negotiating an idiosyncratic meaning is difficult when that meaning is not accepted or legitimated within the institutional field in which the organization is embedded (Lounsbury & Glynn, 2001). Internal tension, moreover, represents only one challenge hybrid organizations face; often hybrid organizations struggle to gain legitimacy amongst stakeholders and external evaluators.
External Challenges in Hybrid Identity Organizations
Traditional conceptualizations of hybrid identities focus on the supposed unexpectedness of hybrid identities, as evidenced in the seminal definition of hybrid organizations as those “composed of two or more types that would not normally be expected to go together” (Albert & Whetten, 1985, p. 270, emphasis added). Hybrids are viewed as most unexpected when they are found in contexts where the hybrid identity is completely unfamiliar. For instance, prior to the 1970s, modern microfinance organizations were virtually unknown and, therefore, unexpected. Institutions such as the Grameen Bank, with Muhammad Yunus, paved the way for legitimation and institutionalization of the microfinance hybrid. As processes to manage the competing logics associated with microfinance became institutionalized and familiar, and as the value and meaning associated with such a business model gained acceptance and legitimacy, microfinance organizations became more commonplace.
Although limited research explores the impact the institutionalization of hybridity may have on hybrids, extant evidence suggests that post-institutionalization, hybrid organizations’ apparently conflictual identity elements may become seemingly less so (e.g., Reay & Hinings, 2009; Smets et al., 2015), and audiences may better understand how and why their distinct identity elements do in fact “go together” (Albert & Whetten, 1985). Once a given hybrid identity has been legitimated, there is typically little stakeholder confusion regarding how or why an organization claims such a hybrid identity. However, in times of crisis, even well-institutionalized hybrid forms, such as the symphony orchestra (e.g., Glynn, 2000), may confront their hybridity anew and audiences may question the conflicts between elements of their identity. Once the crisis is resolved, however, the perceived conflict may fade. Our stylized depiction of the process is shown in Fig. 3.2.
Institutionalization can furnish a kind of “safety net” that provides protection against hybrid organizations’ suffering from an illegitimacy discount (Zuckerman, 1999), at least barring a major event that spurs significant institutional change. This institutionalized safety net serves to maintain the legitimacy of hybrid identities in three ways. First, from a cognitive standpoint, institutionalization facilitates sensemaking regarding the meaning of a hybrid identity; stakeholders will tend to question the hybrid identity less. As a result, such organizations may find it easier to navigate, and make sense of, the tensions inherent to many hybrid identities; they can look to institutionalized templates as models for management. Second, from a normative standpoint, institutionalization redefines expectations and rules for legitimacy in a given context, potentially eliminating many of the social or normative penalties associated with claiming a hybrid identity. In effect, the hybrid organizational identity may itself become a category that evaluators use in determining the degree of fit for any particular organization. Third, from a regulatory standpoint, institutionalization may provide formal, recognized hybrid identity markers for organizations that legally legitimate certain forms of hybrids. We explore each of these pathways through which the institutionalization of a hybrid identity dampens the tensions associated with hybridity.
We follow Scott’s (1995) conceptualization of institutions as being composed of normative, cultural-cognitive, and regulatory pillars and apply it to the institutionalization of hybridity: cognitively, institutionalization can affect how both organization members and external stakeholders think about the relationships between the multiple identities of hybrid organizations; normatively, it can reshape the rules for legitimacy in a given context, tilting isomorphic pressures toward specific types of hybridity; and from a regulatory perspective, new formal designations have been created specifically in response to the prevalence of various forms of hybrid organizations, such as B-Corp or Benefit Corporation designations. In the following sections, we examine the effects of the institutionalization of hybridity for each pillar.
Cultural-cognitive Effects of the Institutionalization of a Hybrid Identity
The cultural-cognitive (or simply cognitive) institutional pillar focuses on how shared meanings are derived and constructed from actions, symbols, and practices. Scott (1995, p. 44) emphasizes that a cognitive perspective on institutions and institutionalization “stresses the importance of social identities: our conception of who we are and what ways of action make sense for us in a given situation.” Navis and Glynn (2011) extend this conception of identity, defining identity as two components – “who we are” and “what we do” – as an organization.
As hybrid identities become increasingly common in a given context, it becomes easier for stakeholders to grasp the cultural meaning of these identities, as they are increasingly normalized, and it becomes easier for organization members to make sense of the reasons behind cultivating a hybrid identity. Hybrid identities may be laden with conflict when they are new to a given context, when both organization members and external stakeholders struggle to make sense of the cultural meanings imbued in a given hybrid identity. As hybrid identities become institutionalized, however, frames and schemata through which to make sense of these identities are better developed, and can facilitate sensemaking processes. In doing so, such frames can reduce ambiguity and eliminate (or significantly lessen the impact of) the penalties associated with claiming a hybrid identity in a space where doing so is illegitimate (or at least non-legitimate). Additionally, much of the internal conflict associated with hybrid identities also stems from the lack of cognitive frames through which to make sense of multiple, divergent, conflicting identity elements. To the extent to which institutionalization provides such frames, institutionalization may also dampen intra-organizational conflict associated with claiming a hybrid identity.
For example, hybrid identities are becoming increasingly common in the beauty products industry. A first mover in this area, The Body Shop embraces “a commitment…to Enrich Not Exploit.” The Body Shop focuses on improving biodiversity in areas where they farm and gather ingredients for their products, never tests their products on animals, and tries to achieve sustainability in myriad ways (The Body Shop, 2020). Similarly, Alba Botanicals strives to “Do Good Do Beautiful” (Alba, 2020), applying their profits toward gender equality and animal rights issues, among other causes. And, women’s clothier, Eileen Fisher, which regularly advertises the use of “recycled polyester,” “responsible wool,” and “organic cotton” in their garments, articulates their aspirations for the field:
Our vision is for an industry where human rights and sustainability are not the effects of a particular initiative but the cause of a business well run. Where social and environmental injustices are not unfortunate outcomes but reasons to do things differently. (www.https://www.eileenfisher.com/vision-2020)
Although these dual sets of interests may have been difficult to make sense of a couple of decades ago, when such concerns about products, environmentalism, and even social justice were uncommon, organizations such as The Body Shop, Alba Botanicals, and Eileen Fisher, have helped to develop frames through which to understand the responsibility organizations have to replenish aspects of the environment that they deplete or potentially harm. Purchasing and using these sustainable products may be meaningful for many modern consumers. And, it may create norms against which external evaluators can judge corporate performance, as in the triple bottom line. The institutionalization of hybrid identities facilitates cognitive processes such as sensemaking about these identities, and in the process, may lessen the tension and conflict previously associated with claiming such an identity.
Normative Effects of Hybrid Identity Institutionalization
The normative pillar of institutions focuses on common systems of values and norms that guide the actions of those embedded within institutions. As certain hybrid identities become increasingly common in a given field, hybridity can become the norm. This is arguably occurring in the outdoor clothing market, where organizations such as Patagonia and REI have dedicated themselves to environmental issues, using their profits to pursue social ends. Patagonia, for example, defines the “what we do” element of their identity as follows: “We’re in business to save our home planet” (Patagonia, 2020). They deliberately, blatantly, and proudly claim a hybrid identity, utilizing their profits to contribute to efforts to reduce the environmental impact humans have on the environment. In doing so, they are changing the conversation about the role of business in society, at least in markets dedicated to facilitating enjoyment of the outdoors and the environment.
Scott (1995, p. 37) argues that “norms specify how things should be done; they define legitimate means to pursue valued ends.” The institutionalization of hybridity modifies the guidelines for legitimacy; hybrid identities become expected, rather than novel. As hybrid identities such as Patagonia’s become more common, new organizations in this space may be expected to conform to the values and norms set by these hybrid organizations. This is one mechanism through which hybrid identities may affect profound social change. By institutionalizing hybridity in specific markets and industries, isomorphic pressures may drive new organizations to continue down this path. Stakeholders’/consumers’ expectations and demands are of paramount importance to most organizations; once hybrid identities are institutionalized in a given context, the normative pressures to satisfy these expectations can become too strong to resist.
Regulatory Effects of Hybrid Identity Institutionalization
The regulative pillar of institutions focuses on the formal processes through which action is monitored and sanctioned – either rewarded or penalized (Scott, 1995). Some organizations signal their hybrid identities through formal, institutionally approved (sometimes even government-sanctioned) symbolic designations. For example, foods may be labeled “Fair Trade” and entire organizations may be designated as “B corporations” (or benefit corporations). Both of these formal designations were created in response to the prevalence of specific hybrid identities and practices.
Typically, organizations who hold Fair Trade designations sell commodity goods like coffee and chocolate. Before the formal Fair Trade designation existed, these organizations still engaged in many of the practices that defined their identities, showcasing “who they are” and “what they do” as organizations (Navis & Glynn, 2011). Fair Trade companies pay relatively high but just prices to exporters for raw goods such as cocoa beans, coffee beans, and cotton, preventing marginalized farmers and workers from being exploited. These practices existed as cornerstones of organizations’ identities even before the creation of the formal Fair Trade arrangement. As these practices became increasingly appreciated and utilized by other organizations, consumers began to value the products produced by Fair Trade organizations, specifically seeking them out and demanding that other producers follow suit. The formal Fair Trade designation was created as a way to institutionalize a given hybrid identity: the Fair Trade symbol signifies a simultaneous commitment to supporting marginalized farmers in developing countries, as well as a commitment to generating sufficient revenue to maintain these operations. Consumers now understand what Fair Trade means, and the formal designation represents a legitimate hybrid identity.
The formal designations of “B corporation” and “benefit corporation” have also grown rapidly in the past several years. In 2006, the organization B Lab was founded. B Lab issues a private “B corporation” certification; B corporations are “legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment” (https://bcorporation.net). This B corporation designation is a privately sanctioned, specific form of a broader organizational identity marker: benefit corporations. Since 2010, 34 states have passed legislation solidifying benefit corporations as formal categories of organizations. B corporations and benefit corporations are required to uphold commitments to applying their profits toward social benefit, and as such provide organizations with a prepackaged, institutionalized hybrid identity that legitimates the simultaneous and harmonious enactment of multiple identities. Cao, Gehman, and Grimes (2017) argue that the B corporation designation offers one method for organizations to claim a simultaneously distinctive and legitimate identity. The authors suggest, however, that the extent to which organizations emphasize this element of their identity should be driven by the context in which they are situated.
Future Research Directions
The institutionalization of hybrid identities across the cultural-cognitive, normative, and regulatory pillars of institutions can considerably dampen the penalties associated with claiming and constructing a hybrid identity. Perhaps most important to developing an understanding of institutionalized hybrids is to examine the phenomenon from additional theoretical perspectives, mainly identity. Currently, almost half of the hybridity studies in top management journals utilize institutional logics as a theoretical lens. The logics perspective is a metatheory ripe for combination with other theoretical perspectives. For example, Durand and Thornton (2018) recently called for more research at the intersection of logics and categorization. We believe research at the intersection of hybridity, logics, and identity could be equally productive. Actors embedded in any given institution are guided – in terms of both practice and cognition – by that institution’s dominant logic(s) and its associated practices. As such, identity construction processes may also be driven by logics. Future research exploring how identities are constructed under the influence of multiple institutional logics could be invaluable.
Additionally, since previous research primarily focuses on research at the organization level during periods marked by high tension and conflict, we have limited understanding of how organizations manage hybridity during more stable periods. To further understand hybridity at differing levels of institutionalization, we suggest that scholars focus on later stages in hybrid organizations’ life cycles. The current literature’s focus on early life-cycle stages or critical junctures for hybrid organizations may anchor on the problems of hybridity rather than suggest possible resolutions. We propose future research focusing on established hybrids that may benefit from the institutionalization, legitimation, or normalization of hybridity at the field or industry level. Such later life-cycle stage investigations can help to reveal whether, how, and when the challenges associated with claiming a hybrid identity may be lessened. This will help to explain the ways in which institutionalization may reduce the tensions and conflicts associated with hybridity, while identifying the tensions and conflicts which remain after institutionalization.
Conclusion
Hybrid organizations often face internal tension and conflict, as actors within them struggle to achieve divergent goals, are guided by different identities, and/or satisfy many sets of stakeholders. Additionally, external evaluators and stakeholders are often hesitant to grant legitimacy to organizations that combine distinct identities in novel ways (Hsu, 2006; Zuckerman, 1999). However, when a given hybrid identity is institutionalized – as is arguably the case with microfinance, for example (Battilana & Dorado, 2010) – organizations may develop practices to manage internal tension, and any external uncertainty and the associated legitimacy discount may weaken considerably. This uncertainty can be further reduced through formal sanctioning of certain forms of hybrid categories, as exemplified by benefit corporation designations (Gehman & Grimes, 2017; Rawhouser et al., 2015).
When structures, processes, services, categories, or identities become taken for granted, we consider them to be institutionalized; “institutionalization occurs as actors interact and come to accept shared definitions of reality” (Phillips et al., 2004, p. 635). A hybrid identity can be considered to be institutionalized when a high level of agreement exists around the identity’s cultural meaning. As systems of meaning, institutions offer the building blocks for identity construction at the organization level. As organizations seek to define their own meanings (i.e., their identities), they look to the institutional context for cues as to what is acceptable (Lounsbury & Glynn, 2001). The institutionalization of any link between competing identity elements facilitates the construction of hybrid identities and has implications for navigating both internal tension and external evaluation. As hybridity becomes increasingly commonplace, scholars must continue to study hybrid organizations in a wide variety of contexts to understand how organizations can successfully navigate the unique terrain a hybrid landscape represents.
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Appendix
Reviewed Articles on Hybrid Organizational Identities
- Prelims
- Chapter 1: Heterogeneity in Organizational Hybridity: A Configurational, Situated, and Dynamic Approach
- Section A: Multiple Theoretical Lenses
- Chapter 2: Hybridity and Institutional Logics
- Chapter 3: Taking Hybridity for Granted: Institutionalization and Hybrid Identification
- Chapter 4: Reasoning with Heuristics: A New Approach to Categories Theory and the Evaluation of Hybrids
- Chapter 5: A Paradoxical Approach to Hybridity: Integrating Dynamic Equilibrium and Disequilibrium Perspectives
- Section B: Varied Empirical Contexts
- Chapter 6: Business Sustainability as a Context for Studying Hybridity
- Chapter 7: How the Zebra Got its Stripes: Individual Founder Imprinting and Hybrid Social Ventures
- Chapter 8: New Hybrid Forms and Their Liability of Novelty
- Chapter 9: Let’s Talk about Problems: Advancing Research on Hybrid Organizing, Social Enterprises, and Institutional Context
- Section C: Multilevel and Dynamic Approaches
- Chapter 10: Shift in Hybridity in Response to Environmental Complexity: The Transformation of the Italian Guardia di Finanza
- Chapter 11: Hybrid Agency: Sheltered Workshops (1941–2019)
- Chapter 12: Institutional Settlements and Organizational Hybridity: The Rise and Fall of Supervised Consumption Sites
- Chapter 13: Legitimacy Trade-Offs in Hybrid Fields: An Illustration Through Microfinance, Impact Investing and Social Entrepreneurship
- Index