Sustaining a hybrid organization by creating an Ecosystem: The case of social enterprises in non-munificent institutional environment

Abstract

Since social enterprises (SEs) pursue the dual mission of social value creation and financial sustainability, they do not fit into traditional classification of for-profit, and not-for profit organizations. They represent a hybrid form of organization, combining for-profit and not-forprofit objectives to different degrees. However, given the extraordinary challenges facing the hybrid SEs in the non-munificent context of emerging economies, it is difficult to imagine their success. In order to address this paradox, we ask the following research question: How do hybrid SEs overcome challenges arising out of hybridity and achieve their dual objectives of social value creation and financial sustainability. We conducted an inductive case study of one social enterprise operating in India. Our findings suggest that SEs overcome hybridity challenges by creating an ecosystem involving a range of actors. Furthermore, we found the critical role played by legitimacy in the creation of ecosystem of the organization. This is more important for SEs considering the kind of legitimacy challenges these organizations typically encounter.