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Edited by David Billis and Colin Rochester

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Lars Fuglsang and Jørn Kjølseth Møller

In this chapter we develop a framework for analysing the challenge of dealing with innovation in hybrid public services. The main objective of the chapter is to analyse how hybridity can lead to innovation. Hybrid organisations are defined by the literature as organisations that combine multiple organisational identities and forms (Battilana and Lee, 2014), multiple institutional logics (Jay, 2013; Battilana and Lee, 2014) or sector principles (Billis, 2010). For the purpose of this chapter we define hybrid organisations as organisations that combine two or more institutional logics. An institutional logic is a socially constructed pattern of cultural symbols and material practices by which individuals and organisations provide meaning to their daily activity (Thornton et al., 2012, p. 2). For organisations, logics may translate into organisational ‘principles’ (Billis, 2010) or rules of the game. In this chapter we use logics and principles as almost interchangeable concepts but for us the overarching phenomenon is logics. The example of hybridity we analyse in this chapter is the growing ‘servitisation’ of public services. Servitisation we understand as a new institutional logic that leads public services to emphasise user-centric innovation approaches. Servitisation and the user-centric logic represent a move towards market sector principles and therefore an increase in sector hybridity.

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Benjamin Huybrechts, Julie Rijpens, Aurélie Soetens and Helen Haugh

Hybrid organisations are ‘organizations that combine institutional logics in unprecedented ways’ (Battilana and Dorado, 2010, p. 1419; Scott, 2001); they thus bring together logics from different, and often conflicting, fields into a singular organisational form. Social enterprises, for example, are typical hybrids that combine economic, social and environmental goals (Battilana and Lee, 2014; Billis, 2010; Doherty et al., 2014) and have been found to operate successfully in diverse sectors such as microfinance (Battilana and Dorado, 2010), fair trade (Huybrechts, 2012) and work integration (Pache and Santos, 2013). Although exploiting business methods to address social or environmental problems might suggest an organisational model that combines the best of both worlds, categorical confusion has been found to limit an organisation’s access to resources and negatively impact upon long-term survival (Tracey et al., 2011). Hybridity in organisations is not a new phenomenon (Billis, 2010), but interest in innovative organisational models that facilitate the achievement of double, or triple, bottom lines has recently flourished in response to global sustainability challenges (Hoffman et al., 2012). Hybrid organisations, however, face legitimacy challenges in that they are: (1) difficult to categorise within established organisational taxonomies (Aldrich and Fiol, 1994; Suchman, 1995); and (2) held to account to multiple institutional demands by audiences that use different and possibly contradictory legitimation criteria (Kraatz and Block, 2008). In turn the credibility of their claims of commitment to different sets of standards may be deemed to be unconvincing. Securing the conferment of legitimacy from stakeholders is therefore an important challenge facing hybrid organisations. Previous research, however, has not investigated the activities required to build legitimacy when an organisational form bridges two or more institutional categories.

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Johan Gärde

The organisational life of faith communities and religious congregations is changing in post-secular environments with new interactions, opportunities for collaboration and social contracts between the public and private sectors and civil society organisations (secular and religious). Religious communities with shrinking congregations and faithbased organisations (FBOs) in a post-secular environment are developing strategies for networking and collaboration with the public and private sectors. They are utilising a new discourse of solidarity and inclusion, which also attracts a larger public that goes beyond the shrinking constituencies of their own members. Collaboration has been accompanied by the growth of hybridity and hybrid organisations. Billis (2010) suggests that this occurs when an organisation from one sector, for example the civil society/third sector, adopts the different approaches and principles of the public and/or the private sector. As this chapter will show, hybrid organisational forms can bring with them the prospect of answers to difficult problems of communities and welfare. But they can also present their own inherent problems when the different principles become uncomfortable partners. I shall shortly illustrate this in a personal example.

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Gabriela Vaceková, Hana Lipovská and Jana Soukopová

The theoretical relevance and practical importance of the development of hybrid organisations around the world has been experienced, among others, by the post-communist economies. The trend towards emerging hybridisation in the transitional economies of Central and Eastern Europe (CEE) has grown significantly in recent years. The process of spanning sectoral boundaries (Billis, 2010; Dees and Anderson, 2003; Laville and Nyssens, 2001) is ‘now perhaps accelerating’ (Donnelly-Cox, 2015), especially with the development of social enterprises that seem to transcend sectors (Dees and Anderson, 2003). To date, however, we lack the means of reflecting in detail on the specific nature of hybridity in a transitional context as well as on the kinds of current public debates and policy-making discourses within which it takes place. This chapter intends to try to fill this gap. The chapter does not attempt to do justice to the considerable heterogeneity of transitional economies but focuses on the Czech Republic in an attempt to present a comprehensive picture of the way in which civil society was transformed in this one country. From the early years of the transition from communist rule, public services were seen as being delivered by hybrid organisations operating in the intersection of the market, the civil society and the public sector.

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Boers Börje and Mattias Nordqvist

The objective of this chapter is to deepen our understanding of the nature of family businesses by analysing them as hybrid organisations. We define family businesses as businesses where one or several families own the controlling majority of the shares and are actively involved in the business (Chrisman et al., 2005; Chua et al., 1999). The focus of the chapter is on the theoretical notion of family businesses as hybrid organisations, and it draws on case research based on two publicly listed family firms. Publicly listed family firms are common around the world (La Porta et al., 1999) and they illustrate explicitly the hybrid character of family businesses by combining the logic of family ownership with the expectation of delivering shareholder value (Boers and Nordqvist, 2012). We argue that hybridity is especially apparent in publicly listed family businesses, where it arises from different underlying institutional logics related to the family and the market and the private and the public. The hybrid nature of this kind of business has an impact on their decision-making, their control and/or their governance more generally. To analyse the two cases, we draw on literature on hybrid organisations, governance and family firms. The study of hybrid organisations has gained momentum in recent years (see, e.g., Battilana and Dorado, 2010; Battilana and Lee, 2014; Billis, 2010; Pache and Santos, 2013; and also this Handbook). The current focus seems to be on social enterprises as typical examples of hybrid organisations (Battilana and Lee, 2014; Doherty et al., 2014). Yet this phenomenon is not exclusive to social enterprises or the third sector: it is equally relevant for some public sector and for-profit organisations. The most common type of business is the family business (Dyer, 2003), which also represents a hybrid organisation, with the two domains of family and business constituting the source of hybridity. Family businesses have been portrayed as hybrid organisations in previous literature (e.g., Arregle et al., 2007; Boers and Nordqvist, 2012; Ljungkvist and Boers, 2017), but the concept of hybridity has not gained as much research attention as it deserves. The purpose of this chapter is to address this limitation.

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Chris Cornforth

In an era when the recent financial crisis has raised questions about the morality and sustainability of the economic system, and austerity measures have led to funding challenges for many charitable and voluntary organisations, hybrid organisational forms such as social enterprise offer a promising alternative: an ethical form of business able to address social issues and reduce the dependence on donations and government funding. However, history suggests that it can be difficult for social enterprises to maintain their social goals in the face of commercial pressures and that consequently they may succumb to mission drift. Organisational governance is important in helping to manage these competing pressures, and this chapter examines some of the main choices and challenges that social enterprises face in designing their governance structures, systems and processes. One of the challenges facing hybrid organisations, such as social enterprises, is how to combine different logics; for example, many social enterprises have to combine a commercial logic necessary for operating in the market with a ‘charitable’1 logic of pursuing a social mission (Ebrahim et al., 2014). It has been suggested that combining different logics can result in long-term instability, where one logic comes to dominate (Young et al., 2012). Indeed, traditional left-wing critiques of co-operatives and other forms of employee ownership suggested that these organisations would simply degenerate into being no different from capitalist forms of business as they succumbed to pressures from the marketplace (Mandel, 1975). This process whereby an organisation gradually loses its social mission is often called mission creep or mission drift (Minkoff and Powell, 2006; Jones, 2007). While social enterprises are not the only types of organisation to be susceptible to mission drift, they face the particular challenge of trying to manage being both a business and pursuing a social mission.

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Vivienne Milligan and Kath Hulse

While much of the literature on hybridity has emanated from Europe and North America, hybrid organisations can be found in many other countries which have qualitatively different welfare regimes (Esping-Andersen, 1990) and in which the respective roles of government, market and civil society (including both third sector organisations and family) may vary enormously (Hill, 2006). This chapter focuses on Australia where scholarship has been concerned primarily with the relationship between the third sector and government since governments began to contract out human services from the late 1980s (Considine, 2001; Lyons, 2001). In addition, there is growing interest in ideas around social enterprise, combining elements of third sector and market (Barraket and Collyer, 2010). Within this literature, however, there has been very little focus on what sorts of housing third sector organisations (HTSOs) are developing in an era in which Australian governments have decreased their direct involvement in social housing, and people in need of assistance with their housing turn increasingly to families, third sector organisations and the market. The aim of this chapter, therefore, is to apply contemporary thinking about hybrid organisations to understand the development and organisational dynamics of the Australian housing third sector. It examines how a particular set of state, market and third sector influences, combined with the Australian housing third sector’s history and organisational dynamics, have circumscribed the growth and potential social contribution of HTSOs in Australia. The chapter provides a worked example of the challenges faced by some of the larger HTSOs as they have become a distinctive group of hybrid organisations that combine elements of the public and private sectors with those of third sector organisations. We argue that this is a case of ‘fragile hybridity’ in which competing internal logics within broader political and market contexts can either constrain or enable innovation and scaling up of hybrid organisational models.

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David Billis

The background to this chapter is a period in which human problems are seemingly greater in scale and gravity than our ability to resolve them. The consequence is that it is has rarely been more important to increase our understanding of the relationship between human problems and formal organisations. It is a relationship which can be called symbiotic, since for organisations human problems are their lifeblood without which they cannot exist, whereas for those with problems the organisations often offer the hope of a solution. The symbiotic relationship is not a balanced one. At times it seems that problems are always with us, apparently insolvable and overwhelming. It is not difficult to be pessimistic and we can all make our own lists of what is going wrong in the world. Nevertheless, influenced by the work of Karl Popper (discussed in the next section) I take the approach that humankind can continually, if often painfully, develop better theories to respond to problems. It is an optimistic approach which I attempt to follow in the search for an increased understanding of the nature of hybrid organisations and their own problems. The theory of authentic sectors and their associated concepts are presented as contributions in the search.

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Philip Marcel Karré

Hybrid organisations are defined by the mixing of different and inherently contradictory characteristics. Their hybridity makes them contested phenomena. While their proponents claim that they can combine the best of different worlds – in the words of the United Kingdom (UK) periodical The Economist, ‘the security of the public sector and the derring-do of the private sector’ – their adversaries claim that they only combine the worst. Hybridity, the more critical voices warn, leads to ‘inherently confused organisations, buffeted by all sorts of contradictory pressures. This means that their internal operations can be hard to understand and their behaviour may be hard to predict’ (The Economist, 2009). This contradiction and contention is perhaps most severe where state and market meet each other and organisations have to combine the characteristics of the public and the private sector in the provision of public goods and services. It is those public?private hybrids that are looked at in this chapter. In the model developed by Billis (2010b, p. 57) they inhabit ‘zone three’, where the public and the private sector overlap.