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Chasing two rabbits: how social enterprises as hybrid organizations manage paradoxes

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Abstract

This study examines what kinds of paradoxes emerge in social enterprises and how they cope with those paradoxes. I argue social enterprises experience conflict due to their logic multiplicity. This research employs an inductive multiple case study design to examine management practices of social enterprises by using the sample of social enterprises in the Republic of Korea. The results empirically confirm four types of paradoxes and reveal that social enterprises use various approaches to address paradoxes, thereby sustaining their organizational hybridity. This study theoretically contributes to research on social enterprises as hybrid organizations, logic multiplicity, and organizational paradoxes.

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Notes

  1. Digital Divide Data (DDD) is a global social enterprise that developed a social business model to educate and employ disadvantaged people in developing countries, and to deliver high-quality, competitively priced business process outsourcing solutions to clients all over the world (http://www.digitaldividedata.com/).

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Acknowledgements

This research was supported by the Keimyung University Research Grant of 2018.

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Authors and Affiliations

  1. College of Business Administration, Keimyung University, 1095, Dalgubeol-daero, Dalseo-gu, Daegu, 42601, Republic of Korea

    Ji-Hoon Park

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Appendices

Appendix 1: Sample interview protocol

Q.1. Entrepreneur

  • Can you tell me about your background and how you came to start this company?

Q.2. Company

  • Can you give me general information about your company?

    • Name of company, foundation year, office location, legal forms, and formal certification from the Korea Social Enterprise Promotion Agency (KoSEA), or B Corporation in the United States

  • Could you describe the company’s mission and objectives? What social problems do you aim to address?

  • Can you give me an account of the company, from its founding to today?

  • Please describe your business model, and the degree of integration between social and commercial activities. Can you tell me about your company’s main products or services?

Q.3. Organizational tensions (paradoxes)

  • If you experienced any conflicts or tensions in managing your company as a social enterprise, what tensions did you confront to simultaneously pursue the dual mission (i.e., social and economic values)?

  • How did you manage or overcome those tensions?

Appendix 2: Overall descriptions of cases (five social enterprises in the Republic of Korea)

Case

Social problem

Business description

Types of hybrid forms

Management of paradoxes

Integrated/differentiated

Types of social-business paradoxes

Intensity of social-business paradoxes

Approaches for managing social-business paradoxes

A

People who cannot be self-reliant due to their social status or economic situations

Firm A’s mission is to promote the self-reliance of those who are socially or economically alienated. Its main businesses are 1) urban greening and 2) flower products. Through its urban greening and landscape architecture companies, A provides training programs and jobs for people who want to be self-reliant

Moderately-integrated

Beneficiary: employees

(North Korean refugees, residents of the shabby one-room town)

Paradox of performing

High

Introducing a new business through which it can successfully pursue its dual mission

Paradox of organizing

Low

Incorporating organizational elements solely associated with for-profit logic, such as a venture-like culture, process, structure, and hiring policy

Paradox of belonging

High

Communicating with each employee about his or her concerns regarding identity conflicts

Paradox of learning

Low

Introducing practices that can foster its balanced growth, such as dedicating 10% of projects as 100% donation projects in which the revenue is entirely donated, or hiring one more employee (i.e., beneficiary) when its sales volume exceeds a certain level

B

Producers in developing countries who have weak bargaining power in the market (unfair trade environment)

Firm B aims to promote the healthy development of communities in developing countries and improve the quality of life for local residents in those areas through businesses that meet “fair trade” standards. B sells products made by local residents in developing countries. With local fair trade organizations, B monitors all business processes, which include manufacturing, logistics, and pricing, to ensure they meet fair trade standards

Moderately-Integrated

Beneficiary: producers (Local weavers and farmers in the developing countries)

Paradox of performing

Moderate

Attempting to create more understandable performance indicators for the achievement of the social mission

Paradox of organizing

Low

Preparing more business-oriented organizational practices, such as systematic training programs for employees

Paradox of belonging

Moderate

Providing a session for employees to convince themselves as members of the social enterprise that pursue the dual mission

Paradox of learning

Low

Focusing on the growth of the firm’s businesses only, such as increasing its sales volume

C

Low accessibility to education for children

Firm C has several paid subscription plans, in which customers can regularly receive handicrafts produced by skillful women in a developing country who have children; the only condition for joining C’s business is that they allow their children to attend school at least twice a week

Moderately-Integrated

Beneficiary: producers (Members of handicraft cooperative), children of producers

Paradox of performing

High

Focusing on improving business performance to provide better treatment for employees, such as increasing salaries

Paradox of organizing

Low

Running the organization as a business venture by incorporating business-oriented processes

Paradox of belonging

Low

Focusing on generating economic value to maintain an appealing point as a business firm to employees

Paradox of learning

Low

Based on the firm foundation of its social mission, pursuing the firm’s economic growth

D

Education inequality among adolescents caused by socioeconomic situation

Firm D seeks to enhance adolescents’ capabilities through debating education programs regardless of their socioeconomic situation. The purpose of D’s business is to provide equal education opportunities for all adolescents in Northeast Asia. D’s profit is generated by offering debating education programs to customers, such as school teachers. Through this profit, D offers free, high-quality debating education programs to adolescents who are socioeconomically disadvantaged

Differentiated

Beneficiary: adolescents who are socioeconomically disadvantaged

Paradox of performing

Low

Making the indicator that informs of its social impact more explicit and visible

Paradox of organizing

High

During the training session for key staff (i.e., debate coaches), highlighting core values that comprise its social mission, such as the true meaning of the debate

Paradox of belonging

High

Introducing a new project which can remind staff of its social mission

Communicating with employees about the adequacy of decisions on business processes

Paradox of learning

High

Consistent discussions between proponents of firm growth and those of internal stability to maintain its dual mission

E

Lack of jobs for artists and restricted access to the art for the general public

Firm E’s mission involves providing jobs for artists by advertising their work of art to the public or by matching them to adequate job offers, and also enhancing the accessibility of the general public to the art through various programs, such as art festivals, and art education programs. Additionally, Firm E attempts to popularize social issues (e.g., recycling, multicultural families, and deprived areas) through its programs. Its main businesses are composed of (1) online/mobile docent service, (2) offline art programs (e.g., art education, art festival, art market), and (3) producing commercial contents with artists through contracts with other companies or organizations

Moderately-integrated

Beneficiary: producers (artists who are lack of jobs for a living)

Paradox of performing

High

Enhancing the quality aspect of the social performance as well as the quantity aspect of it

Paradox of organizing

Low

Running the organization as a business venture by incorporating the culture and policies in a foreign-affiliated IT company

Paradox of belonging

Moderate

Providing a session for employees to enhance their understanding of social business, in which a social mission and business excellence should be pursued simultaneously

Paradox of learning

Low

Emphasizing the expansion of the firm’s social impact to employees

Monitoring the firm’s economic growth implicitly at the top management level

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Park, JH. Chasing two rabbits: how social enterprises as hybrid organizations manage paradoxes. Asian Bus Manage 19, 407–437 (2020). https://doi.org/10.1057/s41291-019-00065-3

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