How to combine multiple identities and gaining stakeholders legitimacy in hybrid organizations? An organizational design response

Hybrid organizations’ success should effectively fulfill both beneficiaries’ and customers’ needs, requirements, and expectations, being embedded in the conflicting—and often incompatible—institutional logics of social mission and commercial activities. Despite the increasing attention to such a phenomenon in the business research literature, still little is known regarding how hybrid organizational structures may facilitate or hinder the co-existence of such conflicting institutional logics. Relying on an inductive comparative case study realized on 9 socially entrepreneurial NPOs—which represent significant examples of socially imprinted organizations involved in commercial activities (hybrid)—operating in the Italian socio-healthcare sector, two main concerns have arisen as particularly influenced by organizational decisions, namely (a) effectively combining multiple identities within the organization and (b) gaining legitimacy from stakeholders. Results show that a coherent identity for a hybrid organization seems to be facilitated by an integrated structure, i.e., social programs and commercial activities run in a unique organization. On the contrary, a compartmentalized organizational structure creates two separate legal entities of a social or commercial nature only and is more crucial in gaining external legitimacy. Finally, some hybrids seem to mimic both features of these organizational structures, tackling both necessities. Thus, this study provides comparisons and practice-oriented implications to implement such organizational changes and explores the complex universe of hybrid organizational design by simultaneously comparing different organizational structures.