Journal of Social Entrepreneurship

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Journal of Social Entrepreneurship
ISSN: 1942-0676 (Print) 1942-0684 (Online) Journal homepage: http://www.tandfonline.com/loi/rjse20
The Distinctive Managerial Challenges of Hybrid
Organizations: Which Skills are Required?
Farah Nabil Adel Al Taji & Irene Bengo
To cite this article: Farah Nabil Adel Al Taji & Irene Bengo (2018): The Distinctive
Managerial Challenges of Hybrid Organizations: Which Skills are Required?, Journal of Social
Entrepreneurship, DOI: 10.1080/19420676.2018.1543724
To link to this article: https://doi.org/10.1080/19420676.2018.1543724
Published online: 11 Dec 2018.
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The Distinctive Managerial Challenges of Hybrid
Organizations: Which Skills are Required?
Farah Nabil Adel Al Taji and Irene Bengo
Management, Economics and Industrial Engineering Department, Politecnico di Milano, Milan, Italy
ABSTRACT
How do the distinctive managerial challenges of hybrid organizations appear in practice? Which skills can be taught to respond to
those challenges? These important questions are investigated
based on, first, an in-depth study of social incubators/accelerators
and social ventures (SVs). Second, building upon the ‘paradoxical
leadership model for social entrepreneurs’, the study associates
the specific challenges in practice with the model’s specific skills.
This study has value not only for the social entrepreneurship (SE)
literature but also for SE educators, social incubators/accelerators
and social entrepreneurs who are all engaged in the capacity
building of SVs.
KEYWORDS
Hybrid organizations; social
ventures; social
entrepreneurship education;
human resources;
capacity building
Introduction
Over the last decade, the phenomenon of social entrepreneurship (SE) has experienced impressive growth, where it has ‘gained momentum and the communities
around the world are self-organizing to directly address issues that affect them’ (Ayob
et al. 2013). Agoston (2014) claimed that failures in the system, market, government,
volunteer sector and others drive the emergence and growth of this phenomenon.
Thus, establishing social ventures (SVs) has become a trend in a wide range of fields
and sectors, such as education, healthcare, poverty, inequality, unemployment, migration and other societal challenges (Battilana et al. 2012).
SV has a variety of definitions, but two main features are commonly mentioned in
a majority of them: a social venture seeks to meet a social need, and it performs
entrepreneurial activities to generate a profit to maintain/scale the generated social
impact (Tracey and Phillips 2007; Bengo et al. 2016).
Moreover, the growth in interest in SVs is attributed to social, economic and political trends. Those trends have required SVs to pursue a social value that is the core
and main driver, while SVs have the role of managing commercial activities to achieve
a financial value that has, in turn, the role of sustaining a social impact and decreasing
reliance on donations (Doherty, Haugh, and Lyon 2014; Arena et al. 2018). This indicates that the social and commercial missions have both been set as main values and
CONTACT Farah Nabil Adel Al Taji farah.al@polimi.it
2018 Informa UK Limited, trading as Taylor & Francis Group
JOURNAL OF SOCIAL ENTREPRENEURSHIP
https://doi.org/10.1080/19420676.2018.1543724
logics of the SV organization, which has led SVs to be characterized by hybridity
(Haugh 2007). The hybrid organization refers to organizations with two or more competing logics, conflicting demands or multiple pressures (Pache and Santos 2010). SVs
have the classic form of a hybrid organization (Doherty, Haugh, and Lyon 2014).
Doherty et al. (2014) have reported that the main managerial challenges of hybrid
SVs, based on the framework developed by Austin, Stevenson, and Wei-skillern (2006),
fall into three management categories: organizational mission, financial resources and
human resources. Those aspects have gained attention because they exhibit the challenges that most distinguish SVs with two institutional logics from commercial enterprises (Simon-Moya, Revuelto-Taboada, and Ribeiro-Soriano 2012). This study addresses
the managerial area of SVs, particularly the specific distinctive challenges in managing
those three dimensions and the associated skills needed to effectively manage hybrid
organizations. The reason that this study is concerned with understanding the specific
challenges and their associated specific skills is because the need for employees
equipped with the necessary competencies to manage the distinctive challenges of
hybrid organizations is increasing; however, there is currently a lack of such employees
in this growing and changing market (Battilana et al. 2012; Napathorn 2018).
Every organization aims to stay focused on its mission, which is generally challenging, but in regard to hybrid organizations, with two missions (social and commercial),
the task is even more challenging (Napathorn 2018; Bruneel et al. 2016; Tracey and
Phillips 2007; Pache and Chowdhury 2012). The passion and commitment of the social
entrepreneur (the founder/s) can help the organization to stay focused initially, but
when the organization grows, it requires the founder/s, along with employees, to be
able to effectively maintain the two missions.
Thus, one of the major issues stressed in the literature responding to this demand
is that hiring and selection criteria as well as the development and management of
internal human capital are instrumental (Battilana et al. 2012; Bruneel et al. 2016).
Since there is a lack of employees with prior experience in hybrid organizations, there
are three possible selection options: first, employ people with a background in either
one of the sectors (nonprofit or for profit). This strategy avoids any conflict, but it
probably leads to mission drift (Battilana et al. 2012). Second, employ a mix of employees from both sectors (social and commercial), but this approach could result in fighting and conflict between the two groups (Bruneel et al. 2016). Third, employ people
with no prior experience in any of the sectors (fresh graduates) and then hold training
and professional development sessions for them about how to maintain the balance
(Battilana et al. 2012). However, this third criterion requires time and finances, which
are limited in the SV case. In conclusion, this issue of lacking employees with prior
knowledge and experience in managing hybrid organizations not only creates a shortage of human resources but also creates a dilemma in the selection criterion at SVs.
However, one possible solution to this issue is to teach students in management
and business schools about hybrid organizations and equip them with the required
competencies to manage such organizations with two competing demands. A study
on the evolution of SE education in business and management schools showed that
the interest in such schools to offer SE education significantly increased in 2014–2015
compared to 2004–2005 (Spais and Beheshti 2016). This consideration in academia has
2 F. N. A. AL TAJI AND I. BENGO
been given a prominent role by leading universities, such as Harvard, Duke, Stanford
and Oxford Universities on both sides of academia: education and research (Simon-
Moya, Revuelto-Taboada, and Ribeiro-Soriano 2012). Since then, many other universities have started to open streamlined SE programmes. Such education focuses on
‘plans, tools, theories/theoretical models and the business-related concepts’ (Spais and
Beheshti 2016).
Moreover, when Plaskoff (2012) interviewed Sarah Harris, the vice president of
Emmis Communications’ Incite entity who ‘has grown a US$7.5 million social enterprise employing 10 social entrepreneurs’ (Plaskoff 2012), Harris strongly advised business schools to equip future managers by including an SE curriculum; this advice
results from the lack of business managers’ awareness and knowledge about SE and
social innovation (SI) that Harris has noticed. However, how can business and management schools respond to this call, considering that the hybridity of SVs adds an extra
layer of complexity? (Tracey and Phillips 2007).
Pache and Chowdhury (2012) stressed that SE education is still new and ‘suffers
from a lack of clear theorizing’. Thus, a limited number of theoretical models about
how to teach or conduct training for SE have been developed and published in academic journals; some of these have focused on the hybridity issue (i.e. Smith et al.
2012; Kickul et al. 2012; Pache and Chowdhury 2012). However, the model developed
by Smith et al. (2012), which is called the ‘paradoxical leadership model for social
entrepreneurs’, strictly connects the demand side with the supply side. The demand
side is demonstrated by including two main challenges of managing organizations
with two institutional logics, while the supply side is articulated by suggesting metaand specific skills as well as pedagogical tools to teach those specific skills that are
associated, with clear links, to the two main challenges. However, this study argues
that the two main challenges included in Smith et al.’s (2012) model are still very general and do not clearly articulate the complex challenges of SVs. What is missing is
specific practical challenges demonstrating how the general challenges appear in practice and then how specific skills can be associated with them.
Building upon the work of Smith et al. (2012), this paper aims, first, to understand
the demand side by investigating, empirically, how specific managerial challenges that
emerge when working at SVs appear? The second aim is to employ the specific skills
and pedagogical tools suggested by the ‘paradoxical leadership model for social
entrepreneurs’ (Smith et al. 2012) to respond to those specific managerial challenges.
To answer the two aims described above, the remainder of the paper is organized
as follows. First, the theoretical framework is introduced, which is based on the model
proposed by Smith et al. (2012). Second, the research methods are outlined, clarifying
the criteria used for selecting the sample and collecting and analysing data. Third, the
results of this research are presented. Finally, theoretical and practical implications are
discussed in the discussion and conclusion sections.
Theoretical framework
The theoretical framework of this study is based on Smith et al.’s (2012) theoretical
perspective of the paradox theory (Lewis 2000), which provides astuteness about the
JOURNAL OF SOCIAL ENTREPRENEURSHIP 3
source, nature, challenges and responses of competing demands in organizations. For
an overview of the paradox theory literature, see Smith and Lewis (2011) and Smith
and Tracey (2016).
Smith et al. (2012) were among the first to build a theory about the challenges and
correlated skills to appropriately manage the tensions elicited from the demands of
competing logics (social and commercial) at hybrid SVs; they also suggested pedagogical tools for teaching these skills. Their theoretical model, which is called ‘a paradoxical leadership model for social entrepreneurs’, is inspired by the award-winning
undergraduate course at Cornell University (SEIP); this course demonstrates teaching
SE in a classroom setting. The main argument of the work of Smith et al. (2012) is that
‘social and commercial sides of a social enterprise are not isolated from one another.
Rather, they are inherently interrelated and often conflicting’, and that is why managing social and commercial demands require a different set of skills than those required
in a traditional enterprise (Tracey and Phillips 2007; Smith et al. 2012; Pache and
Chowdhury 2012; Miller, Wesley, and Williams 2012; Plaskoff 2012)
The framework of Smith et al. (2012), interestingly, connects the demand and supply sides, and it is structured in three main stages: first, identify the main managerial
challenges when managing social and commercial demands. In other words, the challenges faced in managing hybrid organizations demand certain skills and competencies to be managed well. Second, it identifies correlated skills to embrace such
Figure 1. Stages of the paradoxical leadership model for social entrepreneurs developed by (Smith
et al. 2012).
4 F. N. A. AL TAJI AND I. BENGO
challenges; this stage is divided into two sub-parts: meta-skills and specific skills. The
third stage of the framework is the pedagogical tools suggested to help teach the
specific skills identified in the second stage. The second and third stages illustrate the
skills and pedagogical tools for future managers who can effectively manage the challenges stated in the first stage. As shown in Figure 1, the connection that this model
tries to create between the demand and supply sides is unique among other developed models for teaching SE (i.e. Kickul et al. 2012; Miller et al. 2012; Pache and
Chowdhury 2012; Mehta, Brannon, and Zhao 2016).
Smith et al. (2012) stated in the model that there are two main challenges in managing an organization with competing social and commercial demands: the first challenge is in ‘maintaining both social mission and commercial viability’. The second
challenge is in ‘overcoming intractable conflict’. The argument here is that those two
challenges are still very general, practically speaking; they are not concrete enough to
understand their implications in practice. For instance, how do those challenges
appear? What does it take to maintain a social mission in practice? What obstacles
appear while working towards a social mission? What would limit maintaining financial
viability? How would both social and financial missions be in conflict? The answers to
those questions would advance the understanding of how the challenges of managing
hybridity at SVs, practically, appear. Then, connecting them with the correlated specific
skills and pedagogical tools is expected to allow the model to be more effective for
learning and training purposes.
The three meta-skills suggested by the model are acceptance, differentiation and
integration. Those meta-skills were broken down into six specific skills that are
intended to embrace the challenges in transforming the tension between the two
competing demands into a source of new opportunities and solutions for the organization. Meta-skills and the six specific skills are explained in greater detail later in the
Results section.
Methods
To study the distinctive challenges in managing SVs with a hybrid nature, the research
adopted an in-depth study of Italian social incubators/accelerators and Italian SVs.
Data were collected from multiple sources to capture key dimensions of the problems
analysed (Yin 1994): in-depth interviews, websites and direct observations. The analysis
was conducted with managers of social incubators and accelerators in Italy as well as
with a number of founders of Italian SVs. With regard to the data collected through
the social incubators/accelerators, the primary source of data was in-depth interviews
(Goldman and McDonald 1987) with the managers of incubators and accelerators in
particular. The interviewees were selected based on their ownership of responsibility
for the incubation and acceleration programmes in addition to their role in following
up on the progress of the incubated/accelerated SVs. While the primary source of data
collected with respect to the SVs was in-depth interviews with the founder/s of each
SV, the interviewees were selected based on their main role of establishing and then
managing their SVs since the birth of the idea.
JOURNAL OF SOCIAL ENTREPRENEURSHIP 5
Social incubators and accelerators were selected for interviews not only because of
their direct connection with many SVs but also because of their ‘profound impact on
social entrepreneurship practice by identifying and supporting innovative social entrepreneurs through training, mentoring and other means’ (Pandey et al. 2017). Thus,
their managers’ points of view about how the managerial challenges at SVs appear is
of high value, as they are outsiders to the ventures and directly support the ventures’ teams.
Three main social incubators/accelerators are selected in Italy: Impact Hub Milano,
SocialFare and Make a Cube3. These incubators/accelerators were identified after a
preliminary analysis of their websites and other public sources aimed at selecting incubators and accelerators that work with a variety of SVs and support them, especially
with reference to their hybrid nature.
Furthermore, other criteria that drove the selection of six SVs were based on two factors: SVs that had the chance to be incubated/accelerated at one of the selected social
incubators/accelerators and SVs that did not have the chance to be incubated at a social
incubator or accelerator. These ventures were identified after a preliminary analysis of
their websites as well as a discussion with the managers of the incubators/accelerators
aimed at selecting SVs with hybrid natures, at different stages and in various sectors.
Tables 1 and 2 show the selected organizations and their main characteristics.
Overall, nine interviews were conducted. Furthermore, this study had the opportunity to enrich the data collected with follow-up and informal discussions with the above
informants. Each interview lasted between 60 and 120 minutes. All the interviews were
conducted one-on-one and face-to-face except for one interview via Skype, and all the
interviews were conducted in Italy. Each interview was voice recorded and transcribed.
To analyse the data, a thematic analysis (Teddlie and Tashakkori 2009) was applied.
This is one of the most commonly used analyses in qualitative research, and it is a
technique used to pinpoint and record patterns or themes within data. After transcribing the interviews, approximately 100 single-spaced pages of material were produced
from the three incubators/accelerators and six SVs. The produced material was then
coded and summarized based on the thematic analysis. Finally, the themes were
placed side by side with previous literature to validate the analysis. The in-depth study
with incubators/accelerators covers the history of each incubator/accelerator, their
incubation/acceleration programmes and their perspective on the learning process
and challenges that face SVs during their growth. The in-depth study with the SVs
Table 1. Selected social incubators/accelerators and their main characteristics.
Organization Social incubator/accelerator Establishment Services
Impact Hub Milano Social incubator The hub was established in
2010. The incubator started
in 2015.
SVs co-working space; create
a community for SVs; rent
the space for events;
social incubator
and training.
SocialFare Social accelerator The centre was born in 2013.
The acceleration programme started in 2015.
Consultancy for SVs; social
accelerator.
Make a Cube3 Social incubator 2011. Consultancy for SVs;
social incubator.
6 F. N. A. AL TAJI AND I. BENGO
covers the history of each SV, the challenges they faced during their journeys and the
learning process each SV has experienced.
Results
This section demonstrates the results in two parts: first, the specific challenges of managing competing demands at SVs and how those challenged appear in practice and,
second, the association of those specific challenges with the specific skills and pedagogical tools suggested by Smith et al. (2012) in their model ‘a paradoxical leadership
model for social entrepreneurs’.
Specific challenges to manage SVs with competing demands
Data from the interviews elicited four themes of challenges that are distinctive for SVs
with competing demands. These were the risk of mission drift, the need for impact
measurement, stakeholders’ conflicting demands and SVs based on new technologies.
Each one of these challenges has different implications under the three managerial
dimensions defined by Austin, Stevenson, and Wei-skillern (2006): organization
Table 2. Selected SVs and their main characteristics.
Organization
Being in social
incubator/accelerator
Establishment of
the idea
No. of workers at the
date of interview Social value
Italia nonprofit Yes 2014 2 co-founders and 2
freelancers.
Access to information
about nonprofit organizations in Italy to
increase the value
of donations.
Sport Grand Tour Yes 2015 1 founder, 2 workers
and 4 freelancers.
Open the space for kids
to discover their talent
in the sport by giving
them choices and the
opportunity to try
before officially registering in any
sports club.
Yeerida Yes 2012 3 co-founders and
3 workers.
Digital library to everyone
allows people read and
consult texts; allows
publishers and authors
to promote their work
and stay in touch with
their readers.
Merkur.io Yes 2016 3 co-founders. Secure, fast and scalable
payment network for
growing economies
based on blockchain technology.
Helperbit No 2014 6 co-founders. Transparent, free and
secure way to
fundraise based on
blockchain technology.
Merits No 2015 2 co-founders and
2 workers.
An innovative network to
donate to social organizations using the
digital currency Merits.
JOURNAL OF SOCIAL ENTREPRENEURSHIP 7
mission, financial resources and human resources. Table 3 shows how each of the elicited challenges appears within those three managerial dimensions.
Organizational mission
Two main tensions are expected to appear when talking about the organizational mission of a hybrid organization: risk of mission drift and stakeholders’ conflicting
demands (Doherty, Haugh, and Lyon 2014; Pache and Chowdhury 2012). Both managers of incubators/accelerators and founders of SVs stressed the point that it is challenging to stay focused on the main missions (social and financial) and be able to
communicate the organizational mission strongly. According to the manager of the
SocialFare accelerator,
Launching a venture is really tough; if you are social, it’s probably even tougher, as you
have to stay true to your mission and vision, so you are aware of this mission drift
problem … This can come at the expense of the social value of the project; it never
happened to us but it’s always a balancing and trade-off between these two values,
although all of the start-ups that we accelerated had very clear and strong social visions
and social vocations.
Additionally, because of the nature of such ventures, they are multi-stakeholder organizations, where stakeholders have different demands, which, in turn, creates challenges
about how to communicate with each stakeholder. As the co-founder of Merits stated,
We often said that to start talking is similar to a teenager who is defining their identity,
so an important part of that is the work that we are doing now with service designers,
and it is about really defining our identity and the identity of our stakeholders, how and
why they interact with us … You know that if you meet a business, you have to speak a
certain language; if you meet the 3rd sector benefits association, you have to speak
another language; if you meet small entrepreneurs who want to help you, you have to
speak a different language than if you meet a big corporation.
In particular, the results demonstrate the third challenge that is relevant to SVs
based on new technologies, such as blockchain. For example, the lack of knowledge
about blockchain technology creates a perception that it is an evil technology, and
this, of course, contradicts the use of such technology to create social impacts, which,
in turn, creates an extra layer of complexity for social entrepreneurs when defining
their SV identity. The co-founder of Helperbit elaborated on this point:
The main challenge, in my opinion, is the lack of trust in Bitcoin and blockchain because
many people read news about the coin and they think the coin is illegal, is evil, and is
used only by the Mafia … but obviously, it is not, and we are the best example for this
because Bitcoin and blockchain are just technology, are just tools … it is quite complex,
Table 3. Distinctive managerial challenges and their presence under the three managerial dimensions defined by Austin, Stevenson, and Wei-skillern (2006).
Organizational mission Financial resources Human resources
Risk of mission drift X X X
Stakeholders’ conflicting demands X X X
The need for impact measurement X X
SV based on new technology X X X
8 F. N. A. AL TAJI AND I. BENGO
and we have to help NGOs to understand the technology… NGOs are quite scared by
this at the moment.
Financial resources
Social entrepreneurs face difficulties in raising capital mainly because capital investors
are not comfortable with hybrid organizations as an investment, but impact investors
are more comfortable with those organizations (Battilana et al. 2012). However, impact
investment is still an emerging field, which is why the managers of incubators/accelerators, as well as the founders of SVs, raised this point as a challenge. The manager of
Impact Hub Milano said:
Some people have very interesting business models in the environmental or social
arenas … I heard investors say ‘but you are not social because you make a profit, or you
make a great deal of money, too much money’… for example, there is a start-up here
called job network; it’s a marketplace to match people with disabilities, physical
disabilities, with a job in Italy or around the world … because they make money through
the company for these kinds of people like a normal head-hunter … I heard people that
say but how do you calculate the impact and … I remember the answer of the investor
who is a venture capitalist said no … in fact, now I would like to talk more about impact
investing and not more about social innovation because, in Italy, when you say social
innovation, it is philanthropy, clerical, with no profit.
Moreover, it is not only difficult to obtain the support of investors for SVs that
make money in addition to having a social impact but also to obtain the support of
public institutions. According to the founder of Sport Grand Tour,
Like schools and municipalities and so on, they don’t want to work with for profit companies
because they say we cannot promote one company and not the other. In my opinion, it’s
okay, this approach is okay, but if you recognize from a legal point of view the social impact,
because we are innovative start-up with a social impact, so if you recognize this because you
made the law and incentives in order to invest in social impacts because you think social
impact is important so your institution must recognize this.
In addition to the issue of external stakeholders’ misconceptions about SVs, another
two challenges have been raised with regard to financial resources, which are the risk
of mission drift and the need for impact measurement, as shown in Table 3. However,
the risk of mission drift occurs because social entrepreneurs have to be focused on
market needs in addition to social needs, and in many cases, they are not the same
(Alberti and Varon Garrido 2017). On the other hand, impact measurement is continuously a demand of investors, governments and other stakeholders. However, there are
no standard measures for social impacts, and the cost of such measurements is
stressed as distinctive challenges for SVs in the interviews. According to an interview
with the manager of Make a Cube3 incubator,
There should be a standard methodology to measure it, so standard communicators …
you have to balance this trade-off between reliability, in terms of scientific measurement,
and the cost and time that an entrepreneur is going to spend on that topic.
With respect to new technologies, the co-founder of Helperbit talked about how
using new technology such as blockchain adds a third dimension to the fundraising discussion:
JOURNAL OF SOCIAL ENTREPRENEURSHIP 9
It depends on who is the investor because we are talking with banks and
insurance companies. For example, banks are not into the insurance part and only
want to be involved in the humanitarian part from the technology point of view
and the visibility point of view, so they want social impact, while, for example,
insurance companies want the technology aspect and the insurance service, while,
regarding the social part, they don’t care about it. If this process includes banks
and insurance companies, it is then very long, very complex … because they
prefer a mature technology.
Human resources
SVs with dual missions require workers from different backgrounds and with different
interests to meet the needs of both missions (Dufays and Huybrechts 2016). The
results show that human resource issues are relevant to the four challenges: risk of
mission drift, impact measurement, managing multi-stakeholders’ demands and technology. For instance, when people who work at SVs (i.e. founders, employees, volunteers) are not competent enough about what an organization with competing
demands is, this raises the risk of mission drift as well as the possibility of creating an
internal conflict between people with a social orientation and people with a business
focus. The manager of Make a Cube3 incubator opined that
Usually, when talking about the challenges and the barriers in the ecosystem, we always
need more investors, and that’s a part of the supply side. However, we also need much
more maturity on the demand side; I feel that it’s the most important need of all. I think
that once we are able to demonstrate the talented people working on social issues and
finding a sustainable, not a scalable and profitable business model, but a sustainable
business model, money will come.
The manager of the Make a Cube3 incubator elaborated more on the conflict that
might occur between internal stakeholders, such as workers who come from a social
background and others who come from the business background.
When we talk about targeting the market, for example, they (people coming from the 3rd
sector) say “I have worked with these people for 15 years, I know them perfectly,” and
yes, you know one part, you know your beneficiaries, but your beneficiary is not always
your customer, so you have to focus on which is the perceiving process of your position
according to your customer, not only according to your beneficiary … talking to people
coming from the for profit sector, the big challenge is that they lack the deep knowledge
of the social issue they are going to tackle, and it’s not so easy in the beneficiary issues
and not just in the customer issues … in general, something that is really important in
vocal terms is also to understand that in the social sector you have to develop
experiments in order to understand the potential of your idea, and you want to validate
the process.
The challenge of impact measurement with respect to human resources is twofold:
(1) the need for competences capable of providing reliable and effective impact measurements and (2) the need for people who can communicate the created social impact
by the SV. On the other hand, the challenge of SVs based on new technology requires
competences to convince different stakeholders about the capability of the new technology to generate a social impact.
10 F. N. A. AL TAJI AND I. BENGO
Synthetic analysis
Figure 2 shows a synthetic analysis of the specific challenges identified from the
results of the interviews. Figure 2 illustrates how the three managerial aspects (organizational mission, financial resources and human resources) are each connected with
the four specific challenges (risk of mission drift, the need for impact measurement,
stakeholders’ conflicting demands, SVs based on new technology); furthermore, the
figure provides a description of each specific challenge.
Association of the specific challenges with the specific skills and pedagogical
tools suggested by Smith et al. (2012)
The second part of the results connects the four specific challenges extracted in the
first part of the results with the six specific skills suggested by Smith et al.’s (2012)
model, as shown in Table 4.
Based on the model of Smith et al. (2012), the definitions of the three meta-skills
and suggested six specific skills with the pedagogical tools to teach them in a classroom setting are as follows. Additionally, an explanation of how Table 4 has been
developed to integrate the specific challenges in practice with the skills of the model
is as follows.
Acceptance
This ‘involves viewing both sides of competing demands as simultaneously possible,
even if they are inherently in conflict’ (Smith et al. 2012). In other words, the acceptance of both missions at hybrid organizations, in this case the social and commercial
Figure 2. A synthetic analysis of the specific challenges of managing SVs with competing demands.
JOURNAL OF SOCIAL ENTREPRENEURSHIP 11
missions at SVs, would influence the commitment to each mission and open minds to
recognize such competing demands as a blessing but not a burden. Two specific skills
have been suggested in correlation with acceptance.
Adopting an abundance mentality. This specific skill helps managers at SVs to accept
both competing demands by thinking of a problem as an opportunity, building community and opening dialogue to look for possibilities rather than limitations and difficulties. This skill can be enhanced in a classroom setting by enabling students to
share ideas, learn from one another, support each other while completing a certain
task, in other words, to collaborate rather than compete with each other. This can also
be achieved through grading strategies if they are based on collaboration instead of
competition. Further, this can be achieved by assigning exercises about how to provide constructive feedback to one another and to oneself as well as exercises to stimulate thinking of as many positive things as they can about a given scenario. In Table
4, associating this specific skill with the two specific challenges, risk of mission drift
and stakeholders’ conflicting demands, has been suggested. An abundance mentality
can help managers avoid mission drift by being able to accept both social and commercial demands, which, in turn, help managers focus on each demand. Furthermore,
accepting both demands is sufficient to open the space for building communities
from both sides, which is essential to decrease the risk of mission drift. On the other
hand, managing stakeholders’ conflicting demands requires an abundance mentality
to open minds to accept diversity in stakeholders’ methods of thinking and
their demands.
Table 4. Association of the specific challenges with the suggested specific skills by Smith
et al. (2012).
Specific challenges
Meta-skills Specific skills
Risk of
mission drift
The need for
impact
measurement
Stakeholder’s
conflicting
demands
SV based on
new technology
Acceptance Adopting an
Abundance
Mentality
x x
Embracing
Paradoxical
Thinking
x x
Differentiation Recognizing the
Distinct Value of
Each Domain
x x
Mindfully
Attending to
Distinctions
Between
Domains
x X
Integration Developing Trust,
Openness, and
Cultural
Sensitivity
x x X
Seeking Synergies
in
Decision Making
x x x
12 F. N. A. AL TAJI AND I. BENGO
Embracing paradoxical thinking. This is the ability to recognize competing demands
on each side. When two different actors have not only different but competing
demands, then decisions are most likely made based on the ‘either/or’ strategy.
Paradoxical thinking allows managers to first recognize both demands and then
accept them, which leads to making decisions based on a different strategy, ‘both/
and’. This skill can be taught to students in a classroom setting by exposing them to
scenarios, through readings or role playing, in which two different actors are in the
same situation but have different and competing demands. In Table 4, associating this
specific skill with the two specific challenges, risk of mission drift and stakeholders’
conflicting demands, has been suggested. Recognizing the conflicting demands of different sides (social and commercial) or different actors (volunteers and employees or
beneficiaries and clients) has a vital role in avoiding mission drift and managing stakeholders’ competing demands.
Differentiation
This refers to being able to differentiate the characteristics of each side of competing
demands, including each side’s added value, which is the step after acceptance and
feeling more committed to both sides; differentiation will take managers a step further
toward maintaining their commitment to each side. In this case, that is their commitment to social and commercial demands. Two specific skills have been suggested by
Smith et al. (2012) to encourage differentiation.
Recognizing the distinct value of each domain. To recognize the distinct elements
of each domain, the capability to develop and measure each mission separately from
the other is crucial. Teaching students in the classroom to develop a business plan
and measure social impact, for example, would influence their ability to distinguish
the value of each domain. Furthermore, giving students the opportunity to develop
an idea for a SV and build its business model and plan on how to generate its social
value is another possible way of learning differentiation. In Table 4, associating this
specific skill with the two specific challenges, risk of mission drift and the need for
impact measurement has been suggested. Because recognizing the distinct value of
each domain is about giving students (future managers of SV) tools for measuring
social impacts and developing a business plan that, in turn, allows them to stay
focused on market needs and value creation and provides them with measures, so
this value can be communicated later to mobilize resources.
Mindfully attending to distinctions between domains. This specific skill is more
about ‘the ability to seek out novel information about the domains, which in turn enables leaders to make nuanced distinctions between the domains’ (Smith et al. 2012).
To teach students in the classroom on how to seek novel information about each
domain, training about divergent thinking, as one example, can be facilitated. This
means asking students to think of alternatives to one problem or question rather than
providing only one solution. In Table 4, associating this specific skill with the two specific challenges, stakeholders’ conflicting demands and SVs based on new technology,
has been suggested. The capability of thinking of many alternative solutions to one
JOURNAL OF SOCIAL ENTREPRENEURSHIP 13
aspect or problem can help managers find different ways of communicating complexity, such as the complexity of new technology. Additionally, to be able to recognize
specific distinctions between the demands of different stakeholders (investors and
government) would probably help managers to think of a variety of solutions for how
to deal with the demands they face.
Integration
This refers to the ability to integrate both sides of conflicting demands constructively
rather than destructively. Integration is a third step after maintaining commitment
through differentiation to help managers and creating ‘synergies between contradictory elements’ (Smith et al. 2012). Two specific skills have been correlated with
integration.
Developing trust, openness, and cultural sensitivity. The skill of creating a safe
space characterized by openness, trust and cultural sensitivity and including actors
who are strongly committed to the different sides (social and commercial) would allow
for an open environment to exchange ideas and opinions. Such environments are a
fruitful space for managers to understand complexity and find new methods of integration. This skill can be taught in a classroom setting through field projects by giving
students the opportunity to go outside the classroom and work with real SVs.
Furthermore, teachers can create groups of students with a safe space for all group
members to exchange personal perspectives and goals. Such groups without judgemental mindsets are sufficient to train students about being accepting of diversity and
open to other cultures. In Table 4, associating this specific skill with the three specific
challenges, risk of mission drift, stakeholders’ conflicting demands and SVs based on
new technology, has been suggested. The main reason for this association is that
developing trust, openness and cultural sensitivity is important for creating a community and open communication between internal stakeholders (i.e. founders, employees
and volunteers) as well as with external stakeholders (i.e. investors, other SVs, beneficiaries, clients and public sector), which, in turn, is expected to lead to finding new
methods of mutual understanding and the integration of ideas.
Seeking synergies in decision-making. This is the ability to make decisions while
making sure that both sides of competing demands are supported. This competence
can be taught to students by developing their idea for creating an SV, the one they
developed for differentiation, but this time, their thinking is stimulated to show how
the success of their idea is based on the integration between social and business
demands. In addition, in the classroom, inviting social entrepreneurs as role models to
tell stories about decisions they have made successfully while supporting both sides
(social and commercial) would help students learn integration. In Table 4, associating
this specific skill with the three specific challenges, risk of mission drift, the need for
impact measurement and stakeholders’ conflicting demands, has been suggested. This
association is considered because the skill of decision-making is important to avoid
mission drift, use conflict as an opportunity rather than a burden and help balance different domains and needs.
14 F. N. A. AL TAJI AND I. BENGO
Discussion and conclusion
The paper contributes to the social entrepreneurship literature by adding to the
debate regarding the distinctive managerial challenges of hybrid organizations
(Simon-Moya et al. 2012). Those distinctive challenges call for different managerial
competencies than those needed for traditional ventures (Battilana et al. 2012).
However, SE education, which is expected to contribute to the capacity building of
SVs as hybrid organizations (Kickul, Janssen-Selvadurai, and Griffiths 2012), ‘suffers
from a lack of clear theorizing’ (Pache and Chowdhury 2012).
The empirical analysis of this study is framed by the model proposed by Smith
et al. (2012). Based on this framework, the paper analyses how a better understanding
of how the distinctive specific challenges appear in practice; accordingly, the model
suggested by Smith et al. (2012) has been extended. The model is extended by, first,
correlating the investigated distinctive specific challenges with the three managerial
dimensions defined by Austin, Stevenson, and Wei-skillern (2006) (organization mission, financial resources, human resources). Second, those specific challenges are associated with the model’s specific skills and pedagogical tools. An outcome of this
paper, this extended model contributes to the theorizing of SE education and is
expected to have implications for SE education, where educators in the field can benefit from it to improve their SE training and teaching materials. This research is important because social entrepreneurs, social incubators/accelerators and educators in the
field are increasingly engaged in capacity-building efforts to further advance the capability of SVs’ human capital.
Four distinctive specific challenges are elicited in this paper: risk of mission drift,
the need for impact measurement, stakeholders’ confecting demands and SVs based
on new technology. However, an unexpected result is the challenge of SVs based on
new technology. The results show that a new technology, such as blockchain, adds a
third dimension in addition to the other two dimensions (social and commercial). This
might open an interesting venue for future research about how new technology, such
as blockchain technology, might add an extra layer of complexity when managing SVs
with hybrid natures. In addition, there is the question of whether there are distinct
challenges when managing such SVs. However, few studies have addressed SVs based
on new technology (i.e. Ismail, Hossain, and Nor 2012; Arena et al. 2018). The other
three challenges elicited in this paper are consistent with the literature (Tracey and
Phillips 2007; Doherty, Haugh, and Lyon 2014). This paper shows how all of these specific challenges appear in practice and what it takes to effectively embrace each of
those challenges.
Thinking and communication skills with internal and external stakeholders illustrate
the most important skills, whereas the suggested specific skills in Smith et al.’s (2012)
model strongly focus on soft skills, thinking abilities and fieldwork, which are highly
required in managing SVs with hybrid natures. However, two points for further
improvement are suggested as follows: first, allow for more experimental learning
(Pache and Chowdhury 2012; Chang, Benamraoui, and Rieple 2014; Tracey and Phillips
2007) to enhance communication skills with different actors in the SE system. This can
be applied, for example, by exposing students to their expected beneficiaries and clients while working on the big idea project.
JOURNAL OF SOCIAL ENTREPRENEURSHIP 15
Second, strengthen the model with a stronger theoretical basis in addition to the
suggested specific skills. However, the interaction between individuals, field (practice)
and domain (theories) is argued to provide a sufficient learning experience and to
encourage creativity (Csikszentmihalyi 1999). The extended model suggested by this
paper, by adding the specific challenges correlated with the three managerial aspects,
provides a foundation for how to correlate theories with the model to further enhance
students’ knowledge of hybrid organizations (i.e. theory of change, SVs scaling strategies, typologies of hybrid organizations, and the stakeholder theory). This invites further reflection about how to extend the model with theories.
This study is limited in its ability to generalize the results of the specific challenges
because it was based on a limited number of SVs and incubators/accelerators.
Therefore, future research should test the four specific challenges with a larger sample
of SVs and social incubators/accelerators using a quantitative approach to create
opportunities for generalizability, particularly with regard to what has been noted
about SVs based on new technology.
Moreover, future research should test the model by conducting an experiment on a
sample of students by developing measures for each specific skill to measure the
effectiveness of the model in a classroom setting. On the other hand, the model could
be used to evaluate the gaps in any SE educational programme.
Disclosure statement
No potential conflict of interest was reported by the author.
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