Andy Hoffman, Faculty Member at the Erb Institute | Business for Sustainability, Co-Authors Report on Hybrid Organizations and Corporate Sustainability

There has been increasing discussion of the need to "reconceptualize firms and their objectives and to create business models that actively address ecological and social issues while remaining economically viable (Harding, 2004; Thompson & Doherty, 2006). These models have been termed blended value (Miller, Dawans, & Alter, 2009) or shared value and seek to create “economic value in a way that also creates value for society by addressing its needs and challenges” (Porter & Kramer, 2011: 4)"

Many dramatic systemic failures are pointing towards a need for significant changes in how businesses approach sustainability in their operations. There are many examples, but a few recognizable ones include, The BP oil spill in the Gulf of Mexico, Royal Dutch Shell’s dealings with the repressive Nigerian regime, and Nike’s subcontractor labor practices that approach slavery.

In this paper, Nardia Haigh and Andrew Hoffman evaluate existing strategic management and corporate sustainability literatures to provide a definitition of hybrid organizations. For the purposes of this research, a hybrid organization would "combine elements of for-profit and nonprofit domains; maintaining a mixture of market- and mission-oriented practices, beliefs, and rationale (Battilana & Dorado, 2010; Smallbone, Evans, Ekanem, & Butters, 2001) to address social and ecological issues. Hybrids have also been called social enterprises or environmental enterprises (Holt, 2011) and may be legally structured as for-profit or nonprofit, while some use both." 

Haigh and Hoffman set out to determine "ways in which hybrids challenge prevailing norms about economic growth, profit, nature, and society, seeing hybrids as potential sources of vitality in both conceptualizing and operationalizing corporate sustainability beyond its present focus on doing “less bad” (reducing negative environmental and social impacts) to incorporating a focus on doing “more good” (increasing positive environmental and social impacts)."

The team recommends six propositions to inform future research. These propositions fall into three categories: (1) challenges to beliefs about social, ecological, and economic systems; (2) challenges to competitive practices; and (3) challenges to how sustainability is enacted. In aggregate, these propositions identify ways in which hybrids are currently distinct from companies practicing mainstream corporate sustainability practices and point to how hybrids may influence these practices.

Proposition 1: Hybrid organizations are more likely to choose to limit their growth than are companies practicing mainstream corporate sustainability.

Proposition 2: Hybrid organizations are more likely to subordinate profit as a performance indicator than are companies practicing mainstream corporate sustainability.

Proposition 3: Hybrid organizations are more likely to internalize elements of the social and/ or ecological systems in which they operate than are companies practicing mainstream corporate sustainability.

Proposition 4: Hybrid organizations are more likely to strive to understand the value of nature beyond its utility resource value than are companies practicing mainstream corporate sustainability

Proposition 5: Hybrid organizations are less likely to focus on controlling resources and maintaining causal ambiguity than are companies practicing mainstream corporate sustainability

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