Much recent work on hybrids has focused on the strategies and practices these organizations develop to manage the institutional contradictions associated with straddling competing logics. Less attention has been paid to what we call the liability of novelty, defined as the heightened institutional challenges new hybrid forms face both internally and externally. These, we argue, go beyond the liability of newness commonly associated with new venture formation. In this chapter, we use the case of Incubate, a Muslim social incubator in Germany. This case is particularly instructive insofar as Incubate is a hybrid in both substance and mode of organizing: Its mission integrated domains of religion, commerce, and community, and its mode of organizing straddled the digital–analog divide. Neither Incubate’s members, nor its external stakeholders could rely on existing institutional templates to make sense of it. It was not only organizationally new, but also institutionally novel. As a consequence, it experienced what we distinguish as descriptive and evaluative challenges. It was both “not understood” and “not accepted.” This chapter outlines four practices to address these challenges: codifying, crafting, conforming, and configuring, and categorizes them along internal versus external as well as forming versus transforming dimensions.
Gümüsay, A.A. and Smets, M. (2020), "New Hybrid Forms and Their Liability of Novelty", Besharov, M.L. and Mitzinneck, B.C. (Ed.) Organizational Hybridity: Perspectives, Processes, Promises (Research in the Sociology of Organizations, Vol. 69), Emerald Publishing Limited, Bingley, pp. 167-187. https://doi.org/10.1108/S0733-558X20200000069008
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Copyright © 2021 Ali Aslan Gümüsay and Michael Smets.
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Hybrid organizations commonly embrace diverse institutional logics (Friedland & Alford, 1991; Thornton, Ocasio, & Lounsbury, 2012). For instance, social entrepreneurs draw from the institutional logics of market and community (Doherty, Haugh, & Lyon, 2014) to pursue both commercial value and social values (Gümüsay, 2018; Wry & York, 2017). They confront the resultant institutional pluralism (Kraatz & Block, 2008) by developing strategies and practices that constructively engage with the competing institutional logics, and sustain a hybrid form (Battilana & Lee, 2014; Gümüsay, Smets, & Morris, 2020; Kraatz & Block, 2008; Mair, Mayer, & Lutz, 2015; Smets, Jarzabkowski, Burke, & Spee, 2015; Smith & Besharov, 2019).
In this chapter, we focus on how to legitimize a new hybrid organizational form (Huybrechts & Haugh, 2017; Tracey, Phillips, & Jarvis, 2011). In doing so, we respond to calls for deeper connections between institutional theory and entrepreneurship (Bruton, Ahlstrom, & Li, 2010; Tolbert, David, & Sine, 2010) as well as social entrepreneurship (Smith, Gonin, & Besharov, 2013). Building on existing research that emphasizes how novelty intensifies the experience of institutional tensions (Smets, Morris, & Greenwood, 2012), we argue that new hybrid forms – compared to established hybrids – face intensified institutional tension and scrutiny because of the lack of an established template (Gümüsay et al., 2020; see also Wry & Durand, this volume). We therefore explore the additional challenges of integrating institutional elements in a novel yet coherent way in the face of skepticism and adversity. Notably, the lack of a template may concern the hybrid’s novel mission, or substance, as well as its innovative delivery, or mode of organizing. Establishing a coherent new organizational form requires an engagement with taken-for-granted cognitive and normative categories to develop what Greenwood and Suddaby (2006, p. 30) call an “archetypical configuration” that is deemed appropriate and legitimate. The study is hence motivated by the following research question: How do new hybrid organizational forms engage with the liability of novelty?
To answer this question, we conducted an in-depth case study of a Muslim social incubator in Germany, which we dub Incubate. In contrast to most hybrids documented in the literature, Incubate incorporates three logics: market, community and religion (Gümüsay, 2015). In addition to its substance, its mode of organizing is also hybrid, relying primarily on digital engagement, complemented with physical events. As a result of this multi-dimensional hybridity (see also Glynn, Hood, & Innis, this volume), Incubate concurrently grapples with the institutional complexities of a new socio-religious incubator, and its hybrid form of organizing across the analogue–digital divide.
This chapter makes two theoretical contributions: first, we extend the concept of “liability of newness” (Stinchcombe, 1965), that is, “the higher propensity for younger organizations to die” (Singh, Tucker, & House, 1986, p. 171) and introduce the notion of a “liability of novelty.” This captures the higher “legitimacy threshold” (Zimmerman & Zeitz, 2002, p. 414) of new organizational forms. They face this higher threshold, we argue, as they set out to deliver benefits that the current institutional infrastructure is sceptical about and does not yet recognize as valid. There is thus a higher propensity for new forms to be deemed inappropriate. Put differently, the legitimacy threshold for ventures that are institutionally novel is higher than for those that are merely organizationally new. This is because they face both descriptive and evaluative liabilities, that is, a new organizational form can be both “not understood” and “not accepted”. How new hybrids pass this higher threshold is important to understand, as it determines to what extent novel solutions to existing social problems become available.
Second, the chapter offers insights into how hybrid organizational forms deal with their liability of novelty both internally and externally. The liability of newness typically centers on the challenge of making a new organization understandable and palatable to an external audience, while initiating and developing internal cohesion and coordination. By comparison, figuring out a new form faces the dual challenge of explaining and justifying new templates to external audiences, while internal constituents are still figuring out how the logics they represent interrelate. New hybrids, we argue, address these internal and external challenges concurrently in a way that balances novelty and familiarity: Internally, they incorporate novelty while struggling to remain cohesive. Externally, they attempt to fit into the existing institutional context without losing their novelty. We identify four specific practices by which they do so: codifying the new form, crafting novel templates, conforming to established forms, and configuring the institutional environment. These practices are concurrently formative – stabilizing the organization’s inner workings (codifying) and blending in externally (conforming) and transformative – experimenting with new structures, practices, and identities (crafting), and constructing an institutional niche that facilitates access to various forms of capital (configuring).
New Hybrid Organizational Forms
Novelty of Organizational Forms
An organizational form is “an archetypal configuration of structures and practices given coherence by underlying values regarded as appropriate within an institutional context” (Greenwood & Suddaby, 2006, p. 30). In this context, “appropriateness” in an institutional context has typically been evaluated through organizational legitimacy, “a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definition” (Suchman, 1995, p. 574). For a new organizational form this is particularly challenging as it is not an incremental evolution, but a fundamentally novel configuration of characteristics that gives rise to both external and internal challenges.
Externally, the organization needs to engage with its novelty in the institutional field as its legitimacy cannot be evaluated in relation to existing archetypes. As it bridges categories, field actors struggle to place the organization and use established heuristics to evaluate it (Wry & Durand, this volume). Consequently, the template for evaluation needs to be constructed alongside the new organizational form that is to be evaluated. This is particularly taxing, as a new organizational form emerges because existing alternatives in an institutional context do not (adequately) address an important societal need.
Internally, the organization also faces additional struggles. It does not only straddle potentially conflicting institutional logics but needs to craft new practices and codify new templates for bridging them. The new form ventures into unchartered territory. There is no commonly accepted set of values that gives the novel configuration of structures and practices internal coherence. Hence, new organizational forms go against the weave of the existing institutional fabric.
Commonly, novelty in organizational forms is based on their new characteristics. Most prominently, Puranam, Alexy, and Reitzig (2014) determine it based on whether four problems of organizing are addressed in novel ways: task division, task allocation, reward provision, and information provision. Importantly, while Puranam et al. (2014) essentially conceive novelty as universal, Suchman’s (1995, p. 574) definition of legitimacy suggests a more relative concept of institutional novelty as actions are being evaluated “within some socially constructed system of norms, values, beliefs and definition.” Arguably, then, actions could be novel in one “system,” while being established in another. This understanding makes novelty an emic, field-specific, and relative concept (see also Palmer, Benveniste, & Dunford, 2007).
A relative conceptualization of novelty can be understood as bound by space and time. An organizational template may be novel in one context, but no longer in another. For instance, social entrepreneurship (Dacin, Dacin, & Tracey, 2011; Mair & Martí, 2006; Mair & Rathert, this volume) has become a widespread vehicle to address pressing social needs, complete with an institutional infrastructure with central nodes such as Ashoka. Nonetheless, social enterprises are still considered a new organizational form in other settings (Mair & Rathert, this volume), for example, where social needs are predominantly met through charitable organizations or public services. In fact, in these settings, a new organizational form like social enterprise may irritate taken-for-granted processes and practices, as it highlights the needs they left ignored or under-served. In this sense, notions of established-ness and novelty are contingent on field conditions and thereby spatially and temporally bound (see Casasnovas & Chliova; Glynn et al.; Wry & Durand, this volume).
Even if field participants were to agree that a particular organizational template was novel in a particular space, the period of time during which it is perceived as novel may be subjective. For some, it may not be conceptualized as novel after a shorter, for others after a longer period of time. For instance, in the last couple of decades, cellular, modular, and networked organizations were deemed novel as post-bureaucratic modes of organizing (Palmer et al., 2007). They have increasingly become the norm in certain sectors such as software development, while in others, more “traditional” modes of organizing still dominate. As a result, post-bureaucratic modes of organizing would be seen as novel in the latter, but no longer so in the former. Presently – and reinforced by COVID-19 – digital organizational forms become more widespread (Hinings, Gegenhuber, & Greenwood, 2018; Zammuto, Griffith, Majchrzak, Dougherty, & Faraj, 2007). Novelty of forms is thus temporary.
Additionally, novelty is a question of degree; it is neither absolute nor binary. Instead, organizational forms are judged as more or less novel vis-á-vis other forms. In this vein, new forms that are perceived as more similar to existing alternatives, or those that are perceived as closer to an established categorical template are likely to be perceived as less disruptive and novel than those which directly challenge a taken-for-granted archetype, for instance by injecting a new institutional logic into a particular social domain (Gümüsay, 2020).
Hybrids as New Organizational Forms
Much recent research on new organizational forms has focused on “hybrids” (Battilana & Lee, 2014; Battilana, Sengul, Pache, & Model, 2015; Pache & Santos, 2013) as organizations that deal with diverse institutional demands. In a Schumpeterian fashion, the recombination of institutional logics can innovatively constitute a new form. Social enterprises have been identified as particularly instructive instances of such innovative recombinations of logics as they “draw from both for-profit and nonprofit institutional logics, which may be in conflict with one another” (Dacin et al., 2011, p. 1207). Archetypically, social enterprises combine the business and community logic (Battilana & Dorado, 2010; Gümüsay, 2018), but they may also draw on others such as religion (Zhao & Lounsbury, 2016), and on more than two logics (Greenwood, Díaz, Li, & Lorente, 2010; Mitzinneck & Besharov, 2019).
However, to date work in this vein has focused less on the novelty of the organizational form and more on how these organizations deal with the institutional complexity inherent in their straddling competing logics (Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011; Kraatz & Block, 2008). There is thus a need to rediscover “the nexus between institutional context and hybrid organizing” (Mair & Rathert, this volume, p. 189; cf. also Casasnovas & Chliova, this volume). In some instances, the institutional context can offer templates and confer legitimacy to organizations that wish to enact an organizational form, as evidenced in B Corp certification (Gehman & Grimes, 2016; Grimes, Gehman, & Cao, 2018). Alternatively, some hybrids may be novel to the extent that their institutional context cannot provide a template, such as in the case of KT Bank, the first Islamic bank in the Eurozone (Gümüsay et al., 2020), or Aspire, a UK-based social enterprise supporting the homeless (Tracey et al., 2011). In these instances, an organization hybridizes substance: a new organizational hybrid combines institutional logics in a new way that is unprecedented in its field. It faces both institutional pluralism due to diverse and oftentimes conflicting institutional demands, and, in addition, it is also confronted with institutional challenges due to the novelty of its hybrid form.
Additionally, novelty not only concerns the substance of new organizational forms, that is, the institutional logics being combined, but also the mode of organizing, that is, the way they adapt novel structures, practices, and/or processes (Meyer & Höllerer, 2014; Mair & Rathert, this volume). The particular challenge of legitimizing new organizational forms, then, lies in the fact that they disrupt established institutional templates both in the way they create novelty (substance) and in the way they resolve it (mode). Examples of such novelty in forms of organizing include the likes of Uber, Airbnb, and other disruptive innovators that are not just new ventures, but fundamentally challenge established business models and face intensified scrutiny as a consequence (Botsman & Rogers, 2010; Cennamo, 2019; Srnicek, 2017). Notably, it may be the “what,” the substance that goes against the grain, but also the “how,” the mode of organizing, as in the examples above or in new organizational forms such as the social hacker collective Anonymous (Dobusch & Schoeneborn, 2015) or online communities such as Wikipedia and Linux (Garud, Jain, & Tuertscher, 2008).
Overall, the novelty of such forms is context-dependent bound by space, time, and the interpretations of actors in the field. New forms emerge and evolve either due to a perceived novel recombination and reconfiguration of existing or the perceived creation of novel coherent constellations of organizational characteristics – or both. Their novelty faces an external institutional environment as well as internal institutional processes that result in the engagement with processes of institutional stability and change.
Research Site and Methodology
To understand how new organizational forms can address their “liability of novelty,” we study “Incubate,” a Muslim social incubator in Germany founded in 2010. Incubate constitutes an “unusually revelatory” case (Eisenhardt & Graebner, 2007, p. 27) as it combines market, community and religious concerns and delivers its mission across analog and digital means. Its mission is to enable and encourage social entrepreneurship in the German Muslim community. Incubate does so through a variety of formats including analog and digital conferences and workshops, networking dinners, think tank activities, and funding and mentoring schemes. Organized by up to 100 staff, these events welcomed participants who self-identified around their faith and social entrepreneurship. Incubate remained deliberately inclusive. It did not assert any theological authority to define who was, or was not, a Muslim and supported non-profit social projects with the potential to evolve into social enterprises.
The organization describes itself as “the first platform for social entrepreneurship from Muslims for society,” while outsiders note its novelty as a “prototype of neo-Muslim communitarization” (Mykytjuk-Hitz, 2015, p. 196, emphasis added). In short, Incubate is especially novel in the German context as it leverages social entrepreneurship rather than charitable activity as a vehicle for doing good – and did so as early as 2010 when the concept was not yet widely known in Germany (see Mair & Rathert, this volume). It mobilizes Muslim, rather than Christian values as the driver of its social mission; and it positions young Muslims as the providers of community services, rather than their recipients. In many ways, it sits at the intersection of the rise of social entrepreneurship, the growing number of Muslims in “the West,” and technological advancements.
In multiple documents, Incubate describes that it offers four types of capital: human, social, financial, and cultural, which translate into the provision of knowledge, network, money, and motivation, respectively. Accordingly, projects that received support from Incubate deliver across a broad range of causes, from the social, to the ecological and cultural. Some projects have an explicit religious focus such as an audio CD about the life of Prophet Muhammad. Others are “projects with underlying values that are not exclusively [Islamic], but also Islamic” (int). For instance, I,slam, is a poetry slam organization, Nour energy, an organization that builds solar energy panels on mosques, the Intercultural Institute for Inclusion assists people with mobility and accessibility constraints to access Islamic content and conferences. HIMA offers information and consultancy services on environmental protection particularly for Muslim organizations; Restart supports refugee artists; and Refugee Open Ware offers investment in humanitarian technology and innovation and runs trainings in computer coding and robotics for refugees. Frimeo is a smartphone app that connects consumers with local farmers. Incubate supported these projects with prize money, a mentorship program and publicity activities.
Incubate’s initial challenge of institutional novelty, but also its growing legitimacy are illustrated by its partnership network and a host of awards it received in recognition of its mission. For instance, its partners and sponsors include household names from the world of social enterprise such as Ashoka Changemakers, Engagement Global and Social Impact Lab, and also other reputably organizations like the British Council, which had a particular focus on social entrepreneurship at the time. In short, Incubate associated with an international network in the world of social enterprise, seeking validation from these organizations rather than its local institutional context. Concurrently, in 2011, Incubate was selected as one of the 20 projects in the social entrepreneurship competition “Generation-D,” in 2012 it won the Act for Impact Social Entrepreneurship Academy audience award, and in 2013 the startsocial scholarship. These awards are all sponsored by renowned companies and foundations in Germany. By showcasing Incubate as a new template for civic engagement, they celebrate the novelty of its approach and signal its increasing acceptance.
To capture the intricacies of how Incubate engaged with its new hybrid organizational form, we use a case study approach (Eisenhardt, 1989; Yin, 1994) that relies on three kinds of data. First, we used participant observation from Incubate’s founding in March 2010 until October 2018 and label observation data as “obs” in the text. As co-founder and executive board member of Incubate between 2010 and 2013, the first author gained in-depth “native” access and insights into the organization (Brannick & Coghlan, 2007). He collected data as “observing participant” at conferences and (online) meetings (Alvesson, 2003, p. 174). In total, he attended eight conferences, 28 local events – from networking dinners to full-day strategy retreats – and four webinars. He participated in over 220 board and team meetings conducted online. In addition, he took part in meetings with sponsors, partners, journalists, and advisory board members. In October 2012, the first author commenced his doctoral studies and, in that context, started a research diary in which he recorded discussions, observations, and experiences. Given that most activities were online, he took notes both during and directly after calls and webinars. At conferences, he wrote down observations on a laptop or on paper, subsequently typing up the notes in a research diary in the evening or following the events.
Second, we collected documentary materials, labeled “doc,” such as conference brochures, reports, and other written materials produced by Incubate. These include both final versions and earlier drafts, which allowed us to trace the evolution of ideas and distinguish those ideas that became reality from those that were abandoned or toned down in the process. The first author also had access to Facebook groups, WhatsApp messages as well as email, newsletters, and forwarded exchanges. He also had unrestricted access to project management groups, as Basecamp was used as a means to work, store, and share documents and other materials online. Also, we collected external documents such as newspaper articles, website materials, blog posts, book chapters about Incubate, video material, and social media posts. For external documents, we followed three search activities. We searched for Incubate on Factiva, used Google search and screened posts shared by the organization. We used snowball sampling in the sense that we identified links in documents and followed them on to capture what has been written about the organization. Our aim was to collect an exhaustive plethora of documents to capture Incubate in its institutional context and across time.
Third, in addition to various informal interviews, the first author conducted 20 formal semi-structured interviews (“int”) with both Incubate staff and members of projects that participated in the incubating activities. To reduce challenges of role duality and conflict linked to auto-ethnographic research (Brannick & Coghlan, 2007; Karra & Phillips, 2008), interviews were scheduled in summer 2018, over five years after his executive board membership in the incubator had ended. Interviews lasted between 30 and 75 minutes. They were recorded and transcribed verbatim. Questions focused around personal motivation of joining or attending Incubate, its characteristics and novel features, and internal as well as external organizational challenges (Table 8.1).
|Time period||March 2010–October 2018||April 2018–September 2018|
|Description of data||Observing participant at 8 conferences, 28 local events, 4 webinars, and over 220 skype and google hangout meetings||In-process and final documents for internal and external use as well as digital materials such as basecamp notes, WhatsApp group messages, pictures, videos, and email exchanges. Newspaper articles, website texts, blog posts, book chapters, and social media material||20 Semi-structured interviews and informal conversations|
|Analysis insights for||Noting internal struggles and external perception around novelty of organizational form, capturing institutional context and developments||Obtaining personal views, narratives, and examples of organizational struggles|
Given the first author’s deep familiarity with the case, we approached Incubate as a hybrid that combines aspects of religion, community, and market. Following established procedures for qualitative analysis (Gioia, Corley, & Hamilton, 2013), we hence started by categorizing references to these incompatible prescriptions and their underlying logics. However, we quickly noted the large number of references to Incubate as “something different”; difficult to capture, comprehend, and explain. Our interest thus shifted from focusing on incompatible institutional demands toward the novelty of the hybrid form. Internally, people struggled to codify the organization and externally, people found it hard to fit Incubate into existing institutional templates, typically referring to it as “something cool” or “something novel.” This stage of data analysis thus consisted of identifying when our notes, interviewees and documents referred to aspects of novelty, strangeness, or uniqueness. This insight inspired the next round of coding with a focus on how Incubate engaged with novelty. This produced the first-order categories related to how the organization recombined substance: commerce, community, and conviction, as well as its hybrid mode of delivery: analog and digital. We then grouped first-order categories together into second-order themes to conceptualize more abstractly how the organization approached novelty distinguishing between an internal and external focus. As we realized that certain practices primarily stabilized a status quo, while others were shifting it, we ordered them not only along an internal and external difference, but also whether they were forming or transforming practices. In a final stage, we thus grouped these into four aggregate dimensions: codifying the new form, crafting novel templates, conforming to established forms, and configuring the institutional environment, respectively. The former two are internally focused practices, while the latter are externally focused practices. Also, codifying and conforming are forming, while crafting and configuring are transforming practices (Fig. 8.1).
Incubate self-describes as a “Muslim social incubator” that uses both analog and digital means (doc). It asserts to be “the first platform for social entrepreneurship from Muslims for society” (doc). At the time of founding, four of the seven co-founders did not live in Germany. Looking at German society from a distance made them “wistful and yet disconcerted” (doc) and sparked the desire to give back. They crystallized three key tasks: (1) provide a platform for socially engaged Muslims to connect; (2) professionalize and strengthen Muslim engagement; and (3) make existing engagement more visible to the public and to central actors outside the Muslim community (doc). In delivering those tasks, one interviewee explained, the focus on socio-religious concerns (substance) arose out of their own desirability, but reliance on digital delivery (mode) was borne out of necessity as talent was dispersed (int).
Challenges of Novelty
Discussions and interviews revealed the dual challenge early supporters faced when explaining Incubate to others. Initially, the organization was simply unknown (“unbekannt”), yet increasing familiarity created also unease (“Unbehagen”). As one interviewee reported:
I am often asked: what is Incubate and what does Incubate do? Is it a Muslim organization? What is its purpose? Even after explaining what we do and how we do it, I can see in the eyes that there often remains this questioning look. (int)
Yet, as another recalled, a “questioning look” would only be part of the problem:
Sometimes, when I explain Incubate to Non-Muslims, I know …, I mean, I am certain that the other party just thinks: come on, you are really just a bunch of Islamists in disguise. All this social entrepreneurship stuff really is just a façade. (int)
The positioning of Incubate caused irritation, misunderstanding, and even discomfort. The local norm was for civic engagement to be provided through charitable organizations or public services and for young Muslims to be recipients – not providers – of support. Incubate, hence, violated the institutional template and did not fit an established category. It went against the grain of what was locally “known” and “accepted.” Importantly, these challenges of novelty jeopardized Incubate’s access to critical infrastructures. Incubate’s first bank account was closed without notice within two weeks of its opening. Later, a bank employee intimated that this was due to Incubate’s Islamic orientation. Similarly, when enquiring about a venue for one of its events, the location manager responded via email:
I have asked a colleague, who knows about associations like yours, to inspect you. He has contacted the department for [social] integration and migration. Funnily enough, they don’t know you there! You also noted that you had recently an event in Heidelberg. No one knows you there, either!!! Don’t you find this strange?! (doc)
As one interviewee summarized the email:
The email simply said: I don’t know you, I don’t trust you, I cannot categorize you into my frames of reference, so no: you do not get a room here. You are suspicious. – In a way, this pictures well the struggle of being innovative, of being different from the norm. This is hard but exciting. It is hard, exciting work. (int)
Interestingly, questions of category and frame of reference were not limited to external constituents. They were shared internally as well. Key debates would arise over the balance of Incubate’s constituent logics and especially the prominence of religion. Unsurprisingly, proponents of more religious and more secular missions both felt strongly about their positions. Likewise, the chosen mode of organizing had to navigate the narrow channel of building a new identity while being sufficiently compliant with established categories, for instance to access tax benefits associated with charitable missions.
Below, we zoom in on how Incubate tried to address both internally and externally these challenges of being a novel hybrid in terms of substance and mode of delivery.
Novelty and Internal Integration: Codifying and Crafting
Incubate integrates internally through codifying and crafting practices. Codifying novelty serves to explain, realize, and stabilize a cohesive new identity. By contrast, crafting novelty serves to advance the design of new structures and practices.
Codifying the New FormIn the absence of a template to follow, Incubate had to build a coherent new organization. It had to bring its vision, strategy, and form together in a way that allowed for meaningful engagement across commerce, community, and conviction as well as physical distance. To create this coherence, the leadership needed to constantly explain what Incubate is about and how it functions. It circulated written updates via basecamp, webinars, one-on-one sessions, Skype calls, and later Google hangouts. These written and spoken texts framed Incubate and its activities and thereby gradually codified its new organizational form. For instance, in a presentation the executive board highlighted and explained the slogan: “from Muslims for society” to clarify the religious dimension of their mission, noting that Incubate exists to help Muslims serve wider society. Equally, in one webinar the executive board positioned Incubate as a “Muslim social incubator for social entrepreneurship,” codifying the socio-commercial dimensions of its mission by explaining how social entrepreneurship:
[…] engages with innovative, commonly market-oriented solutions connected with a passion for ecological and social sustainability. Social entrepreneurship is then an enterprising activity that aims for a positive societal change on issues such as education, poverty, environment and health (…). (doc)
To bring together the organization despite physical distance and to ensure that the new organizational form was not only codified “top down,” but stabilized further through “lateral” dissemination, Incubate designed shared experiences online. Facebook and WhatsApp groups hosted discussions about topics such as religion and social activism that created common themes across sites. Simultaneously, these online activities spilled over into the analog domain when members used them to organize spontaneous meetups with local colleagues when traveling. They even created a video with impressions of such an informal meet-up, which could then feed back into the digital domain. In addition, Incubate actively used social media techniques before, during, and after events, for instance with Twitter hashtags like #unfoldyourideas and #daretoshare, as well as other hashtags such as #team printed on shirts. Jointly, these communication principles not only clarified and codified the organization’s substance, but also its mode of organizing across the analog–digital divide.
Notably, the resultant sense of coherence was itself codified, as members coined the term “Incubate flash” to capture the identity members shared across domains and modes of engagement:
At Incubate events you really could feel this common vibe. It was called the “Incubate flash.” You were flashed by what it was, by the enthusiasm and passion, the feeling to be part of society, to care about society and to shape society – without losing one’s identity as a Muslim. We were all quite different, more or less religious and from different denominations within Islam, but somehow we felt: this place here is “us.” (int)
Crafting Novel TemplatesWhile the aforementioned structures, practices, and processes created cohesion, identity, and a sense of stability throughout the organization, others were designed to advance the organization and its context. This became particularly apparent in leadership succession. Given the hybrid identity of the incubator, it was looking for a chairperson that would combine business, social and religious pursuits. It struggled to do so and chose successor teams. In the first two leadership successions, these teams remained hierarchically, but were identified together to symbolize, represent, and enact Incubate’s identity. In the third leadership succession, two persons were jointly elected as co-chairpersons with equal rights to fill this hybrid identity of commerce, community, and conviction together. In doing so, Incubate crafted a new template to ensure that the full range of its constituent concerns are represented and integrated at the most senior level of leadership.
More generally, Incubate had to find ways to blend the various component parts of its identity. This was particularly difficult, given the absence of a template for integrating religious and secular missions, and an inability to prescribe appropriate levels of devotion. Accordingly, Incubate experimented to craft its own template and drew complaints from different parts of the membership in the process. Initially, Incubate started each online meeting with a quick prayer or reading from the Quran. This proved uncontentious as participants could easily choose not to join in the oral recital. At face-to-face events, however, the prominence of prayer – as a collective, bodily enactment – caused controversy. Initially, prayer was clearly marked in the event agenda, which some participants complained about as too imposing. Conversely, there were complaints from the opposite camp, when prayer was not explicitly mentioned in the program at a subsequent conference, and only announced verbally on-site. Eventually, prayer was included in the program, but only in parentheses, such as “break (& prayer),” which emerged as a workable inclusive and flexible compromise to give visibility to faith without (the perception of) imposing religious practices.
Similarly, the organization struggled between its business and social commitments and opted for an open and inclusive approach. It offered opportunities for projects to help organizations to scale effectively as a social business, but remained relaxed on the extent of entrepreneurial ambition or commercial potential. Oftentimes, Incubate supported not social ventures, but rather social projects. In other words, it focused on social entrepreneurship, but embraced a broader social mission, too. To accommodate this level of flexibility, Incubate crafted new project categories so that social, non-commercial projects could explicitly apply for participation and also obtain funding and mentoring.
Membership was another concern, which revolved around the question who was actually part of Incubate. As a digital organization the leadership decided to prioritize participation over legal membership. As a consequence, Incubate departed from established definitions of membership and crafted two parallel structures: a legal and a pragmatic one. On the one hand, it observed the rules governing decision-making in charitable associations including formally voting on new memberships and board positions in annual analog meetings. On the other hand, members joined the incubator via a continuous digital recruitment process throughout the year. Formal membership was neither necessary nor checked for. Within teams, decision-making was participatory, distributed, and agile:
We distinguished between de jure and de facto voting rights. All members had de facto voting rights in our meetings. However, legally only very few became members of the underlying association. This was primarily due to practical reasons: we only met once a year, but had new recruitments and exits throughout the year. To keep the bureaucratic side low, we decided to have a de facto membership and also an executive board – that was in charge. (int)
In doing so, Incubate crafted a membership structure that leveraged its analog existence to comply with local institutional norms and access associated benefits, such as tax discounts. Simultaneously, it used its digital presence to maximize participation beyond organizational membership, templating ways to maximize the benefits of its hybrid mode of organizing across the analog–digital divide.
Novelty and External Fit: Conforming and Configuring
Incubate integrates novelty externally through conforming and configuring practices. Conforming is about creating greater resemblance between the new organizational form and existing institutional templates, while configuring is about building an institutional environment that is more knowledgeable and positively inclined toward the new organizational form.
Conforming to Established Forms When Incubate originally filed for charitable status, its application was rejected. It did not fit the existing template; social entrepreneurship was not a formally accepted charitable purpose. It was only when the organization revised its mission statement and foregrounded educational, non-profit, charitable objectives – that is, created greater resemblance with existing templates – that its charitable status and associated tax benefits were granted:
The purpose of the association is the promotion of education (§52.2 No. 1 AO) and the promotion of civic engagement – particularly but not exclusively of people with Muslim faith – in favour of non-profit, charitable objectives. (doc)
Incubate also followed the legal requirement to have regular physical meetings and elections as an association. The board was discharged, a new board elected, the statutes revised and further concerns related to the legal association decided upon. While its digital infrastructure would have allowed Incubate to do all these activities online and with more members present, it was deemed prudent to opt for offline meetings to mitigate against the liability of novelty by creating a greater resemblance to established practices.
We decided to meet annually for all legal purposes. It felt odd. We had already discussed most issues and knew the arguments and outcomes on each issue. We then went through points very quickly and used the meeting – or rather the time after the meeting – to discuss more fundamental questions about the future of Incubate. (int)
Configuring the Institutional EnvironmentAt the same time, Incubate actively worked on configuring its institutional context by constructing a strong narrative around its distinctive character. In parallel to codifying for itself what it meant to be a “Muslim social incubator” or a “social incubator from Muslims for society,” it was equally necessary to explain and justify its positioning to its institutional context. When asked why the three elements were so critical, an interviewee explained:
Both within the organization and outside many people wanted us to engage with specific Muslim-related issues, which can be put under the [social] integration politics umbrella. We resisted vehemently because we did not want to be branded as an organization that does [social] integration or migration work. Oftentimes, having a migrant background is equated with being a migrant or being a migrant issue. As if there is nothing else to us. Instead, we are a professional organization in the social entrepreneurship field that focused on Muslims to act as a bridge towards mainstream social entrepreneurship activities and associations. With religion in general, and Islam in particular, many people see this field as a problem-driven one. We wanted to be solution-driven, active and not reactive, progressive and not regressive. It was essential to form an identity – both internally and externally – that reflected this perspective. (int)
This positioning intentionally avoided being labeled a social integration or migration-focused organization. In other words, Incubate deliberately decided not to fit into the niche that the institutional context would naturally have provided for it. Instead, it proactively configured its institutional context by building more understanding and a benevolent audience. Rather than convince institutional constituents in its local context of its mis-fit identity, it actively selected partners from across the business, social, and religious spheres who intuitively understood and supported Incubate’s chosen position.
In the social entrepreneurship sphere, it partnered with the Social Impact Lab and Ashoka Changemakers, which designed tools for a global digital community. It also won multiple awards such as the “act for impact” online audience award from the Social Entrepreneurship Academy. Again, choosing to participate in this competition with online voting and related to social entrepreneurship positioned Incubate in that context and deliberately moved it away from institutional categories of migration and social integration. Winning such awards showed Incubate’s resonance and endorsement in this environment.
In the beginning, it also worked with the British Council, which had a focus on social entrepreneurship. Ashoka Changemakers and British Council are organizations that originated from the United States and the United Kingdom, respectively. Both are countries where social entrepreneurship was more established than in Germany and hence less novel. Incubate also collaborated with the Robert Bosch Foundation and Vodafone Foundation that are actively involved in social change, with Engagement Global that works on the 17 United Nations sustainable development goals, as well as with selected religious organizations such as styleIslam, a Muslim start-up, which sells most of its products online. Incubate also actively connected to selected media outlets, for instance by engaging with the primary social entrepreneurship magazine in Germany, enorm. Enorm published a four-page article on Muslim social entrepreneurs that featured Incubate and some of its conference award winners. In other words, Incubate purposefully chose collaborators among existing organizations closest to its own (novel) characteristics and values.
Our analysis of Incubate zooms in on the liability of novelty in new hybrid forms. The chapter makes two theoretical contributions. First, it introduces the notion of liability of novelty and conceptualizes it as an emic context-specific concept, which results in descriptive and evaluative challenges. Second, it identifies four practices to overcome this liability, namely codifying, crafting, conforming, and configuring.
The Liability of Novelty for New Hybrid Forms
This chapter presents an empirical case of a new hybrid form that manifests through a recombination of institutional logics and a bridging of analog and digital platforms. This is experienced as novel by both members of the organization and field-level actors. In line with views that organizational forms represent “novel recombinations of core organizational features” (Rao & Singh, 2001, p. 244) this extends work that examines hybrid combinations (Battilana & Lee, 2014) by focusing on novelty of hybrid forms. It differentiates novelty, the fact that new forms are not accepted and not understood as they do not fit institutional templates, from newness, the fact that organizations more generally face challenges when they are new. It also addresses research calls to study hybridity by bridging multiple theoretical perspectives such as logics, organizational forms and archetypes (Battilana, Besharov, & Mitzinneck, 2017).
In contrast to other cases documented in the literature, Incubate faced a heightened level of scrutiny and liability of novelty, as neither its mission (substance), nor its mode of organizing conformed to existing institutional templates. Typically, social enterprises are supported by those with access to critical resources and channel those resources to the marginalized and disadvantaged (e.g., Pache & Santos, 2013; Tracey et al., 2011). Incubate, however, was a platform for the typically marginalized – young Muslims – to support themselves, but also society at large, that is, those typically lending support. This mission turned existing templates of giving and receiving help on their head. Simultaneously, the organizational form of social enterprise ran counter to the institutional template of public service or charitable work. Jointly, these liabilities create a higher legitimacy hurdle than, for instance, that faced by Aspire, a social enterprise supporting the homeless (Tracey et al., 2011): The mission of society supporting the homeless was already understood and accepted in large parts of society and it was the organizational form to deliver such support that had to be legitimated.
Unlike Aspire (Tracey et al., 2011), Incubate did not establish a hybrid logic, but a combination of three institutional logics of market, community, and religion into a new hybrid organizational form. Those logics remained in tension but sustained its distinct institutional identity and organizational survival. For instance, Incubate struggled in its focus on social ventures and often accepted social non-entrepreneurial projects. By keeping the religious focus vague, it allowed for multiple voices to pragmatically co-exist (Gümüsay et al., 2020). Equally, local groups met regularly to complement the digital nature of the incubator and build offline relationships. These challenges illustrate how the liability of novelty in the absence of an organizational template is exacerbated by an internal lack of established procedures. In the absence of a clear template, new hybrids experiment with pragmatic solutions to new complexities (Smets et al., 2012) and may primarily rely on “making space” for a broader diversity of approaches so that that organizational members can figure out their own identity within the new organizational form (Gümüsay et al., 2020). This means that external and internal challenges of the liability of novelty are recursively linked.
The findings also extend work on organizational hybridity more generally, where “limited research explores the impact the institutionalization of hybridity may have on hybrids” (Glynn et al., this volume, p. 62). While extant work has outlined the institutional challenges of hybrids dealing with institutional complexity (Battilana & Lee, 2014; Greenwood et al., 2011; Kraatz & Block, 2008; Mair et al., 2015), a new hybrid form then faces additional concerns. Whereas any social venture needs to integrate its social and business mission (Dacin et al., 2011; Doherty et al., 2014; Gümüsay, 2018; Mair & Martí, 2006; Smith et al., 2013), new organizations that use established organizational forms may draw on existing templates such as the B Corp certification (Gehman & Grimes, 2016; Grimes et al., 2018). A novel social venture requires to design novel templates and practices internally without the ability to refer directly to an existing template, and engages with additional scepticism, unease, adversity, and irritation due to the novelty of the form. Both external judgment and internal experience show distinct institutional challenges as novelty impacts both the understanding and the acceptance of the organization. Vis-á-vis established hybrids, then, a new hybrid form faces additional struggles and hurdles in developing and realizing its templates.
This focus on established-ness and context of hybridity resonates with related arguments in this volume (Besharov & Mitzinneck; Casasnovas & Chliova; Glynn et al.; Mair & Rathert; Wry & Durand, this volume). It also complements work by Puranam et al. (2014, p. 177), who argue that a new form of organizing is a “unique set of solutions” that is a universal phenomenon. In contrast, we argue that novelty can be conceived as institutionally bound in time and place, while potentially being common elsewhere. Conceptualizing novelty as an emic rather than an etic concept, the set of solutions can be novel multiple times resulting in repeated experiences – and challenges – of novelty. Complementing the liability of newness (Singh et al., 1986; Stinchcombe, 1965) and liability of innovativeness (Hyytinen, Pajarinen, & Rouvinen, 2015) this leads to a liability of novelty, as individuals and organizations are challenged to categorize the new organizational form within existing cognitive templates. This means new forms face a higher propensity to be regarded as illegitimate or inappropriate. The liability of novelty is thereby an additional hurdle. Internally, figuring out the organizational identity and cohesion is much more difficult. Externally, the organization faces a higher legitimacy threshold in comparison to new ventures of established organizational forms. A new hybrid form thus needs to integrate and fit institutional demands both internally and externally in novel ways.
Integrating and Fitting Novelty
New hybrid forms are continuously evolving as they struggle to build and sustain new institutional configurations facing misunderstandings and negative evaluations. This is a balancing act between embracing and defying institutional norms. In the following, we note four practices that cope with the challenge of being both novel and acceptable. The practices are codifying the new form, crafting novel templates, conforming to established forms, and configuring the institutional environment. The four identified practices comprise both internal and external dynamics. Internally, the organization integrates its novelty through codifying and crafting while externally it situates itself within the existing institutional environment through conforming and configuring practices. Codifying and conforming form, while crafting and configuring transform the organizational hybrid and the context in which it seeks to establish its legitimacy.
Specifically, codifying manifests the new form through explanations and shared experience that frame the organization. It needs to stabilize novelty without rigidity. Novelty is thereby enacted by both “talking the talk” and “walking the talk” of developed structures and practices. Crafting consists of the development of these new structures and practices that lead to suitable templates. This often happened pragmatically in small steps, through evolutionary learning (Ferraro, Etzion, & Gehman, 2015) and repeated experimentation (Smets et al., 2012), as in the appropriate level of visibility of prayers in conference programs. For instance, complementing research on leadership succession by Jaskiewicz, Heinrichs, Rau, and Reay (2016), we showed how the struggle to combine diverse institutional logics may be resolved through a change of leadership structure from one leader to a team, so that they together “represent” the hybrid. Through the conforming practices the organization stretches its practices and structures to resemble more closely familiar institutional templates to the extent it is externally necessary and internally defensible. The practice of configuring impacts the surroundings of the organization by strategically shaping and selecting the institutional environment. While it may be difficult for individual organizations to change the institutional environment, an organization may have the ability to reorient the normative network (Smets et al., 2012) it is part of, so that rather than convincing sceptical audiences of its merits, the organization configures its own environment to include more external constituents who already positively evaluate its structures and practices.
The new form continuously crafts novel templates and practices that it tries to stabilize toward a configured archetype. At the same time, it engages with its institutional environment by carefully selecting which actors to engage with. Complementing work by Huybrechts and Haugh (2017) who studied the European Renewable Energy Cooperative Network showing how networks can benefit new hybrid forms to obtain legitimacy, Incubate carefully chose its partners and audiences to create alliances around its new form. It also conforms to some requirements and expectations from the field, where necessary. Together, these practices dynamize and extend the model by Huybrechts and Haugh (2017) allowing the organization to balance, both internally and externally, novelty and change with familiarity and stability.
Hybrid forms face institutional pressures both within the organization and across the environment to retain their hybridity – whether it is their hybrid substance or mode of organizing. When additionally their hybridity is perceived novel, this increases institutional challenges and the legitimacy threshold, particularly when such novelty is not incremental, but leads to a new archetypical configuration. The result is what we call the liability of novelty. Through the case of Incubate, we have highlighted both this additional liability and four dynamic practices to engage with it.
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We gratefully acknowledge comments on earlier versions of the manuscript by colleagues from WU Vienna and the University of Hamburg, as well as participants of the WK Org Workshop 2019 and EGOS 2019, in particular Leonhard Dobusch and Emilio Marti. We would like to thank Marya Besharov and Bjoern Mitzinneck for their helpful feedback and editorial guidance.
- Chapter 1: Heterogeneity in Organizational Hybridity: A Configurational, Situated, and Dynamic Approach
- Section A: Multiple Theoretical Lenses
- Chapter 2: Hybridity and Institutional Logics
- Chapter 3: Taking Hybridity for Granted: Institutionalization and Hybrid Identification
- Chapter 4: Reasoning with Heuristics: A New Approach to Categories Theory and the Evaluation of Hybrids
- Chapter 5: A Paradoxical Approach to Hybridity: Integrating Dynamic Equilibrium and Disequilibrium Perspectives
- Section B: Varied Empirical Contexts
- Chapter 6: Business Sustainability as a Context for Studying Hybridity
- Chapter 7: How the Zebra Got its Stripes: Individual Founder Imprinting and Hybrid Social Ventures
- Chapter 8: New Hybrid Forms and Their Liability of Novelty
- Chapter 9: Let’s Talk about Problems: Advancing Research on Hybrid Organizing, Social Enterprises, and Institutional Context
- Section C: Multilevel and Dynamic Approaches
- Chapter 10: Shift in Hybridity in Response to Environmental Complexity: The Transformation of the Italian Guardia di Finanza
- Chapter 11: Hybrid Agency: Sheltered Workshops (1941–2019)
- Chapter 12: Institutional Settlements and Organizational Hybridity: The Rise and Fall of Supervised Consumption Sites
- Chapter 13: Legitimacy Trade-Offs in Hybrid Fields: An Illustration Through Microfinance, Impact Investing and Social Entrepreneurship