Social enterprises are hybrid organizations defined by a simultaneous pursuit of financial sustainability and social purpose (Doherty et al. 2014). This dual mission is a source of tensions that can be productive, when economic performance supports the social finality (Battilana et al. 2014), or disruptive when resources are diverted away from social goals towards the economic imperatives (Ebrahim et al. 2014). The latter is especially damaging in time of crisis, when managers have to make the tough decisions. It might even lead to mission drift as the legitimacy of managerial decision switches from social impact to economic survival. Recently, Battilana et al. (2014) showed how specific structures can help in relieving tensions. They also emphasize the central role of managers: founding partners who initiate the imprinting of the social mission inside the social venture; current managers in charge of the daily management of tensions. However, we are still largely ignoring the cognitive processes that managers mobilize when realizing trade-offs. This leaves important questions about the dynamics of goal prioritization unanswered. How do managers decide that economic goals should now precede the social mission? More importantly, under which conditions will individuals recalibrate their goal priorities when the social mission is drifting? In this conceptual paper, we build on the theory of regulatory focus – i.e., a theory of how individuals approach desired ends – to gain more understanding about how managers make decisions in a context of goal prioritization and economic pressure.
Multiple goal pursuit often requires a balance between competing demands for the limited pool of resources. Higgins and his colleagues (Higgins, 1997, 1998) argue that individuals can pursue such goals by adopting two different kinds of regulatory focus: promotion and prevention. Promotion focus entails striving to achieve an ideal self: ideals, aspirations, whishes, i.e. the person the individual wants to be. As such, promotion produces a sensitivity to the presence or absence of positive outcomes (gains). Strategies for achieving promotion involve the eager pursuit of gains or successes. By contrast, prevention entails striving for safety, responsibilities and duties, i.e. the person others (family, friends, colleagues, society) want them to be. As such, prevention produces a sensitivity to the presence or absence of negative outcomes (loss). Strategies for achieving prevention involve the vigilant avoidance of losses or failure. When managers use strategies and tactics that fit their underlying orientation, it creates a state of “regulatory fit” that makes individuals “feels right” about their choices and actions.
In a context of plural goals and uncertainty, regulatory fit provides a rich conceptual framework to understand how managers in social enterprises set goals, torn between the social mission and its economic sustainability. It also guide researcher in identifying conditions when rising tensions are productive for the social mission, i.e. conditions for avoiding mission drift in social enterprises.
Battilana, J., Sengul, M., Pache, A. C., & Model, J. (2014). Harnessing productive tensions in hybrid organizations: The case of work integration social enterprises. Academy of Management Journal (in press).
Doherty, B., Haugh, H., & Lyon, F. (2014). Social enterprises as hybrid organizations: A review and research agenda. International Journal of Management Reviews, 16(4), 417-436.
Ebrahim, A., Battilana, J., & Mair, J. (2014). The governance of social enterprises: Mission drift and accountability challenges in hybrid organizations.Research in Organizational Behavior, 34, 81-100.
Higgins ET. (1997). Beyond pleasure and pain. American Psychologist, 52, 1280-1300.
Social enterprise, human resource management, employment creation and job quality
