The hybridization movement of business through B Corp certification

Concepts and models of social enterprise worldwideABSTRACTBased on a new reflection about the role of enterprises in current society, new organizational models seek to produce articulations capable of creating a bond between... [ view full abstract ]

• Concepts and models of social enterprise worldwide

ABSTRACT

Based on a new reflection about the role of enterprises in current society, new organizational models seek to produce articulations capable of creating a bond between profit and socio-environmental interest. As an attempt to address the plurality of concepts and organizational formats to describe this new type of organization, the term “hybrid organizations” has been picking up as a broader concept in the academic setting. They are organizations that combine, in a challenging and unprecedented manner, different institutional logics (Battilana et al. 2012; Battilana and Lee 2014; Dufays and Huybrechts 2015; Schmitz 2015). This study explores the concept through an empirical analysis in Brazil.

In the convergence between the private sector and civil society, social enterprises become emblematic examples of what hybrid organization, combining social welfare and market logic (Battilana and Lee 2014; Doherty et al. 2014; Dufays and Huybrechts 2015; Haigh and Hoffman 2012; Santos et al. 2015). The overlap of the terms “social enterprise” and “hybrid organization”, often presented as synonymous, can lead to a risk of narrowing the scope of the concept. At the same time, ‘organizational hybridity’ can accommodate the wide diversity of approaches around social enterprises influenced by the social, political and economic contexts (Comini et al. 2012). Since the distinction between traditional and social entrepreneurship is not dichotomous, but a variation of wide continued extension (Austin et al. 2012), as Schmitz (2015, p 243) pointed out “hybridity is an inevitable feature of every organization to a varying degree” leading to a hybrid spectrum (Alter 2007).

Many authors also cite the B Corp Movement, originated in the United States, as one of the main examples and forerunners of the concept of hybrid organizations (Battilana et al. 2012; Haigh and Hoffman 2012). It then becomes a rich object of study especially because of its representativeness, present in 50 countries with nearly 2.000 certified enterprises supported by global partners in Canada, Europe, United Kingdom, South America, Australia & New Zealand. The B Corp movement differs from approaches of sustainability and corporate responsibility, standing up for redefining the notion of the success in business, also claiming to be a new type of organizational form. The certification is not, admittedly, a classification for social enterprises, although the whole logic of its communication and positioning is linked to similar ideas.

This descriptive-exploratory and qualitative study aims to better understand the B Corp Movement according to the concept of hybrid organizations and also exploring the perspective of an emerging country in Latin America. The study is based on secondary data about how certified enterprises present themselves in their profiles on the B Corp community, analyzing 45 Brazilian examples considering the hybrid spectrum proposed by Alter (2007). The results of this research suggest the heterogeneity of certified companies is one of the main characteristics of the movement, indicating a larger scope on organizational hybridity levels, not exactly an ideal type. The certification can be perceived as an evolution of social and environmental accountability mechanisms, placing more emphasis in the way businesses are conducted, but not necessarily their core business, main-activities or social mission as a guide for business model. By providing a panoramic and analytical overview of the movement, this study serves as a starting point for future researches related to the subject and for the development of the concept of hybrid organizations.

References

Alter, S. K. (2007). Social Enterprise Typology. Virtue Ventures LLC, 1–31. http://rinovations.edublogs.or...

Austin, J., Stevenson, H., & Wei-Skillern, J. (2012). Social and commercial entrepreneurship: same, different, or both? Revista de Administração, 47(3), 370–384.

Battilana, J., & Lee, M. (2014). Advancing Research on Hybrid Organizing – Insights from the Study of Social Enterprises. The Academy of Management Annals, 8(1), 397–441.

Battilana, J., Lee, M., Walker, J., & Dorsey, C. (2012). In Search of the Hybrid Ideal. Stanford Social Innovation Review, 10(3), 49–55.

Comini, G., Barki, E., & Aguiar, L. T. De. (2012). A three-pronged approach to social business: a Brazilian multi-case analysis social businesses. Revista de Administração, 47(3), 385–397.

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Dufays, F., & Huybrechts, B. (2015). Where do hybrids come from? Entrepreneurial team heterogeneity as an avenue for the emergence of hybrid organizations. International Small Business Journal, 1–20.

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Santos, F., Pache, A.-C., & Birkholz, C. (2015). Making Hybrids Work: Aligning Business Models and Organizational Design for Social Enterprises. California Management Review, 57(3), 36–58.

Schmitz, B. (2015). Beyond Structural Governance. International Studies of Management & Organization, 45(3), 241–258.