A hybrid organization is a type of entity which combines the elements of profitability and social impact. Meaning, it mixes the action logics, systems, value, and components. A hybrid organization is, therefore, one which does not only focus on one thing but can diversify its attention to the generation of profits to its shareholders and engage in the corporate social activities aimed at positively impacting on the life of the people in the society in one way or the other. A hybrid organization can be a private investment, public-owned organization or a Non-Profit Organization (NGO). Some of the examples of hybrid organizations include British Airways and National Housing and Construction Company Limited (NHCC).
Although hybrid organizations help in the creation of employment opportunities, generation of profits, and improving the life of the people, they have been facing a myriad of challenges. Top of the list of these problems is lack of concentration on one line of activity. Since a hybrid organization does two different kinds of activities, the management might lose focus on precisely what to do. For example, NHCC which has to balance between profitability and cheap housing might not achieve all of these. That can be disastrous because it might make the company sacrifice one activity at the expense of the other (Battilana & Lee, 2014). Such a scenario might compromise the quality of services rendered to the public or clientele.
The other challenge faced by the hybrid organizations is the conflict of interests. Given that these are organizations which have shared ownership and many shareholders; it might not be easy to accommodate the interests of all of them. Thus, conflicts often arise about issues like financing, and management. That is the similar challenge faced by the NHCC which must balance the interests of all its stakeholders no matter how difficult it might be (Battilana & Lee, 2014).
Last, but not least, hybrid organizations are prone to political manipulation. Whether it is a private or public investment, a hybrid organization must be entangled in politics. Politics arises because it seeks to address the issues to do with the capital acquisition, taxation, and management. This justifies why most of the public-owned hybrid companies often collapse.
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.