The Impact of Internationalization on Performance in Hybrid Organizations

Abstract

With the growing demand for socially and environmentally conscious products and services, hybrid organizations that address social and environmental issues with a market-based solution are gaining widespread significance (Haigh et al., 2015; Miller et al., 2012; Hockerts, 2015). Hybrid organizations, or “social enterprises” or “the fourth sector” as they are sometimes called, appear to present a sustainable solution to a myriad of social causes such as unemployment, poor health, illiteracy, etc. (Haigh and Hoffman, 2011; Battilana and Lee, 2014). Hybrid organizations are an innovative solution to the institutional voids arising from governments facing resource constraints and unable to sustainably address the scores of social problems seen around the world (Mair and Marti, 2009). In this regard, hybrid organizations are of interest to policymakers, investors, and scholars worldwide. In particular, policymakers are increasingly adjusting legal frameworks to accommodate the hybrid organization model (Brakman Reiser and Dean, 2017). Global impact investors (investors seeking both social and financial returns) are increasingly investing in hybrid organizations (Bugg-Levine, Kogut, and Kulatilaka, 2012), and recent reports show that the global market size of these investors is worth more than $700 billion US dollars (Financial Times, 2020). Scholars, particularly international business scholars, are also calling for more research on hybrid organizations, as evidenced by the recent special issue of the Journal of World Business (Alon et al., 2020).