First, it is important to understand the meaning of hybrid organizations. As Wood (2010) defines, hybrid organizations combine the elements of social logic of a non-profit and the commercial logic of a for-profit business. That means that hybrid organizations focus on their goal of providing services to the society for free but uses different approaches to sustain themselves. For instance, a non-profit organization with the objective of helping a community with visual problems may fund entrepreneurs to sell sunglasses in their respective communities in an attempt to raise funds to sustain the organization. That means that the organization does not rely on donations to fund its operations.
Nevertheless, it ought to be noted that hybrid organizations are different and can be grouped into two categories; those that are service related and those that have the objective of providing specific goods to a particular. But the most popular hybrid organizations are those that provide services. Even in the service sector, the types of services may vary. For instance, there are those organizations that provide social amenities while others would just want to empower a certain community. Prominent examples of social amenities include medical care and schools. On the contrary, empowerment may include supporting communities in the developing countries to create businesses in the technology sector. A good example was in 2014 when there was debate in Kenya concerning the funding of start-ups in the technology sector by non-governmental organizations (Marchant, 2017). There were differing opinions with some stakeholders holding the view that such a move is a hindrance while others thought that the move would make the country at par with other tech-savvy countries.
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Past and Present
There is a significant difference between the way hybrid organizations were run in the past and currently. However, it is important to understand the objective of non-profit organizations as well as why organizations may choose to hybridize. Conventionally, non-profit organizations are set up to offer services to members of a particular community or a group of people that are at a disadvantage. The reason behind setting up of such organizations is that the government does not have the capacity to reach out to every citizen in need of certain services. Secondly, non-governmental organizations may help the government to organize and budget for a certain group of people. Thirdly, the government may decide to ignore a certain group of people hence making it necessary for a particular organization to the aid of the marginalized group.
Non-profit organizations may be formed by members of the marginalized group or other people who may identify the group that is need of particular services. When members of a group form a non-profit organization to address their needs, it is usually for agitation purposes (Kaiserfeld, 2013). That means that they try to compel the government to release funds to address their needs. When such groups become many, the government of the day may be unable to prioritize which group to begin with or the amount of funds to allocate to each group. As a result, it becomes necessary for external groups to help the government. Generally, non-profit organizations depend on private donors to help them run the affairs of the organization
Organizations may choose to hybridize for various reasons. The first and obvious reason is that the funds received from the government or private donors may not be enough to satisfy all the organizational needs. Secondly and most importantly, there may be the need to empower the target community with particular skills. Most of the communities which the non-profit organizations target are usually economically disadvantaged (Kaiserfeld, 2013). It is better for such communities to be empowered so that they solve their needs in future instead of allowing the problem to recur. As much as the community will help the organization in terms of funds, it will have also benefited economically. In the case of hospitals that offer health services for free, people who are empowered can seek services elsewhere. That is advantageous because the facilities will not be overstretched.
Another reason why organizations may choose to hybridize is because of the lack of political goodwill. That means that the government may not help a non-profit organization to champion its course. The existence of some organizations is usually seen as hindrances to the operations of the government. The government may also hinder external funding. It then becomes necessary that such an organization tries to involve itself in commercial activities to raise funds to run its affairs. Most of the organizations that have found themselves in such situations are those that champion social justice. The government may have committed atrocities against certain communities in the past. As a result, the community may find it necessary to form an organization to address its needs. The lack of government support may force such a community to look for alternative sources to fund its operations. In most cases, most external donors refuse to associate themselves with activities of such organizations for fear of getting into conflict with the government of the day.
The last reason why organizations decide to hybridize is for self-reasons especially if the administrators forget the purpose of the organization. Unscrupulous managers usually feel that if they use the name of their organization, they can get sympathy and consequently be given certain opportunities (Marchant, 2017). Popularly, there is a notion that non-profit organizations can provide services needed by a certain group of people best. Sometimes managers exploit such opportunities to satisfy their own needs. Such a move has made some for-profit organizations to disguise themselves as non-profit ventures to access the same opportunities as non-profit organizations.
Comparing the past and present hybrid organizations, non-profit organizations stuck to one lane of service provision. For instance, if the organization chose to provide education to members of a particular community, it only engaged in activities aimed at improving the academic conditions of that community. For commercial purposes, such an organization would only deal with academic materials. For instance, an organization would start a library in the community where members have access to books at a small fee (Marchant, 2017). The organization would also employ members of the community to run such facilities. Most members of the community were untrained and as such, it was upon the organization to offer training to members of the community. Often, the hybrid organizations in the past would create social entrepreneurial ventures within the particular communities. The aim was to appeal to the community to use the commercial services or goods with the emphasis that it was for their own benefit.
Additionally, hybrid organizations in the past did not comprise of many people especially in the management. The reasoning was that the funds were not enough to support a large board of directors (Wood, 2010). Perhaps it is important to note that a majority of people worked for such organizations as volunteers. The people who were hired to teach the community to empower itself economically taught the community as part of their corporate social responsibility. A lot of people in charge of such institutions were hired from the local community and did not depend on the institutions for financial gain. In fact, most people worked in the institutions on a part-time basis.
In the modern hybrid organizations, there is usually a large board of directors who work for the organization on a full-time basis. Such a structure may have several implications. First, it means that the board of directors depends on the organization for salaries and other remunerations. The organizations do not just hire anybody but seek the services of other professionals (Doherty, Haugh & Lyon, 2014). Therefore, apart from serving the needs of a community, the organizations have to ensure that they remunerate the directors appropriately. That means that the financial needs of the organization increase. As a result, the organization has to look for ways of addressing the increased financial needs.
Perhaps the most significant aspect with modern hybrid organizations is that they also compete with for-profit organizations in the commercial sector. For example, in the US, the government allows the non-profit organizations to apply for tenders. The US government may have a genuine reason because most non-profit organizations are engaged with local communities and may know the best way of addressing the needs of communities. The second reason is that most non-profit organizations do not mismanage the funds given to them instead; they use the money gained from the tenders to offer valuable services to the community (Doherty, Haugh & Lyon, 2014). Therefore, the government may give such organizations a priority rather than the for-profit organizations which use the money for individual purposes.
Thirdly, most hybrid organizations in the contemporary world may not necessarily set base in the communities that need their services. Even when they may set up their offices, they usually have their headquarters in strategic places such as in urban centers. The location of the headquarters is meant to act as a way of attracting funding as well as commercial activities (Wood, 2010). It means that most modern hybrid organizations do not rely on the marginalized groups for commercial activities. As opposed to the past hybrid organizations, most modern organizations do not rely on the services of untrained members of particular communities to help them meet their commercial objectives. Instead, most of them hire professionals who are conversant in entrepreneurial sector.
Operation Challenges
Hybridization of non-profit organizations makes some donors to stop funding their operations. The reason is that most donors think that the commercial activities can help sustain the respective organizations (Smith, 2017). In real sense, the funds raised by the organizations may not be sufficient. Hybridization always means that the organizations must hire individuals with the knowledge of helping them run the social enterprises. As a result, such individuals require payment from the organization. In such situations, it becomes a challenge for the hybrid organization to define its role. Some organizations may find a challenge to balance between addressing the needs of the community and paying their staff. It ought to be noted that most non-profit organizations do not have adequate experience in dealing with matters of paying their employees.
Additionally, hybridization means that the structure of the organization changes. As mentioned earlier, more departments that are unrelated to the objective of the organization are created, something that necessitates hiring of more managers. The most prominent issue with having a lot of managers is that the decision-making process becomes slow (Bassi, 2014). Whenever the organization wants to implement something, all the managers have to be involved. As is always the case in majority of organizations, different people have different opinions. A project may take long to start because of the divergent opinions. Also, the creation of many departments results into a lot of bureaucracies. Whenever people want get services from the organization, they have to go through a lot of procedures. As a result, the organization may lose its meaning in regard to the objective of its establishment.
References
Bassi, A. (2014, October). David Billis: Hybrid Organizations and the Third Sector: Challenges for Practice, Theory and Policy. In Nonprofit Policy Forum (Vol. 5, No. 2, pp. 395-401). De Gruyter.
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.
Kaiserfeld, T. (2013). Why new hybrid organizations are formed: Historical perspectives on epistemic and academic drift. Minerva , 51 (2), 171-194.
Marchant, E. R. (2017). Organizational Cultural Hybrids: Nonprofit and For-Profit Cultural Influences in the Kenyan Technology Sector. In Digital Kenya (pp. 303-335). Palgrave Macmillan, London.
Smith, S. R. (2017). Hybridization and nonprofit organizations: The governance challenge. Policy and Society , 29 (3), 219-229.
Wood Jr, T. (2010). Hybrid organizations. RAE , 50 (2), 241-7.
