Social Business Hybrids Embody an Innate Tension, but with Benefits
It is gaining momentum the idea that business enterprises should have a social impact and thus, they should respond to a blended logic, not purely economic. If previously social entrepreneurs where considered exclusively as the ones active in nonprofit sectors, nowadays it is believed that economic and social propositions cannot be separated, rather conceived as a unique component. Examples are easily found. TOMS’, for instance, brands itself as a ‘One for One’ business. For each item purchased – whether it be shoes, eyewear, or coffee – TOMS helps a person in need, delivering a pair of shoes to a child or assisting with eye care or safe water in developing countries. Eyewear brand Warby Parker has a similar buy one, give one mission. With a different approach Ben & Jerry’s, the ice cream company that is now a subsidiary of Unilever, has its social identity committed to environmental causes, sustaining initiatives and movements around the world to fight climate change. Finally, baby food producer Plum Organic upholds the company’s strong business sustainability values through recycling programs and a constantly renewed packaging and labeling system.
It is not surprising, therefore, that practitioners and scholars are wondering: “Shouldn’t all business be hybrids?” The term “social hybrid business indicates businesses whose mission and identity are an indissoluble mix between the achievements of a competitive advantage and the realization of a social purpose – one that moves beyond a classical corporate social responsibility to co-create value for and with the society.
The popularity and success of hybrid companies continues to grow and clearly have positive follow-ups on societal wealth. However, this balance between profit and social actions is not an easy solution rebus. Managers must simultaneously deal with two company objectives and take decisions that maximize both. In this respect, these companies can dismiss actions that are valid from a competitive viewpoint because they might contrast with their social goals, or even vice versa: hybrid companies can discard investments with a great social impact if they in turn are not economically feasible. And both of these decisions might very well benefit competitors.
[This research paper has been reproduced with permission of the authors, professors of IE Business School, Spain http://www.ie.edu/]