Legitimacy Trade-Offs in Hybrid Fields: An Illustration Through Microfinance, Impact Investing and Social Entrepreneurship

Hybrid organizations face particular challenges and opportunities due to
combining different logics within one organizational structure. While research
on hybrid organizing has advanced considerably our understanding of how
these organizations can cope with such tensions, institutional theory suggests
that organizational legitimacy and success will also depend on processes that
take place at the field level. We connect these two perspectives to examine how
field hybridity influences organizational legitimacy. Specifically, we consider
both a field’s maturity and its degree of hybridity as two important variables
that determine the effects that field hybridity has on organizational legitimacy.
Drawing from extant research and leveraging our empirical work in the fields
of microfinance, social entrepreneurship and impact investing to provide
illustrative examples, we propose a framework that considers both
positive and negative effects of field hybridity on organizational legitimacy.
We contribute to the literature on hybrid organizing in two ways. First,
we show that hybrid organizations face different challenges and opportunities
depending on the stage of development and degree of hybridity of the field they operate in. Second, we suggest that the effects of field hybridity on
organizational legitimacy can be understood as trade-offs that organizations
need to understand and approach strategically to leverage opportunities and
mitigate challenges.