The Work of Institutional Entrepreneurs Harnessing the Business-Society Paradox in Grand Challenges: (Preparing for submission in Academy of Management Journal)

Responses to grand challenges require collaboration between actors from different sectors, which inherently produces friction and paradoxical tension between organizations. However, how collective efforts arise out of conflict in the context of grand challenges remains poorly understood. Accordingly, in this article we explain how institutional entrepreneurs work on their immediate context to shape underlying paradoxes and produce collaboration. We address this research question with a qualitative study in the context of the development of the European Social Impact Bond (SIB) market. SIBs are a novel form of cross-sector collaboration built around outcomes-based contracts and used to tackle grand challenges. Institutional entrepreneurs’ work affects their immediate sociomaterial context, shaping the system characteristics in which the business-society paradox is inherent, and knotting it with the shared-individualized, control-flexibility, and simplicity-complexity paradoxes. In doing so, the business-society paradox inherent in grand challenges becomes owned, vibrates, and gets materialized along the facets of complexity, uncertainty, and evaluativeness respectively. Our explanation highlights the sociomaterial nature of paradoxical knots, going beyond amplifying and attenuating effects.