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.