Mission Drift and the Sustainability of Hybrid Organizations in Extreme Institutional Contexts: The Case of a Communitarian Microfinance Institution in Brazil

Abstract

Hybrid organizations are those striving to balance business operations with social and environmental goals. The previous literature has largely disregarded the strategies that these organizations use to avoid mission drift, or the risk of losing sight of their social missions in their efforts to generate revenue. In this paper, we draw on the case of a communitarian bank in Brazil to investigate what strategies hybrid organizations mobilize to avoid mission drift in extreme institutional contexts. We argue that by developing the ability of “embedding within the local community”, hybrid organizations are better equipped to guarantee the sustainability of their hybrid nature.

Beyond mission drift: understanding the spaces of vulnerability in social enterprises’ missions

“…Furthermore, SEs have an active role to play in managing their tensions and their practices should not be measured solely by statistics. Responding to calls from Marconatto et al (2020), we widen understanding of ways in which organizations can successfully maintain hybrid goals. Full understanding of mission drift requires seeking new forms for SEs to continuously pursue their dual goals.…”

“…Secondly, they consciously decide to focus on goals that differ from their missions in adjusting to their new necessities (Jones, 2007; Ramus and Vaccaro, 2017; Staessens et al , 2018). Thirdly, they take strategic action to avoid the mission drift (Ebrahim et al , 2014; Marconatto et al , 2020; Wolf and Mair, 2019). SEs do not operate in conflict-free zones, but the achievement of their social mission through market activities does not mean that they are constantly working towards opposite objectives (Mair, 2020).…”

“…Their efforts to generate revenue and ensure survival in markets may end up by leaning towards profitable but less socially impactive choices, thereby drifting from their social mission (Battilana, 2018). Although the pursuit of occasionally divergent interests and the danger of mission drift are intrinsic to all organizational domains, little attention has been paid to organizations that successfully maintain hybrid goals (Marconatto et al , 2020), such disregards indicating a strong bias in this literature towards the inevitability of mission drift. Thus, an important puzzle remains: What are the different natures of tensions between social and financial aims that drive SEs to mission drift?…”