Responses of dual-purpose organizations to economic compensation: an agent-based model approach

Abstract

This study investigates whether and how hybrid organizations continuously achieve their dual objectives. Given the paradoxical pursuit of these goals within such organizations, we argue that hybridity is not a fixed concept; rather, its level fluctuates over time. From this dynamic perspective, we examine how hybridity can be temporally reconstructed. Specifically, since hybridity is shaped by two conflicting institutional logics, we explore how hybrid organizations manage this institutional complexity. Furthermore, we suggest that external incentive mechanisms can support these organizations in reconciling their inherent complexities. To analyze organizational responses to these mechanisms, we develop an agent-based model. This approach effectively addresses the diversity in hybrid organizations' behaviors under dual-purpose settings. Through a qualitative investigation of social enterprises, we detail how these hybrid organizations handle their dual logics and respond to an externally influenced incentive system, illustrating how hybridity can be both enabled and limited by external incentives.