Abstract
Hybrid organizing scholarship has considered various effects of organizational configurations, including evaluations from external audience members. Due to the particular focus of hybrid scholarship on organizations that are subject to market logic, however, it is difficult to determine whether hybrid form or market logic is most relevant to evaluators. We therefore conduct two online vignette experiments, one of which is preregistered. We confirm our hypothesis that the presence of market logic decreases evaluators intent to transact with the organization, mediated through moral legitimacy. We do not confirm our hypothesis, however, that hybrid form decreases intent to transact, mediated through cognitive legitimacy. We further find that the negative market logic effect does not vary by organizational field. Our explicit focus on market logic, and its moral legitimacy evaluations, forms our core contribution to hybrid organizing scholarship, which tends to heavily lean upon the categories scholarship to explain negative audience evaluations.
Keywords
Introduction
Hybrid organizations operate amid institutional pluralism or multiple institutional spheres (Kraatz & Block, 2008). Scholars of hybrid organizing have heavily borrowed from scholarship on categories (Zuckerman, 1999) and theorized that hybrid organizations suffer a penalty due to the cognitive difficulty evaluators have in placing the organization into one clear category. This “categories penalty” hypothesis is pervasive in hybrid organizing scholarship. In their review of 129 articles on atypicality, Cutolo and Ferriani (2024) identified the importance of the cognitive lens and concluded, “scholars using the cognitive lens have paid great attention to the penalties related to a lack of categorical compliance (i.e., illegitimacy and confusion)” (p. 172). In other words, the lack of cognitive legitimacy of hybrid organizations has been a primary explanation for negative evaluations of hybrid organizations (Battilana et al., 2017; Battilana & Lee, 2014a).
Hybrid organizing scholars have moved past this seminal categories penalty insight. They have theorized and found that hybrid organizations do not always face penalties, but in fact can garner benefits (Battilana et al., 2017; Pache & Santos, 2013b). Wry et al. (2014), for example, find conditions under which organizations that span categories are rewarded by external audiences. While better understanding the conditions under which hybrids face a penalty versus synergistic advantage is important progress, we expand the field in a different direction by questioning whether its seminal categories penalty insight is the only compelling reason we might expect a penalty.
Our theorizing begins with an observation that many hybrid organizing studies focus on organizations that are subject to one particular institutional logic: market logic (Durand & Thornton, 2018). Market logic can be defined as a competitive orientation driven by self-interest and profit seeking (Thornton et al., 2012). For example, Glynn and D’Aunno (2023) conclude, “A recurrent research pattern we have discerned is that when the social orders are colocated in organizations, it is typically the institutional order of the market that is contrasted with a different order . . . The market order is almost a default source of contradiction” (p. 323). We think this focus on market logic is largely warranted, but point out a problem this poses for hybrid organizing scholarship. Is the accumulating knowledge from hybrid organizing scholarship telling us something about generic hybrid organizations that are subject to more than one logic, or is it telling us something about organizations subject to market logic in particular?
This problem suggests that a substantial portion of theorizing and empirical work in hybrid organizing scholarship could be the result of audience evaluations of market logic in particular. This insight led us to theorize an alternative explanation for negative evaluations of such organizations. Inspired by renewed interest in the moral dimension among institutional scholars (Hampel & Tracey, 2019; Kraatz et al., 2020; Kraatz & Block, 2017; Kraatz & Flores, 2015; Risi, 2022), we consider descriptive scholarship on morality from sociology and psychology which suggests market logic is frequently perceived to be immoral (Bhattacharjee et al., 2017; Fourcade & Healy, 2007). We thus focus on the moral legitimacy of organizations, as an alternative to cognitive legitimacy (Bitektine et al., 2020; Suchman, 1995) to help explain what drives negative organizational evaluations. This focus on market logic in an organizational configuration, and its moral legitimacy evaluations, forms our core contribution to hybrid organizing scholarship, which tends to heavily lean upon the categories scholarship to explain negative audience evaluations. The core research question we address, therefore, is what shapes the negative evaluations of an organization: hybrid form, market logic, or both?
To address this research question, we conduct two online experiments. Participants read a vignette about an organization that is randomly presented as a for-profit core hybrid, a for-profit business, a nonprofit core hybrid, or a nonprofit organization. These experimental conditions are differentially combined to operationalize the following organizational configuration key independent variables: Hybrid and For-profit core (i.e., Market Logic). We then collect measures of evaluations of the organization, that is, Cognitive legitimacy and Moral legitimacy (Bitektine et al., 2020), which are our mediators, as well as the participants’ Intent to transact with that organization, our dependent variable. We hypothesize that (a) organizational hybridity decreases intent to transact and this negative effect is mediated by cognitive legitimacy; (b) for-profit core (or Market Logic) decreases intent to transact and this negative effect is mediated by moral legitimacy; and (c) the negative for-profit core logic effect and its mediation through moral legitimacy are weaker in organizational fields with a for-profit norm.
Study 1 is an exploratory 2 (hybrid vs. non-hybrid) × 2 (for-profit core vs. nonprofit core) study that tests our key hypotheses with an online sample of adults. Study 2 is a preregistered 2 (hybrid vs. non-hybrid) × 2 (for-profit core vs. nonprofit core) × 2 (healthcare vs. banking) online study that tests the same key hypotheses with an undergraduate sample, offering the opportunity to replicate results from Study 1 with a different sample population and a different organizational setting. Across both studies, we replicate our key finding that the presence of market logic decreases Intent to transact, mediated through Moral legitimacy. In both studies, we fail to confirm our cognitive legitimacy hypotheses, which addresses whether category confusion drives negative organizational evaluations. Furthermore, in Study 2, we do not find evidence that market logic effect is moderated by organizational field.
Literature Background
Hybrid Organizing
Hybrid organizations are defined as organizations “that operate within multiple institutional spheres,” or amid institutional pluralism (Kraatz & Block, 2008, p. 243). Research in this vein accentuates a puzzle that derives from the neo-institutional theory. If organizations are driven to seek legitimacy from their environment, what happens when that environment includes multiple institutions with appropriate courses of action that contradict one another?
In one vein of subsequent scholarship, hybrid organizing scholars have explored various forms of hybridity. Besharov and Smith (2014) theorize hybrid logic compatibility (i.e., the degree to which logics are consistent and reinforcing) and logic centrality (i.e., the degree to which more than one logic is core to organizational functioning) and explore their implications for internal conflict in the organization. Fu (2024) advances the seminal description of hybrid form by creating a precise measurement scale for assessing how individuals perceive this logic compatibility and centrality. With the goal of better understanding how entrepreneurs influence hybridity, Shepherd et al. (2019) elaborate the degree of hybridity, which comprises hybrid relativity (i.e., the balance or unbalance of logics) and the hybrid intensity of each logic. Furthermore, Litrico and Besharov (2019) analyze Canadian nonprofits and identify two additional dimensions of hybrid form: locus of integration (i.e., who is served, who is employed, and/or what is sold) and scope of logics (i.e., how narrowly or broadly the beneficiary group is defined). Importantly, they also demonstrate how hybrid forms in their sample of nonprofits tend to shift over time from low centrality hybrids, where one logic dominates, to more integrated hybrids. In sum, scholars have valuably developed an advanced understanding of various hybrid forms, but have paid less attention to the specific logics, that is, logic content, involved in the hybridity. In this article, we make a contribution to hybrid organizing with our focus on the presence of market logic. We contend that paying more attention to the specific logic content that is present in various organizational configurations will yield explanatory benefits.
Individual-Level Legitimacy Judgments
Scholars have theorized and examined how organizations internally respond to the tension from institutional pluralism (Battilana & Dorado, 2010; Greenwood et al., 2010). Another important issue for such organizations is their quest for legitimacy from their external environment (Kraatz & Block, 2008). Battilana et al. (2017) explain, “All organizations depend on external resource inflows and productive relations with target audiences. For this purpose, they need to be deemed acceptable and legitimate by their external constituencies” (p. 142).
Recognizing the dearth of individual-level theorizing, institutional scholars began focusing on the microfoundations of institutional theory to, in part, help better explain macro-level phenomena (Bitektine & Haack, 2015; Tost, 2011). Acknowledging there are many important social evaluations of organizations (Bitektine et al., 2020), in this article, we focus on the legitimacy evaluations of the external audience of an organization (Suchman, 1995). We borrow the concept of individual-level legitimacy judgments, which refers to “an individual’s own judgment to the extent to which an entity is appropriate for its social context” (Tost, 2011, p. 689). More specifically, we borrow cognitive and moral legitimacy constructs (Bitektine et al., 2020; Suchman, 1995) as key mechanisms to generate and test two alternative theories of audience evaluation of organizations. The predominant explanation in hybrid organizing scholarship posits that negative evaluations arise from individuals’ cognitive difficulties in categorizing hybrids (Cutolo & Ferriani, 2024; Zuckerman, 1999). We test this perspective using cognitive legitimacy. Recognizing the pervasive focus on market logic in hybrid organizing scholarship, we propose that the negative evaluations may instead stem from market logic, which is often viewed as immoral by individuals in society (Bhattacharjee et al., 2017; Fourcade & Healy, 2007). We use moral legitimacy to theorize and test this alternative explanation.
Intent to Transact
Our dependent variable is audience members’ intent to transact with the organization. We focus on this dependent variable to generate results that are applicable to organizational leaders who are faced with the problem of securing resources needed to survive. More theoretically, scholars care about legitimacy, in large part, because it provides organizations with a “reservoir of support” (Tost, 2011, p. 686) or the “active support” (Suchman, 1995, p. 575) that often comes in the form of “financial support it needs to survive and grow” (Fisher et al., 2017, p. 53). While we acknowledge legitimacy yields a wider array of boons, in this article, we conceptualize the more tangible resources in the form stakeholders’ willingness to transact with it. Customers and employees are particularly important in this regard. Do customers intend to purchase goods and/or services from it? Would potential employees intend applying to work for the organization? Indeed, research shows that customers and employees receive top priority from organizational leaders, partly due to their power to exert significant, direct economic rewards or punishments (Agle et al., 1999).
Intent to transact has been extensively studied in marketing, with a stream of research focusing particularly on the influence of legitimacy on customer intent to buy (Handelman & Arnold, 1999; Li et al., 2017; Randrianasolo & Arnold, 2020). Existing hybrid scholarship too has emphasized the importance of customers who make purchases from hybrid organizations (Gregorec, 2021; Lortie et al., 2022) and whether or not they are also the beneficiaries of the social enterprises’ pro-social mission (Battilana et al., 2012; Fosfuri et al., 2015; Santos et al., 2015). Hybrid scholarship also focuses on employee perceptions of hybridity (Battilana & Dorado, 2010; Radoynovska & Ruttan, 2021). We will also borrow categories literature (Zuckerman, 1999) to generate hypotheses below, and this scholarship too has explored customer’s willingness to purchase products from category spanning organizations (Hsu & Grodal, 2015; Weber et al., 2008).
In sum, the intent of key stakeholders such as customers and employees to transact with an organization is theoretically and practically justified, and it has been often studied in existing hybrid scholarship. We build on the research interest in this outcome and model cognitive legitimacy and moral legitimacy as mediator variables that explain how organizational configurations impact intent to transact.
Hybrid Form and Cognitive Legitimacy
Organizational scholars, including hybrid organizing scholars, have frequently turned to the categories literature and emphasized evaluators’ cognitive sensemaking processes. The has led to the insight that hybrid organizations tend to be negatively evaluated. Zuckerman’s (1999) seminal article examines discounted stock prices when the firm is not covered by a securities analyst who specializes in the industry in which the firm seeks to compete. This article spawned the influential insight that categorically challenged, or atypical, firms suffer legitimacy deficits. Durand and Thornton (2018) explain “categories are defined as interfaces of cognitive agreement about a considered object” (p. 637) and that “categories are lenses by which audiences identify and then evaluate producers and their offerings” (p. 638). Combining the categories literature to the hybrid organizing literature suggests that when evaluators observe the presence of multiple competing institutional logics in an organization, it will not fit neatly into their expected organizational “cluster of features” (Battilana et al., 2017, p. 135) and such category spanning organizations are penalized by evaluators (Battilana & Lee, 2014a).
Cognitive legitimacy, therefore, is the key individual-level legitimacy judgment driving this categories penalty theory (Bitektine, 2011; van Werven et al., 2015). Suchman (1995) defines cognitive legitimacy as the comprehensibility, taken-for-grantedness and understandability of organizations. Bitektine et al. (2020, p. 109) further explains that the “cognitive legitimacy of an organization is predicated on how well the organization fits in established cognitive categories in evaluators’ minds” (p. 109).
Based on categories scholarship, one theoretical mechanism linking cognitive legitimacy and our outcome variable, Intent to transact, is the valuation of the organization (Leung & Sharkey, 2014; Sharkey, 2014). Zuckerman’s (1999) seminal insight was that when the identity of the firms does not match analysts’ assigned identity, the stock valuation of the firm suffers. Zuckerman (2017) later generalized beyond investors by depicting the categorical imperative as “the tendency for evaluators to place less value on ‘offerings’ that do not fit in the categories they use to organize valuation” (p. 32). The implication, for this article, is that category confusion reduces intent to transact due to less value being placed on the purchase and employment opportunity being considered at a hybrid organization.
Market Logic and Moral Legitimacy
To provide an alternative account for why hybrid organizations might be negatively evaluated, we shift the focus from the confusion caused by hybrid form, to the logic content of the organizational configuration. We follow an existing pattern in hybrid organizing scholarship (Battilana & Lee, 2014b; Venkataraman et al., 2016) and conceptualize organizational hybridity with the institutional logics conceptual framework (Friedland & Alford, 1991; Thornton et al., 2012). Thornton and Ocasio (2008) define institutional logics as “the socially constructed, historical patterns of material practices, assumptions, values, beliefs, and rules by which individuals produce and reproduce their material subsistence, organize time and space, and provide meaning to their social reality” (p. 101). To theorize a societal-level interinstitutional system, scholars have emphasized various institutional orders (e.g., family, state, religion, market, etc.) that impose a specific logic.
In order for individuals to make legitimacy judgments and subsequent intentions to transact with respect to specific logics, they must first recognize how an organization prioritizes logics. Scholars have emphasized that organizational behavior is premised on this recognition and sometimes organizations go to the effort of manipulating their logic prioritization in attempt to gain stakeholder acceptance (Mair et al., 2015; Pache & Santos, 2013b). More directly, Pache and Santos (2013a) develop a model that theorizes individuals’ responses to hybrids’ competing logics as a function of the individual’s degree of logic adherence (i.e., availability, accessibility and activation). For example, Gautier et al. (2023) empirically apply this model to better understand how individuals’ existing adherence to logics shapes their posture to impact investing, an example of hybrid organizing. From a different empirical approach, Fu (2024) creates a measurement scale to assess the degree to which one logic is more central to organizational functioning. For instance, respondents are asked to indicate whether social value or profitability goals are prioritized in an organization. In sum, in this article we rely on existing scholarship that has established the ability of individuals to meaningfully perceive the logic prioritization of an organization.
As we argued earlier, market logic has received extensive scholarly attention (Glynn & D’Aunno, 2023) and can be defined as a competitive orientation driven by self-interest and profit seeking (Thornton et al., 2012). While there are alternative evaluations one may have of activity within market logic domain, we focus on moral evaluations. Heeding recent calls to reinfuse institutional theory with an emphasis on values and morality (Hampel & Tracey, 2019; Kraatz et al., 2020; Kraatz & Block, 2017; Kraatz & Flores, 2015; Risi, 2022), we focus on the moral dimension of organizations and, in doing so, offer a novel contribution to hybrid organizing scholarship. Kraatz and Block (2017) argue that by focusing on the important role that “people” play in organizations, we must acknowledge the moral dimension. “They are the ones applying moral standards in their legitimacy judgments. . .. They are the ‘guts of institutions.’ When we tune out the moral dimension of institutional reality, these fellow humans are apt to disappear from view altogether” (p. 545). In short, moral evaluations matter.
Scholars across various disciplines have depicted the market as immoral for a variety of reasons. It pushes individuals to overconsume (Fourcade & Healy, 2007), exacerbates inequality (Dutt & Wilber, 2010; Fourcade & Healy, 2007), is contaminating or profane (Besharov, 2014; Quinn, 2008; Smith et al., 2010; Yue et al., 2018; Zelizer, 1981) or it encourages destructive behavior among market participants (Dutt & Wilber, 2010; Falk & Szech, 2013; Molinsky et al., 2012). We advance this scholarship on the perceived immorality of market logic by following Suchman’s (1995) original “altruistic grounding” of moral legitimacy; “These judgments . . . reflect beliefs about whether the activity effectively promotes societal welfare, as defined by the audience’s socially constructed value system” [italics ours] (p. 579). Namely, we suggest that market logic, which Thornton et al. (2012) characterize as “profit seeking” (p. 56), reduces market participants’ altruistic concern for others. In their descriptive study of North American participants, Bhattacharjee et al. (2017) find “people see business profit as necessarily in conflict with social good.” For instance, in two studies, participants reported their perceptions of how profitable a firm or industry is, along with their perceptions of its societal value. For both firms and industries, a strong negative correlation was found, suggesting people tend to believe “profit can only motivate harmful outcomes” (p. 677). In sum, people tend to view profit seeking, a core component of the market, as immoral. This perception may lead to a decreased intent to transact with organizations primarily focused on profit, relative to organizations with a stronger nonprofit focus.
The theoretical mechanism linking moral legitimacy with intent to transact, is a social identity based mechanism (Tajfel & Turner, 1985; Wry & York, 2017). Transacting with an organization causes consumers (Bhattacharya & Sen, 2003) and employees (Turban & Greening, 1997) to include that organization in their own sense of identity. To the extent the focus of market logic on profit is not a favorable self-identifying element, we expect reduced intent to transaction with that organization.
Organizational Field Moderation
In motivating our moral legitimacy hypotheses (H2a and H2b), we argue that market logic is characterized by a profit-seeking orientation, which is commonly perceived to be in conflict with the social good (Bhattacharjee et al., 2017). We now consider whether that perception of immorality is moderated by organizational field (Radoynovska & Ruttan, 2021). More specifically, we suspect evaluating an organization in a field that is primarily directed by market logic (e.g., banking) will reduce the moral disapproval hypothesized above. In other words, in an organizational field where I expect profit seeking, I am less morally concerned about profit seeking, relative to a field where I do not expect profit seeking to be dominant.
Greenwood and Suddaby (2006) define fields as “clusters of organizations and occupations whose boundaries, identities and interactions are defined and stabilized by shared institutional logics” (p. 28). In Zietsma et al.’s (2017) review of field scholarship, they too carve off professional exchange fields as “characterized by a single logic or a few relatively minor permutations” (p. 399). Field logics, furthermore, are theorized to influence both organizations and their audiences. Fisher et al. (2017), for example, theorize how new venture entrepreneurs gain legitimacy from diverse audiences who are driven by distinct institutional logics. “Because institutional logics provide the governing principles that define appropriate behavior for organizational actors, they significantly shape judgments about the validity and appropriateness of different organizational practices . . . Hence institutional logics and legitimacy judgments are inextricably linked” (p. 59). In Study 2, we use banking to operationalize a field that is primarily driven by a market logic and therefore a profit orientation (Glaser et al., 2016). We expect that in such a field, evaluators will be more morally tolerant of profit-seeking activity because it is congruent with the primary institutional logic of that field.
Figure 1 illustrates all the hypothesized relationships we examine in this article.
Research Framework.
Study 1
Experimental Design
This exploratory study tests Hypotheses 1a, 1b, 2a, and 2b. We employ a 2 (hybrid vs. non-hybrid) × 2 (for-profit core vs. nonprofit core) between-subject online experiment (see Figure 2). Online participants are randomly assigned to one of four conditions that varied (a) the hybrid form of the organization and (b) the institutional logic that solely populates the core dimensions of the organization. This design creates the following four organizational conditions: for-profit core hybrid, for-profit business, nonprofit core hybrid, and nonprofit organization.
2 × 2 Organizational Configuration Experimental Design.
We focus on urgent care centers in the healthcare industry in order to adopt an applied research approach, which means we attempt to closely emulate a real-world setting (Bitektine et al., 2018).
Organizational Configuration Manipulation
We use the fake organizational name, AHV, for this experiment. To experimentally manipulate each organizational configuration, we focus on the following organizational dimensions: legal incorporation status, workforce composition, interorganizational relationships. and culture (Battilana & Lee, 2014b). We manipulate legal incorporation status several times on various webpages with the text “AHV (Health Inc./Community Health)” along with a fake logo (see Appendix A). The workforce composition dimension is manipulated by the educational credential of the President as follows: “Prior to earning a (Masters of Business Administration (MBA)/Masters of Social Work (MSW)) degree, Dr. Forshey worked for 20 years as a licensed Medical Doctor in a family practice office.” The signature line on the letter from the President also manipulates workforce composition with (MBA/MSW) following the President’s name (see Appendix A). We manipulate interorganizational relationships with the following text: “All AHV physicians are required to undergo bedside manner training provided by Bedside Care (Consulting, Inc./ Charities).”
Scholars have identified different hybrid forms based upon the extent to which one logic is dominant or not (Besharov & Smith, 2014; Fu, 2024). Besharov and Smith (2014) define hybrid centrality as the “extent to which multiple logics manifest in core features that are central to organizational functioning” (p. 366). Conversely, low hybrid centrality occurs when “a single logic guides core operations while other logics manifest in peripheral activities not directly linked to organizational functioning” (p. 369). We operationalize low centrality hybrids, that is, organizations where hybridity occurs in their peripheral dimension. Without firm guidance from existing literature on which organizational dimensions are core or peripheral, we operationalize organizational culture as a peripheral dimension at AHV. This decision is not to suggest organizational culture is unimportant. Rather, since hybridity is manifest in the peripheral dimension of a low centrality hybrid organization, this operationalization enables us to highlight organizational culture as a key manipulation in the experimental design. Therefore, the cultural dimension of our experimental conditions is manipulated as follows:
For-profit core hybrid: Most importantly, we are first and foremost a for-profit business and have developed a culture that primarily focuses on efficiently enhancing customer satisfaction and making money for the organization. We also have a nonprofit-like culture around here. Our outstanding administrative staff and technicians work hard to compassionately serve our patients for the greater good.
For-profit business: Most importantly, we are first and foremost a for-profit business and have developed a culture that primarily focuses on efficiently enhancing customer satisfaction and making money for the organization. The culture around here means our administrative staff and technicians work hard to provide outstanding medical care to each and every person.
Nonprofit core hybrid: Most importantly, we are first and foremost a nonprofit organization and have developed a culture that primarily focuses on compassionately serving our patients for the greater good. We also have a for-profit business-like culture around here. Our outstanding administrative staff and technicians work hard to efficiently enhance customer satisfaction and make money for the organization.
Nonprofit organization: Most importantly, we are first and foremost nonprofit organization and have developed a culture that primarily focuses on compassionately serving our patients for the greater good. The culture around here means our administrative staff and technicians work hard to provide outstanding medical care to each and every person.
Pie charts (see Appendix A) depicting the hybridity status (or not) of the organization were also visible to participants to amplify our experimental manipulation.
To test whether our experimental organizational configuration manipulation was successful, we asked all respondents the following question: “AHV is. . . (1) mostly a for-profit incorporated (Inc.) business, but also has some nonprofit culture as well; (2) entirely a for-profit incorporated (Inc.) business; (3) mostly a nonprofit organization, but also has some for-profit culture as well; or (4) entirely a nonprofit organization.” This manipulation check survey question was included after dependent variable items were collected.
Sample
Power analysis indicated that to obtain 0.80 power to detect an effect size of 0.10 for the main effects at the .05 significance level in a 2 × 2 factorial analysis, about 200 participants were needed in each condition (N = 800). In December of 2020, we recruited 1,191 online participants to accommodate the potential exclusion of participants who fail attention checks. Online participants were recruited via Lucid Theorem and resided in the United States. Lucid Theorem is an online platform that allows researchers to recruit online participants in a similar fashion as Amazon Mechanical Turk (Coppock & McClellan, 2019). The median time taken to complete each survey is 9.3 min. Lucid Theorem pays third-party organizations to recruit online participants, and each third party arranges various compensations arrangements for online participants. Lucid was paid $1 for each respondent.
Importantly, participants were recruited under the guise of taking part in a market research study. In other words, our study involves IRB-approved deception. Without being prefaced by a standard academic survey consent form, respondents initially read: Thank you for agreeing to take part in this market research study on health care. AHV (Health Inc. is a for-profit/Community Health is a nonprofit) health care organization that is opening urgent care centers around the United States and we are collecting consumer feedback to determine where we should open our next centers. We are also collecting information about your perceptions of our organization to enhance our services.
This IRB-approved deception (i.e., that it was a market research study by a real organization) was adopted because we judged it did not substantially harm the participants, and we wanted participants to believe that their evaluations of the organization would really have an impact on the likelihood of the organization opening a location near them. This design was intended to enhance the external validity of the study and strengthen the incentive for participants to complete the experimental task (Schilke, 2015). To determine how successful the deception was, participants answered the following survey question after being debriefed about the deception: “I believed this was a real market research study.” Answer categories ranged from 1 (strongly disagree) to 7 (strongly agree). Thirty-seven (37.3) percent of the analysis sample answered 7, and 71.7% gave an answer greater than 4. This result assures us that the majority of respondents believed their response to our key intent to transact outcome items was given with the belief that their answers might determine the likelihood of the organization opening in their region.
One first attention check is “AHV. . . (1) specializes in cancer treatment; (2) is an urgent care center; (3) is a hospital; and (4) don’t know/can’t remember.” Seventy-five (75.4) percent correctly selected urgent care center. The second attention check question is “Please select strongly agree, to indicate you are paying attention” and 74.7% correctly did so. We dropped from our analysis sample all respondents who got one or two of the above attention checks wrong. The analysis sample, therefore, includes 734 observations (61.6% of recruited participants) that correctly answered both attention check questions. Respondents who were dropped because of missing attention check(s) tended to be younger, have lower household income, have less education, and were more likely to be men. We will also report hypothesis test results with a larger analysis sample (N = 1,054) that includes respondents who answered one attention check question incorrectly (Berinsky et al., 2014).
Fifty-eight (57.6) percent of the analysis sample is female. Thirty-three (32.8) percent is 18 to 39 years of age, 34.2% is 40 to 59, 31.1% is 60 to 79, and 1.9% is 80 or older. Twenty-three (22.9) percent has a high school degree (or other post high school vocational training) or less, 18.8% has completed some college, and 58.04% has an associate’s degree or higher. The regional distribution of the sample includes 21.1% from the Northeast, 19.4% from the Midwest, 39.7% from the South, and 19.9% from the West.
Measures
Dependent Variable: Intent to Transact
The following two survey items operationalize consumer intent to transact: If AHV opened an urgent care center in my region, I would go there for medical care. I would benefit if an AHV urgent care center opened in my region. Similar to Radoynovska and Ruttan (2021), we also measure the likelihood of respondents in applying for a position at the organization with the following two survey items: AHV is a desirable place to work. If there was a job opening at AHV, I would consider applying for the position. Participants indicated their level of agreement with each statement on a scale from 1 to 7. For the employee items, participants were also given an additional “not applicable” answer category for participants who find it difficult to imagine working in the healthcare industry. Seventeen (17.4) percent and 23.2%, respectively, selected the Not Applicable answer category for the employee items. An exploratory factor analysis (EFA) suggested that all four items loaded onto a single factor (eigenvalue = 2.58, 88.5% variance explained). We thus average together all four items to operationalize intent to transact (Cronbach α = .85, N = 734). In observations with missing employee outcome values, the average is still calculated with all non-missing values.
Independent Variables: Organizational Configuration
The key independent variables are indicator variables that reflect the condition each participant was randomly assigned to. Our hypotheses call for different combinations of our four experimental conditions. To test Hypothesis 1a to b, Hybrid = 1 for participants who are randomly assigned to the for-profit core hybrid or nonprofit core hybrid, and Hybrid = 0 for participants who are randomly assigned to the for-profit business and nonprofit organization conditions. To test Hypothesis 2a to b, which derive from our theoretical focus on market logic, For-Profit Core = 1 for participants who are randomly assigned to the for-profit core hybrid or the for-profit business, and For-Profit Core = 0 for participants who are randomly assigned to the nonprofit core hybrid or the nonprofit organization conditions. In other words, the For-Profit Core indicator variable represents an organization where market logic is prioritized.
Measured Mediating Variable: Cognitive legitimacy
We borrow Bitektine et al.’s (2020) following cognitive legitimacy items: AHV is typical of its industry. AHV is a normal organization for this industry. AHV is a typical organization that operates in this industry (Cronbach α = .89).
Measured Mediating Variable: Moral Legitimacy
We borrow the following sociopolitical legitimacy items from the study of Bitektine et al. (2020) to operationalize moral legitimacy: I agree with AHV’s practices. AHV follows the best practices. AHV contributes positively to society. Averaging items together yields a Cronbach α of .93. Importantly, this last item “AHV contributes positively to society” nicely operationalizes the social welfare promoting aspect we have highlighted in the hypothesis section above. As a robustness check, however, we also use the following integrity trustworthiness (Mayer & Davis, 1999; Peifer & Newman, 2020; Walsh & Beatty, 2007) items as an alternative operationalization of moral legitimacy because it includes the following more explicit moral language than socio-political legitimacy. I like AHV’s values. Sound principles seem to guide AHV’s behavior. AHV has high integrity. I can depend on AHV to do the right thing. Averaging these items together yields a Cronbach α of .94.
Data Analysis
To test our hypothesized main effects and interaction effects, we use the analysis of variance (ANOVA), which is widely used to assess the differences between groups means in factorial experiments (Kutner et al., 2004). We employ structural equation modeling (SEM) to test mediation-related hypotheses. SEM is a common method for estimating mediation models due to its flexibility in model specification and estimation options (Hayes, 2022; Preacher & Hayes, 2008). Since the sampling distributions of indirect effects are rarely normal in finite samples, we incorporate the bootstrapping method with 5,000 replications to address potential estimation bias caused by the non-normality of indirect effects (Preacher & Hayes, 2008). We further adopt bias-corrected (BC) confidence intervals (CIs) to account for potential bias associated with the often nonsymmetric nature of the distributions of indirect effects (Efron & Tibshirani, 1993). Indirect effects are considered insignificant if zero is included in the intervals. Descriptive statistics for the model variables, the correlation matrix, and ANOVA results are provided in Tables S1-S4 in the online supplemental material.
Results
We first tested our manipulation check (see above for more details) by cross tabulating the responses of the participants with the random assignment of the study. The results indicate our manipulation was successful (Pearson X2 = 258.56, p < .001, N = 734). Most of the participants in each experimental condition accurately identified the organizational configuration as manipulated.
Table 1 displays the mean values of the dependent variable and mediators for each condition. The nonprofit organization condition shows the highest intent to transact: 5.40 out of 7. The next highest comes from the hybrid conditions: 5.19 for the nonprofit core hybrid and 5.16 for the for-profit core hybrid. The for-profit business condition yields the lowest intent to transact: 4.91.
Study 1 Descriptive Statistics of Model Variables by Experimental Condition (N = 734).
Note. Mean [95% confidence interval].
Before testing our hypotheses, we first checked if there is a significant interaction between the two manipulated factors (i.e., Hybrid and For-profit core). Results suggested a presence of such interaction effect: F(1,730) = 5.87, p = .016,
H1a predicts that hybrid organizations (i.e., for-profit core hybrids and nonprofit core hybrids) cause less intent to transact than non-hybrid organizations (i.e., for-profit businesses and nonprofit organizations). This hypothesis finds no statistical support: F(1,730) = .06, p = .810,
H1b predicts that the negative effect of Hybrid on Intent to transact is mediated by Cognitive legitimacy. We first test the effect of Hybrid on Cognitive legitimacy and find it to be nonsignificant (F(1,730) = 0.00, p = .980,
Study 1 Direct, Indirect, and Total Effects of Hybrid on Intent to Transact.
We find consistent results with the larger analysis sample (N = 1,054). While there is a positive relationship between Cognitive legitimacy and Intent to transact (b = 0.148, p = .000), the effect of Hybrid on Cognitive legitimacy is not significant (F(1,1050) = 0.07, p = .798,
H2a predicts that for-profit core organizations (i.e., for-profit core hybrids and for-profit businesses) attract less intent to transact than nonprofit core organizations (i.e., nonprofit core hybrids and nonprofit organizations). We find evidence to support this hypothesis. The main effect of For-profit core is significant (F(1,730) = 6.84, p = .009,
H2b predicts that the negative effect of For-profit core on Intent to transact is mediated by Moral legitimacy. We first test and find a negative and significant effect of For-profit core on Moral legitimacy (F(1,730) = 8.74, p = .003,
Study 2 Direct, Indirect, and Total Effects of For-profit Core on Intent to Transact.
Results with the larger sample also demonstrate a significant indirect effect through Moral legitimacy (b = −0.157, BC 95% CI = [−0.259, −0.057]) which accounts for 73.4% of the total effect (b = −0.214). As another robustness check, we use Integrity trustworthiness as mediator (in place of sociopolitical legitimacy) and find that the indirect effect through this operationalization of moral legitimacy is statistically significant (b = −0.169, BC 95% CI = [−0.278, −0.060]) and accounts for 65.8% of the total effect (b = −0.257, N = 734).
To summarize the results from Study 1, we do not find support for our hybridity and cognitive legitimacy hypotheses (i.e., H1a and b) and do find support for our market logic and moral legitimacy hypotheses (i.e., H2a and b).
Study 2
This preregistered study 1 (https://doi.org/10.17605/OSF.IO/FQGNW) was designed to replicate the results of Study 1, using a different organizational setting and a different sample population. It therefore tests H1a–b and H2a–b. In addition, it tests whether the key results from Study 1 vary by the organizational field (i.e., H3a–b).
Experimental Design
We employ a 2 (hybrid vs. non-hybrid) × 2 (for-profit core vs. nonprofit core) × 2 (healthcare field vs. banking field) between-subject online experiment. Online participants are randomly assigned to one of eight organizational configuration conditions: for-profit core hybrid bank/health, for-profit business bank/health, nonprofit core hybrid bank/health, or nonprofit organization bank/health. Undergraduate participants were instructed to read a review of a phone app and then provide their assessment of it, including their likelihood of downloading the app and taking an internship position at the organization that created the app. These evaluations operationalize the outcome of the study, intent to transact. We developed an online vignette study about a phone app largely because there are many organizational fields represented by phone apps (e.g., sports, news media, family, religion, health, finance, art, etc.) allowing us to manipulate organizational field in a carefully controlled experimental setting. We also assumed the undergraduate sample population would be interested in reading about this topic that is likely relevant to their lives.
Field-Level Manipulation
Participants were randomly assigned to evaluate a health or financial wellness app (see Appendix B for experimental vignette). The health wellness app is described to “help you become more physically healthy” and represents an evaluation of an organization in the healthcare field, providing an opportunity to replicate the results of Study 1. The financial wellness app is described to “help you become more financially secure” and operationalizes the banking organizational field. To test if the organizational field was successfully manipulated, participants read, “The next few questions are about the field of the organization you just read about. Field refers to the larger group of similar organizations. What field does the organization that created the app belong to? (1) healthcare field, (2) banking field, and (3) photography club field.” This manipulation check was included after dependent variable items were measured.
Similar to the healthcare field, banks can be subject to market and/or community logics and therefore appropriate for hybridity scholarship (Almandoz, 2014; Battilana & Dorado, 2010). Nevertheless, we theorize that the banking organizational field is commonly perceived to have a for-profit norm (Glaser et al., 2016; Radoynovska & Ruttan, 2021) which is necessary to test Hypotheses 3a–b.
Organizational Configuration Manipulation
Similar to Study 1, to experimentally manipulate each organizational configuration, we focus on the following organizational dimensions: legal incorporation status, workforce composition, interorganizational relationships, and culture (Battilana & Lee, 2014b). We manipulate legal incorporation status with the following organizational names: AHV Community Health; AHV Community Bank; AHV Health, Inc.; and AHV Bank, Inc. The organization was also explicitly referred to as a “nonprofit organization” or “for-profit business.” The workforce composition dimension is manipulated by the background of the primary app creator as follows: “The primary app creator is a licensed (social worker at AHV Community Health) | (financial officer at AHV Health Inc.) | (social worker at AHV Community Bank) | financial officer at AHV Bank Inc.).” We manipulate interorganizational relationships with the following text: “After 15 years with the organization, the (social worker/financial officer) was asked to work closely with an experienced team of app designers at Streamlined (Tech Business Consultants, Inc./ Nonprofit Tech Support) to design the app.” Like Study 1, we manipulate hybridity when we describe the cultural dimension of the organization with terms such as “make money” and “help more people.”
To test whether our organizational configuration manipulation was successful, we asked all respondents the following question: “The organization that creates the app is. . . (1) entirely a for-profit business focused on making money; (2) mostly a for-profit business focused on making money, but also has a nonprofit culture of helping others; (3) entirely a nonprofit organization focused on helping others; and (4) mostly a nonprofit organization focused on helping others but also has a culture of making money.” This manipulation check was included after dependent variable items were measured.
Sample
Between February and October of 2022, undergraduates at a large Northeastern urban public university in the United States were recruited and completed an IRB-approved online study via the SONA system. Students were remunerated with course credit. Power analysis indicated there needed to be around 100 participants in each condition (N = 800) in order to obtain 0.80 power to detect an effect size of 0.10 (for either main effects or interaction effects) at the .05 significance level in a 2 × 2 × 2 factorial analysis. Based on a pilot test, we anticipated dropping about 30% of respondents for failing to pass both of our screener questions and therefore aimed to recruit 1,143 participants [1,143−(1,143 × 0.3) = 800]. In the end, we recruited 1,146 participants. Due to erroneously taking the survey more than once or failing to finish the survey, 49 participants were dropped from analysis, leaving 1,097. The median duration of the survey among these participants is 11 min.
One attention check question reads, “To make sure you are paying attention, please indicate the two things the app does to encourage habit formation? (1) Lotteries and Cartoons, (2) Education and Reminders, (3) Avatars and Ringtones.” Ninety-seven percent provided the correct answer: Education and Reminders. The second attention check question is “To demonstrate you are paying attention please select Strongly disagree” and 74.5% correctly did so. We dropped (from our analysis sample) all respondents who got one or two of the above attention checks wrong, leaving 802 (73.1% of eligible participants) observations that correctly answered both attention check questions for the analysis sample. In the Results section and in accordance with our preregistration plan, we will also report hypothesis test results with a larger analysis sample of 1,079, which includes respondents who answered at least one attention check question correctly (Berinsky et al., 2014).
The mean age of participants in the analysis sample (N = 802) is 21.1% and 58.2% identify as female. The racial and ethnic demographics are as follows: 42.8% Asian; 11.1% Black; 0.3% Pacific Islander; 20.8% White; 18.8% Some Other Race; and 6.2% preferred not to answer; and 26.2% identified Hispanic, Latino, or Spanish origin.
Measures
Dependent Variable: Intent to Transact
Participants indicated their level of agreement with the following items on a scale from 1 to 7; I would download this app. I would use this app regularly. I would benefit from having this app on my phone. If I were qualified for the paid internship, I would apply. I would likely take the paid internship if offered. AHV is a desirable place to intern at. We submit all six items to an EFA, and a two-factor structure emerges with the consumer and employee items loading on two separate factors. Since there is a substantial correlation (r = .43) between the two factors, justifying the formation of an overall score of intent to transact from the two dimensions (Furr & Bacharach, 2013), we average together all six items to operationalize Intent to transact (Cronbach α = .87, N = 802).
Independent Variables
The key independent variables are indicator variables that reflect the condition each participant was randomly assigned to. Our hypotheses call for different combinations of our experimental conditions. To test Hypothesis 1a–b, Hybrid = 1 for participants who are randomly assigned to the for-profit core hybrid bank/health or nonprofit core hybrid bank/health, and Hybrid = 0 for participants who are randomly assigned to the remaining conditions. To test Hypothesis 2a–b, For-profit core = 1 for participants who are randomly assigned to the for-profit core hybrid bank/health or the for-profit business bank/health, and For-profit core = 0 for participants who are randomly assigned to the remaining conditions.
Measured Mediating Variables
As in Study 1, we borrow Bitektine et al.’s (2020) Cognitive legitimacy items (Cronbach α = .90, N = 802). We borrow Bitektine et al.’s (2020) sociopolitical legitimacy scale to operationalize Moral legitimacy (Cronbach α = .90, N = 802). As a robustness check, we also use Integrity Trustworthiness (Mayer & Davis, 1999; Peifer & Newman, 2020; Walsh & Beatty, 2007) as an alternative operationalization of moral legitimacy because it includes more explicit moral language than socio-political legitimacy (Cronbach α = .93, N = 802).
Moderator Variable
To test Hypothesis 3a–b, Banking = 1 for all four banking conditions (i.e., financial wellness app) and Banking = 0 for all four healthcare conditions (i.e., health wellness app).
Data Analysis
As in Study 1, we employ ANOVA and SEM (incorporating bootstrapping with 5,000 replications) for hypothesis testing. We use BC confidence intervals to determine the statistical significance of indirect effects. Descriptive statistics for the model variables, the correlation matrix, ANOVA results, and conditional indirect effects are provided in Tables S5-S9 in the online supplemental material.
Results
We first examined the effects of our manipulations (see above for more details). For the organizational configuration manipulation, we cross tabulated the manipulation check with the random assignment of the study. The results indicate our manipulation was successful (Pearson X2 = 1,400, p < .001, N = 802). The majority of the participants in each experimental condition correctly identified the organizational configuration as manipulated. Cross tabulating our manipulation check for organizational field with the Banking variable indicates that our field manipulation was also successful (Pearson X2 = 668.2, p ≤ .001, N = 802). Among those randomly assigned to read about the financial/health wellness app, 96.2%/94.6% correctly answered banking/healthcare field.
To test our field moderation hypothesis (H3a–b), the banking field must be perceived to have more of a for-profit norm, in general, than the healthcare field. To provide empirical evidence of this assumption in the literature (Glaser et al., 2016; Radoynovska & Ruttan, 2021), we asked all participants (after dependent variable items were measured) to indicate their level of agreement with “A profit-orientation is quite common in that field.” Respondents in the banking field conditions agreed with this statement more (M = 5.34) than respondents in the healthcare field conditions (M = 4.57, t = −7.18, Cohen’s D = −0.51, p < .001).
The descriptive statistics (Table 2), broken down by field, indicate that for the healthcare field, the nonprofit organization condition has the highest mean Intent to transact (M = 5.09) and the for-profit business condition has the lowest (M = 4.47). In the banking field, the nonprofit hybrid condition has the highest mean Intent to transact (M = 5.07) and the for-profit business has the lowest (M = 4.51). One key interpretation of these descriptive statistics is that for-profit business conditions have the lowest level of Intent to transact across both field conditions.
Study 2 Descriptive Statistics of Model Variables by Experimental Condition (N = 802).
Note. Mean [95% confidence interval].
Before testing hypotheses, we conducted an ANOVA test to examine if there were significant interactions among our 2 × 2 × 2 experimental design. We found a marginally significant two-way interaction of Hybrid and For-profit core (F(1,794) = 3.86, p = .050,
Starting our hypothesis testing with H1a, recall we predict a negative effect of Hybrid on Intent to transact. The main effect of Hybrid is not significant (F(1,794) = 2.53, p = .112,
H1b predicts that Cognitive legitimacy mediates the negative effect of Hybrid on Intent to transact. We first test and find a nonsignificant effect of Hybrid on Cognitive legitimacy (F(1,794) = 0.13, p = .723,
Regarding the Moral legitimacy mechanism, we predict that for-profit core organizations attract less Intent to transact than nonprofit core organizations (H2a) and that this negative effect is mediated by Moral legitimacy (H2b). The main effect of For-profit core is negative and significant (F(1,794) = 26.21, p = .000,
As for the hypothesized mediation, we find that For-profit core reduces Moral legitimacy (F(1,794) = 82.23, p = .000,
As in Study 1, we conduct several robustness checks on market logic content mechanism and find similar results. The negative effect of For-profit logic on Intent to transact is significant when using the larger sample (F(1,071) = 24.03, p = .000,
It is worth noting that the above results on H1a–b and H2a–b (including robustness checks) are highly consistent with Study 1. In other words, we successfully replicate the results of Study 1 using a different organizational setting and a different sample population, thereby enhancing the robustness of our findings.
H3a predicts that the negative For-profit core effect (H2a) is weaker in organizational fields with a for-profit norm, relative to fields that do not have a for-profit norm. We test this prediction by examining the interaction of For-profit core and Banking in the estimation of Intent to transact. The interaction term is nonsignificant (F(1,794) = 0.52, p = .473,
H3b predicts that the Moral legitimacy mediation (H2b) is weaker in organizational fields with a for-profit norm, relative to fields that do not have a for-profit norm. The interaction of For-profit core and Banking is not significant in predicting Moral legitimacy (b = 0.251, p = .119), indicating an absence of a moderated indirect effect through Moral legitimacy, despite a positive association between Moral legitimacy and Intent to transact (b = 0.465, p = .000). Bootstrapping results confirm that the indirect effect of For-profit core on Intent to transact is not moderated by Banking: while the indirect effect of For-profit core on Intent to transact through Moral legitimacy appears to be weaker when Banking = 1 (b = −0.281, BC 95% CI = [−0.406, −0.170]) compared to when Banking = 0 (b = −0.398, BC 95% CI = [−0.524, −0.284]), this difference is not statistically significant (b = −0.117, BC 95% CI = [−0.263, 0.029]). We thus fail to find evidence for H3b. The difference is also nonsignificant when using Integrity trustworthiness (b = −0.060, BC 95% CI = [−0.195, 0.076]) as an alternative measure of moral legitimacy. It is, however, marginally significant with the larger sample (b = −0.124, BC 90% CI = [−0.233, −0.019]), presumably due to greater statistical power.
Lastly, although we do not find consistent support for the moderating effect of organizational field, we do observe that our main finding (i.e., moral legitimacy mediation) is replicated in both banking and healthcare settings (see statistics reported in the preceding paragraph), demonstrating its robustness across organizational fields.
General Discussion
Our article contributes to hybrid organizing and organizational legitimacy scholarship. Our primary theoretical contribution is that the logic content of organizations matters. This insight has important implications for hybrid organizing scholarship, which tends to more commonly focus on various forms of hybridity. Going in a different direction, we make a theoretical link between moral legitimacy evaluations and the dominant logic of focus in hybrid scholarship: market logic. Our focus on market logic, and its moral legitimacy evaluations, forms our core contribution to hybrid organizing scholarship, which tends to heavily lean upon the categories scholarship and cognitive legitimacy to explain negative audience evaluations. We theoretically explain and empirically show that organizations with market logic at its core tend to be negatively evaluated for moral reasons.
Contributions to Hybrid Organizing Research
Categories and Cognitive Legitimacy
Hybrid organizing scholarship has borrowed from categories scholarship to conceptualize a potential problem facing hybrid organizations. Namely, when hybrids fail to fit neatly into a preexisting cognitive category, they may suffer a cognitive legitimacy deficit (Battilana et al., 2017; Battilana & Lee, 2014a). As tested by the experimental design of this article, however, we fail to find evidence to support this hypothesis. Instead, we find that hybrid form alone does not matter, and hybrid organizations do not face reduced intent to transact. While we do find a positive association between cognitive legitimacy and evaluators’ intent to transact with the organization, we do not find evidence that the hybrid status of an organization impacts evaluator-perceived cognitive legitimacy of the organization. One interpretation of this null result is that hybrid organizations are now normal in society, and therefore face fewer cognitive obstacles from audience members (Glynn et al., 2021). This shift implies the ability of cognitive legitimacy, as a construct, to explain variance in audience evaluations of hybrid organizations is diminishing over time.
From Hybrid Form to Logic Content
While we appreciate that seminal definitions of organizational hybridity can generalize to many different types of organizations subject to different institutional logics, we caution scholars to more carefully account for the specific institutional logics in play. In other words, the form of hybridity has been usefully theorized (Besharov & Smith, 2014; Fu, 2024; Litrico & Besharov, 2019; Shepherd et al., 2019). We call for more attention to the content. We borrow the institutional logics theoretical framework, which theorizes distinct institutional orders, such as the family, state, religion, or market. We have focused on market logic in this article due to its existing ubiquity in the field of hybrid organizing research (Glynn & D’Aunno, 2023). As previously noted, this prevalence of market logic raises the possibility that the accumulating insights of the field may not be from the impact of the form of hybridity, but rather from the particular influence of market logic content. To examine this possibility, we test market logic alongside the hybrid form in both studies and consistently find that while the hybrid form does not affect participants’ intent to transact, the presence of market logic in the core of the organization reduces it. This robust result suggests that the ubiquity of market logic in organizational hybrid studies is indeed consequential and may obscure the accumulating insights of the field. Future research might consider conducting a systematic review of hybrid organizing research to determine whether and to what extent existing findings regarding the hybrid form are confounded by the specific impact of market logic.
Additionally, through careful study designs, such as the one employed here, we call for more scholarship to make distinctions between scholarship on hybrid forms in general and scholarship on hybrid organizations populated by specific institutional logics of interest. In this vein, we highlight two potential ways to advance organizational scholarship forward. First, we theorize and test if the effect of market logic varies by organizational field (Radoynovska & Ruttan, 2021) and find insufficient evidence to support our hypothesis. One way to interpret this null finding is to amplify the robustness of our theorized negative moral evaluation of market logic. Even in the banking field, where for-profit norms are ubiquitous, evaluators continue to react negatively to bald-faced evidence of profit seeking. Nevertheless, we suspect continued exploration of moderating field conditions (Zietsma et al., 2017) is warranted and likely to be a fruitful research agenda. Indeed, this focus on macro conditions is a seminal insight of institutional theory. Second, the growing literature on individual-level attributes and their relation to various logic prioritization perceptions (Gautier et al., 2023; Pache & Santos, 2013a; Pache & Thornton, 2020) provide another avenue forward. For example, future research could explore how individual differences in the degree of logic adherence (Pache & Santos, 2013a; Gautier et al., 2023) or moral intuitions (Graham et al., 2013; Liu & Peifer, 2022) might influence organizational evaluations.
Beyond focusing on market logic, future research could also examine other institutional orders, such as the family, state, profession, or religion. Each order imposes a specific logic and therefore demands unique and careful theorizing. While we focus on market logic in this article, organizations that are infused with a family logic, for example, may shape evaluations in ways quite different than an organization infused with the logic of the state. In this vein, we call for more logic-specific theorizing that would need to specify its expected relationship with audience evaluations. The larger implication is that when an audience evaluates a “hybrid” organization, they do not notice its hybrid form, or the lack thereof, but are instead attuned to the presence or absence of a relevant institutional logic.
Contributions to Organizational Legitimacy Research
Our article also supports the calls for more attention to moral evaluation of organizations in institutional scholarship (Hampel & Tracey, 2019; Kraatz et al., 2020; Risi, 2022). Applying a moral legitimacy evaluative lens to our study yields strong empirical support. We position individual-level moral legitimacy judgments as a mediator between a common organizational configuration (i.e., with market logic at the core) and stakeholders’ intent to transact. We hypothesize and find that individuals negatively morally evaluate market logic. We point out that the focus of moral legitimacy is on the altruistic promotion of social welfare (Bitektine, 2011; Suchman, 1995) and theorize this moral intuition conflicts with the emphasis of the market on profit seeking (Bhattacharjee et al., 2017). We acknowledge that other dimensions of market logic could elicit positive moral evaluations. Fourcade and Healy (2007), for example, suggest the market is also “civilizing,” leading to cooperation between strangers. In this vein, we caution future scholarship to recognize there is a plurality of moral intuitions (Graham et al., 2013; Liu & Peifer, 2022) and to carefully define the type of moral evaluation. In sum, careful attention to the variety of ways morality can drive audience evaluations of market logic, and other organizational attributes, promises to open a rich area of research. We also hypothesize and find that negative moral evaluations are associated with reduced intent to transact with the organization. This bolsters our contention that moral evaluations stand to materially impact organizations, of course, with the caveat of the well-recognized intention–behavior gap (Sheeran & Webb, 2016).
Methodological Contributions
There are also methodological contributions worth noting. We join a growing body of organizational scholars employing experimental studies (Levine et al., 2023). We think vignette-based experimental studies provide a valuable methodological tool to advance hybrid organizing scholarship. We also take the additional step of enhancing external validity by engaging in IRB-approved deception. Namely, Study 1 respondents made assessments of organizations after being told they were engaged in “market research” being conducted by a real organization. Lastly, we preregistered our second study. While preregistration in some ways hampered our ability to respond more flexibly to reviewer recommendations, we trust this practice increases transparency of the research process and bolsters the credibility of study results.
Limitations
There are limitations to our study. We acknowledge our rather blunt experimental manipulation of market logic, that is, “make more money” may lack external validity. Namely, organizations that possess strong profit-seeking motives may intuitively understand the core finding of this article and shy away from communicating its true colors. To the extent this possibility is true, the moral disapproval we find here would likely be muted. Furthermore, we cannot comment on how strong this moral disapproval is and concede that other evaluative considerations may overpower it. This augments calls to further clarify and distinguish between multiple organizational evaluations (Bitektine et al., 2020).
We use two different sample pools to test the same hypotheses: an online survey pool of adults and a sample of college undergraduates. We also employ different organizational forms: urgent care centers and phone app teams. We acknowledge these differences introduce complexity in interpreting the results across both studies. For instance, perhaps younger college students are more accustomed to hybridity. Or perhaps a physical healthcare setting elicits different kinds of evaluations than a phone app. Acknowledging this complexity, however, we are heartened that we obtain similar hypothesis testing results across both disparate studies.
Another related limitation is our payment for the online participants in Study 1, which might raise concerns about ethical issues and data quality. Participants were paid the equivalent of $1 for a median completion time of 9.3 min, equaling to approximately $6.50 per hour. We acknowledge that this rate was lower than ideal and due to our budget constraints. However, it aligns with the average wage ($6.50/hr) on Amazon MTurk, a platform most frequently used by researchers (Moss et al., 2023). Moss et al.’s (2023) study on the ethical aspects of MTurk found that the majority of MTurk workers use it as a form of paid leisure or part-time work to cover nonessential expenses. Moreover, most workers would not trade the hidden value of MTurk (e.g., working from home, flexible hours, no commute) for less than $25 per hour, suggesting that these hidden benefits augment their overall compensation. While these findings are specific to MTurk, we believe they help alleviate the ethical concerns regarding our research conducted on a similar platform. Finally, potential concerns about data quality are mitigated by our use of attention checks and the fact that the conclusions drawn from this dataset are consistent with those from Study 2, which use a different sample and compensation method.
Conclusion
Knowledge accumulation of hybrid organizing scholarship may be skewed by its focus on market logic. And when scholars theorize a hybrid penalty, their preferred explanation tends to be a version of a categories penalty. Our study therefore makes contributions on both fronts. Our results suggest the focus of the scholarly field on market logic is consequential because we find moral evaluations of market logic tend to reduce one’s intent to transact with the organization. Of course, this moral mechanism adds an additional explanatory framework alongside the more well-trod category penalty explanation, for which we fail to find supportive evidence.
Supplemental Material
sj-docx-1-bas-10.1177_00076503251324062 – Supplemental material for Evaluations of Organizational Configurations: Does Hybrid Form or Logic Content Matter?
Supplemental material, sj-docx-1-bas-10.1177_00076503251324062 for Evaluations of Organizational Configurations: Does Hybrid Form or Logic Content Matter? by Jared L. Peifer and Jing Liu in Business & Society
Footnotes
Appendix A
Appendix B
Acknowledgements
We thank Matthew Lee, Daniel Waeger, and Scott Newbert for their useful feedback on this article.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Lawrence N. Field Center for Entrepreneurship at Baruch College, City University of New York research grant. PSC-CUNY Award #62368-00 50
Supplemental Material
Supplemental material for this article is available online.
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References
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