Doing Well and Doing Good? Employee Exit in Social Enterprise

Abstract

The literature on hybrid organizations offers a number of strategies designed to avoid destabilizing, internal tensions within such organizations. We argue, however, that in implementing these practices, hybrid organizations may unintentionally create new challenges for frontline employees and increase their likelihood of exit. We examine a microfinance bank that enacted practices designed to minimize internal, inter-group tensions. We find that this approach left loan officers ill-prepared to achieve the bank’s key social outreach goal of lending to poor clients. Through qualitative observations, we show how these practices contributed to a lack of fit, unmet expectations, and unproductive social comparisons among loan officers. Through quantitative analyses of the bank’s employee database, we show that loan officers were more likely to exit the bank when lending to the poor constituted a greater proportion of their workload. Overall, this study reveals an important, unintended outcome of hybrid organizing, and demonstrates how efforts to avoid internal conflict can displace organization-level tensions onto individual employees.