From Logic Acceptance to Logic Rejection: The Process of Destabilization in Hybrid Organizations

Abstract

We study the introduction of the private logic into a mature Italian hospital that was governed previously as a hybrid of professional and public logics. Intriguingly, the reconstituted hospital was for several years widely praised for its strong clinical and financial performance, but quickly and with little warning, it became riven by political differences that led to its demise. Through our case analysis, we develop a multilevel model that reveals the destabilizing process that can unfold when a new logic enters an established organization. We contribute to the hybrids literature by explaining the puzzle of how a new logic can become accepted and then rejected in organizations, emphasizing the critical importance of the interaction between the audience, organization, and practice levels. Crucially, we reveal that positive feedback from multiple audiences may be a mixed blessing for hybrids: although it offers resource and legitimacy advantages, it can induce internal tensions with severe destabilizing consequences. Our findings and model also run counter to two core assumptions within the institutional literature: that social endorsement is advantageous and that alignment with institutional expectations results in stabilization. We qualify these assumptions and indicate the circumstances under which they are unlikely to hold.