Globalization in Social-Commercial Tensions: The Case of Nepalese Microfinance

Abstract

Hybrid organizations that simultaneously pursue social and commercial objectives often experience tensions. Yet such tensions can arise from contradictory global and local demands. This study focuses on how individual actors' relations with macro-level institutions construct social and commercial objectives, which, in turn, shape tensions. We apply the qualitative case study method to investigate how the translation process from the global to the local informs the experience with tensions among leaders of hybrid organizations. We analyzed interviews and archival data on 26 microfinance organizations in Nepal, where both the traditional (local) model of microfinance and the global model of microfinance are practiced. We compare the microfinance leaders who belong to global professional networks with those embedded only in local professional networks. We find that the managers embedded in global professional network exposed to and embraced more expansive meanings of social and commercial activities and goals in microfinance. Moreover, social-commercial tensions were more pronounced among globally embedded leaders than locally embedded leaders. Our findings contribute to the hybrid organization literature and paradox theory by illustrating the role of globalization and global networks in shaping leaders' conceptualization of commercial and social objectives, which in turn give rise to tensions and hybrid organizational practice.