Legitimacy Evaluations of Organizational Configurations: Does Hybrid Form or Logic Content Matter

Abstract

Hybridity scholarship has considered the various effects of organizational hybridity, including evaluations from external audience members. We theorize and test whether hybrids organizations that blends a charity and business logic are penalized because the blended logics reduce evaluators’ perceived cognitive legitimacy of the organization. We also test whether the organization’s presence of the market logic is a reason it is penalized, mediated by decreased moral legitimacy. We borrow economic sociology’s moral markets scholarship to hypothesize two dimensions of moral il-legitimacy; the diminishment of social welfare and the contamination of something sacred. In a 2x2 online experiment, participants read about a health care organization that is randomly presented as a for-profit core hybrid, a for-profit business, a nonprofit core hybrid or a nonprofit organization. We find the presence of market logic decreases pragmatic legitimacy, mediated through social welfare diminishing (and not contaminating) moral il-legitimacy. In other words, we find evidence that logic content matters. We conclude with our contributions to hybridity scholarship.