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Hybrid Organisation

What is a Hybrid Organization?

A hybrid organization is one that mixes elements, value systems and action logics (e.g. social impact and profit generation) of various sectors of society, i.e. the public sector, the private sector and the voluntary sector. A more general notion of hybridity can be found in Hybrid institutions and governance.

According to previous research hybrid organizations between public and private spheres consist of following features:

1. Shared ownership

2. Goal incongruence and different institutional logics in the same organisation

3. Variety in the sources of financing

4. Differentiated forms of economic and social control

What is a Hybrid Organizational Structure?

A hybrid organizational structure is a framework that employs multiple reporting structures in the organisation. A hybrid form of organization, for example, is created by combining functional and product structures. Employees are required to work on many projects and report to multiple managers under a hybrid organisational structure.  

An engineer working on a project should, in an ideal world, report to his project manager. In the hybrid structure, however, the engineer may be invited to work on another project for a limited time if a need develops, resulting in a situation in which he reports to both project managers.

What are the effects of Hybrid Organization?

As hybrid organisations combine diverse stakeholder groups, the potential for conflict within them might be greater. This is the challenge of stakeholder management.

This problem is similarly emphasized from the perspective of agency theory.The purported 'numerous main issue' joins different aggregate activity issues that can happen with hybridity. Free-riding or duplication in controlling and observing methodology can bring about significant expenses. Essentially, mandate vagueness or campaigning of the enterprises by singular partners can instigate wastefulness. 

Any strains can have positive and negative monetary, execution related, social and administration related impacts for the association, its standards, and its clients. For example, for state-possessed endeavors, Schmitz (2000) contends that the blend of open and private interests brings an ideal mix of motivating forces for decreasing expenses and improving quality in correlation with unadulterated generation forms.In differentiate, Voorn, Van Genugten, and Van Thiel (2017) theorize that assorted variety of proprietorship may prompt advantages, for example, specialization and expanded proficiency, yet in addition drawbacks, for example, expanded disappointment rates.

What is the example of a hybrid structure?

The following are some examples of hybrid business examples:  

  • Public service organisations founded by societal actors, such as most social housing providers, public schools, and hospitals (in the European setting);
  • Organizations in the public sector that act like businesses, such as state-owned enterprises that compete in the marketplace;
  • Franchises, joint ventures, and business groups are examples of private sector organisations.
  • Associations, particularly trade associations, often combine impact-oriented operations (public relations, lobbying, special interest groups) with profit-oriented activities (e.g., events, seminars, consulting) through a subsidiary, usually a wholly-owned subsidiary.
  • Microfinance institutions;
  • Hybrid corporations that engage in corporate social entrepreneurship in order to advance social and environmental goals while also generating profits for shareholders.  

What are the main organisational elements of Hybrid Organisation?

The hybrid organisation comprises four major organizational elements: 

1. Core structure or backbone – it secures the overall strategy, governance and synergies across the corporation 

2. Functional units – they assure the operational excellence, protection and further development of the company’s key capabilities, skills, and competencies 

3. Agile units – they operate closely to/with the customer and the market. They execute the operational business, especially in volatile environments. 

4. Shared services – they represent the interface between the agile (3.) and the functional (2.) units



What are the advantages of Hybrid Organization?

1. Increased efficiency

The major advantage of hybrid structure is the increased efficiency. This structure makes sure that the right quantity of work is assigned at the right time to the right professionals, thus making the optimum use of resources and prevention of waste. This structure works very well even when the resources are scarce. As the specialised staff are readily available, projects are launched quickly, thus increasing the efficiency of the organisation.

2. Development of cross-functional skills

In hybrid structures groups are formed considering the specialisations as well as services. Thus employees with different skills are mingled together which gives an opportunity to learn and develop a variety of skills from many other participants. This is the main advantage of hybrid structure in terms of the personal growth of employees, which can be later utilised by the organisation. This also results in minimisation of projects costs, as resources can be shared.

3. Flexibility

The hybrid business structure is more flexible than divisional and functional structures. There exists a healthy relationship between the senior managers and junior employees. This helps in addressing all employee problems easily, thus increasing the effective output from the employees.

What are the disadvantages of Hybrid Organization?

1. Conflicts:

The major disadvantage of hybrid structure is the chance of having conflicts between corporate departments and divisions. There could be dilemmas among project managers and department managers regarding deadlines and resources. Many employees become very confused about the line of authority. There can also be confusion regarding the roles and responsibilities of each employee.

2. Too much administration overhead:

Waste of time and effort come into picture in case of hybrid organisations. To resolve the conflicts that happen between divisions and corporate departments, time and effort get wasted in the form of meetings. Meetings are also required for better utilisation and coordination of staff in case of two or three concurrent projects.