Managing the centrality of logics in for-profit social enterprises: a multiple case study approach

Purpose The purpose of this paper is to examine the process of how hybrids engage with the centrality of institutional logic to manage institutional complexity. It aims to unfold the mechanism through which organisations develop logic centrality among incompatible logics. The paper reveals the mechanisms through which non-profit microfinance organisations originated in development logic and incorporated banking logic, engaging with the centrality of development logic as they transform into commercial microfinance organisations. Design/methodology/approach The study used a multiple-case study approach to examine two NGO-MFIs in India that were transformed into NBFC-MFIs. Interviews, fieldwork and organisational documents constituted the source of data. The data analysis is carried out, keeping the focus on the relative and relational aspects of the centrality of institutional logics. Findings The microfinance organisations carried out three sets of activities targeted at three different stakeholders. These activities focused on outreach, fund mobilisation and workforce management. The stakeholders targeted were beneficiaries, investors and employees, respectively. The dynamics of centrality of logic are managed through three mechanisms – enactment of activities, interpretation of logic and translation of meanings. Research limitations/implications The generalisability of findings is restricted because of the type of microfinance organisations selected for this study. The notion of multiplicity of logic as a stable event restricts the applicability of the findings of this study. A different set of organisations will likely undertake varied activities to develop the centrality of logic. Originality/value The paper contributes to the emergent area of understanding institutional complexity through the centrality of logics and its two aspects – relative and relational.