|Social ventures change the traditional business environment by offering competitive products and services, while solving societal problems. Consistently, such organizations aim to generate both social and economic value. However, these organizations are often fragile as they are continuously torn between accomplishing their social mission and meeting market requirements. To enable social ventures to achieve their dual objectives, it is important for managers to be are aware of the challenges that may arise, and the consequences these might have. Even so, scholars often neglect the diversity of social business models when studying the dual mission conflict. Thus, existing literature falls short in providing tailor-made recommendations to social ventures on how to thrive.
Based on in-depth interviews, case examples and an extensive literature review, we (1) identify three types of challenges distinct to social ventures, (2) compare these challenges across four types of social business models, and (3) propose solutions to the most pressing challenges that social ventures encounter. Our findings show that formulating and communicating a hybrid identity raises complex identity issues with regards to internal and external audiences for the social venture. We have found that the degree to which this challenge arise for an organization are more dependent on the complexity of the business model than the category of the business model itself. Furthermore, attracting and selecting resources that support the dual mission may lead to reduced access to human and financial resources, complicated hiring-processes, and difficulties in selecting investors. Our findings show that ventures that include beneficiaries in their value creation experience additional challenges, as their process of resource allocation is more complex. Finally, navigating mission drift, managing stakeholder demand, and measuring social value are all issues that can severely impede social ventures to stay true to their hybrid identity. We argue that the level of integration between social and commercial activities seem to be decisive for the way mission drift occur in different social hybrids.
After discussing these challenges, we propose several solutions and concrete advice within each category, with an aim to enable social hybrids to mitigate the consequences of their most pressing challenges. Thereby, we contribute to the literature on social ventures and the dual mission conflict by identifying and categorizing the challenges from a business model perspective. Furthermore, we provide social entrepreneurs with concrete advice that can empower them to achieve successful alignment of their dual objectives.