Multidimensional model of a hybrid organization
In the light of the many examples of interrelations between state and market, the distinction between public and private is (at least in academia if not by the general public) commonly seen as not a dichotomy but as a continuum of several dimensions. A first step in the construction of this continuum is to define its poles. In my model, these are Dahl and Lindblom’s agency and enterprise.
Agencies are subject to polyarchy (or governmental authority) which is based on centralized rules and authoritative directions as the broad mode for organizing economic and social activity. Economic markets are the alternative of polyarchy, and the mode of social control determining the actions of enterprises, which grant individuals a larger degree of choice about their transactions and relations.
There already are several models that arrange the different forms of hybrid organization in between these two poles. Some of these models only use one dimension to range organizations, while others are multidimensional. Taken together, a multidimensional model of a hybrid organization can be constructed, consisting of ten dimensions clustered (for clarity’s sake) into three groups: (1) structure and activities, (2) values and strategy and (3) governance and politics.
Structure and activities
The dimensions in this cluster tell us more about its principal as well as about the activities of the organization.
- Legal form: this dimension deals with the degree to which an organization’s legal form is governed by public or by private law.
- Ownership: this is the continuum between full governmental and full private ownership.
- Activities: this is the continuum between a complete focus on statutory or public tasks and one on private, commercial activities.
- Funding: this is the continuum between 100 % governmental appropriation and 100 % private funding.
- Market environment: this is the continuum between a monopolistic and a competitive market environment.
Strategy and culture
The dimensions in this cluster deal with questions concerning the organization’s overall strategic outlook and its value system.
- Strategic orientation: the continuum between a strategic orientation totally aimed at government and one totally aimed at the market.
- Value orientation: the continuum between a total orientation on the public values of the guardian syndrome and a total orientation on the values of the commercial syndrome.
Governance and politics
The dimensions summarised in this cluster deal with the question of how the organization’s relationship with its public principal(s) looks like and to which degree it possesses autonomy, both managerial as well as executive.
- Relationship with political principal: the continuum between a relationship based on public and one on private law.
- Managerial autonomy: the continuum between political autonomy (a system in which the management of an organization is influenced by politics) and economic autonomy (a system in which the management of an organization is influenced by the market)
- Executive autonomy: on this dimension I score whether an organization has little or much autonomy in how it conducts its activities.
By scoring it on these ten dimensions, a hybrid organization can be visualized, for example by means of a radar chart. A hypothetical organization, represented as only a dot at the centre of the chart, would be 100 % public on all of the dimensions featured above. As the surface area grows, the organization becomes more private to the maximum of covering the full chart, which represents an organization that scores 100 % private on all dimensions: the ideal-typical enterprise.
Scoring the mixed character of an organization is obviously no exact science but can help to understand its hybrid character and the degree of its public/private mix, which I refer to as an organization’s hybridness. I used the following scores in my own research: completely public (0), mostly public (2), somewhat public (4), halfway between public & private (5), somewhat private (6), mostly private (8) and completely private (10).
A prototypical hybrid organization would be half agency/half enterprise and would score 5 on all dimensions. However, reality is far messier and such perfect hybrids are only rarely to be found. Most hybrid organizations do not score evenly on all dimensions but rather show heterogeneous scores, as is demonstrated in the two figures below.
The first figure for example visualizes a hybrid organization that is a municipal service. It conducts some activities for commercial customers but still generates most of its revenues by executing tasks on behalf of its municipality. Its culture still is more bureaucratic than entrepreneurial and the organization’s strategy is mostly aimed at the public sector. The organization’s director only has limited autonomy concerning how he runs the organization and how it conducts its services.
The second figure visualizes a quite different organization. This hybrid organization is a quango with a governmental department as its principal. It already conducts most of its activities for private partners and hence generates a substantial amount of its income from commercial activities. This organization operates in a competitive market environment and embraces commercial values and strategy. The organization’s CEO has a considerable amount of managerial as well as executive autonomy.
Both organizations are hybrid organizations. However, they differ from one another in regard to their hybridness, which is more intense for the organization visualized in the second figure than that visualized in the first.