Why hybrid organisations struggle to earn legitimacy in fields built on social values

Prof. Bernard Leca from ESSEC Business School and Nicolas Dahan from Seton Hall University explore how hybrid organisations defend themselves when influential stakeholders perceive the combination of impact and financial goals as fundamentally incompatible.

By CoBS Editor Mallika Rahane. With kind acknowledgments to Bernard Leca.

Related research: Dahan, N.M. and Leca, B. (2025), When Duality Fails: Addressing the Liability of Hybridity in a Field Dominated by Non-profit Values. J. Manage. Stud., 62: 2805-2829. https://doi.org/10.1111/joms.13143.

Hybrid organisations have notably been highlighted as a promising way to address societal and economic challenges. However, some critics and prominent actors argue that for-profit and non-profit goals should not be mixed and that such business models are inherently problematic.

Hybrid organisations represent a dual logic: a combination of a commercial endeavour with social mission, attempting to harness market efficiency while addressing issues such as poverty, inequality and malnutrition. Yet the coexistence of profit and purpose can create suspicion rather than trust. In some contexts, the very idea of mixing humanitarian action with commercial logic casts a long shadow of distrust over organisational legitimacy.

The hidden tension inside hybrid organisations

Much of the existing research around hybrid organisations focuses on their internal tensions and governance. In contrast, this research paper by Professors Bernard Leca and Nicolas Dahan takes a different perspective and shifts the spotlight outward. Using a qualitative case study, the authors explore what happens when external actors themselves reject the legitimacy of hybridity.

This distinction is important. A hybrid organisation may internally manage its dual mission effectively, yet still encounter resistance from powerful stakeholders who believe humanitarian problems should remain entirely separate from commercial interests. In such settings, hybridity itself becomes an impediment.

The researchers describe this phenomenon as the “liability of hybridity” – a situation where such organisations are viewed with scepticism and distrust because they attempt to combine profit and purpose. Rather than being celebrated as innovative bridges between sectors, hybrids may instead appear morally ambiguous or strategically opportunistic.

A battle over child malnutrition

The paper is a focused case study of a French company called Nutriset, which developed Plumpy’Nut, a Ready-to-Use Therapeutic Food (RUTF) product designed to treat severe acute malnutrition in children. The product transformed humanitarian nutrition treatment and was considered an extraordinary step forward. Unlike traditional therapeutic interventions requiring hospitalisation, Plumpy’Nut can be administered at home, dramatically increasing treatment access and recovery rates.

As such, the product rapidly gained legitimacy within the humanitarian field. UNICEF, Doctors Without Borders, and other humanitarian organisations widely adopted it. Nutriset soon became the dominant supplier of therapeutic food for severe child malnutrition.

Yet alongside its social mission, Nutriset also pursued a commercial strategy. The company patented its innovation across numerous countries and aggressively protected its intellectual property rights. Under World Trade Organisation regulations, Nutriset could challenge anyone manufacturing, importing, or distributing a similar product in any country where it held a patent. The patent, valid for 20 years, was broad enough to claim most seed/nut-based emergency rations enriched with nutrients as infringing. What initially appeared as a humanitarian breakthrough gradually became the centre of an ethical storm.

Nutriset’s dominant position became problematic in late 2008 when demand spiked, and it could not fulfil all its orders. Field members such as UNICEF and DWB grew concerned about relying on a single supplier and demanded a diversified supplier base. They also believed that more competition would lower prices. However, Nutriset’s aggressive patent protection seemed to hinder these goals. Although Nutriset had partnered with local franchisees in developing countries since 2005, the share of its partners in global RUTF supply remained very modest until 2008

For many NGOs and activists, the contradiction became impossible to ignore. How could a company claim humanitarian purpose while simultaneously restricting access to a product capable of saving children’s lives? Critics argued that life-saving nutritional products should not be treated like conventional commercial goods.

The controversy intensified in 2009 when Doctors Without Borders publicly challenged Nutriset’s patent strategy. Other organisations soon joined the criticism, accusing the company of limiting competition, preventing local production, and maintaining unnecessarily high prices.

What the paper compellingly highlights is that the conflict was not simply economic. It was symbolic. Beneath the legal and operational debates sat a deeper struggle over what humanitarian legitimacy should look like.

Framing the debate

To understand how this conflict unfolded, the authors draw upon the concept of framing – an interpretative process of meaning construction by which actors focus attention on an issue, convey one set of meanings over another, and shape how some object or actor is viewed.

In this case, different actors attempted to frame Nutriset’s role in radically different ways.

Humanitarian NGOs framed the issue through the lens of access, openness, and humanitarian ethics. From this perspective, patents appeared incompatible with the values of the humanitarian field. International NGOs referred to the non-profit humanitarian values dominant in the field, opposing Nutriset’s attempt to combine non-profit aspects with a for-profit economic model. They asserted that nutritional products of a humanitarian nature ‘must’ be handled differently from commercial products. In doing so, these NGOs expressed what the authors call the ‘core frame’ of the controversy – a frame that could not be ignored or radically questioned by other actors because it was advocated by the most powerful actors in the field, who ultimately assess the legitimacy claims of other actors and publicly support or shame them in the media.

Nutriset, however, gradually reframed the conversation. Rather than defending patents purely as commercial protection, the company repositioned them as mechanisms supporting local production in developing countries, which would contribute to long-term nutritional autonomy. Nutriset changed its official mandate from providing solutions to malnutrition to supporting nutritional autonomy, a key concern in the core frame’s diagnostic. This shift became central to the company’s survival.

The research identifies two broad strategic responses through which Nutriset attempted to regain legitimacy.

The first involved what the authors call “wedging strategies”. Nutriset attempted to fracture the appearance of a unified opposition by exposing inconsistencies between different critics. Some NGOs advocated open access to patents in order to support local Southern producers, while other actors pushed for unrestricted global competition that would likely benefit large Northern manufacturers. While international NGOs argued that opening Nutriset’s patent would encourage greater market access for Southern producers, Nutriset pointed to a contradiction in this logic. It argued that although removing the patent might initially help Southern competitors enter the market, in the long run, large Northern producers would likely outcompete them and undermine their development.

On the other hand, upon being sued by Mama Cares and Breedlove (two US NGOs), Nutriset accused the two non-profit litigants of being fronts for the US peanut producer lobby, thereby attempting “piracy under a humanitarian pretence”, according to Nutriset’s CEO. Nutriset insisted that Mama Cares and Breedlove, while non-profit entities, were associated with for-profit interests. While Nutriset eventually won the US legal case, confirming that its RUTF was a novel innovation, its public argumentation focused more broadly on exposing the framing of Mama Cares and Breedlove as illegitimate due to their ulterior motives to open the market to large for-profit food multinationals in the North, which ran counter to some of the purposes of the core frame sponsors.

Thus, by illuminating these tensions, Nutriset weakened the image of a single moral front opposing the company.

The second response involved “alignment strategies”. Here, Nutriset progressively aligned parts of its discourse and actions with humanitarian concerns. The company expanded partnerships with local producers through its PlumpyField network and introduced more flexible patent licensing arrangements for organisations in developing countries. This was done through the selective opening of their patent and the related allocation of resources, both financial and technical, to support new producers in the South.

Importantly, the research shows that discourse alone was not enough. Nutriset coupled its framing with material action. The company invested financial resources into local manufacturing partnerships and visibly altered aspects of its operating model. In this way, legitimacy was rebuilt not only through words, but through demonstrable commitment.

When legitimacy becomes negotiated

One of the most fascinating insights from the paper is that legitimacy does not emerge as a fixed or objective condition. Instead, it is continuously negotiated between organisations and stakeholders.

The researchers show that critics did not necessarily become enthusiastic supporters of Nutriset. Rather, many gradually moved towards reluctant acceptance. Nutriset’s model was not perceived as perfect, but it increasingly appeared more legitimate than the available alternatives.

This reframes legitimacy as something pragmatic rather than absolute. Stakeholders often operate within imperfect realities where they evaluate what is feasible, workable, and comparatively acceptable rather than purely ideal.

The paper, therefore moves beyond simplistic narratives of “good” or “bad” corporations. Instead, it paints legitimacy as an evolving social process shaped through dialogue, contestation, framing, and compromise.

Beyond Purpose: Practical implications

This research highlights that hybrid organisations cannot assume that social impact alone will guarantee legitimacy. In fields shaped by strong humanitarian or non-profit values, commercial activities may quickly attract scepticism, even when organisations are pursuing meaningful social goals. It therefore becomes important for managers to understand how stakeholders interpret organisational motives, not simply organisational outcomes.

The study also suggests that legitimacy is strengthened when communication is supported by visible action. Public framing, stakeholder engagement, and social narratives matter, but stakeholders are more likely to trust organisations when commitments are reinforced through concrete operational choices, partnerships, and long-term investment. As such, organisations may benefit from ensuring stronger alignment between what they claim to represent and how they actually operate.

More broadly, the findings encourage organisations to rethink how commercial mechanisms such as patents or licensing systems are designed within socially sensitive sectors. The case particularly suggests novel ways of using intellectual property not to ensure monopoly, but to selectively open access to innovation. Approaches built around collaboration, local participation, and a fair distribution of the created economic value may therefore strengthen both legitimacy and long-term acceptance.

Useful links:

• Link up with Profs. Bernard Leca and Nicolas Dahan on LinkedIn
• Read a related insight: The Tightrope of Hybridity: Managing dual mandate of profit and purpose 
• Browse and buy the Routledge-CoBS book Promise, Pitfalls, and Potential of Social Entrepreneurship
• Discover ESSEC Business School France-Singapore-Morocco
• Apply for an MBA or EMBA at ESSEC.

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