Hybrid organizations influence on market competitive dynamics: the Azorean case

Hybrid organizations are an increasing phenomenon in pluralistic environments of modern societies. As this phenomenon grows, it has become more and more common that hybrids and non-hybrids compete and interact in the same market. This paper aims at investigating how hybrid organizations influence market competitive dynamics and institutions. The methodology follows a multi-case study qualitative design in the context of the São Miguel dairy market, where hybrids and non-hybrids have been competing side-by-side for more than 60 years. The results reveal that hybrids, due to the logics they endorse, tend to display competitive behaviors that deviate from the ones of incumbent organizations, which leads to a competitive microcosm. A competitive microcosm tends to emerge when hybrids' atypical behavior increases competition in the market more than would be expected in markets with similar characteristics and where incumbents display all similar behaviors. The higher the degree of incompatibility between hybrids’ endorsed logics and incumbents' logics, the higher the hybrids' influence is on competition. This effect may be mediated by hybrids' market power. The results also suggest that hybrids have a higher incentive to defy and change market institutions, when those are misaligned with hybrids’ endorsed logics. In these situations, market power functions as a mechanism to trigger institutional change.