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International Journal of Public Administration
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Hybrid Organizations: No Cause for Concern?
Taco Brandsen a & Philip Marcel Karré b c
a Radboud University Nijmegen, Nijmegen, The Netherlands
b Netherlands School of Public Administration, The Hague, The Netherlands
c Amsterdam University of Applied Sciences, Amsterdam, The Netherlands
Available online: 14 Nov 2011
To cite this article: Taco Brandsen & Philip Marcel Karré (2011): Hybrid Organizations: No Cause for Concern?, International
Journal of Public Administration, 34:13, 827-836
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International Journal of Public Administration, 34: 827–836, 2011
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DOI: 10.1080/01900692.2011.605090
ARTICLES
Hybrid Organizations: No Cause for Concern?
Taco Brandsen
Radboud University Nijmegen, Nijmegen, The Netherlands
Philip Marcel Karré
Netherlands School of Public Administration, The Hague, The Netherlands
Amsterdam University of Applied Sciences,
Amsterdam, The Netherlands
Hybrid organizations mix the characteristics of state, market, and civil society. Critics have
suggested that such organizations pose severe risks to the public sector, both financially
and culturally. However, these assertions are based mostly on theoretical claims or single
case studies. No systematic evidence has been collected to support them. The findings of
a large research program in The Netherlands in several policy fields show that the con-
cerns over hybrid organizations appear to be overstated, since theoretically defined risks have
not materialized. Conditions such as the presence of active regulators and a high degree of
professionalism appear to dampen the risks.
Keywords: social enterprise, accountability, corruption, third sector
INTRODUCTION
The public management reforms of the past decades (Hood,
1991; Lane, 2000; Barzelay, 2001) and the switch from
government to governance (Rhodes, 1997; Pierre & Peters,
2000; Osborne, 2009) have led to the emergence of an
increasing number of hybrid organizations. These organi-
zations stand at the crossroads of market, state, and civil
society. Usually, they are either former state agencies set at
arm’s length (Pollitt & Talbot, 2004) or organizations that
originally emerged from civil society, were later incorpo-
rated into the public sector, and then became part of (quasi-)
markets introduced as part of (new) public management
reforms (Evers, 2005; Brandsen, Van de Donk, & Putters,
2005). Roughly, the former is more frequent in Anglo-Saxon
and Asian systems, the latter in European Continental ones,
but in most countries both types can be found. Despite
Correspondence should be addressed to Taco Brandsen, Radboud
University Nijmegen, Nijmegen School of Management, Department of
Political Science & Public Administration, PO Box 9108, 6500 HK,
Nijmegen, The Netherlands. E-mail: t.brandsen@fm.ru.nl or Philip Marcel
Karré, karre@hybridorganizations.com
different backgrounds, the issues organizations face are on
the whole similar.
As they are outside traditional categories, hybrid orga-
nizations raise new issues of accountability, control, and
legitimacy. However, they have only fairly recently found
their way onto the agenda of public administration research.
Until a few years ago only a limited number of studies on the
subject had become available, a disproportionate number of
which were of Dutch and German origin. However, recently,
the topic has received increasing attention and a wider range
of studies has appeared, which has of course enriched the
international debate.
Early work on hybrid organizations in public adminis-
tration research consisted largely of theoretical reflections
about the differences between public, private and hybrid
organizations (e.g., Emmert & Crow, 1988; Perry & Rainey,
1988; Rainey & Chun, 2007) and a small number of case
studies (e.g., Kickert et al., 2001; Koppell, 2003). The past
five years have seen the emergence of several volumes with
a broader, comparative scope (notably Evers & Laville,
2004; Brandsen, Van de Donk, & Kenis, 2006; Billis, 2010).
As a result, our empirical knowledge of this type of orga-
nization has significantly advanced. However, theoretical
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828 BRANDSEN AND KARRÉ
progress has been slower and the debate has continued to
revolve around the question whether hybrid organizations
are in some way more harmful than “pure” organizational
types. While this reflects national public debates and relevant
concerns, it has also allowed rather suspect assumptions to
linger in the debate and has held back theoretical progress.
It may have drawn the attention of scholars away from
other, academically more interesting issues. In this article,
we will address this issue head-on and attempt to take it a
step further, towards a resolution of what is now becoming a
repetitive discussion.
The second section will start our analysis by discussing
different conceptualizations of hybrid organizations. In the
third section, we describe the risks theoretically associated
with them. The fourth discusses our methodology and the
issues that it has had to deal with. Next, the fifth section
describes the empirical evidence on whether the theoreti-
cal risks become reality, and concludes with a reflection on
the theoretical implications of the findings and directions for
future research.
THE CONCEPTUALIZATION OF HYBRIDITY
Hybridity as a concept is scattered across numerous aca-
demic disciplines. It is, for example, used in biology to
denote racial mixing; in linguistics and cultural studies to
describe the effects of colonialism and globalization on lan-
guage and identity formation; and in technology to indicate
the combination of various technologies. In all these con-
texts, though describing different things, hybridity always
symbolizes the process and product of a mixture of essen-
tially contradictory and conflicting elements.
In this article we focus on yet another form of
hybridity, hybrid organizations. These can most broadly
be defined as “heterogeneous arrangements, characterized
by mixtures of pure and incongruous origins, (ideal)types,
“cultures,” “coordination mechanisms,” “rationalities,” or
“action logics.” ” (Brandsen, Van de Donk, & Putters, 2005,
p. 750). In the field of business administration, hybrid orga-
nizations mix the characteristics of the functional and the
business unit organization. Examples of hybrid organiza-
tions from the field of public administration are government
organizations that resemble business firms, third sector orga-
nizations that perform functions similar to those of govern-
ment, and commercial companies that engage in the produc-
tion of public goods and services (Rainey, 1997). These are
the hybrid organizations we focus on in this article.
The conceptualization of hybrid organizations most com-
monly employed in the field of public administration starts
with the visualization of society as a triangle with different
sectors or domains at the corners, each with a distinct coor-
dination mechanism at play (cf. Evers, 1990; Pestoff, 1992;
Zijderveld, 1999). The state, which is idealtypically iden-
tified with hierarchy, is situated in one corner. In another
corner is the market, coordinated by the free exchange of
FIGURE 1 Societal Triangle (Van de Donk, 2001).
goods and services. The third corner is occupied by the
community, with social bonds (or “love”) as its coordina-
tion mechanism. Each domain has a different response to
deteriorating quality in products or services: voice in the
state, exit in the market, loyalty in the community.
Van de Donk (2001) expanded upon this earlier work by
adding three dimensions to the triangle, describing organi-
zations in terms of their publicness, their profit-orientation,
and their formality (see Figure 1). In his model, state organi-
zations are defined as public, formal, and non-profit; market
organizations as private, formal, and for profit; and com-
munity organizations as private, informal, and non-profit.
The hybrid organizations described in this article have
evolved from one of the corners of the triangle and have
since moved into its centre, where the characteristics of the
three domains mix. It means these organizations need to
combine a profit and not-for-profit orientation; a public and
private orientation; formality and informality. The question
is how that affects the quality of public services.
Theoretically, there are quintessential differences
between public, private, and third sector organizations that
make a combination of their characteristics potentially
conflict-laden and risky (see Table 1 for an overview). This
is why a number of critics have warned against the creation
of hybrid organizations, which are seen as inherently
unstable and likely to have detrimental effects on service
quality. In the next section, we will discuss the theoretical
reasoning behind their argument.
THE THEORETICAL RISKS OF HYBRID
ORGANIZATIONS
Although much effort has been expended on conceptual
discussions, most of the debate on hybrid organizations in
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HYBRID ORGANIZATIONS 829
TABLE 1
Characteristics of Public, Private and Third Sector Organizations (based on Evers, Rauch, & Stitz, 2002)
Public Private Third Sector
Resources General allocations Earnings on marketplace Donations, subsidies and voluntary
contributions
Goals Public good and welfare Profit maximization Specific to groups, situation, and
environment, contribute to public
good and welfare
Coordination
mechanisms
Politics and public administration Competition on the market place Formal and informal influence of
societal stakeholders
Organizational culture
and action logics
Hierarchy, legality, equality Entrepreneurialism, efficiency,
effectiveness
Trust
public administration research has until recently focused on
the perceived risks caused by hybrid organizations. It has
been a slippery debate, continually fed by scandals, inci-
dents, and political outcries. We will argue that it is now
time to pursue other, more interesting directions in future
research. To do this, of course, it is first necessary to clarify
the previous discussion on this topic, as it has evolved among
academics and practitioners over the last two decades. In this
article, we will present research on hybrid organizations
in a variety of policy fields. The findings suggest that
many past assertions were under-theorized and derived from
overgenerous generalizations of untypical cases.
In a nutshell, critics believe hybrid organizations are the
road to disaster. The assumption behind these claims is that
there is a direct causal link between the “hybridization” of an
organization and the problems that this organization suffers
from. It is hard, though not impossible, to make methodolog-
ically valid claims about such causalities—a point to which
we will return later. In fact, the risks mentioned in the liter-
ature tend to be theoretically derived hypotheses, sometimes
backed up by incidental evidence.
On the basis of a literature review, we have identi-
fied three major types of risks associated with hybrid
organizations:
•Financial risks: hybrid organizations will eventually
cause a major loss of public money, either indirectly
through unfair competition or directly through invest-
ment in risky ventures.
•Cultural risks: hybrid organizations will lead to a
decline in public service ethos and moral degeneration;
•Political risks: governments will no longer be able
to effectively control organizations once they have
become hybrids.
We will now discuss each of these risks in more detail.
As we will see, only some lend themselves well to empirical
verification in a comparative framework.
Financial Risks: Distortion of Competition and
Unnecessary Losses
One criticism is that hybrid organizations, which enjoy
competitive advantages due to their government ownership,
distort competition in markets where they compete with
private-sector businesses (see OECD, 2004, for an overview
of this argument). One such advantage is that hybrid organi-
zations could use governmental subsidies, meant for funding
public service obligations, to cross-subsidize commercial
activities. An example is the use of publicly funded overhead
(accommodation, administrative staff), to compete with for-
profit organizations that need to incorporate these costs in
their market prices. This not only has the effect of distorting
markets, but also, potentially, of creating implicit overcapac-
ity at the taxpayer’s expense. This is an argument based on a
neo-classical economic perspective, in which hybrid orga-
nizations are assessed primarily in relation to the market
conditions in which they operate. The assumption is that a
properly functioning market will lead to optimal results for
customers or clients. Any detraction from optimal conditions
must from that perspective be regarded as an implicit loss of
public money.
A second criticism, especially heard in the wake of
media incidents, is that hybrid organizations are inclined
to spend public funds on risky commercial ventures, cul-
minating in high losses that the taxpayer will eventually
have to reimburse. An example: a number of Dutch social
housing providers invested in ambitious but ill-conceived
schemes that eventually led to the near bankruptcy of the
organizations and, in some cases, the need for a govern-
ment bailout. This is essentially a version of moral hazard,
in which the agent takes improper risks without bearing the
ultimate responsibility. The problem is that the organiza-
tions act as for-profits when it comes to risk-taking, but,
unlike for-profits, they cannot be allowed to collapse when
the risks materialize (noting that the recent banking crisis
has demonstrated this is problematic even for large for-profit
organizations that are “too big to fail”).
In the case of hybrid organizations, the prime example is
that of Fanny Mae and Freddy Mac, which needed a mas-
sive bailout from the US government and were effectively
re-nationalized (Koppell, 2003). The same applies to key
public services: allowing a large hospital or school to close
may have massive social and political consequences, which
usually leads governments to intervene preemptively.
Different authors have emphasized different dynamics
behind such developments. In the cases analyzed by Koppell,
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830 BRANDSEN AND KARRÉ
the hybrid organizations in question were suspected of
co-opting regulators and encouraging a light regime that
allowed undue risk-taking. Others have placed less emphasis
on the weakness of principals than on changed preferences
of the agent, such as an increased willingness to engage in
risky ventures. This borders on the next type of risk prevalent
in the literature, which is related to the motives of individual
agents.
Cultural Risks: Moral Degeneration and Tensions
One line of reasoning suggests that, as organizations become
hybrid, their commitment to a public service ethos will dete-
riorate and be mixed with (or even replaced by) a profit
motive. If they are part of a system that requires a pub-
lic service ethos to function effectively, this is a dangerous
mix. It can result in internal tensions, or, in the worst case,
outright rent-seeking and corruption. This capture of pub-
lic institutions by private interests is, of course, common to
public administration in many countries.
This type of argument is based on the combination of
two assumptions: first, that there is an essential distinction
between the cultures of public and private organizations, in
that they are driven by different sets of conflicting values
(Lane, 1994, Bozeman, 2007); second, that organizations
can only remain stable if they have one dominant culture
and, by implication, that the combination of opposing core
values within hybrid organizations results in destabilizing
tensions. That is why some critics have argued that public
and private interests and values should be strictly separated.
Jacobs (1994), for instance, warned against the creation of
“monstrous moral hybrids,” referring to the Mafia as an
example.
It is complicated (and according to some impossible) to
objectively assign values to the “public” or “private” sphere.
For example, a focus on efficiency and effectiveness can be
associated with the private interest of an organization, but
also with the public interest as it diminishes the demand on
public funding. Another problem is that it is not clear what
units and levels of analysis are involved. For instance, many
businesses are extremely hierarchical internally, whereas
public service departments can be highly competitive. Does
that make the former public organizations and the latter pri-
vate? Recently, several studies have taken on the challenge
of defining these notions of public and private in the con-
text of hybrid organizations more precisely and developed
detailed indicators of their manifestations (e.g., Van der Wal,
2008; Van der Wal & Van Hout, 2009). However, such work
expressly studies mixes of public and private values and
implicitly rejects the notion of a single dominant culture as
the “normal” condition.
The criticism of moral degeneration in hybrid organiza-
tions has less to do with this scholarship in ethics than with
cultural ideal types, tied to a strong (though not specified)
brand of cultural determinism. The implication is that the
actions of members of these organizations can to a large
extent be deduced from these dominant cultures. This type
of argument is theoretically shaky.
But the “impurity” claim is only one element of this type
of reasoning. In addition, there is the argument that mix-
ing organizational cultures creates a situation that members
of these organizations perceive as tensions between differ-
ent cultures of service provision. This type of argument has
been used, for instance, in the literature on professionalism
when discussing the effects of private-sector models intro-
duced in public service delivery (e.g., Clarke & Newman,
1997; Exworthy & Halford, 1999; Kirkpatrick, Ackroyd,
& Walker, 2005). For instance, medical staff may be torn
between the desire to offer patients every possible treat-
ment (e.g., expensive new medicines) and the need to keep
overall costs in check. In theory, tensions such as these can
be a major stress factor to staff and ultimately even desta-
bilize an organization. Such problems are not exclusive to
hybrid organizations, though. To continue the example, they
also arise in public and commercial hospitals, since every
healthy organization necessarily has a private interest in
maintaining its financial viability and doctors adhere to the
public interest by virtue of their professionalism. However,
inherent tensions are theoretically exacerbated in a con-
text of heightened sensitivity to cost and heightened public
accountability.
Political Risks: Loss of Control
A third major issue that emerges from the literature concerns
political control. Diversification of funding, combined with
looser and/or more complex regulatory systems, result in an
increased measure of autonomy for managers. As a result,
the political principals of hybrid organizations fear that they
will lose their grip on the organizations in question and by
implication on the implementation of their own policies.
Such a lack of control is perceived to be especially problem-
atic when goal displacement may occur; specifically, when
hybrid organizations neglect their public tasks and focus pri-
marily on commercial activities, without sufficient means for
public authorities to intervene. The issue of loss of politi-
cal control is of course a widely discussed issue in public
management literature, as it also affects agencies without a
trace of hybridity (e.g., see Van Thiel, 2001; Pollitt & Talbot,
2004).
Yet although this has been an important topic in some
of the literature on hybrid organizations, we will not dis-
cuss it in the analysis presented in this article. Why on
earth not? It is because, even though this type of risk may
seem straightforward, it is in fact exceedingly problematic,
because it is conceptually unclear what constitutes a “suffi-
cient” level of political control. Well-known cases of loss
of control usually involve organizations that made grave
errors (as in the Fanny Mae and Freddy Mac case) or aban-
doned their original mission. These mishaps are assumed to
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HYBRID ORGANIZATIONS 831
relate to deficiencies in political control (as in the famous
case of the Tennessee Valley Authority). But this is rather
patchy reasoning: the fact that weak control and bad things
occur simultaneously does not necessarily mean that they are
causally related.
In the 1980s, several scandals surrounding state-owned
enterprises served as a powerful proof that things can go
wrong even despite the direct involvement of government
representatives (some might even say that they occurred
because of politicians’ influence in organizations, with the
HUD scandal as an example). Where organizations are
caught in a culture of private interest-seeking, there is no
a priori reason to assume that increased government involve-
ment is in itself the answer. Also, the causality could be the
reverse, in that cultural drift encourages attempts to avoid
political control. And what constitutes a desired level of
control in cases if there is no outright goal displacement or
fraud? The latter is not so much a technical as a political
issue. In itself, weakened control is not a problem, only its
(theoretically assumed) adverse consequences.
These concerns may have been regarded as less pressing
in the context of the single case studies that have so far dom-
inated this area of study and that have driven the debate so
far. However, they present grave difficulties in a compara-
tive research design such as we will present here. We have
therefore focused our empirical analysis on the other two
risks.
METHODOLOGY AND CONTEXT
Methodological Issues
The identification of risks has been mainly theoretical in
nature, with limited empirical support. There are at least
three reasons why we must be cautious in extrapolating the
conclusions of such studies to other organizations, let alone
policy fields or countries.
The first is the lack of systematic empirical evidence
on the activities and performance of hybrid organizations.
As noted before, most work has until now consisted of iso-
lated case studies that shed little light on the contingencies
of why organizations perform as they do. For instance, why
would effects observed in the context of financial services
apply to organizations in hospital care or garbage disposal?
To our knowledge, the research program on which we will
report in this article is the first to collect a broad range
of data for a large number of organizations across various
policy fields. Of course, even these data are still particu-
lar to one national (i.e., the Dutch) administrative context,
which underlines the need for cross-national comparative
work. The current state of the art is that any general con-
clusions on hybrid organizations must be considered as
exploratory, although some studies are more exploratory
than others.
A second issue is that some of the risks signaled in the
literature are heavily infused with normative assumptions.
That does not preclude empirical testing in itself, but only
if the expected adverse effects of hybridization are rede-
fined in such a way that they are directly measurable and are
not simply theoretically derived effects of other phenomena.
This applies specifically to the latter two of the three risks
noted previously. In the cultural degeneration argument, the
assumption is there should be only one dominant culture
and that deviations from that culture constitute a risk. One
can measure the mixing of cultures, but the adverse effect is
implied—it cannot be tested as such.
However, if as noted before it is interpreted in terms
of cognitive perceptions of tensions resulting from cultural
differences, then it is still possible to verify whether the
theoretically defined risk is realized in practice. The ques-
tions surrounding the issue of political control are more
fundamental. Any measured loss of control perceived by
principals cannot be regarded as a perverse effect as such,
unless it is clear what constitutes an acceptable loss of con-
trol, balanced against the benefits of more autonomy for
the management of the organization. Quite apart from the
complex methodology this calls for, it is a much more con-
troversial political issue than any of the other risks described
in the literature.
In this article, we will for reasons of methodological
soundness and lack of space examine only the less ambigu-
ous risks: financial losses and perceived cultural tensions.
As described in the preceding section, the question of polit-
ical control is highly normative and raises complex theoreti-
cal and methodological issues, which make it more properly
the subject of a separate publication.
A third methodological issue is the difficulty of proving
the causality between hybridization and adverse effects,an
issue we already touched upon when discussing political
control. Hybrid organizations usually emerge in turbulent
environments where many contingencies affect their activ-
ities and performance. Causal links between the hybrid
nature of an organization and performance are therefore hard
to substantiate without detailed knowledge of the mecha-
nisms at play. This makes it necessary, not simply to collect
data across populations of organizations, but also to con-
duct intensive qualitative case studies that give access to
sufficiently dense data.
The Context of the Findings
The conclusions presented in the next section are based on
research undertaken in The Netherlands by a research net-
work consisting of, among others, members of the faculty
of Tilburg University and Radboud University Nijmegen,
the Netherlands School of Public Administration (NSOB),
and the Dutch Court of Audit. During the period 2004–2010,
the network conducted intensive case studies of hybrid orga-
nizations in almost 20 policy fields, including vocational
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832 BRANDSEN AND KARRÉ
education, public broadcasting, social housing, universities,
care for the elderly, hospital care, and waste management.
These areas cover a broad section of the Dutch welfare
state and several thousand organizations, which in our view
was crucial to address the lack of systematic cross-sector
evidence in the study of hybrid organizations.
For each of the policy fields, we first catalogued the
institutional manifestation of hybridity in each field. As a
next step, we examined the effects of hybridity on the
organizations themselves, the services they delivered, and
the relations they maintained with political principals and
other stakeholders. Although there were some minor dif-
ferences of timing and operationalization between policy
fields in the implementation of the research, the studies were
based on similar designs, methods, and concepts, allowing a
systematic comparative basis.1
The case study method was chosen because of the
methodological concerns discussed before and due to its
strength in examining phenomena that have not thoroughly
been studied before (cf. Yin, 1994). In each case, data
were collected by means of triangulation, combining semi-
structured interviews, the study of relevant documentation,
and media analysis. The data were then analyzed separately
for each policy field and compared across fields, resulting in
several publications, among them an edited volume of case
studies, an audit by the Dutch Court of Audit, and several
Ph.D. dissertations.
One could argue that The Netherlands are an ideal setting
for such an extensive research program on hybrid orga-
nizations. For one, the Dutch non-profit sector is among
the largest in the world (Brandsen & Van de Donk, 2009).
The Netherlands have a welfare state in which, like in
many traditionally corporatist welfare states on the European
Continent, private non-profit organizations have tradition-
ally played a major role in service delivery. Especially from
the second half of the 20th century onwards, massive public
funds were channeled into the sector, which as a result grew
exponentially (Dekker, 2004).
Not surprisingly, public funding came with regulation and
control, bringing service-delivering non-profits within the
public sector. As such, they were later also subject to public
management reforms that introduced (quasi-)market ele-
ments into the governance of service delivery, for example
by allocating funding on a contract basis and increasing
the degree of competition over funding. The provision of
public services in The Netherlands also relies heavily on
autonomous agencies, originally created as a ministerial
department and later set at arm’s length. From then onwards,
1Although some of the results with reference to specific policy fields
have been published separately, the comparative analysis has so far only
been published in Dutch and is only now being made available to an
international audience.
many have started offering goods and services on a com-
mercial basis, as a way to substitute for shrinking public
funds.
As a result of these developments, there is a dispro-
portionately high number of hybrid organizations in The
Netherlands, as compared to other countries. This applies
to a broad range of providers in fields such as health care,
elderly care, education, social housing, transportation, and
waste management. Given the breadth of the research pro-
gram presented here and the limited space allowed for a
publication in this journal, we must necessarily refrain from
discussing each separate policy field in detail. Where avail-
able, we will refer to English-language publications on
particular fields. We will describe the differences between
policy fields in more detail only when they are relevant to
the risk analysis central to this article.
ACTUAL RISKS IN PRACTICE
Financial Risks
A first financial risk is that hybrid organizations distort
the markets in which they operate by covertly using their
public funding to subsidize commercial activities, creat-
ing unfair competition and ultimately inefficiencies at the
expense of the taxpayer. However, neither the financial
analysis of the accounts of specific organizations, nor the
analysis of market conditions in the different fields, showed
evidence that this occurred on any significant scale. To begin
with, the theoretical argument presents hybrid organizations
as entrants into an already established market—disturbers
of the peace. In actual fact, in those fields where hybrid
organizations and “pure” commercial businesses competed
directly, it was the latter who were the new entrants, whereas
the former had previously been the preferred suppliers.
The market distortion argument also rests on the assump-
tion that both types of providers offer the same types of
products. This too was disproved by the evidence. New
entrants tended to focus on the most profitable niches of ser-
vice quasi-markets, offering service packages at lower costs
than established providers. In domiciliary care, for example,
they restricted services to relatively simple tasks for which
low-skilled (cheap) staff could be employed, while their
competitors continued to invest in more high-skilled and per-
sonal aspects of care. Public procurement rules tended to
favor the former kind of strategy. In other words, rather than
hybrids undercutting businesses, the empirical data tend to
show the reverse. Of course, public service markets were still
under construction at the time of writing, so it is too early for
definitive statements. In any case, unfair competition seems
never to have been more than a theoretical issue.
Another concern voiced in the literature was that hybrid
organizations would cross-subsidize their commercial activ-
ities with public funding. Here, too, there was no evidence
that it occurred on any significant scale. Obviously, it was
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HYBRID ORGANIZATIONS 833
impossible for us to verify the accounts of all the thou-
sands of organizations involved and we must qualify our
findings in this respect; however, given the extensive mon-
itoring by independent public authorities, such as the Court
of Audit, there was a significant amount of data available.
These data show a somewhat mixed, but generally consistent
picture. In some areas, notably social housing, higher educa-
tion, residential care, and hospital care, there were scattered
and highly publicized incidents of severe waste and loss.
Investment in risky real estate projects led some housing
providers to go under. A major provider of residential care
went bankrupt after parading several white elephants. These
scandals created a media image of structural problems in
these fields. Yet our overview of developments within vari-
ous policy fields did not show any systematic rise in financial
problems or irregularities, incidents aside. The media image
therefore appears to be distorted.
Most organizations seemed to have established clear
rules and administrative barriers between different sources
of funding, thus lowering the risk of public funds leak-
ing away. Their budgets were transparent (or, at least, no
less transparent than before they engaged in commercial
ventures). An investigation by the National Court of Audit
(2005) showed that many organizations were still struggling
to establish regular procedures to deal with commercial
activities, leading to uncertainty over issues such as price
calculation and the allocation of staff time between different
types of projects. But this was an internal issue without any
apparent strategic consequences. Where widespread finan-
cial losses occurred, these were the result of decreases in
public funding and of stronger competition from commer-
cial entrants, but only in isolated instances of financial
malpractice.
This suggests that clear regulation on the administrative
handling of different sources of funding has been sufficient
to prevent the theoretically defined risks from becoming
real problems. Calls for more radical interventions (e.g.,
the mandatory break-up of organizations into separate pub-
lic and commercial entities) have become less frequent
as a result, although the position of many organizations
remains controversial. Evidence rarely stands in the way of
a vigorous public debate.
Cultural Conflicts
It has been reasoned that, since hybridization forces orga-
nizations to satisfy an increasing number of conflicting
demands, they may lapse into a condition of cultural chaos.
This is what Jacobs (1994), in a different context, referred
to as the creation of “monstrous moral hybrids”—strong
language indeed. The implication is that competing exter-
nal demands, expressing different values, would translate
directly towards the normative templates of staff. The evi-
dence on this, based on in-depth case studies of organiza-
tions in different fields, is mixed.
At the top- and middle-management levels of organiza-
tions, there is some evidence to support the hypothesis, with
managers reporting that they felt more pressure and faced
more difficult trade-offs. For instance, hospital managers
needed to consider the possibility of introducing inequali-
ties into their service provision to funnel in more revenues
through commercial projects. As a result, managers have to
shift between different roles. In their communication with
their political principals, they needed to exude more cer-
tainty and balance than their strategies could allow. This is,
of course, always the case to some extent, but hybridization
tends to increase the numbers of ways in which organi-
zations can fail, making them politically vulnerable in a
risk-averse climate. This was a finding evident in many
different policy fields, but especially strong in medical or
personal care services, where decisions over trade-offs were
perceived as affecting certain groups of clients most directly
(Henderson & Peterson, 2002; Kuhlman & Saks, 2008).
However, evidence at the “street level” shows a different
picture. The Dutch literature especially conjures up fright-
ening images of hard-working professionals torn between
commitment to clients and the commercial aspirations of
their superiors (Noordegraaf, 2007). In fact, research shows
that most staff barely noticed hybridization in any direct
sense. Where they did, it was in policy fields where com-
mercial activities constituted a directly identifiable addition
to regular working routines. This was especially the case
in various branches of vocational education, where teachers
became involved in contract-based projects that stood clearly
apart from their regular activities. Elsewhere, the effects of
hybridization mostly came in the shape of a stronger for-
malization of tasks and output measurement, as well as an
increase in workload. This created stress and was experi-
enced as unpleasant, but it was not perceived as a conflict
of values.
KEY CONDITIONS FOR DAMPENING RISKS
Our research indicates that few of the expected risks have
materialized into real difficulties. Although questions remain
over the financial transparency of hybrid organizations, there
is no systematic evidence of cross-subsidization from pub-
lic to commercial activities. Culturally, moral confusion and
degradation have been an issue in some cases. Yet it appears
that hybridization only translates into tensions and conflicts
over values under specific circumstances, and then mostly
at the management level of the organization. In short, the
effects of hybridization have generally been limited and
mixed. There appears to be no ground for drastic inter-
vention. This is a surprisingly positive outcome, given the
generally negative tone of the public debate on this type of
organization.
It leads us to the interesting question what conditions
have led to this favorable outcome. Here, of course, the
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834 BRANDSEN AND KARRÉ
methodological problem is that certain institutional condi-
tions in our sample are common to all policy fields and as
such The Netherlands represent only a single case. However,
the variations between policy fields and intensive nature of
the case studies do allow us to pinpoint two theoretically
relevant conditions.
First of all, since hybridization is such a widespread
phenomenon in The Netherlands, regulators were actively
engaged in developing and refining guidelines for their activ-
ities. At an early stage the Dutch Court of Audit, which
supervises specialist regulators, developed and enforced
clear generic guidelines concerning the administrative
handling of diversified funding sources. While these were
not implemented overnight, they provided a clear framework
against which the financial performance of organizations
could be judged. Also, regulators have on the whole been
actively involved in helping to implement guidelines and
counseling the organizations involved.
As a counterpoint, let us take the well-known case—
described by Koppell—of Freddy Mac and Fanny Mae
(2003). One could argue that their collapse was ultimately
the effect of regulatory failure in the United States, rather
than an inherent effect of their hybrid nature. The empiri-
cal evidence from The Netherlands offers a counter-example
where hybrid organizations were kept in check by active reg-
ulatory bodies. International comparative research will have
to determine definitively whether this is a decisive condition,
but it suggests that attributing the failure of organizations
to their hybrid nature is the result of a spurious correlation,
where the real underlying factor is the weakness of regula-
tors. Much as the work of Koppell (2003) is valuable, it may
over-generalize the significance of interesting but untypical
cases.
A second condition that affects the realization of theoreti-
cal risks is the nature of the services involved. In determining
the cause of heightened stress levels in hybrid organizations,
there has been a debate over the correct causal attribution.
Some authors have argued that these effects have noth-
ing to do with a perceived cultural conflict (e.g., Brandsen
& Van Hout, 2006; Honingh & Karsten, 2007), whereas
others argue that stress induced by a new focus on effi-
ciency and entrepreneurialism should be treated as an effect
of hybridization (e.g., Karré, 2011). Although this requires
even more in-depth research to determine with more cer-
tainty, the difference in interpretation appears to relate to the
types of service studied. Particularly, the degree of profes-
sionalism appears to be the crucial variable in determining
cultural effects. The evidence suggests that the higher the
degree of professionalism, the lower the level of perceived
cultural conflict. Heightened stress levels are not experi-
enced in terms of cultural conflict as a result of commercial-
ization but rather as simply another step in the standardiza-
tion of work routines and the continuing bureaucratization
of the organization.
This may be related to several aspects of professionalism.
To begin with, the nature of professional service delivery is
such that it tends to be located in relatively intimate condi-
tions, such as a private room with few eyes and ears present.
Therefore it tends to be more insulated from organizational
pressures under all circumstances. Furthermore, professional
values and norms provide a cultural mind-set that anchors
the practices of staff members and may make them more
resistant to efforts to impress other values upon them. These
professionals will still experience rising stress levels, but
will not interpret them in terms of cultural conflict. In their
organizations, hybridization is primarily a managerial issue.
CONCLUSION
Some of the earlier literature on hybrid organizations sug-
gested that they pose unacceptable hazards to the provision
of public services. However, the available evidence suggests
that the risks have been overstated. Active regulators and
a high degree of professionalism have been identified as
potentially important safeguards.
How does this theoretically reflect back upon earlier
expectations of hybrid organizations? Not entirely favorably.
The assumption on which theoretically defined economic
and cultural risks are based appears to be that the legal or
economic structure of an organization translates directly into
the activities and cultural templates of its members. The
empirical evidence presented in this article underlines that
this is not only empirically invalid—the data hardly support
these assumptions about causality—but also theoretically
flawed. It could at best be construed as an issue of disci-
plinary confusion: economic and legal categories cannot be
equated with social categories.
Furthermore, the organization is often taken as the sin-
gle level of analysis, whereas the reality of public service
provision is multi-layered. The evidence showed that there
are variations in how different members of an organization
are affected by organizational changes, depending on how
deeply they are integrated in other (professional) communi-
ties. Of course, this is only natural because organizations are
not holistic entities, but conglomerates of different units with
sometimes very different subcultures. Professionalism insu-
lates certain staff members from any organizational change,
including hybridization. At a more abstract level, the more
loosely coupled an organization is, the lower the risk of
cultural conflict may be. It does not take advanced organiza-
tional theory to signal this and it is (at least from an academic
perspective) curious that holistic approaches have lingered
for so long in the analysis of hybrid organizations.
All of this indicates that the state of the art in research on
hybrid organizations has moved forward from where it was a
decade ago, but that there is still much to be gained. We have
now moved to the point where the original proto-theories,
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HYBRID ORGANIZATIONS 835
mostly reflections of an ideological debate, can be safely
discarded. In addition to the various case studies that have
become available, there are now several volumes with a more
elaborate scope and the beginnings of systematic compari-
son (esp. Evers & Laville, 2004; Brandsen, Van de Donk, &
Kenis, 2006; Billis, 2010). However, all of these are limited
in their comparative scope. For instance, the recent volume
by Billis inexplicably focuses only on the UK and US litera-
ture, while similar work elsewhere (especially the European
Continent, Australia, and Asia) is mostly ignored. Likewise,
European scholars could engage more actively with debates
in the Anglo-Saxon world.
Also, future research on hybrid organizations in public
administration should connect more explicitly with tradi-
tional disciplinary theory. The fact that proto-theory has
continued to set the agenda is partly a consequence of its
persistence in national public debates, where preconcep-
tions about hybrid organizations are consistently repeated.
However, it also signals the failure of scholars in this area
(including ourselves) to pursue alternative, more advanced
theoretical directions. Now that the exploratory phase of
the research is over, the time has come for more system-
atic empirical (especially cross-national) work. Theoretical
progress should be at the top of the agenda.
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