Building Character: The Formation of a Hybrid Organizational Identity in a Social Enterprise

Abstract The formation of a hybrid organizational identity is a significant challenge for many social enterprises. Drawing on in‐depth longitudinal data from the first three years of a successful social enterprise – Fairphone, founded in Amsterdam – we induce an empirically grounded theoretical model of how a hybrid organizational identity is formed. We identify a general process of organizational identity formation, with founders, leaders and members experimenting with different organizational characters describing ‘who they are’ as well as with alternative social impact strategies defining ‘what they do’. As part of this experimental process, we elaborate the role of a key leadership process – ‘rekeying’, which involves leaders re‐figuring prior understandings into more dual readings – which we found facilitates ongoing adaptation and helps members of the organization to become progressively better able at combining multiple objectives and values as part of a shared hybrid identity. Our theoretical model of hybrid organizational identity formation has a number of direct implications for ongoing research on organizational identity formation and hybrid organizations.