Pursuing both social and economic goals is good for business —shows our new study of academic spin-off (ASO) ventures, published in the Journal of Management Studies. New ventures pursuing such hybrid goals also benefit from involving multiple stakeholders that represent different social and economic investment goals.

Introduction

In the world of business, the pursuit of profit has traditionally been seen as the primary goal of organizations. Notwithstanding, a growing body of research suggests that in the context of new ventures, entrepreneurs often embrace a broader set of motivations when they formulate their goals. This concept, known as ‘goal hybridity,’ is particularly relevant for ASO ventures, which aim to commercialize scientific research from universities while also addressing societal challenges. Understanding the impact of hybrid goals on ASOs’ performance and governance is crucial for advancing academic entrepreneurship and public-private partnerships.

Our study focuses on understanding how goal hybridity influences the performance and governance of ASOs. We hypothesized that ASOs with hybrid goals —combining both economic and social aspects— would outperform those solely focused on either economic or social goals. The study involved a longitudinal analysis of Norwegian ASOs, combining multiple data sources to analyze their performance over time.

What did we find?

The findings revealed that ASOs with hybrid goals, incorporating both economic and social objectives, performed better than those with singular goals. This suggests that integrating social missions with commercial logics can lead to higher performance and longevity for ASOs. Contrary to expectations, hybrid goals did not create conflicts between economic and social institutional logics but instead had complementary effects, reinforcing business performance.

Furthermore, the research showed that the type of stakeholders the ASOs engaged with played a vital role in shaping their performance outcomes. ASOs that engaged multiple stakeholders whose investment goals aligned with the hybrid objectives had superior performance compared to those that did not.

Why do our findings matter?

The research has important implications for different stakeholders. For practitioners and ecosystem builders, the findings can aid in making informed decisions about investing in ASOs to promote regional development, job creation, and societal advancement. Universities can identify ASOs with hybrid goals and encourage them to engage multiple stakeholders for better outcomes. For ASO founders, the research emphasizes the significance of incorporating both economic and social objectives, as well as enrolling diverse stakeholders, to improve their ventures’ performance and sustainability.

Moreover, this study challenges traditional assumptions in management theory and highlights the benefits of embracing hybrid goals in new ventures. Management theory often assumes focus on profit maximization is the only goal of businesses. This assumption is undermined in this paper by its emphasis on the existence of a wide range of non-economic goals among firms. We show that firms are often times established for a variety of reasons, leading to diverse goal orientations. Further, our paper challenges the assumption that firms should adhere to a single dominant economic or social logic to gain consistency and legitimacy. In fact, we show that businesses that integrate these two seemingly opposing goals are more successful financially. We provide valuable insights for scholars studying hybridity within entrepreneurship and expands understanding of how organizational goals influence behaviors and performance.

Actionable Takeaways

Entrepreneurs and ASOs seeking success should consider adopting hybrid goals that combine both economic and social objectives. By doing so, they can attract diverse stakeholders with aligned investment goals, reinforcing their business performance. The combination of social and economic goals among ASOs can create synergies, rather than conflicting effects, leading to long-term success.

Who Should Read the Full Paper?

The full paper should be of interest to academic entrepreneurs, university administrators, ecosystem builders, and investors involved in ASOs and entrepreneurial ventures. Universities, and ecosystem builders can benefit from the research to make informed decisions on strategically promoting ASOs for regional development and societal impact. Academic entrepreneurs can apply practical insights to enhance their ventures’ effectiveness and impact. Investors involved in ASOs and entrepreneurial ventures can also gain knowledge on how to engage multiple stakeholders to achieve hybrid goals and enhance performance.

Concluding remarks

Our research emphasizes the power of combining economic and social goals in ASOs. Pursuing hybrid goals and involving diverse stakeholders with aligned investment goals can lead to better performance outcomes and contribute to both economic growth and societal welfare. Universities, entrepreneurs, investors, and policy makers alike can leverage these insights to foster successful and impactful ventures.

Overall, our study advances the understanding of hybridity in entrepreneurship, stakeholder engagement, and public-private partnerships. It encourages a broader consideration of organizational goals and their impact on the behaviors and performance of new ventures.