Dynamic Capabilities in Hybrid Businesses: An Empirical Investigation of Hybrid Competitiveness

As more and more hybrid businesses enter mainstream markets with the aim of attaining social or environmental goals while employing a financially sustainable business model, the question arises of how these types of businesses build and maintain competitive advantage. Taking 18 case studies of hybrid businesses in Germany, we develop an empirical framework of key dynamic capabilities (DCs) that such businesses share. The results indicate that sensing is heavily based on ready access to a multitude of stakeholders. This allows the companies to seize opportunities by accessing a network of informants, achieving innovation through improvisation, and appearing more multifaceted in their business processes, thanks to societal and financial goals. Transformation is attained through knowledge sharing, an open promotion and sharing of the business model, and incentives that align the goals of all the actors in the organization.