Making sense of hybrid practices: the role of individual adherence to institutional logics in impact investing

Hybrid practices combine core elements of different institutional logics. As such, they elicit contrasting responses from individuals, including ignoring, rejecting and adopting them. Yet, extant research in institutional theory does not explain how individuals come to form these responses. To address this gap, we adopt a sensemaking perspective and conduct an inductive, comparative case study of 14 wealthy individuals based on life story interviews, examining their responses to impact investing, an emergent hybrid practice combining elements of the philanthropy and finance logics. Our study uncovers key contextual mechanisms by which institutions influence how individuals respond to hybrid practices, a neglected dimension in sensemaking studies. In particular, we show how individuals' degree of adherence to the logics involved shapes how they notice, interpret and finally respond to impact investing. Contrary to what previous research suggests, our study shows that individuals who are merely familiar with the logics at play are better positioned than both novices and individuals who identify with the logics to evaluate hybrid practices positively and adopt them.