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Can nonprofits and universities thrive in the mining sector?
The potential entry of higher education institutions to the mining sector poses significant management risks as well as possible solutions to anticipate and mitigate such risks, among them the hybrid organizational structure.
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A student browses library stacks on Dec. 10, 2024, at Gadjah Mada University in Sleman, Yogyakarta. (Antara/Andreas Fitri Atmoko)
A
fter granting mass and nonprofit organizations permission to obtain mining licenses, the government is now exploring the possibility of extending similar support to universities and higher education institutions. Lawmakers are currently deliberating this proposal as part of the draft mining law, and proponents of this policy argue it could help these institutions diversify their revenue streams.
Despite these good intentions however, significant management risks appear to be either overlooked or ignored under the proposed schemes. Managing a presence across multiple industries is inherently challenging, especially when the sectors involved operate under fundamentally different dynamics.
To succeed, these organizations must be supported by a robust ecosystem for hybrid organizations, which operate by balancing and integrating different, often conflicting, logics.
Examples of hybrid organizations include social enterprises and companies that embrace ESG (environmental, social and governance) principles. State-Owned Enterprises (SOEs) are also frequently classified as hybrid organizations because they must navigate and manage three distinct organizational logics: public, business and political.
A few management researchers have begun investigating this emerging phenomenon in organizational studies.
Prominent management scholars such as C.K. Prahalad and Richard Bettis have highlighted that organizations typically operate according to a dominant logic. For example, business organizations prioritize profit maximization, while public organizations focus on public service delivery.
These logics are inherently in opposition because they emphasize distinct objectives, which in turn dictate how organizations manage their resources. For example, an educational institution’s primary objective is to provide accessible education for all, and it allocates resources accordingly to achieve this goal. In contrast, a business prioritizes generating profits and distributing them to shareholders.
