The literature on business model innovation for sustainability is contradictory about the mechanisms unfolding in the context of organizational hybridity. Existing hybrid organizations are put under pressure to transform their business model to meet new social and environmental goals while ensuring financial sustainability. However, organizations with a strong social mission might be reluctant to change, having structured their business model to meet a particular social goal. Through an ethnographic study at a Dutch social housing association introducing an energy-neutral house as a new product, we investigate the key stages and enabling mechanisms for a sustainable business model change in which the social and environmental logics are conflicting. We analyze the underlying causal mechanisms in the process of business model innovation for sustainability. We show that the mechanisms responsible for organizational inertia in its conventional (negative) connotation, may in fact enable the intended positive and enduring social and environmental goals over time.
