The promise and problems of price subsidization in social entrepreneurship

Social entrepreneurship research has often focused on the benefits and challenges of designing hybrid organizations that integrate competing institutional logics to tackle social problems using market-based methods, especially in developing economies. Drawing on case evidence from the Safe Water for Africa program, we show how and why pricing new products at other than market prices offers a seductive but dangerous mechanism for managers seeking to pursue dual objectives in hybrid organizations. We identify five strategic and operational challenges with ethical implications that manifest as pricing dilemmas and show how and why they are likely to elicit moral dilemmas among stakeholders of social entrepreneurship who are not equally committed to both social and economic objectives.     

Institutional logics and social enterprises: Entry mode choices of foreign hospitals in China

When social enterprises, being defined by their social mission and profitability, internationalize, they need to respond to institutional logics in the host country. By juxtaposing institutional logic and entry mode choice literature, this paper shows how social enterprises accommodate different institutional logics when they enter foreign markets. We collected data on Chinese healthcare reform, governmental policies and their changes, and conducted 36 in-depth interviews and three expert group meetings. By analyzing five non-Chinese hospitals entering China, we show how social enterprises, as hybrid organizations, respond to governmental, commercial, and social institutional logics, when entering a foreign market.     

How institutional logics shape fairness in crowdsourcing: The case of Threadless

Fairness is essential for successful crowdsourcing. Without it, companies run the risk of consumers not participating, or worse, sabotaging the crowdsourcing initiative. Yet little is known about how consumers determine what is fair in crowdsourcing. Building on theories of organizational justice and institutional logics, and using a longitudinal netnography of Threadless, a popular crowdsourcing platform, this paper shows how experiences of fairness stem from the interaction between two conflicting crowdsourcing logics: the logic of renewal and the logic of community. The two logics inform notions of fairness in crowdsourcing contests across procedural, distributive, and interactional justice dimensions. A balance between the two logics is ideal for maintaining fairness among a crowdsourcing community. We show the conditions in which crowdsourcing participants tolerate transgressions to each justice dimension, consequently emphasizing one logic over the other. Overall, our study advances theory on crowdsourcing logics and how they guide notions of procedural, distributive, and interactional fairness in crowdsourcing. Our study also offers new guidance on how to manage fairness in crowdsourcing.     

Organizations as Human Communities and Internal Markets: Searching for Duality

Business firms have been explained as internal markets or as communities. To be sustainable, however, they need to reconcile these two constituting elements that have mainly been touted as opposite and part of a dualistic relationship. We suggest that organizations may, in alternative, view market and community as part of a duality, interdependent and mutually constituting processes that may not only contradict each other but also enable one another. The implications of a duality view for business ethics, which articulates market and community elements in a fruitful, mutually enabling relationship, are considered, and duality is presented as a way of transcending what is commonly viewed as opposition, moving organizations both in the direction of humane and competitive finalities.     

Mitigating the Myopia of Dominant Logics: On Differential Performance and Strategic Supply Chain Research

The primary question of management scholarship is, “What leads some firms to be successful even as others fail?” Over the years, a variety of dominant logics have emerged to inform this question. Synthesized, these logics make it clear that companies win when they create customer value better than the competition and efficiently enough to be profitable. That is, firms that design distinctive and dynamic value‐added systems win competitive battles. This observation is salient to the Journal of Business Logistics community as systems design and value creation are focal decision areas of supply chain management. With this in mind, we briefly discuss two of many areas for which strategic supply chain research can inform differential performance.     

Dynamic ambidexterity: How innovators manage exploration and exploitation

Firms must excel at both exploration and exploitation to ensure long-term survival and prosperity. However, firms often have difficulties in doing so because they have to accommodate the contradictory logics of exploration and exploitation. This article examines the logics of exploration and exploitation, evaluates the difficulties of accommodating both logics, and identifies dynamic ambidexterity as a new way to overcome these difficulties. To achieve dynamic ambidexterity, firms need to support structural ambidexterity at the corporate level, contextual ambidexterity at the business-unit level, and sequential ambidexterity at the project level. I believe that the notion of dynamic ambidexterity and its managerial practices can help firms manage exploration and exploitation and ensure long-term survival and prosperity.     

Unmasking Corporate Sustainability at the Project Level: Exploring the Influence of Institutional Logics and Individual Agency

Due to their consolidated nature, corporate sustainability reports often mask the evolution of organizations’ sustainability initiatives. Thus, to more fully understand the environmental performance of an organization, it is essential to examine the experiences of specific projects and how they relate to corporate sustainability. Based on case studies of green projects in four different organizations, we find that it is difficult to determine the environmental impact of a project a priori, even in cases where environmental considerations are included as part of the initial project scope. Instead, the decision to integrate environmentally favorable elements into projects is a dynamically occurring interaction between competing institutional logics and organizational identities, which create windows of opportunity for individual agency. During these windows, individuals may engage in reinforcing microprocesses that support traditional practices, or invoke enabling microprocesses to facilitate green decision-making, consistent with ecosystem logics. The process model developed in this paper provides a new perspective on the temporal and contextual dimensions of environmental championship behaviors, and sheds light on otherwise puzzling results such as why organizations with strong environmental orientations continue to struggle with delivering projects with strong positive environmental impacts.     

Foreign market entries,exits and re-entries: The role of knowledge,network relationships and decision-making logic

We focus on the following question: how are knowledge, network relationships and decision-making logic interrelated throughout the internationalization process – foreign market entries, exits and re-entries? We contribute to the internationalization literature, network approach and effectuation theory that have not examined these interrelationships during internationalization – especially de- and re-internationalization – in detail yet. Thereby, we provide a more complete view of internationalization. Based on a single punctuated longitudinal case study, we show that lack of knowledge results in mostly effectual (opportunity-driven) decision-making: finding customers via weak ties, trade fairs and unsolicited export orders and experiencing numerous market exits and re-entries due to “experimenting”. Knowledge acquisition leads to more causal (systematic, plan-driven) decision-making and stronger ties, but serendipitous (“by chance”) entries can still occur, and exiting and re-entering foreign markets may continue. We suggest that managers should network and acquire knowledge actively, use both decision-making logics and accept uncertainty as normal during internationalization.     

Institutions,paradoxes, and compensation logics: evidence from corporate values of the largest Chinese and US companies

This study introduces the concept of Institutional Compensation Logics, which suggests that organizations can dynamically balance coexisting local and global logics, through a process known as the ‘paradox of embedded action’. Through this process, managers can gradually adapt institutional logics to the global environment, even if their actions, intentions, and rationality are embedded in the very logics that they wish to change. We propose that one important way they do that is by designing corporate values that challenge the organization’s local values. To test this approach, we use the mission-based corporate values’ framework and analyse the corporate values of a sample from the largest Fortune companies in the two most influential world economies: China (PRC) and the United States (US). Our study also helps advance the understanding of how espoused values are related to cultural values, often in paradoxical ways, thus supporting a negative relationship between espoused organizational and cultural values.     

One more only if it is one of us. The number of partners and the stock market reaction to domestic and international alliance formation in EU telecom firms

In this paper, we analyze the interaction between two dimensions of strategic alliances whose real impact on the potential value of an alliance has not yet been highlighted: the number of partners and the direct competition among them. Building on the resource-based view, as well as on the relational view of alliances, we argue that increases in the number of partners are positively valued by the stock market when the alliance is formed by competing firms that belong to different countries. Multiparty alliances are thus positively valued when they allow a quick internationalization by affording access to resources owned by competing firms from different countries. An empirical test of stock market reaction to alliances announced by European telecom firms between 1986 and 2001 has confirmed our hypotheses.     

Do Chinese corporations take their governance practices abroad? Evidence from Chinese mining subsidiaries in Australia

Directors of firms are theorized to fulfil control, service and resource dependence roles. However, the ways in which directors’ of Chinese MNCs govern their foreign subsidiaries, and perform these roles remains unclear. Building on the institutional logics perspective, this study explores the roles enacted by the boards of directors eight Chinese‐controlled companies in Australia to gain an appreciation of their governance practices. In depth semi‐structured interviews with insider and independent directors, consultants and market analysts were undertaken. A content analysis of company annual reports and web sites complimented primary sources of data on board functions. Findings reveal that control is the most dominant role played by these boards, rather than service or resource dependence. It also appears that the dominant logics of Chinese institutions influence the corporate governance of Chinese MNCs as they internationalize. These findings extend our understanding of corporate governance practices in China and abroad.     

Measuring Price Effects of Concentration in Mixed Oligopoly: An Application to the Swedish Beef-slaughter Industry

Empirical studies of market power focus exclusively on industries with private firms. Yet, it is not uncommon to find private firms competing with public firms or cooperatives (coops) within the same market. We develop an empirical procedure for measuring market-power and cost-efficiency effects of concentration in mixed oligopoly consisting of coops and investment-owned firms (IOF) and apply the procedure to the Swedish beef-slaughter industry. We find that the cost-efficiency effect of coop concentration more than offset its market power effect, resulting lower beef prices. IOFs are found to be price-takers in both cattle procurement and beef sales.      

证券市场交易机制的国际发展趋势研究

证券市场的两种主要交易机制是竞价方式和做市商制度.文章在综合分析国际上有代表性的相关研究文献后,发现在交易机制与股票买卖价差的关系方面,采用竞价方式的股票其买卖价差较小,采用做市商机制的股票其买卖价差较大;在股票交易成本方面,采用竞价交易机制的股票交易成本较低,而做市商机制的股票交易成本较高.从国际上证券交易机制的发展趋势看,以一种方式为主,多种方式为辅的"混合交易"机制是最有优势的机制,是证券交易机制的未来发展模式.     

When institutional change outruns the change agent: The contested terrain of entrepreneurial microfinance for those in poverty

We argue that institutional change moves through stages punctuated by recurring attempts to formally redefine the boundaries and logics of organizational fields that institutional entrepreneurs initially establish. With a grounded theory model, we demonstrate that institutional change in microfinance started with dominant development logic, shifted to market logic, and got stuck in a conflict over regulatory logic. We show how the role of the entrepreneur can change markedly over time while the institutional change process continues unabated. We present institutional entrepreneurship as an evolving phenomenon and suggest that the interplay between institutional entrepreneurs and established organizational fields is highly nuanced.     

Controls as a Sharable Knowledge Commodity: An Architecture for Open Exchange

The world seems to be getting more dangerous: terrorists; fraudulent corporations; money laundering; hurricanes; pandemics. Governments and organizations respond with a flurry of new controls. In some cases these are centrally mandated (e.g. Sarbanes Oxley). In others, organizations struggle to find their own control solutions. Seldom, however, do organizations work together as a community of common interests to share solutions to their control threats. In this paper we consider how an open exchange of control solutions might be supported electronically. We assume a community of similar organizations that wish to exchange detailed knowledge about organizational control techniques. These might be non-competing institutions, such as libraries, customs agencies, and even universities; or, they may in fact be competing organizations, wishing to exchange control solutions in dimensions where they do not compete – e.g. the airlines exchanging best practice about safety and security. The main point is to propose an information technology architecture that permits a view of organizational controls as shareable, exchangeable knowledge commodities.     

Globalization and affordability of microfinance

We study how globalization can differentially affect financial inclusion through the lens of microfinance. Based on an institutional logics perspective, we argue that MFIs embody both social logic and market logic with regard to provision of affordable microfinance loans. Speicially, social logic is amplified by greater social globalization and the stronger presence of nonprofit organizations (NPOs) in the microfinance industry. In contrast, economic globalization catalyzes MFIs' market logic, leading to weaker or greater affordability of microfinance, depending on the relative strength of the profit-maximizing motive and real competition. We test these predictions by focusing on MFI interest-rate setting and using longitudinal data from 2030 MFI observations across 50 countries from 2002 to 2012. We find that country-level social globalization measure is negatively associated with the average MFI loan interest rates and that country-level economic globalization measure has an inverse U-shaped relationship with the average MFI loan interest rates. These results support our hypotheses and suggest a more nuanced view on how globalization affects affordability of microfinance.     

Bayesian estimation of discrete games of complete information

Estimation of discrete games of complete information, which have been applied to a variety of contexts such as market entry, technology adoption and peer effects, is challenging due to the presence of multiple equilibria. In this paper, we take a Bayesian MCMC approach to this problem, specifying a prior over multiple equilibrium selection mechanisms reflecting the analysts uncertainty over them. We develop a sampler, using the reversible jump algorithm to generate draws from the posterior distribution of parameters across these equilibrium selection rules. The algorithm is flexible in that it can be used both in situations where the equilibrium selection rule is identified and when it is not, and accommodates heterogeneity in equilibrium selection. We explore the methodology using both simulated data and two empirical applications, one in the context of joint consumption, using a dataset of casino visit decisions by married couples, and the second in the context of market entry by competing chains in the retail stationery market. We demonstrate the importance of accounting for multiple equilibrium selection rules in these applications and show that taking an empirical approach to the issue, such as the one we have demonstrated, can be useful.     

International network formation,home market institutional support and post-entry performance of international new ventures

Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.     

An Investigation on Incentive Strategies in Community Building in Business-to-Business Electronic Markets

ABSTRACT

Purpose: Community building is recognized as an important governance mechanism in business-to-business (B-to-B) electronic markets by enhancing firms’ participation in these platform markets. However, little research has been done regarding the role of incentive strategies in community building. The main purpose of this paper is to understand how to motivate merchants to participate in a merchant community with incentive strategies.

Methodology: Data were collected in a community of a large B-to-B electronic platform market in China. We randomly chose a sample of 605 participants from among all merchant firms registered in this community, and track their behaviors for 2 weeks. Their behaviors are recorded based on our research design.

Findings: With the empirical analysis from a community of a large B-to-B electronic platform market in China, our results show that (1) both platform and peer incentive strategies can significantly enhance community participation, while platform incentives is more effective in general; (2) platform incentive strategy is a more effective strategy as seller firm uncertainty increases; (3) peer incentive strategy is a more effective strategy as buyer firm uncertainty increases.

Originality: This paper is among the first to investigate two types of incentive strategies in community building, platform level and peer level. We also investigate the moderating role of market uncertainties due to market participants from seller and buyer when examining the effectiveness of these two incentive strategies.     

The influence of demand factors on dynamic competitive pricing strategy: An empirical study

This empirical paper investigates the relationship between the dynamic strategic interactions among competitors in a component market and demand factors in the market for the end product. The structure of competition in the US microprocessor (MPU) industry is analyzed using data on prices and sales in both the MPU market as well as the market for personal computers. The pattern of dynamic strategic interaction between competing firms in this market on a key decision variable, price is studied. Non-nested model comparison tests based on equilibrium solutions derived for specific differential games are applied to identify the mode of competitive strategy between pairs of competing brands. The empirical fit to the longitudinal and cross-sectional data, of alternative models of competition, independent (Bertrand?CNash), Stackelberg leader?Cfollower, and Collusion, is used to determine which dynamic model best describes actual competitive behavior over the life of each MPU. Demand for the product market which is downstream from microprocessors, that for personal computers, is estimated using a generalized diffusion model with price effects. Data from the markets for desktop and laptop computers are analyzed at the level of computer vendor and internal microprocessor. Patterns are uncovered, linking downstream demand parameters with upstream competitive strategy. There is evidence to suggest that when there are strong diffusion effects driving sales of both the competing computer brands, there is a higher likelihood of Bertrand?CNash competition among MPU firms. However, when there are higher cross-price effects (substitutability) among personal computer brands there is a greater chance of Stackelberg leader?Cfollower price competition. When self-price effects are relatively high, the likelihood of Bertrand?CNash competition among MPU firms increases. Furthermore, when the potential demand for the computer product category is high, there is a higher likelihood of Bertrand?CNash pricing in the MPU market.