theories of social entrepreneurship part1

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institutional theory, institutional void, instititional logic, institutional memory

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theories of social entrepreneurship part1

  1. 1. Institutional theory and Social Entrepreneurship Anirudh Agrawal Anirudh Agrawal PhD Fellow Copenhagen Business School Porcelænshaven 18A, 0,119 DK-2000 Frederiksberg Denmark Office.: +45 38 15 34 01 M: +45 41 68 95 02 e-mail : aag.ikl@cbs.dk
  2. 2. Last Session • Microfinance – Theory of Change • Poverty and Microfinance • Financial Inclusion – Formal banking system and Microfinance • Debt and Equity finance • Information assymetry • Moral hazard Anirudh Agrawal
  3. 3. Principles of Microfinance • • • • • • • • Poor people need a variety of financial services, not just loans. Microfinance is a powerful tool to fight poverty. Microfinance means building financial systems that serve the poor. Microfinance must pay for itself to reach large numbers of poor people. Microfinance is about building permanent local financial institutions. Microcredit is not the best tool for everyone or every situation. Interest rate ceilings making it harder for poor people to get credit. The role of government is to enable financial services, not to provide them. • Donor funds should complement private capital, not compete with it. • The key bottleneck is the shortage of strong institutions and managers. • Microfinance works best when it measures and discloses its performance. Anirudh Agrawal
  4. 4. Institutional theory and Social Entrepreneurship http://www.youtube.com/watch?v=mL_KmeykiH0 Anirudh Agrawal
  5. 5. THE ORGANIZATIONAL SOCIETY Clusters Networks Industries Economic Groups Cartels Organization Populations Organizational Field Organizations Source: Internet Anirudh Agrawal
  6. 6. Institutional Theory Legitimacy, Reputation, Mission, Vision, Objectives, Sustainability Organizational Maintenance, Expansion and Transformation Identity construction, Memory, Power, Degree of coupling Social Comme rcial Public regulato ry investor Institutional environment Anirudh Agrawal Source: Anirudh Agrawal WIP-1 Seminar 6
  7. 7. Why organizations change? • • • • Innovation Market pressures, Competition New Norms Changing consumer behaviour Anirudh Agrawal
  8. 8. Institutional Theory • Economic View – Homo Economicus – Efficiency – Profit maximization • Sociological view – – – – – Norms and rules of the society Culture Religion Family Social Network Anirudh Agrawal
  9. 9. What is an institution? • • • • • • • Walls Family Religion School Education Marriage Rituals Anirudh Agrawal
  10. 10. What is an institution? • • • • • • • Organizational Structure Bureaucracy Constitution Church Society Community Market Anirudh Agrawal
  11. 11. Why Organizations appear similar? Anirudh Agrawal
  12. 12. Isomorphism • DiMaggio & Powell: Organizations remain similar– and continue to become more like each other– because of different “isomorphic” pressures. Anirudh Agrawal
  13. 13. Types of Isomorphism Competitive Isomorphism:  Driven by regular market pressures Institutional Isomorphism:  Coercive: Driven by government regulation, political influence, search for legitimacy  Mimetic: Driven by standardized responses to uncertainty  Normative: Socialization of workers– professionalization– creates pressures to work in accepted ways Anirudh Agrawal
  14. 14. Isomorphism • Competition in Markets – Influence firms to behave in order to respond to markets • • • • • Niche Markets Emerging Markets BOP Markets Open Markets Close Markets Anirudh Agrawal
  15. 15. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  16. 16. Institutional Logic Embeddednes: The idea that economic relations between individuals or firms are embedded in actual social networks and do not exist in an abstract idealized market • Each institution has a central logic • Logic guides organizing principles, gives actors vocabularies of motive and sense of self Anirudh Agrawal
  17. 17. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  18. 18. Institutional Work • the ways in which individuals, groups, and organizations work to create, maintain, and disrupt the institutions that structure their lives • the range of ways that people build, sustain, and change institutions. • understand the role of individuals in building, maintaining, and toppling institutions • Examples: • Managers in Organizations • Priests in Church • Parents in Family • Community leaders Anirudh Agrawal Lawrence, T., Suddaby, R., & Leca, B. (2011). Institutional Work: Refocusing Institutional Studies of Organization. Journal of Management Inquiry
  19. 19. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  20. 20. Institutional Memory • Collective set of facts, concepts, experiences, and know-how held by a group of people • Culture • Folk Tales • Stories • Documentations • Processes, Products and Services • How • • • • Pictures Movies Books and Writings Folktales Anirudh Agrawal
  21. 21. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  22. 22. Institutional Void • Lack of marketing supporting institutions such as market intermediaries, legal protection. – Ashoka Fellowship – Impact investment – Microfinance in Bangladesh – Socialization place for the marginalized in Copenhagen – HuB Copenhagen – http://www.youtube.com/watch?v=NswJJBJZQgE Anirudh Agrawal
  23. 23. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  24. 24. Institutional Entrepreneurship • Who changes institutions? • paradox of embedded agency • How does new institution get legitimacy? Anirudh Agrawal Leca, Battilana and Boxambaum 2008
  25. 25. Institutional Entrepreneurship • • • • • • • Gandhi Martin Luther King Mo. Yunus Bill Drayton Michael Jackson Elvis Presley Alferd Hichhock Anirudh Agrawal
  26. 26. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  27. 27. Legitimacy • Suchman (1995) “generalised perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions.” • But how is legitimacy constructed? Anirudh Agrawal
  28. 28. Types of Legitimacy • Moral legitimacy • Pragmatic Legitimacy • Cognitive Legitimacy Anirudh Agrawal Suchman 1995
  29. 29. Layers of Legitimacy Anirudh Agrawal
  30. 30. Discuss for 10 minutes • • • • Ashoka Fellowship and Unlimited SKS Microfinance Specialisterne Car sharing Anirudh Agrawal
  31. 31. Next Lecture • Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (n.d.). Building Social Business Models: Lessons from the Grameen Experience. Long Range Planning And • Ashoka Fellowship and Unlimited • SKS Microfinance • Specialisterne • Car sharing Anirudh Agrawal
  32. 32. Additional reading list Isomorphism DiMaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48(2), 147–160. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=14846933&site=ehost-live DiMaggio, P. J., & Anheier, H. K. (1990). THE SOCIOLOGY OF NONPROFIT ORGANIZATIONS AND SECTORS. Annual Review of Sociology, 16(1), 137–159. Retrieved from http://escweb.lib.cbs.dk/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9101282649&login.asp&site=ehostlive&scope=site Institutional Work Dobbins, F. (2010). Institutional Work: Actors and Agency in Institutional Studies of Organizations. Administrative Science Quarterly, 55(4), 673–676. Retrieved from http://escweb.lib.cbs.dk/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=59240580&login.asp&site=ehost-live&scope=site Lawrence, T. B., & Suddaby, R. (2006). Institutions and Institutional Work. In S. Clegg, C. Hardy, T. B. Lawrence & W. R. Nord (Eds.), The SAGE handbook of organization studies (2nd ed., pp. 215-254). London: Sage Publications • Agency and Institutional Entrepreneurship • Agency and Institutions: A Review of Institutional Entrepreneurship By Bernard Leca ,Julie Battilana ,Eva Boxenbaum (online free) • Institutional logic Thronton, Ocasio, & Lounsbury. (2012). The Institutional Logics Perspective: A new approach to culture, structure and process. Oxford: Oxford University Press. Anirudh Agrawal
  33. 33. Anirudh Agrawal

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