Essays on institutional innovation by business actors

Date: 17 December 2014

Venue: University of Antwerp, Kapel Grauwzusters - Lange Sint-Annastraat 7 - 2000 Antwerp

PhD candidate: Wouter Van Bockhaven

Principal investigator: Prof. dr. Paul Matthyssens

Co-principal investigator: Prof. dr. Koen Vandenbempt

Short description: PhD defense Wouter Van Bockhaven - Faculty of Applied Economics

Abstract: There is one thing common about globalization, population ageing, depletion of natural resources, growing inequality, rising health spending and the growing mismatch between labor supply and demand. They are all challenges that require a better answer but which cannot be solved by one person, one organization, even one country alone. Often, we turn to NGO's and other interest groups to work toward such an answer. Whereas these organizations are plenty rich in intrinsic commitment, ideological repertoire and overall normative legitimacy, they often lack in financial, political, organizational and technical resources. In other cases, we just wait and look to the government to come up with an answer, because it does control substantial financial, human, political and legal legitimate resources. Yet, these solutions often excel in dialogue and in the number of influential stakeholders participating, but often lack in decisiveness and initiative, thus rarely providing the answer that was needed. Often overlooked is the potential role of business actors. Surely, the primary goal of business is to make a profit and indeed managers have been taught for decades that the best way to do so is by 'winning' over competitors, rather than by creating value. Yet business is great at solving technical problems and it is a very straightforward realization that high profits reside where there is high (societal) demand.
This dissertation looks into the way businesses can be made to collaborate on issues that surpass their individual capabilities and that require collective action. Whether they are of a more social or a more economic nature, common among these problems is that their effective solution requires participation from multiple types of stakeholders: private, public, and interest groups alike. Business is rarely seen as the answer to these problems. Yet if they take part in the initiation and orchestration of such collective action, odds are that if they succeed in providing an answer, it should be an effective and efficient one. However, to actually succeed in collective action, they have a lot riding against them. So this dissertation tries to provide answers to the different problems faced by business actors when they engage in collective action.
Business actors are definitely not interest groups, quite the contrary in fact. So although there is a lot of research on collective action by interest groups, the challenge is not really the same for business actors who can easily mobilize the resources that interest groups lack, but who want in other areas. Businesses as collective actor initiators will face distinct challenges, such as convincing stakeholders to participate when they believe you are only out to exploit their good intentions, such as making companies behave in a more collectively optimal way, while they have always been taught to do it differently and are still rewarded for keeping on doing as they did, such as organizing collective action that works toward the common good, while at the same time keeping participating firms interested and committed for years in a row. Conclusion is that for such collective action to succeed, business actors could do with more sophistication regarding the moral, cultural and institutional dimension of their field. It could be rational for them to resort to counterintuitive strategies that require them to give up some control in order to gain power collectively. Finally, for business actors to become better at collective action and find answers to most of their competence and strategic needs to this end, they could learn from interest groups even though they generally lack in material, technical and business sophistication.