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Social embeddedness and the BOP network evolvement: a longitudinal case study

XING Xiaoqiang1 GE Hufei2 Tong Yunheng3

(1.Business School, University of International Business and Economics)
(2.School of Economics and Management, Southeast University)
(3.Tsinghua University School of Economics and Management)

【Abstract】In the Bottom of the Pyrimad (BOP) market, during the business operation of companies, the cooperative network, which has specific relations and structures with diversified organizations and individuals, is able to realize value creation and sharing in a more effective manner. The study bases on the features of social embeddednesssocial embeddedness: double, dynamic and layers, proposes a theoretical analysis framework, use the development process of Hunan Shunhua Duck Industrial Development Company as case study subject, investigate the process features and internal mechanism of the BOP network envolvement. The research has shown that the relations and structure features of the BOP networks decide the social embeddednesssocial embeddedness status of the members, and then further produce corresponding social capitals and liability combination, influencing the cooperative behaviors of the members and the network achievements. Corporates will also promote the networks evolvement through taking the initiative and adjusting the networks relations and structure. Among this, introducing an agent organization that represents the collective interests of the BOP producers to form a layered governance is a crucial means to simplify and optimize the networks. Companies can transfer partial network power to the agent organizations to reduce the relations embeddedment level of the BOP producers and enhance the operational efficiency. In the end, the article summarizes four modes in the BOP networks evolvement from the subject that organizes the BOP producers and their power relations, and, based on that, discusses a general approach of the BOP network evolvement.

【Keywords】 base of the pyramid market; network evolvement; social embeddedness; social capital; social liability;

【DOI】

【Funds】 the General Program of National Social Science Foundation (14BGL178) the Beijing Planning Program of Philosophy and Social Science (13JGB037) the Beijing Higher Education Young Elite Teacher Project (YETP0895)

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    Footnote

    [1]. ①This article was firstly designed to select multiple case studies methodology, including a long-term investigation on the relationship between Mengniu Dairy, Yili Group and the dairy farmers. However Eisenhardt (1991) demonstrates that whether the amount of cases is appropriate or not is primarily decided by how much information is known, how much information could be acquired through the added cases. After our comparing analysis on multiple cases, we discover that the Shunhua Duck Industrial Development Company case has strong strength in representing other cases. Its information could support our research problems, whilst other cases will take a lengthy proportion of the article, yet its marginal contribution to the theoretical construction is limited. Much of it is redundant information. Thus in order to focus on the core research issue and distinctly show the relations of theoretical concepts, we eventually choose this single case to study. [^Back]

    [2]. ② In the model IV, the company could also establish deep confident and mutual beneficial relations with each farmer through long-term trading and quite frequent interactions. But due to the large number of farmers and their highly scatteredness, this model will costs a large amount of time and energy, and could easily result in over embeddedment, which brings high social liability to the company. It is not of benefit to the future growth and expansion of the future business model. Thus this article only considers the integration models, in which the company incorporates farmers to the internal organization. [^Back]

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This Article

ISSN:1002-5502

CN: 11-1235/F

Vol , No. 10, Pages 160-173

October 2015

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Article Outline

Abstract

  • 1 Introduction
  • 2 Literature review
  • 3 The design of the study
  • 4 Case studies analysis and discussion
  • 5 Conclusion and outlook
  • Footnote

    References