Category Archives: Models

Communication, Concepts, CSR, Featured, Governance, Models, News, Policy, Social

Trusting Nudges?

By Lucia Reisch.

Policy makers all over the world increasingly choose nudges from the toolbox to combat challenges of society including public health and the environment. However, when we embrace nudges we should not only consider their benefits for society. We should also ask: Do people approve of using them, and why?

Nudges cover different interventions that steer people in certain directions. They can be everything from warnings on tobacco products to defaults for green energy. What is important: A nudge always allows people to choose themselves – and to opt out of a default. The approval of nudges is the focus of my new article written with co-authors Cass Sunstein and Micha Kaiser, recently published in the Journal of European Public Policy. Our analysis draws on an international survey from five countries: Belgium, Denmark, Germany, South Korea and the US. We asked a representative group of people in these countries if they approve of 15 widely used health and environmental nudges. We also checked for a long list of socio-economic, psychological, and social variable – including their trust in public institutions.

Most people do

A high level of support for nudges exists across countries and cultures. This is what we had found in earlier studies in about 25 countries worldwide. Yet differences in attitude show up across various beliefs, traits, and behaviours. Women and people with marked environmental concern are most likely to approve. At the same time, conservatives are less likely to do so. We see the force of behaviour when, for instance, a “meat-free Monday” in a cafeteria is less well supported by meat-eaters. Interestingly, this also applies to smokers who tend to disapprove of government anti-smoking campaigns.

Nudging from “above” requires trust from the base.

Trust is a must

While our analysis points to several findings, one might outshine the others. Approval comes with trust. To be more specific, we find the trust in public institutions strongly connected with social approval. In other words, when people have high trust in, e.g., government or police, they are likely to be supportive towards nudges. As expected, those who strongly believe in the free market to solve challenges of society will be less in favour.

Openness and transparency

The finding of trust gives a very important lesson. We should make sure to cultivate trust in arguing for nudges. Even though most people already approve of nudges, policy makers should not rest on their laurels but rather engage citizens in the development of new policies and ways of assessing their cost-effectiveness and acceptance. The best way to obtain trust is to earn it, and to invite citizens to participate. This is why we propose a “bill of rights for nudging” that sketches out the rules a government should follow when using nudging as a policy tool. Transparent rules and processes tend to create trust in institutions.

Author

Lucia A. Reisch is Full Professor for Consumer Behaviour and Consumer Policy at Copenhagen Business School.

Full article

Cass R. Sunstein, Lucia A. Reisch & Micha Kaiser (2018): Trusting nudges? Lessons from an international survey, Journal of European Public Policy, DOI: 10.1080/13501763.2018.1531912

Images

Header photo: a trash bin in Copenhagen.
Photo by Bernard Hermant on Unsplash.

Accountability, Concepts, CSR, Economic, Ethics, Featured, Food, Issues, Models, News, Regulation, Research, Stakeholders, Standards, Sustainability

Sustainability’s Infrastructure

Ethnographies of the global value chain of certified tea (SUSTEIN)

By Hannah Elliott, Martin Skrydstrup and Matthew Archer.

Why SUSTEIN?

Currently, the world’s tea industry is on a race with time to source tea sustainably before 2020. But what is “sustainable tea” and how do we know if tea is sustainable or not? This project entitled SUSTEIN (SUStainable TEa INfrastructure) will focus on this question by way of looking at localized translations of transnational sustainability standards in Kenya, United Arab Emirates and corporate headquarters in Europe. We aim to advance our understanding of the global value chain of certified tea.

3 Research lines

The theoretical objective is to venture beyond the notion of global value chain by reinterpreting sustainable supply chain management through the concept of infrastructure, a notion anthropologists and other social scientists have deployed in recent years to emphasize the political and temporal aspects of networks such as transnational supply chains. We hope that this concept will allow us to better comprehend how sustainable certification schemes manifest in global value chains.
SUSTEIN consists of three sub projects, which each address a core question posed by the project:

  • How does certification shape agrarian production in the form of cultivation and factory processing, and vice versa? Who benefits from which sustainability standards? (Line A)
  • How does certification influence the valuation of tea, assessed in terms of taste, grade and price? How is the value of certification performed and capitalized? (Line B)
  • How do corporate professionals and independent auditors distinguish between “sustainable/unsustainable”? What lines of evidence are recognized? (Line C)

Each of these questions will be answered by the corresponding research line:

tea plantation
Tea plantage in Kericho; one of SUSTEIN’s field sites.

Research line A

explores agrarian questions, enquiring into the ways contemporary drives towards sustainability shape and are shaped by modes of tea production in Kenya. The research focuses on the institution of the tea plantation and its associated factories and outgrower farms, all key components of the infrastructure of sustainable tea. The tea plantation has been described as having a “dual character” (Besky 2008: 1); it has its roots in British colonialism while being contemporarily positioned in international markets for certified sustainable commodities. This research line enquires into what ‘sustainability’ comes to mean and materialise within this apparently contradictory setting. How do contemporary measures seeking to ensure sustainable tea production, such as certified standards, affect the way tea is produced in the context of the plantation? And to what extent do longer-standing modes of plantation production endure through the present, in turn shaping contemporary sustainability ideologies and practices? The research line addresses these questions through ethnographic inquiry. The researcher will spend time with the people working on tea plantations and in factories certified by different certification bodies and on the farms of outgrowers contracted to supply the companies owning plantations with supplementary sustainable tea. Through interviews and participant observation, the ethnographer will enquire into the social, political and ethical worlds surrounding sustainable tea production in contemporary Kenya.

Research line B

will follow through on the plantation and factory sites to the auction sites in Mombasa and Dubai. Ethnographic fieldwork will be conducted in the Jebel Ali Free Zone in Dubai with no tax regulations, no strict labor laws nor import/export duties, making it the perfect infrastructural hub to blend and pack tea according to corporate logic. Likely as an outcome of this, the Dubai Tea Trading Centre has since its establishment in 2005 risen to re-export 60% of the world’s tea production. These volumes are predominantly traded on virtual platforms.
In contrast, the Mombasa Tea Auction holds two weekly auctions under the auspices of the East African Tea Trade Association (EATTA), which conforms to national regulations (Tea Act of Kenya & Tea Board of Kenya). Recently, this auction site voted “against the mouse and for the hammer,” maintaining the tradition of the Dutch auction style vs. virtual trading. The ethnography for this research line will move between these two sites, following tea blenders who purchase in Mombasa vs. Dubai and investigating tea expertise and technologies as it pertains to the valuation of certified tea.

Research line C

builds on these ethnographies of production and exchange to try and understand the relationship between corporations and standards/certification regimes. There is a tension between these groups of actors whereby standards organizations such as the Rainforest Alliance and Fairtrade International need to appear independent in order for their certifications to remain credible while at the same time remaining sensitive to the financial obligations of for-profit corporations in order to promote “buy-in.”
This research line will draw on interviews with people working in these organizations and participant observation at sites where they interact, including industry conferences and trade fairs. These are the sites where sustainability is negotiated as both a concept and as a set of practices. With that in mind, interview questions will focus on, among other things, the extent to which specific agricultural and trading practices are integrated into broader definitions of sustainability and their manifestation in different certification regimes, the challenges of maintaining a critical distance between certifiers and corporations, and the way standards govern markets and, crucially, vice versa.

The grant

SUSTEIN is made possible by the Sapere Aude Starting Grant (meaning “dare to know”), awarded by the Danish Council for Independent Research (DFF). The Sapere Aude program “is aimed at younger, very talented researchers, who at the time of the application deadline and within the last eight years have obtained their PhD”. The Sapere Aude program targets “top researchers who intend to gather a group of researchers, in order to carry out a research project at a high, international level.”

Reference

Besky, S. (2008) ‘Can a plantation be fair? Paradoxes and possibilities in Fair Trade Darjeeling tea certification’. Anthropology of Work, XXIX: 1, pp. 1-9.

Hannah Elliott is a post-doc in the Department of Management, Society, and Communication at Copenhagen Business School, having recently finished her PhD at the University of Copenhagen. She is responsible for research line A.

Martin Skrydstrup is an associate professor in the Department of Management, Society, and Communication at Copenhagen Business School and is the principal investigator of SUSTEIN. He is also responsible for research line B.

Matthew Archer is an assistant professor in the Department of Management, Society, and Communication at Copenhagen Business School and is responsible for research line C. He recently completed his PhD in environmental studies at Yale University and is interested in corporate sustainability and sustainable finance.

Closing remarks

In a year we hope to update BOS readers about how far we are with answering our research questions. In the meantime, we invite you to swing by our offices at Dalgas Have for a cup of tea.
The SUSTEIN project runs from 1 July 2018 to 30 June 2020.
For further information about the project, please contact the principal investigator, Martin Skrydstrup, at msk.msc@cbs.dk.

Concepts, Economic, Featured, Food, Models, News

The BUSINESS Model is Dead: Long Live the Organizational Value Model!

By Oliver Laasch.

An ApPeaRange!

Business models are logics of value proposition (Pr), creation (Cr), exchange (Ex) and capture (Ca). When closely looking at sustainability business models, it becomes clear that these ‘value functions’ are not only shaped by a commercial logic, but also by one of sustainability. Many of sustainability business models include further logics of social welfare (e.g. social enterprises), and government (e.g. private-public partnerships) (Laasch, 2018b). If a homogeneous commercial business model was an orange, these business models are more like a heterogeneous mixture between an apple, a pear and that orange, an ApPeaRange! Their value logics are not homogeneously commercial, but heterogeneous mixtures.

Strange Fruit Everywhere

Heterogeneous value logics like the one of sustainability business models are widespread. Imagine you peel an orange and find an apple inside:

Over half of the FTSE100 corporations have integrated a responsibility logic into their business model descriptions (Laasch & Pinkse, 2018). Many large businesses, such as LEGO, as well as SMEs are family-run, integrating their commercial logic with a family logic (Laasch & Conaway, 2015). We may also think of the Chinese semi-conductor producer Goodark blending commercial logic with a spiritual logic of Confucianism; the German car supplier Allsafe with its humanistic logic of freedom and responsibility; or the Brownie bakery Greyston with its commercial value logic firmly wrapped around a social welfare logic (Laasch et al., 2018). Once opening our eyes to the variety of ‘values’, of normative orientations and purposes businesses are oriented towards (Randles & Laasch, 2016), the perceived number of companies adhering to a purely commercial value logic shrinks considerably. While the purely commercial business model might not be entirely dead, it sure shouldn’t be considered the norm. And then there are entirely non-commercial organizations with value logics.

Comparing APPLE and Oranges: Yes!

Isn’t comparing a commercial organization, for instance, Apple and noncommercial organizations, let’s say a church, like comparing Apple and oranges? Yes, cheap pun intended:

“…a commercial business like Apple. With a customer value proposition (Pr) of high quality and high-end design, it depends on highest-standard production processes (Cr) and on the ability to maintain high margins (Ca).”

Laasch, 2018b: 165.

It appears we have found a purely commercial value logic, one that deserves the name BUSINESS model. Can we analyze a non-business organization, for instance a church, the same way?

“…shaped by an institutional logic of religion. It may pursue a value proposition of spiritual salvation (Pr), by helping believers to live according to religious values through the provision of religious services from marriages and funerals to humanitarian aid (Cr), and exchange value in a global network of churches (Ex).”

Laasch, 2018b: 165.

It appears non-business organizations, while not having a BUSINESS model per se, do have an organizational value model of value proposition, creation, exchange and capture. Freeing the organizational value logic from its commercial business origins enables us to take a fresh look at any kind of organization: Churches, universities, NGOs, governments, your favorite sports club, you name it! Organizational value logics lend themselves to study, design, and improve all kinds of organizations.

How to Farm Strange Fruits?

It has been argued that one of the main challenges of our times is to create companies and other organizations shaped by alternative logics, be it the one of sustainability, or of social welfare. We have seen that many organizations already have heterogeneous value logics. How to change the ones that don’t? Three interrelated manifestations of organizational value logics together form an organizational value model:

  • Cognition: An organizational value logic manifests in organizational members’ cognitive structures, their mental models and related decision making.
  • Activities: Value logics manifest in the logic of action of the activity systems through which an organization’s value model is enacted.
  • Artefacts: Value logics materialize in physical form, as texts, or images, such as a business model description in the annual report, factory layouts, or products.

Changing an organization’s value logic can start in any of its manifestations. For instance, as a corporate responsibility strategy circulated through a multinational retailer, the document’s responsibility logic was translated into peoples’ mental models, new activities and structures (Laasch, 2016, 2018a). In the companies Goodark, Allsafe, and Greyston mentioned above, new practices centered on a humanistic value logic (Laasch et al., 2018; Laasch, Dierksmeier, & Pirson, 2015) changed the networks of practices’ enacting their business models (Boons, Laasch, & Dierksmeier, 2018; Laasch et al., 2015). The emerging field of business model sociology provides further insight into such change processes (Laasch, 2018c).

Oliver Laasch is an Assistant Professor of Strategy at the University of Nottingham Ningbo China, founder of the Centre for Responsible Management Education and a visiting professor at the University of Tübingen’s Global Ethic Institute. Currently, he is a part of Copenhagen Business School’s Governing Responsible Business (GRB) World Class Research Environment Fellowship program.

References and Materials

If you enjoy strange fruits, have a look at the ‘apples and oranges’ audioslides with a more ‘academic’ presentation.

  • Boons, F., Laasch, O., & Dierksmeier, C. 2018. Assembling organizational practices: The evolving humanistic business model of Allsafe, 6th Asian SME Conference. Tokyo.
  • Laasch, O. 2016. Business model change through embedding corporate responsibility-sustainability? Logics, devices, actor networks. University of Manchester, Manchester.
  • Laasch, O. 2018a. An actor-network perspective on business models: How ‘Being Responsible’ led to incremental, but pervasive change. Long Range Planning, [DOI 10.16/j.lrp.2018.04.002].
  • Laasch, O. 2018b. Beyond the purely commercial business model: Organizational value logics and the heterogeneity of sustainability business models. Long Range Planning, 51(1): 158-183.
  • Laasch, O. 2018c. Business model sociology: Exploring alternative lenses (not only) for the study of alternative business models. CRME Working Papers, 4(4).
  • Laasch, O., & Conaway, R. 2015. Principles of responsible management: Glocal sustainability, responsibility, ethics. Mason: Cengage.
  • Laasch, O., Dierksmeier, C., Livne-Tarandach, R., Pirson, M., Fu, P., & Qu, Q. 2018. Humanistic management performativity ‘in the wild’: The role of performative bundles of practices, 32nd Annual Australian & New Zealand Academy of Management (ANZAM) Conference. Auckland.
  • Laasch, O., Dierksmeier, C., & Pirson, M. 2015. Reality proves possibility: Developing humanistic business models from paradigmatic practice. Paper presented at the Academy of Management Annual Convention, Vancouver.
  • Laasch, O., & Pinkse, J. 2018. How the leopards got their spots: A typology of corporate responsibility business models, 3rd Annual Conference on New Business Models. Sofia.
  • Randles, S., & Laasch, O. 2016. Theorising the normative business model (NBM). Organization & Environment, 29(1): 53-73.

CBS, Communication, Concepts, Education, Environment, Event, Featured, Food, Issues, Models, News, Social, Sustainability

Raising the bar for sustainable events

By Louise Thomsen

How often do we as event coordinators ask ourselves: how can I minimize the plastic use, the waste, the paper? I could also reverse the question and ask: Could we imagine a smarter, more efficient and even more inspiring new way to host events?

Copenhagen Business School hosts a significant number of conferences and other events throughout a year and all carry the opportunity to be managed more sustainably. But, what makes an event sustainable? In June, the Sustainable Consumption Conference hosted by the VELUX Endowed Chair in Corporate Sustainability at CBS became the first pilot conference for implementing sustainable initiatives at a bigger event at CBS.

Hosting events is a wasteful affair

We all know exactly what to expect when attending a conference. You receive a name tag when you register, which you usually throw in the waste bin when you leave. You get a plastic bottle of water, and when you are done with that, or even before you are done, you get another one. You get the conference programme and the participant list which you look at a couple of times before that goes into the waste bin. Often printed in colour.

Now, imagine attending a conference with no plastic bottles, no paper, no meat, and no food waste. Imagine, how this conference would increase the level of awareness, communication and engagement between the participants and the hosts. And ignite fruitful discussions because we would realize, how much we can actually achieve with little changes in our everyday lives.

Sustainability taken to new heights

On June 27-30, more than 200 scholars and policy practitioners participated in an international conference on sustainable consumption at Copenhagen Business School, The conference topic Sustainable Consumption naturally raised the question how a sustainable conference could look like at Copenhagen Business School? No attempt at all to satisfy the conference’s title would be more than hypocritical.

In order to make sure that the sustainability initiatives implemented at the conference were the most sustainable solutions and had a high impact factor, the conference organizers allied themselves with a group of students from the Danish Technical University (DTU) who were doing a course on Life Cycle Assessments.

The students received 2 cases

  1. How should the conference supply water?
  2. How should the conference be catered?

Over the course of 4 months, the DTU student teams collected data from CBS and carried out life cycle assessments taking into account various impact factors such as production, transportation, use and disposal etc. Based on the results, all conference meals were vegetarian, and all conference participants received one glass bottle that could be filled from water dispensers throughout the entire conference.


The conference participants also received information about the sustainability initiatives that they could expect prior to the conference. The findings from the life cycle assessment were communicated on posters and on the back of the staff t-shirts. All conference staff engaged with the participants and assisted with water bottles and waste sorting. Furthermore, the conference participants were continuously encouraged to share feedback and discuss the attempts made with each other and the staff.

Implemented sustainability initiatives at the Sustainable Consumption Conference

  • Each conference participant received one reusable glass bottle, which replaced single-use plastic bottles for the distribution of water throughout the conference.
  • Every meal served at the conference was vegetarian, reducing the environmental impact of the conference’s catering by 44% compared to meat-based meals.
  • Participants were asked to sort their waste throughout the conference, using designated bins for paper, plastic, food, and general waste.
  • The conference was largely paperless. Programs and other general information were made available in ways that reduced the need for paper, such as printed posters and an app with, among other information, the timetable.
  • The lanyards for name tags were made from recycled polyester, and both name tags and lanyards were collected for reuse after the conference.
  • Food waste was minimized by asking participants to give notice in advance about which meals they were going to participate in, and any leftover food was brought to a nearby centre for homeless people.
  • All conference staff wore a sustainable and organic cotton t-shirt with key sustainability messages on the back.

Invitation to a learning journey

When hosting an event at CBS, you are in touch with many different stakeholders who have procedures on how to efficiently meet requests on catering, waste handling, or cleaning. This means that it must be a collaborative effort if you want to change the existing structures. Engagement and communication are key.

We should not get carried away by the belief that the easiest solutions to implement will necessarily be the most impactful or more environmentally significant than our starting point. There is a big difference between solutions that carry a high degree of reducing CO2-emissions (real impact), and solutions that have the purpose of creating awareness. Both aspects are highly important. However, we should be aware of when we spend resources on one or the other and communicate this clearly.

I want to invite you to think about how we can improve our ecological footprint when we host events at CBS and elsewhere. As you will soon learn, there is no such thing as a “sustainable event”. However, there are well-founded decisions and much to learn if we dare to ask the question:

How can we raise the bar for sustainable events?

Louise Thomsen is Project Manager for CBS PRME and the VELUX Chair in Corporate Sustainability at the Department of Management, Society and Communication, CBS. Louise is focused on implementing the UN Sustainable Development Goals in an university context through student engagement. Follow her on LinkedIn and Twitter.

Save the date: 29 August, 15 h, Dalgas Have, Copenhagen Business School.

Creating a whole conference to have a significantly reduced amount of waste, use of paper and plastics is a big challenge. But many people also wonder, what they can do as individuals to limit climate change, if there is anything at all.
This issue is treated in another edition of the Sustainability Seminar Series at the department of Management, Society and Communication at CBS.

For more information and sign-up click on “What Can the Individual Do to help Limit Climate Change?”.

Communication, Concepts, Development, Economic, Environment, Featured, Governance, Issues, Knowledge, Models, News, Research, Standards, Sustainability, Technology

A framework for assessing the potential of behaviour change for global decarbonisation

By Kristian Steensen Nielsen

Addressing climate change requires an urgent implementation of far-reaching solutions. Policy-makers and natural scientists have mainly offered supply-side solutions to solving the climate problem, such as widespread adoption of new or innovative technologies. While of critical importance, strictly prioritising supply-side solutions is unlikely to deliver the necessary greenhouse gas (GHG) emissions reductions within the desired time frame. An often-overlooked demand-side solution is behaviour change, which can offer both immediate and long-term reductions in GHG emissions.

There is an urgent need for rapid decarbonisation to reduce the magnitude of climate change. The Paris Agreement reflected this urgency in its formulation of ambitious goals to keep the global temperature increase below 2°C and preferably 1.5°C. Since the Paris Agreement, researchers—often affiliated with the Intergovernmental Panel on Climate Change (IPCC)—have with accelerated frequency been building scenarios for potential pathways to reach the temperature goals.[1] These far-reaching—and arguably radical—pathways involve urgent transitions to renewable energy sources and the majority assumes the use of carbon dioxide removal (CDR) technologies, such as afforestation or bio energy with carbon capture and storage (BECCS). Neither of the pathway scenarios take behavioral changes into account despite the fact that studies have shown its potential to reduce GHG emissions. For example, Thomas Dietz and colleagues (2009) found that a national implementation of behavioural changes in the United States could reduce U.S. households’ direct emissions by 20% within 10 years (representing 123 million tons of CO2). Although not sufficient single-handedly, behaviour change can help speed up the decarbonisation of societies.

 

Three dimensions of behaviour change

To identify the potential of behavioural changes to reduce GHG emissions, it is critical to consider three dimensions[2]:

  1. the technical potential (TP) of a behaviour, or the emissions reduction achieved if an individual or a target population collectively adopted the behaviour;
  2. behavioural plasticity (BP), or the proportion of the technical potential achievable through the most effective behavioural interventions; and
  3. feasibility of initiatives (IF) to induce change, which refers to the likelihood that the most effective interventions are achievable within a target population.

Focusing exclusively on either of the three dimensions will result in skewed analyses from which only imperfect interventions can be developed. For example, substituting a GHG-intensive behaviour with a less GHG-intensive alternative (e.g., flying to Bermuda on vacation versus vacationing in one’s own country) will promise a high TP but the extent to which people are willing to make such a behavioural substitution may be less promising (BP) and so might the feasibility of achieving the behavioural change across a large population (IF). Conversely, a behaviour could be easy to change (e.g., getting people to shut off lights in unoccupied rooms) and feasibly be implemented in a large population, yet hold a very low TP and therefore even in the aggregate fail to reduce emissions by much.

Identifying the most promising target behaviours

The task of researchers (across disciplines) in collaboration with policy-makers and companies is to identify the behaviours with the highest potential to reduce GHG emissions while considering all three dimensions in cohesion. Making such calculations is no easy task—as the dimensions may vary substantially between and within countries—but neither is adopting innovative technologies at a massive scale. However, focusing on both supply- and demand-side solutions will heighten the likelihood of achieving the Paris goals.

[1] Rogelj et al., 2018.

[2] Dietz et al., 2009; Vandenbergh & Gilligan, 2017.

 

References

Dietz, T., Gardner, G. T., Gilligan, J., Stern, P. C., & Vandenbergh, M. P. (2009). Household actions can provide a behavioral wedge to rapidly reduce US carbon emissions. Proceedings of the National Academy of Sciences, 106(44), 18452-18456.

Rogelj, J., Popp, A., Calvin, K. V., Luderer, G., Emmerling, J., Gernaat, D., … & Krey, V. (2018). Scenarios towards limiting global mean temperature increase below 1.5° C. Nature Climate Change, 8(4), 325.

Vandenbergh, M. P., & Gilligan, J. M. (2017). Beyond Politics. Cambridge University Press.

Kristian Steensen Nielsen is a PhD Fellow in environmental behaviour change at Copenhagen Business School. His research interests are self-control, behaviour change, and environmentally significant behaviour.

 

Pic by Duncan Harris, Flickr.

Concepts, Economic, Ethics, Featured, Issues, Models, News, Regulation, Social, Technology

The not-so-sharing economy

By Attila Marton

With the rise of Airbnb and Uber into the elite club of Silicon Valley superstar firms, the sharing economy has become an accepted business concept and social practice. Apart from the fact that sharing economy platforms (SEPs), such as Airbnb and Uber, are very savvy in playing labelling games (most of them have little to nothing to do with actual sharing), they are also very savvy in purposefully blurring established institutional boundaries and categories – most prominently, categories of employment and labour. By facilitating the “casual participation” of private individuals as users of their services, SEPs can gain significant advantages over well-established incumbents as they disrupt mature markets and labour structures as well as challenge long-held wisdoms of how to organize the creation and distribution of value.

It’s a thing now

The sharing economy is here to stay. Although, it is not yet clear whether the sharing economy will turn out to be as big a thing as the hype surrounding it suggests. Just to give some indicative numbers; The Economist estimates that the consumer peer-to-peer rental market is worth $26 billion, McKinsey predicts that the sharing economy will rise to $335 billion in revenues by 2025. In Denmark, 10% of the population has participated in the sharing economy in some form, while the Danish government announced a sharing economy strategy. At least it is safe to say that the hype is real and so are the expectations for high returns on the investments made into sharing economy platforms.

Something new, something old

The sharing economy, in its contemporary digitally platformed version, is the result of the confluence of three developments:

  • The rise of access-over-ownership as consumers are increasingly okay with paying for services and servitised products rather than to buy stuff. Streaming services, such as Netflix and Spotify, are telling examples. When we say access-based consumption or on-demand economy, we typically refer to this development.
  • The rise of peer-to-peer networks, which allow for direct inter- and transactions between peers coordinated by trust and reputation mechanisms. Think eBay and YouTube – typical examples of what we sometimes call the peer-to-peer economy or collaborative economy.
  • Allocating idle resources in order to tap into privately owned resources (assets and labour) and to promote more economical and sustainable use of resources as a result. Examples are IKEA’s second-hand campaign or renting out idle storage space via sharemystorage.com. Terms such as collaborative consumption and circular economy typically refer to this notion.

None of these developments is, of course, new nor exclusive to the sharing economy. Clans have been sharing food and tools since the dawn of humanity. Donating blood peer-to-peer has been around for at least half a century and the allocation of idle resources in brick-and-mortar second-hand shops even longer. The same applies to digital varieties of these practices; sharing files or selling/buying peer-to-peer online have been around since the 1990s (eBay was founded in 1995, Napster in 1999, Wikipedia in 2001). What is new is how these developments come together under specific technological, economic and cultural circumstances.

Mature technologies of automation enable private individuals to casually participate in economic activities as they self-service on dedicated platforms, which run automated matchmaking algorithms. Network effects attract larger groups of participants, increasing the economic value of those platforms (and of the corporations owning them). Thus, the coordination of casual participants has become a highly profitable business model. Culturally, these developments have become socially acceptable and appropriate as the new narrative of the Web 2.0 propagates “sharing is caring” and a general fascination with technological wizardry.

Four generic types of sharing economy platforms

An important outcome of above developments is that established institutional categories are becoming blurred, and static boundaries are becoming fluid. SEPs purposefully utilize these fluid boundaries to their advantage – be it between firms and markets (are Uber drivers employees or self-employed?), between internal and external resources (Airbnb hosts bring their own assets and have all the risks), and between private and business spheres (participants monetize and commodify their private life into assets), to name but only the most important examples. In our research (with Ioanna Constantiou, Dept. of Digitalization, CBS, and Virpi Tuunainen, Dept. of Information and Service Economy, Aalto University), we found that successful SEPs are very good at exploiting these boundary fluidity for their purposes. We identified four generic types we call the Franchiser, Chaperone, Principal, and Gardener.

  • The Franchiser aims for tight control over the platform participants and high rivalry among the service providers. The prototypical example is Uber, exploiting boundary fluidity by treating its drivers like employees while making them compete for fares dictated by Uber’s algorithm.
  • The Chaperone aims for loose control over the participants and high rivalry among the service providers. This is, of course, the Airbnb model; Airbnb exploits boundary fluidity by treating its participants like community members expected to follow norms and values while making the hosts compete like micro-entrepreneurs, who set their own prices based on Airbnb’s recommendation.
  • The Principal aims for tight control over the participants and low rivalry among the service providers. For instance, Handy (a per-task labour platform) treats its service providers like employees by making them sign contracts while the service providers participate in tenders based on standardized prices dictated by Handy.
  • Finally, the Gardener aims for loose control over the participants and low rivalry among the service providers. For instance, Couchsurfing (facilitating short-term, free-of-charge accommodation) leaves it to the participants to coordinate their accommodation while eliminating rivalry among the hosts by not allowing them to charge money.

Not so obvious implications

What each of these four types have in common is that they all rely on the casual participation of their user base; that is, their users typically operate on smaller scale, use their personal resources, and are less experienced than traditional service providers and professionals (not only in terms of delivering services but also protecting oneself against exploitative business practices).[1] Combined with digitalisation, such casualness provides unprecedented sources for creating value and disguises large portions of the labour of the participants.

It is the degree to which this hidden labour has become the core of the business models of Uber, Airbnb, Handy, and Couchsurfing, that is really new.

To name just two examples. By means of the app and data-driven algorithms, Uber obviously replaces taxi dispatchers. Not so obvious, however, is the hidden labour provided by the Uber riders who, by scoring their rides, control the service quality. This used to be the purview of employed and paid middle managers. Likewise, Airbnb does not only profit from on-boarding private individuals as hosts (instead of hiring professional concierges) but also from the marketing those hosts provide not just for themselves but for Airbnb, the corporation – hidden labour, which would have traditionally required to pay marketing specialists.

It is a not-so-sharing economy we are dealing with. In fact, the sharing economy is the quintessential expression of a new logic of capital accumulation in the digital economy, where large portions of labour are disguised as casual (or even pleasurable) participation in the name of self-servicing and sharing. These forms of hidden labour are not unintended consequences; they are essential parts of the platform business model, as they sustain the digital systems and algorithmic operations of those platforms in order to make “sharing” not only economically viable but, above all, profitable. As a result, the historically and culturally important institution of sharing (in the true sense of the word) is thinned out and replaced by the logic of the platform economy, the micro-entrepreneurial ethos of monetizing every aspect of one’s “everydayness”, and the precarity of depending on demand.

Attila Marton is Associate Professor at the Department of Digitalization at Copenhagen Business School. He  focuses the interplay between information management and digital memory studies and the question how we will remember and forget the past in the future.His research can also be found on Academia and ResearchGate.

Academic Reference

[1] See Katz, V. 2015. “Regulating the sharing economy,” Berkeley Technology Law Journal (30:385).

Photo by Fancycrave on Unsplash

 

Consider also our post from last week, dealing with the topic of sharing.

Accountability, Citizenship, Concepts, CSR, Economic, Featured, Models, News, Philanthropy, Social

Hybrid organizing in the face of grand challenges

By Ali Aslan Gümüsay.

Sharing is not always caring

In 2015, thousands of refugees arrived in Europe. A recent paper by Kornberger and colleagues (2017) zooms in on the “Train of Hope”, a civil society organization that organically gained exclusive operational command at Vienna’s main train station during this refugee crisis. The paper is a critical reflection on much of the current sharing economy ‘hype’. In contrast to cases of “collaborative consumption”[1], where platform companies such as AirBnB or Uber offer (share?) other people’s resources, this is an exemplary case of engagement and sharing without expectations for direct individual return: a sharing of a concern for social well-being.[2] Sharing then becomes caring.

Hybridity everywhere

What is Train of Hope? It is probably something of a platform and social movement blend that combines various skills like first aid, translation and accommodation services. It is a hybrid organization – and such hybrids seem to pop up everywhere lately. These novel forms of organizing combine different logics, orders of worth, value spheres, organizational forms and/or identities – struggling for a value(s) synthesis.[3] I see incubators, social ventures, ateliers, fab labs struggling to organize, represent and scale – and find their diverse pursuits fascinating, enriching and complementary. They do hybrid organizing in and for society and are frequently novel, digital, flexible, fluid, cross-boundary, multi-jurisdictional, and temporary forms.

Grand challenges & novel forms of organizing

Why now? A potential answer may lie in the types of challenges our societies face. Scholars from the field of management and organization studies speak of “grand challenges”[4] that are complex, uncertain, and multi-jurisdictional phenomena.[5] They represent fundamental, global societal concerns of ecological or social nature that require coordinated and collective efforts of multiple actors, including business firms, governments, civil society, and academia – as well as new forms of (hybrid) organizing.

Together with Emilio Marti (Erasmus University Rotterdam), Hannah Trittin (Leuphana University Lüneburg), and Christopher Wickert (VU University Amsterdam), I have initiated a scientific network that will be funded by the German National Science Foundation (DFG). The network will zoom in over the next three years on the interrelationship between grand challenges and new forms of organizing. Such organizations attempt to tackle the various sustainable development goals from climate change, decent work and sustainable growth, gender equality, populism and racism, societal cohesion, responsible consumption and production, to sustainable cities and communities.

A Janus face

The scientific network takes the vantage point in the assumption that such new forms of organizing often have a Janus face. They are both potential cause and solution for certain grand societal challenges. On the one hand, social entrepreneurial ventures[6], online communities such as Wikipedia and Linux[7], crowd science projects like Foldit, Galaxy Zoo and Polymath[8], and social initiatives like “Train of Hope” promise novel means to tackle these challenges. On the other hand, they also create new ones. For example, crowdsourcing and other new forms of platform-organized work crafted along the surge of the digital economy[9] often fuel the proliferation of precarious, self-employed and low-paid work that undermines social welfare systems and thus endanger modern democracies.[10] Likewise, in her recent book “Weapons of Math Destruction”, O’Neil (2016) describes how the (ab)use of new, seemingly efficient big data management techniques can promote, rather than reduce, racism, inequality and discrimination. Clearly then, novel hybrid forms of organizing promise many opportunities to tackle grand challenges – yet also create new (grand) challenges for society.

Ali Aslan Gümüsay is a Postdoctoral Researcher at the University of Hamburg and Research Fellow at Vienna University of Economics & Business. Twitter: @guemuesay

 

[1] Botsman & Rogers, 2010.

[2] Gümüsay, 2018.

[3] Gümüsay, 2017.

[4] George, Howard-Grenville, Joshi, & Tihanyi, 2016.

[5] Ferraro, Etzion, & Gehman, 2015.

[6] Mair & Martí, 2006.

[7] Garud, Jain, & Tuertscher, 2008.

[8] Franzoni & Sauermann, 2014.

[9] Bauer & Gegenhuber, 2015; Boes, Kämpf, Langes, & Lühr, 2016.

[10] Morozov, 2015.

References

Bauer, R. M., & Gegenhuber, T. 2015. Crowdsourcing: Global search and the twisted roles of consumers and producers. Organization, 22(5): 661–681.

Boes, A., Kämpf, T., Langes, B., & Lühr, T. 2016. “Lean” und “agil” im Büro: Neue Formen der Organisation von Kopfarbeit in der digitalen Transformation, Working Paper Forschungsförderung. Düsseldorf: Hans-Böckler-Stiftung.

Botsman, R., & Rogers, R. 2010. Beyond zipcar: Collaborative consumption. Harvard Business Review, 88(10): 30.

Ferraro, F., Etzion, D., & Gehman, J. 2015. Tackling Grand Challenges Pragmatically: Robust Action Revisited. Organization Studies, 36(3): 363–390.

Franzoni, C., & Sauermann, H. 2014. Crowd science: The organization of scientific research in open collaborative projects. Research Policy, 43(1): 1–20.

Garud, R., Jain, S., & Tuertscher, P. 2008. Incomplete by Design and Designing for Incompleteness. Organization Studies, 29(3): 351–371.

George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. 2016. Understanding and Tackling Societal Grand Challenges through Management Research. Academy of Management Journal, 59(6): 1880–1895.

Gümüsay, A. A. 2017. Unpacking entrepreneurial opportunities: an institutional logics perspective. Innovation: Organization & Management, 1–14.

Gümüsay, A. A. 2018. COMMENTARY: Sharing is caring: From material to socio-material sharing. Academy of Management Discoveries. [Forthcoming]

Kornberger, M., Leixnering, S., Meyer, R., & Hoellerer, M. 2017. Rethinking the Sharing Economy: The Nature and Organization of Sharing in the 2015 Refugee Crisis. Academy of Management Discoveries. https://doi.org/10.5465/amd.2016.0138.

Mair, J., & Martí, I. 2006. Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1): 36–44.

O’Neil, C. 2016. Weapons of math destruction: how big data increases inequality and threatens democracy. London: Allen Lane.

Pic: SDGs, circle, by UN WMO; edited.

Citizenship, Communication, Concepts, Ethics, Featured, Governance, Models, News, Regulation, Social

Big fuss about a big policy plan – and why this matters for corporate social responsibility: the Chinese social credit system

By Dieter Zinnbauer & Hans Krause Hansen.

Few statist policy blueprints on matters pretty technical have captured our collective imagination as has the Chinese Social Credit System (SCS). Announced by China’s State Council on June 14, 2014, and building on experimentation with related mechanisms since the early 2000s, it sets out a hugely ambitious effort, officially described to instil societal trust, integrity and cohesion in a highly complex society. To get there it seeks to combine cutting-edge technology and vast amounts of data to create incredibly granular behavioural profiles of both companies and individuals. Good and bad behaviours are meant to be recorded in and through elaborate rating systems and blacklists, and made public on digital platforms. The expectation is that punishments and rewards will deter deviance and incentivise good conduct in close to any sphere of life.

With the West in the mirror

After years of relative in-attention, the SCS has loudly burst onto the Western media landscape. Here, it is typically described in Orwellian terms as a totalitarian system of surveillance and control. On closer inspection, the SCS is in fact embryonic, fragmentary and faced with enormous implementation challenges.

But the scale, scope and level of invasiveness associated with the data collection effort currently emerging in China should not look so shockingly unprecedented to Western publics once they begin to scrutinize their own backyards. Take the use of social media in the policing of protests as an example. Here the UK government engages in the analysis of big data to predict, pre-empt and respond in real time to a range of issues, including public dissent. Take information on someone’s physical whereabouts as another example. As it turns out the exact location of cell phone owners in 95% of the US is being tracked with the help of all major carriers in close to real time (ok, with a 15 seconds delay) and related data is being available to nudge people’s behaviour for a wide variety of purposes, e.g. by sending them last-minute campaign pitches when they wait in line outside a particular polling station or anti-abortion messages when they are found to linger outside health clinics that carry out these procedures or by sending political messages when they wait in line outside a particular polling station.

Or take the most popular new media companies. They are collecting extremely granular dockets of what their users do, say and who they socialise with on their own platforms. But less in the spotlight they also track users and non-users alike across millions of other websites and across the bulk of the most popular mobile applications, recording anything from detailed surfing behaviour down to the modes of movement – is the user currently cycling or on the train? What’s more, they increasingly merge theses profiles with billions of data points collected by other parties. One leading new media company claims to have access to information on 70% of all credit card purchases and thus approximating a rather totalitarian 360 degree, 24/7 view of user conduct, all the way to – no kidding – the barometric pressure of the users’ environment.

Public and private entanglements

A special matter of concern in the West relating to SCS is its fusion of socialist government and private sector capabilities, technical affordances and interests that make such a system feasible in the first place.

However, long gone in the West are the times when governments were the main purveyors and guardians of data about their citizens.  Even the holy grail of state information prowess, the census is not immune to private sector resources and influences. The UK government for example is exploring ways to make its census more cost-effective with the help of other big data sources and acknowledges that this will also have to include privately-held ones.

And there is also a proximity of big tech and political actors on a much more fundamental level. Tech companies evolved into some of  the most vocal and most prolific donors and lobbyists on the political scene. An entirely legitimate democratic engagement, but it raises questions about outsize influence given the scale of these efforts. Yet, much more unnerving, the leading social media and tech companies in the US   seconded staff as pro-bono experts to become part of the support teams of most presidential candidates in the run up to the 2016 presidential elections, giving them unique insights and connections into the affairs of some of the leading politicians in the country.

Subtle social sorting and weak institutional safeguards

A factor that explains the extraordinary attention that the SCS has received might pertain to the breadth of sanctions and consequences that these early uses have already resulted in. Bad social credit makes it more difficult for Chinese citizens to travel, find a home or get a job.  Unfortunately, this is nothing new and happens all over the world.  Under the label of risk- management citizens whose criminal record or financial credit history contains some irregularities have long been subjected to inferior treatment when renting a home, looking for a job or seeking insurance.

In principle, the protection of individual rights and limits on state over-reach and surveillance in most western countries relies on a host of elaborate institutional safeguards, checks and balances. While some of the egregious examples referenced above have actually been remedied when they were exposed, thus attesting to some degree of efficacy of legal and broader societal protections, other incidences have not been resolved and are somehow even seen as acceptable.

So shifting some of the attention and moral outrage that is being directed towards the Chinese SCS back to the home turf, and to investigate what troubling data practices and regulatory gaps that are germinating over here is more than warranted. In the wake of the Facebook and Cambridge Analytica scandals this has begun to happen and more commentators are noting the troublesome parallels between Chinese SCS and emergent data surveillance and discrimination issues in the West.

Enter the urgent business of business

And this is where business and its social responsibility comes in. Because one of the fundamental differences between the SCS and many issues in the West is that the disciplinary power, control functions and discriminatory implications of big data-driven social scoring are not primarily organised and instrumentalised through government, but deployed by the private sector and working their way into everyday lives.

Egged on by a growing populist Tech-lash, a whirlwind of new regulatory efforts and undoubtedly also in many cases by a deeper sense for doing no harm, the new tech companies have begun to take note, moving from denial to a gradual re-examination of some of their working principles, practices and normative anchoring.

Yet, the proof is still in the pudding whether this is a substantive change of minds and hearts. The Performance of the new tech sector on some standard measures of corporate integrity and transparency is still mediocre and lagging many other established industries.

The ways to a much more comprehensive, proactive and transformational integration of corporate social responsibilities into the strategy and practice of tech will have to coalesce around a broad band of issues, ranging from responsible stewardship of data, platform power and emergent artificial intelligence capabilities to bread and butter CSR issues such as responsible corporate political activity and supply chain and subsidiary integrity.

Think tanks and tech activists are putting forward a sprawling pool of ideas and initiatives from data collaboratives or privacy by design standards to high-profile research endeavours into artificial intelligence ethics. Meanwhile  European regulators are putting into force trailblazing rules as we write this column.

But a big tech embrace of a substantive and comprehensive notion of corporate social responsibility is urgently required to stave off the threat of an even more populist, illiberal, unequal, misogynistic and fragile future in which the tech industry is more part of the problem than a solution to it.

Dieter Zinnbauer is Governing Responsible Business Research Fellow at Copenhagen Business School in the Department of Management, Society and Communication.

Hans Krause Hansen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. He teaches and researches about various aspects of public and private governance, including corruption, anti-corruption and transparency regimes in the global North and South.

 

Pic by Alias, Flickr.