Pro-social motivation beyond firm boundaries: the case of the genolyptus network.

AutorFoss, Nicolai

Introduction

In this paper, we examine the motivational foundations of economic organization, specifically the extent to which the motivations of members differ across governance structures (markets, hybrids, hierarchies; Williamson, 1996). This research question is prompted by a recent influential stream in macro-management theory (in particular, organization theory and strategic management) that casts the main difference between organizations, such as firms, and other kinds of economic organization--notably markets--in motivational terms (e.g., Ferraro, Pfeffer, & Sutton, 2005; Kogut & Zander, 1996). The basic argument is that motivations differ in kind across different governance structures. Thus, the argument is different from the well-known organizational economics argument that organizations, such as firms, and markets differ in terms of the strength or intensity of their incentives (e.g., Williamson, 1996). Specifically, the argument is that firms can build pro-social motivation among employees, and that non-firm economic organizations (i.e., markets and hybrid) cannot. In fact, the latter may be destructive of such motivation. Pro-social motivation is generally understood to be the motivation to engage in behaviors that benefit others, such as helping, sharing, and donating. The motivation to engage in such behaviors ranges all the way from pure altruism over to more reciprocal motivations to self-interest (Fehr & Fischbacher, 2002).

The literature on pro-social motivation spans several research streams in social psychology (e.g., Grant & Dutton, 2012), behavioral economics (Fehr & Fischbacher, 2002; Isaac, Mathieu, & Zajac, 1991), and moral philosophy (e.g., Sandel, 2013). In management research, pro-social motivation is invoked in parts of organizational behavior literature (e.g., LePine, Erez, & Johnson, 2002), in writings on corporate social responsibility (e.g., Servaes & Tamayo, 2013), and in organizational theory. In the context of organizational theory, Osterloh and Frey (2000) argue that firms can govern transactions, particularly those relating to the sharing and building of valuable knowledge, in subtle ways that are compromised by the high-powered incentives of the marketplace but make use of the specific pro-social motivation of firms. Lindenberg and Foss (2011) proffer the notion of joint production motivation as a specific kind of pro-motivation that can be called forth by firms. They uniquely associate this kind of motivation with firm-like organizations.

Even within transaction cost economics, Williamson (1996) suggests that a particular feature of firms is their access to low-powered incentives, which facilitates certain types of transactions. Several other contributions, many published in top management research journals, echo or express similar ideas in various ways (e.g., Adler, 2001; Ferraro et al., 2005; Foss & Lindenberg, 2012; Ghoshal, 2005; Ghoshal & Moran, 1996; Hodgson, 1998; Kogut & Zander, 1992, 1996; Nahapiet & Ghoshal, 1998; Spender, 1996). Further argument asserts that the ability of firms to cultivate pro-social motivation underlie organizational advantage (Nahapiet & Ghoshal, 1998); that is, firm-like organizations can carry out activities that other kinds of economic organizations are incapable of carrying out (at the same level). Chief among these advantages is knowledge sharing (Osterloh & Frey, 2000) and knowledge integration (Kogut & Zander, 1992). In fact, many of the above contributions belong to what is often called the knowledge-based view of the firm (e.g., Spender, 1996). The clear implication of these contributions is that markets and other non-firm governance structures should be used sparingly for the organization of knowledge processes such as innovation, knowledge sharing, knowledge integration, and so on (Kogut & Zander, 1992).

In this study, we question these ideas, in particular the tight linking of pro-social motivation and governance structure. Specifically, based on 42 semi-structured interviews, we study a single illustrative case, namely the case of a Brazilian inter-firm network, called the Genolyptus Network, that was dedicated to joint innovative projects and partly orchestrated by public organizations. Building on this case, and on theoretical arguments, we suggest that strong pro-social motivation can in fact thrive within non-firm economic organizations, notably in networks. Evolutionary anthropology suggests that humans have been hardwired by evolution to mobilize a specific motivation for cooperating in team-like settings, characterized by a high degree of interdependence and the need for ongoing mutual adjustments.

However, while many productive activities that take place in firms do indeed have these characteristics, so do many productive activities that cut across firm boundaries, such as supplier relations and network relations between cooperating firms. It may be that what looks like pro-social motivation in such relations (and perhaps even within firms) is in fact entirely selfish in motivation, albeit checked by reputation effects, hostages, and so on (cf. Klein & Leffler, 1981). Yet, we argue that our case speaks against such an interpretation, and instead in favor of the idea that pro-social motivations can thrive beyond firm boundaries. This requires that individuals who engage in non-firm economic organizations be capable of building support structures that can preserve pro-social motivations. Our case suggests that this is in fact possible, and we discuss the nature of such structures in general.

In sum, we contribute to the recent discussion in macro-management theory about the nature of organizations in general and firms in particular, a discussion that has strongly influenced management research fields such as organization, strategic management and international business theory. We specifically argue that pro-social motivations not only exist, but also thrive outside of the boundaries of the firm, for example, in firm networks, and as such are not unique to firms. In fact, the mechanisms that support pro-social motivations in firms--namely, intensive communication, rewards that are tied to joint outcomes, knowledge-based authority, and consensual decision-making--are also the mechanisms that support pro-social motivations in non-firm governance structures. Given this, we propose a research program dedicated to examining the relative advantages of firms and non-firm economic organizations fostering pro-social motivation and the mechanisms these different governance structures deploy to foster such motivation.

Theoretical Background: Pro-Social Motivation, Organizations, and the Knowledge-Based View

Pro-social motivation: meaning

Many streams in management research highlight the pro-social motivation that may thrive in firms. Work on the knowledge-based view of the firm in strategic management, organization theory and other macro-management research fields stress that efficient knowledge production, integration, sharing and so on require high levels of pro-social motivation, that is, the motivation to engage in behaviors that benefit others, such as helping, sharing, and donating. Standard examples of pro-social behavior include donating blood, whistle-blowing, giving money to charities, and general helpful behavior. Such behaviors fundamentally matter to the smooth working of organizations. Helpful employees are an obvious resource that make processes run smoothly because helping others aids in reducing bottlenecks, solving problems and evening out workflows. In the context of knowledge creation, sharing and integration, these knowledge-related activities are inherently hard to measure and incentivize, and thrive best with weak incentives and less-controlling environments (e.g., Osterloh & Frey, 2000). Research has found that pro-social behaviors stimulate sales performance (Podsakoff & MacKenzie, 1994), operating efficiency (Walz & Niehoff, 2000), product quality (Podsakoff, Ahearne, & MacKenzie, 1997), as well as coordination, innovation, organizational development, and cohesion (see Organ, Podsakoff, & MacKenzie, 2006).

An additional argument asserts that firms are better capable of building support structures for such motivation and that markets are destructive of it (e.g., Adler, 2001; Ferraro et al., 2005; Foss & Lindenberg, 2012; Ghoshal, 2005; Ghoshal & Moran, 1996; Hodgson, 1998; Kogut & Zander, 1992, 1996; Nahapiet & Ghoshal, 1998; Spender, 1996). The underlying argument is that firms can decouple efforts and rewards in a way that markets cannot, better build shared knowledge across multiple interacting individuals, and cultivate a sense of shared purpose. Such features strongly support knowledge creation, sharing and integration.

Pro-social motivation is also influential in micro-management research. For example, influential research on organizational citizenship (Deckop, Mangel, & Cirka, 1999; LePine et al., 2002; Podsakoff & MacKenzie, 1997) points to other-oriented motivation (e.g., helping, sportsmanship, civil virtue). Work on identities in relations (Brewer & Gardner, 1996; Brickson, 2005, 2007) emphasizes that mutual concern for the interest and outcomes of significant others may be quite salient to employees. In the field of organizational or collective identification (Brewer & Gardner, 1996; Haslam, Powell, & Turner, 2000) research emphasizes employees' membership in a collective category, and indicate that belonging to such categories imply that they adopt similar motivations. Some research explicitly link collective goals to the motivation of organizational members. Shamir (1990, 1991) coined the notion of collectivistic work motivation, recognizing that organizational members can be motivated in terms of what is beneficial to the organization (or a sub-group within the organization). Literature on teams (e.g., Kozlowski & Ilgen, 2006; Mathieu, Maynard, Rapp, & Gilson, 2008) also...

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