Social Value Creation in Institutional Voids: A Business Model Perspective

The literature on Base of the Pyramid (BoP) strategies emphasizes that creating social value requires collaborative, multi-stakeholder business approaches. However, there is limited understanding of how businesses can successfully coordinate such value creation processes in the developing economies that face significant institutional voids. This study adopts a business model perspective for analyzing social value creation processes that span organizational boundaries. We introduce a novel, theoretically grounded business model framework that helps conceptualize social value by locating the various loci of value creation, and the stakeholders that partake in creating and capturing this value. We subsequently analyze the mechanisms of social value creation in M-Pesa, a renowned boundary-spanning mobile money system that has advanced financial inclusion among tens of millions of users in Kenya. The results show that information and communications technology can help advance social value creation by reducing the cost of coordinating boundary-spanning business models that integrate diverse societal stakeholders. The results further point to uneven distributional outcomes in self-governing social value creation strategies where the focal firm plays a coordinating role.