enterprise emergence by distributed agency: the fairphone case
TRANSCRIPT
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* Katz & Gartner (1988): Enterprise emergence characterised by
intentionality, resources, boundaries and exchange
1. No obvious technical capabilities/expertise in industry
2. Small group of “creatives” in a small office in Amsterdam
3. Lots of (unsolicited) help
½
At time of speech (Oct 2012) Dec 2014
0
0
0
60,000
€325
32
2 40
Founders simply want to raise awareness about connection between Dutch consumers and
Congo. No intention to make commercial product
United Nations report on
exploitation of DRC’s
“conflict minerals”
NGOs campaign for ‘fair
practices’ in electronics supply
chain.
ActionAid commissions Peter van
der Mark to develop campaign
Van der Mark, dissatisfied
with petition idea discusses
with van Abel
Team secure €86,000 funding for
campaign
Fairphone as ‘hand-on’
campaign. Target: consumers,
‘creatives
Establishing online presence Urban mining workshops
Designing a
modular “phone”
Awareness campaign to build a ‘fair’ mobile phone (March 2010 -August 2012)
Urban mining
workshops
Online presence
Publicity “stunts”
Radio shows
Source: Fairphone
@
influential actors support
Fairphone even though no
intention to start phone company
MediaCarry positive stories about Fairphone project
CorporationsLend material support
Fairphone project wins
€10,000 ASN Bank Prize
NGOsFairphone appears on
NGO “radars”
PublicNumber of subscriptions to campaign
website increases
Source: Fairphone, corporate websites
Yes, I was doing a presentation to the board of directors 2-3 years ago. I didn’t even know what to ask
these guys. I had just returned from Congo and wanted to show what we were doing. And they said,
‘yeah, nice, what is your proposition. What do you want?...
Alright, we don’t have a proposition. I was just finding out if you are interested.
And they said, ‘it is sad what is happening in Congo and China, but what has this got to do with us?
We don’t produce phones
“
”
No intention to make commercial product—yet
Fairphone CEO, Bas van Abel, speaking about meeting board of Alpha Mobile in March
2011
Serendipity, contingent action and emergence
Campaign team runs of out funds.
Conflict within team
Debate on future direction. Should
we make a phone? A battery? Be
an NGO?
Serendipitous discovery of
accelerator programme
Van Abel and Ballester attend
accelerator programme.
“London was first time someone
told me, “we are going to make
a phone”
Secures €400,000 investment
from angel. Company
incorporated.
First employee: Tessa Wernink
Begin crowdfunding campaign
to fund only 5,000 phones.
Source: LinkedIn, Fairphone
In-depth longitudinal case study over 15-month period embedded in organisation
Data sources Description
Interviews 47
Incl. founders, employees, (disgruntled) ex-associates, NGOs, consumer electronics
firms, government official, MNOs
Average duration – 55min
Fairphone archival data Business plans, reports, internal presentations
Publicly-available sources Fairphone-generated. Facebook, Twitter (1,870), blog posts, newsletters
Third party-generated. Media reports (~150)
Participant observation 130 field visits (6-10 hours/visit). October 2013-January 2015.
Observed meetings, parties, conferences and internal interactions. Made detailed field
notes and memos
e.g. Haugh, 2007; Perrini & Vurro, 2006; Robinson, 2006; Corner &
Ho, 2010; Mair, Battilana, & Cardenas, 2012
The “visionary” explanation and the “biological” evolutionary explanation
Dees, 1998; Thompson, Alvy, & Lees, 2000; Martin
& Osberg, 2007; Light, 2009; Miller, Grimes,
McMullen, & Vogus, 2012
“
”Fairphone founder/CEO, Bas van Abel,
February 2014
I didn’t even know about conflict
minerals when I started this project...
I was interested in making the phone
from a purely design perspective, but
not the business side to it. The whole
aspect of bringing the phone to market
did not interest me
Attribute of artifact Illustrative quote
“We knew it [campaign] had to be a physical product because
otherwise you lose all your research into vagueness. “
(Fairphone founder/CEO)
“Everybody uses a phone…That’s why we went for it”
(Fairphone co-founder)
“…we looked for the electronic device that people cared about
the most. Everybody has a smartphone. If I take your
smartphone and I walk away with it, you feel really
uncomfortable. So different than a television or a tablet.”
(Fairphone ex-associate)
Smartphone deliberately selected as campaign artefact
Mobile phones create environmental and social problems, but there is hope: the
Fairphone is coming.
For the last year, the leader of the initiative Bas van Abel of the Waag Society has been
working on the Fairphone project. The objective: to make a phone in which no
component is made by human exploitation.
(De Volkskrant 19.03.2011)
“
”
Fairphone hailed as “right thing to do” when no track record of performance. No intentionality to make
product
Bas van Abel
Peter van der MarkMiquel Ballester
Manager (Waag)Activist #5 (NGO 1)
Activist 1 (NGO#1)
Tessa Wernink
HRH Prince Jamie de Bourbon Parme
Bibi Bleekemolen
Joe Mier
Activist 4 (NGO#1)
Activist campaign Social enterprise
Gabriel SebastianThe “Mystery man”
Investor (Fund #1)
Manager 5 (CFTI) Manager 6(CFTI)
SwedWatch
Manager 8 (NGO#1)
Manager 2 (Beta Mobile)
Manager 3 (Beta Mobile)
Manager 1 (Alpha Mobile)
Manager 4 (Beta Mobile)
Manager 7 (NGO#2)
Phase
Roos van der Weerd
Laura
Consultant (Design #1)
Transition
Indirect
Direct
Awareness raising only
No intention, means to make commercial productMaking commercial product predicated on addressing
social problem
Invo
lve
me
nt
The cast: from social activism to social enterprise
The media
Activist 2 (NGO#1) Activist 3 (NGO#1)
“The future is not given. My actions today will constitute the future. No need to predict, but control
1Act using means (identity, knowledge, networks), not searching for means to meet pre-selected goals
Under conditions of uncertainty, expert entrepreneurs do the following: (Sarasvathy, 2001)
2“How much can I afford to lose?” not “how much can I expect to make”?
3Co-creation of business with self-selected effectual network, not competition with existing firms
4Accidents, contingencies “welcome” and exploited to shape enterprise
5
Changing goalsAffordable lossExploiting contingencies
Serendipitous discovery of
accelerator;
Oversubscription
crowdfunding;
Conflict-free mineral
initiative
Acting within means
Founders draw on to
suggest designing smart
phone as campaign;
NIZA activists choose
conflict minerals in DRC
because organisation
had knowledge of
subject
[T]he fact that we were accepted in London
had a big influence.
…The moment the accelerator programme
said, “We want to make this happen; we
believe in your story”…you know, it was like,
“yeah, actually we can make this happen
Small, stage-gated
investments from “pipe-
smoking gentleman”
A prayerLuck,
randomness
An alternative
to rationality
Anything goes,
nonchalance
New product
Existing product
Existing market New market
The “suicide”
quadrant
Source: Sarasvathy, 2003
How do you introduce a new product to a new market?
“I never chose to be an entrepreneur; it just
happened…I can tell you it is a lot of
pressure. At a certain point, you’ve worked
yourself through two or three burnouts
because you didn’t have time to have a
burnout.”
Fairphone CEO, Bas van Abel, December 2013,
giving classic example of non-teleological
emergence
Explanatory concepts from the Fairphone case
Discursive process by which actor
establishes congruence with extant
product category, distinctiveness from
extant industry using an artefact as a
story-telling device
(Unsolicited) commitment of resource,
legitimacy by dispersed actors with
heterogeneous interests, despite
intention of entrepreneur
A logic of decision making under uncertainty in
which entrepreneur acts within means, interacts
repeatedly with stakeholders attracting
commitments expanding cycle of resources and
constrained choices lead to emergent formation
of enterprise
Source: Akemu, Whiteman, Kennedy (2015)
Firm emergence from social
movement
Academics assume linear
purpose. We show non-linear,
non-teleological process
Artefact in effectuation theory
Artefacts central to effectuation,
but have disappeared from theory.
We re-introduce the symbolic role
of artefact
Complementarity between
distributed agency and
effectuation
Distinct, but complementary
processes that lead to emergent
outcomes in social movement
Artefact as boundary object
Artefact “inhabits” various social
worlds. Triggers distributed
agency. Extend concept to non-
hierarchical settings
What does it mean for me? For an enterprise? For Fairphone? for a manager?
Artefact has a certain “power” to
convene an effectual network.
Under specific condition, a network
of people commit resources to
emerging enterprise?
How can Fairphone use “artefacts”
in future?
Telling a story such that you legitimate
Fairphone’s goals vis-à-vis existing category, but
distinguished identity from NGOs and phone
companies.
How to distinguish Fairphone from other players,
yet maintain that goals are not “out of this world”
Is effectual decision making applicable as
organisation grows larger?
1
Entrepreneurs gets “stuff” such as legitimacy, resources from diverse people even when no intention to start
enterprise. Distributed agency occurs in a perturbed contextual condition
Issue framing around an artefact distinguishes and legitimates founders’ despite no intention to begin
enterprise
2
Fascinating case showing the neglected role of the artefact in effectuation
Effectuation and distributed agency are complementary processes that have remained in distinct literatures. Social
movements embody both. We show complementarity
Artefact “inhabits” various social worlds. Triggers distributed agency. Extend concept to non-hierarchical settings
Extend the concept of boundary objects to include non-hierarchical interactions
3
Artefacts—Embody symbolic and functional values. Creative use of artefact can trigger resource commitments. How
would Fairphone use artefacts in future?
Issue framing—How to remain distinctive while being credible