The Circle of Trust: Market Shaping via Orchestration

In this study we explore the dynamics of stakeholder engagement in market shaping via the concept of orchestration, which we postulate as a specific mode of market shaping different from collaborative market driving (Maciel & Fischer, 2020). Theoretically, the concept of orchestration as the “application of dynamic capabilities to identify resources, create linkages and mobilise actors” (Nenonen & Storbacka, 2021, p. 339) leans on the resource-based view (RBV) (Barney, Wright, & Ketchen, 2001; Peng, 2001) with the focus on the specific market shaping capabilities such as mobilisation of market actors through engagement. However, there is no clear conceptualisation of market shaping via orchestration and no empirical evidence illustrating such an approach. We also consider the firm’s embeddedness as especially critically and under-researched in the market shaping literature while broadly recognised in the international business and network literature (Hermes & Mainela, 2022). Therefore, we explore market shaping via orchestration as an embedded approach, drawing on network theory and the ARA framework (actors, activities, resources) (Håkansson & Johanson, 1992; Håkansson & Snehota, 1995). We will answer the following research questions: How does a MNC engage different actors via critical activities and resources? What is the role of embeddedness in the dynamics of this engagement? This paper is based on a supplementary secondary analysis (Heaton, 2008) of qualitative data collected in 2011 and 2012. This paper focuses on a subset of the original data. In total, fifty-eight interviews were part of this subset, including representatives of two Swedish MNCs in Sweden, Brazil, India, and China, business partners and customers. Furthermore, secondary materials were gathered. The transcribed interviews were analysed with NVivo. Especially in emerging markets, MNCs are confronted with environments that are characterised by high fluidity (Elahi & Ghauri, 2020; Sinha & Sheth, 2018). For an MNC, the challenge of local actors’ engagement and collaboration is comparatively more pronounced as many actors may not perceive the MNC as a legitimate actor (Elg, Schaumann, & Ghauri, 2012), making this a good research context to study market shaping. In our analysis we have identified the actors, activities and resources that were critical for the mobilisation of diverse local actors, sharing of resources and creating new resource linkages to ensure the local stakeholders’ support of the market shaping firm. The focal firms have engaged a vast variety of business and non-business actors. We have also identified different layers of engagement (primary, secondary, tertiary): the most primary layer of critical actors such as customers, industry association; the secondary layer of actors often contacted via the “immediate” ones (such as NGOS) and the tertiary layer - potentially unaware or uninterested in the shared cause (the goal of market shaping firm). We see that, in line with the literature, actor engagement functions as a catalyst for market shaping, as emerging dispositions and behaviours diffuse through the network until they are collectively embraced and accepted by most actors (Kleinaltenkamp et al., 2021).We named these layers of engagement, the circles of trust, in which the firm needs to enter in order to become a trusted and legitimate actor in the local context. Yet, to enter this circle, the MNC needs partners who may enjoy trust and legitimacy. Through connections with more embedded stakeholders, the focal firm used the high levels of trust and legitimacy of these local actors to reach more distant players. We outlining that by triggering the contacts with the most immediate circle of actors (influencing value perceptions, altering infrastructure to allow value-actualization, influencing key events, technical standards, and social norms) and facilitating the exchange of resources (through activities such as outlining the win-win-win, leveraging own and stakeholders reputation, support stakeholders in their day-to-day operations, involving stakeholders to promote changes) (Nenonen et al., 2019). Moreover, our study demonstrates the importance of branding capability that it is crucial to connect the actors and layers of engagement. Through these capabilities, the focal firms advanced their influence deeper into the society and activated new stakeholders. Our data shows also that managers did not only mobilise local stakeholder resources and put them to different use but also supported their stakeholders in creating new capabilities and foster new resource integration. Among corporate resources that the MNCs offered to its stakeholders were e.g. their contacts with global actors, investment of human resources and monetary funds, knowledge and expertise in technical solutions, global brand reputation - a mixture of tangible and intangibles. MNCs actively used their global brand as a valuable intangible resource to create credibility and overcome the liability of outsidership (Johanson & Vahlne, 2009). In addition, the MNCs positioned their technology and knowledge/expertise as a non-inimitable ‘bottleneck’ resource to gain the influence over the unfolding of the contextual change. Previous research into market shaping has focused on the individual and collective (collaborative) market work led by either individual firms (Baker & Nenonen, 2020) or the coalitions of firms of similar status and size (Maciel & Fischer, 2020). We add to the existing knowledge of collective market shaping by arguing that it might take a different form, which we define as orchestrated market shaping and outline its elements in contrast to individual and collective market shaping. The findings allow us to conceptualise orchestrated market shaping as the engagement of a broad variety of business and non-business actors in purposeful activities led by the focal firm’s vision of market change via the exchange and integration of critical resources and market embeddedness via legitimacy and trust. This paper contributes to our understanding of the larger phenomenon of market shaping via orchestration. We postulate that orchestration represents a different, more complex mode of market shaping, not previously recognised by the literature (Fehrer et al., 2020; Kleinaltenkamp et al., 2021; Maciel & Fischer, 2020; Storbacka, 2019). We also followed the call (Nenonen et al., 2019) to direct more research attention towards ‘engaging’ a broader set of stakeholders in resource exchange and integration. We show that both tangible and intangible resources play a role, but it is mainly intangible resources that are sought after since they allow the creation of ‘layers of legitimacy and trust’ to reach those distant groups of actors and create market embeddedness. Moreover, our findings suggest that orchestrated market shaping rests on the particular dynamic capabilities: triggering, facilitating and global branding.