Forming a Social Partnership between a Small Social Enterprise and a Large Corporation: A Case of the Joint Platform, H-JUMP

Abstract

This study illustrates how partnerships in asymmetric power relationships, such as social enterprises and large established firms, can be made in the context of social partnership. We acknowledge that partnerships with large corporations can help social enterprises to overcome several structural barriers they may encounter in forming and sustaining their business models. However, these partnerships can be situated in asymmetric power relationships as resource dependence unfolds. Thus, paradoxically, a partnership with a large corporation can be another challenge to the social enterprise. In absorbing these constraints, we propose that a social enterprise should come up with a stylized social partnership model, utilizing their social capital when engaging in the formation of such a power-imbalanced partnership. We conducted an in-depth case study which presents how a small and young social enterprise can achieve a viable partnership with a large, established firm. Our findings show that social enterprises can form and develop long-term sustainable partnerships with large corporations using a stylized platform strategy with social capital and relational governance in the process of collective value creation.

1. Introduction

There are different kinds of entrepreneurs who might have different goals and motivations for their activities, such as job creators, high-growth entrepreneurs, solo-self-employed individuals, and even social entrepreneurs [1]. In particular, social enterprises have different goals and motivations from commercial organizations. While commercial organizations (i.e., established firms) set a definitive business model that connects ideas to economic performance [2,3], it is inevitably difficult for social enterprises to set a business model that establishes such important strategies. The main reason is that social enterprises suffer from severe resource constraints [4,5,6]. Many scholars of management strategy have argued that to gain competitive advantages, companies usually attempt to attain resources, internally and externally [7,8,9]. This suggests that social enterprises need to overcome their resource issues by mobilizing critical resources proactively either internally or externally.

Partnerships between social enterprises and large corporations can be beneficial for both parties. First, from the perspective of social enterprises, a partnership with a large corporation can be an attractive option for resource mobilization. Although the emphasis on resource attainment for sustainable businesses of social enterprises has been widely accepted by scholars [5], it is certainly questionable whether nascent organizations (particularly social enterprises) can self-attain the resources critical for their own business models. In fact, given that dependence on donations or charities from outside organizations limits the sustainability of social enterprises, collaborations or partnerships with established organizations can be a viable strategy to mobilize critical resources [10,11]. As such, partnerships can effectively mobilize the resources for their ambidextrous goals. A second motivation is that large corporations also acknowledge that partnerships can be an essential activity for corporate social responsibility (CSR) [12,13]. With pressures from stakeholders on social and environmental issues, these firms are required to increase their efforts for helping society. In response to this, they attempt to increase the number of charitable actions or philanthropic contributions made by them, but both have shown to have limited effects and benefits, especially in the long-term. In this sense, for large corporations, partnerships can be an alternative to CSR [13]. Therefore, both social enterprises and large corporations can be incentivized to create a coalition in order to act upon their social missions.

However, partnerships are not always straightforward. In fact, the partnerships between large corporations and nonprofits encounter numerous managerial challenges, including partner selection, risk assessment, experimentation with the partnership agreement, crisis management, and maintaining personal relationships [14]. These challenges suggest that large corporations, as well as social enterprises, need to take serious actions to reconcile possible uncertainty elicited by the inter-organizational relationships. Thereupon, managerial challenges also remain in social enterprises. In general, when organizations gain critical resources externally, their decision-making processes are influenced by the resource providers [15]. Because they are sourced by the resources from external organizations (particularly large, established firms (or large corporations)), social enterprises are destined for resource dependence. This leads to a certain asymmetrical power relation. As such, partnerships can be another burden for social enterprises.

This implies that it may be questionable to form partnerships between social enterprises and large corporations. For large corporations, a small social enterprise cannot be a perfect match, for the uncertainty can be exacerbated. They may want to partner with a more visible organization. What is worse, once partnered, social enterprises may perceive that large firms may threaten their ownership despite seeking those partnerships not to be dependent but also for organizational sustainability. Although it is tremendously tough to implement partnerships between social enterprises and large corporations, such asymmetric partnerships may not be entirely impossible to form. There is evidence of asymmetric partnerships in terms of the characteristics of the main participants, such as the firm size or firm reputation. Such evidence includes the partnership between Starbucks and Conservative International [16] and that between IKEA and Doi Tung [17]. These studies showed how partnerships between multi-national corporations and social enterprises or non-profit organizations can be made.

In this study, we provide actual evidence of an ongoing social partnership between a social enterprise, JUMP and a large corporation, Hyundai Motors Company (hereinafter ‘HMC’), which built up a joint platform named H-JUMP. HMC, a multinational automotive manufacturer, is one of the largest firms in Korea. On the other hand, JUMP, established in 2011, is a social enterprise in Korea, creating social values by providing high-quality tutoring to kids from disadvantageous families. With its unique business model, JUMP has shown a drastic growth since its inception and the World Bank recognized its achievements in 2017. H-JUMP is an education program that was co-developed by HMC and JUMP.

It was not an easy option for large corporations like HMC, the second largest company in Korea, to form and sustain a partnership with a newly established social enterprise like JUMP. There might be few incentives for large corporations to partner with social enterprises. In this sense, we found that although there has been much research regarding philanthropic partnerships, only a few studies focus on sustaining business partnerships between large corporations and social enterprises with the aim of benefiting both partners and society. To make such a partnership sustainable, incentive mechanisms must be stylized in such a way as to offer benefits to both partners. Designing a sustainable social partnership under an asymmetrical power relationship requires a profound consideration of the incentives of the participating organizations in order to ensure that they contribute to the social mission. However, prior research has done relatively little to answer the key questions arising from this process.

We investigated how social enterprises can successfully achieve their social missions through partnerships with large firms in order to pursue both economic and social goals. In particular, by acknowledging that attaining external resources is indispensable for nascent social enterprises [5,10,15], we paid attention to how social enterprises make viable coalitions with large firms to attain critical resources. Our research questions include the following: why would large corporations be interested in forming a partnership with small social enterprises when there are many differences in their goals, perspectives, and methods? What could they obtain in the process of negotiating the formation of a social partnership? How could new and small social enterprises scale up their social mission when large corporations and nascent/small social enterprises lie within asymmetrical power relations? As a key mechanism for the creation of such viable coalitions, we proposed that the social enterprises’ social capital and relational governance play active roles with regards to how social partnerships among multiple organizations in asymmetrical power relations can be formed to benefit the participants in the partnership. To this end, this paper contributes to the literature on social partnerships by presenting a case study of H-JUMP in Korea.

The current paper is structured as follows: in the Section 2, the current paper presents a literature review on social entrepreneurship, the importance of the social enterprises’ network to access external resources, and the social partnership between a social enterprise and a large corporation. The emphasis is concentrated on social capital and relational governance as a strategic means for social partnerships and collaborative value creation in the process of forming a social partnership. In the Section 3, this study describes the qualitative method used in the study. The qualitative method for this case study was a thematic analysis based on Collaborative Value Creation (CVC) processes. Thematic analysis is a widely used method of analysis in qualitative research for identifying, analyzing, and reporting patterns within data [18]. According to the CVC process, the authors conducted preliminary research followed by interviews and an analysis grounded on four main categories: common goals and interest; formation and partner selection; design, operations, and institutionalization; and the benefits from the partnership. Section 4 presents the key results and findings drawn from the qualitative data analysis in detail with the inclusion of quotations from the interviews. Finally, the theoretical and practical implications and limitations of this study are discussed in the Section 5.

2. Theoretical Background

2.1. Social Partnerships between Social Enterprises and Large Corporations

Social enterprises realize opportunities related to neglected social issues that the market and the government do not address, but generate positive externalities [19]. Consequently, social enterprises contribute to society by creating social welfare to prioritize social benefits over their financial viability [20], while commercial enterprises pursue private welfare with profit maximization [21]. Hlady-Rispal and Servantie [22] defined social entrepreneurship by organizing commonly accepted existing definitions as “the process of identifying, evaluating and exploiting opportunities to create social value that can occur within or across the non-profit, private for-profit and public sectors” (p. 62). However, Mair & Martí [23] provided the differences between the definitions as follows: “Definitions of social entrepreneurship typically refer to a process or behavior; definitions of social entrepreneurs focus instead on the founder of the initiative; and definitions of social enterprises refer to the tangible outcome of social entrepreneurship” (p. 37).

When we consider a meta-analysis and the literature reviews on social entrepreneurship, social entrepreneurship can be classified into eight categories: social value creation and proposition [22]; social entrepreneurs’ motivations [19]; definitions and main constructs of social entrepreneurship [24]; commonalities and distinctions between social entrepreneurship and related fields including nonprofit enterprises, social activism, social service sectors, and commercial entrepreneurship [25,26]; resources and financing of social entrepreneurship; social entrepreneurs’ networks and communities; an organizational theory perspective on social enterprises; and social enterprises’ processes [27]. In this stream of research on social entrepreneurship, the current study can make contributions to the literature on social entrepreneurship by providing an empirical study of how a social enterprise makes a partnership with a large company to mobilize resources and build a platform as a business model.

Kuratko, et al. (2015) suggested it is important to examine how personal and organizational networks play a role in the process of corporate entrepreneurship [28]. These networks facilitate and catalyze innovation and growth through the process of entrepreneurship [29]. These networks become a valuable asset to access resources for entrepreneurship processes and they are particularly critical during the start-up phases [30]. Complementary resources create synergistic effects, which make the partnership that generates the accessibility of resources valuable [31]. Parida et al. [32] argued that start-ups and small ventures in the high-tech industry need to participate in inter-organizational networks that enable them to access external resources due to their limited resources and opportunities. In the case of small and nascent social entrepreneurship as well, such networks can be critical in order to collaborate with other organizations in relation to implementing their social missions.

From the perspective of inter-organizational collaboration between businesses and nonprofits [33,34,35,36,37,38,39], special partnerships called “social partnerships”, which refer to “social problem-solving mechanisms among organizations” are being paid attention to by scholars [40]. Through these partnerships, large corporations can efficiently implement their CSR while nonprofits can effectively achieve their missions. Given these mutual benefits, social partnerships can address social issues by combining each party’s resources towards common goals [34,41]. Accordingly, such social partnerships have been understood as a means to “address issues that extend beyond organizational boundaries and traditional goals and lie within the traditional realm of public policy” [40].

In other terms, “social partnerships are accomplished with a firm’s commitment to collaboration with an organization in a different economic sector (public or nonprofits)” [40]; social partnerships center on how the parties can collectively mobilize their resources with diverse partners from various sectors. While large corporations provide financial resources or other tangible assets, nonprofits can provide their unique activities to address particular social issues. By absorbing the resources and practices from nonprofits, large corporations can direct their CSR activities [34]. For example, with a partnership with a nonprofit that pursues education issues for people at the bottom of the pyramid, a large corporation can tackle education issues, pursuing the CSR engagement in education. This implies that to solve social problems, the parties have to have a clear division of labor. Additionally, this suggests that each party has distinctive goals, roles, and identities in implementing the social partnership, creating a “virtual team” with the other party [34].

Given the above, partner selection is a critical phase for the creation of successful partnerships [13,34,35]. As Seitanidi & Crane (2009) specified, selecting partners before the partnership is designed and further institutionalized requires significant effort [34]. In this selection process, large corporations seriously consider the other party’s reputation and competence as critical factors. As large corporations plan social partnerships in hopes of the successful implementation of their CSR for the sake of the firm [23], they assess their potential partner in terms of their proficiency in solving social issues. From this standpoint, social enterprises can be the best partners to large corporations for the following three reasons: first, as hybrid organizations, social enterprises simultaneously pursue both economic goals and social goals [42,43]; second, they have expertise and valuable networks to address social issues at the local level; lastly, they have the flexibility to adapt themselves to uncertainty and rapid environmental changes. However, if the social enterprises are too young and small, even though they have innovative ideas to solve the social issues that the large corporations intend to tackle, they might not be a viable partner for the large corporations. This mismatch may come from the doubts of large corporations on whether such young and small companies have valid expertise within the area of interest [34]. As CSR departments of large corporations need to yield the results of their social contribution programs, they seek visible outcomes from social partnerships with social enterprises. In social partnerships, large corporations avoid the risks involved in forming social partnerships with untested social enterprises. This suggests that such risks in partner selection can be a crucial factor. Therefore, social partnerships with social enterprises cannot be made exclusively from the perspective of large corporations even if the social enterprises have expertise in the proposed social issues. From the perspective of young and small social enterprises, as they must attain resources to implement their social missions, it is critical for them to be selected as a partner by large corporations when they suffer from the severe resource constraints [4].

2.2. Social Capital and Relational Governance as a Strategic Means for Social Partnerships

Although social partnerships are understood as a means for large corporations to efficiently implement CSR or for social enterprises to address certain social issues, the formation of a partnership cannot be automatically achieved [44,45,46]. Each party puts in significant effort to form the partnership. This is true for partnerships in asymmetrical power relationships, such as a partnership between a large corporation and a small and fledgling social enterprise. Since the nature of large corporations and nonprofits are different, their vested interests through the partnership are different. If their vested interests are not aligned, a social partnership may not be successfully achieved [46,47,48].

Social capital refers to the connections among individuals and social networks and the norms of reciprocity and trustworthiness that arise from them [49]. It has characteristics that promote coordination and cooperation among the individuals in the social relationship and the networks to which they belong [49]. Social capital reduces the transaction costs in the society through a trust that is built on identical values and norms [14].

Social capital can be categorized into three categories: structural capital, cognitive capital, and relational capital. First, structural capital refers to ways to connect actors, which includes network ties and network configuration. This structural capital is related to the social interactions, size, and scalability of the network [50,51,52]. Second, cognitive capital helps the members of an organization have shared codes and language in order to facilitate a shared identity. Third, relational capital refers to the human relationships among the members of an organization which are formed through active interactions, trust, norms, duties, and identification. This relational capital secures social interactions in terms of trust and norms which enhances the quality of said human relationships [50].

Thanks to social capital, a social enterprise with enough social capital to be recognized by other parties can play an important role in facilitating cooperation among the interested parties of society in order to achieve economic and non-economic benefits because social capital can reduce the transaction costs and can facilitate collective collaboration and innovative activities [52]. The social capital of nascent and small social enterprises, including authoritative parties (e.g., government officers, reputable NPOs or academics), can work as leverage to persuade large corporations into recognizing them as a viable partner. Large corporations may feel confident when they regard asocial enterprise with social capital as a package that has enough competence and expertise to successfully implement their social mission together.

Although a social enterprise with social capital can induce large corporations to make a coalition with said social enterprise, this is just an inter-firm contract that does not guarantee that each party will successfully achieve their goal [53]. Opportunism can be involved in implementing partnerships [54]; by nature, different motivations within the partnerships from different sectors may impede a shared understanding within the partnerships [45], or conflicts of interest may unfold between the parties [55]. To reduce these risk factors, relational governance is introduced [53,55,56].

“Relational governance” is a control mechanism used to maintain the relationships between the parties by emphasizing their common goals [56]. Focusing on the mutuality and continuity of the inter-firm relationship, relational governance utilizes relational norms and joint actions [56,57]. As such, in a social partnership, the roles of each party are, through relational governance, coordinated in a cooperative way [45,46,58].

Relational governance, which explains the economic and sociological phenomena of exchange, combines the related parties with inter-organizational trust [55]. Therefore, the main role of relational governance in a social partnership is to keep the relationship continuity. A social enterprise’s social capital works as a moderator or facilitator in the formation process of a social partnership, whereas relational governance works as a retainer in the implementation process of the partnership.

If one party is dependent on the other, cooperation within the partnership may not take place [59]. Rather, any decisions in this inter-firm relationship will be dominated by the party who has more power [60,61]. In the context of social partnerships between large corporations and social enterprises, large corporations mainly provide critical resources to run the social enterprise’s business; this incurs a resource dependence and the partnership becomes situated in an asymmetric power relation [13,61]. From the perspective of social enterprises, the resources provided by large corporations are critical for their businesses, but these externally attained resources entail resource dependence, influencing the partnership [59,62]. Such a bipartite partnership in an asymmetric relationship between a nascent and small social enterprise and a large corporation may result in a relationship between a service provider and a service customer based on the social enterprise’s heavy resource dependency on the large corporation. The social enterprise’s social capital and relational governance can shift the bipartite partnership to a multilateral partnership or transform their asymmetric relationship to a symmetric one.

2.3. Collaborative Value Creation

There are incentives for both large corporations and social enterprises to engage in a social partnership in terms of addressing social issues. Meanwhile, for both parties, social partnerships also convey impediments. This means that the interested parties, whether a large corporation or a social enterprise, can hesitate to make a partnership with each other by doubting whether they can be a feasible partner. Nevertheless, there is a mechanism to facilitate such social partnerships between large corporations and social enterprises. We postulate that “collaborative value creation” works by use of this facilitation process [45,46]. As small firms can obtain reputation and other benefits from the partnership between a small and a large firm, they may seek to secure a long-term partnership to overcome the limitations of their smallness and newness [31]. Collaborative value creation may enable small and new social enterprises to build long-term partnerships with large companies.

The process of social partnership formation and implementation can be described as a collaborative value creation process where different parties co-create values through collaboration. Through collaborative value creation, each party mobilizes and leverages the resources that they each need. Social enterprises can attain more resources, such as financial capital from the large corporations while large corporations can leverage their resources to implement CSR. From this standpoint, collaborative value creation can be understood as a catalytic mechanism that can be used to facilitate a social partnership. By delivering these values, they can co-create rather than calling for complementary resources; thus, social enterprises can emphasize mutual dependency in implementing a social partnership [63]. This can alleviate the risks of a power imbalance [64]. As such, collaborative value creation enables social enterprises to overcome the asymmetric power relationship which could unfold if the social enterprises were to make a social partnership with a large corporation.

3. Methods

3.1. Methodological Approaches

To examine the process of social partnership in asymmetric power relationships, we conducted an in-depth case analysis. The case study methodology is particularly suitable for exploring the practices related to the sustainability issues from an inside-out perspective since they are firm-specific and context-specific. To specify the process of collaborative value creation, we used multiple data sources. At the initial stage of this research, public information on the companies was collected through archival documents (annual reports, media coverages, and IR/PR materials). With an overall understanding of JUMP and HMC, we interviewed the key decision makers from HMC and JUMP, respectively.

Along with this, we employed a thematic approach to deal with the multiple qualitative datasets. A thematic approach, a qualitative study which identifies patterned meanings within a set of data, was useful when analyzing the multiple datasets [18]. In this study, we categorized the qualitative data on the formation of H-JUMP into themes and sub-themes identified in the process of collaborative value creation. Then we analyzed the data to specify the process of H-JUMP. Specifically, with the transcribed interviews of the key decision makers from the related parties, we figured out the commonly-identified mechanisms in the process of their social partnership formation, i.e., H-JUMP. As the interviews accumulated, we updated and adjusted our categorization to specify the partnership formation process. After that, we sent our analysis results to the interviewees to check if our interpretations on the activities of the parties matched what they had intended to say at the interview.

3.2. Data Collection

Data collection is multi-fold. The first author had attended for quarterly meetings with the partners to observe how the partnership formation was made and what roles and responsibilities were set by the participating members from the inception of H-JUMP since 2013. Sharing the first author’s experience with the other authors, we collected archival documents related to the formation of H-JUMP, such as annual reports from HMC and JUMP and other public-relations documents. This gave the authors an overall understanding of H-JUMP, as well as HMC and JUMP. Then, we generated qualitative data on the formation process of H-JUMP through interviews. The interviewees were selected according to the following criteria: (1) they were key decision makers who actively engaged in the formation of H-Jump; (2) they were familiar with the depth and breadth of the process; (3) they could ensure that they had undergone the full spectrum; (4) they were able to articulate the H-JUMP formation process from the beginning to the present. As a result, we found that the vice president in charge of corporate social responsibility (CSR) and the director of CSR in HMC, as well as the CEO and a vice president of JUMP (who are both co-founders in JUMP), were the key decision-makers. To interview the key decision-makers, we formally asked the interviewees during the board meetings whether they could participate in our study after explaining the conceptual and academic goals of the research. They all consented with understanding. After that, interviews were arranged and scheduled for each decision-maker, and one-to-one interviews took place in meeting rooms where there was enough space for the interviews to be conducted privately. Before the interviews, the interviewees were informed that their participation was voluntary and that they could withdraw from the session at any time. Throughout the interviews, there were no ethical issues raised by the interviewees about the process of this research.

In total, eleven individual in-depth one-to-one interviews were conducted from 6 January 2016 to 10 July 2018 on the premises of the Hyundai Motor Company (HMC) and JUMP. Specifically, the interviews were cyclically made between HMC and JUMP, which took around 6 months and the key decision-makers from the related parties were interviewed on the development of the social partnership, including the opportunities and challenges they had faced over the life of this partnership. All digital audio voice recordings made during the interviews were transcribed verbatim by the authors.

All interviews were conducted face-to-face by three of the researchers. Each interview was held in a comfortable area, lasting for approximately 60 min. A free-flow discussion was permitted during the interviews where the interviewees were asked semi-structured questions. The themes in the interview guide resulting from our preliminary literature review to answer our research question were used to help facilitate the interview process. All the interviews were electronically audio-recorded and transcribed. The interview began by asking each interviewee to describe and identify how he/she had established the social partnership and what sustains the partnership. Specifically, the interview questions were based on (1) social issues that each party attempted to address, (2) each party’s individual background and motivation for the engagement in a social partnership, (3) the process by which major decisions were made, and (4) how to cope with the hardships of the formation process of the social partnership.

To supplement these cyclical interviews, we collected the emails which the vice president of JUMP and the director of CSR in HMC had exchanged regarding the formation of H-JUMP. These emails helped to elaborate on how they had interacted with each other in relation to H-JUMP, as well as to validate what both parties had said in the interviews.

3.3. Data Analysis

Thematic analysis was conducted with an emphasis on identifying ideas that were derived from the interviews with our subjects. Specifically, the investigators followed the following six steps of a thematic analysis presented in Virginia and Victoria [18]. First, we, as a research team, tried to be familiar with the contents through active searching of the meanings of the data. Each author read the data thoroughly at least two times. Then, we generated the initial codes. The codes that appeared to be interesting to each author were manually noted through the dataset. Then we identified repeating patterns (i.e., themes) among the dataset items. The codes identified across the data set were generated with the use of mind maps and tables. These identified codes were, in turn, matched to the original qualitative data we extracted for coding in order to validate whether our code identification was consistent. The thematic search began after all the data were coded and collated. That is, with the identified codes, we searched for themes. Then, we reviewed the themes by checking if the themes worked in relation to the coded extracts and the entire data set, generating a thematic ‘map’ of the analysis. After reviewing the themes searched, we defined and named the themes by identifying the core of what each theme is about and what the themes are about overall, on top of determining what aspect of the data each theme captures. Then these defined themes are revisited dependent on whether the themes are consistent with our research questions, i.e., the formation of a social partnership.

Table 1. The data analysis of the themes categories.

Category	Data Extracts from Interview	Key Words	Themes
Goals, Interest	“Usually, at the education field, there are many people who does not really understand such education movements done by social enterprises. Actually, many of them are socially conscious and want to help others voluntarily. When we shared our goals with HMC people for first time, we felt that they seemed to understand our ideas and showed a sort of interest at our idea. This made us thrilled and pushed us forward to make the social partnership together despite of many challenges ahead. Of course, we could easily guess that their interest was different from ours. But at least, they understood and agreed with our goals. That made all the difference.”	Understand, shared, goals, interest, challenge, partnership, together, agree	Goal, Interest
Formation, Selection	“Based on my experiences, while at the for-profit fields competition is a critical mechanism, here [fields related to social impact] collaboration seems to work better. We believed that it is critical to create a social partnership to promote collaboration and make changes in our society rather than doing everything by ourselves. Even if JUMP looked too young and small to be selected as a partner with us, they had already built a small network consisting of social organizations and made performances through their education services to bottom of pyramid students. We finally reached conclusion that we trust this organization as our partner; then we formed a partnership together.”	Collaboration, Create, social partnership, trust, selected, formed, together	Formation of social partnership, Selection
Design, Operation, Institutionalization	“In fact, JUMP itself was not attractive to our decision makers at first. We weren’t clear that the company could effectively conduct their platform business. But, when JUMP invited SSF as another partner in order to design a social partnership, we changed our mind. We thought, ‘then, we can talk!’ For example, SSF could aid funding for scholarships and we could utilize their reputation as a public education specialist. We noticed that SSF had established operational capabilities to deal with the scholarship projects. So, we expected that they could relieve our concerns about entering the new area”.	design, social partnership, operational capabilities, expected	Design, Operation
Benefits	“For HMC, through partnerships with JUMP, HMC benefited from the collaboration and expanded our CSR activities to create a platform to nurture other young and potential social entrepreneurs. So, we launched a new program called “On-Dream”. This expansion in the CSR activities happened because we achieved great result from the partnerships with JUMP”.	benefited, expansion, created, achieved, result	Benefits, Expansion, result

shows a summary of the categorization and final themes that resulted from a process of thematic analysis.

4. Findings from a Case Analysis of H-JUMP

4.1. Common Goals with Different Interests

HMC, the second largest chaebol in Korea, paid attention to their corporate social responsibility (CSR). For their implementation of CSR, they started a project that supports the disabled with vehicles modified for them. With the success of the CSR project for the disabled, HMC expanded their CSR activities to various areas such as unemployment, the environment, and inequity. In 2012, they turned their attention to education to the bottom of the pyramid CSR services. The reasons why HMC decided to expand to the field of education can be explained by two reasons provided by the director of CSR in HMC. First, the fact that major CSR competitors had succeeded in the field of education had put pressure on the director of CSR; second, the education field is one of best branding options for CSR activities as this field has a direct engagement with future customers of HMC: young students from universities and junior schools. However, HMC had no experiences in educational services and had no specialists in the field of educational services as they had never delved into this field. As a method to enter educational services, they could give considerable donations to certain nonprofits who were specialized in the field. Yet, from their prior experiences with philanthropic activities, they realized that donations or charities had limitations in addressing the targeted social issues. Meanwhile, the success of incubating a social enterprise that manufactures vehicles for the disabled made them search for partners with whom they could collaborate with on educational services.

On the other hand, JUMP was established in 2011 as a social enterprise to provide educational services to the bottom of the pyramid (i.e., children from disadvantaged families). This business model is an adapted version of Teach for America for the Korean education environment using platform strategies. On this platform, there are different social actors who have different roles, including volunteering university students for tutoring, local community centers for providing tutoring sites, local universities for recruiting tutors, and government agencies helping students at the bottom of the pyramid. JUMP specifically send voluntary tutors who were sourced from local universities to children who were situated at the bottom of the pyramid for academic support and mentoring.

JUMP had already been financially viable before it went into a social partnership with HMC in 2013. From its establishment in 2011, JUMP was fully subsidized by the Korean government for its innovative ideas and it received some projects before it really started. Moreover, its platform strategy helped the enterprise to reduce costs dramatically compared to other social enterprises. The main reason to get into a social partnership with HMC was that JUMP needed HMC’s brand power to scale up its model throughout the country and get credentials it needed to recruit more competent university student teachers for the fulfillment of its social mission. Of course, using an external resource was also an important factor for its platform strategy.

JUMP also needed partners for the co-creation of public values including external funding. First, they needed credibility to scale up their business model to achieve their social objectives; second, the Seoul Scholarship Foundation was especially needed for the university network, both for business stability in terms of a long-term partnership and for the recruitment of competent university student teachers.

In 2007, South Korean government enacted the Social Enterprise Promotion Act in order to contribute to social integration and the improvement of citizens' quality of life through support for the establishment and operation of social enterprises. There are five main business types of social enterprises: job creation, social service provision, regional integration, other, and mixed. These types are not immutable, another form of social enterprise might emerge as new social issues arise in the future [65].

South Korea is well recognized for its high level of education. The problem is the incredibly competitive social system, especially in relation to academic achievement, which is measured by university prestige/names. If a student did not graduate from a top prestige university, then that student feels disadvantaged. This has trickled down to even the elementary school level where parents press their kids to excel, to be at the top of the class in order to get into top universities. In order to excel enough to enter into good universities, after-school education is as important as normal school education. The quality of the students’ after-school education widely varies between haves and have-nots. The social problem rises at this point, as those from have-not families feel inferior as they cannot afford high-quality after-school education, forming a vicious cycle in the society: the rich get richer and the poor get poorer. This is why JUMP started the social service in the field of education to help kids from disadvantaged families in order to overcome the vicious loop caused by income disparity.

In terms of matching university students and children for tutorship, JUMP’s business model can be understood as a platform model [66,67]. After earning a Master’s degree from the same graduate school in the U.S., JUMP’s co-founders came back to Korea to establish JUMP. To effectively implement the business model—a platform business between tutors and children—they needed financial resources for tutoring, operations, administration, and scholarships for the tutors, as well as social resources to make the business prosper so that the participants (including tutors, children in need, and resource providers) could be widespread. In particular, they sought to bring in more support from large, established firms (i.e., chaebols in Korea), as they expected that the chaebols could bring them visibility and awareness in the education field. Additionally, they conjectured that such reputation-related support, as well as financial support from chaebols, could enable JUMP to attain more resources.

Regarding this common goal with a different interest, the CEO of JUMP reflected as follows:

“Usually, in the education field, there are many people who do not really understand the education movements done by social enterprises. Actually, many of them are socially conscious and want to help others voluntarily. When we shared our goals with the HMC people for the first time, we felt that they seemed to understand our ideas and showed a sort of interest in our idea. This thrilled us and pushed us forward to make the social partnership together despite the many challenges ahead. Of course, we could easily guess that their interest was different from ours. However, at least they understood and agreed with our goals. That made all the difference.”

In sum, both HMC and JUMP attempted to address the issue of education for those at the bottom of the pyramid. To achieve this goal, HMC needed specialists in the education area and JUMP needed resources to implement their business model. This same-goal-but-different-interest situation allowed both firms to become involved in a partnership.

4.2. Formation and Selection

HMC and JUMP can consider each other as partners in providing educational services to children at the base of the pyramid through an accelerator, Seed:s. As a nascent social enterprise, JUMP had been incubated and nurtured since its inception by Seed:s, which was a nonprofit that provided a co-working space, consulting services, and incubating and accelerating services for young social entrepreneurs. In fact, the nonprofit, Seed:s, was mainly sponsored by HMC and, thus, continuously interacted with the CSR division at HMC. Accordingly, the mentors from Seed:s were able to introduce the executives of JUMP (i.e., the CEO and the vice president) to the director of CSR at HMC. This connection was made in 2012, one year after the inception of JUMP.

The director of CSR in HMC, Mr. Choi, thought that JUMP was the right company for HMC to enter into the new CSR area, education. From his perspective, their business model was innovative and he thought that that social enterprise could make themselves sustainable through their business model. Additionally, from the perspective of JUMP, they believed that the match-up with HMC could be a big opportunity for JUMP’s growth as they looked toward to attaining financial resources from HMC, as well as to enhancing the awareness of JUMP in society by means of their partnership.

However, from the perspective of HMC, they were implementing a partnership with JUMP, which was only two years old and a young and small venture. Therefore, its performance was unknown and barely validated. Their business model seemed to be implemented in an innovative way, but their size was very small and it was not certain whether JUMP was financially sustainable. There were few employees able to engage in the social enterprise and their total assets were not considerable. Aside from those factors, the number of children JUMP served was small as well. In the eyes of Mr. Choi, the business model was viable, but he questioned whether JUMP could be an equivalent partner to HMC. These concerns were also raised by the executives of HMC. Although the decision makers at HMC acknowledged the specialties of JUMP in educational services and the company’s business model was innovative, viable, and feasible, JUMP itself had not proven to be a legitimate partner for HMC.

Regarding the formation and selection, the director of HMC reflected as follows:

“Based on my experiences, while at the for-profit fields, competition is a critical mechanism, here [fields related to social impact] collaboration seems to work better. We believed that it is critical to creating a social partnership to promote collaboration and make changes to our society rather than doing everything by ourselves. Even if JUMP looked too young and small to be selected as a partner with us, they had already built a small network consisting of social organizations and made performances through their educational services to bottom of the pyramid students. We finally reached a conclusion that we would trust this organization as our partner and then we formed a partnership together.”

In the process of collaborative value creation [45,46], the first stage is partner selection. That means, partner selection can be both the beginning and the end of a successful collaboration. With the right partner, collaboration can be effectively made, leading to co-creation processes. In order for there to be a co-creation of social values through an effective collaboration, each party should start with finding the right partner. Since power relations are critical in collaborations in terms of the control mechanisms of the partnership, it would be impossible for a social enterprise to partner with a large corporation. Given that the partner selection is the starting point in a process of collaborative value creation [45,46], if the social enterprises could employ strategies to show themselves as the right partner to large corporations, partnerships in asymmetrical power relations could be made.

4.3. Design, Operations, and Institutionalization

In our analysis, the partnership formation was led by JUMP. To form a social partnership with HMC, JUMP employed strategies to create a platform where diverse parties jointly sought social value while being flexible enough to adapt in the face of their counter-parties’ needs. In designing H-JUMP, a joint platform, the co-founders of JUMP utilized their social capital to make HMC consider JUMP as a robust partner. Specifically, two styled tactics were used in the creation of a joint platform: the halo effect and third-party engagement.

JUMP noticed that HMC was searching for specialists in educational services. To be a viable partner, JUMP had to emphasize their specialties. Regarding their specialties, the graduate background of the owners (coming from a top school in the U.S.) could create a halo effect. Based on their school network, JUMP could create a list of mentors which could endorse the specialties of JUMP as well as their abilities. This did not mean that in order to have a strong legitimacy, an elite status was required. Instead, JUMP responded to HMC’s needs, i.e., their want to enter a new area of CSR, and they utilized their backgrounds to be a viable candidate. As a representation of the expertise of JUMP for educational services, their social capital based on their educational background could facilitate a social partnership. Regarding this strategy, the director of CSR in HMC reflected as follows:

“We needed specialists on educational services because we’ve never done any projects on education for CSR. To effectively penetrate this new territory, we needed more powerful methods. We had contacted many large nonprofits that specialized in educational services. But the mentor list from JUMP, a full list of alumni from top schools, and their educational service experiences attracted us and made us trust JUMP’s expertise.”

The halo effect can thus work well for relatively weak parties in a partnership when they are utilizing their professional backgrounds, which can be clues to show their abilities and competence. In this sense, constituting advisory boards with professionals can be a tactic for haloing. If the weaker parties have professional backgrounds that are a critical resource to the other parties, the halo effect is one strategy to be seriously employed.

One critical concern HMC raised in implementing a partnership was the firm size of JUMP. The notion of a firm size does not only refer to the number of employees or the number of sales or assets. It represents the firm’s ability to achieve the goals and legitimizes their business viability. When the firm is not sufficiently big in a partnership, it can borrow critical resources which can increase its firm size. In the case of H-JUMP, JUMP included the Seoul Scholarship Foundation (hereinafter SSF) in the dyadic partnership with HMC as a third party. JUMP brought the engagement of SSF, which is a governmental institution that deals with any type of scholarships for students in Seoul. The involvement of SSF in the partnership between HMC and JUMP made JUMP gain legitimacy as a business because as a governmental body, SSF could support all kinds of administrative work related to scholarships. They had expertise in collecting, screening, and selecting qualified undergraduate tutors. Additionally, the process of awarding scholarships to tutors is routinized work at SSF, and SSF could financially support JUMP as a source for scholarships. This could alleviate HMC’s financial burdens if a partnership between HMC and JUMP were made. SSF was not a major body in H-JUMP, but it provided many kinds of resources, such as administrative workforces, funds for partial scholarships, and specialty endorsement. As a result, JUMP could be seen as bigger than its actual size. The director of CSR in HMC said regarding this:

“In fact, JUMP itself was not attractive to our decision-makers at first. We weren’t certain that the company could effectively conduct their platform business. But when JUMP invited SSF as another partner in order to design a social partnership, we changed our mind. We thought, ‘then, we can talk!’ For example, SSF could aid the funding for scholarships and we could utilize their reputation as a public education specialist. We noticed that SSF had established operational capabilities to deal with the scholarship projects. So, we expected that they could relieve our concerns about entering into the new area.”

That is, through this third-party engagement, JUMP was able to utilize all the resources and competencies from SSF. Such a third-party engagement tactic, i.e., including another big organization as a partner in a partnership, proved to be a very effective way to deploy their platform strategy. Yet, third-party engagement is effectively employed only when social actors have crucial social networks. That is, this tactic relies on how diverse the social actors build up their social networks (with those that have diverse interests). This suggests that social actors need to make considerable efforts to make their social capital as diverse as possible.

Finally, in 2013, with the involvement of SSF, HMC made a partnership with JUMP. The partnership was about the creation of a joint platform for the education of disadvantaged children. In this joint platform, HMC provided financial resources and took responsibility for the overall management, but it endows JUMP with authority over any operational decisions. In response, JUMP took responsibility for sustaining the joint platform. To distinguish this partnership from the original work of JUMP and to highlight the sponsorship from HMC, they named the joint platform H-JUMP. This was the genesis of H-JUMP.

4.4. Benefits from H-JUMP to Participants in the Social Partnership

Through the co-developed education platform of H-JUMP, HMC could deeply engage in the business model of JUMP, using platform strategies to educate disadvantaged children while JUMP could sustain their business model. This case presents a viable, long-term partnership, based on collaborative value creation. We found that this type of partnership requires a higher effort for its sustainability in the long-term, but it can achieve a win-win consequence for both parties. We specified three consequences from the collaborative value creation in terms of sustainable growth and dependency alleviation. In regards to this, the director of CSR in HMC had this to say:

“For HMC, through a partnership with JUMP, HMC benefited from the collaboration and expanded our CSR activities to create a platform to nurture other young and potential social entrepreneurs. So, we launched a new program called ‘On-Dream’. This expansion in the CSR activities happened because we achieved great results from the partnerships with JUMP.”

First, for JUMP, resource attainment was achieved by constructing a joint platform. Through the collaborative value creation in the negotiation processes of forming and implementing a social partnership, resulting in the formation of H-JUMP, JUMP was able to achieve sustainable growth. In particular, the critical resources for operating the joint platform can be shared by various actors, such as universities, government, and other companies. As a result, the social enterprise can expand their business to different regions such as Busan, Daegu, and even to Japan. Additionally, this regional expansion can further mobilize more resources by use of actors in these regions. This created a self-reinforcing resource-attainment process. Previously, JUMP’s social beneficiaries (children from disadvantaged backgrounds) were limited, but H-JUMP could enable them to help more children and elevate the social awareness of educational opportunities for disadvantaged children. Second, for HMC, social partnerships with social enterprises allowed them to expand to other areas. In fact, HMC, having learned from their collaboration with JUMP, expanded their CSR activities to create a platform to nurture nascent social entrepreneurs, called On-Dream. As such, this partnership helped HMC extend their line of work into social innovation. This expansion in their CSR activities happened because their partnerships with JUMP provided HMC with opportunities to partake in a rich discourse on CSR ideas and ways to make social contributions as a partner in multi-party platforms. The CSR department at HMC may have previously felt a lack of commitment or authentic motivation to develop CSR programs since they somehow performed CSR activities based on social pressures and company reputation. However, they seemed to feel a sense of belonging to a community (platform) that pursues social value and contribution; thus, they created collaborative social values in the social partnership platform. This sense of belonging and collaborative value creation built HMC’s trust in JUMP, which led to a concrete partnership. In particular, trust in partnership promotes further cooperation [31].

5. Discussion and Conclusions

In this study, we demonstrate that an asymmetric power relationship, particularly a partnership between a social enterprise and a large, established firm, can be reconciled through collaborative value creation. Additionally, this study explores how new and small social enterprises can overcome their weaknesses as a viable partner in a social partnership when large corporations and nascent and small social enterprises lie in asymmetrical power relations. The critical barrier to form a social partnership lies in the fact that social enterprises may not be desirable partners for large corporations which have many options to select from when searching for a partner, including successful NPOs and reputable social enterprises. The H-JUMP case interestingly shows us that a young and small social enterprise like JUMP could utilize their social capital and relational governance to persuade a large company like HMC to form and successfully implement a social partnership. In particular, through the thematic analyses, we found out the challenges faced by large-scale companies and social enterprises during their partnership. Additionally, we highlighted the key aspects which ensured the creation of a sustainable business model with both parties’ economic and social value in mind.

This study gives practical insights and academic implications in terms of the implementation of partnerships between large firms and social enterprises. As both parties acknowledge that social values for the bottom of the pyramid can be created through collaboration, they became strongly tied to each other. Additionally, the self-interests of the parties became consensual through their “stylized” partnership. They jointly sought social value by using each other’s comparative advantages and, thus, their self-interests were balanced in a dyadic relationship. Furthermore, this stylized partnership helped to develop a unique business model. HMC created social values by applying this stylized partnership to other inter-organizational relations. This transformed HMC’s CSR methods. Based on the experience from their JUMP partnership, HMC’s CSR has focused on making coalitions with social enterprises that specialize in certain areas working for the bottom of the pyramid. Instead of internalizing all their CSR activities, HMC started nurturing social enterprises to seek their social values. Thus, they were able to achieve their CSR mission effectively in a more efficient way.

In fact, what we highlight in this study is not the consequences of the collaborative value creation. Given that shared values are critical in mobilizing collaborative and collective actions [9], our study claims that the shared values can be used as a critical source for social enterprises to overcome their asymmetric power relations in their partnerships with large firms. In our case, the partnership through collaborative value creation was crystallized into a joint platform. It is not easy to make diverse organizations commit to a common social value because of their own self-interests. Therefore, social enterprises, when collaborating with large firms to attain resources, should emphasize how valuable and important their social values are and the fact that these social values can be expanded through collaboration. The social values can also be strategically delivered to other parties through actions that validate their competence and specialties. Further, collaborative value creation is also beneficial for large firms. From the perspective of large firms, a partnership with social enterprises can be a good source for fulfilling their corporate social responsibilities. In summary, our findings suggest that the use of social capital and relational governance can help social enterprises overcome the possible issues which can arise when a partnership in asymmetric power relations is made (i.e., resource dependence). Furthermore, collaborative value creation emphasizes the common goals (social values) and the importance of collaboration in order to achieve them, and provides feasible action outcomes for the corporate social responsibilities of large firms, which eventually turns out to be a viable non-economic incentive to them.

Even though this in-depth case study provides useful insights, there are some limitations to this study. The main limitation of this paper is that the findings and insights discovered are from the limited perspectives of the management level, which could be subjective to some extent (e.g. interviewer bias). Due to time and geographical limitations, the authors could not gain access to information from a broader set of interested parties, such as the disadvantaged children who were benefiting from the joint platform and the tutors who taught the children. However, the authors tried their best to diminish these limitations by attending key meetings multiple times where diverse parties related to the joint platform gathered, such as awards events. Furthermore, to reduce interviewer biases (such as leading questions or confirming questions), we strictly followed semi-structured interview schemes and open-end questions were used mainly.

Additionally, as the authors could only carry out one case study, the empirical findings and conclusion can be limited to the specific context of one case study, which may not be sufficient to generalize. Nevertheless, it can be valued as this study shows a unique case in the formation of a social partnership (i.e., a partnership between a large corporation and social enterprise), which can shed light on the collective value creation processes in forming asymmetric social partnerships.

In this sense, we hence suggest future research to further elaborate on the formation of asymmetric social partnerships, as well as to empirically examine the process of the formation of this kind of social partnership. The future research can be threefold. First, by examining the challenges in social partnerships at a deeper level, future studies can investigate how large corporations and social enterprises manage to make their respective long-term goals parallel each others’ goals in the long run. Second, future studies can consider how internal and external challenges can be addressed by each party in order to maintain the partnership’s sustainability. Lastly, the critical challenges to impact the partnership in the long term, as well as the implications for each partner to streamline their side of the process of the partnership formation, can be specified.

Along with this, there are some other future research areas that have to be studied regarding the development and maintenance of social partnerships and inter-organizational relations. These include the role of the environment and of leadership. Additionally, the partnership process over time needs to be studied in more detail. Similarly, an in-depth study of the developmental cycle of a number of types of inter-organizational relations will enhance our understanding of various partnerships not only from a theoretical point of view, but also from a practical point of view. Other potential areas for future research involve the nature and challenges associated with social partnerships. The case study put forth in this manuscript represents one attempt at providing a practical framework that will help both practitioners and researchers of social partnerships better understand the formation process of social partnerships.