The Evolving Networks and Institutions in the Genesis of Organizational Novelty: Evidence from Ant Group

• In Event: 40860 - Section on Economic Sociology Roundtables
  In Refereed Roundtable (60 minute): Table 10. Innovation and entrepreneurship

Abstract

This is a case study of the organizational evolution of the Chinese fintech conglomerate Ant Group as an example of the emergence of organizational novelty. To investigate how an e-retailer evolves into a massive financial conglomerate under a shifting regulatory environment, I have developed an integrated network-institutional theoretical framework to characterize how the intertwined networks of e-commerce, banking, and governments and institutions co-evolved to shape the genesis and evolution of Ant Group. The archival evidence presents how organizational practices and values (big data and platform mindsets) in e-commerce were transposed to the banking industry at the intersection of three originally separate networks. This transformed the way the financial market is organized and the way finance is regulated. Moreover, the network-institutional approach captures how shifting institutions interact with the relational process of transposition, and influence intertwined networks’ effects on the generation of novel practices. Under the originally loose regulatory institutions, the Ant Group was able to mobilize several business and political networks to facilitate the transposition. As the regulatory institutions grew more stringent, Ant Group’s extensive business and political networks, and its central network positions, failed to buffer the regulatory uncertainties. This resulted in organizational restructuring requested by the Central authorities.

Author

• Yilin Zhu, University of California-San Diego