The Role of Regulation in the Development and Internationalization of Social Firms

Round 1

Reviewer 1 Report

The paper addresses a topic of high interest for theorists and practitioners in the field of social innovation, especially in the emerging & low-income economies.

The study is well-documented, and provides the development & internationalization experience of Farmacias Similares.

A clearer presentation of the research objectives would be nice, because the discourse is extensive, methods combine desk research & interviews, a lot of information is presented, and thus the reader might get lost in the reading. To me, it looks that the main topic is that of social business model innovation (instead of social – frugal innovation, which is a proposed classification with which I do not necessarily agree).

As the paper presents the development of a new business model, I believe the paper would increase its value added through an analysis using the framework of the business model canvas (Osterwalder and Pigneur) identification for Farmacias Similares.

I see the authors submitted to the issue of ”Emerging Markets’ Competitive Advantages in Sustainable Management”. From this perspective, to emphasize on competitive advantages, a 5 forces model (Porter) analysis would be useful. Within this framework, the authors could emphasize on the role of social ”business model innovation” of Farmacias Similares.

On the internationalization part, an analysis of main barriers & drivers for Farmacias Similares would be also nice. Although the abstract starts with the declared intention ”to analyze the drivers”, my feeling is that somehow the discourse was lost in the facts, and authors forgot about it.

In conclusion, my recommendation would be to clearly state the research objectives, and then re-shape the paper accordingly.

Good luck with the publication!

A typo here: externalities in society tend to be provided o subsidized by the govern- 433

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

I think the growth from 2 branches to 144 branches, in just one year, is a very important transition. I think it may be helpful to explain this passage more fully. (lines 336-337).

Author Response

Point 1. The growth between 1998 and 1999 was briefly explained in the text. Thank you

Reviewer 3 Report

Very good work

Author Response

Thank you

Round 2

Reviewer 1 Report

The title is too general: “Regulation and the Internationalization of Social Firms”. I don’t remember if this was the original title. The title should be relevant in relation to the paper, which is on Farmacias Similares Frugal Innovation and Internationalization. Claiming through the title that you bring valuable insights on all possible sorts of Social Firms (from different economic sectors) is just too much! Also, “regulation” differs from one national context to another.

1. My recommendation: “A clearer presentation of the research objectives would be nice, because the discourse is extensive, methods combine desk research & interviews, a lot of information is presented, and thus the reader might get lost in the reading. To me, it looks that the main topic is that of social business model innovation (instead of social – frugal innovation, which is a proposed classification with which I do not necessarily agree).”

Authors’ reply: “As pointed out in part 4 of the article, the paper aims to explain social and frugal innovations. Prepositions 1a and 1b are about frugal innovation and 1c and 1d about social innovation. The article works and combines the two.”

I understand, but the reader cannot wait until page 15 to discover your research objectives, which are presented in fact, as propositions (not research objectives). The commonly accepted method in the economic scientific literature is to state the research objectives in the Introduction, and Methodology sections (and briefly, in Abstract).

 

2. My recommendation: “As the paper presents the development of a new business model, I believe the paper would increase its value added through an analysis using the framework of the business model canvas (Osterwalder and Pigneur) identification for Farmacias Similares.”

Authors’ reply: “The paper develops an internationalization of an emerging market social firm. We do not work from the perspective of a business model canvas. It is frugal and social innovation model.”

There isn’t any frugal innovation model in the literature. Or, social innovation model. These two are types of innovation. In the paper, you refer to “business model innovation”, not frugal/social products.

3. My recommendation: “I see the authors submitted to the issue of “Emerging Markets’ Competitive Advantages in Sustainable Management”. From this perspective, to emphasize on competitive advantages, a 5 forces model (Porter) analysis would be useful. Within this framework, the authors could emphasize on the role of social “business model innovation” of Farmacias Similares.”

Authors’ reply: “in section 4.4, we use the framework mentioned by Rugman (2009) and Zaheer (1995), on how differences in culture and institutions play an important role in limiting the ability of multinationals to succeed in host countries. And on this framework the article has been worked”.

Why would you use that? Farmacia Similares is not a multinational. As you say, it just have started the internationalization process.

4. My recommendation: “ On the internationalization part, an analysis of main barriers & drivers for Farmacias Similares would be also nice. Although the abstract starts with the declared intention “to analyze the drivers”, my feeling is that somehow the discourse was lost in the facts, and authors forgot about it.”

Authors’ reply: “We belive that Proposition 3.a. Frugal social innovations can be applied with more success in other markets that have similar conditions to the home country in both the level of poverty and the under-provision by the government. Social innovations are more difficult to adapt to local conditions than traditional innovations as social innovations are driven by particular conditions of public goods under-provision rather than by technological advances. And Proposition 3.b. Regulation has a higher impact on the internationalization of social innovations than of frugal innovation. These two can help understand the drivers of internationalization.

More work could be done to expand or add more propositions in a later article.”

Well, you cannot leave work unfinished, saying the reader should look for the next episode to clarify.

Secondly, this is why you should have clear research objectives. You mention something in the abstract like “to analyze the drivers” as I said in my first review, and you expect the reader to find some information on this somewhere in your paper on page 19 out of 25 (???).

5. A typo here: externalities in society tend to be provided o subsidized by the govern- 433

It is on row 433

Author Response

Please see the attachment

Author Response File: Author Response.docx

Round 3

Reviewer 1 Report

Except from minor corrections on the text (e.g. replacement of ”branch” with ”store”), I don't see any major improvement to the paper.

Author Response

Thank you for your comments.

 

1. The coherence of the whole manuscript piece, in terms of structure, title, abstract and text. Please revise carefully to ensure this overall coherence.

 

We have carefully reviewed the title, the text and its structure, and the abstract:

1. We have changed the title to "The Role of Regulation in the Development and Internationalization of Social Firms." We believe that it better reflects the spirit of the paper after revisions.
2. The text and its structure. We have made multiple changes and we believe that it is now more consistent.
3. Abstract. It has also been modified. We believe it better reflects the -new- conformation of the paper.

 

2. Reflect carefully what is the main contributions, the role of regulation in the social innovation, in the internationalization of organization (or social organization), or/and differences in social innovation and frugal innovation, and revise accordingly.

 

To better show what the main contributions and consequences are, the role of regulation in social innovation and its differences with frugal innovation plus the internationalization of the organization; the following changes have been made:

1. Introduction. Important modifications to better understand the role of innovation, regulation and organizations.
2. Theoretical Framework. It has been modified to be clearer on the subject of innovation and the internationalization of the company.
3. Research Design. We have tried to better express the process and point out the four stages to understand the process by which the firm was created and internationalized.

(Results in the point 3)

1. Discussion. It has been modified trying to show the above changes.

 

3. Are propositions part of results of literature review or part of analysis of the case?   Please clarify and further the discussion part for the contribution.

 

We have modified the wording of the prepositions and their comments to avoid confusion, showing that the prepositions are the result of the analysis of the case, adding some other examples.

Author Response File: Author Response.pdf