Concepts and Cases
Edited by Joseph Mark S. Munoz
Chapter 17: Social Capital and Cross-cultural Model Replication: The Case of Hand in Hand in India and South Africa
Lin Lerpold and Laurence Romani INTRODUCTION As evidenced by increasing public and institutional attention, as well as the growth of invested or donated private and public funds, microfinance (MF) has been considered the “magic bullet” for poverty alleviation. Besides being predicated on neoliberal market assumptions (Kah et al., 2005) and individual microentrepreneurship (Sanyal, 2009), MF success as a tool for poverty alleviation is predicated on the existence or development of social capital (Leigh Anderson and Locker, 2002; Pretty and Ward, 2001; Rankin, 2002; Woolcock, 2001). Since social capital consists of trust, reciprocity, norms, mutual engagement, and networks, the nature and dynamics of social capital vary across countries and are culturally influenced. Microfinance institutions (MFIs) and non-governmental organizations (NGOs) have increasingly become multinational in the development field. Thus, MF models developed in distinct cultural settings are being holistically transferred to different cultural contexts. For instance, the Grameen model first developed in Bangladesh has spread to 24 countries, including North and South America and sub-Saharan Africa. An important issue in internationalization pertains to assessing the cultural fit of what organizations wish to transfer or replicate to different host environments (Kostova and Roth, 2002). A well-developed model or successful practice in one country may or may not “fit” in another cultural context (Kostova and Roth, 2002). A “model replication” (Winter and Szulanski, 2001) or “copy exactly” strategy, as in the paradox of Disney’s success in Japan but initial failure in France, illustrates how model replication may backfire (Brannen, 2004). In the MF context,...
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