Financial Inclusion through the Sphere of Solidarity in Corporate Governance: The Cases of Digital Crowdfunding and Conventional Microfinance

Many business conflicts arise through financial exclusion. Such conflicts are often erroneously reduced to solely economic factors and material interests. In truth, though, the root cause of the conflicts is often the denial of "recognition," meaning exclusion from a venture's "sphere of solidarity." In this study, we propose a strategic management paradigm based on the philosophical concept of recognition and the sphere of solidarity. Relying on four case studies in crowdfunding and microfinance, we postulate that many conflicts are motivated by moral expectations and demands for recognition. In the spirit of financial inclusion, these conflicts can be avoided if companies recognize the value of non-equity contributors instead of using non-equity contributors as tokens to benefit equity shareholders. Requests for recognition find increased importance in the sharing economy, which calls for contributions from crowds for the realization of individual projects and is therefore inclusive in nature. Several studies show that the pursuit of financial gain is not always the predominant motivation of contributors in the sharing economy. Instead, non-economic factors such as proximity, solidarity, creativity, and curiosity often motivate non-equity contributors to support projects in the sharing economy. If economic interests are not always the only or even the primary motivations of such contributors, then economic interests are not likely to be the sole cause of conflicts. As the solution to these conflicts, therefore, we propose recognition of the moral demands of all contributors—equity and non-equity alike.