Market, Hierarchy, or Clan? Types of Governance in the Sharing Economy

Abstract The rise of the sharing economy has brought with it a huge variety of new organizational forms and innovative business models. An integral part of these forms and models is the communities and members of sharing-economy organizations, since they significantly contribute to value creation for these organizations. Relying on community member contributions, though, is a challenge for these organizations because fluid community boundaries and voluntary membership makes it difficult to coordinate their activities. This chapter investigates the under-researched question of how sharing-economy organizations govern the actions of their community members. Following an abductive approach that included site visits, participant observations, and 67 interviews, we develop a framework that illustrates four different types of governance: pure market, pure clan, market-hierarchy hybrid, and clan-hierarchy hybrid. The framework explains differences among these types depending on the main activity (providing resources or producing jointly) and the primary aim of the community (business orientation or social orientation). This study thus contributes to research on both governance in general and to sharing-economy organizations in particular by capturing the variety and diversity of community forms, governance practices, and business-model configurations.