The firm as an architect of polycentric governance

Emerging markets typically present additional obstacles for business operations because they lack the necessary underlying institutional infrastructure such as access to capital and labor markets. We introduce a new way for firms to overcome these obstacles—which we call building an OII—by investing in such infrastructure themselves and making it available to their commercial partners, local communities, and even to competitors. Firms must empower those actors to take the lead in collectively defining the rules for accessing this infrastructure, by orchestrating cross-sector partnerships. This process creates relational norms around the alignment of public and private interests, which ultimately can promote firms’ competitive advantage.