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In African countries such as Ghana, microentrepreneurs make formal economy goods and services available to base of the pyramid (BOP) consumers. Multinational enterprises (MNEs) co-opt BOP business models when they enter the BOP market. We conducted a case study of six MNEs and 36 microentrepreneurs in three key sectors. In two sectors (fast-moving consumer goods and telecommunications), reverse bridging enables MNEs to capture value from BOP business models, which has a negative impact on both the financial and social capital of (...) |
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Base-of-the-pyramid business models aim to achieve profitability and poverty reduction by including poor people into corporate value chains. This goal duality creates tensions. Actors’ responses to these tensions are influenced by their cognitive frames of the phenomena building the tension. Applying a cognitive perspective, I investigate how corporate actors with different frames of poverty respond proactively or defensively to the poverty–profitability tension by adapting business model elements. I find that proactive and defensive responses differ for actors holding different cognitive frames (...) |
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The early literature on base of the pyramid strategies argued that multinational enterprises can contribute significantly to poverty alleviation of the poorest population in the world. An emergent perspective suggests that the solution to poverty lies within the BOP itself. Here, entrepreneurship within the BOP population is seen as the more credible solution to poverty. In this Special Issue introduction, we briefly present how the literature has further shifted the discussion of BOP strategies toward issues such as innovation, networks, business (...) |
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Bottom of the Pyramid organizations are the ones that develop a set of capabilities that contribute to create short- and long-term sustainability values inside and outside the boundaries of BoP ecosystems. Capabilities have an important role in BoP organizations’ strategies that aim to solve BoP issues. Notwithstanding its developments, BoP research still lacks theoretical contributions for the analysis of organizations. We suggest special attention to the need of advancing knowledge on capabilities of BoP organizations because this field is scattered and (...) |
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Base of the pyramid ventures seek to create “mutual value” for themselves and poor communities, but often use business models unadapted for the BoP context, and have been less successful than hoped. Sustainable business models’ multi-stakeholder lens offers a promising alternative path to mutual value, but BoP-based SBM studies are scarce. This single case study explores whether and how SBM characteristics manifest in the business model and value outcomes of Habi, a Manila footwear company successfully creating mutual value with BoP (...) |
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This article examines the question: How do local organizations deal with competing temporal dynamics when building and implementing base/bottom of the pyramid initiatives? Time has been neglected in the BoP literature to date, yet, addressing poverty in a developing country requires a complex perspective of time. An analysis of 21 semi-structured interviews with locally based organizations implementing BoP initiatives in the Philippines revealed that the organizations had an ambitemporal perspective. In particular, we discover that they harmonize multiple temporal pacers by (...) |
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The literature on Base of the Pyramid strategies emphasizes that creating social value requires collaborative, multi-stakeholder business approaches. However, there is limited understanding of how businesses can successfully coordinate such value creation processes in the developing economies that face significant institutional voids. This study adopts a business model perspective for analyzing social value creation processes that span organizational boundaries. We introduce a novel, theoretically grounded business model framework that helps conceptualize social value by locating the various loci of value creation, (...) |
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We advance research on how businesses engage with the complex social problems currently known as Grand Challenges. We study the concepts that preceded the term Grand Challenges, the connected ontologies that ground them, and the diversity of perspectives they offered. We construct a knowledge map that includes well-researched obstacles, such as governance obstacles hindering engagement and sensemaking obstacles limiting the ideation of novel and creative efforts. But we also build on prior research to identify curation obstacles, which precede engagement and (...) |
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Stakeholder engagement has grown into a widely used yet often unclear construct in business and society research. The literature lacks a unified understanding of the essentials of stakeholder engagement, and the fragmented use of the stakeholder engagement construct challenges its development and legitimacy. The purpose of this article is to clarify the construct of stakeholder engagement to unfold the full potential of stakeholder engagement research. We conduct a literature review on 90 articles in leading academic journals focusing on stakeholder engagement (...) |
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In this paper we investigate how different discourses on frugal innovation are articulated, and how the dynamics between these different discourses have led to a certain dominant understanding of frugal innovation today. We analyse the dynamic interactions between three discourses on frugal innovation: innovations for the poor, grassroots innovations by the poor, and more recently co-creating frugal innovations with the poor. We argue that this latter discourse is articulated as a hegemonic project as it is designed to accommodate demands from (...) |
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A growing body of research looks into business-led efforts to create social value by improving the socio-economic well-being of Base of the Pyramid (BoP) communities. Research shows that businesses that pursue these strategies—or BoP businesses—face distinct sets of challenges that require unique capabilities. There is, however, limited effort to synthesize current evidence on the mechanisms through which these businesses create social value. We systematically review the literature on BoP businesses, covering 110 studies published in business and management journals. We start (...) |
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Top-tier management journals are advocating for greater relevance from management research to Grand Challenges such as poverty alleviation. However, many scholars struggle to identify linkages between the practical undertaking of poverty alleviation and theory development opportunities in the management literature. Responding to this call, we develop and outline a framework for theorizing from an increasingly common business-based poverty alleviation approach known as ‘market orchestration.’ Core to this framework are a set of contextual difference that contrast with the Western environment in (...) |
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The microfinance business model focuses largely on lending to the woman in the household, rather than the man. The belief is that women are more trustworthy borrowers than men, and that lending to women may have increased social impact. Yet in several cases, women do not have control over the loan backed business despite being the borrower of record. Such takeover of the business by the man constitutes an ethical violation. We find that high dependency ratios in the family are (...) |
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Poverty observed from business in the academic field has evolved in some publications and is characterized as a multidimensional phenomenon, having several theoretical strands that add their attention to this problem. The objective of this study is to identify and cluster the variables of poverty in the business area through the network analysis. There were 1,745 keywords mentioned in 566 papers about the theme present in the Scopus database between 2000 and 2016. The results demonstrate a network with four clusters: (...) |
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With over three billion people currently living below the poverty line, finding better ways to lift people out of poverty is a concern of scholars from a range of disciplines. Within Management Studies, the focus is on developing market-based solutions to poverty alleviation through Bottom/Base-of-the-Pyramid initiatives. To date, these have enjoyed limited success, sometimes even exacerbating the problems they attempt to solve. As a result, there is a growing academic and practitioner push for a third iteration—BoP 3.0—that moves closer to (...) |
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Business Ethics: A European Review, EarlyView. |
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Research on the base-of-the-pyramid (BoP) approach and the associated business case for deprived participants in informal markets now appears frequently in a range of business ethics and management-related journals. The present analysis of how supply chain management (SCM) and sustainable supply chain management (SSCM) concepts are habitually used in base-of-the-pyramid research serves to strengthen the theoretical foundation of BoP research by addressing the related business case. Based on a content analysis of BoP papers published in English-speaking peer-reviewed journals between 2000 (...) |
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The private sector is vital to building and sustaining peace. These efforts are often recognized as “Business for Peace” or “Peace through Commerce.” Academic research on Business for Peace is almost twenty years old and tends to be theoretical. This paper is the first to present qualitative findings on businesses operating in an active violent conflict such as the case of Iraq. Companies in Iraq operate under the constant threat of violence and yet many still try to enhance peace through (...) |
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The private sector is vital to building and sustaining peace. These efforts are often recognized as “Business for Peace” or “Peace through Commerce.” Academic research on Business for Peace is almost twenty years old and tends to be theoretical. This paper is the first to present qualitative findings on businesses operating in an active violent conflict such as the case of Iraq. Companies in Iraq operate under the constant threat of violence and yet many still try to enhance peace through (...) |
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Sixteen years ago, Prahalad and Hart introduced the possibility of both profitably serving the poor and alleviating poverty. This first iteration of the Bottom/Base of the Pyramid approach focused on selling to the poor. In 2008, after ethical criticisms leveled at it, the field moved to BoP 2.0, instead emphasizing business co-venturing. Since 2015, we have witnessed some calls for a new iteration, with the focus broadening to a more sustainable development approach to poverty alleviation. In this paper, we seek (...) |
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Inclusive businesses that combine profit making with social impact are claimed to hold the potential for poverty alleviation while also creating new entrepreneurial and innovation opportunities. Current research, however, offers little insight on the processes through which for-profit business organizations introduce social innovations that can profitably create social impact. To understand how social innovations emerge and become sustained in business organizations, we studied a telecom firm in Kenya that successfully extended financial services across the country through a number of mobile (...) |
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With over three billion people currently living below the poverty line, finding better ways to lift people out of poverty is a concern of scholars from a range of disciplines. Within Management Studies, the focus is on developing market-based solutions to poverty alleviation through Bottom/Base-of-the-Pyramid initiatives. To date, these have enjoyed limited success, sometimes even exacerbating the problems they attempt to solve. As a result, there is a growing academic and practitioner push for a third iteration—BoP 3.0—that moves closer to (...) |
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Existing research posits that decision makers use specific cognitive frames to manage tensions in sustainability. However, we know less about how the cognitive frames of individuals at different levels in organization interact and what these interactions imply for managing sustainability tensions, such as in Bottom of the Pyramid projects. To address this omission, we ask do organizational and project leaders differ in their understanding of tensions in a BOP project, and if so, how? We answer this question by drawing on (...) |
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The starting premise of this paper is that business models can transform social reality—sometimes to an extreme. Then, building on the concept of “grand challenges,” we argue that such transformations can be either positive or negative in nature —even in the case of business models designed to improve value not only economically but environmentally and socially as well. To further our understanding of the negative aspects, we introduced two conceptual categories of business model: those for oppression or depletion and exclusionary (...) |
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The vast majority of indigenous communities are among the world’s poorest and are unlikely to be engaged in a thriving, mutually beneficial partnership with an MNC. While there are increasing studies on CSR initiatives in base of the pyramid communities, few—if any—feature the self-initiated stakeholder transition of an impoverished community. This paper examines the factors that motivated the stakeholder transformation process of an indigenous community, from its position as a non-stakeholder, one lacking in power and legitimacy, to the status of (...) |
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Business and society research has increasingly moved from the margins to the mainstream. Although this progression has benefited from advances in empirical research, the field continues to suffer from considerable methodological challenges that hamper its development. In this introductory article to the special issue, we review how far our field has come in advancing methods and methodologies in business and society research. We also highlight the methods and methodologies covered by the contributors to this special issue and how they help (...) |
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ABSTRACT:How does the state influence stakeholder legitimacy? And how does this process affect an industry’s ethical challenges? Stakeholder theory adopts a forward-looking perspective and seeks to understand how managers can address stakeholders’ claims to improve the firm’s ability to create value. Yet, existing work does not adequately address the role of the state in defining the stakeholder universe nor the implications this may have for subsequent ethical challenges managers face. This article develops a political stakeholder theory (political ST) by weaving (...) |
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ABSTRACT:We extend the Base of the Pyramid (BoP) poverty-alleviation approach by recognizing the poor as valuable suppliers—specifically of intellectual property. Although the poor possess huge reserves of intellectual property, they are unable to participate in global knowledge networks owing to their illiteracy and poverty. This is a crippling form of social exclusion in today’s growing knowledge economy because it adversely affects their capabilities for advancement at several levels. Providing the poor access to global knowledge networks as rightful participants—as suppliers of (...) |
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Why and how does a multinational corporation adapt its strategy and organizational capabilities to address markets at the base of the pyramid? This paper builds on the results of a 3-year action research program conducted with Lafarge, a global building materials company, during which it started to consider the BOP segment as a strategic business opportunity. The article shows how pilot projects and global action networks created as part of the action research in the Indonesian subsidiary and the firm’s head (...) |
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