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 (...) by using bibliographic analysis to map the broad contours of the literature in terms of its common theoretical and empirical approaches, intellectual core, and evolution in time. We subsequently conduct a qualitative content analysis on the identified articles to synthesize their main findings. The analysis leads to a conceptual framework that explicates the antecedents, constraints, capabilities, and contingencies that drive social value creation. In addition to providing a rich and systematically organized account of the evidence, our analysis provides a critical reflection on the ethical dilemmas of social value creation efforts for the BoP, and outlines promising avenues for future research. (shrink)

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 (...) and 2014 from the Web of Science database, this literature review comprehends existing research in the context of established SCM and SSCM frameworks, using both frequency and contingency analyses. The frequency analysis indicates that supply chain management and sustainable supply chain management [(S)SCM] constructs regularly discussed in the BoP literature include supplier integration, strategic purchasing, decommoditization, long-term relationship and enhanced communication among supply chain actors. The identified contingencies reflect linkages between BoP research and (S)SCM constructs. The highest number of links was found between the SCM constructs of strategic purchasing and long-term relationship and the SSCM constructs of supplier integration and communication and coordination with suppliers. These can be regarded as the most crucial (S)SCM constructs in the BoP business environment. This analysis facilitates the development of future research propositions at this intersection, including the use of tools from (S)SCM theories to evaluate BoP propositions and projects. Granted the limited range of BoP-related papers analyzed, the findings provide a coherent understanding of (S)SCM practices crucial to the functioning of BoP markets and why they matter, so contributing to the related ethical rationale. These findings will be of use to researchers and practitioners alike for the formulation of business development strategies and their subsequent implementation in informal market economies. (shrink)

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 (...) to answer the question: How has the BoP approach evolved over the past 16 years, and has it delivered on its early promise? We conducted a systematic review of 276 papers published in journals in this period, utilizing a rigorous correspondence analysis method to map key trends, and then further examined the 22 empirical studies conducted on the BoP approach. Our results suggest that the field has evolved, passing through a number of trends and coming full circle—with our analysis pointing to more recent BoP literature emphasizing similar themes to those espoused in the initial BoP iteration, rather than reflecting the principles espoused in either BoP 2.0 or BoP 3.0. Our analysis also points to a lack of clear evidence that the BoP concept has delivered on its promise either to businesses or to BoP participants. (shrink)

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 (...) fragmented, misinterpreted, and still underdeveloped in the literature. We oriented our research formulating and seeking answers to our main question on what are the capabilities needed to enable organizations to create sustainability values in BoP ecosystems? We conducted an integrative review of BoP research for the period from 1998 to 2019, and we found 22 key capabilities of BoP organizations. We organized the capabilities into four major categories including BoP Responsible Consumption, BoP Responsible Business Model, BoP Responsible Management, and BoP Responsible Innovation. We advanced propositions and discussions regarding the capabilities and major categories’ popularity, interdependence and combination, short- and long-term temporal functions, sustainability roles, and effectiveness to address BoP issues. Our article organizes the field of capabilities of BoP organizations; advances contributions and implications for management, organizations, and policymaking; and opens fruitful avenues for future research. (shrink)

Although a number of microfinance initiatives have improved financial inclusion in various regions of developing countries, the transferability of their foundations from one context to another is still a challenge. This study proposes an innovative process-based model targeting the initial stages of the transfer process that links three interconnected categories: local contextual conditions, transferring practices, and initial developmental consequences. The results were produced through a longitudinal study of the implementation of three community development banks on the periphery of Sao Paulo (...) based on a highly successful Brazilian model known as Banco Palmas. In addition to the process-based model, our findings contribute to the microfinance and bottom of the pyramid literatures, showing a cross-fertilization that has been insufficiently explored. (shrink)

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 (...) models, and sustainability at the BOP. This analysis signals a gap in our knowledge related to the success factors in business models of BOP entrepreneurs, with attention to economic, social, and environmental impacts. We present the five articles accepted for publication in this Special Issue, of which three contribute to our knowledge of BOP business models and two to our knowledge of sustainability at the BOP. In conclusion, we propose several avenues for future research. (shrink)

Management of different types of partnerships plays a decisive role in company performance. Complex business ventures, such as those created to serve low-income populations, usually include both cross- and same-sector partnerships. However, the initial diversity featured in these alliance portfolios diminishes as companies take their ventures up to scale. This article develops theoretical propositions about the evolution and configuration patterns of portfolios that include both cross- and same-sector partnerships. Two longitudinal case studies serve to illustrate the theoretical framework developed for (...) alliance portfolios that include both types of partnerships. Companies that create such portfolios adopt partnership strategies that follow paths also identified in the evolution of portfolios only made up of partnerships with other private firms: i.e., an evolution from adapting to shaping and exploiting strategies. (shrink)

Hunger and deprivation, lack of education, sanitation, and health care are only a few pressing issues related to poverty in developing countries. Addressing such complex social issues requires pooling complementary resources of the civil, public, and private sector. Over the last decade, stakeholders tried to cocreate innovative solutions in cross‐sector social partnerships (CSSPs) at the base of the economic pyramid (BoP), but collaboration proved to be very challenging. Practitioners become increasingly frustrated with operational differences, intransparency, and mismatched goals in partnerships. (...) This study unravels the black box of collaboration and delivers empirical insights on trust and power inCSSPsbased on social exchange theory. Structural equation modeling (SEM) enables us explore relationships beyond case‐based insights. Our rigorous empirical analysis covers 207 interorganizational relationships and outlines a crucial gatekeeping function of trust inCSSPs. Findings provide strong empirical support for conceptual works calling for an “integrative orientation” inCSSPs. Furthermore, we pinpoint the role of intermediates and draw implications for future research. (shrink)

Dynamic capabilities are crucial to the survival and development of enterprises in the BOP market. The research focuses on the double-edged sword impact of relational embeddedness on dynamic capabilities via ambidextrous learning, that is moderate embeddedness facilitates dynamic capabilities while overembeddedness inhibits them. Furthermore, this study investigates whether human capital moderates the relationships between relational embeddedness and ambidextrous learning. Selecting 264 samples for empirical research, firstly, the results show that the relational embeddedness in the BOP cooperation network has an inverted (...) U-shaped influence on ambidextrous learning and dynamic capabilities. Secondly, exploratory learning and exploitative learning play a mediating role in relational embeddedness and dynamic capabilities. Thirdly, prior experience plays a positive moderating role in relational embeddedness and exploitative learning. The conclusions facilitate understanding the antecedents of dynamic capabilities and the black box of “embeddedness paradox,” and provide empirical evidence for adjusting the human capital of enterprises, enhancing the exploratory learning capability and exploitative learning capability, and coping with the overembeddedness effects. (shrink)

The Sustainable Development Goal of the United Nations related to reduced inequalities calls for greater economic inclusion of the poor. Yet, how business leaders grant economic opportunities and development to the poor is significantly under-researched. Extending burgeoning responsible leadership theory that promotes paradox-savvy leadership for building inclusive ventures through various actors, this study introduces new concepts of inclusive leadership that foster the economic inclusion of the poor from Amartya Sen’s capability approach perspective. By studying how leaders include the poor in (...) social businesses, we provide a fresh perspective of inclusive leadership as a personalized empowering cycle of economic–social–economic inclusion to close the gaps between the rich and poor in business and society. This perspective provides new territories of diversity and inclusion research for reduced inequality. (shrink)

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 (...) making strategic decisions about the best mechanism of entrainment to utilize to move their community and any stakeholders to a long-term temporal horizon. We find that organizations manage this process by generating what we term a “third time” via a process of push-and-pull entrainment between the communities, the business, and the different temporal pacers. This article develops a conceptual framework for helping organizations to harmonize competing temporal dynamics to generate a bespoke “third time” for each community they work with. (shrink)

This research note proposes the Bass Model as an empirical tool for analyzing the diffusion of new product and service innovations in Base of the Pyramid markets. This approach allows researchers to test whether factors that seem theoretically relevant to the speed and trajectory of adoption actually matter empirically. The authors model the growth of three BoP success stories using the Bass Model: Patrimonio Hoy, e-Choupal, and Grameen’s Village Phone. In two of the three cases considered, the Bass Model estimates (...) confirm Diffusion Theory predictions, but generate additional insight by quantifying the strength of the identified effects. In the case of PH, the Bass Model estimates conflict with the predictions of Diffusion Theory. Sorting out this paradox demonstrates the Bass Model’s potential to identify conflicting influences on consumer adoption, and measure how the relative strength of these competing forces nets out to determine the course of consumer adoption. (shrink)

Does responsible leadership matter when assembling an inclusive supply chain at the Base-of-the-Pyramid? Current literature implicitly assumes that it does not. BOP scholars initially focused on the importance of shaping innovative and disruptive offerings, with radically improved price–performance ratios. Subsequent studies tended to focus on barriers to implementation of large-scale ventures at the BOP. Their common characteristic was the fact that the attributes and roles of the individuals involved were deemed unimportant. If the opportunity was there, provided barriers were removed (...) and the right value proposition was offered, the inclusive venture should take off. We evaluate three cases of leaders who succeeded in building inclusive ventures at the BOP, in contexts marked by institutional voids—where formal markets were weakly structured or nonexistent. Building a viable business under those circumstances entailed two tasks: imagining what is possible and then turning that vision into a reality. We found that, in carrying out those tasks, individuals do matter. Sampled cases show that working with nontraditional partners in inclusive supply chains requires more than aligning material incentives. Our analysis suggests that responsible leadership with a strong ethical foundation can provide powerful leverage to ensure buy-in and commitment from the various actors involved. We show how RL can impact organizations and external stakeholders through positive upward spirals. Our analysis contributes to the literature on BOP and RL by confirming, extending, and challenging existing knowledge. We propose two novel attributes and argue that context matters, influencing how RL is operationalized and defined. Understanding the critical role of RL in the construction of inclusive supply chains adds a critical missing link that sheds light into the micro level of new business creation, development, and consolidation at the BOP. (shrink)