The entry of multinational companies to the base of the pyramid: A network perspective

Multinational corporations (MNCs) have traditionally ignored low-income markets, usually referred to as the base of the pyramid (BOP). Despite the dominant poverty in this market, a growing number of MNCs are attempting to learn about successful strategies for entering this market segment. Some of the studies suggest that establishing relationships with non-governmental organizations (NGOs) is crucial at the BOP. In this paper, we focus on relationship between MNCs and NGOs and try to explain how they facilitate MNCs? entry into this market. A network perspective has been adopted in this research and the relationship between MNCs and NGOs has been analysed in relation to this theoretical framework. Interviews with four MNCs and their NGO partners in India suggest that corporations can enter the BOP market by building trust in their relationships with NGOs and consequently the BOP, demonstrating their commitment and strengthening their legitimate position among NGOs and BOP communities

Social entrepreneurship

Review of: Choi, David Y and Gray, Edmund (2010), Values-Centered Entrepreneurs and Their Companies, Routledge, ISBN 978-041599761

The 'Mystery' of Entrepreneurship and Innovation

Review of: Mitra, Jay (2011) Entrepreneurship, Innovation and Regional Development: An Introduction. Routledge. ISBN 9780415405157 <http://repository.essex.ac.uk/4334/

Entering the base of the pyramid market in India: A corporate social entrepreneurship perspective

Purpose – The purpose of this paper is to shed light on the international market expansion of multinational corporations (MNCs) to the base of the pyramid (BoP). The authors employ the corporate social entrepreneurship (CSE) perspective to reveal how MNCs can enter this market, the key enabling factors and the benefits they can gain. CSE is related to entrepreneurial and marketing strategies that are inspired by social responsibility. Design/methodology/approach – An exploratory, qualitative multiple-case study has been employed. In-depth interviews were conducted with managers from three MNCs that have entered the BoP market in India. Findings – The findings of this research confirm that successful entry into the BoP requires the pursuit of social responsibility and the adaptation of marketing strategies. In addition, MNCs should identify the key environmental factors (demand conditions and socio-political actors’ expectations) and develop organisational characteristics (management support, network orientation towards non-governmental organisations and availability of financial resources) to match. The findings of this research show that engagement in CSE in countries with considerable BoP populations can bring firms legitimacy and sustainable profitability. Research limitations/implications – This research is based on interviews with a limited number of MNCs in India. Future studies could generalise the findings of this research to a larger number of corporations in other countries. Originality/value – This research brings new insights to the field of international marketing by integrating the corporate social responsibility, marketing and entrepreneurship disciplines. The findings of this research offer empirical support for CSE and its role in international marketing strategies

Internal social capital and international firm performance in emerging market family firms: The mediating role of participative governance

Family firms benefit from internal social capital, which refers to resources related to structural, relational and cognitive aspects of family relationships. However, it is not clear if and how possession of internal social capital can enhance the international performance of emerging economy family firms. Based on the data collected from 192 small and medium sized family firms from Turkey, we show that family firms can improve their international firm performance by utilising the internal social capital of family relationships. Our findings also demonstrate that the relationship between internal social capital and international firm performance is mediated by participative governance capability. In participative governance, family members as well as board members have the capability to contribute to strategic decision-making and implementation. We also show that all structural, relational and cognitive aspects of internal social capital should be developed in order to improve international firm performance

Bricolage, Collaboration and Mission Drift in Social Enterprises

Increasingly, social enterprises are relying on collaboration with partners to tackle the resource constraints that they face. In this research we focus on the strategy of bricolage to explore whether and how the different types of partner becoming involved may impact on the mission of social enterprises. Grounded in resource dependency and transaction cost theories, we explore how power asymmetry and the nature of involvement may impact on the outcomes of bricolage. Our findings demonstrate that in the more integrated relationships with high power asymmetry, more instances of mission drift might be observed compared to when social enterprises develop the more collaborative or complementary nature of partnerships with symmetrical power dependency, or when the partners? involvements are mainly transaction-based

Resource bricolage and growth of product and market scope in social enterprises

This research aims to understand how resource bricolage strategy plays a role in the growth of social enterprises in terms of their product and market. Based on interviews with nine social enterprises, our exploratory finding suggests that social enterprises often employ both internal and network resources in the process of making do. We further explore the relationship between the form of resource utilisation and the nature and scope of activities that the social enterprises embark upon, and find that only those relying on both internal and network bricolage are able to expand into new markets utilising newly developed products. We also find that social enterprises relying on only internal resources can reach the same point through incremental improvisation, by first moving towards either product extension or market expansion, before then embarking on the other. This research contributes to the social entrepreneurship literature by enhancing our understanding of the relationship between resource bricolage strategy and growth of social enterprises through product/ market scope in a penurious environment. The findings of this research also have implications for social enterprise managers and policy makers in utilising their resources and responding to environmental opportunities and challenges

The creation view of opportunities at the base of the pyramid

This research aims to understand how multinational corporations (MNCs) enter the base of the pyramid (BoP) by adopting the creation view of opportunities. We employ actor–network theory and explore the key actors, the process and the opportunity development that enable MNCs to tackle the relative poverty of the BoP market. Our qualitative exploratory case study illustrates that, at the BoP, MNCs have to involve beneficiary stakeholders such as non-governmental organizations and BoP communities. In this process, they should be open to modifying their business model continuously to build awareness about the product among the poor and ensure affordability, availability and acceptability. At the BoP, opportunities do not exist in the external environment and they should be developed by identifying and addressing the real needs of the poor, enhancing their quality of life and being patient about earning a profit. This research contributes to the entrepreneurship literature by expanding the creation perspective of opportunities and provides implications for the managers of companies targeting the BoP market

A Corporate Social Entrepreneurship Approach to Market-Based Poverty Reduction

In this article, we aim to conceptualize a market-based approach to poverty reduction from a corporate social entrepreneurship (CSE) perspective. Specifically, we describe some market-based initiatives at the base of the economic pyramid and relate them to the social entrepreneurship literature. We refer to the entrepreneurial activities of multinational corporations that create social value as CSE. We then conceptualize CSE according to the corporate entrepreneurship and social entrepreneurship domains and shed light on how corporations can implement CSE. Finally, by reviewing relevant literature, we propose some of the factors that can stimulate CSE in organizations and some of the benefits companies can gain by implementing CSE

Socially entrepreneurial behaviour of multinational companies: Are MNCs 'social entrepreneurs'?

Multinational corporations (MNCs) have been recognized as the key agents of globalization. Rugman and Verbeke (2004) highlight the fact that most MNCs’ sales are within their home region, namely in North America, the European Union and Asia. On the other hand, Dunning and Lundan (2008) emphasize that MNCs are deemed to be not only bringers of economic development but also agents of social well-being, especially in less developed countries. Thus, a growing number of MNCs are altering their strategies to play a substantial role as regional agents to solve social challenges. They are embracing a new approach to corporate social responsibility (CSR) by reformulating their CSR activities. They identify social problems, not as a challenge to be avoided, but as a profitable opportunity that can be seized. Among various social problems, this paper will focus on poverty, which has inspired MNCs’ efforts in less developed countries (London and Hart, 2004; Prahalad, 2009). For instance, the bottom of the pyramid (BOP) approach explains the new strategy for implementing social responsibility and poverty reduction as well as making profit. In his seminal book, The Fortune at the Bottom of the Pyramid, Prahalad (2004) provides examples of pioneering MNCs in emerging markets that have modified their businesses and processes. As in many emerging fields, most of the examples and case studies about the innovative initiatives of MNCs in offering sustainable solutions to social hurdles are fragmented and there have been few attempts to provide a theoretical explanation. Thus, this research aims to bridge this gap by borrowing the literature from entrepreneurship and social entrepreneurship domains