Abstract
An important market that is receiving increasing attention by firms relates to the poorest at the Base of the Pyramid (BoP). BoP businesses contribute to the first UN Sustainable Development Goal that calls for an end to poverty in all its manifestations. BoP businesses are regarded as financially and socially beneficial for both participating firms and poor communities. It is, however, understood that success in BoP markets cannot (and should not) be assumed, as it demands a profoundly different view towards managing supply chains. Focusing on this issue, our conceptual study contributes to the emerging debates in BoP and supply chain management research by elaborating the notion of legitimacy contexts (LCs) at BoP. We draw on institutional theory to characterize the LCs in BoP markets and discuss their implications for key supply chain functions. We argue that firms often design their supply chain functions for BoP business using their own LCs as opposed to those of BoP actors. This implies ignoring the institutional distance between BoP markets and firms and reveals a key culprit in the failure of BoP projects. We offer practical implications for firms intending to engage in BoP business.
Highlights
Studies on poverty and poverty alleviation strategies can be found in various disciplines ranging from economics to entrepreneurship, business, and marketing
We argue that firms often design their supply chain functions for Base of the Pyramid (BoP) business using their own legitimacy contexts (LCs) as opposed to those of BoP
We address the following research questions: How can the LCs of BoP markets characterized? and What are the implications of this characterization for the supply chain functions of a firm?
Summary
Studies on poverty and poverty alleviation strategies can be found in various disciplines ranging from economics to entrepreneurship, business, and marketing. Other roles that the poor can assume (as part of supply chain engagement), such as supplier, producer, and distributor, have been less explored [28] In light of such inadequacies in the literature, we attempt to develop an integrative model that encapsulates both the BoP 1.0 and BoP 2.0 approaches in characterizing the LCs of BoP markets and their implications for the supply chain functions of a firm. We critically review relevant studies to elaborate our initial framework and address the research questions This involves the characterization and implications of LCs for the supply chain functions of firms. The paper concludes with a discussion of theoretical/practical contributions, limitations, and directions for future research
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