Managing and Leveraging Poverty: Implications for Teaching International Business

Abstract

Over half of the world's population lives on less than $2 a day, and yet international business education to date has continued to ignore the not so well-off customers. We propose a holistic pedagogical approach to studying this market by considering the historical background of the growth of inequality and poverty in different regions of the world, as well as the criteria for segmenting various levels of poverty. A two-pronged approach is then suggested to addressing poverty issues: first, showing how traditional international business principles can be adapted to address the needs of the impoverished market segment using a macro (top-down) approach, and second, how this untapped market can be harnessed for profits while simultaneously uplifting them out of poverty using principles of social entrepreneurship as a micro (bottom-up) approach. Exemplar case studies are used to illustrate these strategies, as are catalytic factors such as investments in technology, education, and capital, which help alleviate poverty in both cases. Finally, a debate about which of the strategies is more effective is outlined with respect to the salient issues.