Bottoms up: Delivering sustainable value in the base of the pyramid

Abstract

Despite a wealth of expertise involving leading institutions over at least 15 years, a base of the pyramid (BoP) model resulting in scalability has yet to emerge. We posit that institutional gaps between BoP goals of developing human and social capital on one hand and a short‐term profit focus of business on the other contribute to the lack of scalability. We address this gap by proposing a social intermediary to link the BoP with firms involved in the BoP. The social intermediary will coordinate and interpret the informal market requirements of the BoP to the firm in a “bottoms up” approach. We illustrate the bottoms up approach through a case involving Deutsche Gesellschaft fur Internationale Zusammenarbeit, a German government agency, with the garment manufacturing industry in Pakistan. The case study involves implementation of labor standards and productivity in the Pakistan garment industry, resulting in improved productivity and labor standards enabling garment manufacturers to access global supply chains.

Determinant Factors of Young People in Preparing for Entrepreneurship: Lesson from Indonesia

“…Young entrepreneurs also need to have an understanding of the law to start a business. With the regulation of business law, it is expected to reduce the potential risks that can occur, especially for small-and medium-sized entrepreneurs who generally lack knowledge and access to legal information (Heuer & Seuring, 2020).…”

Leveraging Digital Approaches for Transparency in Sustainable Supply Chains: A Conceptual Paper

“…However, the situation has further been complicated by the structural and dynamic complexity nature of GSCs [2] resulting from trends such as outsourcing (also known as international or global sourcing) [3] and diverse and dispersed consumers-base [4][5][6]. These developments are particularly driven by globalization, consumerism, and advancements in information and communication technology era [3].…”

Weaving a strategy for a base‐of‐the‐pyramid market: The case of Grundfos LIFELINK

“…Initially, Grundfos tried to solve the problem of providing safe drinking water to local communities by building on familiar technologies, working with established business partners, and collaborating with an NGO to help identify suitable villages and negotiate terms with local authorities. Using civic sector organizations as intermediaries is common in BoP environments, as it can help bridge institutional voids (Gold, Chowdhury, Huq, & Heinemann, 2019; Heuer et al, 2020; Schuster & Holtbrügge, 2014), but Grundfos's experience underscores that companies should think carefully about which civic sector organizations they collaborate with.…”

“…MNCs are posited as being essential for achieving the SDGs before 2030 as they are responsible for about one‐third of the total output and the majority of world trade (Organisation for Economic Co‐operation and Development, 2008), although this privatization of poverty alleviation and development to MNCs is not without detractors (Arora & Romijn, 2011; Karnani, 2007, 2011). Therefore, MNCs are under pressure to find ways to unlock opportunities for joint wealth creation in the poorest countries (Muusten, Rhyne, & Zheng, 2013), for instance, by using social intermediaries to help address institutional gaps between formal and informal markets and create mutual value by tackling the unique cultural, economic, and social issues in local communities (Heuer, Khalid, & Seuring, 2020).…”

“…Therefore, MNCs are under pressure to find ways to unlock opportunities for joint wealth creation in the poorest countries (Muusten, Rhyne, & Zheng, 2013), for instance, by using social intermediaries to help address institutional gaps between formal and informal markets and create mutual value by tackling the unique cultural, economic, and social issues in local communities (Heuer, Khalid, & Seuring, 2020).…”