Household Enterprise in Base-of-the-Pyramid Markets: the Influence of Institutions and Family Embeddedness

Abstract

Nearly half of the population in Africa lives on less than $1.25 per day in what scholars refer to as base-of-the-pyramid (BOP) markets. More broadly, BOP markets account for two billion of the world's population living in extreme poverty. Household enterprises, a dominant organizational form in BOP markets, draw upon significant levels of family involvement. In order to cope with poverty, the involvement often includes inputs from elderly to young family members. Yet, we have little understanding of how family embeddedness influences household enterprise outcomes in BOP markets. The article presents a model that explains how the institutional environments with BOP markets influence family embeddedness in the household enterprise, and how family embeddedness influences household enterprises' povertyrelated outcomes (i.e., subsistence and child well-being). It also examines how household enterprises can draw upon income diversification strategies to reduce their vulnerability to poverty. The theory presented herein provides a foundation for scholars to examine family firm-related issues in BOP markets.

Experiencing microfinance

“…Conceptually, this study attributes this problem to the neoliberal rationality assumption on which the microfinance model is developed (Webb et al, 2015).…”

The role of institutional and family embeddedness in the failure of Sub-Saharan African migrant family businesses

“…Family businesses are characterized by significant levels of family involvement, often including inputs from family members (Webb, Pryor & Kellermanns, 2015). Researchers have been encouraged to analyse the activities of entrepreneurs within the context of family embeddedness perspective and incorporating family dimensions for more holistic insights (Azmat & Fujimoto, 2016;Kansikas et al, 2012).…”

“…The concept of 'familiness' has been used to show how families in family businesses become a strategic resource for sustained performance (Kansikas et al, 2012). In this study, we develop arguments to suggest how family embeddedness (that is family members versus non-family ties) (Carr & Hmieleski, 2015;Kansikas et al, 2012;Webb, Pryor & Kellermanns, 2015) interacts with culture to influence SSA migrant businesses. In some families, due to binding social ties, the family comes first and the business second, and that can be a challenge (Miller, Wiklund & Yu, 2019).…”

“…The theory thus refers to the interdependence between the socio-economic characteristics of ethnic groups and their embeddedness in social networks, as well as the socio- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 F o r P e e r R e v i e w 9 economic and politico-institutional environment of the host country (Azmat & Fujimoto, 2016). Webb et al (2015) emphasise that embeddedness refers to the notion that economic activities are not necessarily decided upon by rational actors; instead, economic activities are shaped by the context in which these actors are embedded, facilitating or constraining the actors' behaviours and potentially leading them to pursue behaviours that are not wholly rational. Furthermore, Webb et al (2015) acknowledge that embeddedness can lead to potential efficiencies by enabling individuals to make faster decisions and, from a relational standpoint, and leading to trust, greater knowledge sharing, and joint problem-solving.…”

“…First, by integrating institutional theory, we establish a foundation to examine migrant family business environment. Despite the importance of migrants' businesses, we have much less understanding of the unique dynamics inherent in the markets, institutions and the implications (Webb, Pryor & Kellermanns, 2015). Second, as an important factor in the family business research, we explore family embeddedness and 'cultural boundedness' of SSAMBs entrepreneurial practices and outcomes.…”