Gaining mutual benefits through business-non-profit partnerships in base-of-the-pyramid markets: A relational view

Project Description:

An increasing number of multinational corporations (MNCs) engage in base-of-the-pyramid (BOP) markets aiming at developing sustainable business models to achieve both economic performance and poverty reduction. In the recent past it has become more and more evident that the success of such business models in BOP markets depends on establishing effective collaborative networks with various stakeholders. As conditions at the BOP are quite different from those in other markets, firms are particularly dependent on the knowledge, support and trust of non-profit partners with a developmental orientation (e.g. non-governmental organizations, self-help groups or public actors from the field of international cooperation). The mechanisms that contribute to the constitution of successful collaborations with non-profit partners at the BOP, however, are only poorly understood. Likewise it is still not concretely conceptualized what successful collaboration respectively achieving mutual benefits in such partnerships mean. Based on this twofold research gap we first consider the meaning of achieving mutual benefits in BOP partnerships, clarifying that it entails economic value creation for the MNC and social value creation in the form of improved basic capabilities at the BOP. Then we apply the relational view on competitive advantages through cooperation proposed by Dyer and Singh (1998), which provides a solid conceptual framework to identify which determinants are necessary for economic and social value creation in partnerships at the BOP. Based on the analytical exposure of the peculiarities of business-non-profit partnerships at the BOP we are able to present recommendations for improving the potential to generate value at the BOP for the benefit of both partners.

Key References:

Arnold, D. G., & Valentin, A. 2013. Corporate social responsibility at the base of the pyramid. Journal of Business Research, 66(10): 1904–1914.

Dyer, J. H., & Singh, H. 1998. The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage. The Academy of Management Review, 23(4): 660–679.

Hahn, R., & Gold, S. 2014. Resources and governance in “base of the pyramid”-partnerships: Assessing collaborations between businesses and non-business actors. Journal of Business Research, 67(7): 1321–1333.

Rivera-Santos, M., Rufín, C., & Kolk, A. 2012. Bridging the institutional divide: Partnerships in subsistence markets. Journal of Business Research, 65(12): 1721–1727.

Sen, A. 1999. Development as freedom. New York: Oxford University Press.

Publication:

Grimm, Jordis / Gilbert, Dirk Ulrich (forthcoming): Gaining mutual benefits through business-non-profit partnerships in base-of-the-pyramid markets: A relational view. In: Beschorner, Thomas / Sales, Arnaud (eds.): Corporate Social Responsibility. Institutional and Organizational Perspectives. Studies in Economic Ethics and Philosophy (Springer).