Bottom-of-the-pyramid: organizational barriers to implementation

California Management Review

Volumn 51, Issue 4, 2009, Pages

  Olsen, Mette ^a   Boxenbaum, Eva ^a  

^a Department of International Economics and Management   (Denmark)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70349218109     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41166507     Document Type: Conference Paper

References (52)

1. The World Business Council for Sustainable Development, "From Challenge to Opportunity- The Role of Business in Tomorrow's Society", WBCSD, c/o Earthprint Limited, Switzerland, 2006. Publication available at .
2. Sustainable development is most commonly defined as "the ability of current generations to meet their needs without compromising the ability of future generations to meet theirs." The World Commission on Environment and Development, Our Common Future (New York, NY: Oxford University Press, 1987).
3. The business community's response to corporate sustainability is typically defined as a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental, and social developments. See Dow Jones Sustainability Indexes, .
4. The business of sustainability has been explored from numerous angles ranging from the benefits from "eco-effidency"
5. [Cf. M. E. Porter and C. Van der Linde, "Green and Competitive: Ending the Stalemate", Harvard Business Review. 73/5(1995):120-134] to the benefits of sodal/environmental marketing
6. [F. Reinhardt, "Environmental Product Differentiation: Implications for Corporate Strategy", California Management Review, 40/4(Summer 1998):43-73].
7. Based on the business case debate, Margolis and Walsh took it uponthemselves to try to establish a tangible finandal link. J. Margolis and J. Walsh, People and Profits? The Search for a Link Between a Company's Social and Financial Performance (Mahwah, NJ: Lawrence Erlbaum, 2001).
8. Sustainability as a source of "creative destruction" was made famous by S. Hart and M. Milstein, "Global Sustainability and the Creative Destruction of Industries", Sloan Management Review, 41/1(Fall 1999):23-33. Here they argue "that the emerging challenge of global sustainability is a catalyst for a new round of creative destruction that offers unprecedented opportunities."
9. For similar observations see K. N. Hockerts, "Sustainability Innovations. Ecological and Sodal Entrepreneurship and the Management of Antagonistic Assets", dissertation, Difo-Druck GmbH, Bamberg, 2003.
10. Also, see A. L. Larson, "Sustainable Innovation Through an Entrepreneurship Lens", Business Strategy and the Environment, 9/5(September 2000): 304-317.
11. Cf. C. K. Prahalad and S. L. Hart, "The Fortune at the Bottom of the Pyramid", Strategy + Business, 26(First Quarter 2002):2-14. For more recent publications with a similar theme
12. see S. L. Hart, Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World's Most Difficult Problems (Upper Saddle River, NJ: Wharton School Publishing, 2005);
13. Hart and Milstein, op. cit.
14. Also, see J. D. Sachs, The End of Poverty: Economic Possibilities for Our Time (New York, NY: The Penguin Press, 2005).
15. C. K. Prahalad, The Fortune at The Bottom Of the Pyramid-Eradicating Poverty Through Profits (Upper Saddle River, NJ: Wharton School Publishing, 2004).
16. A. Karnani, "Fortune at the Bottom of the Pyramid: A Mirage. How the Private Sector Can Help Alleviate Poverty", Ross School of Business Working Paper Series, 2006.
17. Sushil Vachani and N. Craig Smith, "Sodally Responsible Distribution: Distribution Strategies for Reaching the Bottom of the Pyramid", California Management Review, 50/2(Winter 2008): 52-84.
18. The notion that BOP will require a radical reinvention of existing practices is not only indicated by Prahalad [(2004), op. cit.], but also resonates in similar pieces describing the characteristics of sustainability-driven market creation. Cf. Hockerts, op. cit.; Hart and Milstein, op. cit;
19. Hart and Milstein, op. cit
20. Novozymes is widely recognized for its performance in sustainability. Some of their achievements include top rankings in the Nordic Sustainability Index, Sustainable Business.com, Storebrand SRI, and the FTSE4Good Index Series. Novozymes also holds the number one spot in their industry in the Dow Jones Sustainability World Indexes (DJSI World) and in the pan-European Dow Jones STOXX Sustainability Indexes (DJSI STOXX). Cf. .
21. Conventional BOP literature and practice has tended to focus on the delivery of end-consumer products to some of the poorest people in the world [cf. Prahalad (2004), op. cit.].
22. The World Business Council for Sustainable Development, op. cit.
23. It is important to distinguish between the line of thinking brought forth here and some of the later branches of this discourse, like "sustainable livelihoods" and "inclusive business." These concepts generally take a broader view of the market opportunities available to large MNCs by looking at the people at the bottom of the pyramid not only as consumers, but also as producers and business partners. This line of thinking was brought forth by Karnani [op. cit.] in his critique of the BOP concept and while there is definitely a strong reasoning behind widening the scope of BOP from solely looking at consumers, this article will focus on the BOP concept in its original form, i.e., as a business strategy aimed at selling profitseeking products to low-income segments. This is due to the empirical case which follows a similar definition.
24. The concept of "sustainable livelihoods" (SL) has its origins in the UN system, particularly the United Nations Conference on Environment and Development (UNCED), and refers to a way of approaching development that incorporates all aspects of human livelihoods and the means whereby people obtain them. The concept has become popular in the World Business Council for Sustainable Development, where it refers to "inclusive business models" as a sustainable business that benefits low-income communities and thus contributes to sustainable livelihoods-not necessarily by selling them consumer products, but also by (for example) directly employing low-income people or targeting development of suppliers and service providers from low-income communities. See .
25. Karnani, op. cit., p. 108.
26. .
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28. .
29. .
30. .
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51. Warner, op. cit.
52. Nilakant and Ramnarayan, op. cit.