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Dynamic Capabilities and Base of the Pyramid Business Strategies

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Abstract

Numerous scholars have observed that the relationship between poverty and violent conflict is endogenous. As a result, the area of Peace Through Commerce argues as one of its central tenets that the institution of business may be able to contribute to sustainable peace by creating economic development where poverty is a critical issue. While this argument may be valid, it leaves the question open – what is the business case for engaging in poverty alleviation business strategies? Strategic Management scholars are addressing this question, arguing the general proposition that poverty is not only experienced by the people, but also impacts businesses operating in environments where the phenomenon is pervasive. By addressing poverty, businesses can help themselves. Yet, organizational theory justifying this proposition is still emerging, consisting of only a few studies that generally suggest that these strategies can help firms develop competitive advantage through the lens of the resource-based view. This article extends the theoretical application of the resource-based view, suggesting that conditions of poverty directly suppress the value of organizational resources and capabilities that are or could be contributed by people affected by it. In addition, it characterizes poverty alleviation strategic capabilities as dynamic capabilities. Finally, it describes a framework of “base of the pyramid dynamic capabilities” that could guide both future discourse in the area and deductive-disconfirmatory research examining the efficacy of these strategies.

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Acknowledgments

Pete Tashman thanks the Institute for Corporate Responsibility (ICR) at the George Washington University School of Business for financial support, and Patrick McHugh, Tim Fort, and two anonymous reviewers for their valuable comments. Valentina Marano thanks the financial support of the University of South Carolina Graduate School.

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Authors and Affiliations

  1. Department of Strategic Management and Public Policy, School of Business, George Washington University, Washington, DC, 20052, U.S.A.

    Pete Tashman

  2. Department of International Business, The Moore School of Business, University of South Carolina, Columbia, SC, 29201, U.S.A.

    Valentina Marano

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  1. Pete Tashman
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  2. Valentina Marano
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Correspondence to Pete Tashman.

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Tashman, P., Marano, V. Dynamic Capabilities and Base of the Pyramid Business Strategies. J Bus Ethics 89 (Suppl 4), 495–514 (2009). https://doi.org/10.1007/s10551-010-0403-7

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