Abstract
In 2015, the United Nations Sustainable Development Goals set an ethical imperative: end extreme poverty and hunger by 2030. Microfranchising can contribute to this critical effort by offering nonprofit organizations and businesses an opportunity to rapidly scale entrepreneurship within Base of the Pyramid (BOP) markets. However, while abundant literature exists on traditional franchising, we know little about how to leverage microfranchising in resource-scarce contexts to alleviate poverty. To address this gap, we report a longitudinal case study of a microfranchise network aimed at providing timely access to quality, affordable agricultural input, and services for millions of small-scale farmers in Bangladesh. Anchored in the BOP and microfranchise literature and drawing on innovation theory as an analytical lens, we provide a detailed account of how CARE—a global humanitarian and development non-governmental organization—developed and managed the network. We found that context played a strong role and that adaptability therefore was key to successfully recruiting and engaging BOP entrepreneurs and other business partners in the network. Moreover, as members joined the network with past ties and established practices, managing these path dependencies had important implications for network performance. Network sustainability in terms of financial and social impact was also a key theme that required careful consideration throughout network development. We combine these empirical findings with extant literature to discuss contributions to the theory and practice of microfranchising and innovation networking in the BOP context.
Similar content being viewed by others
References
Ahuja, G., Soda, G., & Zaheer, A. (2012). The genesis and dynamics of organizational networks. Organization Science, 23(2), 434–448.
Albert, S., & Whetten, D. A. (1985). Organizational identity. Research in Organizational Behavior, 7, 263–295.
Bamford, C. E., Dean, T. J., & McDougall, P. P. (2000). An examination of the impact of initial founding conditions and decisions upon the performance of new bank startups. Journal of Business Venturing, 15(3), 253–277.
Bhaskar, R. (1986). Scientific realism and human emancipation. London: Verso.
Brass, D. J., & Burkhardt, M. E. (1993). Potential power and power use: An investigation of structure and behavior. Academy of Management Journal, 36, 441–470.
Becchetti, L., & Huybrechts, B. (2007). The dynamics of fair trade as a mixed-form market. Journal of Business Ethics, 81(4), 733–750.
Calton, J. M., Werhane, P. H., Hartman, L. P., & Bevan, D. (2013). Building partnerships to create social and economic value at the base of the global development pyramid. Journal of Business Ethics, 117, 721–733.
Chliova, M., & Ringov, D. (2017). Scaling impact: Template development and replication at the base of the pyramid. Academy of Management Perspectives, 31(1), 44–62.
Choi, C. J., Kim, S. W., & Kim, J. B. (2010). Globalizing business ethics research and the ethical need to include the bottom-of-the-pyramid countries: Redefining the global triad as business systems and institutions. Journal of Business Ethics, 94(2), 299–307.
Christensen, L. J., Parsons, H., & Fairbourne, J. (2010). Building entrepreneurship in subsistence markets: Microfranchising as an employment incubator. Journal of Business Research, 63, 595–601.
Combs, J. G., & Ketchen, D. J., Jr. (1999). Explaining interfirm cooperation and performance: Toward a reconciliation of predictions from the resource-based view and organizational economics. Strategic Management Journal, 20, 867–888.
Dhanaraj, C., & Parkhe, A. (2006). Orchestrating Innovation Networks. Academy of Management Review, 31(3), 659–669.
Di Domenico, M., Tracey, P., & Haugh, H. (2009). The dialectic of social exchange: Theorizing corporate-social enterprise collaboration. Organization Studies, 30(8), 887–907.
Easterly, W. (2006). The white man’s burden: Why the West’s efforts to aid the rest have done so much ill and so little good. New York: Penguin Press.
Fairbourne, J. (2007). Why microfranchising is needed now: Introduction and book overview. In J. Fairbourne, S. W. Gibson, & W. G. Dyer (Eds.), Microfranchising: Creating wealth at the bottom of the pyramid (pp. 17–42). Northampton, MA: Edward Elgar.
FAO, IFAD & WFP. (2014). The state of food insecurity in the world 2014. Strengthening the enabling environment for food security and nutrition. Rome: FAO.
Ferrary, M., & Granovetter, M. (2009). The role of venture capital firms in Silicon Valley’s complex innovation network. Economy & Society, 38(2), 326–359.
Fowler, A. (2000). NGO futures beyond aid: NGDO values and the fourth position. Third World Quarterly, 21, 589–603.
Gibson, S. W., & Dyer, W. G. (Eds.). (2007). Microfranchising: Creating wealth at the bottom of the pyramid (pp. 17–42). Northampton, MA: Edward Elgar.
Grootveld, P., & Vermeulen, P. A. M. (2014). Building trut at the Base of the Pyramid. In P. Vermeulen & E. Hutte (Eds.), Strategic challenges for the Base of the Pyramid (pp. 58–82). Cheltenham: Edward Elgar Publishing Ltd.
Hahn, R. (2009). The ethical rational of business for the poor: Integrating the concepts bottom of the pyramid, sustainable development, and corporate citizenship. Journal of Business Ethics, 2009(84), 313–324.
Hernandez-Cazares, R., Lawson-Lartego, L., Mathiassen, L., & Quinonez-Romandia, S. (2019). Strategizing for the bottom of the pyramid: An action research into a Mexican agribusiness. Journal of Business & Industrial Marketing. https://doi.org/10.1108/JBIM-01-2019-0042.
Karamchandani, A., Kubzansky, M., & Lalwani, N. (2011). Is the bottom of the pyramid really for you? Harvard Business Review, 89(3), 107–111.
Kistruck, G., & Beamish, P. (2010). The interplay of form, structure, and embeddedness in social intrapraneurship. Entrepreneurship Theory and Practice, 34, 735–761.
Kistruck, G. M., Webb, J. W., Sutter, C. J., & Ireland, R. D. (2011). Microfranchising in base-of-the-pyramid markets: Institutional challenges and adaptations to the franchise model. Entrepreneurship Theory and Practice, 35(3), 503–531.
Kistruck, G. M., Webb, J. W., Sutter, C. J., & Baileyd, A. V. G. (2015). The double-edged sword of legitimacy in base-of-the-pyramid markets. Journal of Business Venturing, 30(3), 436–451.
Kriauciunas, A., & Kale, P. (2006). The impact of socialist imprinting and search on resource change: A study of firms in Lithuania. Strategic Management Journal, 27, 659–679.
Kriauciunas, A., & Shinkle, G. (2008). Organizational imprinting: Informing firm behavior in domestic and international contexts. West Lafayette: Purdue e-Pubs.
Langley, A. (1999). Strategies for theorizing from process data. Academy of Management Review, 24(4), 691–710.
Levén, P., Holmström, J., & Mathiassen, L. (2014). Managing research and innovation networks: Evidence from a government sponsored cross-industry program. Research Policy, 43, 156–168.
London, T., & Hart, L. S. (2010). Next generation business strategies for the base of the pyramid. Upper Saddle River: New Jersey, US.
London, T., & Hart, S. L. (2004). Reinventing strategies for emerging markets: beyond the transnational model. Journal of International Business Studies, 35(5), 350–370.
Magleby, K. (2007). Microfranchise business models. In J. Fairbourne, S. W. Gibson, & W. G. Dyer (Eds.), Microfranchising: Creating wealth at the bottom of the pyramid (pp. 133–148). Northampton, MA: Edward Elgar.
Marquis, C., & Tilcsik, A. (2013). Imprinting: Toward a multilevel theory. The Academy of Management Annals, 7(1), 195–245.
Miles, M. B., & Huberman, A. M. (1994). Qualitative data analysis: A methods sourcebook. Thousand Oaks, California, US: Sage.
Miles, M. B., Huberman, A. M., & Saldana, J. (2013). Qualitative data analysis: A methods sourcebook. Thousand Oaks, CA: Sage.
McKague, K., Zietsma, C., & Oliver, C. (2015). Building the social structure of a market. Organization Studies, 36(8), 1063–1093.
McKague, K., & Siddiquee, M. (2014). Making markets more inclusive lessons from CARE and the future of sustainability in agricultural value chain development. Basingstoke, United Kingdom: Palgrave MacMillan.
Nambisan, S., & Sawhney, M. (2011). Orchestration Processed in Network-centric innovation: Evidence from the field. Academy of Management Perspectives, 25(3), 40–57.
Prahalad, C. K., & Hammond, A. (2002). Serving the world’s poor, profitably. Harvard Business Review, 80, 4–11.
Prahalad, C. K. (2011). Bottom of the pyramid as a source of breakthrough innovations. Production Innovation Management, 29(1), 6–12.
Pratt, M. G., & Foreman, P. O. (2000). Classifying managerial responses to multiple organizational identities. Academy of Management Review, 25(1), 18–42.
Rogers, C. P., Fairbourne, J., & Wolcott, R. C. (2011). The diffusion of innovations through microfranchising. In N. Sireau (Ed.), Microfranchising: How social entrepreneurs are building a new road to development (pp. 35–49). Sheffield, UK: Greenland Publishing.
Rometsch, M., & Sydow, J. (2003): Identities of networks and organizations: The case of franchising. EMNet-Conference on ”Economics and Management of Franchising Networks” Vienna, Austria, June 26–28, 2003 www.univie.ac.at/EMNET.
Saka-Helmhout, A., & Ibbott, C.J. (2014). Network orchestration: Vodafone’s journey to globalization. In: T. Pedersen, M. Venzinu, T. M. Devinney, & U. Tihanyi (Eds.), Orchestration of the global network organization. Cheltenham: Emerald Group Publishing Limited.
Schuster, T., & Holtbrügge, D. (2014). Resource dependency, innovative strategies, and firm and firm performance in BOP markets. Journal of Product Innovation Management, 31(S1), 43–59.
Segel, A. I. (2007). Patrimonio Hoy: A Groundbreaking corporate program to alleviate mexico's housing crisis. In V. K. Rangan, J. A. Quelch, G. Herrero, & B. Barton (Eds.), Business solutions for the global poor: Creating social and economic value (pp. 155–166). New York: Wiley.
Sen, A. (1999). Development as freedom. New York, US: Knopf.
Simanis, E., & Hart, S. (2008). The base of the pyramid protocol: Toward next generation BOP strategy. Ithaca: Center for Sustainable Global Enterprise.
Sireau, N. (2011). Microfranchising: How social entrepreneurs are building a new road to development. Sheffield, UK: Greenland Publishing.
Sutter, J. C., Kistruck, G. M., & Morris, S. (2014). Adaptation to knowledge templates in base-of-the pyramid market: The role of social interaction. Strategic Entrepreneurship Journal., 8, 3–32.
Van de Ven, A. (2007). Engaged scholarship: A guide for organizational and social research: A guide for organizational and social research. Oxford: Oxford University Press.
Venkataraman, H., Vermeulen, P., Raaijmakers, A., & Mair, J. (2016). Market meets community: Institutional logics as strategic resources for development work. Organization Studies, 37(5), 709–733.
Wanasika, I. (2013). Strategizing for BOP Markets. American Journal of Management., 13(3), 46–56.
Wasserman, S., & Galaskiewicz, J. (Eds.). (1994). Advances in social network analysis. London: Sage.
Webb, J. W., Kistruck, G. M., Ireland, R. D., & Ketchen, D. J, Jr. (2010). The entrepreneurship process in base of the pyramid markets: The case of multinational enterprise/nongovernment organization alliances. Entrepreneurship Theory and Practice, 34(3), 555–581.
Weick, K. E. (1976). Educational organizations as loosely coupled systems. Administrative Science Quarterly, 21, 1–19.
Werhane, P. H. (2010). Principles and practices for corporate responsibility. Business Ethics Quarterly, 20(4), 695–701.
World Bank. (2014). The World Bank annual report 2014: Main report (English). Washington, DC: World Bank Group. http://documents.worldbank.org/curated/en/111781468170952958/Main-report.
Yin, R. K. (2003). Case study research: Design and methods. CA, Sage: Thousand Oaks.
Funding
No funding was received for this research.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflicts of interest.
Ethical approval
The article does not contain any studies with animals performed by any of the authors. The research was approved by Georgia State University’s IRB.
Informed consent
Informed consent was obtained from all individual participants included in the study.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Lawson-Lartego, L., Mathiassen, L. Microfranchising to Alleviate Poverty: An Innovation Network Perspective. J Bus Ethics 171, 545–563 (2021). https://doi.org/10.1007/s10551-020-04459-8
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-020-04459-8