Why Don’t BOP Ventures Solve the Environmental Problems They Initially Set Out to Address?

Abstract

As Western firms have tried to create new businesses in low-income communities that solve social and environmental problems, they have learned that they need to be socially embedded in order to develop the business models successfully. Thus, some firms have deployed field teams to their target BOP (bottom of the pyramid) markets; tasked with creating the new businesses in close cooperation with local stakeholders and consumers. In this article, I examine how two firms launched BOP ventures in a socially embedded manner and describe how this iterative approach engenders extensive shared decision making, unclear organizational boundaries, and conflicting goals. These factors obliged the field teams to construct new business opportunities that shifted the initial social and environmental goals of the initiatives: emphasizing locally valued social benefits in the businesses’ value propositions, de-emphasizing the original environmental impact objectives, and generating unforeseen positive environmental effects related to their evolved cost structures.

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