Unintended Consequences of Business with 4 Billion: Lessons Learned from First Generation BOP Strategies

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Author(s): Nancy E. Landrum (University of Arkansas at Little Rock, USA)
Copyright: 2012
Pages: 13
Source title: Ethical Models and Applications of Globalization: Cultural, Socio-Political and Economic Perspectives
Source Author(s)/Editor(s): Charles Wankel (St. John's University, USA)and Shaun Malleck (University of California, Irvine, USA)
DOI: 10.4018/978-1-61350-332-4.ch003

Keywords: Business Science Reference / Global Business / Information Ethics / Security & Forensics

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Abstract

In the past, there has historically been a pursuit of profit as the motive for multinational corporation (MNC) international strategies in emerging economies. We have long known of some of the unintended and controversial consequences of MNC international strategies on emerging economies. By contrast, base of the pyramid strategies (BOP) are aimed at the poorest residents in emerging economies and seek to improve social, environmental, and economic conditions for all, ideally addressing many of the problems encountered with more traditional MNC international strategies. Anecdotal examples continue to accumulate of businesses with success in the base of the pyramid, fueled by innovation in new products, services, and/or business models. However, academic research is emerging that does not support this image of BOP success. This chapter will discuss unintended consequences or outcomes of BOP strategies which may not always result in environmental sustainability, improved lives in the BOP, and improved economic conditions. This presentation focuses specifically on the unintended consequences of base of the pyramid strategies within emerging economies. Even with the recent interest in BOP strategies, closer scrutiny of current examples of BOP successes still reveal some of the same negative unintended consequences as MNC international strategies; that is, there is still an emphasis on profit ahead of responsibility and sustainability. Literature and research reviewed in this chapter reveals that BOP strategies have resulted in the promotion of stereotypes, an anticipated increase in e-waste under already hazardous recycling conditions in India and Africa, a loss of social capital, and worsened economic conditions.

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