Gaining mutual benefits through business-non-profit partnership in base-of-the-pyramid markets: A relational view

Abstract

An increasing number of multinational corporations (MNCs) engage in base-of-the-pyramid (BOP) markets aiming at developing sustainable business models to achieve both economic performance and poverty reduction. In the recent past, it has become more and more evident that the success of such business models in BOP markets depends on establishing effective collaborative networks with various stakeholders. As conditions at the BOP are quite different from those in other markets, firms are particularly dependent on the knowledge, support, and trust of non-profit partners with a developmental orientation (e.g., non-governmental organizations, self-help groups, or public actors from the field of international cooperation). The mechanisms that contribute to the constitution of successful collaborations with non-profit partners at the BOP, however, are only poorly understood. Likewise, it is still not concretely conceptualized what successful collaboration respectively achieving mutual benefits in such partnerships mean. Based on this twofold research gap, we first consider the meaning of achieving mutual benefits in BOP partnerships, clarifying that it entails economic value creation for the MNC and social value creation in the form of improved basic capabilities at the BOP. Then we apply the relational view on competitive advantages through cooperation proposed by Dyer and Singh in Acad Manage Rev 23(4):660–679 (1998), which provides a solid conceptual framework to analyze the characteristics of the determinants of economic and social value creation in partnerships at the BOP. Based on the analytical exposure of the peculiarities of business-non-profit partnerships at the BOP, we are able to present recommendations for improving the potential to generate value at the BOP for the benefit of both partners.