Inclusive Businesses in Developing Economies: Converging People, Profit, and Corporate Citizenship

440 Pages·2022·7.94 MB·English

by  Rajagopal, Ramesh Behl

PALGRAVE STUDIES IN DEMOCRACY, INNOVATION,
AND ENTREPRENEURSHIP FOR GROWTH
SERIES EDITOR: ELIAS G. CARAYANNIS
Inclusive Businesses
in Developing
Economies
Converging People, Profit,
and Corporate Citizenship
Edited by
Rajagopal · Ramesh Behl
Palgrave Studies in Democracy, Innovation, and
Entrepreneurship for Growth
Series Editor
Elias G. Carayannis, The George Washington University, Washington,
DC, USA
The central theme of this series is to explore why some areas grow and others
stagnate, and to measure the effects and implications in a trans-disciplinary
context that takes both historical evolution and geographical location into
account. In other words, when, how and why does the nature and dynamics
of a political regime inform and shape the drivers of growth and especially
innovation and entrepreneurship? In this socio-economic and socio-technical
context, how could we best achieve growth, financially and environmentally?
This series aims to address such issues as:
• How does technological advance occur, and what are the strategic
processes and institutions involved?
• How are new businesses created? To what extent is intellectual property
protected?
• Which cultural characteristics serve to promote or impede innovation?
In what ways is wealth distributed or concentrated?
These are among the key questions framing policy and strategic decision-
making at firm, industry, national, and regional levels.
A primary feature of the series is to consider the dynamics of innovation
and entrepreneurship in the context of globalization, with particular respect
to emerging markets, such as China, India, Russia, and Latin America.
(For example, what are the implications of China’s rapid transition from
providing low-cost manufacturing and services to becoming an innovation
powerhouse? How do the perspectives of history and geography explain this
phenomenon?)
Contributions from researchers in a wide variety of fields will connect
and relate the relationships and inter-dependencies among (1) Innovation,
(2) Political Regime, and (3) Economic and Social Development. We will
consider whether innovation is demonstrated differently across sectors (e.g.,
health, education, technology) and disciplines (e.g., social sciences, physical
sciences), with an emphasis on discovering emerging patterns, factors, trig-
gers, catalysts, and accelerators to innovation, and their impact on future
research, practice, and policy.
This series will delve into what are the sustainable and sufficient growth
mechanisms for the foreseeable future for developed, knowledge-based
economies and societies (such as the EU and the US) in the context of
multiple, concurrent and inter-connected “tipping-point” effects with short
(MENA) as well as long (China, India) term effects from a geo-strategic,
geo-economic, geo-political and geo-technological set of perspectives.
This conceptualization lies at the heart of the series, and offers to explore
the correlation between democracy, innovation and growth.
·
Rajagopal Ramesh Behl
Editors
Inclusive Businesses
in Developing
Economies
Converging People, Profit, and Corporate
Citizenship
Editors
Rajagopal Ramesh Behl
Tecnologico de Monterrey International Management Institute
EGADE Business School Bhubaneswar, Odisha, India
Mexico, Mexico
ISSN 2662-3641 ISSN 2662-365X (electronic)
Palgrave Studies in Democracy, Innovation, and Entrepreneurship for Growth
ISBN 978-3-031-12216-3 ISBN 978-3-031-12217-0 (eBook)
https://doi.org/10.1007/978-3-031-12217-0
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Preface
There has been a chain effect on income inequality intertwining the
economic resources and businesses operations between countries. This
situation is caused due to the divergence of profitable businesses in
geo-demographic segments, benefiting a selected stratum of the society.
The business divergence with a combination of technological change,
global disintegration, domestic regulation, and immigration laws has been
driving major changes in business and economy across the countries,
resulting in pressure of widespread economic insecurity. Policymakers,
industrialists, and researchers have overlooked this issue significantly since
the mid-twentieth century, as the economic focus was profusely toward
the industrialization. The economies of most of the developing nations
have reached today the era of Industry 4.0. However, integration of
people, profit-with-purpose, and corporate citizenship still appear to be
a far cry.1 The fragmented links between the society and business today
call for an inclusive growth agenda in business by converging human
capital and corporate social responsibilities. The right perspective of an
inclusive growth in business can be visualized through a business design
cube comprising design-to-market, design-to-society, and design-to-value
philosophy. The business planning in multinational companies, such as
1 Lasi, H., Fettke, P., Kemper, H.G., Feld, T., & Hoffmann, M. (2014). Industry 4.0.
Business & Information Systems Engineering, 6(4), 239–242.
v
vi PREFACE
Unilever, Pfizer, and Apple, are focusing on human attributes in busi-
ness by converging diverse personalities, languages, cultures, ethnicities,
and physical abilities, and paving path to achieve sustainability goals.
Such trend in businesses has evolved over temporal and spatial dimen-
sions to reinforce the desired concern for developing corporate citizenship
behavior today.2 Despite global concerns, diplomacy, and economic coop-
eration, a large population in the developing countries is staying outside
the formal economy. Various schools of thought during the classical, neo-
classical, and modern eras have contributed theories in support of learning
organizations. Blending theories of social learning and of decision sciences
is a relatively new knowledge pool as compared to the schools of thought
of twentieth century.3
Many forces drive local enterprises to globalize by expanding their
brand reach and participating in foreign markets through various modes
of entry. In developed countries, domestic markets have turned mature
and are seeking international markets. Regional enterprises in big
emerging markets are mainly the domain of large, well-resourced national
enterprises. These enterprises are now open to global trade and are
supported by multinational companies and business diplomacy of the
countries with trade power. Global economy faces significant challenges as
it continues to integrate high levels of public debt in Europe and North
America that are causing the fear of a negative impact on GDP growth.
Emerging markets with young and growing populations are increasingly
becoming the focus of rising consumption and production and the major
providers of capital, talent, and innovation.
Traditional corporate social programs are facing incremental chal-
lenges toward driving the transformative changes by integrating people,
profit, and corporate social responsibilities. Broadly, corporations need to
redefine the regional ecosystems, in which they participate and search
for systemic, multisector opportunities to mobilize local partners and
scale-up the business outreach to the society and economy. Inclusive busi-
nesses focus on aligning strategy development and business operations
with stakeholders and co-creating people-led business models to deliver
2 Likoko, E. & Kini, J. (2017). Inclusive business-a business approach to development.
Current Opinion in Environmental Sustainability, 24(1), 84–88.
3 Liu, W., Kwong, C. Y., Kim, Y. A., & Liu, H. (2021). The more the better vs. less
is more: Strategic alliances, bricolage and social performance in social enterprises. Journal
of Business Research, 137, 128–142.
PREFACE vii
social values. The concept of inclusive business helps in driving collective
performance and socio-ethical values. Enterprises adapting to inclusive
business practices invoke social value or virtue in managing people-led
business strategies.4 Such business models evolve with the people at the
grassroots to incite the economic and moral aspects of business perfor-
mance. The paucity of public development finance in many developing
countries, investment in public infrastructure, and social development
have been scaled down the prospects of inclusive businesses. However,
with the increasing response to free market reforms, active contributions
of self-help groups, and community efforts in new social and busi-
ness enterprises, the private sector has been motivated to coevolve with
the enterprises of semi-urban and rural areas by establishing strategic
alliances. The foundations laid by sustainable business initiatives, invest-
ment promotion in social development, and market-based entrepreneurial
push have served as powerful enablers of inclusive businesses. Conse-
quently, inclusivity in business has emerged as a design-to-society business
model to enhance the compatibility between small, medium, and large
enterprises.5 The underlying philosophy of inclusive business has been
actively supported by governments, NGOs, and leading agri-food and
customer-centric companies such as Nestlé (enabling technology and
training to the coffee growers), Unilever (empowering women in devel-
oping countries), Google (information outreach to remote areas), Levy
Strauss & Co. (diverse and inclusive workplace), and Starbucks (coffee
and farmers equity). Such business models have been benefitting the
stakeholders and people by integrating them into business value chains
(in the farm and non-farm sector) in developing economies.
The concepts of bottom-of-the-pyramid and inclusive business are
intertwined. The inclusive business has emerged as a new enterprise-
based approach to conduct business with people and alleviate poverty by
empowering them to access global brands6 . Over time, this management
philosophy has integrated the concepts of inclusive business, subsistence
4 German, L. A., Bonanno, A. M., Foster, L. C., & Cotula, L. (2020). “Inclusive
business” in agriculture: Evidence from the evolution of agricultural value chains. World
Development, 134, (in Press). https://doi.org/10.1016/j.worlddev.2020.105018
5 Chamberlain, W. & Anseeuw, W. (2019). Inclusiveness revisited: Assessing inclusive
businesses in South African agriculture. Development Southern Africa, 36(5), 600–615.
6 Prahalad, C. K. & Hammond, A. (2002). Serving the World’s Poor, Profitably.
Harvard Business Review, 80(9), 48–57.
viii PREFACE
marketplaces, frugal innovation, and impact investment. Some compa-
nies such as Nestlé, Kellogg’s, and AMUL (India) have incorporated the
above concepts into their business model to coevolve with people and
the corporate distinctive identity. However, relevant epistemologies and
business research have not advanced at the same pace with the inclu-
sive business revolution. Consequently, knowledge about parameters for
successfully integrating business and working on inclusive business models
remains ambiguous7 . This edited volume attempts at the grassroots
to critically examine the inclusiveness embedded in the businesses and
unveil the strategies for marketing at the bottom-of-the-pyramid segment.
Attributes of the inclusive businesses in building effective business models
are listed below:
• Linking business with societal modes to reduce whiplashes with the
conventional innovation-marketing matrix,
• Developing inclusive business into consumer-centric perspectives to
strengthen social foundation,
• Developing firms as the first movers and reaping competitive advan-
tage by developing collective business strategies and building “value-
defensive” models,
• Understanding cognitive ergonomics of consumers to develop value-
led business performance, and
• Developing collective engagement in business settings.
Though inclusive business is a collective concept, it is often viewed as
a social growth of firms. The inclusive value proposition is described as
the synergy between society and business in this book, which asserts that
people-led business models reap strategic benefits. Building and main-
taining synergy in inclusive businesses is an ongoing process through
cooperative and collaborative activities and programs to create and
enhance mutual economic value8 . This perspective is emphasized in this
book in the context of for-profit and not-for-profit organizations. The
7 Hart, S., Sharma, S., & Halme, M. (2016). Poverty, business strategy, and sustainable
development. Organization & Environment, 29(4), 401–415.
8 Luu, N., Ngo, L. V., & Cadeaux, J. (2016). Value synergy and value asymmetry in
relationship marketing programs. Industrial Marketing Management, 68, 165–176.
PREFACE ix
book argues that companies need to consider a broader social perspec-
tive to enhance the effectiveness of business models by implementing
applied marketing decisions and putting the consumer first in the busi-
ness management process. This book connects the social perspectives
of companies in emerging markets with business performance-matrix
across geo-demographic segments. Inclusivity and diversity in business
explore the relationship between business models, value chains, and
business ecosystems affecting the business growth and performance. It
explores new information-intensive business system in the production and
services segments. The thematic discussion also focuses on the connec-
tion between technology and governance, often enabling the latter in
context to the former, or the latter offering prospects for the innovative
entrepreneurs and investors to develop new business models9 .
The people’s involvement of in business has significantly encour-
aged crowd participation in design thinking, developing print and digital
commercials for products and services, and value co-creation programs.
Engaging people in production and business operations has updated
the real-time knowledge on market and consumption needs among
stakeholders and consumers10 . Most organizations prefer to stay in busi-
ness as learning organizations, which helps them grow competitively
and consistently in the marketplace. Design thinking in business has
been conceived as an essential tool for simplifying the business oper-
ation by interlinking organization, society, and stakeholders, and more
comprehensively humanizing the business. The extended principles of
design thinking in businesses converge with the market attributes (market
players, ethics, and business growth), social responsiveness (marketing
with purpose), and value propositions of customers. The philosophy of
inclusive business advocates the people-led win–win business model to
lead the market. Customer-centric11 companies, therefore, tend to build
simpler products conceived through the collective intelligence involving
people and engaging customers and stakeholders in production and busi-
ness operations. Inclusive businesses operate with diverse workforce and
9 Manouchehrabadi, B., Letizia, P., & Hendrikse, G. (2021). Governance of collective
entrepreneurship. Journal of Economic Behavior & Organization, 185, 370–389.
10 Kietzmann, J. H. (2017). Crowdsourcing: A revised definition and an introduction
to new research. Business Horizons, 60(2), 151–153.
11 Desai, H. P. (2014). Business Models for Inclusiveness. Procedia—Social and
Behavioral Sciences, 157, 353–362.