Inclusive Business at the Base of the Pyramid: The Role of Embeddedness for Enabling Social Innovations

Addisu A. Lashitew, Lydia Bals, Rob J.M. Van Tulder

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Abstract

Inclusive businesses that combine profit making with social impact are claimed to hold the potential for poverty alleviation while also creating new entrepreneurial and innovation opportunities. Current research, however, offers little insight on the processes through which for-profit business organizations introduce social innovations that can profitably create social impact. To understand how social innovations emerge and become sustained in business organizations, we studied a telecom firm in Kenya that successfully extended financial services across the country through a number of mobile banking innovations. Our qualitative analysis revealed the strong role of being embedded in local networks and structures for initiating and implementing social innovations. Strong embeddedness enhanced the pragmatic and ethical imperative for internalizing social issues, but also provided access to diverse resources for implementing and legitimizing social innovations. However, hybridization processes that emphasized social issues introduced organizational tensions by increasing goal diversity and requiring adapting organizational processes and structures. The case shows how developing a mission-driven identity enabled the sustenance of social innovations by providing a meta-narrative that bridged goal diversities and rationalized organizational change.
Original languageEnglish
JournalJournal of Business Ethics
Volume162
Issue number2
Pages (from-to)421–448
Number of pages28
ISSN0167-4544
DOIs
Publication statusPublished - Mar 2020

Bibliographical note

Published online: 17. August 2018

Keywords

  • Inclusive business
  • Hybridity
  • Sustainable business
  • Social innovation
  • Social mission
  • Base of the pyramid (BOP)

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