Creating Shared Value in Bottom-of-Pyramid Supply Chains

Abstract

Purpose: This thesis aims to discover how the bottom-of-pyramid environment affects the creation of shared value in the supply chain. There seems to be a gap in the research about how enterprises can successfully design and operate their supply chains at the bottom of the pyramid, while also attempting to meet sustainability goals. The purpose is to show the challenges that supply chain managers face in this environment and the practical solutions they can apply to create shared value, in alignment with the existing theories and qualitative empirical data. Design/Methodology: This thesis first identifies the kind of organisations that are among the multiple stakeholders in the supply chains at the bottom of the global income pyramid. Second, it assesses theoretical approaches to the bottom-of-pyramid supply chain models as a primary framework and introduces the philosophy of creating shared value as a secondary framework to contrast with the primary one. Then, applying a qualitative research method, it draws on the findings from semi-structured interviews of 13 supply chain management experts from different markets, industries, and organisation types, who were asked to share their profound practical thoughts about the creation of shared value in bottom-of-pyramid supply chains. Findings: The key findings show that the bottom-of-pyramid environment affects supply chains and interrelates with shared value creation. The challenges that these organisations tackle relate primarily to the social bottom line, from which certain economic problems arise, while environmental issues seem to represent a lower priority. These supply chains were found to be complex networks, with the active participation of a broad variety of stakeholders with or without a profit focus, which could be marketoriented, mission-driven, or government-related. The results show that supply chain experts at the bottom of the pyramid must focus on managing a culturally and organisationally very diverse environment, where the adequate segmentation and technological innovation are key tools to achieve progress and market scale. Originality/Contributions: The originality of the research comes from the pioneer approach to combine a bottom-of-pyramid supply chain management framework with the shared value creation framework and to phrase recommendations accordingly, irrespective of geographic location, industry, or organisation type. The results provide theoretical contributions to the field by revisiting existing models and to the managerial practice by phrasing recommendations.