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Partnerships for base of the pyramid technology from a SME perspective

Menge, J.A. (2013) Partnerships for base of the pyramid technology from a SME perspective.

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Abstract:This research investigates the characteristics of cooperation between small and medium-sized enterprises (SMEs) and non-governmental organizations (NGOs) within the framework of the Base of the Pyramid (BoP) concept. While the BoP is an increasingly important field in international business, some BoP mechanisms remain under-researched. However, limited attention has been paid to Western SMEs to SME-NGO alliances and their impact on technology for BoP markets. Additionally, only little is known about the influence of SMENGO tandems on environmental obstacles in BoP markets. Thus, this study seeks to fill in these gaps by answering the main research question: -NGO alliances influence technology and exogenous To examine the relations between aforementioned variables, this study employs a qualitative single case study. Data collection was conducted through 12 semi-structured interviews with informants of both SME and NGO backgrounds and by means of several documents and memos. Subsequently, the investigation tests a hypothesized research model which was developed in accordance with existing BoP literature. As a predominant result, there is no main effect of SME-NGO duos on the design of technology. Co-creation between both actors in order to create Bop products does not regularly take place. Apparently, SMEs are neither interested in co-developing technology with NGOs nor capable of it. Nevertheless, the study revealed that cooperation mitigates some exogenous factors such as corruption or cultural and educational differences. In contrast, governmental obstacles are too dominant to be alleviated by SME-NGO pairs. Despite the abovementioned advantages in relation to environmental conditions, there is an indication that cooperation rarely improves the financial self-sustainability of market initiatives. This study substantiates that Western BoP projects reach profitability only if NGOs finance the initiative. SMEs cover their costs and create revenues for themselves only through subsidies from NGOs or governments. This aspect is in contrast to the BoP concept that market initiatives have to create revenues to sustain themselves. Beyond those results directly related to the main research question, further features of SMENGO alliances are revealed. Firstly, SMEs preferably cooperate with NGOs of similar size. Secondly, SME-NGO partnerships are characterized by a funding-buying relationship. Management summary III Thirdly, BoP projects enhance the local livelihood of technology applicants for the period that their funds persist. Fourthly, the research sheds light on actors who possess a merged role between enterprises and NGOs. They pursue both financial and philanthropic objectives and are frequently companions of SME-NGO alliances. To this group belong social entrepreneurs as well as social consultants.Finally, all results are discussed in relation to the existing literature. The discussion rejects some BoP concepts due to being inapplicable to an SME setting, while some are substantiated. Therefore, this study contributes to the academic discourse from an SME
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/63419
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