Sustainable Entrepreneurial Ventures and the Bottom of the Pyramid: Creating Sustainable Values and Opportunities.
| Autor | Morais-Da-Silva, Rodrigo Luiz |
| Cargo | Research Article |
INTRODUCTION
The debates initiated with the introduction of the concept of sustainable development (SD) after the publication of the Brundtland Report in 1987 started being discussed in different organizational spheres, with a political, economic, and social scope (Ayuso & Navarrete-Baez, 2018; Mio, Panfilo, & Blundo, 2020; Steurer, Langer, Konrad, & Martinuzzi, 2005). These discussions also were disseminated in the business area when considering adopting environmental and social practices in the strategies of the companies (Elkington, 1997; Parrish, 2010), encouraging responsible attitudes toward current and future generations (World Commission on Environment and Development [WCED], 1987).
Those changes affected the dynamism of the market, enabling the expansion of the business context and stimulating new entrepreneurial opportunities in order to contribute to sustainable development (Johnson & Schaltegger, 2020; Munoz & Cohen, 2018; Parrish, 2010; Tilley & Young, 2006). Thus, forms of entrepreneurship emerged that integrate economic, social, or environmental dimensions of sustainability, as well as these three dimensions simultaneously, such as in sustainable entrepreneurship--SE (Teran-Yepez, Marin-Carrillo, Casado-Belmonte, & Capobianco-Uriarte, 2020; Tilley & Young, 2006; Thompson, Kiefer, & York, 2011).
SE stands out for involving the three dimensions of the SD holistically, associating profit-making with the search for environmental and social problem-solving (Cohen, Smith, & Mitchell, 2008; Hall, Daneke, & Lenox, 2010; Schaltegger, Hansen, & Ludeke-Freund, 2016). Thus, sustainable entrepreneurship ventures (SEVs) encompass new business opportunities that can seek solutions to socio-environmental problems. It could become a means of generating sustainable value by combining its economic objectives with social and ecological perspectives (Pacheco, Dean, & Payne, 2010; Patzelt & Shepherd, 2011). This combination occurs intentionally through their business activities and their interrelation with partners and stakeholders (Ciasullo & Troisi, 2013; Orsiolli & Nobre, 2016; Schlange, 2006a), trying to obtain favorable results for the actors involved and the society. For this, these ventures seek partners that can meet the requirements and demands of their business, such as partnerships with BoP communities.
The business interaction with the BoP communities is explained as an assumption of the social pillar involved in the existence of SEVs, aiming at local development and return to the society. Furthermore, discussions of BoP have been gaining more and more space in the literature of the area for seeking alternative solutions to poverty based on business activities (Dembek; Sivasubramaniam; & Chmielewski, 2020; Heuer, Khalid; & Seuring, 2020).
The seminal premise of the BoP perspective is that companies, especially multinationals, could profitably serve low-income markets worldwide while helping alleviate poverty (Prahalad & Hart, 2002; Prahalad, 2005). However, this understanding has suffered several criticisms by the authors: (a) when suggesting that there is a need to pay more attention to value creation from the perspective of both the business and BoP (Dembek et al., 2020), (b) when claiming that BoP approach encourages unsustainable consumption behaviors and environmental degradation (Arnold & Williams, 2012; Arora & Romijn, 2012; Dembek et al., 2020; Jose, 2008; Pitta, Guesalaga, & Marshall, 2008; Schrader, Freimann, & Seuring, 2012; Shevchenko, Pan, & Calic, 2020), and (c) when challenging the effectiveness of BoP approach to tackle poverty alleviation (Jaiswal, 2008; Jenkins, 2005; Karnani, 2007; Landrum, 2007; 2021).
Therefore, it is proposed to address the critical gap and research (a) and bring responses to both (b) and (c). Accordingly, it is argued that partnerships between sustainable entrepreneurship ventures (SEVs) and the bottom of the pyramid (BoP) communities are a necessary approach to create sustainable values in BoP ecosystems that comprise both the business, i.e., the SEVs, and the BoP community. It is also proposed to find answers to the main question: How do partnerships between SEVs and BoP communities create sustainable values and generate benefits and opportunities for the BoP? By answering this question, it is intended to present results, analysis, and propositions that contribute new insights to the problems arising from (a) to (b) and (c).
A qualitative approach was used to investigate three cases of partnerships between SEVs and BoP communities in the Brazilian context. These cases are related to (a) the manufacturing and sale of chocolates in packages made from partnerships with BoP communities in the Amazon region; (b) the commercialization of carbon credit in forest regions inhabited by riverside and indigenous communities; and (c) the manufacturing and sales of recycled paper in partnership with the cooperatives of paper collectors.
Seeking to understand the values developed or improved that meet the three dimensions of sustainability and possible future benefits for BoP from this relationship, SEV actions resulting from these partnerships were investigated. Thus, the main theoretical contributions of this study are related to the potential of the SEV-BoP partnerships, including how SE can approach and establish partnerships with BoP communities (Teran-Yepez et al., 2020). Moreover, it was also sought to fill the gap in the literature regarding studies that emphasize sustainability aspects of business activities in low-income markets (Gold, Hahn, & Seuring, 2013; Kolk & Van Tulder, 2010; Morais-da-Silva, Nobre, & Orsiolli, 2018; Nobre & Morais-da-Silva, 2021).
Regarding the practical contribution, the results of the study could help SEVs realize the potential their businesses can reach through partnerships with BoP communities. The results may involve co-developing products and services and the generation of mutual benefits for social, environmental, and economic dimensions of sustainability. The study also contributes by revealing the potential positive impact on BoP regarding SEVs actions, especially compared to the traditional perspectives that mainly involve multinationals in these ecosystems. Public policymakers could also benefit from the conclusions presented in this study to create strategies to encourage this type of partnership.
THEORETICAL BACKGROUND
Sustainable entrepreneurial ventures (SEVs)
The phenomenon of entrepreneurship, studied under different aspects and perspectives, brings one of its approaches for the process of change in an economy. This change can be explained by entrepreneurial opportunities that make it possible to understand the motivation to develop new products and services (Companys & McMullen, 2007; Shane & Venkataraman, 2000). These opportunities may arise due to the economic imbalance (Schumpeter, 1982), generating information and demands to meet new needs or seek solutions to evident problems (Schaper, 2002).
This economic fluctuation generates market imperfections that can encourage entrepreneurial intentions toward sustainable development (Dean & McMullen, 2007; Kuckertz & Wagner, 2010). Such direction occurs to the extent that it is sought to understand the situation of the natural and social environment, so that the perception of entrepreneurs about the threats to these ecosystems serves as motivation for the recognition of opportunities related to the dimensions of sustainability (Patzelt & Shepherd, 2011).
With the dissemination of the concept of sustainable development in the business environment, especially after the introduction of the three pillars of sustainability, also known as the triple bottom line (TBL)--economic, social, and environmental pillars (Elkington, 1994; 1997), the strategies of the enterprises have been changing. The search for a sustainable direction originated new means of production and consumption, encompassing in its systems concerns related to the use of natural resources and the impacts of its actions in the society (Keskin, Diehl, & Molenaar, 2013; Kuckertz & Wagner, 2010; Schaltegger & Wagner, 2011; Urbaniec, 2018). As a result, new types of entrepreneurships have emerged, encompassing opportunities to cover the economic, social, or environmental dimensions, or the three dimensions simultaneously, as in sustainable entrepreneurship--SE (Tilley & Young, 2006; Thompson et al., 2011).
SE encompasses the economic, social, and environmental principles simultaneously (Choi & Gray, 2008; Patzelt & Shepherd, 2011), without imposing a balance among them, adapting the business strategies toward sustainability (Thompson et al., 2011; Schlange, 2006b; Parrish, 2008). Gerlach (2006), Kuckertz and Wagner (2010), and Schaltegger and Wagner (2011) emphasize SE as an innovation driver by breaking with conventional production methods in order to develop new products or services that considers sustainable aspects in their development.
SE is understood in this paper as a form of entrepreneurship arising from the precepts of the SD, which encompasses the three pillars of sustainability intrinsically and concomitantly. Regardless of the prominence among the dimensions, SE aims to obtain economic gains, together with actions that contribute to the natural environment and the society. SEV, therefore, contemplates this notion by involving new business opportunities that can contribute to the search for solutions to social and environmental problems (Lans, Blok, & Wesselink, 2014; Stubbs, 2017).
The ability to transform society with actions that demonstrate social and environmental concerns indicates that SEVs become a means of generating sustainable value. It occurs as SEVs intrinsically demonstrate the combination of their economic objective with social and ecological perspectives (Pacheco et al., 2010; Patzelt & Shepherd, 2011) both for their business and for their partners and stakeholders.
The creation of...
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