Research Articles

Household Enterprise in Base-of-the-Pyramid Markets: the Influence of Institutions and Family Embeddedness

Published in: Africa Journal of Management
Volume 1, issue 2, 2015 , pages: 115–136
DOI: 10.1080/23322373.2015.1024089
Author(s): Justin W. WebbUniversity of North Carolina at Charlotte, USA, Christopher G. PryorHigh Point University, USA, Franz W. KellermannsUniversity of North Carolina at Charlotte, USA

Abstract

Nearly half of the population in Africa lives on less than $1.25 per day in what scholars refer to as base-of-the-pyramid (BOP) markets. More broadly, BOP markets account for two billion of the world's population living in extreme poverty. Household enterprises, a dominant organizational form in BOP markets, draw upon significant levels of family involvement. In order to cope with poverty, the involvement often includes inputs from elderly to young family members. Yet, we have little understanding of how family embeddedness influences household enterprise outcomes in BOP markets. The article presents a model that explains how the institutional environments with BOP markets influence family embeddedness in the household enterprise, and how family embeddedness influences household enterprises’ poverty-related outcomes (i.e., subsistence and child well-being). It also examines how household enterprises can draw upon income diversification strategies to reduce their vulnerability to poverty. The theory presented herein provides a foundation for scholars to examine family firm-related issues in BOP markets.

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