Resolving the base of the pyramid inclusion paradox through supplier development

Carolin Brix‐Asala, Stefan Seuring, Philipp C. Sauer, Axel Zehendner and Lara Schilling

Business Strategy and the Environment, 2021, vol. 30, issue 7, 3208-3227

Abstract: Resulting from divergent business environments between actors, the integration of the base of the pyramid (BoP) into formal supply chain (SC) structures is often hampered by institutional voids, which can result in the emergence of paradoxical situations. This paper analyzes the potential of supplier development (SD) for addressing the BoP inclusion paradox. The study develops a framework based on the assumption that SD enables the development of capabilities and supplier performance, which is especially relevant when operating in BoP contexts. Seventy‐two semi‐structured interviews stemming from two case studies of (a) a local dairy and (b) an international certified pineapple SCs with BoP involvement provide empirical insights into the theoretical framework. Paradox resolution strategies (temporal separation, spatial separation, and synthesis) are related to (direct and indirect) SD practices. The proposed framework and results show that indirect SD can be used as temporal and spatial separation, but not as synthesis strategy. Contrastingly, direct SD can be used as temporal separation and synthesis. The BoP context needs direct SD to address two sustainability goals simultaneously: the social dimension of BoP inclusion and the economic dimension of formal and efficient SCs. This research extends the discussion on paradoxes in sustainability management to SCs, especially to BoP SCs. It is relevant to show that BoP inclusion is neither a sole win‐win nor trade‐off scenario. Resulting paradoxical situations can be addressed by SD, thereby moving to sustainable supply chain management (SSCM).

Date: 2021
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