Patricia Marquez

The idea that business can play a role in alleviating poverty has caught the imagination of academics and practitioners alike. An emerging consensus points to the critical importance of partnerships in market initiatives addressed to the base of the pyramid (BOP). But despite the calls for cross sector partnerships in BOP initiatives, our collective understanding of how these actually work has not advanced proportionally. This study attempts to address this issue by examining the dynamics at play in nine networks that integrated the BOP with mainstream markets in nine developing nations. The paper is structured in three broad issue-areas: alliance formation (drivers that compelled companies to engage in strategic partnerships); alliance implementation (choice of governance mechanisms, resources for enhancing trust and reciprocity between partners, and conflict-resolution mechanisms); and performance outcome (the extent to which an organization's commitment to an alliance impacted its performance and its societal context).

Management of different types of partnerships plays a decisive role in company performance. Complex business ventures, such as those created to serve low-income populations, usually include both cross- and same-sector partnerships. However, the initial diversity featured in these alliance portfolios diminishes as companies take their ventures up to scale. This article develops theoretical propositions about the evolution and configuration patterns of portfolios that include both cross- and same-sector partnerships. Two longitudinal case studies serve to illustrate the theoretical framework developed for alliance portfolios that include both types of partnerships. Companies that create such portfolios adopt partnership strategies that follow paths also identified in the evolution of portfolios only made up of partnerships with other private firms: i.e., an evolution from adapting to shaping and exploiting strategies.

The idea that business can play a role in alleviating poverty has caught the imagination of academics and practitioners alike. An emerging consensus points to the critical importance of partnerships in market initiatives addressed to the base of the pyramid (BOP). But despite the calls for cross sector partnerships in BOP initiatives, our collective understanding of how these actually work has not advanced proportionally. This study attempts to address this issue by examining the dynamics at play in nine networks that integrated the BOP with mainstream markets in nine developing nations of North, Central, and South America. Our field-based analysis generated a number of tentative propositions structured around three broad issue-areas: alliance formation (drivers that compelled companies to engage in strategic partnerships), alliance implementation (choice of governance mechanisms, resources for enhancing trust and reciprocity between partners, and conflict-resolution mechanisms), and performance outcome (the extent to which an organization’s commitment to an alliance impacted its performance and its societal context).