Building boundary capabilities at the base of the pyramid

Over the last 15 years, articles about the base of the pyramid (BOP) have begun to appear in scholarly business journals. Although attention was driven initially by claims that corporations could earn a fortune selling to these consumers, it became clear that this is difficult. The paper aims to discuss these issues.

To move beyond this difficulty, the authors emphasize the iterative boundary capabilities built by local, for profit enterprises as the key to creating markets at the BOP.

The authors argue that the evolution of the business models to permit firms to earn profits and have positive social impact requires building iterative boundary capabilities and support this claim by reviewing two cases of community based non-profits.

Future research should demonstrate that the process the authors observed in these two cases applies in other contexts. Scaling social impact will require sharing knowledge about iterative boundary capabilities and developing best practices that can help effective allocation of patient capital to share best practice and guide public policy.

Social entrepreneurs can conceptualize their own enterprises in terms of iterative boundary capabilities. Social investors can use the framework to assess and advise enterprises in which they may or have invested. Policy makers can enact laws and other legal actions to facilitate the formation of iterative boundary capabilities.

The authors see the framework as part of a broader move toward business models that pursue both positive social impact and profits.

The authors link a structuring approach with an institutional perspective to enhance business models that pursue profit and create positive social impact in BOP communities.