Company-NGO interaction for poverty reduction: Co-creation of inclusive business

Research output: ThesisDoctoral ThesisCollection of Articles

Researchers

  • Tytti Nahi

Research units

Abstract

The world is wealthier than ever, but every ninth person is still undernourished. Every eighth person lacks access to a toilet. Clearly, new approaches and interaction between business, civil society and public actors are needed to fight poverty and inequality.  Inclusive business is one of the novel approaches that has aroused great hopes among development actors and businesses alike. It proposes that co-creation among companies, poor communities, NGOs and other partners can yield new business models that generate profits and reduce poverty at the same time. Co-creation can be generally defined as interaction where partners integrate their knowledge to generate novel solutions. Yet such co-creation of inclusive business is little studied. In this thesis, I ask what inclusive business co-creation entails in low-income contexts and what hurdles need to be overcome for co-creation to marry profit making with poverty reduction. I build on a systematic, interdisciplinary literature review, as well as two and half years of action research on seven company-NGO partnerships that sought to forge inclusive business in India or Sri Lanka. Theoretically, Iengage with the sensemaking and practice perspectives.  I argue that the inclusive business approach places excessive expectations on co-creation as a means of marrying profit-making with poverty reduction. I find that co-creation entails continuous social processes where partners search for coherent understandings, draw on and adapt their potential resources and related practices, and utilize resources enacted by others. I show how such co-creation is hindered by unequal power relations, sectoral and cultural differences, paradoxical role expectations, as well as limited expertise and trust.  Theoretically, my strongest contribution arises from the realization that co-creation hinges on collective sensemaking: I suggest that organizational, sectoral and cultural diversity among partners may influence the process, pace, temporal orientation, possibility of reaching shared understandings and the facilitating practices of collective sensemaking. In contribution to international business research, the study deepens recent proposals that on emerging markets, "local integration" is a superior alternative to "local responsiveness".  For practitioners, this research shows that NGOs can often bring valuable expertise, community contacts, networks and legitimacy to business projects in low-income contexts, supporting both commercial and societal objectives. Yet it takes hard work to convey these benefits and other types of interaction will remain appropriate for many NGOs and companies. This research does not lend support to big increases in public funding of inclusive business activities. Where funding is extended, companies and NGOs are equally relevant applicants.

Details

Translated title of the contributionYritysten ja kansalaisjärjestöjen vuorovaikutus köyhyyden vähentämiseksi: Osallistavan liiketoiminnan yhteiskehittäminen
Original languageEnglish
QualificationDoctor's degree
Awarding Institution
Supervisors/Advisors
Publisher
  • Aalto University
Print ISBNs978-952-60-8060-4
Electronic ISBNs978-952-60-8061-1
Publication statusPublished - 2018
MoE publication typeG5 Doctoral dissertation (article)

    Research areas

  • cross-sector partnerships, co-creation, Inclusive business, sustainable development

ID: 32206239