Sourcing from base of the pyramid (BoP) markets: a multiple case study

Studies on supply chain and sustainability suggest that sourcing from Base of the Pyramid (BoP) markets and involving the poor in the value chain can improve sustainability performance and contribute to alleviating global poverty. Nevertheless, BoP sourcing also gives rise to a multitude of new issues that must be addressed and managed effectively. Standard procurement models are not applicable in dealing with the specific challenges associated with sourcing from BoP markets and new sourcing mechanisms must be developed. However, current research offers limited theoretical and practical insights regarding BoP sourcing. Recognising this inadequacy, this thesis focuses on sourcing from poor smallholder farmers within BoP markets to develop a holistic BoP sourcing model that can inform sourcing decisions of BoP business stakeholders. Grounded in agency theory, this thesis builds on and extends existing debates in BoP sourcing by delving into pertinent literature such as that on BoP, social sustainability, purchasing and supply management. A multiple case study design based on semi-structured interviews and archival data was adopted. Five agribusiness companies (i.e. five cases) in Australia involved in BoP sourcing programs (as the unit of analysis) were selected and 31 interviews were conducted, not only with the BoP sourcing companies but with government and non-governmental organisation (NGO) partners. The interview data were supplemented and cross-validated with an extensive volume of archival data, such as companies¿ and partners¿ reports and websites, cases and reports from Australian Government Department of Agriculture and cases and reports from United Nations Development Program (UNDP) initiatives such as Business Call to Action (BCtA). Through in-depth analysis of various sources of qualitative data, this thesis identifies and categorises challenges related to sourcing from the poor (in terms of supplier-, product- and market-related challenges), and characterises the manifestation of these challenges in the form of macro- and micro-contextual drivers (institutional voids and agency problems, respectively). Finally, responses exercised by the case companies against the BoP souring challenges are categorised in terms of agency-, identity- and network-based mechanisms. This thesis elaborates on the relationships between the constructs of the study (as well as their sub-categories) and develops a holistic model that advances BoP sourcing, BoP supply chain and sustainability research agendas and literature. Apart from theoretical contributions, the findings have important implications for practice, society and policy. The categorisation of BoP sourcing challenges and their associated drivers from both the macro and micro perspectives could assist managers in formulating appropriate mechanisms to overcome these envisaged challenges individually. The findings also inform business partners, or those interested in initiating or supporting a BoP sourcing business, of the practices and activities involved in the procurement process. This is also important for policy- and decision-makers to align and improve their incentives and support mechanisms to foster BoP sourcing engagement. Providing a clear vision of BoP sourcing could also set the foundation to enable the integration of poor smallholder farmers into global supply chains, to improve their livelihood and ultimately contribute to alleviating global poverty. It also helps policy makers to revise their sourcing policies and suggest new cost-effective sources of raw materials for company partners while contributing to the Sustainable Development Goals of the United Nations.