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PhD Defence

Kevin McKague
by

Kevin McKague

on 3 March 2013

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Transcript of PhD Defence

Bottom of the Pyramid - poor as consumers

Microfinance - poor as microentrepreneurs

SMEs - poor as employees

What is missing from these three approaches that might help us understand poverty alleviation from a management perspective? An examination of the poor as producers
Schulich School of Business
York University Bottom of the Pyramid Approach Microfinance Methodology
Grounded theory and in-depth case study

Suitable for understanding complex organizational-level phenomena embedded within its social and institutional context Case Study: Strengthening the Dairy Value Chain in Bangladesh Bill and Melinda Gates Foundation funding

$5.25 million, 5 year (2007-2012) initiative

To double the incomes of 35,000 smallholder farmers

CARE Bangladesh the implementing organization
Non-Governmental Organization (NGO)
In Bangladesh since 1955
1 million beneficiaries annually
Dairy project staff 100% Bangladeshi
Taking a market-based approach Data Collection Interviews (59 individual + 240 in focus groups)

Observation (3 field visits)

Archival documents (20")

Quantitative data (350 variables analyzed 475 hours) smallholder farmers (1-3 cows) account for majority of national production
rely on subsistence agro-residue methods
only 10% of milk to formal sector Analysis and Trustworthiness Methods to ensure trustworthiness of analysis and findings based on Lincoln and Guba (1985); Miles and Huberman (1994); Yin (2008) Internal Validity (Credibility) External Validity (Transferability) Reliability (Dependability) Construct Validity (Objectivity) Substantive quantity and diversity of rich multi-layered data
Triangulation among data sources and types of informants Thorough description of context
77 page written case description shared with key informants
Presentation of findings at Bangladesh international dairy conference Data comprehensively collected with attention to factual accuracy and precision
Interviews transcribed verbatim
Bangla interviews translated by two independent translators
Use of multiple sources of evidence
Consideration and elimination of rival explanations Project Outcomes 69% increase in farmer incomes

48% increase in household milk production

50% increase in household milk consumption Poverty alleviation as institutional leveraging and
redistribution of social control Contributions to the Literature on Market-Based Approaches to Poverty Alleviation The first in-depth, theoretically informed account of poverty reduction for poor producers in the management literature

Focuses on the value chain and broader social economic, and institutional system beyond the boundaries of a focal firm, SME or entrepreneur

Introduces the concept of social control Making Markets
Work for the Poor Findings Literature Research Question Contributions Proposition Skills of the poor are underutilized and financial services overcome capital constraints to entrepreneurship "Microcredit is one of the most powerful tools
to address global poverty." Qualitative, Inductive
Research Design September 28, 2012 (Strauss and Corbin, 1998) (Eisenhardt, 1989) (Yin, 2008) Hamida Begum is married, has three children, works as a day labourer and tends her family's two cows

57% own less than half an acre of land
<$1/day incomes
1-3 cows

79% of the project's farmers are women

Cows as valuable assets Dairy Farming Households Market-Based Approaches to Poverty Alleviation as Institutional Leveraging and Redistribution of Social Control Research Timeline The Bangladeshi Dairy Value Chain smallholder farmers (1-3 cows) account for majority of national production
rely on subsistence agro-residue methods
only 10% of milk to formal sector Formal Sector Informal Sector Partnerships Across the Value Chain Research Setting Independent
Collectors Inputs Dairy Producer
Households (2007-2012) Instances where pursiut of self-interest results in sub-optimal social and ecological outcomes due to:
information asymmetries
non-competitive marketplaces
externalities



Instances where governments do not fulfil their obligations to:
provide basic public services
uphold basic human rights Transparency Reducing Market
and Governance Failures (Stiglitz, 1989) (Datta-Chaudhuri, 1990) Poor as consumers

Access to goods
Lower cost
Higher quality
Improved choice (Prahalad, 2005) "Low-income markets present a prodigious opportunity for the world's wealthiest companies - to seek their fortunes and bring prosperity to the aspiring poor." (Prahalad and Hart, 2002: 1) Consumption = Poverty Alleviation? Socially useful goods? (Landrum, 2007) (Yost and Ydren, 2006) However (State of the Microcredit Summit Campaign Report, 2006) Proposition However (Robinson, 2001; Yunus, 2003) (Banerjee and Duflo, 2006) Subsistence undifferentiated enterprises SME Employment (Karnani, 2011: 157) "SMEs are the major creators of employment opportunities
and therefore hold an important key to
employment and poverty reduction." Proposition However (Karnani, 2011) SMEs more labour intensive Less skill intensive Less capital intensive More geographically disbursed Create jobs better suited to the poor (Collier, 2007) What if governments don't take up their responsibilities, enforce regulations, fund public services, especially in countries where poverty is most acute? Summary: Current Explanations of Poverty Alleviation in the Management Literature Market Failure Government Failure Instances where pursiut of self-interest results in sub-optimal social and ecological outcomes due to:
information asymmetries
non-competitive marketplaces
externalities



Instances where governments do not fulfil their obligations to:
provide basic public services
uphold basic human rights Transparency Reducing Market
and Governance Failures (Stiglitz, 1989) (Datta-Chaudhuri, 1990) Market Failure Government Failure Capability Enhancement as Redistribution of Social Control Challenge
Agricultural residue-based subsistence mixed farming
Rice straw diet, low dairy productivity

Training
12 essential dairying practices, control over production Thank You! Questions and Discussion Instances where pursiut of self-interest results in sub-optimal social and ecological outcomes due to:
information asymmetries
non-competitive marketplaces
externalities



Instances where governments do not fulfil their obligations to:
provide basic public services
uphold basic human rights Reducing Market
and Governance Failures (Stiglitz, 1989) (Datta-Chaudhuri, 1990) Market Failure Government Failure Research Question Community-based enterprise

Subsistence marketplaces

Sustainable local enterprise networks

Social business

Social entrepreneurship

Inclusive business / markets

Pro-poor / inclusive value chains Poverty and Management Research Undertaken under many banners: Main Occupations of the Poor Adapted from the Bill and Melinda Gates Foundation, Financial Services for the Poor Strategy Overview, November 2010, with data from the United Nations and the World Bank. (Mendoza & Thelen, 2008) (Seelos & Mair, 2005) (Humberg, 2011) (Wheeler et al., 2005) (Mitchell and Coles, 2011 ) Given... "Market society has produced more income, wealth, goods and services than any other form of human social organization"

...Many are left out
2.6 billion people living on under $2/day

Including the "Bottom Billion"
not responsive to traditional approaches to poverty alleviation Poverty Reduction an Old Question 60 years in development economics
and development studies ...but relatively new to the Management Literature Academy of Management Mission "The general objective of the Academy shall be therefore to foster: a) a philosophy of management that will make possible the accomplishment of the economic and social objectives of an industrial society with increasing efficiency and effectiveness: How is an organization able to make markets work for poor primary producers in least developed economies? (Viswanathan & Rosa, 2011) (Peredo & Chrisman, 2006) (Scott, 1995) (Weick, 1974) the public’s interests must be paramount in any such philosophy..." Unquestioned libertarian assumptions? (Karnani, 2011) Editor's preface, Journal of the Academy of Management, 1958, 1(1): 5-6 (Fligstein, 2001: 3) (Collier, 2007) CARE's Market Practice Enhancements Farmer groups

Collectors as agents of groups

Capacity building

Paravets and shops

Digital milk fat testing machines

Agreements with buyers It would take only a 1.3% shift in world income distribution to lift every single person above the $2/day poverty line. (Karnani, 2011) Kevin McKague Poverty reduction as institutional leveraging and redistribution of social control
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