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Becoming Trusted at The Base-Of-The-Pyramid
Becoming Trusted at The Base-Of-The-Pyramid
Author
Peter Grootveld
ANR: s577220
Tel.: 06 52 30 7700
Email: p.grootveld@uvt.nl
Supervisors
Dr. Patrick A.M. Vermeulen
Prof. Dr. Jac L.A. Geurts
Abstract
Numerous academics and business managers believe that western MNCs can create new markets and
help eradicate poverty at the same time, once they recognize the poorest of our world, the so-called
base of the pyramid (BoP) as novel consumers and innovative producers. To be successful in this
bipartite mission, MNCs are dependent on successful collaboration with local parties in the developing
countries. However, collaboration with western partners is based on other grounds than collaboration
with local parties, often living in remote communities. Trust appears to be the key word in the latter
and BoP literature provides quite some propositions on trust building activities. However, despite the
acknowledgement of the necessity of trust building with local partners, there is no empirical research
specifically aimed at MNCs trust building processes with people in the remote communities. Hence,
this master thesis sets out to explore how western multinational companies build trust with local
communities in developing countries. Departed from present BoP and trust literature this thesis studied
a BoP case in Tanzania and confirmed five variables causing trust: outset manifestation, reciprocity,
consistency, adaptation to institutional framework and communication. Moreover the results of this
thesis show that the relation between the variables and the actual processes that account for the
relationship between the concerning variables are determined by the context of the BoP.
Preface
This master thesis presents the results of an inductive research on strategies for the base of the
pyramid. I conducted the preparing and concluding parts of the research at Tilburg University
and the field research in Tanzania. The finished thesis brings along ambivalent feelings. On the
one hand, it means the successful ending of a fruitful period of studying. On the other hand, it
means the end of working on a subject that inspired me increasingly, day after day. However, as
Jac Geurts spoke to me reassuring: its just like a boomerang, it will return to you once again.
The thesis has its origins in the strategy classes of Patrick Vermeulen and Jac Geurts. Their
enthusiastic introduction of the Base of the Pyramid made many hearts beat faster, and Strategies
for the Base of the Pyramid became a very interesting thesis subject. Hence, I want to thank both
Patrick and Jac for their impassionate classes. More specifically, I want to thank Patrick for his
professional supervision. His feedback was always quick, clear and to the point. It was not only
helpful to conduct better research, but also taught me to sharpen my vision in general.
Furthermore I want to thank Harrie Hendrickx from Unilever, who supported me in studying the
Allanblackia case - which was perfect for my thesis - and connected me to the right people. One
of these people was Fidelis Rutatina from NDTL. Fidelis introduced me to the real world of
Allanblackia and to Tanzania in general. He is the best host in Tanzania one could imagine. Next,
I want to thank Godfrey Nkongolo who not only helped me translating the interviews, but also
guided me during the trips across Tanzania.
Of course, I owe the results of this thesis to all the interviewed people. Hence, I thank all the
community members I interviewed and their villager leaders. I also want to thank, Maria and Tom
from FaiDa Mali, Ndanshau from SNV and Doris from ICA. I admire them for their dedicated
work to create a better life for the people in Tanzania.
I am also very grateful to all the people that have read my thesis and thought along with me, with
special thanks for their critical feedback to Michel Bachmann and Chris van der Schoor.
Peter Grootveld
Nijmegen, January 2009
Table of contents
1. INTRODUCTION..................................................................................................... 5
2. THEORETICAL BACKGROUND ........................................................................ 10
2.1 Organizing the trust literature ............................................................................. 10
2.2 Trust defined ....................................................................................................... 11
2.3 Antecedents of trust............................................................................................. 11
2.4 Trust in BoP studies ............................................................................................ 17
2.5 Insights from other studies .................................................................................. 20
2.6 Comparing visions on trust building ................................................................... 21
3. METHODOLOGY.................................................................................................. 24
3.1 Research design................................................................................................... 24
3.2 The case............................................................................................................... 25
3.3 Data collection..................................................................................................... 26
3.4 Data analysis ....................................................................................................... 29
4. RESULTS................................................................................................................ 32
4.1 Introduction ......................................................................................................... 32
4.2 Build trust incrementally..................................................................................... 32
4.2.1 Outset manifestation....................................................................................... 33
4.2.2 Manage reciprocity ........................................................................................ 36
4.3 Consistency ......................................................................................................... 41
4.4 Manage communication ...................................................................................... 42
4.5 Adapt to institutional framework ........................................................................ 44
4.6 An overview of the results & a BoP trust building model .................................. 49
5 DISCUSSION AND CONCLUSION ...................................................................... 51
5.1 Introduction ......................................................................................................... 51
5.2 The suitability of prevailing trust literature......................................................... 54
5.3 Comparison with the BoP literature .................................................................... 55
5.4 Conclusion........................................................................................................... 57
5.5 Limitations .......................................................................................................... 58
5.5 Further research................................................................................................... 59
6 REFERENCES......................................................................................................... 59
1. Introduction
If we stop thinking about the poor as victims or as a burden and start recognizing them as
resilient and creative entrepreneurs and value-conscious consumers, a whole new world of
opportunity will open up. (Prahalad, 2004, p.1).
This proposition is illustrative for the increasing signs of interest in the possibility of doing
business in developing countries and alleviating poverty at the same time.
The websites and annual reports of fortune global-500 companies show that nearly all of them
are to a certain extent serving the poorest of our world, the so-called base of the pyramid
(hereafter: BoP). Wal-Mart, for example, moved into the Mexican retail banking sector.
According to themselves, not only to sell more stuff but also to compete against the
entrenched domestic businesses that are not fulfilling local demand. And as the New York
Times (2006) stated affirmatively: Poorer Mexicans have been largely shut out of
traditional banks by minimum balances, high fees and intimidating paperwork. Community
banks barely exist. Another illustrative example is Unilever. It notifies on its website that
their deep roots and early engagement in BoP markets gave them valuable experience in
meeting the needs of BoP consumers. For instance, one of Unilevers oldest brands is
lifebuoy, once launched in the UK as an affordable soap. Today it is mainly consumed in
BoP countries. Nearly half of the sales take place in rural Asia, where hygiene issues such as
hand washing are of vital importance for whole communities. Another BoP-aware company
is DSM. This multinational proclaims they started three concrete Base of the Pyramid
projects in India this year. According to their website these projects will focus on the topics:
increased production of milk, better nutrition and the development of sustainable construction
materials. Like this, numerous other examples of companies entering the BoP can be found.
Strategies to enter the BoP are also increasingly subject of interest in Academia. In 2002 an
article named the fortune at the bottom of the pyramid caught not only the eye of the corporate
world, but attracted also many scholars of different disciplines. In this article Stuart Hart and
C.K. Prahalad capture the division of the worlds purchasing power parity in a pyramid with
four consumer tiers. They sketch the top tier as a saturated market accommodating about
hundred million people earning more than $20.000 a year. The bottom tier consists of more
than four billion people with an annual per capita income of less than $1500. Thereupon, they
state that although these bottom tier people are poor, they represent an underserved multitrillion dollar market. Hart and Prahalad continue in their article with quashing the prevailing
assumptions why these people should not be seen as potential consumers for western
companies and subsequently they draw attention to a few crucial elements to create a
commercial infrastructure in developing countries. For instance, they assume that the poor can
afford and do have use for the products and services in developed markets and they argue that
it is crucial to pay special attention to improvement of access to these products. Considering
the scholars innovatory train of thought, it is not surprising that many colleagues reacted on
Prahalad and Hart by publishing articles in line with The Fortune at the Bottom of the
Pyramid. Some of them primarily in a critical way (e.g. Jenkins, 2005; Crabtree, 2007;
Karnani, 2007) and others elaborated on Prahalads and Hart s ideas by studying certain
aspects of the BoP proposition, or by approaching it from a specific angle. For example, it is
studied how to create successful business models for entering the BoP (London, 2007; Seelos
& Mair 2007), how corporations and NGOs can partner successfully to learn from each other
(Brugmann & Prahalad, 2007), how a BoP perspective can complement other poverty
reduction programs (London, 2007), alternative perspectives on BoP concept are explored
(Jaiswal, 2007) and there is even a BoP protocol, helping organisations step by step to launch
a BoP venture (Simanis & Hart, 2008).
It seems convincing that the BoP philosophy receives increasing and mainly positive attention
by both academics and business managers. However, it is not all roses in the BoP markets.
Among the high number of organizations that entered the BoP, there are also many examples
of failed initiatives. A typical example is the Word Shoe project of Nike. In its attempt to
supply low priced shoes to the low-income-populations in China, it failed in meeting its sales
goals. According to McDonald et al (2002), Nike was unsuccessful in reaching the target
consumer because its business model was not based on an emphatic understanding of the
context. Stuart Hart (2007) has put forward that if Nike had started with a pre-commercial
period of engagement, deep listening and building trust with local parties, it would have had a
greater chance of being successful in resolving the contradictions between its used business
model and the one required to serve the low-income-populations of China. And even if a BoP
venture seems to have success in the beginning, it can still easily fail to meet its targets. The
detergent product Wheel of Unilevers subsidiary Hindustan Lever Ltd. (HLL) perfectly
illustrates this failure to make a BoP initiative grow. The business model was based on single
serve packaging, low-cost production, and distribution through small local companies.
6
Although rapid growing sales figures were visible in the beginning, the business model was
not suitable to reach 500 million potential customers in rural villages. After a few years
HLLs rapid growth began to stagnate. In 2004, the HLL share price ended up in a downward
spiral, and shed over 25 percent within 3 months (Financial Express, 2004). HLL became
aware that it had to integrate deeper into the local communities to reach the 500 million
people. Hence, Project Shakti came into existence: through womens self help groups, HLL
trained thousands of entrepreneurial women in building a local HLL micro-franchise. This
project has resulted in both income creation for the female micro-entrepreneurs and the
possibility of reaching the 500 million previous unreachable customers.
The interested reader has probably considered what might be essential if a MNC wants to be
successful in entering the BoP. Consulting the BoP literature to explore this matter, results in
finding many factors that influence the consolidation in the alien BoP market. London and
Hart (2004) make a fundamental point with respect to becoming successful: Business
strategies that rely on leveraging the strengths of the existing market environment outperform
those that focus on overcoming weaknesses. All of the BoP scholars seem to comply with
the proposition that it is necessary for MNCs to become integrated in the concerning context
and hence they have to collaborate with local governments, local NGOs, local firms and local
individuals. Furthermore, literature suggests that MNCs have to develop a learning process
with the local people in order to create relevant ideas for products or services that the people
really need and to obtain other needed knowledge about the local context. Frequently
mentioned is the importance to have local companies and individuals taking over a part of the
MNCs activities and include them in supply chains. Logically, this creates income generation
in local communities and hence eradicates poverty. And indeed, also the earlier described
examples of BoP initiatives leads one to suspect that involving local communities in BoP
ventures calls for special attention and even determines the success of the venture. Unilever
brings its soap hand in hand with education on hygiene and according its website, it visits
each village several times, engaging all parts of the community, Nike failed because it didnt
engage with the local community and HLL began to meet its objective not before it started to
collaborate intensely with rural women.
It might be clear that collaboration with diverse local parties plays a major role in becoming
successful at the BoP. Consequently, the next question would be: how to collaborate with
local parties in this new market? Also this question is broadly discussed by BoP scholars and
7
the ever returning key word in this discussion is trust. For instance, Stuart Hart (2007,
p.213) states: unleasing the wellspring of innovation at the BoP() requires developing a
personal relationship of trust, understanding and respect through which new possibilities for
locally-embedded businesses can emerge. In the same line, his colleague Simanis et al.
(2008) mentions that the corporate team will depend heavily on the trust they have to obtain,
because it will enter the local community as an outsider. Some imminent phrases in BoP
publications attach even more weight to trust because they could have the reader presume
that trust building in a developing country brings along more barriers than just differences in
cultural background. For example, Prahalad (2004, p.20) notices that Both sides- the large
firms and the BoP consumers- have traditionally not trusted each other. The mistrust runs
deep. Private sector firms approaching the BoP market must focus on building trust [}. ,
and Hart (2007, p.213) emphasizes that the key to success in the BoP is trust [] because
the poor are frequently exploited by predatory lenders and unscrupulous vendors.
The importance of collaborating with local partners and the striking statements about trust in
the BoP literature raise undeniable inquisitiveness about the way in which trust is build in the
BoP. Surprisingly, there is no empirical research aimed at a MNCs trust building process with
the people in the remote communities. Statements are mainly conceptual or derived as side
effects from other studies. To the best of my knowledge, not even one of the BoP articles
refers to the mature field of organisational trust research. Trust is, after all, recognized in
several scholarly disciplines as a crucial element in business partnerships. McEvily et al.
(2006) designate various viewpoints. Referring to Arrow (1974) they mention that economics
argue that trust is an essential lubricant necessary for even the simplest forms of economic
exchange. Strategy researchers believe that trust is a strategic resource providing a source of
sustained competitive advantage (Barney & Hansen, 1994) and other organisational
researchers describe trust as a governance form which helps organisations to coordinate its
economic activity (Powell 1990). It could be well conceivable that findings in general trust
research are applicable in BoP ventures and help MNCs to become successful in their mission
to create new markets and eradicate poverty at the same time. Hence, departed from the
mature field of trust research this thesis sets out to explore:
how western multinational companies build trust with local communities in developing
countries.
The importance of trust building is obviously discussed in the BoP literature, but it falls short
when it comes to the actual process of trust building with local partners. Consequently,
answering the research question will contribute to closing this important gap. Besides closing
the gap, it will also hold the proposed methods for launching BoP ventures in general against
the light. An interesting question is if these methods, for instance the ones elaborately
discussed in the BoP protocol by Simanis and Hart (2008), are fostering the trust building
process as well. But there is even more theoretical relevance. Also within the mature field of
trust research is the context of the BoP unknown. Hence, answering the research question will
provide insight in the applicability of the long standing trust antecedents in the context of the
BoP. Then there is the more practical point of view. The outcome of this thesis is valuable for
MNCs in search for the crucial relationship with local people in the yet untapped new market.
It will provide a model that can be used by MNCs as a guideline to build a trusted relationship
with local partners at the BoP.
The theoretical framework will first expound on the mature field of organisational trust
research. Subsequently, the conversely juvenile field of BoP research will be turned inside out
to make an inventory of ideas on trust building living in this academic domain. Also the
literature from the development field and on cross cultural collaborations will be shortly
visited to derive potentially important insights for this thesis.
2. Theoretical background
2.1 Organizing the trust literature
Many interesting but not always convergent streams of trust research have developed among
scholars (Bachmann and Zaheer, 2006). Already for decades, but especially at the moment of
writing (2008), trust in economies is a much discussed topic. Also trust in (groups within)
societies is studied a lot (Bachmann and Zaheer, 2006) and even within organisations trust is
studied on various levels.
Why is trust that interesting to study? It was already discussed in the introduction that trust is
a key factor in collaborations. McEvily et al. (2003) pointed out that economics define trust as
an essential lubricant necessary for all forms of economic exchange, strategy researchers
believe that trust is a strategic resource providing a source of sustained competitive advantage
and other organisational researchers describe trust as a governance form which helps
organisations to coordinate its economic activity. In addition, Larson (1992) claims that trust
reduces the extent of formal contracts needed. Furthermore, trust determines the likelihood of
future cooperation (Williamson, 1993), lowers transaction costs (Gulati, 1995), induces
desirable behaviour (Madhok, 1995) and facilitates dispute resolution (Ring & Van de Ven,
1994). Trust appears to be a broadly discussed concept, so it is important to be clear about the
context in which trust is studied and what is meant by the concept of trust.
This thesis explores how companies can become trusted by people within developing
communities. Hence, this theoretical background will go more deeply into how companies
can become trusted by individuals. However, trust in a company appears to be closely
connected with trust in an individual. For instance, Zaheer et al. (1998) conducted empirical
work on the relationship between trust in a specific individual dealt with, and trust in that
individuals organisation. They found that there is a significant relation between these two
levels of trust. Trust in the organisation is a result of trust in individuals from the concerning
organisation. With respect to this relation, McEvily et al. (2003) found evidence that negative
experience with individuals from a collective have even more impact on the trust in the
concerning organisation. Hence, the focus will be on both trust building between individuals
and between organizations and individuals.
10
Das & Teng (1998) mention that theorists (e.g. Bowman & Hurry, 1993) propose incremental
resource commitments as the preferred strategy when risk and uncertainty levels are high. In
that sense they note, trust is the accumulation of prior satisfactory experiences (Gulati, 1995;
Luhmann, 1988). Also Burt and Knez (1996) discus trust building as an incremental process.
11
Citing Blau (1968, p.454) they summarizes the process as follows: social exchange relations
evolve in a slow process, starting with a minor transaction in which little trust is required
because little risk is involved and in which both partners can prove their trustworthiness. This
enables them to expand the exchange process in their relation and hence, after a certain
period, they can engage in major transactions. Thus, the process of exchange leads to the trust
required for it in a self-governing fashion. Lewicki and Bunker (1995) call this insight in the
behaviour of the trusted partner knowledge-based trust. There is a willingness to rely on the
other person because of direct knowledge about this persons behavior. Knowledge-based trust
is grounded in the predictability knowing the other party sufficiently well so that the others
behavior is anticipatable. Knowledge-based trust relies particularly on information about the
other.
Part of reciprocity is the way in which benefits of a partnership are divided. Das & Teng
(1998) derive insights from Adams (1963) equity theory of motivation. This theory suggest
that people have a strong need to maintain their sense of equity in exchange relationships. In
this context it means that the all parties benefit from the collaboration in accordance with the
amount of resources they bring in. On occasion, this feeling of getting an equal return on
investment can even be more important then maximizing the synergy of the collaboration
(Ring & van de Ven, 1994). At the other side, if there is a high level of trust, partners tend to
be more flexible in getting an unequal share of the collaborations results for a short time.
When there is inequity felt for a longer term, tension will arise and trust will decrease. So, for
successful trust building, profits need to be distributed in an equal manner.
Das & Teng (1998) linked reciprocity also with risk taking. They explain that trust researchers
usually link risk taking with trust to notify that trust leads to risk taking (e.g. Coleman, 1990).
However, from another perspective, Das and Teng suggest that trust and risk taking forms a
reciprocal relationship because risk taking increases the level of trust. When it is visible that
one of the parties within a relationship takes a risk in trusting the other, the other tends to feel
incumbent upon the other to behave in a trustworthy manner. So risk taking is a way to show
one another his trustworthiness. Again, in this technique of trust building, people will not at
once take a lot of risk in the hope that it will cause reciprocal trust from the other party.
When partners get used to each other, they slowly develop a customary way of working. Van
Ees & Bachmann (2006) introduce the concept of extended trust. This form of trust is not
12
really build on personal contacts, but is rather grounded in patterns of routines and rules,
which people use to predict their partners future behaviour. This would mean that over time,
trust is not only determined by personal contact and (cultural) similarity of partners, but can
also be based on norms produced by and integrated in an institutional framework (Arrighetti
et al., 1997).
Das & Teng (1998) suggest a more tangible step to take in order to build a trusted
relationship, namely locating a partner with a good reputation. This might provide the first
piece of evidence to take some initial trust (Barney & Hansen, 1994). Mayer et al. (1995)
suggest that another way of becoming trustworthy is showing your ability. As expounded in
the definition of trust, trusting one another, means being vulnerable to the actions of the other.
The willingness to be vulnerable will partly be determined by the extent to which a party is
really able to fulfil its promises. According to Mayer et al. (1995) this ability depends on the
specific technical skills and competences needed for the situation.
Lewicki & Bunker (1995) describe the whole process of trust building and divide it in phases.
The first phase they distinguish is calculus-based trust. This trust is derived from
consistency of behaviour that leads to expectations that the other party will behave
predictably; this trust could be determined by the perceived costs and benefits from staying in
the relationship vs. the costs and benefits of cheating on the relationship. Calculus-based trust
is sustained through a clear deterrent which is likely to occur if trust is violated.
13
Communication
Another, more generic antecedent for trust that is often discussed by trust scholars in varying
ways, is communication. By studying relationships between 204 independent automobile tire
retailers and their suppliers Morgan and Hunt (1994) found, among other factors,
communication as significant antecedent to trust. Communication was defined as the formal
and informal sharing of meaningful and timely information between parties. Also Das & Teng
(1998) suggested communication and information exchange as a point of attention during
trust building. Partners can avoid conflicts by constantly discuss differences. Van Ees &
Bachmann (2006) describe communication as an antecedent to trust in the same way, but
more specifically. They discuss that interpersonal trust builds on frequent face-to-face
contacts. Two arguments endorse this proposition; misplaced trust tends to be low because
information about the potential trustee is available and untrustworthy behaviour can
immediately be sanctioned.
Bacharach and Gambetta (2001) introduce communication from a somewhat different point of
view. They propose that many trust precursors as suggested in the literature indeed influence
the trust in a relationship, but the extent of the effect of the precursor is dependent on the
extent in which the precursor is noticeable to the other party. For instance, a person or
organization can be very capable to carry out certain activities, but the other party must also
be acquainted with this capability. In other words, the performative acts of self-presentations
influence the effect of the trust enablers. Bacharach and Gambetta call the signals that form
the empirical basis from which the trust-giver makes the decision for the first move in the
development of trust manifesta. Hence, communication in the form of manifesta can be seen
as a moderator variable between other precursors and trust. Creed & Miles (1996) describe the
function of communication in a way that perfectly fits in the point made by Bacharach &
Gambetta. They state that communication facilitates the process of proving trustworthiness
and credibility to each other.
Not only communication between the trustor and the trustee influences the trust within a
relationship. Mayer et al. (1995) notice that also the credible communications by others
determines the extent to which a party trust one another.
14
15
An overview
Trust research has been very popular the last decades. Many research, however, is conducted on
different levels of analysis, from different viewpoints and certainly not as a coherent whole. A
great overlap is visible in the factors that explain how trust is built and many similar concepts are
given a different name. To create an orderly overview of the above described trust literature, and
to gain insight in the overlap, a table with the discussed antecedents is presented below. The trust
building antecedents are divided in five main categories.
Trust antecedents
Authors
Experience of reciprocity
Prior satisfactory
Gulati, 1995
Risk taking
Incremental commitment
Propensity to trust
Communication
Communication
Institutional framework
Arrighetti 1997
Shared values
Similarity
16
Already the first article speaking in terms of BoP, the fortune at the bottom of the pyramid
(Prahalad & Hart, 2002), notices the importance of building a personal relationship with the
poor, or as they describe, to build a local base of support . They exemplify this
proposition with the situation in which a sunflower-seed company threatens the existing
power structure within the community by empowering some of the poor involved in the
company. As a result, two of the companies offices were burned and local politicians revolted
against the firms seed business. After investing in the community with training, education and
supply of farm inputs, they improved the relation with the farmers. Nowadays they are seen as
a friend and the political opposition has vanished. With respect to the creation of business
relationships, London & Hart (2004) mention the informal character of BoP economies and
that relationships in informal economies are grounded primarily in social, not legal contracts.
Informal, social boundaries often dominate over formal legal documentation they continue,
and hence trust cannot be obtained by having the backup of enforceable legal systems.
Consequently, insight in social infrastructures is necessary to successfully operate in this
business environment.
By interviewing MNC managers from four multinationals involved in BoP market entry,
London & Hart discovered that western companies can receive legitimacy of local people by
collaborating with non-traditional parties or people. Seelos and Mair (2007) emphasize the
value of collaborating with trustable partners by discussing a case in which the Norwegian
telecommunications company Telenor partnered up with the Grameen Bank, which was
founded by Muhammad Yunnus, the 2006 Nobel Peace Prize winner. Together they founded
for-profit ventures bearing Grameens name. The objectives of both organisations could be
pursued by this venture. The venture became successful for a greater part thanks to the well
17
know Grameen brand. Other important non-traditional partners are for example the so called
fringe stakeholders (Hart, 2007) like individuals and small companies in local communities.
Based on experiences of organisations like Nike, Shell and the Word Trade Organisation, Hart
& Sharma (2004) state that firms can develop intimacy and trust with fringe stakeholders by
generating complex interactions. Complex interactions are explained as interactions in which
managers from MNCs empathize with diverse and disconfirming perspectives of these
stakeholders and try understand their culture, thought processes and language.
In another BoP related article, Hart and London (2005) explain the success of Grameen Bank
and Honey Care Africa because of their embeddedness in the BoP communities. By building
partnerships from the ground up with local entrepreneurs, NGOs and local governments, they
created a web of trusted connections through which they became integrated in the local
communities. Creating embeddedness takes a lot of time, but brings along the advantage that
it cannot quickly be duplicated by competitors. Also Wheeler et al. (2005) discuss the
importance of a trust-based, densely networked environment. According to their examination
of 50 case studies, it are the development organisations who can act as catalysts for these
partnership opportunities by convening dialogues between local and international businesses.
Arnould & Mohr (2005) go more deeply into the functioning of embedded ties. Natural
channels in BoP markets are embedded in relationships and networks. For being successful at
the BoP, they contend, its critical to create an understanding of the embedded ties in a
community and to cultivate and mobilize them. They state that trust in these networks is often
produced by culturally specific, familial, ethnic and religious ties. When a dominant actor is
granted decision-making authority on behalf of the community, it is likely that he has
developed the ability to mobilize the embedded relationships and norms. In addition, Stuart
Hart (2007) mentions the importance of avoiding a short-term commercial agenda. He
underpins this statement with an example of Cemex. In order to find possibilities for a home
building business in Mexico, Cemex managers had to live in shantytowns for six months. One
of the managers said they had to remove the cement chip from their brains which led to
unanticipated insight in how they could serve the real needs of the communities. This, in
combination with the long term stay created the crucial trust with the local people. Finally
BoP ventures become trusted over time, when the (financial) outcomes are felt by the ventures
local partners and the community in which it operates (London, 2007).
18
It appears that the BoP literature contains quite some ideas about how trust is built with local
people in communities of developing countries. The table below shows a summary of the
salient catalysts appointed by BoP scholars.
Author
Prahalad, 2004
farm inputs
Hart, 2007
London, 2007
The above listed trust building activities are put forward by academics based on their general
studies on BoP phenomena without departing from prevailing trust literature. However,
prevailing trust research could contain many trust enabling factors which are also relevant for
companies entering the BoP market.
19
Next to the lesson from development studies, insights can be derived from research on cross
cultural collaboration between private corporations. Although dealing with a corporation is
different that dealing with an individual or a community, there is some similarity with respect
to overcoming cultural differences.
Child and Faulkner (1998), discuss that there is more risk and uncertainty involved in
collaborations between parties with a different nationality. Cross-national differences between
partner firms with respect to culture, law, politics, and trade policy give trust an extra
important, but also fragile role in the collaboration (Child and Faulkner,1998). Cultural
barriers obstruct initial trust building because (potential) partners are less able to rely on
interpersonal similarity, common background and experience. These obstruct the contribution
to the mutual attraction and the willingness to work together (Mayer et al., 1995).
Other research shows that the precursors of trust as described earlier, are applicable in
different cultures, but the extent to which factors influence trust differ across cultures. For
example, Schoorman et al. (2007) argues that task-oriented cultures as found in European
countries, seem to have a high initial trust of strangers and therefore a high propensity to
20
It turns out that cultural differences obstruct trust building and hence a more specific approach
is needed in the concerning context. There are several studies that show how parties in crosscultural collaborations can overcome these barriers in general. For example, Johnson et al.
(1997) studied trust enablers in an international cooperative alliance between Japanese and
U.S. partners and found significant trust enablers. They state that transactions crossing
cultural boundaries are calling for cultural sensitivity which is the firms awareness of
cultural differences and the ability to manage them. This statement was based on research of
several scholars in several types of relationships (e.g. Johnson et al., 1997). So, in addition to
the already discussed interfirm adaption of Das & Teng (1998) a partner must not only
invest money, managerial effort and time in creating an understanding of the partner's needs,
but also in understanding and managing its culture. Cultural sensitivity depends on the ability
to relate to cultural counterparts and colleagues, the understanding of the other culture, the
ability to adapt, received sensitivity training, and the willingness to communicate and make
relationships in the other culture. Johnson et al. (1997) found the lack of cultural adjustment
as a major reason for failed cross cultural collaborations.
21
BoP literature
Trust literature
religious ties.
Become related with trustable people or brands.
Communication
and language.
Take the time to create a web of trusted connections
by building partnerships from the ground up with local
entrepreneurs.
Development literature
Trust literature
Communication
-
22
Trust literature
across cultures.
in institutional framework
Communication
-
The three discussed disciplines show an apparent conformity to the importance to adapt to
norms values and needs and the necessity to integrate in the institutional framework of the
(potential) partner. Also communication is mentioned a lot as an essential factor. It will be
interesting to study if these factors also stand out in practise. The absence of many other trust
enablers mentioned in the general trust literature, does not mean that those factors are not
applicable in BoP ventures. Hence, the next chapter will describe the used methodology,
departed from, but not bounded to the factors stood out in the tables above.
23
3. Methodology
3.1 Research design
The introduction and theoretical framework pointed out that trust building in the context of
the BoP is a relatively new phenomenon. According to Eisenhardt (1989), a qualitative case
study is appropriate to understand relationships between variables within an unknown context.
Also George & Bennett (2005) state that an unfamiliar context requires a detailed
consideration of contextual factors, which is extremely difficult to do in statistical studies, but
is common in case study. Consequently, to inductively identify causal paths and potentially
new variables, a heuristic case study approach is chosen to explore trust building processes
in the BoP (George & Bennett, 2005, p.75). Since the amount of time was limited and suitable
cases to study were not proximate, a single-case research design is used to conduct the
research. The theoretical framework provided potentially suitable concepts which could be
useful to guide the research. Hence, methodological insights are derived from the grounded
theory approach (Glaser & Strauss, 1967). Grounded theorists, do not construct theory by
testing hypothesis, but have theory slowly emerge by creating an interplay between data
collection and analysis (Charmaz, 2006). Data collection is often started by using sensitizing
concepts. Charmaz (2006) states that these concepts give you initial ideas to pursue and
sensitize you to ask particular kind of questions about your topic. In this thesis, the trust
antecedents on page 16 are used as sensitizing concepts and are used to determine the initial
interview questions. The section about data collection shows examples of the initial interview
questions.
The selection of the studied case is based on two kinds of criteria. The first kind are criteria to
select a genuine BoP case. Hence, this thesis used a case that meets the criteria of the BoP-asproducer venture, as described by Ted London (2007): a scalable profit-oriented venture,
operating in the informal economy, catalyzed by external participation and co-created with
those at the BoP, that connect BoP producers of goods and services to non-local markets.
The second kind of criteria had to indicate that there is a relationship of trust between the
MNC and the local people within the BoP communities. The definition of trust, as outlined in
the theoretical framework (p.11) is used to determine the actual presence of trust in the case.
This means that the local people had to be willing to be vulnerable to the actions of Unilever
based on the expectation that Unilever would perform a particular action important to the
local parties. The next section provides an elaborated case description.
24
25
26
investment of time and efforts as the factors that made them vulnerable. Creating a new
source of income was mentioned as the action that was important to them.
Following Charmaz (2006), sensitizing concepts were used to determine the subsequent
questions. Hence, interviewees were asked in which way they experienced:
The first steps Unilever took to approach them
Unilevers adaptation to their norms, values and friendship
the communication by Unilever
Unilevers integrity and consistency
the increase of Unilevers and their own investments in the relationship
Furthermore, interviewees were asked about factors in general that made them willing to
collaborate with the Allanblackia project. The text box below shows four random examples of
questions based on the sensitizing concepts.
Do you think that Unilever has the right skills and competences to do what they promised?
-
Can you name specific situations in which Unilever showed these skills and competences?
How did your opinion about the skills and competences of Unilever evolved? What particular things
happened that it evolved like that?
Do you feel connected with Unilever because you have shared values?
-
Can you give me some specific examples in which Unilever showed these values?
How did these shared values evolved? What particular things happened that it evolved like that?
If so, how was this friendship created? If not how could this friendship be created
Can you give me some specific examples in which Unilever showed this friendship?
How did your friendship with Unilever evolved? What particular things happened that it evolved like that?
Have their been persons in you acquaintances that had an influence on your decision to collaborate
with Unilever/party like family, friend, village members etc.?
-
How important is the opinion of these persons, like family, friends, village members, etc in making your
decision to collaborate?
Are there particular persons in your acquaintances whos opinion is of special importance to you?
What would you have done if this persons recommended you not to collaborate with Unilever?
27
28
The 12 interviewed villagers and the 2 village leaders did not understand English. Therefore,
interviews were conducted in association with a translator. During these 14 interviews,
questions were asked in English and directly translated into Swahili. Next, answers were
given in Swahili and translated back into English directly. To secure the proper interpretation
of the questions by the translator, the questions were first translated on paper from English to
Swahili by the translator and subsequently cross-checked by the Tanzanian country manager.
The other interviews with the 4 NGOs and the Tanzanian country manager are conducted in
English and the interview with the global Allanblackia manager is conducted in Dutch.
The context in Tanzania is very different from the west, both the physical environment and
the cultural aspects. By living with Tanzanian people it became easier to understand the
communities taken-for-granded assumptions and rules and hence could give a better
understanding of the case (Charmaz, 2006). In analyzing the results, this information is used
to shape the idea of the context where necessary.
29
In the end, it resulted in more that 17 hours of interviewing with 20 different people (see list
in paragraph 3.3). All these interviews were digitally taped with a memo recorder.
Subsequently, the recorded interviews are transcribed with an application called F4.
To bring meaning to the data, all transcribed interviews and the obtrusive data were analyzed
with Atlas.ti. The concepts described above are not used during the coding process. This
could have obstructed the open attitude towards the data and neglected important information
about Unilevers actual activities that cause trust building processes. Hence, an initial coding
process as suggested by Charmaz (2006, p.47) was used. The objective was to reduce the data
by deriving the processes and activities that Unilever used to build trust. To achieve this, data
was coded incident to incident (Charmaz, 2006, p.53) by looking for and preserving actions
from all parties involved in the Allanblackia project. This part of the coding process resulted
in 330 quotations coded with 46 different codes. Next, to determine the adequacy of these
codes, a focussed coding process is carried out (Charmaz, 2006, p.57). The trust codes
appeared to have a fairly great overlap and interconnection. Hence, the 46 codes were reduced
to 14 codes that made the most analytic sense. In some cases this meant that a group initial
codes fit in another initial code and in other cases a new focussed code was made to embrace
a group of initial codes. The 14 focussed codes are formulated as mechanisms. The concept
mechanism is derived from Campbell (2005), who explains mechanisms as the processes
that account for causal relationships among variables. Mechanisms are the nuts, bolts, cogs,
and wheels that link causes with effects. An example of a mechanism that emerged from the
focussed coding process is manage transparent communication.
The formulated mechanisms were, however, no isolated factors that caused the trust
separately. The interconnection between the mechanisms and the temporal ordering played an
important role in the process of trust building. Hence, a theoretical coding process (Charmaz,
2006, p.63) is used to specify the relationships between the mechanisms. This resulted in
ordering the mechanisms on a theoretical, higher level of abstraction. The mechanisms are
subdivided into theoretical variables based on higher level consequences and temporal
ordering. The next page shows an example of the coding process.
30
Quotation (330)
First code
(46)
Mechanism
(14)
Theoretical
Variable (5)
clear and
constantly
A part from all this, the farmers trust is gained during gross margin
Communication
Create
insight
Because you just tell them: this is how the AB seeds are being sold
in the
project
31
4. Results
4.1 Introduction
The process of trust building took and still takes place in different phases, on different levels,
and in different ways. This widespread existence of trust indicates that trust building starts
already before the beginning of a BoP venture, and continues to be interwoven in all details of
the relationship as long as it last. The next paragraphs discuss five factors that influenced the
trust building process and their specific role. Three of the factors are recognized as
independent variables, one factor as a moderator variable and one factor as both an
independent and moderator variable. Furthermore, the accompanying mechanisms that
account for relationships among the trust building factors and trust itself are discussed.
This quote of the Dutch Allanblackia manager characterises the importance of building trust
in an incremental way. Unilever experienced that people increased their trust bit by bit and
scheduled the first year to build trust. In the beginning just a few people in the villages
decided to collaborate. In general the villagers first wanted to see what happened. Hence, they
started to put little efforts in the project and once they experienced the returns of Unilever,
they started to put more and more efforts in it. The company have to be aware of the
importance of building trust incrementally even before starting the project, because the
strategic intentions influence the whole process for as long as it last. The quotes in the table
below reflect the experiences of the people involved in the Allanblackia project and endorse
the incremental way in which trust is build.
they wont invest a lot of time and effort when youre coming by the first or the second time, or
Allanblackia
ever the third time. They first want to see if theres really money, if the weighting is done in an
manager
honest way and that sort of things. They first start with collecting a few seeds, like one kilo, and
after that they collect another kilo, and then the see they get their money and they decide to
collect a little bit more next time. Like that is slowly increases
already in the beginning it was clear that we wanted a long term relationship, and this is
something that shines through in all behaviour, things that you say but also what you expect
32
from others. Sometimes we invested almost a year in a community group before they started
collecting or selling the nuts. We could do this because Unilever had a lot of money to pump
into the project, so actually this was a luxurious position, a small company could never have
done this.
Villagers
to collaborate with a person you first need to know the person, so it took us a while before we
came to know that these people have a good intention
he came here three times and he was still talking about the same thing, and thats why we
thought, this man is serious, he will help us
NGO
there are always the early adaptors, you dont miss them anywhere
Interviews showed that incremental trust building can be divided in two factors, with the
characteristics of independent variables. The first factor to create the necessary base for trust
building is the outset manifestation. This relates to the first impression Unilever made with
the communities they approached. Some essential steps in making the first contacts, created a
trusted atmosphere for building a structural relationship. The second factor is reciprocity. This
means that the parties experienced that both sides invested in the relationship. The following
paragraphs will elaborate on both components of incremental trust building and explain the
actual mechanisms used by Unilever that caused trust.
33
Unilever used three mechanisms to manifest in a trustable manner at the very outset, namely:
collaborating with trusted parties, showing skills and competences in a practical way and
writing of agreements.
so normally there is this tendency of believing that private organisations are always for
maximizing their profits. Then how are they sure that farmers are not going to be exploited?
Thats why we have the NGOs in the partnership, these are civil society organisations, whom
theyll believe will be there for the benefits of the village members
we went with the representative from the forest conservation so we were even more trustable,
the guy was already walking with the communities on tree planting so they knew his face
Villagers
After Novella talked to the leadership, the leadership talked to the villagers. They told that the
34
people from Allanblackia had very good ideas, so after that we decided to cooperate, to work
with Novella. The leadership of this village influenced our decision
when they came here, they first met our elders and they started to discuss it with our elders,
before they came directly to us. And even the village government itself depends on the elders.
First you have to get the ideas from the elders before you do anything
we distrust the clerk, because he is always giving the prices [won as part of the AB project] to
his relatives
Besides, people within the concerning remote communities want to feel that this alien large
company knows how to handle and dont like it if you tell them you dont know something.
you need to know what you want and you need to have knowledge and experience. In the
Allanblackia
Netherlands its sometimes respected to say, I dont know but lets find out together. Well, that
manager
Villagers
you have to know the capability of the person first, and then you create friendship to work
together, I can not being friends with you if I dont know your behaviour
And even after they produced the oil, they came back with a sample, so they are showing the
oil that is produced from the nuts
35
Village leader
4.2.2 Reciprocity
The second factor under the umbrella of incremental trust building is reciprocity. This means
that parties within a relationship act in a cooperative way because the other party shows
cooperation as well. In other words, trust itself causes more trust over time. It is already
discussed that this process starts with little investments and extend based on previous positive
experiences about the other parties behaviour. Unilever influenced this process by using four
mechanisms: Invest constant and structural in relationships, make the project community
property, do what you promise and have periodical evaluations.
Allanblackia project is investing in the communities in several ways. They are taking care of
community development, training the farmers in business skills, forming individuals in
groups to make them a legal entity and several other things. To make the Allanblackia project
even more living in the village, all kind of activities were organised. For example, individual
villagers and whole villages can win prices for collecting the most nuts. Villagers in the
concerning communities are very grateful to Unilever because of this investment. The story
below, told by an involved villager is a typical example of how the investment in professional
and personal relations is received:
you know, before this we were ignorant, we didnt have any knowledge, so this company came and
started to educate us. When you are doing the job, you have to calculate the costs, costs of farming, of
taking care of the farm, of harvesting and finally you know the total costs. When you are selling you
know if you can get profits or not. And they also told us about gender. Now we are living with our wives
without fighting and we even share what we have at the house. They told us to live in equity with our
wives. For example myself, I sold the nuts and told my wife how much, and we decided together to buy a
cow, and now we have a cow.
The following table shows endorsing quotes with respect to investment in relationships:
I couldnt invest the same amount of time Im investing now because I didnt really had a
picture of what was going on. But now, also because they have trained us and gave seminars we
are aware of what is going on. But before, I couldnt invest that much
they succeeded in creating friendship because they have been visiting us so frequently
First I had some doubts, but when they were coming so frequently and gave the seminars and
kept on explaining everything, all the doubts were gone
according to our society, its very important to create friendship with people and spend time
with them because they do not have knowledge. You have to keep close to them and keep raising
awareness. Collaboration couldnt be possible without that kind of friendship creation
they came here and started to create a friendship, and they told the village leadership that for
every kilo Allanblackia, 50 shilling goes directly to village development
I trusted them because they came here and spend all their time and energy for the whole week
so I thought, theyre serious, there was even a great manager who came all the way from
37
we brought some presents, thats how we make it, so thats a kind of bond, its good in Africa.
If you dont do that in a partnership, they think, okay, my organisation is in there, but as an
individual they dont really care about me
of course its all trust building, the more you interact, the more you teach them new skills, they
will trust you more, they know you better, they are gaining a lot of insight in business, in group
formation, we teach them on contracts and on negotiating, so its a whole process, for years
physical presence is very important, you have to keep on visiting, you have to be there for them,
we even have an office in Muheza [one of the districts].
Dutch
the farmers value the relationship much higher than the money. They are not willing to trade
Allanblackia
manager
Tanzanian
We are there to do more than business. The training were giving them is on the basics, on
Allanblackia
business skills like gros margin analysis and making contracts, its not only applicable to
manager
Allanblackia, its useful for every crop. We also look at the other crops they produce and get
access to markets for that crops, not only Allanblackia
Village
You can even see the competition itself. People are trying to collect more nuts, because the
leader
want to win so they get the prices. It challenges a lot. Last year another village collected 10.000
more nuts than mine, next time I want to beat them
Village leader
38
because I heard and saw that other people were working with Allanblackia, and they were
getting what was promised, I thought, okay if other people getting that, I can do it myself as
well
its very important with farmers, because they are easily disappointed. They put their trust on
you and if you dont meet their expectations, they are easily disappointed.
especially farmers, if something fails, youll need a good reason to explain. Because if youre
working together with them, youll need good reasons why something failed, because if you
dont, theyll never trust you again.
Tanzanian
if there was a meeting on a certain date, you have to make sure that youre there, If you agreed
Allanblackia
to bring the cash on a certain day, you need to make sure youre there, if they say they need
manager
bags, you need to buy them and make sure they get them, if you say you are going to open a
nursery or bring the material, make sure you are there.
we sit down with the whole district and we do the evaluation, we discuss what went well and
leader
Villager
they are coming twice a year to have a big evaluation, and we always give feedback.
Tanzanian
For example in muheza we meet with 75 people. Very big meetings. So each group brings the
Allanblackia
chairman and the secretary and the clerk. And each village brings the village chairman and the
39
manager
village executive officer. You know why, the group leaders we talk about the farmers interests,
the feelings of the farmers. We get that from the group leaders, then the clerk, we talk about
challenges facing by leaking things of the farmers. The village government is first of all
interested in seeing that its economy is increasing, and they also get 5% of the village income
generated by the seeds for development work. so they want the project to be successful. So they
address problems from both areas, they are neutral. They not supporting us, they not support the
farmers, they support the interest of the government. So they make sure that everything is
moving smoothly.
4.3 Consistency
Trust building requires consistency in behaviour. Unilevers consistent behaviour is the third
factor that made them a trustworthy partner to the community members. It appeared to be
particularly important with respect to the way in which villagers are approached by different
project partners. Its already discussed above that it is essential to be consistent by doing what
you promise. Managing consistency in this context is pursued by the use of two very closely
related mechanisms: the consistency in information that is spread in the communities, and
consistency in the external project members who are send to the communities. Because of the
close relatedness of the mechanisms, they are discussed together.
So village members find it disturbing when continuously different project people coming to
the village. External project members have to become known by the village members, and tell
the same story. Consistency also provides the opportunity to have the different partners
function as a synergetic team. Community members mentioned they felt more confident with
40
the project because it was brought by a team which included all relevant parties. In the
Allanblackia project the international development organisation is specialized in partnership
strengthening. Among other things, they are putting the involved parties on the same line by
showing the shared objectives and the dependence on each other. In this case Unilever wanted
to start business in local communities, which make them dependent on NGOs who has to
mobilize the communities. The NGOs objective is to eradicate poverty in the communities,
which happens through the business initiated by Unilever. Furthermore, Unilever benefits
from governmental bodies who are responsible for conserving the forest, but also conduct
research on domestication of Allanblackia trees. These organisations give the company also
legitimacy. In turn the (non-)governmental bodies need money to do research and conserve
the forest, which Unilever can arrange through own funds, but also through external funds. So
all parties can help each other to meet their objectives by dedicating their specialization. The
quotes below underline the importance of working in a consistent way.
it was in Ghana, but actually is not very well anywhere. You have to look through the eyes of
Allanblackia
the farmer. If there is five times somebody from our project walking in, and it is five times
Manager
another person who tells five times a different story, than you will create a totally different
relation compared to when this is five times the same person
Tanzanian
acting like a team is very very important. Because I go there to buy the allanblackia, and find
Allanblackia
the quality is good because there is agreed on the quality with the partner who is responsible for
manager
training the farmers in quality. So when I leave, Faida MaLi is there [local NGO], and when
they leave, TFCG [forest conservation] is there, and the community members know we are one
thing, we are talking about the same thing
I never really interfered in approaching the communities, because the NGOs told which steps
were needed to organize it in a proper way and it indeed seemed to work out in a good way. So
besides I spend some money on it, I had not much interference with it
Villagers
I didnt really knew the organisation, but they came as a group, they gave us trainings and
seminars on all kind of subjects and they came to open new markets for us. Because of that, I
decided to trust them
NGOs
The task of SNV is to bring the organisations together, putting them on the same page and
show them the shared objective, at the individual level, no-one can attain that objective. So we
use action learning and make sure everybody sees each other as an important part of the system,
that you need each other
41
Village leader
Villagers
42
And indeed, during the interviews all villagers mentioned the posters they saw and the
commercials they heard.
43
Another illustrative example of what influences the institutional framework are historical
events of a concerning community. They can determine how strangers are welcomed, and
need to be taken in account very seriously.
Im talking about more that twenty years ago, but the wounds are still there. People are rising
questions: are these not the same people who came here and told us they would buy all our spices, but
didnt, they left the product with us, are those not the same people who promised all this and that? And
there are also farmers who sold crops during the Tanzanian corporate movement, and havent got paid
to date. You have to be aware of this information to be able to anticipate on this kind of questions
44
Unilever obtained the crucial insight in the hierarchy, rules, norms, values and history of the
communities which had to be involved in the Allanblackia supply chain. Using this
knowledge was an essential moderator variable during the trust building process. From this
point of view, three mechanisms were key in the process: adaptation to rules and hierarchy,
adaptation to norms and values and collaboration in a country executive team.
Although proper use of the hierarchal structure in Tanzania means going through the
government structure as outlined in the quote above, it can require a totally different approach
in another country.
in Ghana, you just go into a village and make a quick stop at the local chief, if hes available, and
then you go straight to the villagers. So it is much more direct, much easier, but at other side, the
relationship is also less strong. In Ghana its always very unclear what you exactly have achieved
(quote by Dutch Allanblackia manager)
45
if its a foreigner coming to this country, it means that the government has to agree with him,
and he has to come with some kind of agreements from the government
I wouldnt have trusted them if they didnt pass the leadership because there are a lot of
cheatings. People can cheat, the can come and pretend they want to do something and you can
find them deceiving you. So its very important for them to pass the village leadership
You cannot work with people without the government being aware, even now, as you have come
here, the village leadership is suppose to know that there are people here doing the interviews,
thats why I told your driver to go there and sign the book
NGOs
and you get their [villager leaders] blessings. They will also help you to explain the benefits to
the villagers. Sometimes youll find that this Swahili language is not as clear as their own
language. The village executives are born in the same village and understand both Swahili and
the local community language very well, then they just talk the peoples language to the people.
46
the environment is very important, it gives us lee, and even what we are harvesting is from the
trees. The people from Novella [the Allanblackia project] are supporting us a lot concerning the
environment
We discovered that these people had good intentions, because apart from anything else, they
are keeping our environment, so we decided to collaborate
NGOs
Dress code is very important, and the way you talk to old people, the way you address them. If
you not well behave, they may not kick you out rudely, but they will not entertain you next time,
theyll give you a slow go
African men, normally they want to control the funds in the family. We had to convince them
Allanblackia would be an extra income for the family by respecting they are the heads of the
family. At the same time we showed them this was a gender sensitive project
Dutch
he [one of the NGO people] knows how to handle people, he did many first introductions to
Allanblackia
create rapport with the people, that people thought, -thats a gentile man, I believe him or I trust
manager
him-. If I had stand there myself it probably worked out in a totally different way
Tanzanian
Now, sustainable in Unilever terms, because that can bring some confusion, is about don't
Allanblackia
harm the environment, but also to make sure that ethics are taken in to account, we agreed in
manager
the beginning that we were not going to pay corruption to any institution, we had norms; no
corruption, no child labour, respect the government laws and the local laws and also gender,
make sure that women are taking part, yes.
47
I always brought local persons and organisations in action to perform the actual job
Allanblackia
manager
in each country it are always people from the country itself, including the local management,
who are running the project. The greater part of the project is in association with small local
companies and people on village level, and I dont think western people can handle this in an
efficient way
we said, guys [to the international NGO] we have a wonderful idea, but we have to collaborate
with all those people in the local communities, were not sure how to do it, but we want to do it
in a decent way and you can help us with that
Tanzanian
Unilever utilized the capacity of the company that was already existing in the country, and that
Allanblackia
is an advantage. I was local staff from Unilever, but the people in Tanzania see me as one of
manager
International
we are specialized in connecting peoples capacities, we can collect the capacities of all
NGO
organizations on the ground, who can support the mobilisation of communities and establish the
supply chain
Local NGO
Culture, I mean this is dynamics of the community, for them to trust you, you have to know
their behaviour, what they expect from you
Villager
it was important for them to come through the forest people because the Allanblackia is
leader
supposed to be prevented, and it is under the forest people. Even we have rules in our village to
make sure we protect some of the trees, so most of the time we work together with the forest
people
48
49
Reciprocity
Incremental trust building
Trust
Consistency
- Spread consistent information
- Control consistency in external project members
Communication
- Manage transparent communication
- Use mass communication
Another objective was to explore if prevailing trust literature has value in the context of the
BoP. Looking at the trust building factors in the Allanblackia case through the scope of this
literature provides in first instance a familiar view. The factors as described in the result
chapter show a strong overlap with the categories of the trust building literature as displayed
in the table on page 16. In that sense, we can say that the prevailing trust literature is valuable
in the context of the BoP. However, the trust building model on page 50, shows two
interesting characteristics. The first one is the moderating role that two of the trust building
factors have. The other characteristic is the insight in mechanisms. Knowing that certain
factors influence trust building, doesnt tell much about the actual processes that account for
relations. To overcome this gap, the result chapter discussed the mechanisms that exactly tell
what caused the relation between the variables in the specific context of the BoP.
Then there are two questions concerning the BoP literature. The first is: what does this thesis
add to the existing literature, and are there any contradictions? The second is: do the methods
to successfully launch BoP ventures, as proposed in the BoP literature, foster trust as well?
Incremental trust building is a broadly discussed matter. Bowman and Hurry (1993) stated
that a trusted relationship starts with incremental commitment and Burt and Knez (1996)
discusses the slow process of change in the development of trust. In line with the literature,
the result chapter made clear that the villagers first started with little investments in the
project and increased their devotion over time. The literature leads one to suspect that
reciprocity is a driving factor in this process. And indeed, the case showed reciprocity as one
of the factors hanging under the incremental trust building umbrella. Furthermore, outset
manifestation, proposed as the other factor with respect to incremental trust building is
comparable with the category the first steps in trust building as displayed in the table on
page 16.
Also consistency is a familiar concept in the trust literature. Mayer et al (1995) appoint
integrity as a variable influencing trust. According to them, integrity is determined by the
extent to which a party shows consistency in behaviour.
Adaptation to the institutional framework can be traced to several of the insights discussed in
the theoretical framework. Yet, besides Arrighetti (1997), all scholars mainly discuss the
informal part of the institutions. Morgan and Hunt (1994) name shared values, Mayer et al.
(1995) speak of benevolence, Creed and Miles (1996) call it similarity, Lewicki and Bunker
(1995) a social bond because of mutual appreciation and Das and Teng (1998) discuss the
importance of norms, values and needs of each other.
52
More exiting, however, is the deviating use of the above discussed factors in the context of
the BoP. As already mentioned, there are two variables which play an important moderating
role.
The first one is communication. Although Bacharach and Gambetta, (2001) appointed
communication already as a moderator variable, it seems to have a more important role in the
context of the BoP than in a western context. The results showed that the world views of the
representatives from the western MNC and the members of the BoP communities are very
different. Hence communication had the very responsible role, to not only to make the trust
building activities knowable to the community members, but also to translate these
activities to their world view. Transparency in the communication is requisite. The reason
why the moderating role of communication is less weighty in western situations, could be
because less explanation is needed on institutional factors. This brings us directly to the next
moderator variable: the importance to adapt to the institutional framework of a concerning
community.
The difficult surmountable differences between western life and life in BoP communities, can
be a serious barrier in trust building. A MNC could put a lot of effort in the earlier mentioned
trust building factors, but if they dont adapt it to the institutional framework of the
concerning community, it wont make a big difference. Hence, the extent to which this
happens determines the success of the other trust building factors. The previous page already
showed that acknowledging rules, norms and values is discussed in the literature. It is,
however, not discussed as a moderator variable. Hence, the question is: why it should be a
moderator variable in the context of the BoP and not just an independent variable as presented
in the literature? The answer could be the following: the literature generally refers to
institutional factors as the more you are similar to each other and share the same norms and
values, the more you will trust each other. In western situations, MNC representatives
already have a similar kind of world view as their western partners and hence, the more it is
similar, the more they will trust each other. Conversely, western MNC representatives and
BoP community members are not similar at all. The difference is that big, that trust could
hardly be based on similar world views. Exactly this is the reason why trust building activities
should be very consciously adapted to the institutional framework of the concerning
community members. Hence, the lack of similarity makes adapting to the institutional
framework a moderator variable.
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Another point regarding the adaptability of prevailing trust literature in the context of the BoP
is the actual mechanisms that cause the relationship between the variables. It could be well
conceivable that totally different mechanisms have to be used in the context of the BoP. And
indeed, although some mechanisms can be traced back to the literature, most of them are
specifically applicable in the BoP and some of them stand out especially.
For instance, showing skills and competences in a practical way. Showing skills and
competences is also mentioned by Mayer et al. (1995). However, the way in which skills and
competences cause trust is different in the BoP. Members of remote communities assess skills
and competences by looking at practical examples. An example is showing an actual product,
made by the company, or by learning practical lessons during the trainings.
Also the writing of agreements has a special way of functioning in the BoP. It would be likely
to trace this mechanism to the possibility of deterrence if trust is violated as described by
Lewicki and Bunker (1995). However, the way how it actually works is quite different.
Deterrence on legal grounds is barely possible, community members have nor the money nor
the experience to summon Unilever. Still they see these written agreements as an important
confirmation of the understandings with respect to the collaboration. Deep interviews
revealed that this is mainly because NGOs co-sign the agreements, and villagers attach strong
value to this. Hence, writing agreements can therefore better be reduced to the trusted
partner as described by Das & Teng (1998).
As in the theoretical framework turned out, all trust scholars agree that reciprocity influences
trust building. However, how to influence or manage reciprocity is less discussed. Basically
this makes sense, because reciprocity is about how both (or all) parties experiencing each
others investments in their relationship, and not about an effect caused by one of the parties.
Yet, if reciprocity has to do with more than one party, there must be at least one party who
can influence or stabilize this process. Unilever managed the reciprocity by four mechanisms:
constantly investing in the relationship, making the project community property, doing what
they promised and having periodical evaluations. The first three mechanisms determined that
the other party experienced a constant devotion from Unilevers side. The last mechanism, the
evaluations, was used so all parties could vent the way in which they experienced each others
investment in the relationship. This way, the reciprocity was evaluated.
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Another mechanism standing out, is the transparent communication. The result chapter
discussed in Unilevers strategy to build trust, was constantly watching the clearness of all
aspects of the project to all involved parties. Everything, from strategic intentions until gross
margin analysis was explained down to the smallest detail, time and time again. However,
some suspicion with respect to this mechanism is appropriate. How can the complexity and
stratification of a company like Unilever be transparent to a BoP community member?
Indeed, it hardly cant. However, it are only the aspects of Unilever relevant to the involved
community members that have to be transparent. Hence, communication the factors related to
the supply chain can be made transparent, and doing this made Unilever a trustable partner.
However, zooming out on the literature to a more general level provides some interesting
views. The first thing we bump into, is the proposed importance of flying under the radar of
corruption, found in Stuart Harts book Capitalism at the Crossroads (2007). He explains
that building BoP ventures from the bottom up, by working directly with the end-consumer,
makes it possible to bypass the need to deal with the often corrupt central governments. This
might work out well, but might also take the corner too tightly. In the Allanblackia case it
turned out that trust was earned by using the government system in a proper way. Although
the national government wasnt involved in the beginning of the project, Unilever had to pass
the government on the regional, ward and village level before it could reach the actual
villagers. All interviewees mentioned explicitly that Unilever would not have been trusted if
they would have went directly to the villagers or the government on ward or village level. The
district government was the first trusted party to involve, before going any further. Another
statement in Harts book is also worth to reconsider. He mentions that relationships are
primarily grounded in social, not legal contracts. This could imply that written agreements,
signed by the involved parties are useless. The Allanblackia case, however, showed that
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although people in local communities do attach great value to social contracts, they feel even
more confident with having contracts signed by Unilever representatives.
The findings of this thesis have more to offer than just, similarities and contradictions with the
BoP literature. There are also findings which are not connectable to the BoP literature yet, but
can offer a added value.
One of the findings in the Allanblackia case was the role of mass communication. People in
remote communities are not used to poster advertisements and commercials on their local
radio and it is taken much more serious than in western countries. Besides, by the use of mass
communication, people get constantly confronted with the project and it get integrated in the
community faster. The only communication channel discussed in the literature is face-to-face
communication. Mass communication is not yet recognized as a medium to increase
trustworthiness.
Furthermore, BoP literature pays a lot of attention to the engagement with local people and
becoming indigenous. The Allanblackia case showed that the community members attached
a lot of value to the transparency of the communication and to consistency in both
information and people. This could be an added value to the process of becoming indigenous.
The question that rest is: do the methods to successfully launch BoP ventures, as proposed in
the BoP literature, foster trust as well? The BoP protocol (Simanis & Hart, 2008) provides a
well-organized and comprehensive overview of most of these methods. Hence, it would be
interesting to discuss this protocol in the light of this thesis findings. It seems, however, that
this is a very short discussion. All of the nine steps as proposed in the protocol can also be
found in the Allanblackia case. Hence, based on this thesis, one could say yes, the BoP
protocol fosters trust building. There are, however, some points in general found in the
protocol that needs some reconsideration.
It is stated that in the selection of a BoP project site it would be better if the MNC does not
already have an extensive, entrenched business presence, Because, the initiative could be
captured by the corporations traditional business norms and practices. Surprisingly,
Unilever did have an extensive, entrenched business in Tanzania, namely the tea business.
Moreover, in this case it was very convenient, because Unilever could recruit easily suitable
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people who had both knowledge of Tanzanian culture and Unilever culture. Of course, it
should be taken in account that the venture have to be flexible and innovative, but that should
not have to be a great barrier. The Allanblackia case showed that it can have more advantages
than disadvantages to already have an extensive business in the selected BoP business site.
Furthermore, the protocol suggests as one of the first steps to select a community based
organisation as a partner. This thesis endorses that it is very important to have a local partner,
but the protocol might include one essential step, before selecting a local partner. Unilever
collaborated with an international NGO called SNV. This partner had essential connections
with various local NGOs throughout the country. It did not only helped Unilever with finding
an appropriate local partner, but also fostered the collaboration between the several partners
and stimulated the learning process between the parties from different communities. Hence,
according the findings in this thesis, it could be more effective and efficient to partner up with
a international NGO, before directly approaching community based organisations.
The last point in the protocol to reconsider is about entering the community with no
preconceived product ideas and no initial commercial agenda. Unilever did the opposite. It
knew already what it wanted: oil from the Allanblackia nuts. Knowing already what they
wanted enabled them to conduct some preliminary research about potential possibilities. This
had the advantage that they could approach immediately the right communities with a clear
story, which made them more trustworthy to the government and the villages. Of course,
starting a BoP venture without any commercial agenda can lead to very innovative business
plans. However, it does not have to mean that having an idea in advance will by definition be
less successful.
5.4 Conclusion
The discussion showed that we already knew the trust building factors in the Allanblackia
project from the prevailing trust literature. So, could it be that trust building works the same
all around the world? As for variables relevant in trust building activities, this could be true.
This thesis confirmed they are also applicable in the context of the BoP. However, this case
also showed that the relation between the variables, their role within the process, and the
actual processes that account for the relations were for a great part context specific. Hence,
variables from the trust literature can be used as a good starting point for trust research in
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various contexts, but the art of trust research will be to find the context dependent relations
and mechanisms. The model on page 50 indicates the relations between the variables and the
actual mechanisms accounting for the relations in the context of a western MNCs building
trust with local communities in the BoP. As for the BoP literature, we saw that the ideas
living in this field of research are for the greater part consistent with the outcomes found in
the Allanblackia case. However, the discussion showed also some critical remarks, suggested
several points that could have some attention. The main reason for this could be the still infant
phase in which the BoP literature finds itself. Keep on studying BoP cases from different
viewpoints and by different researchers could slowly evolve this area of Academia to a
meaningful discipline that might have more impact on the equal distribution of the worlds
wealth than we can imagine on this very moment.
5.5 Limitations
The relevance of the above written conclusions has to be taken with some shade of meaning.
To start with, the drawn conclusions are based on just one case. Findings would have had
more weight if they were originating from multiple cases including both successful trust
building cases and unsuccessful cases. Furthermore, trust building activities can be very
dependent on the country in which they are executed. This study would be more significant if
it was conducted in various countries. Also working with a translator could have caused some
bias in the interpretation of the interviews with the people in local communities. Although the
translator was a very proficient Swahili and English speaker, the intervention of a third person
between interviewer and interviewee could cause the lost or distortion of potentially important
information. Furthermore, the point of departing could have influenced the findings. Trust is
interwoven in a complex network of research fields. This study started with prevailing trust
literature, BoP literature, cross cultural collaboration literature and development literature as a
base. However, there are also other fields of research that could offer an interesting starting
point. The results showed that an important factor to build trust is the adaptation to the
institutional framework. The subject institutions, however, is a well-established field of
research. Hence, we could learn a lot from literature on institutions with respect to trust
building, or collaboration in general. For instance, if we know how to study institutions, trust
could even more effectively been build. Also research from communication studies could
have had added value to the theoretical framework. The results sketched communication as an
important factor in trust building. It would be interesting to see if the field of communication
research offers useful guidelines to explore effective ways of communication in BoP contexts.
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