TITLE: Business Solutions for Poverty Eradication: A Review of Management Literature and Future

Research Directions

Name: Joseph Angelo Panghulan

Course & Section: International Development Studies 41 (spelled-out format)

Subject: International Political Economy

Professor: Jumel G. Estrañero

Table of Contents

Summary

Introduction

Aims

Conceptual Framework

Conceptualizations of Poverty

Critique of Traditional Perspectives

Proposed Conceptual Evolution

Future Research Directions

Conclusion

Summary

This thesis undertakes a comprehensive exploration of the academic literature on business approaches
to poverty eradication, with a specific focus on management perspectives. It identifies limitations within
existing interpretations, emphasizing the often-overlooked interacting constraints that ensnare
individuals in persistent multidimensional poverty. The discussion advocates for an evolved
understanding of poverty and proposes solutions explicitly designed to break the self-reinforcing cycles
of deprivation, fostering sustainable escapes. In addition, the thesis outlines directions for future
research to harness the full potential of management science in addressing global poverty challenges at
scale.

Here is the mini thesis formatted with thesis spacing:

Business Solutions for Poverty Eradication: A Review of Management Literature and Future Research
Directions

Introduction

Poverty remains one of the most persistent global challenges, with billions worldwide unable to meet
their basic needs. While economic growth has reduced extreme poverty in some regions, progress has
been uneven and poverty continues to trap people in a vicious cycle of deprivation. The exploration of
business solutions to alleviate poverty has arisen as a complementary field to governmental, non-profit
and social entrepreneurship efforts. Management research seeks to conceptualize innovative models
that positively engage impoverished populations, providing ethical profits for corporations while creating
social and economic impact.

This article reviews academic literature on business approaches to eradicating poverty, specifically from
a management perspective. It summarizes key traditional viewpoints, critiques dominant assumptions,
and proposes recommendations to advance this burgeoning domain of scholarly inquiry. The analysis is
structured into four main sections. First, it outlines the methodological approach undertaken in the
literature review. Second, it synthesizes conceptualizations of poverty and poverty reduction solutions
proposed in current scholarship. Third, it identifies critical limitations in existing perspectives and argues
for an evolved understanding of poverty informed by principles of construct validity. Finally, it suggests
implications and directions for future research.

Methodology

This literature review engages in purposive sampling of academic articles on business solutions targeting
poverty reduction and eradication. The initial search spanned formal channels like electronic databases,
informal channels such as experts, and secondary citation tracking to identify influential contributions.
While this generated substantial results, inclusion criteria were applied to refine selections. Articles had
to: critically engage with business poverty approaches, provide conceptual models/frameworks or
theoretical analysis, offer influential or novel perspectives, and contain relevant empirical or practical
applications.

Furthermore, the review excludes literature examining economic impacts of foreign direct investment
and corporate growth under broad 'trickle-down' assumptions. The focus remains specifically on
business initiatives consciously targeting impoverished groups. Final included articles range from
pioneering scholarship that stimulated academic and commercial interest in 'bottom of the pyramid'
(BOP) markets, to recent conceptual developments like microfranchising, inclusive business models,
partnerships between corporations and non-profits.

The next section summarizes dominant themes and perspectives that emerged from analysis of 18
identified articles. This sets the groundwork for discussing limitations of traditional assumptions and
proposing an evolved understanding to advance poverty scholarship.

Conceptualizations of Poverty and Poverty Reduction Solutions

Analysis of the sample literature reveals diverse interpretations of poverty and resultant business
solutions. Two primary categorizations are discussed below along with their implications.

Poverty as a Multidimensional Problem

Some studies adopt conventional conceptualizations of poverty as a socioeconomic problem manifesting

in forms like inequality, social marginalization, and capability deprivation. These portrayals underlie
skeptical critiques of corporate social responsibility (CSR) initiatives, arguing their limited capacity to
address structural poverty drivers aligned with critical development goals. Newell and Frynas (2007)
exemplify this perspective in their assessment that output-centric CSR has restricted potential for
redressing complex, multidimensional poverty. They advocate governmental interventions to enable CSR
poverty alleviation agendas integrated with state-led development policies. Their approach construes
business poverty solutions as supplementary to broader institutional efforts.

Poverty Symptoms and Causes as Innovation Spaces

In contrast, an influential set of scholarship chooses narrower views of specific poverty attributes as
launchpads for commercially viable solutions. Prahalad and Hart's foundational 2002 article illustrates
this thinking by concentrating on the untapped purchasing potential of the world's four billion poorest
people. Terming this demographic the 'bottom of pyramid' (BOP) market, they argue its latent demand
can simultaneously benefit multinational firms and low-income consumers through appropriate
innovations.
 Follow-on research elaborates potential innovations in products, services and business models. Karnani
(2007) critiques the profitability of BOP models but endorses private sector job creation for poverty
reduction. Gibson (2007) proposes microfranchising as a platform for impoverished entrepreneurs. The
unifying thread across these examples is the alignment of business solutions with particular poverty
symptoms and causes.

Critique of Traditional Perspectives

The above analysis reveals two dominant logics applied to conceptualizing and addressing poverty - one
adopting conventional assumptions grounded in broader development fields, another based on
fragmenting poverty attributes as discrete innovation problems. However, synthesizing the sample
literature exposes critical limitations in both perspectives.

Failing to Capture Multidimensionality

First, while studies in the initial category argue poverty encompasses multiple reinforcing deprivations,
proposed interventions like CSR partnerships have ambiguous poverty reduction outcomes. Most
solutions target specific areas like health, education, or gender equity without considering systemic
interactions between these dimensions. This risks transient outcomes relapsing once program inputs are
withdrawn.

On the other hand, concentrations on singular poverty facets for business model innovation provide only
partial relief. The poor still remain trapped by structural barriers not addressed through products aiding
water access or microcredit for subsistence entrepreneurs. Fragmented alleviation across disconnected
domains cannot enable comprehensive poverty escapes.

Overlooking Core Poverty Drivers

Additionally, both sets of scholarship tend to overlook dynamics that keep people persistently poor.
Observing income, consumption, employment or other attributes in isolation masks the tendencies for
disadvantages in these areas to accumulate and lock people into deepening impoverishment. Escaping
stable equilibriums of deprivation requires coordinated progress across different dimensions like
capabilities, physical and financial assets, social relationships and psychological outlooks. While multiple
academic disciplines have examined poverty traps, management literature examining business solutions
lacks this systems perspective.

Proposed Conceptual Evolution

Constructing Valid Measures

The above discussion reveals a need to evolve conceptualizations of poverty and resultant business
solutions using principles of construct validity. This requires accurately and comprehensively capturing
the phenomenon intended for investigation. In poverty research, it becomes imperative to incorporate
interacting constraints across economic, social, political, physical and psychological realms that
collectively sustain debilitating equilibriums. The appropriate analytical unit shifts from reductionist
income measures towards the complexity of deprivations denying human well-being.

In this light, a valid conceptualization views impoverished existence as embedded inside a 'self-
reinforcing mechanism of multidimensional constraints systematically depriving capabilities and
opportunities'. Individual attributes represent symptoms rather than the phenomenon itself. Escaping
enduring poverty requires dismantling the mechanisms trapping people in marginalization across
interconnected domains of life.

Aligning Goals and Evaluative Metrics

Furthermore, poverty alleviation interventions must shape goals and evaluative yardsticks from
construct-valid representations. In the business context, models targeting discrete facets risk
misdirecting resources if the underlying purpose remains increasing profits or shareholder returns.
Fulfilling social motivations like poverty eradication is ultimately ancillary. The suggested conceptual
evolution instead argues that business solutions aiming for comprehensive, sustained poverty escapes
must expressly design and optimize all functions solely for this purpose with embedded metrics tracking
progress towards capability security and opportunity expansion.

In practical terms, this could translate into platforms offering integrated solutions spanning microcredit,
skills training, apprenticeship employment, and niche market linkages rather than isolated products. The
constructive synergy enables multiplying prosperity impacts not achievable through individual solutions.
It orients stakeholder efforts and resources in unison towards the unambiguous goal of catalyzing escape
trajectories for people trapped in poverty. The following section expands on key directions and
imperatives to progress conceptual evolution and applied translation.

Future Research Directions

Realizing evolved understandings in academia and practice requires pursuing critical unfinished agendas
that can consolidate emerging insights and address persistent knowledge gaps. The article emphasizes
research across six domains:

1. Leveraging Traditional Business Knowledge

Pioneering poverty scholarship reacted against limiting assumptions in mainstream corporate models.
However, decades of management science offer invaluable context in strategizing, implementing and
scaling solutions. Integrating this by configuring conventional tools towards the unconventional
challenge of poverty escapes remains vital. Studies must creatively adapt marketing concepts identifying
willingness-to-pay, distribution know-how penetrating remote communities, HR practices incentivizing
talent retention, and other established expertise with context-specific customization.

2. Ensuring Model Sustainability

While social missions can morally justify business poverty interventions, ensuring self-sufficiency is
essential for enduring operations. Analyses indicate many social enterprises collapse despite showing
initial traction. Future research must formulate and test frameworks securing revenue models and
couplings with funding ecosystems, without compromising social objectives. Striking this balance
between financial viability and poverty centricity is critical.

3. Incorporating Poor People's Perspectives

Much scholarship focuses on innovating solution models from outside-in using conventional business
lenses. Without integrating worldviews, priorities and insights from people living in poverty, these run
the risk of misallocating resources or missing vital dynamics. Studies recognize this gap but actual
incorporation remains limited. Deep dialogic engagements can surface hidden constraints and contextual
adaptation needs.

4. Framing Business Poverty Solutions as Development Instruments

As elaborated earlier, business ventures targeting the poor often retain traditional orientation pillars like
profit maximization. With poverty complexity, these quickly arrive at oversimplifications losing validity.
The suggested evolution instead argues for constituting business efforts as development tools gauged
against capability enrichment and deprivation escape. Research must expand philosophical arguments
and practical directives towards this paradigm shift.

5. Exploring the Poor as Innovators and Change Agents

Most literature positions impoverished populations as mere recipients of business solutions and passive
beneficiaries of poverty reduction efforts. However, examples like microfinance evangelize that the poor
can actively drive grassroots innovations addressing shared adversity. Academia largely lacks
explorations of such bottom-up entrepreneurial potential within marginalized communities.
Understanding informal Institutional dynamics and incubation support models should receive greater
prominence.

6. Developing Scaling Strategies and Multiplier Platforms

Final research priority must engage the challenge of expanding demonstrated solutions to match the
scale of global poverty. Pilot ventures often concentrate in limited geographies. Transitioning these
localized successes into national and international scaling through partnerships and multiplier platforms
remains a monumental but vital undertaking. Studies dissecting scaling barriers and enablers can
crucially advance realization of impact.

Conclusion
In conclusion, this mini thesis summarizes academic literature on business approaches to reducing and
eradicating poverty, focused specifically on scholarship with a management orientation. The dominant
themes and categories analyzed expose critical limitations in existing perspectives. They overlook the
tendency for poverty to manifest as a self-reinforcing equilibrium of constraints across different life
dimensions. Furthermore, proposed solutions often address isolated symptoms in a fragmented manner
or retain fundamental mismatches between alleviation goals and business priorities.

Tackling these shortcomings requires an evolved conceptualization using principles of construct validity
to accurately represent persistent, multidimensional poverty traps. Solutions must then tightly couple
around the singular focus of disabling constraint cycles and empowering escape trajectories in a
sustained manner. The article argues this represents a paradigm shift positioning business firmly as an
instrument for development rather than commercial interests. It also offers six imperatives for future
research that can realize the potential of management science in tackling global poverty priorities. In
generating new insights that translate into scaled impact, academia bears the opportunity to catalyze
solutions by innovating how business approaches shared human challenges.

REFFERENCES:

https://warwick.ac.uk/fac/sci/chemistry/research/gibson/gibsongroup-oldversion/intranet/theses/
creese_oliver.pdf

https://eric.ed.gov/?id=EJ1363167

https://eric.ed.gov/?id=EJ1363167