For the Poor, Help from MBAs
Wednesday, August 17, 2005
They’re bringing microfinancing, business development — and eventually a consumer economy — to many impoverished
Sue Igoe, a second-year MBA student at
Igoe, who originally sought to intern at a media outlet in
Agora -? which draws its name from the Greek word for marketplace -? was founded by
“BOTTOM OF THE PYRAMID.” This is one of many opportunities MBA students and recent graduates are creating to help give purchasing power to people in
Several educators like C.K. Prahalad, a professor of corporate strategy at the Stephen M. Ross School of Business at the University of Michigan, and Stuart L. Hart, a professor of management at the S.C. Johnson Graduate School of Management at Cornell University, are writing about these practices and sharing their ideas with students. However, B-schools still have largely ignored the phenomenon, says Meghan Chapple, senior associate at the World Resources Institute (WRI), a nonprofit group in
“You’ll see that there isn’t enough happening in the classroom,” she adds. “The academic world has to keep up with what practitioners are doing.”
EVENTUAL PROFIT. BOP principles refer to a corporate strategy that has managers seeking to improve the lives of the less fortunate. The difference between BOP and charity is that the companies plan to make a profit eventually and turn the poor into consumers. The idea is also to provide them with dignity and the means to care for themselves.
In one example, GSM Assn., a trade organization in
“By providing reliable and low-cost cellular technology to emerging markets and connecting the unconnected, we will be able to strengthen and accelerate economic development, which will ultimately help contribute to an overall better standard of living,” says David Taylor, director of strategic operations in high growth markets at Motorola Mobile Devices in Britain, a partner of GSM Assn. “Building a communications infrastructure is one element of this development.”
BEHIND THE TIMES. While Prahalad’s book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing, 2004), has put the theory on the table, advocates say B-schools are behind the times in teaching this new approach. In the 2003-04 academic year about 25 elective courses focusing on BOP principles were offered. This fell to 23 the following year, according to “Beyond Grey Pinstripes 2005,” a survey by WRI and Aspen Institute of 90 B-schools that will be released in October. On average, about 818 students a year took an elective BOP course.
Students are seeking out many of the opportunities on their own. Ting Shen, a second-year student at the Tepper School of Business at
When she was offered the chance to intern at UNICEF in
GRASSROOTS RELIEF. But the position offered to Shen was unpaid, and that’s often not viable for MBA students. She went to Dean Kenneth B. Dunn, who agreed to give her a scholarship, so she wouldn’t be financially penalized for taking the job. In fact, Dunn and his colleagues are now trying to find a way to offer a similar scholarship annually to students interested in doing nonprofit work of this nature.
Many of the MBA students and alumni say the most exciting part of the sudden interest in BOP programs is watching a relatively new theory being put into practice. Providing necessities like clean water and health care plays an important role in the quest to alleviate poverty. Blaise Judja-Sato, an MBA graduate of the
He quit his job and created VillageReach, a nonprofit group that brings basic health care to people in
“LIKE A PIONEER.” Craig Nakagawa, chief operating officer of VillageReach and a 1997 alumnus of the Graduate School of Business at the
Similarly, Venkat Shankar, an M.D. and 2005 EMBA graduate of
“The work really recharges my batteries,” says Shankar. An interest in doing larger-scale projects similar to this one is what prompted him to enroll in the EMBA program in the first place.
Truly, Shankar represents a new wave of students who see business ?- not charity — as the solution to poverty. “Companies can be responsible, profitable, and change the world all at the same time,” says Prahalad, one of the leaders in the BOP movement. It’s just a matter of time before other B-school professors and researchers catch up to their students.