Cross‐functional Management and Base‐of‐Pyramid Issues in Logistics and Supply Chain Management

• DOI: http://doi.org/10.1111/jbl.12223
• Published date: 01 June 2019
• Author: G. Tomas M. Hult,Tobias Schoenherr,Walter Zinn,Paul Hong,Thomas J. Goldsby
• Date: 01 June 2019

Editorial

Cross-functional Management and Base-of-Pyramid Issues in

Logistics and Supply Chain Management

Paul Hong

1

, Tobias Schoenherr

2

, G. Tomas M. Hult

2

, Walter Zinn

3

, and Thomas J. Goldsby

3

1

University of Toledo

2

Michigan State University

3

Fisher College of Business

Keywords: Base-of-Pyramid markets; emerging economies; social responsibility

INTRODUCTION

In this issue, we present a Special Topic Forum (STF) covering

questions related to the Base of the Pyramid (BoP), as well as

two additional articles covering cross-functional topics. Cross-

functional research remains a key topic in our field. The two

cross-functional articles included in this issue advance our under-

standing by (1) providing a synthesized definition and measure-

ment scale for functional integration and (2) looking at the roles

of the procurement and engineering functions in the supplier

selection process. The BoP STF focuses on the subject matters

of supply chain efficiency, corruption, and success factors for

social enterprises. The remainder of this editorial is an introduc-

tion to the STF and is followed by a summary of each individual

contribution in the issue.

Over the last decade, the significance of emerging economies in

Africa, Asia-Pacific, and Latin/South America in global logistics

and supply chain management (LSCM) has been increasing. Using

these regions as a context, research attention is beginning to be

devoted to a market commonly known as the “Base of the Pyramid”

(or BoP), recognizing its poverty reduction imperative and market

growth potential (Karnani 2007; Prahalad 2009; Rivera-Santos and

Ruf

ın 2010; Viswanathan et al. 2010; Acosta et al. 2011; Singh

et al. 2015). The BoP includes the majority of the world’s popula-

tion, predominately residing in the least developed countries, who

make up the bottom of the world’s economic pyramid. In addition,

while countries such as China and India have been growing affluent

classes that are comparable to the economic middle class in other

advanced economies, a considerable number of people in these

countries can also be considered to belong to the BoP, due to their

often very low income level.

The BoP context provides opportunities for scalable business

solutions to create social and economic value, while at the same

time requiring mechanisms to address resource scarcity (Calton

et al. 2013; Sutter et al. 2014; Chliova and Ringov 2017). As

such, involving the BOP as a significant pool of potential

customers requires vigorous private and public partnerships that

are willing to assume shared responsibility and implement sus-

tainability practices beyond narrowly defined economic/produc-

tivity-based goals (Porter and Kramer 2011; Berger and Nakata

2013; Calton et al. 2013).

Within this context, supply chain management, in general, and

logistics, in particular, have a special responsibility due to their

focus on enhancing wealth creation, designing successful deliv-

ery of products and services, determining socially responsible

distribution, and managing global complexity (Gold et al. 2013;

Guanasekaran et al. 2014; Hong and Park 2014; Vachani and

Smith 2008). It is therefore time for LSCM researchers to con-

sider emerging issues related to BoP markets (Gold et al. 2013;

Fawcett and Waller 2015; Rodr

ıguez et al. 2016).

THE BASE OF THE PYRAMID AND THE TOP OF THE

PYRAMID

The Base of the Pyramid (BoP) concept has distinctive characteris-

tics and stands in contrast to the Top of the Pyramid (TOP). The

BoP is generally referred to as the more than 4 billion people who

live on less than $2.00 a day. This population, however, constitutes

a combined purchasing power of $5,000 billion a year (Perez-Ale-

man and Sandilands 2008; Prahalad 2009; Acosta et al. 2011). The

population not belonging to this group is generally referred to as

the Top of the Pyramid. As such, while the ToP is often associated

with advanced economies, the BoP includes vast segments of the

population in the least developed or developing countries (Sutter

et al. 2014; Maksimov et al. 2017).

Table 1 summarizes ToP and BoP parameters across popula-

tion, region, annual income per capita, demographic characteris-

tics, capital availability, technology capabilities, and logistics

infrastructure, as anticipated for the next 20 years.

THE INTERFACE BETWEEN TOP AND BOP

Figure 1 conceptualizes the nations of the world into two groups:

the Top of the Pyramid (ToP) and the Base of the Pyramid

(BoP). Although individuals and organizations from countries in

different groups may interact directly, such as ToP countries with

BoP countries, ToP countries are significantly separated by

Corresponding author:

Tobias Schoenherr, Hoagland-Metzler Endowed Professor of Pur-

chasing and Supply Management, Department of Supply Chain Man-

agement, Eli Broad College of Business, Michigan State University,

632 Bogue Street, Room N370, East Lansing, MI 48824, USA;

E-mail: schoenherr@broad.msu.edu

Journal of Business Logistics, 2019, 40(2): 76–80 doi: 10.1111/jbl.12223

© 2019 Council of Supply Chain Management Professionals