The Surprising Duality of Jugaad: Low Firm Growth and High Inclusive Growth

• DOI: http://doi.org/10.1111/joms.12309
• Published date: 01 January 2020
• Author: Joakim Wincent,Dean A. Shepherd,Vinit Parida
• Date: 01 January 2020

The Surprising Duality of Jugaad: Low Firm Growth

and High Inclusive Growth

Dean A. Shepherd, Vinit Parida and Joakim Wincent

University of Notre Dame; Luleå University of Technology and the University of Vaasa; Luleå University

of Technology and Hanken School of Economics

ABSTRACT Western theories on creativity emphasize the importance of access to resources and

the generation of innovations as a source of sustainable competitive advantage for firms.

However, perhaps the emphasis on slack resources and the firm as the level of analysis may

be less appropriate for understanding the benefits of individual creative problem solving in

resource-poor environments of the east; focusing solely on the firm is not sufficiently inclusive

and may underestimate the benefits of creative problem solving under resource scarcity.

Through an inductive interpretive case study of 12 problem solvers in the highly resource-

poor environment of rural India, we identified the antecedents, dimensions and duality of

outcomes for an Indian cultural source of creative problem solving called jugaad. Jugaad

relies on assertive defiance, trial-and-error experiential learning and the recombination of

available resources to improvise a frugal quick-fix solution. Our inductive framework provides

new insights into the dual outcomes of creative problem solving from an eastern perspective;

jugaad is unlikely to be a source of competitive advantage for firm growth but represents a

source of enhanced wellbeing for inclusive growth.

Keywords: creativity, inclusive growth, innovation, social entrepreneurship

INTRODUCTION

Creative individuals can help improve the performance of organizations (Amabile,

1988; Elsbach and Flynn, 2013) and communities (Miller et al., 2012; Shepherd and

Williams, 2014). Western theories of the creativity of individuals within organizations

emphasize the importance of access to resources (Bradley, et al., 2011; George, 2005;

Paeleman and Vanacker, 2015). The flipside of this effect is that those without sufficient

resources are unlikely to facilitate the creativity necessary to generate solutions and are

doomed to languish with poor performance. Extending this logic, individuals in

Address for reprints: Dean A. Shepherd, Mendoza College of Business, University of Notre Dame, Notre

Dame, IN, USA (Dshepherd@nd.edu).

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resource-poor environments – those who need creative solutions to problems the most

(to improve their situations) – are the least able to assemble the resources necessary to

generate creative solutions. In contrast to emphasizing resources to generate creative

solutions, bricolage represents actions individuals take that generate creative solutions in

resource-constrained environments (Baker and Nelson, 2005; Garud and Karnoe,

2003). This act of creativity is consistent with the adage that necessity is the mother of

invention, but despite evidence that such a process generates creative solutions,

researchers question how beneficial these solutions are to firm growth (e.g., Baker and

Nelson, 2005; Garud and Karnoe, 2003; Lanzara, 1999).

However, perhaps the firm level of analysis – generally used in the extant literature in

the west exploring the benefits of solutions – may be less appropriate for understanding

the benefits of individual creative problem solving in resource-poor environments of the

east. Indeed, rather than focus on firm growth as a benefit of creative endeavours, scholars

exploring resource-poor regions of the east have begun to call for research on inclusive

growth (George, et al., 2012; Halme et al., 2012; Kabeer, 2012). Scholars suggest that

focusing solely on firm performance is not sufficiently inclusive and may underestima te

the benefits of individual creative problem solving for enhancing the social and economic

wellbeing of disenfranchised members of society (George, et al., 2012, p. 663). Therefore,

we ask: how individual creative problem solving in resource-poor regions impacts per-

formance beyond traditional Western theories of a firm’s competitive advantage?

We contextualize our exploration of the outcomes of individual creative problem-

solving in the highly resource-poor environment of rural India. Specifically, we build a

framework on the duality of outcomes of an Indian cultural source of creative problem

solving called jugaad, which relies on assertive defiance, trial-and-error experiential learn-

ing and the recombination of available resources to improvise a frugal quick-fix solution.

Through an inductive interpretive case study of 12 jugaadus (individuals engaged in

jugaad) in India, we build a framework of jugaad’s impact on firm and inclusive growth.

We inductively found that jugaad has a behavioural dimension consistent with the

notion of bricolage (i.e., ‘making do by applying combinations of the resources at hand

to new problems and opportunities’ [Baker and Nelson, 2005. Further, jugaad is a

broader concept than bricolage because it also involves an attitudinal dimension (an

assertive, defiant attitude) and an iterative dimension. In exploring the antecedents,

dimensions, and consequences of jugaad, we make two primary contributions to the lit-

erature on individual creative problem-solving under resource scarcity and the poverty.

First, we found that jugaad generates a duality of outcomes – low firm growth

(i.e., minimal [if any] sustainable competitive advantage to the firm) and high inclusive

growth (i.e., enhanced wellbeing of disenfranchised members of society), which has

theoretical implications for problem solving in resource scarce environments.

Specifically, although scholars have acknowledged that solutions can be and are

generated despite (or because of) resource constraints (Branzei and Abdelnour, 2010;

Salunke, et al., 2013; Senyard, et al., 2014), there have been questions about the useful-

ness of these outcomes for the firm (Baker and Nelson, 2005; Senyard et al., 2013). We

find that while jugaad generated solutions that were difficult to market, scale, and

protect and thus unlikely to lead to a sustainable competitive advantage and firm

growth, it did generate solutions that had a positive impact on the individual (i.e., the

2 D. A. Shepherd et al.

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jugaadu) and his or her community; a viable duality for resource constrained regions in

the east. This duality if outcomes help explain the ‘mixed findings’ regarding solutions

generated in resource-poor environments and highlight the importance of explaining

impact at levels of analysis other than the firm. Indeed, this study contrasts the West’s

focus on sustainable competitive advantage and its effect on firm growth with an under-

standing of the East’s focus on solving problems and its effect on the growth of individuals

and communities—namely, we offer an inclusive perspective on the impact of solutions.

Second, for studies that have explored inclusive growth, the focus has been on the

roles of multinationals (e.g., Ansari, et al., 2012; Halme, et al., 2012), governments (Hall

et al., 2012), and non-government organizations (Fowler, 2000; Khavul and Bruton,

2013) in providing and delivering solutions to the problems faced by people living in

resource-poor regions of the world. We extend this stream of research by explicitly

examining local sources of inclusive growth and implications for growth at the individual

and community levels rather than solely (or primarily) at the organizational level.

Although this creative problem-solving process often does not generate commercializ-

able solutions – the panacea for firm growth – it generally results in creative solutions to

problems that help improve community members’ lives – a basis for inclusive growth.

To build toward our findings, in the next section, we review the literature on inclusive

growth and on the benefits and costs of both bricolage and jugaad. Second, we describe

our extensive data-collection effort, data coding, and analytical procedures. Third, we

describe the nature of jugaad and both its drivers and consequences. Finally, we offer a

conceptual framework of jugaad and discuss its implications for the duality of firm and

inclusive growth and the bricolage literature.

THEORETICAL BACKGROUND

Inclusive Growth

Although still in its infancy, research has begun to focus on the notion of inclusive

growth (George, et al., 2012). This research makes more salient the question of who

benefits from innovations, that is, to what extent does the implementation of an innova-

tion ‘improve the social and economic well-being of communities that have structurally

been denied access to resources, capabilities, and opportunities’ (George et al., 2012,

p. 661). These inclusive innovations can be in the form of policy changes by govern-

ments (e.g., Indian Planning Commission, 2006) and/or new products, services, proc-

esses, and/or business models typically generated by large, established organizations

(e.g., Halme, et al., 2012). Through the implementation of inclusive innovations, the

poor can become ‘enfranchised as customers, employees, owners, and community mem-

bers’ (George et al., 2012, p. 662) and the innovative organization can grow markets

and generate profits (Prahalad, 2006; Prahalad and Hammond, 2002). Although inclu-

sive growth research has increased our understanding of the intra-organizational proc-

esses of developing inclusive innovations (Anderson and Markides, 2007; Halme, et al.,

2012) and how these organizations can achieve both firm growth and inclusive growth,

less is known about the processes by which local individuals can generate solutions that,

while not necessarily commercially viable, contribute to inclusive growth nonetheless.

3The Surprising Duality of Jugaad

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