The Ethics of Global Business

Chapter SevenCorporate Social Responsibility at the Base of the Pyramid

The base of the pyramid (BoP) proposition (Prahalad and Hart 2002; Prahalad and Hammond 2002) holds that transnational companies (TNCs) can exploit neglected entrepreneurial opportunities while simultaneously alleviating poverty by serving billions of previously ignored customers living in poverty. Prahalad (2004) describes the BoP as an invisible market of four billion people living on less than $2 per day, waiting to be tapped. London and Hart (2004) describe it as a huge base of potential customers earning less than $1500 PPP (purchasing power parity) per year. BoP strategies are recommended as win–win market opportunities that allow TNCs to do well by doing good. It is claimed that pursuing BoP strategies “means lifting billions of people out of poverty and desperation” (Prahalad and Hart 2002) and enhancing the “dignity and choice” of the poor via access to more goods and services (Prahalad 2004). At the core of the BoP proposition is the idea that socially responsible TNCs can simultaneously improve their profitability while benefitting the global poor. But, as will be argued, the validity of this claim depends on the specific BoP business venture, the ethical framework that is utilized to analyze the venture, and the theory of corporate social responsibility that is employed.

Given a lack of uniformity in the literature regarding the size and the purchasing power of the BoP, this chapter begins by ...