Internationalising SMEs and Social Networks in the Global South

Abstract

Following a critique of previous firm-centred conceptualisations of the bottom of pyramid markets that gave little relevance to the role of consumers in value creation. Questions regarding the best ways to approach and mutually harness the potential of these markets remain unanswered. The purpose of this study is to help fill this gap by applying a sociological view to economic activities within BOP markets. Specifically, we explore how social networks influence internationalising SMEs business models in BOP markets. Through exploring the activities of one international SME in Zambia and comparing them to another local SME in South Africa by means of inductive grounded theory, we identified seven processes that define social embeddedness and five contextual conditions and mechanisms that lead to embeddedness. Finally, we offer implications for theory and managers of BOP ventures.