Community Inclusion under Systemic Inequality: How For-Profit Businesses Pursue Social Purpose
Addisu A. Lashitew, Oana Branzei, Rob van Tulder
Journal of Management Studies · 2024 · Volume 61 · Issue 1
Abstract
In countries where systemic inequality is pervasive, purposeful businesses that assume wider societal responsibilities try to counteract its effects by including marginalized social groups in their value creation processes. While current research documents a variety of business approaches for community inclusion, the nature, drivers and effectiveness of these inclusionary practices are not fully understood. We develop and empirically validate a framework of community inclusion that explicates the mechanisms through which purposeful businesses generate civic wealth – or economic and social benefits – to disadvantaged community groups. We differentiate betweencommercial practicesthat recast existent firm-centric processes towards creating value for marginalized groups andcollaborative practicesthat aim to devise novel, participatory processes for engaging marginalized groups. Analysis of primary data from a sample of 430 small businesses in seven African countries confirms that the effect of social purpose on civic wealth is partially mediated by the two inclusionary practices. Businesses are more likely to extend the scope of their inclusion through collaborative practices when they receive favourable external validation and when institutional voids are low. We contribute to the literature by documenting the role of social purpose in motivating the pursuit of community-level goals and by unpacking the specific inclusionary practices used to achieve them.
Keywords
social purpose, community inclusion, systemic inequality, civic wealth, Africa
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