Management & Marketing no. 2/2014

Leveraging low income farmers’ performance through empowerment: Analysis of a sustainable initiative in Mexico

Mario César Dávila‐Aguirre,
Tecnológico de Monterrey, EGADE Business School, Monterrey

Lisa M. Hanley,
Zeppelin University, Chair for Strategic Organization & Finance (SOFI) & CiSoC

Gerardo Lozano‐Fernández,
Tecnológico de Monterrey, EGADE Business School, Monterrey

Thomas S. Lyons,
City University of New York, Baruch College

Abstract. Several researchers have said that the real solution to alleviating, or at least reducing, the level of poverty is not to view poor people only as customers, it is important also to view this sector as producers, or in other words integrate these people into the value chain of Multinational Companies (MNCs). The objective of this research work is to analyze how the MNCs with sustainability initiatives can generate better individual performance through the creation of empowerment in the Low Income Sector (LIS). We conducted 47 interviews to build our model. Then we developed and applied surveys to 212 participants. To test our hypotheses, we used PLS‐SEM and analyzed two groups: LIS people that currently belong to the sustainable initiative and LIS people that belonged (graduates of the sustainable initiative). We confirmed the positive relationship between psychological empowerment and individual performance, also found that consumer behavior constructs, like coping strategy, moderate in both conditions of this relationship. Finally, we demonstrate that trust moderates the relationship, also. Theoretical and managerial implications as well as limitations and future research avenues are discussed.

Keyword: low‐income sector, empowerment, performance, trust, coping strategy, risk aversion, social entrepreneurship, inclusive business, base of the pyramid.

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