When natural resources run out, market knowledge steps in: Lessons on natural resource deployment from a longitudinal study in a resource‐scarce region of Ethiopia

Abstract

With the increasing scarcity of natural resources, the ability to maintain quality standards during resource-scarce times becomes more critical for business performance.Theories on managing resource scarcity cannot be easily tested in contexts where resources are still abundant. This study therefore turns to an emerging market context in which natural resource availability naturally varies strongly between seasons, namely, that of Ethiopian pastoralists who for many generations learned to adapt to natural resource scarcity. Central to our theory is the natural resource deployment capability, which is the ability of a business to make efficient and effective use of available resources to maintain business performance during resource-scarce times.Using three-wave longitudinal data from 120 pastoral family-based livestock businesses, the study shows that when resources are scarce or extremely scarce, market knowledge helps to better deploy the scarce natural resources, leading to higher product quality. The findings imply that businesses with a better understanding of markets have stronger natural resource deployment capability. The lesson for businesses that are confronted with approaching resource scarcity is therefore to strengthen their ability to deploy resources efficiently and effectively by strengthening their market knowledge in which such capability is rooted.

Scaling social impact in women-led social enterprises in developing countries: a knowledge-based perspective

“…, 2018) along with an external network (Smith et al. , 2016) add value and help achieve competitive advantage and growth among commercial enterprises (Cummings, 2002; Gugissa et al. , 2020).…”

“…We contribute to the body of knowledge of social entrepreneurship, entrepreneurship and the broad management literature in several ways. Various KM practices such as creating, sharing, using and managing information (Dzenopoljac et al, 2018) along with an external network (Smith et al, 2016) add value and help achieve competitive advantage and growth among commercial enterprises (Cummings, 2002;Gugissa et al, 2020). We develop a conceptual model from the lens of knowledge-based theory (Grant, 1996a, b) and social capital theory (Szreter, 2002),where we theorize that different KM practices and external networks positively influence scaling social impact in the context of social enterprises as well.…”