Managing Base of the Pyramid as a Business Opportunity: A Longitudinal Field Study

With Thomas André, May 2015

Abstract:
In the last decade a growing articulation of the business strategy of the firms with some specific global societal challenge in line with its core activities has been observed. This change provides both a need and an opportunity for Base of the Pyramid (BoP) activities to migrate from their preserved status within the Corporate Social responsibility (CSR) department to business operations. We explore the successive steps associated with this change at Schneider Electric through a longitudinal case study. The newly adopted business strategy of the firm clearly facilitates the change in the mindsets all through the company. Still the need for adapting the management systems remains pending. A key finding that emerges from our analysis is to instill interactive processes through an organizational change and a strong commitment on the commercial purpose of the BoP activities. We also highlight that BoP activities cannot be directly transferred to operational entities without simultaneously identifying which of the functional department will be in charge of providing the corresponding management systems and support such longer-term investments.

link

Pour un financement conditionnel des projets risqués bas carbone

With Guy Meunier, September 2016

Abstract
Subsidies are extensively used for promoting the deployment of green technologies (renewables, clean development mechanism, electric vehicles…). Such policies may generate high windfall profits: some of the projects that benefited from the subsidies would have been undertaken anyway. The paper formalizes this situation using a simple principal agent framework under adverse selection. The agent may invest or not and obtain some private benefit in case of success. The principal observes both the investment and the eventual success, which generates a social benefit. Under some conditions it is shown that a subsidy paid conditional on failure (and not on success) limits the windfall profit while encouraging a large portfolio of projects to be invested. The relevance of this policy is discussed in the context of facilitating investment for infrastructure for fuel cell electric vehicles.

link

Using output-based allocations to manage volatility in pollution permit markets

With Guy Meunier and Juan-Pablo Montero, June 2016

Abstract:
We study pollution permit markets in which a fraction of permits are allocated to firms based on their output. Output-based allocations, which are receiving increasing attention in the design of carbon markets around the world (e.g., Europe, California, New Zealand), are shown to be optimal under demand and supply volatility despite the output distortions they may create. In a market that covers multiple sectors, the optimal design combines auctioned permits with output-based allocations that are specific to each sector and increasing in its volatility. When firms are better informed about the latter or must self select, the regulator resort to some free (i.e., lump-sum) allocations to sort firms out. Numerical exercises illustrate the policy relevance of our results: the gains from considering output-based allocations can be substantial.

link