A data-driven analysis of business operations to improve private sector-led social development in emerging markets

Kundu, Amrita (2020) A data-driven analysis of business operations to improve private sector-led social development in emerging markets. Doctoral thesis, University of London: London Business School.

Abstract

This thesis presents new research and data on business operations in emerging markets. It highlights two operational best practices that the private sector in emerging markets can employ to achieve social development at scale. The first essay focuses on the role of timely after sales service in adoption of new technology in emerging markets. While the use of novel technologies across sectors including energy, healthcare, education and telecommunication has the potential to significantly accelerate social and economic development in emerging markets, the rate of adoption of such technology remains slow. An empirical model based on detailed customer-level sales and after-sales service data from thousands of customers of a solar distribution company operating in off-grid communities in Uganda, shows that timely after-sales service is a strong driver of technology adoption in these regions. A one week increase in average wait time for service decreases adoption upto 32.2%. Also, the number of customers acquired through referrals from an existing customer depends on the referring customer's service wait time, suggesting a strong word-of-mouth channel of information sharing. The results have direct implications for the customer acquisition strategies of technology firms and technology investors in emerging markets. The second essay focuses on small informal businesses (with ten or less employees) that provide livelihood to millions of people in emerging markets. While prevalent, these firms have very low productivity levels. This essay examines how to improve productivity of these firms by reducing their downside losses from business disruptions. In the absence of prior data and literature on business disruptions and resilience strategies for small firms, the essay uses original survey data. Empirical analysis based on a panel dataset of 646 randomly selected small firms operating in Kampala, Uganda, finds that managerial disruptions (such as sickness of the owner-manager or her relatives) and operational disruptions (such as supply shortage, electricity outage, thefts etc.) are highly prevalent and have a significant negative impact on the performance of small firms. However, by building appropriate resilience strategies, namely, relational resilience (such as cover for the owner-manager in her absence) and resource resilience (such as reserves for stock or electricity backup), firms can swiftly recover from disruptions. The results have implications for the owners of small firms, policy makers as well as big multinationals that have small firms in their supply chains.