DOWNSIDE OF CORPORATE PERFORMANCE MANAGEMENT PRACTICES IN LOW-INCOME MARKETS

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Abstract

Based on theoretical literature review, the paper demonstrates the misgiving of market economy corporate performance management practices when applied in poor markets. Western developed management practices are incongruent to serve poor customers in low-income markets. The findings of the literature review are that these management systems are exclusionary and conflict with sustainable development as they reject the poor as unprofitable and worthless to pursue as customers. In addition, they are based on antiquated assumptions and contradict ideologies and cultural contexts of the poor. In recent times, corporates are under pressure to enter low-income markets as developed markets get saturated. The poor are, however, significantly different from the affluent customers obtained in higher income segments. Corporates find themselves poorly equipped to succeed. Because poor markets are only latent, firms are expected to do more in order to create value than they would do when entering developed markets. The paper provides recommendations for the firms from developed markets to adjust their performance management practices in order to be successful in emerging markets.

Keywords: Performance Measurement; Low-Income Markets; Sustainable Value Creation; Traditional Performance Management; Firm Behavior

Received: 24.09.2017

Accepted: 30.11.2017

How to cite this paper: Mazambani, L., & Mutambara, E. (2017). Downside of corporate performance management practices in low-income markets. Journal of Governance & Regulation, 6(4), 69-77. https://doi.org/10.22495/jgr_v6_i4_p7