- Elgar original reference
Edited by Benson Honig, Joseph Lampel and Israel Drori
Chapter 9: Creating innovative solutions in microfinance and the role of organizational ingenuity
We examine organizational ingenuity in Brazil by addressing the context of community banks in areas with severe economic constraints. The concept of 'organizational ingenuity' refers to the 'ability to create innovative solutions within structural constraints using limited resources and imaginative problem solving' (Lampel et al., 2011). The ability to create ingenious solutions with limited resources is often shaped by the social and institutional environment where individuals live and work. We investigate conditions under which organizational ingenuity has emerged in specific low-income communities or shantytowns in Brazil. Such bottom-of-the-pyramid communities typically face institutional constraints including poverty, deficient sanitation and basic infrastructure, violence, and low levels of education. However, specific entrepreneurs in some areas have emerged as change agents. We also examine how specific individuals have built organizations that have transformed the social and institutional environment where they operate. The concept of organizational ingenuity refers also to the notion of creative reformulation of institutional constraints (Honig et al., 2012). Most individuals have to operate within existing norms and boundaries to create solutions to existing problems. Yet the work of some individuals and the organizations they build can alter the institutions in which they operate.
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