Abstract

This article draws on resource‐based theory and the literature on strategic intent to develop a theoretical model that explains the concept of mission drift in microfinance institutions . We argue that the differential strategic intents of commercially oriented, for‐profit, and socially oriented nonprofit organizations drive the acquisition of disparate resources and capabilities, which in turn drives distinct performance outcomes, including a focus on different markets within the overall base of the pyramid . The article suggests that it is the dynamic aspects of changing strategic intent and the consequent timing delays in the development of associated resources and capabilities that lead to various issues of mission drift. Finally, we suggest that cross‐sector alliances between for‐profit and nonprofit MFIs may benefit from the unique capabilities of both types of organizations and deliver the most and broadest impact on poverty alleviation in BOP markets