Social and Sustainable Enterprise: Changing the Nature of Business: Volume 2

The field of entrepreneurship is continuously expanding, and new perspectives on existing theories continue to emerge, challenging established norms and generating exciting avenues of inquiry. The aim of the ISBE-Emerald Book Series is to facilitate such inquiry by providing a platform for leading edge research that reflects the themes of interest to contemporary entrepreneurship scholars. Each volume in the series is designed around a specific theme that is both relevant to the ISBE Conference and of importance to the entrepreneurship and small business community. While volumes will seek to explore and develop theory and practice in the field of entrepreneurship and small business, the emphasis of the research will be on quality, currency and relevance.

Around the world, people are confronted by a variety of complex and pervasive environmental, social and economic challenges. In many cases, including anthropogenic climate change, resource depletion, financial system disruption and poverty, there has been an increasing recognition that ‘wicked problems’ require entirely new ways of thinking, and that the solutions are unlikely to be found by governments, businesses or civil society actors operating in isolation. In parallel with these developments, many observers have commented on a growing interest in various forms of social entrepreneurship and in new models of enterprise that seek alternative ways of delivering products and services, while also securing the ‘triple bottom line’ of social, environmental and economic sustainability. This volume draws together a selection of contemporary entrepreneurship research studies that explore different aspects of this phenomenon. Our original call for papers was based around the themes addressed in one of ISBE's longstanding annual conference tracks. It attracted some strong submissions from within and beyond the ISBE research community. The editors reviewed papers relating to social and sustainable entrepreneurship, the environmental impacts of enterprise, and ethics and social responsibility in enterprise.

Purpose – This study explores the processes underlying the founding and growth of GOONJ, a social venture devoted to the cause of clothing in India, and examines the role of the founder in reconciling the trade-offs between market-based and socially motivated criteria in the venture creation process.

Methodology/approach – A case study was used to discern the relevant processes and the reasons for the founder's choices. Primary insights were combined with material from secondary sources such as GOONJ's website, press releases and video clips.

Findings – The founder has ethically and effectively mobilized resources for mass social impact; however, he may adopt a more entrepreneurial approach based on long-term financial planning and professional management for sustained growth.

Research limitations/implications – The research is based on a single case study that precludes generalization; a survey-based approach may be adopted in the future.

Practical implications – Individual entrepreneurs with an overriding social mission can successfully resolve social problems; however, there is the need to combine the social motive with an entrepreneurial approach for sustained growth.

Social implications – Social entrepreneurship (SE) plays a potentially significant role in alleviating pressing social problems in emerging economies mired in institutional constraints; however, it needs support mechanisms to enable an entrepreneurial approach to social venture creation.

Originality/value of chapter – The study contributes to the literature on SE in emerging economies, in particular India, a unique cultural context compared to North America or Europe, yet significantly under-represented in entrepreneurship research. Also novel is an entrepreneurial process-based model to investigate the chosen case.

Purpose – The purpose of this study is to gain insights into strategies used by entrepreneurs developing radical innovations to influence the system surrounding them. Specific attention is given to determine the differences between environmental-technology entrepreneurs (ETEs) and non-eco radical innovation entrepreneurs.

Methodology/approach – Ten entrepreneurs (five ETEs) in the Dutch greenhouse horticulture sector are selected for this case study. Their motivations and strategic actions are determined through interviews. The results are analysed using an innovation system function approach.

Findings – Radical innovations in the sector encounter barriers due to the lack of relevant knowledge and subsidies that support the old system. To overcome this, the studied entrepreneurs focus their strategies on building new innovation systems. Interestingly, ETEs receive more governmental support and try to improve the sector as a whole. However, sustainability alone is not enough to create added value.

Social implications – Policy makers can provide better support for radical innovations by increasing the availability of relevant knowledge and creating a level playing field. Alternatively, they can present these pioneering entrepreneurs as examples for others to follow. Sustainability has been important in the sector for some time, but until now has not changed the nature of business.

Originality/value of paper – In innovation systems research, the micro-level actions of entrepreneurs have not received much attention. Furthermore, the insights regarding motivations and strategies of radical innovation entrepreneurs in the context of a mature system are novel. Finally, the results regarding barriers for ETEs are an original addition to the theory of barriers for eco-innovations.

Purpose – The UK energy market is in a period of significant transition, with a target of cutting carbon emissions by at least 80% by 2050. There is widespread agreement that the current policy landscape needs to change if this ambitious target is to be achieved. However, the current business structure also requires a radical overhaul. This chapter explores the new business models that are being introduced to serve commercial and domestic customers.

Methodology/approach – This chapter presents a case study of the UK energy sector that draws on the first author's active engagement in the UK's energy market and thus participant observation. The discussion is framed around relevant material from the entrepreneurship and innovation literatures, with a particular focus on entrepreneurial opportunities created by policy.

Findings – In a rapidly changing policy environment, new ideas, technologies and business models are emerging. A range of new business models evident in the market are explored. These include new forms of service delivery, market-making models and finance models.

Social implications – The chapter highlights the importance of entrepreneurship and innovation in the delivery of a low-carbon economy. It also explores the role of policymakers in promoting more environmentally sustainable approaches in this industry sector.

Originality/value of chapter – The chapter presents a novel, industry-specific case study. It contributes to extant knowledge on sustainable business through its focus on the complex interaction of policy and entrepreneurship as well as some of the business models required for the transition to a low-carbon future.

Purpose – There has been a growing interest in the development of a ‘green’ or ‘low carbon’ economy as a means of reconciling economic development and the environment. Research on green entrepreneurs to date has been upon individual entrepreneurs, neglecting wider economic and social contexts within which they operate. By looking at these wider networks of support, we suggest that discourses of the lone entrepreneur innovating and changing business practices are misrepresentative.

Methodology/approach – Semi-structured interviews to investigate green entrepreneurship with green building companies and policy makers.

Findings – Combined with new demands from consumers for more environmentally friendly products and services, the changing shape of national and global economies is leading to new forms of entrepreneurship. We identify a number of tensions between policy intentions and businesses’ experiences on the ground.

Research limitations/implications – To date, research has only been undertaken in the UK – we recommend that future research takes other national contexts into account. Other economic sectors also represent promising areas for future research, potentially including social enterprises in the green economy. Sustainability transitions theories offer a potentially valuable means for understanding the role of businesses in engendering a green economy.

Practical implications – Implications for policy frameworks are outlined in the conclusions.

Originality/value of chapter – By incorporating policy and support organisations, and informal networks of support, the chapter challenges the dominant view of the lone entrepreneurial hero and points to the significance of networks for facilitating green entrepreneurship. This will be of importance for policy makers and funders of entrepreneurship programmes.

Purpose – This paper examines the effects that voluntary environmental reporting has on specific environmental practices in micro businesses. In particular, praxis discontinuities between disclosure and behaviour are contrasted between disclosing and non-disclosing micro businesses, ceteris paribus, in a rural region of North West England.

Approach – Six businesses were interviewed and findings were interpreted using a lens derived from the concept of moral proximity (the belief that small businesses are embedded in local communities and therefore are more morally accountable for their actions).

Findings – Findings suggest that environmental reporting is primarily driven by coercive/regulatory forces, whereas environmental practice is driven more by economic/strategic forces. The degree of discontinuity between disclosure and behaviour can be correlated to moral proximity, and this is found to vary significantly by industry sector.

Implications – The study concludes that an increased level of environmental reporting is no guarantee of improved environmental practice due to the dislocation between the drivers of the two elements of praxis.

Value – The study provides empirical evidence of the impact of different external interventions that can help inform future policy development on small business environmental responsibility.

Purpose – In the recent redefinition of the European Commission's corporate social responsibility (CSR) strategy, attention is brought to CSR as a motor for innovation. However, literature in the area remains scarce. This chapter describes and discusses innovation as a consequence of a firm's CSR activities.

Methodology/approach – The empirical part of the chapter is based on the content analysis of 58 annual reports issued by the companies listed on the Swedish large-cap stock exchange. Their statements on CSR were coded to grasp the meanings of CSR, what areas they focus on, and types of innovation.

Findings – The study indicates that CSR innovation mostly focuses on environmental aspects. Companies that are less regulated by law in their operations tend to become more creative in their CSR approaches. CSR policy complements rather than enhances CSR innovation. CSR orientation is path-dependent on competences and position in the supply chain, and puts focus on incremental innovation. For product innovation, CSR may either appear as CSR in product (CSR-influenced material choices) or CSR in use.

Research limitations/implications – The data comprises established Swedish firms, however acting on international markets.

Social implications – Innovation and CSR are two important pillars for societal development. Finding motors that foster innovation, while increasing CSR awareness and using CSR as the driver for innovation, are important challenges for the future.

Originality/value of chapter – The study contributes to previous research through linking CSR orientation to innovation, describing types of innovation, and connecting their combined foci to different industry sectors.

Purpose – Is the current economic crisis affecting the quality of working conditions within organisations? More specifically, due to constrained economic times, are organisations reducing the social benefits they offer to employees? This study analyses whether the current economic downturn influences companies’ maintenance of social benefits. Social benefits are those remunerations in kind voluntarily offered by an employer beyond what is established in labour laws and collective agreements

Design/methodology/approach – In doing so, this chapter presents an analysis of the evolution of social benefits in a sample of 171 employees, comparing the situation before and during the economic crisis.

Findings – Results showed that, in general, social benefits offered by companies to their workers have been reduced due to economic recession.

Originality/value of the chapter – Understanding the topic addressed in this work is interesting for scholars, regulators, and practitioners because the diminishing of social benefits due to the economic constraints could yield negative consequences for the employees’ involvement with the firm and have a subsequent negative impact on business performance.

Practical/social implications – This work demonstrates the need to pay greater attention to indirect remuneration. This issue is intimately related to the Internal Corporate Social Responsibility of the company.

Purpose – The purpose of this research is to identify the CSR dynamics through a social capital lens in a developing country's context.

Approach – The research design underpinning this study is qualitative. Semi-structured interviews have been conducted with SMEs owner-managers.

Findings – Adopting a pragmatic stance, the research highlighted the significant role of the social capital concept in enabling or hindering SMEs’ engagement in the CSR discourse in the Egyptian context.

Implications/limitations – A holistic understanding of the subject has been achieved by examining core issues at different levels. It is recommended that micro-individual (SME owner/manager), meso-organisational (SME context and industry), and macro-environmental (socio-economic and cultural environment) dynamics be explored by employing suitable research methods grounded in research paradigms that allow for qualitative exploration.

Practical implications – By giving prominence to SMEs as the research focus, the significance of these enterprises for sustainable development is highlighted at the policy level by developing tools and mechanisms that deal with effective implementation of CSR programmes in that sector.

Social implications – An in-depth understanding of the CSR practices of SMEs as embedded in their operational management will help policy makers in promoting sustainable practices by integrating social and environmental activities in the day-to-day operations of SMEs.

Originality/value – The chapter makes a contribution to academic theory in the area of CSR in SMEs by examining the phenomenon through a social capital lens using a multi-layered approach from a developing country's perspective.

Sarah Underwood is the Director of Student Education for Enterprise and a Lecturer in Enterprise at the Leeds Enterprise Centre, University of Leeds, UK. Her research interests cover social enterprise and social innovation, with particular focus on the pedagogical development and inclusion of these topics in HEI curricula. Sarah has published several academic papers and was the founding Chair of the Institute for Small Business and Enterprise special interest group, the ‘Social and Sustainable Enterprise Network’ 2010–2012.