accepted-papers-2015 - Sustainability Ethics Entrepreneurship

Sustainability, Ethics and Entrepreneurship (SEE)
Academic Research Conference
April 30- May 1, 2015 - Denver, Colorado
Papers accepted for presentation on Friday, May 1
(listed in alphabetical order by primary author’s last name)
Moral Communities as Antidotes to Moral Deafness and Blindness
Nino Antadze, University of Waterloo; Oana Branzei, Richard Ivey School of Business, University of Western
Ontario; Haiying Lin, University of Waterloo
Management scholars have explored moral impairment of organizations (Bird, 1996; Shadnam &
Lawrence, 2011; Palazzo et al., 2012). Yet, less is known about how organizations go about reclaiming
and restoring their moral conduct. Drawing on the case of the deadly collapse of the Rana Plaza factory
in Dhaha, we suggest that morality can be externally sourced. We explain how the emergence of
concern-focused moral communities can help their individual members reverse the decline and even
restore moral conduct, when their internal cultures have eroded their own moral hearing and seeing
Do Organizations Light a Candle and Hide It Under a Bushel? The Strategic
Publication of Certification Status
Chad Carlos, Brigham Young University; Ben Lewis, Brigham Young University
Scholars have long recognized the symbolic value of certifications in helping organizations to acquire
legitimacy and other benefits. However, extant research has largely treated the attainment and
publication of a certification as a single process. In so doing, previous literature provides few insights
as to why organizations might attain a certification and at times elect not to publicize their certification
status. Drawing upon impression management theory, we suggest that the attainment and publication
of certification status are two distinct actions and that firms may engage in strategies to limit
communications about a certification if their recent actions appear hypocritical in light of the claims
associated with the certification. We test our hypotheses by examining variation in the publication of
membership in the Dow Jones Sustainability Index.
How Social Hybridity Can Be Sustained From the Ground
Laura Claus, University of Cambridge
While much research has focused on how complexity can be managed at the organizational level, we
know less about how individuals experience and cope with conflicting institutional prescriptions. To
examine how individuals balance multiple logics as an ongoing accomplishment, we conducted an indepth case study at a leading Benefit Corporation in the U.S. – a newly emerging hybrid form that
incorporates a social welfare and commercial logic at its core. We find that not every organizational
member experienced complexity to the same degree, and that individuals caught between objectives
coped by means of anchoring. Anchoring served to mitigate the discomfort experienced from having to
satisfy competing demands, safeguard against drift toward either alternative and sustain hybrid
organizing from the ground.
CONFERENCE – Accepted Papers
Do I put solar panels on my roof if my neighbors can see them? Uniqueness and
conformity as drivers of individual technology adoption
Jörg Claussen, Copenhagen Business School; Anders Ørding Olsen, Copenhagen Business School
Utility from technology adoption is not only derived from economic value but also influenced through
social factors. We argue that visibility of technology adoption can be an important social factor that
can increase adoption if individuals want to signal uniqueness or decrease adoption if they want to
conform to their peers. We study in how far the potential visibility of solar panels from the street
influences the adoption decision of 122,349 Danish households and find that conformity motivations
seem to dominate, i.e. the average household is less likely to adopt if solar panels are visible from the
street, but less wealthy households are more likely to adopt of solar panels are visible. These findings
generate policy implications for supporting the adoption of sustainable technologies.
Hybrid Social Enterprise and the Problem of Identity Correspondence
Michael Conger, Miami University; Jeff York, University of Colorado-Boulder; Jeffery McMullen, Indiana
The rise of social enterprise as a new class of organization and the basis of emerging hybrid industries
has potential implications for the future of both charity and business. However, we know relatively
little about the processes or means by which individual actors and organizations become aligned with
movements, nor and the mechanisms by which this alignment leads to active participation in collective
action and, ultimately, field emergence. We examine this phenomenon through an inductive study of
the B Corp movement in the U.S. and build a process model of identity correspondence spanning the
individual and organizational levels. Our findings shed light on the role of identity processes in the
emergence of hybrid organizational forms, industries, and fields.
Authenticity in CO2 Reductions: the Impact of Women Directors
Elizabeth Cooperman, University of Colorado-Denver; John Byrd, University of Colorado-Denver; Ken
Bettenhausen, University of Colorado-Denver
This paper adds to the literature on the impact of corporate board gender diversity on the
environmental performance of corporations. Using a sample of 214 S&P 500 companies during 2010
to 2013, reporting to the CDP on corporate environmental commitments and CO2 emissions, we
examine whether the presence of women board of directors, along with other corporate governance
characteristics, are associated with firm carbon reductions. We identify companies that made a high
commitment to reducing their carbon emissions and the firms among these actually reporting lower
emissions in the following two to three years. The empirical results show for firms with a high
organizational commitment about climate change, those with a larger percentage of women on their
boards are more likely to follow through and reduce CO2 emissions. We also find a significant relation
between CEO tenure and the likelihood that a firm will have CO2 emission reductions. JEL
Classification: G38, M14, J16, Q56 Keywords: Corporate governance, Diversity, Board of Directors,
Environmental Performance
Institutionalizing fair trade: A rhetorical analysis of new market category creation
Bob Doherty, University of York
We draw on category and rhetoric theories to examine how language is employed to create and
mainstream new market categories. Originating in the 1970s from consumer interest in alternative
trade, annual sales of fair trade certified products now exceed $6 billion. From our analysis of archival
data and interviews, we theorize three rhetorical strategies that we connect to new market category
creation: Oppositional rhetoric demarcates the new market and establishes the boundaries between
new and existing categories; impact rhetoric communicates the purpose and achievements of the new
category; and regulatory rhetoric formalizes, disciplines and monitors category membership. Growth
rhetoric mainstreams the new market category by selectively combining elements of oppositional,
impact and regulatory rhetoric with growth. Category growth proceeds against a backdrop of
competing member interests concerning the plasticity and rigidity of category boundaries. We
propose the process of category elaboration to explain how members relax category boundaries to
accommodate increasing membership and certification variety.
CONFERENCE – Accepted Papers
New firm sustainable performance via the implementation of resource bundles
utilizing resource based theory
Mark Gagnon, Pennsylvania State University
A significant number of entrepreneurs add sustainability to existing business models that in many
instances leads to incremental results and lower performance. Rather, to optimize sustainable
performance, sustainability should be a core element of firm business models with model
underpinnings in key resource bundle combinations. In this work we examine five key resource
bundles of human capital, social capital, process, place and physical capital for sustainability-focused
firms. Case data from 30 sustainability-focused firms is used to illustrate for-profit, sustainabilityfocused business models and the role of resource bundles. Our findings indicate that combinations
across resource bundles build unique sustainable competitive differentiation.
Shine on me: Firm density, social movement support, and government endorsement
of the solar photovoltaic industry
Panayiotis Georgallis, University of Michigan; Glen Dowell, Cornell University; Rodolphe Durand, HEC Paris
In this paper we treat regulative institutions as dependent on firm populations and supportive
collective action. We argue that in emerging sectors, as the number of firms grows it signals legitimacy
and growing acceptance of the sector, which in turn increases the likelihood that the government will
endorse it. We further disentangle the influence of two different types of entry – by de novo and de alio
firms – on government endorsement, and consider the role of supportive social movements in
augmenting the influence of firm density on the establishment of favorable regulation. Analyses of the
feed-in-tariff policy support scheme in the European Union suggest that government endorsement
depends on the number of firms in a country, and that the presence of a supportive movement
increases the effect of de novo firm density on government endorsement. We discuss the implications
of our findings for institutional theory, research of social movements and markets, and industry
When Organizational Form Influences Ethics: Intrafirm Co-opetition in Hybrid
Peter Gianiodis, Clemson University; Jill Brown, Bentley University
Ethical tensions can manifest when current environmental conditions place pressure on an
organization to adapt in a manner that may contradict with the imprinting related to its original
mission. As firms have increasingly adopted hybrid organizational forms to better fit more challenging
external environmental conditions, they have had to manage the ethical challenges resulting from
intrafirm co-opetition. In this study, we investigate how a new hybrid form and the adoption of
intrafirm co-opetition affected ethical decision-making within a hospital setting. We find that,
consistent with prevailing game theory’s prisoners dilemma and organizational explanations of moral
misconduct, tensions inherent in intrafirm co-opetition can provoke unethical decision-making. We
also find that control mechanisms and incentives increase tensions and perpetuate opportunities for
misconduct, rather than reduce them.
Organizational Responses to Public and Private Politics: An Analysis of Climate
Change Activists and U.S. Oil and Gas Firms
Jake Grandy, University of Southern California; Shon Hiatt, University of Southern California; Brandon Lee,
Melbourne Business School
We explore how activists’ public and private politics elicit different organizational responses. Using
data on U.S. petroleum companies from 1982-2010, we investigate how climate change activists
serving as witnesses at Congressional hearings and engaging in firm protests influenced firms’ internal
and external responses. We find that public politics induced internally focused technical actions while
private politics induced externally focused institutional actions. The results suggest that activists can
have a significant impact on firm behavior by instilling regulatory uncertainty in the early phases of
the policymaking process. We discuss the implications of our study for social movement research,
organization theory, and nonmarket strategy.
CONFERENCE – Accepted Papers
Cultivating an Industry Identity: The Agency and Influence of Stakeholders in
Colorado’s Emerging Cannabusiness
Aimee Hamilton, University of Denver; Paul Seaborn, University of Denver
Despite considerable work in the identity theory literature on how collectives develop workable,
coherent, sustainable identities, major questions remain regarding how other types of interested
parties influence the emergence of a new industry as well as the identity of that new industry. Our
paper uses stakeholder theory to understand how the actions taken by entrepreneurs and other
stakeholders in Colorado’s emerging marijuana industry interrelate to form a collective identity. In
highly regulated industries, such as our setting, governments hold tremendous power to influence
industry identity through their requirements in areas such as ownership qualifications, vertical
integration and marketing. In addition to issues pertaining to entrepreneurship in a new market, we
also consider the industry’s ethical conflicts and sustainability challenges.
Entrepreneurial Round Tripping: Contributing to Sustainability through MultiDirectional Value Creation
Richard Hunt, Virginia Polytechnic Institute; Lauren Ortiz-Hunt, University of Colorado-Boulder
One of the key drivers of sustainable growth involves the development of commercial processes that
allow for the extended use, reuse or recycling of disposable productive assets. One significant way in
which this enhanced utilization occurs is in the realm of multi-directional value creation, which refers
to profits that are generated from the development of solution sets that allow commercializable goods
and services to flow in more than one direction. The focal point of our investigation centers on the
paradox of incumbency in round-tripping: that despite possessing insider knowledge, efficient scale
and technical resources, incumbent firms often fail to develop the leading solution sets for multidirectionality. Far more often, it is innovating entrepreneurs, who create and capitalize on these
sustainability-driven gains.
Community-Building Strategies: The Role of Non-Pecuniary Incentives, Rewards, and
Christina Kyprianou, University of Texas-Austin
A type of firm-sponsored external stakeholder community, customer communities increasingly play a
central role in how entrepreneurial firms create and capture value. Existing research, however, still
lags in explicating the mechanisms through which firms build customer communities. Through an
inductive multi-case study, I explore entrepreneurial firm strategies that support community building
while focusing on the role of non-pecuniary incentives, rewards and exchanges. Findings suggest that
firms face a central strategic challenge: balancing the growth of the community against the quality of
its membership. Firms approach this problem by pursuing three sets of processes: community
organizer training, community member education, and social processes of inclusion. These findings
provide evidence of the important yet neglected role of non-pecuniary mechanisms that support
community-building strategies.
Market Mediators and the Tradeoffs of Legitimacy-Seeking Behaviors in a Nascent
Brandon Lee, Melbourne Business School; Michael Lounsbury, University of Alberta; Shon Hiatt, USC
This study contributes to a growing body of research on the emergence and growth of new product
market categories by focusing attention on market intermediaries and their role in garnering
legitimacy for a nascent market category. Although extant research has demonstrated the importance
of attaining legitimacy for new market categories, few have considered the tradeoffs associated with
such actions. Using the U.S. organic food product category as a context, we explore how one type of
market intermediary—a standards-based certification organization—sought to balance the expansion
of a nascent market category with retaining its distinctive coherence and identity. Our findings suggest
that standards-based certification organizations can expand a market and demarcate clear categorical
boundaries, but at a cost to the initial collective identity of the category’s members. Our findings hold
important implications for the literatures on legitimacy, new category formation and growth, market
intermediaries, and movement-driven markets.
CONFERENCE – Accepted Papers
Stuck in the Middle: Corporate Innovation and Environmental Performance
Jegoo Lee, Stonehill College; Sang-Joon Kim, University of California, Irvine
This research proposes that a firm considers environmental issues once it achieves innovation at certain
levels. Combining the resource allocation approach and the good management theory, we hypothesize the ushaped relationship between firms' patenting activities and their environmental performance, and test this
hypothesis with a panel of 1564 firms from 1991 to 2010. Based on research findings, we suggest that the
motivation for “doing good” for environment is accelerated once corporate innovation through patenting
activities are accumulated. We also offer a practical implication that corporations who are “stuck in the
middle” with moderate innovation level should attempt to diminish the negative environmental activities as
well as to develop knowledge creation further.
Sustainability Commitment in IPO Firms: The Role of Board Capital
Krista Lewellyn, University of Wyoming
The IPO event is fraught with uncertainty. Being committed to sustainability so as to help address
environmental and social issues creates even greater uncertainties since the costs and any benefits of
sustainability initiatives on the IPO’s future performance are not certain. According to institutional
theory one means by which organizations attempt to reduce uncertainties is through mimetic
isomorphism, or imitating competitive and proven strategies of successful organizations. From a
resource dependency theory view IPO firms attempt to reduce uncertainty by receiving valuable
resources such as strategic advice from the human and social capital of their boards. Using a unique,
hand-collected dataset of IPO firms between 2009 – 2011, we explore the relationships between
industry sustainability, board capital, and a focal firm’s commitment to sustainability.
Firm Strategies for the Development of Environmental Technology Capabilities
Alfred Marcus, University of Minnesota; Joel Malen, Hitotsubashi University
This study identifies strategies that firms employ when technological objectives include the
internalization of negative environmental externalities as well as mitigation of additional risk brought
about by the market, technological, and public policy uncertainties associated with ETD. Employing
data from 256,649 patents held by 347 US manufacturing firms over a 20-year period allow for a clear
distinction between ETD and non-ETD activities and enable the use of estimation strategies that
control for unobserved firm-level heterogeneity. Results indicate that when firms develop
environmental technologies they modify their innovation strategies by relying less on their own
knowledge and capabilities, more on publicly generated knowledge, and by adopting a more
incremental approach to innovation.
Insider-Driven Change in Fields of Practice: Exploring the Case of Green Chemistry
Andrew Nelson, University of Oregon; Jennifer Howard-Grenville, University of Oregon; Andrew Earle,
University of New Hampshire; Julie Haack, University of Oregon; Doug Young, Lane Community College
Insiders can be effective at mobilizing to bring about change in organizations or professions, yet we
know little about how they work to influence change in a less structured field of work practice.
Drawing on interview, observational, and archival data, we inductively investigate the emergence and
growth of “green chemistry,” an effort within the chemical sciences to improve the health, safety, and
environmental impacts of chemicals through changing practices associated with chemical synthesis
and design. We find that advocates mobilized other chemists through a multivocal discourse and
flexible principles, as opposed to a cohesive resonant frame. A pluralistic community resulted, which
demanded ongoing efforts to both check and sustain this pluralism. The trajectory of green chemistry
suggests that insiders can leverage the very elements that structure a field – shared expertise and work
practices – in service of change, but that these same elements are threatened by such change. We
discuss implications for theory on insider-driven change in fields of practice, the strategic use of
multivocality, and the challenges of social and environmental change among those bound by common
expertise, including members of occupations.
CONFERENCE – Accepted Papers
Towards Understanding Community-based Enterprise Performance in Resource
Constrained Environments
Kiven Pierre, Syracuse University; Tom Lumpkin, Syracuse University; Todd Moss, Syracuse University
While there has been considerable research into the effect of market oriented development in less
developed economies on entrepreneurship in general, research on the relationship between such
development and community-based enterprise has remained sparse. Building on entrepreneurship,
institutional theory, and resource dependence literatures, the present study addresses this gap by
exploring the effect of pro-market institutions and resource dependence factors on the performance of
community-based enterprises within resource constrained environments. Using multi-level random
effects estimation on a cross-country sample we find evidence that pro-market institutions have both
positive and negative effects on the performance of community-based enterprises which are contingent
on a country’s magnitude of dependence on the external environment. We discuss the theoretical and
practical contributions of these findings to entrepreneurship literature.
Spillover Effects of Institutional Entrepreneurship: Observations from the Global
Carbon Offset Industry
Hans Rawhouser, University of Nevada-Las Vegas; Michael Cummings, University of Nevada-Las Vegas
New industries are often the source of revolutionary changes in economic, organizational, and social
life. This study focuses on the creation of an institutional infrastructure to support an emerging
industry (Van de Ven, 1993). In particular, it explores the role of public and private sector institutionbuilding activities in the global carbon offsets industry. Insights from our study may provide lessons
for future market-based approaches to economic externalities or social value creation.
50$, a Laptop, and a Client – The Start to How Impact Makers Has Become a Business Working to
Better Their Community
Joseph Sprangel, Mary Baldwin College; Amanda Slemaker, Mary Baldwin College
B Lab is leading a global movement to redefine success in business. This research is a qualitative study
of Impact Makers (IM) a for-profit company and B Lab Certified B Corporation that contributes 100%
of their net profits ($247k in 2013) to their nonprofit partners. The design strategy of this qualitative
inquiry was a purposeful sampling of IM as an “information rich” organization where the intent is to
share empirical evidence of organizational success that can be generalized to the current and future
Certified B Corporation population. The data collection involved 22 interviews to date of in-depth
open interview questions of representatives of the various stakeholder groups of IM.
Gains, Large and Small Through Industrial Symbiosis
Suzanne Tilleman, University of Montana; Raymond Paquin, Concordia University; Jennifer Howard-Grenville,
University of Oregon
Addressing the challenge firms face to improve environmental performance while simultaneously
earning profits, we test learning and capability development by firms completing successful industrial
symbiosis exchanges. These exchanges provide an opportunity to reduce carbon dioxide equivalent
emissions while also finding new avenues for financial benefit by selling waste. Using data on 5,016
industrial symbiosis exchanges in in the United Kingdom from 2003-2012, we find partner experience
is significant in completing industrial symbiosis exchanges for all firms. However, the impact is
greater for novice firms who do not continue after the most opportunistic exchanges are completed.
Also, firms gain more financially when they commit to seeking out many industrial symbiosis
exchanges despite losses during the development of a capability in industrial symbiosis.
Cleantech Clusters and Firm Performance: Evidence from Young Private U.S. Firms
Y. Lisa Zhao, University of Missouri-Kansas City ; Sanwar Sunny, University of Missouri-Kansas City
Although Cleantech represents a fast growing sustainable economy, the market is still nascent and
uncertain. As a result, a wide range of responses in business strategies and government policies are
emerging; yet it is not clearly how these will affect Cleantech performance at both regional and
individual firm levels. This study attempts to fill the literature gap by examining how local
entrepreneurship and innovation climate, government policy, resources, and general population
awareness affect Cleantech entrepreneurial firm creation and performance using the lenses of
CONFERENCE – Accepted Papers
institution theory, resource-based theory and economy of agglomeration. Our results show that
entrepreneurship and innovation climate and access to resources have positive impact on geographical
clustering and entrepreneurial firm performance but findings about policy and public awareness are
Papers accepted for “lightning presentation” or poster
sessions on Thursday, April 30
(listed in alphabetical order by primary author’s last name)
Stakeholder theory and value creation
Antonio Argandona, IESE Business School
One often reads in the literature that firms must be “managed” not only “for shareholders” but, more
generally, “for stakeholders”. What does this mean? In this paper we discuss how economic value is
created for all stakeholders – that is, the “social (economic) value” – and how that value is distributed
or captured. We consider the appropriation of value as the outcome of negotiation or confrontation
between stakeholders and the company; as the outcome of a company strategy to achieve economic or
non-economic results in the long run, and as the outcome of actions that approach the logic of gratuity.
Sharing Tribes: Using Collaborative Consumption To Engage Millennial Employees
Anita Bhappu, University of Arizona
In today’s global economy, motivated and productive employees are the differentiating factor when it
comes to business performance and competitive advantage (Rich, Lepine & Crawford, 2010).
Organizations today are struggling to engage their employees, especially Millennials – the generational
cohort born between 1980 and 2004 – who will be 75% of the workforce in 2025 (Council of Economic
Advisers, 2014). 51% of Millennials report that they prefer to share rather than buy things (Havas,
2014), which is why collaborative consumption is the essence of the rapidly growing sharing economy
(Botsman, 2010). This exploratory research investigates, both theoretically and empirically, whether
organizations can better engage and integrate Millennials into their enterprise by encouraging
collaborative consumption among their employees.
Pausible, Yet Unpredictable: The Effects of Comprehensibility and Normative
Legitimacy on Entrepreneurial Success
Goran Calic, Krannert School of Management, Purdue University; Elaine Mosakowski, Purdue University
The current paper extends extant research on the importance of normative legitimacy for
entrepreneurial success by focusing on the comprehensibility of a new venture idea. While external
actors may generally support entrepreneurs seeking to address environmental or social problems, a
sustainability orientation by itself does not explain entrepreneurial success. Given the complexity of
social and environmental problems in particular, backers will also emphasize the comprehensibility of
a venture idea in their evaluation. We decompose comprehensibility into plausibility and
predictability, and conduct an empirical examination of the effects of these factors, along with factors
indicating a sustainability orientation, in an analysis of the crowdfunding outcomes of technologybased projects. We find support that plausibility contributes to success, but that predictability has a
negative effect. We interpret the latter result as unpredictable ideas being perceived as more novel.
CONFERENCE – Accepted Papers
Toward a New ROI: Measuring Intangible Entrepreneurial Returns on Investment
Mellani Day, Colorado Christian University; Mary Boardman, Globalytica, LLC
Scholars have discussed both the profit motive (Simons & Astebro, 2010) and a broader set of motives
(Elkington, 1997; Becker, 1993; Balog, et al, 2014) when studying entrepreneurial behavior. Some of
these are internal and underlie how entrepreneurs perceive and experience risk and reward, costs and
benefits. These motivators that may affect an internal return on investment (ROI) calculation can also
be examined through a neuroentrepreneurship lens. Day (2014) takes a first step in this through
framing the issue, identifying a set of potential costs and benefits, and developing a hypothesis for how
these may be ranked in order of importance. This current paper presents a first step in the empirical
testing of the ROI model presented in Day (2014). It does so by identifying existing data that measures
these costs and benefits to varying degrees, then discussing the future research necessary to build upon
this moving forward.
Marketized, activist, and brokered market social orders
Silvia Dorado, University of Rhode Island; Alex Nicholls, Said Business School, Oxford University; Bogdan
Prokopovych, Stockholm Centre for Organizational Research
This paper contributes to research on the advancement of social value within markets. It advances a
typology that establishes a connection between the 'social order' of a market and variances (beyond
those rooted in organizational charter) in (a) the degree to which the generation of social value
generates financial/competitive upsides, (b) the potential for private value to crowd out social value,
and (c) the challenges of balancing private and social value. Here, social order describes institutional
alignments which solve the three inevitable coordination problems required for a market to operate
(Beckert, 2009): An alignment which defines the use value derived by customers; reconciles the
competitive forces framing how much of this value is privatized, and limits the risk of opportunistic
behavior in exchanges. This alignment is institutional rooted by emerges stochastically as actors
interactions layer historically and generate differences among markets.
From "Pounds Delivered” to “Shortening the Line”: Food Bank Leaders in the U.S. as
Ethical Sensemakers and Social Innovators
Michael Elmes, Worcester Polytechnic Institute; Karla Mendoza-Abarca, Worcester Polytechnic Institute
This paper considers the critical role that food bank leaders are playing in sensemaking around the
ethical and justice dimensions of hunger and food-related illnesses in the U.S. These food bank
leaders are engaged in a kind of ethical sensemaking (Sonenshein, 2009) that has led to a shift from a
traditional operationally-focused strategy (food-in/food-out efficiencies and pounds served) to one
that both provides emergency food aid and tries to “shorten the line” through experimentation with
innovative, ethical solutions designed to eliminate hunger at its source. We consider food justice as a
discourse of resistance to the logic of industrial agriculture and at how some food banks as ethical
sensemakers are trying to bridge these discourses in their approach to hunger and food-related
diseases. To illustrate the phenomenon, we consider the transition that has occurred at one food bank
in the US and the justice-based innovations that they have designed and implemented across its
county to end hunger. We conclude by proposing a model of ethical sensemaking that may help to
explain how some food bank leaders have successfully adopted a variety of new strategies in their
approach to food insecurity.
Value and Valuation for a Sustainable Approach to Finance
Scott Fullwiler, Presidio Graduate School; Vanessa Fry, Boise State Univesrity; Steven Crane, Presidio Graduate
Financial tools, models, and theories play a powerful role in the planning, assessment, and decision
making about the economic aspects of an enterprise. The concept of value within these foundations
largely means economic value, namely it can be counted and converted to a monetized unit.
Acceptance of value as economic value continues to dominate research on value concepts in the social
and natural sciences disciplines even when an alternative approach to value is proposed. Our research
attempts to expand concepts of value beyond financial/economic and be inclusive and integrative with
social and ecological value. We believe this research is critical and important to influence the
CONFERENCE – Accepted Papers
education of finance in business and management schools that offer course work or focus on
Is Information Enough? An Investigation of the Effects of Executive Pay Disclosure on
Future Pay Practices
Amy Guerber, University of Alberta ; Samantha Conroy, Colorado State University
Social unrest due to the increasing wealth gap in the U.S. could lead to a widespread legitimation crisis
– threatening the sustainability of social, economic, and government institutions. Although the
government has passed legislation requiring increased reporting of pay policies and outcomes for top
managers and for average workers, questions about the likelihood that these policies will have a
meaningful impact persist. In the current paper, we explore the conditions under which compensation
disclosures may influence future pay outcomes for executives as well as average employees. We
propose a model explaining the impact of compensation disclosure characteristics on future
compensation outcomes for both executives and workers, and we explore the moderating impact of
stakeholder influence (specifically employee and shareholder bargaining power) on this relationship.
Sustainability: Is a Dematerialized Economy the Answer?
Steven Hinson, Webster University
It now seems evident that the global economy has overshot the ecological carrying capacity of the
planet. Yet there remains some difference of opinion as to whether this necessitates limits on
economic growth. This paper critiques the ‘weak’ sustainability argument that the substitution of
human-made capital and technology for natural capital allows for potentially unlimited growth. Yet
the need for continued growth is real. One possible answer put forward is the dematerialization of
economic activity. This paper discusses the potential weaknesses of the dematerialization argument
but acknowledges that this may yet be the best way forward.
Do Constraints from Socially Responsible Investing Impact an Investment Manager’s
John Hughen, University of Denver
Investment managers commonly construct equity portfolios subject to client-imposed constraints.
Common constraints include restrictions on investing in socially responsible companies (SRI). When
clients impose severe restrictions, the portfolio manager is prevented from applying his investment
strategy, and the account is classified as a non-discretionary portfolio. Most investment management
firms have now adopted ethical guidelines (GIPS Standards) that prevent non-discretionary portfolios
from being included in performance presentations to prospective clients. This paper uses Compustat
data and ASSET4 ESG ratings on environmental, social, and corporate governance performance to
quantify the impact of SRI. As measured by Jensen’s alpha, SRI constraints generally do not impact a
portfolio manager’s discretion in implementing popular investment strategies. This study is the first to
provide guidelines on how SRI constraints impact manager discretion.
When the crowd gives credit: the ethics of debt-based crowdfunding
Claire Ingram, Stockholm School of Economics; Michel Elmoznino Laufer, Stockholm School of Economics
Existing investment legislation and standard terms around investments are implemented with
professional investors in mind. Allowing consumers, or crowdfunding creditors, to invest smaller
amounts of money than professional investors online may require a different regulatory framework.
This paper looks into the implications of applying the existing arrangements to debt-based
crowdfunding, first through an examination of the differences between professional investors and
consumers who make purchases online and then through an examination of the terms and conditions
of a debt-based crowdfunding company based in Sweden. We find that professional investors and
crowd investors differ in three key ways: first, in the amounts that they invest, second in the variance
of their levels of education and experience of investment, and third how they interact with investment
CONFERENCE – Accepted Papers
Does It Pay to Be Good and Green? A Cross-Sectional Analysis of Corporate
Florian Jaeger, RWTH Aachen University
Empirical studies have shown that corporate commitment to sustainability can be achieved through
the simultaneous adoption of economic, environmental, and social principles. Firms must apply these
principles to their organizational practices and strategies in order to express sustainable forms of
development. These prior findings are mainly based on aggregated measures of corporate
sustainability and may not consider the measurement of the underlying determinants. This study
provides a more comprehensive operationalization of corporate sustainability in order to reveal its
increasing complexity. We test the generalizability and applicability of the multidimensional measures
by using original survey data obtained from 396 firms, representing different industries in Europe and
the United States. Drawing on the institutional and resource-based theories, we find evidence that
organizational size, ownership structure, and regulatory environment influence a firm’s transition
toward sustainability. The results also suggest that firms benefit from their investments in corporate
sustainability activities. This unambiguous result challenges the inconsistent association of financial
performance and corporate sustainability. The study’s findings have several academic and practitioner
implications which are then discussed.
No chaos, no creation – the role of physical environment for entrepreneurs
Chanhyo Jeong, University of Oregon
Entrepreneurship is all about creativity. Without enough understanding, we design our work
environment based on intuition and anecdotal evidences. Although some research found a causal link
between clutter and divergent thinking ability, their research covered neither team creativity nor
convergent thinking. Our brain does not always make a distinction between physical and cognitive
activity. We hypothesize that being surrounded by disorganization will activate the alleviation of
controlled self. We also expect that it will take less time for a team in a disorganized environment to
complete creativity tasks. We predict that people in a disorganized space will reach a consensus for a
convergent thinking task quicker, because a disorganized environment will hinder a team to carefully
evaluate each option due to ego depletion.
Firm “Kingmaking" as an NGO Strategy to Achieve a Transformational Partnership in
an Industry Sector
Roland Kidwell, University of Wyoming; Rhoda Davidson, University of Wyoming; Corey Billington, University
of Wyoming
This study illustrates how a non-governmental organization working with a utility firm used a
deliberate partnership strategy to create large-scale transformational benefits in the form of a lower
carbon economy. The adoption of a “kingmaker” strategy by the NGO allowed the firm to gain
appreciable competitive advantage through an agreement to reduce its carbon emissions in return for
strong NGO support. Joint partnership projects additionally created “networked enablers” that
subsequently brought institutional pressure to bear on government and industry competitors leading
to the signing of an environmentally-friendly energy policy in The Netherlands. This longitudinal case
study illustrates the factors required to create a transformational partnership and demonstrates how a
deliberate NGO strategy can create systemic and sustainable change.
Predicting and Examining Links Between IPO Hype, Managerial Expectations, and
Firm Outcomes
Kip Kiefer, U.S. Air Force Academy
This paper provides a model for understanding the information environment and explores how
differential relationships between media hype and managerial behavior exist. A key aspect of the
model is sources and timing of hype, particularly a concept from communications literature called a
trigger event. The specific trigger event explored is the IPO. Results indicate that managers are
influenced by media hype in that they exhibit actions reflecting overconfidence when the media hype
generated about the firm surrounding its IPO is volumous, salient with respect to the focal firm and
relatively positive in nature. Curiously, results reveal that media’s influence is not the same at all times
CONFERENCE – Accepted Papers
and that it impacts managerial expectations and firm outcomes differently for different types of hype
at different times.
Attributes of Environmental Disaster & TMT Attention to Natural Environmental
Jaemin Kim, Richard Stockton College; Clay Dibrell, University of Mississippi
Research in the attention-based view literature has made advances in exploring the effects of
organizational characteristics on its attention and responses. However, less is understood about why
top management teams (TMTs) allocate their limited attention to natural environmental issues in
response to environmental disasters. Combining attention-based view and stakeholder theory, we
hypothesize that technological disaster, economic damages, and number of occurrence affect the
extent to which TMTs elaborate a cognitive category of the issues associated with stakeholders.
Examining five most polluting industries for 10 years, we found that technological disasters and
economic damages of environmental disasters stimulated TMTs to attend to natural environmental
issues and the frequent occurrence was inversely U-related with the TMT attention.
Challenges for global supply chain sustainability: Evidence from the conflict minerals
Yong Kim, University of Michigan
Can companies determine if their products contain conflict minerals? Section 1502 of the Dodd-Frank
Act gives us an opportunity to answer this question. Our analysis of all reports submitted to the SEC
show that nearly 80% of companies admitted that they were unable to determine the country of origin
of such materials. Highly diversified firms, that tended to have large and complex supply chains, were
less likely to declare their products as conflict-free. Subsequent analysis showed that this was partially
because they were unable to gain information from their suppliers and suppliers’ suppliers. Also, most
CSR programs (e.g., GRI, CDP) were not effective in helping companies figure out their supply chains,
except when the companies had a large cap and were thus more heavily scrutinized.
Escaping Unscathed: The Varying Treatment of Firm Misconduct by Markets and Civil
Jocelyn Leitzinger, University of Michigan; Ivana Katic, Columbia University
Prior research indicates that firms caught in acts of misconduct may suffer a loss of legitimacy, damage
to their reputations, or other sanctions. Yet, despite pressures to conform, many prominent firms
continue to “misbehave” – some successfully, and others to the outcry of stakeholder audiences. In this
study, I suggest that both discrepancies may be due to variation in stakeholders’ assessments of firm
actions as instances of misconduct, and that these assessments depend on characteristics of the
wrongdoing allegation, the firm accused, and the act itself. Using a unique data-set of corporate front
groups in the U.S., I examine how markets and society react to allegations of firm misconduct –
investigating changes in the accused organization’s social legitimacy and market value after their
misdeeds are made public.
Who Is Manning the Gates? Gatekeepers and Crowdfunding
R. Scott Livengood, The Ohio State University; Claire Ingram, Stockholm School of Economics
Providers of financial capital play an integral role in the entrepreneurial process. From one
perspective, financiers provide capital to resource-constrained enterprises and make possible activities
that otherwise would not occur. From another perspective, however, financial institutions can also act
as gatekeepers, withholding funds from enterprises that are not deemed to have a high likelihood of
success and effectively allocating funds to those new firms that appear to capitalize on promising
opportunities in the marketplace. This theoretical paper examines the underlying characteristics and
motivations of various sources of financial capital available to early-stage firms in light of their roles as
gatekeepers of both social and economic value creation. This gatekeeper model is then applied to a
relatively new form of entrepreneurial finance, crowdfunding.
CONFERENCE – Accepted Papers
Value Experience and Persistence: A Regulatory Engagement Perspective on what
Keeps Social Entrepreneurs Engaged over Time
Cristina Martinez, IE Business School; Peter Bryant, IE Business School, Madrid
We develop a theoretical explanation of how value experience and level of engagement in
entrepreneurial goal pursuit help to explain social entrepreneurs persistence through the
entrepreneurial process, or withdrawal from it. In doing so, we examine the role of entrepreneurial
behaviors and self-regulatory orientation on motivation and engagement. This conceptual integration
proposes a novel explanation for what keeps individuals engaged in social entrepreneurship over time:
it is not only the pursuit of an opportunity as an outcome which explains entrepreneurial persistence
over time, but also the strength of motivation and engagement with the entrepreneurial process itself
and the value derived from this experience.
Animating stakeholder engagement processes: Lessons from the Ceres-Nike
Corporate Responsibility reporting process
Amanda Moss Cowan, University of Oxford; Doug Creed, ; Marc Ventresca, University of Oxford
In 2005, environmental NGO Ceres’ stakeholder report review process with Nike yielded unexpected,
positive outcomes. By 2015, the organization’s Roadmap to Sustainability had institutionalized
expectations for business reporting of sustainable business practices. This paper explores the
formative experiences underpinning Ceres’ work supporting firms and stakeholders working on
difficult issues. As this qualitative study reveals, practical lessons from the Ceres-Nike go beyond
current ‘best practices,’ also illustrating how the presence of ambiguity and unpredictability leads to
progress in these complex multi-stakeholder dialogues. In contrast to accounts that treat ambiguity as
a deficit, we identify opportunities for breakthrough outcomes through the robust, intentional
managing of these ambiguities. This case reveals the ways that a carefully convened process enhances
firm’s strategic capabilities and creates stakeholder-to-stakeholder benefits.
The Squeaky Wheel Gets the Grease: The Effect of Organizational Wrongdoing on
Stakeholders’ Responses
Brian Park, INSEAD
Research on organizational wrongdoing has been dominated by the social punishment view whereby
organizations can expect to be punished by stakeholders for wrongdoing. Drawing on research on
organizational sensemaking, this paper questions the social punishment perspective, suggesting that
whether organizations are punished after wrongdoing depends on the type of stakeholders concerned.
Classifying stakeholders in two groups – consumers or governments – I show that while consumers
punish an organization in the wake of severe wrongdoing, governments lend financial support to the
culpable organization. I propose that these divergent responses are the result of their respective roles
in the market and different ways of sensemaking. The study also explores how such stakeholders
interpret and react differently according to the controllability of wrongdoing and to the size of the focal
organization. Analyzing the airport industry in the United States from 2009 to 2014, I found that
following a serious accident, airports experienced a drop in service fees from consumers but received
more funds from government. Surprisingly, airports received more government funds when the
accident was controllable. Another finding was that after a severe accident, large airports were less
punished by consumers but less supported by governments. This paper contributes to the research
stream by providing a more nuanced understanding of stakeholders’ responses to wrongdoing.
Business Sustainability in Entrepreneurial Firms: Examining the Signaling Impact of
Virtue and Temporality on Market Performance
G. Tyge Payne*, Texas Tech University; Curt Moore, West Virginia University; Miles Zachary, West Virginia
University; Keith Brigham, Texas Tech University
Business sustainability is the ability to virtuously manage a business such that short-term demands
can be addressed without compromising the future of the business, its stakeholders, or society. As
such, two key dimensions of business sustainability must be considered from an organizational level of
analysis: temporality and virtue. In this manuscript, we conceptually develop these dimensions and
empirically examine their ability – as independent and combined signals of business sustainability – to
CONFERENCE – Accepted Papers
influence the market performance of entrepreneurial firms. Our findings, based on a longitudinal
sample of 236 IPO firms, support our main hypothesis regarding the effect of sustainability on
performance. Hypotheses on the differential influences of each dimension and curvilinear effects of
business sustainability are also supported.
Mentor or Tormentor: Understanding How Mentors Impact Entrepreneurs’
Performance Using a Creativity Perspective
Sid Saleh, University of Colorado-Boulder; Maw Der Foo, University of Colorado-Boulder; David Hekman,
University of Colorado-Boulder
Mentors benefit entrepreneurs by lending them expertise and access to contacts (Ozgen & Baron,
2007; Davidsson & Honig, 2003). Using a creativity lens, we explore how mentor-investors (mentors
who invest) influence startup performance. Self-determination theory (Deci & Ryan, 1985) suggests
mentor-investors may stifle creativity increasing the likelihood of startup failure. In contrast, the
learned industriousness theory (Eisenberger, 1992) suggests that rewards influence individuals’
behavior towards goals that enhance creativity. We suggest that choice control (Byron and Khazanchi,
2012) moderates the relationship between rewards and startup creativity. This study links the
entrepreneurship, creativity and mentoring literatures. We offer insights into how mentor-investors
may undermine the creativity that they need to recoup their investments.
Enhancing the Sustainability Narrative: Conceptualizations from Thermodynamics
and Ecology
Manjula Salimath, University of North Texas; Vallari Chandna, University of North Texas
Constant growth fueled by endless consumption, production and waste harms the ecosystem’s ability
to regenerate natural resources and creates areas of excesses and voids. In this paper, we present two
key vocabularies: entropy and metabolic rift to add to the dialog of sustainability. We provide relevant
arguments from Georgescu-Roegen, Marx, Foster, Moore and other scholars that provide a sound
rationale for advancing the current work in sustainability using the underlying fundamentals of
systems theory and natural-resource based theory. In our search for additional conceptualizations, we
were encouraged by the deep thinking of earlier scholars who were able to bridge the domains of
ecology and thermodynamics to render a holistic perspective that we believe provides value and
informs future understanding of sustainability.
Does Entrepreneurial Society Undermine Corporate Social Responsibility? An
Empirical Investigation of Institutional Setting
Hessamoddin Sarooghi, University of Missouri-Kansas City; Niloofar Abolfathi, Bocconi University
Previous studies on institutional determinants of Corporate Social Responsibility (CSR) have
contributed to our understanding of the ceteris paribus effect of specific elements of institutional
environments (e.g., rules, norms) on CSR. However, the contingencies that enhance or diminish the
effect of these elements on CSR have not been explored in previous studies. To fill this gap, current
study focuses on how entrepreneurial institutions (entry regulations and entrepreneurial culture)
interact with social institutions (labor regulations and social empathy) to affect the social performance
of firms embedded within different institutional settings. The preliminary results show that labor
regulations are less efficient in improving CSR when firms are located in countries with
entrepreneurship-friendly entry regulations. Results have implications for theory and efficient crosssectoral policy making.
Human Capital Differences in Philanthropic vs. Traditional Venture Capital Firms
Mariarosa Scarlata, University of Surrey; Jennifer Walske, ; Andrew Zacharakis, Babson College
Philanthropic venture capital (PhVC), like traditional venture capital (TVC), provides funding and
value added services to a portfolio of entrepreneurial firms. However, TVC’s primary goal is to
maximize the economic return of its investments. In contrast, PhVC firms expect their portfolio
companies to perform well in terms of social and economic return. This paper compares differences in
human capital (HC) between PhVC and TVC firms, using hand-collected data. Our results indicate key
differences in general and specific HC. PhVC firm founders have much greater social work experience,
CONFERENCE – Accepted Papers
compared to founders of TVC firms. However, both TVC and PhVC firms have high levels of
commercial work experience. As for educational related variables, TVC firm founders have
significantly more education in science, engineering, business, and law.
Principals vs. Principles: How Environmentally and Ethically Responsible are Firm
Ralf Steinhauser, Universitat Hamburg
The separation of ownership and control in corporations opens up the potential for moral hazard. Thus
it is conventional wisdom that managers who are not closely monitored pursue personal goals rather
than maximize shareholder wealth. Yet little is known about what these goals are. This paper provides
new insights into managers’ personal preferences by studying the variations in corporate
environmental and social performance associated with different corporate governance provisions. I
employ a unique dataset to exploit variations in takeover defenses to analyze differences in managers’
behavior. We find that with weaker governance, more resources are allocated into environmentally and
socially responsible objectives and away from core responsibilities. These findings support a theory
that ethical principles are important for the subjective well-being of managers.
Changing the Cassette: Exploring Institutional Field Change Among Nicaraguan
Dairy Farmers
Chris Sutter, Miami University; Justin Webb, University of North Carolina at Charlotte; Geoff Kistruck, York
This study examines an institutional entrepreneur’s efforts to orchestrate field-level change: a nongovernmental organization’s efforts to change rural Nicaraguan dairy farmers’ long-held beliefs and
practices, restructure their relationships and market transactions, and establish new rules for milk
production as means to incorporate the farmers into more developed dairy supply chains. We find that
the institutional entrepreneur uses inter-related tactics to change the understandings, relationships,
and rules that characterize the field. We also find that field members’ willingness to participate varied
depending on their prior experience with alternate institutional logics as well as their openness. We
seek to contribute to theory regarding institutional entrepreneurship by exploring the relationships
between understandings, relationships, and rules during field change and by clarifying how distributed
agency fits into this process.
Entrepreneurship in Contested Industries: The Case of the Marijuana
Dara Szyliowicz, University of the Pacific; Tammy Madsen, Santa Clara University
Entrepreneurs in Colorado are pioneering businesses in the marijuana industry, an industry grossing
over $600 million in 2014, that the federal government considers illegal. As a result, innovative
entrepreneurs face a series of conflicting obstacles, or sources of contestation that hinder the
development of a durable and productive industry. We identify five different drivers that generate
contestation in industries -- actor heterogeneity, regulatory arrangements, competing logics,
institutional voids and changes in social belief systems. We examine how these drivers influence
contestation in, and the evolution of, the marijuana industry in Colorado and, in turn, the choices
entrepreneurs make.
Standing on Its Head: Using Institutional Entrepreneurship Theory to Facilitate
Craig VanSandt, University of Northern Iowa
Institutional theory seeks to identify and explain, post hoc, the processes and mechanisms leading to
organizational stability and change, and ways in which those mechanisms constrain human agency.
We will stand the existing agenda on its head. Rather than explaining how institutional change occurs,
we will use institutional entrepreneurship theory to explore how organizational fields might facilitate
more efficient evolution processes. In particular, we will focus on the well-established energy
production fields—coal, oil, and natural gas. Our premise for spotlighting this particular field is the
crucial need to move from “dirty” sources of energy generation to cleaner, renewable supplies, such as
CONFERENCE – Accepted Papers
hydropower, wind, and solar. We will use a model of institutional change processes proposed by
Dorado as the starting point for our analysis.
Big Pharma and BOP Markets: An Entrepreneurial Approach
Isaac Wanasika, University of Northern Clorado; Abe Harraf, University of Northern Colorado
The purpose of this paper is to develop an entrepreneurial framework for effective economic and social
performance of big pharma in base of the pyramid (BOP) markets. BOP markets have immense
business challenges and are the most underserved segments of the pharmaceutical industry. However,
these markets have significant potential for sustainable growth and the most urgent medical needs.
Instructively, other industries such as telecommunications and the consumer sector have made
inroads in BOP markets, despite the odds. Big pharma stands to achieve sustainable benefits through
increased focus on BOP markets. In this paper, we develop an entrepreneurial and transaction
economics theoretic approach towards effective performance of big pharma in BOP markets.
The Role of Overconfidence in the New Venturing Process
Justin Weinhardt, University of Calgary; Justin Davis, University of West Florida; Olga Petricevic, University of
Overconfidence plays a significant role in entrepreneurial decision making but the directionality, or
potentially the varying nature, of its effects in the new venturing process is still not well understood. To
address this complexity regarding overconfidence we integrate a multi-stage motivational framework
that predicts differential effects of overconfidence depending on the context and stage of
entrepreneur’s motivation during the new venturing process. We then take this framework and use it
as a guide for conducting a systematic review of the entrepreneurship literature. Our findings reveal
inconsistent results with respect to the impact of overconfidence on new venturing outcomes at
different decision making stages and suggest several gaps in our understanding of the underlying
mechanisms and relationships between overconfidence and new venturing processes.
Beyond the Investment: The Social and Communal Impact of a Localized
Microlending Project
Nathan Woolard, Emporia State University
The opportunity to invest in small business is changing due to Kickstarter and other creative venture
funding websites. The purpose of this research project is to explore how participants in a specific
Midwestern community crowdfunding project define their involvement in terms of social and political
importance that may extend beyond contractual obligations. Specifically, the research will attempt to
determine whether participants in the crowdfunding project were motivated by means beyond
potential return on investment, and the extent in which communal obligation and consideration for
localized economic development impacted the likelihood of their investment. This qualitative case
study focuses on a specific large-scale micro-lending project, where an entrepreneur group worked
with a local economic development agency to solicit micro-lenders for gap financing for a “BrewPub.”