inter-firm relationships for...
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DOCTORAL THESIS IN INDUSTRIAL ECONOMICS AND MANAGEMENT STOCKHOLM, SWEDEN 2020
KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT
Inter-firm relationships for sustainability Incumbent firms and sustainability ventures
Andra Riandita
ISBN 978-91-7873-428-3 TRITA-ITM-AVL 2020:35 ©Andra Riandita 2020 [email protected] This academic thesis, with the approval of KTH Royal Institute of Technology, will be presented to fulfil the requirements of the Degree of Doctor of Philosophy. The public defence will be held on Friday the 25th of September 2020, at 14:00, in Hall Ångdomen, KTHB, Osquars backe 31, Stockholm. Printed in Sweden, Universitetsservice US-AB
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This research was conducted within the framework of the “European
Doctorate in Industrial Management”—EDIM—which is funded by The
Education, Audiovisual and Culture Executive Agency (EACEA) of the
European Commission under Erasmus Mundus Action 1 programs.
This research was jointly conducted at
KTH Royal Institute of Technology and Politecnico di Milano
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Abstract
The magnitude of global environmental and social challenges puts business
firms under constant scrutiny. To address such challenges, incumbent firms
initiate and manage partnerships with external organizations. Among various
types of partnerships, incumbent firms have increasingly engaged with
sustainability ventures – newly-created ventures dedicated to tackling
sustainability issues. This thesis studies this type of partnership. Specifically,
the thesis aims to unpack the antecedents of and determinants behind the
formation, and development, of inter-firm relationships between incumbent
firms and sustainability ventures – issues which have hitherto received scant
scholarly attention in the management and entrepreneurship fields.
With a particular emphasis on drivers and outcomes of such collaborative
relations, the thesis builds on three empirical studies. These studies are set in
the food and manual service sectors in Europe and combine qualitative and
quantitative research approaches. The three studies are reported in four
independent papers. Paper I provides a descriptive analysis of how incumbent
firms leverage inter-organizational partnerships in their sustainability efforts.
The paper identifies a shift where firms increasingly ally with sustainability
ventures to bring about sustainability-oriented innovation while reducing
their engagement in philanthropic partnerships. Paper II adopts the
perspective of such ventures and investigates how they achieve sufficient
legitimacy in the eyes of incumbent firms to enable the initiation of a
partnership. In Paper III, the incumbent firms’ interest in such partnerships
is investigated. Paper IV, finally, sheds light on the question as to if and when
being profiled as actively prosocial helps suppliers win contracts with
incumbents.
The thesis offers two broad lines of contribution to our understanding of
firms’ contemporary efforts to tackle sustainability challenges. First, the thesis
contributes to the field of inter-organizational relationships for sustainability
by delineating the role of sustainability ventures as a novel type of partner and
a key partner for incumbent firms. In doing so, this thesis demonstrates that
the combined elements that the incumbents can gain from their relationships
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with sustainability ventures may enable the transformation of the firm into
more sustainable businesses. Second, the thesis complements extant literature
on sustainable entrepreneurship that previously considered the role of such
ventures in advancing sustainable development as that of competition for
incumbent firms. By clarifying the two collaborator roles of sustainable
ventures, i.e., as strategic partners and as prosocial suppliers, the thesis
demonstrates how forming and developing ties with incumbents may lead to
long-term success for sustainability.
Keywords: inter-firm partnership, sustainable entrepreneurship, incumbent firm, new venture, sustainability
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Sammanfattning
Världen står inför stora utmaningar vad gäller att uppnå miljömässigt och
socialt hållbar utveckling inom en lång rad områden. Dagens företag möter
allt högre förväntningar på att de skall agera för att möta dessa utmaningar. I
sina försök att leva upp till sådana förväntningar arbetar många företag med
att inleda och utveckla allianser med andra organisationer. Bland sådana
allianser märks på senare år ett allt viktigare inslag av samarbete med små,
nystartade företag som inriktar sig på att adressera utvalda hållbarhetsproblem.
Detta slags samarbete, som tidigare inte uppmärksammats i särskilt hög
utsträckning av management- och entreprenörskapsforskare, står i fokus för
avhandlingen. Det övergripande syftet för avhandlingen är att utforska
förutsättningarna för att ingå och utveckla inter-organisatoriska länkar mellan
befintliga företag och nystartade hållbarhetsorienterade företag.
Avhandlingens analys av drivkrafter och utfall av samarbete bygger på tre
empiriska studier, situerade i de europeiska mat- och tjänstebranscherna.
Tillsammans innefattar de tre studierna insamling av såväl kvalitativ som
kvantitativ data.
De tre studierna rapporteras i fyra fristående artiklar. I den första av dessa ges
en deskriptiv analys av hur företag inom dagligvaruhandeln använder sig av
allianser i sitt hållbarhetsarbete. Artikeln identifierar ett skifte över tid, där de
stora företagen inom handeln i ökande grad bildar allianser med nystartade
hållbarhetsorienterade företag i syfte att åstadkomma innovation inom den
egna verksamheten. Parallellt med detta ser handlarna ut att engagera sig i
färre allianser av mer filantropisk natur. I artikel II studeras hur nystartade
hållbarhetsföretag kan uppnå tillräcklig legitimitet för att framstå som
trovärdiga allianspartners. Artikel III utvecklar analysen av hur de större
företagens drivkrafter för allianser av detta slag ser ut, och hur dessa
drivkrafter utvecklas över tid. Artikel IV, slutligen, adresserar de relaterade
frågorna om på vilka bevekelsegrunder ett företag kan tänkas föredra ett
något högre prissatt anbud från en leverantör profilerad mot en relevant
hållbarhetsfråga, och hur en sådan leverantör kan agera för att vinna
affärsmässig nytta från en sådan profilering.
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Avhandlingens viktigaste bidrag faller inom två områden. För det första
bidrar den till vår kunskap om hållbarhetsrelaterade inter-organisationella
relationer genom att utmejsla villkoren för en särskild typ av relationer – de
mellan små företag profilerade mot ett hållbarhetsområde och en större
marknadsaktör – vilka inte varit föremål för särskilt ingående tidigare
forskning. Avhandlingen ger sammantaget en bild av dessa länkar som
potentiellt betydelsefulla för industriell omställning mot mer hållbar praktik.
För det andra komplementerar avhandlingen den befintliga forskningen om
hållbarhetsorienterat nyföretagande, i vilken befintliga företag tenderats att
analyseras som potentiella konkurrenter snarare än samarbetspartners.
Genom att utforska de mindre företagens förutsättningar att forma och
utveckla gynnsamma band till större företag i form av antingen samarbeten
eller rena leverantörsförhållanden visar avhandlingen på vägar till
framgångsrik nyetablering med förutsättningar att påverka delar av ekonomin
i riktning mot en mer hållbar samhällsutveckling.
Nyckelord: allianser, hållbarhetsorienterat företagande, entreprenörskap,
hållbarhet
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Sommario
L'entità delle sfide ambientali e sociali globali pone le aziende sotto un
costante scrutinio. Per far fronte a tali sfide, le aziende incumbent
intraprendono e gestiscono delle partnership con organizzazioni esterne. Tra
i diversi tipi di partnership, le incumbent sono sempre più impegnate in
venture di sostenibilità – venture di nuova creazione, dedicate ad affrontare i
problemi di sostenibilità. Questa tesi studia tale tipo di partnership. Nello
specifico, la tesi mira a svelare gli antecedenti e le determinanti che
sottendono la formazione e lo sviluppo delle collaborazioni intra-aziendali tra
le imprese incumbent e le venture di sostenibilità – questioni che hanno
ricevuto un’attenzione molto limitata da parte degli accademici nei campi del
management e della imprenditorialità.
Ponendo particolare enfasi sui driver e sui risultati di queste relazioni
collaborative, la tesi si basa su tre studi empirici. Questi studi son stati
condotti nei settori dei servizi alimentari e manuali, combinando approcci di
ricerca qualitativi e quantitativi. I tre studi sono riportati in quattro articoli
indipendenti. Il primo articolo (paper I) fornisce un’analisi descrittiva di come
le aziende nel settore della vendita al dettaglio di alimenti utilizzino le
partnership interorganizzative nei loro sforzi di sostenibilità. L’articolo
identifica come le aziende si alleino sempre più con le venture di sostenibilità,
riducendo nel contempo il loro impegno nelle partnership filantropiche. Il
secondo articolo (paper II) adotta la prospettiva di tali venture e investiga
come queste raggiungano una legittimità sufficiente agli occhi delle aziende
incumbent al fine di consentire l’inizio della partnership. Il terzo articolo
(paper III) investiga gli interessi delle aziende incumbent nel diventare partner.
Il quarto articolo (paper IV), infine, fa luce sul se e quando l’essere profilati
come attivamente prosociali aiuti i fornitori a vincere dei contratti con le
imprese incumbent.
La tesi contribuisce alla nostra comprensione degli sforzi contemporanei delle
imprese nell’affrontare le sfide della sostenibilità su due fronti. In primo luogo,
la tesi contribuisce al campo delle relazioni interorganizzative per la
sostenibilità, delineando il ruolo delle venture di sostenibilità come nuovo tipo
di partner e partner chiave per le imprese incumbent. In tal modo, questa tesi
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dimostra che gli elementi combinati che le incumbent possono guadagnare
dalla loro relazione con la venture di sostenibilità possono consentire la loro
trasformazione in business più sostenibili. In secondo luogo, la tesi
complementa la letteratura esistente sull’imprenditorialità sostenibile che,
precedentemente, ha analizzato il contributo delle venture nell’avanzare lo
sviluppo sostenibile attraverso il loro ruolo di concorrenti delle aziende
incumbent. Spiengando i due ruoli da collaboratrice delle venture, ovvero
partner strategico e fornitore prosociale, la tesi dimostra come la formazione
e lo sviluppo di legami con le imprese esistenti possano contribuire al successo
delle venture di sostenibilità nel lungo periodo.
Parole chiave: partnership interaziendali, imprenditorialità sostenibile,
imprese incumbent, nuova venture, sostenibilità
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Acknowledgements
Writing this thesis, and pursuing the PhD journey, has taught me a lot –
academically, professionally, and personally. This journey wouldn’t have been
possible without the help of many, and I would like to dedicate this space to
them.
First of all, I would like to thank my principal supervisor Anders Broström
for his dedicated support, thoughtful guidance, and utmost patience. Anders
has always been available and willing to assist in any way he could until I
finally reach this finish line, safe and sound. Anders, I really enjoyed working
with you, and I am grateful to learn about academic writing and research
integrity from you. Thank you for being such a great mentor and a role model!
To Raffaella Cagliano, my supervisor at Polimi, I owe appreciation for her
trust and continuous supervision from the very beginning of my PhD.
Raffaela, thank you for introducing me to this exciting research topic and for
being supportive all the way, especially at times when the road gets bumpy.
My PhD journey started with EDIM, a family I am proud to be part of.
Therefore I thank the EDIM scientific committee: Mats Engwall, Cali Nuur,
Paolo Trucco, and Felipe Ruiz for allowing me to embark on this journey.
Thank you for establishing this program and supporting me along the
way. During my years in KTH, I am indebted to many other mentors who
have helped me undertake this PhD. Andreas Feldmann, for the
encouragement and brainstorming sessions. Gustav Martinsson, for the
friendly and stimulating fika, in live and digital editions. Hans Loof, for the
energizing morning talks in the corridor. Matti Kaulio, for the support and
inspiring talks. Bo Carlsson, for all the help with my teaching endeavor.
Annika Rickne, for the early inspiration and motivation. I also thank many
people at INDEK KTH for the insightful discussions and friendly
conversations: Niklas Arvidsson, Charlotte Holgersson, Johann Packendorff,
Frauke Urban, Terrence Brown, Ebba Laurin, and Vardan Hovsepyan.
I am grateful to also be part of DIG Polimi and experience DIG's stimulating
academic and research environment. My stay in Milan has been one of the
highlights of this PhD journey. I want to thank many faculties for their
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contribution to my research development: Lucio Lamberti, Luca Grilli,
Cristina Rossi, Federico Caniato, Massimo Colombo, Michaela Arnaboldi,
Filomena Canterino, Federica Cicculo, and Claudio Dell’Era. Joining Polimi’s
Food Sustainability Observatory has also been an exciting experience, and I
thank Giulia Bartezzaghi for her collaboration.
I cannot miss mentioning the helping hand of Caroline Ahlstedt, Kristin
Lohse, Christer, Gulten Baysal, Martina Sani, Giuseppa di Tavi, Antonella
Frangi, and Claudio Duran. Thank you for all the administrative support
during my stay in KTH and Polimi. Sebby Gustin, thanks a lot for saving the
day whenever the IT bits gets tricky.
Special thanks for friends who have made my PhD life more colorful. First
of all, thank you Milan, Ed, and Claudia for our chats during lunch and dinner
dates, coffee and tea breaks, gym sessions, and more. I don’t think I can
survive a single office day in Stockholm without you guys around. I owe much
to Vikash, Emrah, Yulia, and Sudipa for your kindness, unlimited time, and
generous tips on surviving the PhD. I also thank Enes, Richard, Matthew,
Daniel, Shoaib, Oskar, Armaghan, Tatiana, Ermal, Maria, and Aziza for
making me feel that I am not alone. Thank you Monia, Julia, Linda, and Ingrid
for making the corridors more cheerful. Thank you Serdar and Irina for
adopting me so often, I really appreciate this. Thank you Roya, Nicole, Liubov,
Farah, Gresa, Marjan, Sina, Sarah, and Yasmine for the joyful company during
my Polimi days, I wish I had more time in Milan. Thank you Marin, Maxim,
Simon, Yury, Andres, Anna, Ebru, Rami, Isaac, Hakan, Hossein, Seyoum, and
Artha for helping me along the way. Thank you Karla, Agam, Anjari, and Mita
for the fun times and sharing session outside office life. Thank you Bontang,
Ully, Sasky, Sella, and Chandra for keeping in touch, although we are in
different corners of the globe.
My family has been the source of unconditional support and love for me. My
mother, Mama Lina, thank you for giving me the infinite love and being the
role model of a hardworking mom. My father, Papa Yudi, thank you for
believing in me and encouraging me to aim high. My sister, Gia, for our heart-
to-heart conversations and being someone that I can always rely on. I love
you Sis. Also, as the eldest, knowing that my reliable brother is close to Mama
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and Papa brings me peace of mind in my journey abroad. So, Indra and
Keshia, thank you for always being there for Mama Papa. I also thank Ibu
Dini and Bapak Gatot for your attentiveness, kindness, care, and support
from afar.
The most important of all, my husband Sanggi, thank you for putting up with
me working many distances away at times. Thank you for staying by my side
and having my back along our journeys in Bandung, Stockholm, Milan, and
Stavanger – cities we call home. Thank you for the needed distractions, you
were the most vocal reminding me that the journey is not a sprint and quality
breaks are essential fuel to keep me running. I want you to know that I
treasure all the emotional support you gave me.
Andra Riandita
Stavanger, August 2020
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List of appended papers
Paper I
Riandita, A. To ally and innovate for sustainability: Food retailers and their external
partners
(Submitted to Technological Forecasting and Social Change)
An earlier version of this paper was presented at the 36th European Group for
Organizational Studies Colloquium, July 2020
Paper II
Riandita, A., Broström A., Cagliano R, Feldmann A. Legitimation work in environmental entrepreneurship: Sustainability start-ups’ journey towards the establishment of major partnerships
(R&R in the International Small Business Journal)
Abstract of the previous version published in Academy of Management Proceedings, Vol. 2019, 19178. https:// /doi/abs/10.5465/AMBPP.2019.19178abstract
Paper III
Riandita, A., Broström A., Cagliano R. The evolving rationales of sustainability-
oriented alliances: Green start-ups as partners in the battle on food waste
(second round of review in the Journal of Business Ethics)
Abstract of the previous version published in Academy of Management Proceedings, Vol.
2019, 18087. https:// /doi/abs/10.5465/AMBPP.2019.18087abstract
Paper IV
Broström A. Riandita, A., Getting paid for doing Good: Employee Working
Conditions as a Source of Supplier Competitive Advantage
Abstract of the previous version published in Academy of Management Proceedings, Vol.
2020, 20374. https://doi.org/10.5465/AMBPP.2020.20374abstract
xiv
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Index
Abstract ................................................................................................ iii
Sammanfattning ................................................................................... v
Sommario............................................................................................ vii
Acknowledgements ............................................................................. ix
List of appended papers .................................................................... xiii
1. Introduction ................................................................................. 17
1.1. Research background and motivation ............................................. 17
1.2. Research objective and research questions ..................................... 20
1.3. Structure of the thesis ......................................................................... 22
2. Theoretical background .............................................................. 23
2.1. Inter-organizational relationships for sustainability ...................... 23
2.1.1. Configuration and development of sustainability-oriented partnership ..................................................................................................... 24
2.1.2. Drivers of sustainability-oriented partnership .............................. 25
2.2. Sustainable entrepreneurship ............................................................ 26
2.2.1. Venture legitimation and dual logics .............................................. 28
2.2.2. Attributing social values in a buyer-supplier relationship ........... 29
2.3. Institutional theory of legitimacy ...................................................... 30
2.3.1 Legitimacy as property ....................................................................... 31
2.3.2. Legitimacy as a process ..................................................................... 32
3. Methodology ............................................................................... 35
3.1. Overall research design ...................................................................... 35
3.2. Empirical projects ............................................................................... 36
4.2.1. Project A ............................................................................................. 36
4.2.2. Project B .............................................................................................. 39
4.2.3. Project C .............................................................................................. 44
4. Summary of the appended papers .............................................. 49
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Paper I ................................................................................................................. 50
Paper II ............................................................................................................... 51
Paper III ............................................................................................................. 52
Paper IV .............................................................................................................. 54
5. Results and discussion ................................................................ 57
5.1. Scope, characteristics, and trends of the collaboration ................. 58
5.2. Drivers of collaboration ..................................................................... 60
6.2.1 Drivers for the formation .................................................................. 60
6.2.2 Drivers for the development ............................................................. 61
5.3. Sustainability ventures’ approaches to establishing collaboration 63
5.3.1. Sustainability ventures’ approach in a strategic partnership ........ 63
5.3.2. Sustainability ventures’ approach in a buyer-supplier relationship ......................................................................................................................... 64
5.4. Implications for sustainable development ....................................... 66
5.4.1. Firm level and dyad level .................................................................. 66
5.4.2. Societal level ........................................................................................ 69
6. Contribution ................................................................................ 73
6.1. Theoretical contributions ................................................................... 73
6.2. Practical contribution.......................................................................... 75
6.2.1. Implications for managers ................................................................ 75
6.2.2. Implications for policy-makers ........................................................ 78
7. Conclusions ................................................................................. 79
7.1. Limitations and further research ....................................................... 80
References ........................................................................................... 82
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1. Introduction
1.1. Research background and motivation
The escalating rate of climate change and the widening gap of social inequality
pose enormous challenges for society. The growing global population
increases the demand for natural resources, leading to an over 30% increase
in food demand by 2030 (Alexandratos and Bruinsma, 2012). The 9 billion
population projected by 2050 (UN, 2017) also intensifies demands for safe
and sustainable work opportunities. The magnitude of global environmental
and social challenges puts businesses under constant scrutiny. Stakeholders
demand that business firms address such challenges more actively and
contribute toward the global agenda of sustainable development.
Large incumbent firms are particularly strongly affected, owing to their high
visibility and the widespread presence and impact of their businesses
(Kostova and Zaheer, 1999). In response, incumbent firms introduced a range
of initiatives to address social and environmental challenges, such as the
design of corporate sustainability strategies (van Marrewijk, 2003; van
Marrewijk and Werre, 2003). Due to the unfamiliarity of such challenges,
however, incumbent firms require external support to implement their
sustainability-oriented initiatives (Buysse and Verbeke 2003; Darnall et al.
2010). Therefore, the formation of inter-organizational relationships with
external partners has played a significant role in establishing such initiatives
(Lin, 2012b; Wassmer et al., 2014).
Also, grand societal challenges have attracted other groups of business actors
to react and to contribute to tackling the issue of environmental degradation
and social injustice through entrepreneurship activities (Patzelt and Shepherd,
2011; Shepherd and Patzelt, 2011). Entrepreneurs recognize, evaluate, and
exploit opportunities coming from such issues while aiming to generate
economic gain (Dean and McMullen, 2007; Hall et al., 2010) through the
creation of for-profit ventures (Stubbs, 2017), namely sustainability ventures.
Sustainability ventures are created with the explicit aim of achieving results in
terms of environmental and social sustainability as well as in economic
success terms (Kuckertz and Wagner, 2010; Schaltegger and Wagner, 2011).
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In recent years, there has been a surge in the formation of such ventures
entering and disrupting various industries (Hockerts and Wüstenhagen, 2010).
While operating in niches of their respective markets, sustainability ventures
are at the forefront of environmental (Demirel et al., 2017) and social
innovation (Cacciolatti et al., 2020).
Incumbent firms have shown interest in initiating collaboration with
sustainability ventures (Post et al., 2015). In recent years, major industrial
players like Unilever Foundry and HENRi@Nestle launched initiatives.
Through such programs, Unilever and Nestle seek to find new ventures with
the capacity to solve specific social and environmental challenges. Based on
their contrasting yet complementary approaches to addressing social and
environmental issues (Baumann-Pauly et al., 2013; Horisch et al., 2015;
Mousiolis et al., 2015), a joint effort between the two actors may be mutually
beneficial. As providers and suppliers of sustainability-oriented competences
(Klewitz and Hansen, 2014), sustainability ventures can play essential roles in
accomplishing the incumbents’ objectives of transforming into more
sustainable businesses (Dyllick and Muff, 2016b). With their clear social and
environmental goals, sustainability ventures may also directly offer legitimacy
benefits to the incumbents (Lin and Darnall, 2015). At the same time, such
ventures may gain advantages from their affiliation with incumbent firms that
have abundant resources and high credibility (Yang et al., 2014).
In the field of inter-organizational relationships for sustainability, the
literature has not engaged with studying sustainability ventures as potential
partners to incumbent firms (see e.g. Wassmer et al., 2017; Wassmer et al.,
2014). While the entrepreneurship literature has recognized interactions
between the two actors in a sustainability-driven market (Hockerts and
Wüstenhagen, 2010; Schaltegger and Wagner, 2011), past studies have mainly
positioned such ventures as a competitor to the incumbent firms. This
limitation in the literature limits our ability to unpack the antecedents and
determinants behind the formation, and development, of inter-firm
collaboration between incumbent firms and sustainability ventures.
Prior studies on firms’ sustainability-oriented partnerships have been
dominantly engaged with the role of cross-sector partners, such as non-
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governmental organizations (NGOs), government agencies, communities,
and universities (e.g. Stadtler, 2018; Stadtler and Lin, 2017). Collaboration
with cross-sector partners, however, has been characterized by conflicts
(Klitsie et al., 2018) due to the lack of unity and the different priorities among
partners (Ashraf et al., 2017; Ashraf et al., 2019), which could lead to the early
termination of partnerships (Meschi and Norheim-Hansen, 2018). For
example, partners from the nonprofit sector may be driven more by social,
environmental, and/or political concerns rather than by commercial
considerations. In contrast, while sharing a common social or environmental
mission with that of cross-sector partners (Cacciolatti et al., 2020),
sustainability ventures have a strong commercial orientation (York et al.,
2016b). While such features position sustainability ventures as a conducive
partner for incumbent firms, little is known regarding the aspects that
characterize partnerships between the two firms.
Insights from extant studies suggest that firms’ motives in forming inter-
organizational collaboration for sustainability suggest that firms are driven by
competence, profit, or legitimacy objectives (Lin and Darnall, 2015; Wassmer
et al., 2017). Two organizations engaging in a partnership may not, however,
necessarily be motivated by the same type of motive. In the case of incumbent
firms and sustainability ventures, the two types of organizations can be
expected to face different challenges to success in the sustainability arena. For
example, incumbent firms often struggle to legitimate their sustainability
initiatives (Patala et al., 2019) and may be liable to greenwashing judgment
(Schaltegger and Burritt, 2018). In contrast, sustainability ventures perceive
challenges in terms of financial, administrative, and informational supports
(Hoogendoorn et al., 2019) and continuously strive to acquire external
legitimacy, given the variety of stakeholders presumed to attribute legitimacy
to them (Weidner et al., 2019). In view of the different starting points and
challenges facing incumbent firms and sustainability ventures, it would seem
that drivers and outcomes for each side of a partnership involving both firms
should be investigated in order to understand the antecedents and potential
of such inter-firm relationships.
In examining sustainability-oriented partnerships, legitimacy-seeking
behavior can be expected to play a central role (Lin and Darnall, 2015).
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Building external legitimacy is particularly important for sustainability
ventures seeking to collaborate with key partners (Weidner et al., 2019),
including incumbent firms. Given their potential role as a sustainability
partner and prosocial supplier (Klewitz and Hansen, 2014), such ventures may
need to employ different strategies to successfully establish a formal
relationship with the incumbents. For this reason, this thesis examines the
conditions of success for sustainability ventures in two distinct settings of
forming a strategic partnership and establishing a buyer-supplier relationship
with incumbent firms.
Against this background, this thesis aims to shed light on the emerging form
of sustainability-oriented partnerships between incumbent firms and
sustainability ventures. Insights generated from this thesis aim to provide
understanding regarding the role of such collaboration in promoting and
enabling organizational and inter-organizational sustainability, thereby
advancing societal progress toward sustainable development.
1.2. Research objective and research questions
The objective of the thesis is to explore relationships between incumbent
firms and sustainability ventures, with a particular emphasis on drivers and
outcomes of collaborative relations. The thesis is built on the research
literature on inter-organizational relationships for sustainability (e.g. Lin and
Darnall, 2015; Stadtler, 2018; Stadtler and Lin, 2019; Wassmer et al., 2017),
sustainable entrepreneurship (e.g. Hockerts and Wüstenhagen, 2010; Johnson
and Schaltegger, 2019; Munoz and Cohen, 2018; Patzelt and Shepherd, 2011),
as well as firms’ prosocial behavior and its influence on customer decision-
making (e.g. Davies et al., 2012; Goebel et al., 2018). By exploring the role of
sustainability ventures as partners with incumbent firms and the dynamics of
such inter-firm collaborations, this thesis aims to contribute to the literature
on sustainability-oriented partnerships. Furthermore, the thesis aims to
contribute to sustainable entrepreneurship literature through insights
regarding the journey of sustainability ventures in establishing relationships
with incumbent firms, and in leveraging such relationships to achieve their
multiple objectives. Specifically, the thesis highlights two types of
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relationships, strategic partner and prosocial supplier, offered by such
ventures to the incumbent firms.
To achieve this objective, the thesis is guided by the following research
questions (RQs):
1. What are the scope, characteristics, and trends of inter-firm
collaboration between incumbent firms and sustainability ventures?
2. What drives the formation and development of collaboration
between incumbent firms and sustainability ventures?
3. How may sustainability ventures establish desirable relationships
with incumbent firms?
a. in their role as a sustainability partner
b. in their role as a prosocial supplier
4. How do such collaborations contribute to promoting and advancing
sustainability at the firm-, dyad-, and societal level?
Through these questions, the study engages with the different phases of inter-
organizational relationships (Das and Teng, 2002): the formation,
development, and outcome phases. Consequently, the thesis examines the
sequential elements in such relationships by applying a temporal perspective.
As I seek to capture the dynamics of such relationships, I integrate
perspectives from both sides of the partnership, together with a dyad
perspective. Finally, this thesis also seeks to explore the alignment between
the ties formed and the firm’s strategy in addressing social and environmental
issues.
In so doing, the thesis aims to generate an understanding regarding the role
of collaboration between incumbent firms and sustainability ventures in
promoting and enabling sustainability at organizational, inter-organizational,
and societal sustainability levels. For this objective, I analyze the implications
of such relationships for incumbent firms and sustainability ventures as
22
separate entities. I further analyze how such relationships may contribute to
advancing societal progress toward sustainable development.
1.3. Structure of the thesis
The thesis is composed of a cover essay and four appended papers. The cover
essay consists of four chapters. Chapter 1 introduces the research
background, sets out the research problem, and presents objectives and the
research questions of the thesis. In Chapter 2, the literature review and
theoretical lenses that I draw upon in the thesis are presented. Chapter 3
describes the research design, methodology, and the three empirical studies
that are included in this thesis. Chapter 4 summarizes the appended papers
and provides an overview of the author’s contribution to each of them.
Chapter 5 synthesizes the findings of the papers and discusses them in the
context of the research questions. Chapter 6 elaborates on the theoretical
contributions and practical implications. The final chapter, Chapter 7,
concludes the thesis, identifies limitations, and makes suggestions for future
research.
23
2. Theoretical background
This section presents the theoretical background. First, I review the two
streams of literature upon which this thesis is built: inter-firm collaboration
for sustainability and sustainable entrepreneurship. The former addresses
firms’ external collaborations in addressing social and environmental issues,
with a particular focus on incumbent firms. The latter focuses on
entrepreneurship activities driven by social and environmental concerns, with
a particular focus on sustainability ventures. Second, I review the institutional
theory of legitimacy as the main theoretical lens in this thesis. Finally, I
summarize the section by elaborating on how the different streams of
research literature are connected to this thesis.
2.1. Inter-organizational relationships for sustainability
Inter-organizational relationships for social and environmental issues have
attracted considerable interest from management scholars. Firms collaborate
with various types of external organizations to broaden the scope of their
sustainability activities and to improve their sustainability performance. Inter-
organizational collaboration may also involve actors both within (e.g.,
suppliers and customers) and outside the supply chain (e.g., government
agencies and NGOs) (Albino et al., 2012; Crane, 1998). This thesis mainly
focuses on inter-firm collaborations, defined as voluntary collaborations
between two or more firms involving the exchange, sharing, or co-developing
of resources and capabilities as part of a project or business operation (Gulati,
1999) between incumbent firms and sustainability ventures. Following prior
studies in the field (e.g. Stadtler and Lin, 2019; Wassmer, 2010; Wassmer et
al., 2017; Wassmer et al., 2014), the terms collaboration and partnership are
used interchangeably in this thesis.
In the past, firms’ external collaborations in addressing social or
environmental issues were dominated by activities concerning philanthropy
and sponsorship (Carroll, 1991). Such activities typically involve cross-sector
partners, such as NGOs, and tend to be somewhat detached from the firm’s
core business activities (Rondinelli and London, 2003). As many firms
develop a greater engagement in activities related to sustainability issues, such
24
collaboration comes to involve more diverse types of partners (Wassmer et
al., 2017), including relations with other firms. Firms’ partnership engagement
in sustainability-related issues have also shifted as they increasingly include
activities closer to their core business strategy and operations (e.g. Klettner et
al., 2014; Porter and Kramer, 2011). In this regard, more recent studies have
looked into other forms of external collaboration with activities such as
product innovation (Melander, 2017; Watson et al., 2018), clean technologies
(Sadovnikova and Pujari, 2017), and market creation for base-of-the-pyramid
settings (Gutierrez et al., 2016). These studies provide examples of various
strategic purposes of such firms’ partnership engagement. However, we have
yet to understand how firms may develop their partnerships and bring about
these new purposes. Gutierrez et al. (2016) suggest that looking into the
configuration and development of such partnerships may provide some
understanding regarding how firms can advance their use of partnerships.
2.1.1. Configuration and development of sustainability-oriented partnership
Past studies suggest that firms that initiate and manage diverse partnerships
are more likely to achieve their sustainability goals (Lin, 2012a) and to create
a sustainability-based competitive advantage (Wassmer et al., 2017). Managing
partnerships with a diverse category of partners, however, is associated with
significant complexity (Gutierrez et al., 2016). Selecting an appropriate type
of partner and managing multiple partnerships can be challenging for the
focal firm, in particular, when partnering with cross-sectoral partners (Ashraf
et al., 2017). For example, partners from the nonprofit sector may be driven
more by social, environmental, and/or political concerns than by market
considerations.
In the broader management context, the critical factor in understanding how
firms manage diverse partnerships arises in the configuration and the
development of the partnerships (Hoffmann, 2007). While configuration
refers to the relational and structural characteristics of alliance partners,
development can be observed in the evolutional characteristics or trends of
the partnerships (Hoffmann, 2007). In this regard, studying the latter aspect
requires a temporal investigation (Bakker and Knoben, 2015). As for the
former, the configuration of sustainability partners determines the
25
heterogeneous scope of activities and the mechanisms carried out by each of
the partnerships (Lin, 2012a, 2012b). Based on studies that examine
sustainability partnerships according to their scope of activities and
mechanisms, such partnerships may be classified based on the intensity or the
degree of shared responsibility as well as with the primary purpose and the
focus of the activities (Gray and Stites, 2013; Rondinelli and London, 2003;
Stadtler and Lin, 2019).
As firms initiate ties with diverse actors, each type of partner may serve a
different purpose for the firm’s sustainability objectives (Wassmer et al., 2017).
Hence, firms need to carefully link objectives of a specific partnership to the
firm’s sustainability objectives, e.g., to establish which stakeholder groups to
target (Stadtler and Lin, 2019) or which sustainability-related topic to address
(Clarke and Crane, 2018). These characteristics define how partners differ
from one another and complement extant partners. Past studies have
investigated the scope, characteristics, and frequency of occurrence of firm’s
sustainability-oriented partnerships (Alonso and Andrews, 2019; Gutierrez et
al., 2016; Lin, 2012a; Meschi and Norheim-Hansen, 2018), where authors
emphasized the impact of the partnership’s configuration and development
toward its performance both in terms of outcome (Alonso and Andrews,
2019) and longevity (Meschi and Norheim-Hansen, 2018).
While studying partnership configuration and development might provide a
broad overview of inter-firm collaboration between incumbent firms and
sustainability ventures, a closer look into the motivation of both firms can
offer insights into the depth of such collaborations.
2.1.2. Drivers of sustainability-oriented partnership
Extant literature suggests that firms engage in external collaboration for
competence, profit, or legitimacy motives. Competence-oriented motives
refer to firms seeking to develop new competences through access to partners’
knowledge, skills, and networks as they seek to understand challenging issues,
new markets, as well as future regulations and policies (Kolk, 2013; Lin and
Darnall, 2010, 2014). Profit-oriented motives include measures that can
directly enhance revenue or reduce costs (Wassmer et al., 2017), for example,
by introducing new products and increasing operational efficiency (Kolk,
26
2013). Finally, legitimacy motives include the efforts of firms to enhance
reputations and social legitimacy in response to institutional pressures from
regulatory systems, industry norms, and community constituents (Lin and
Darnall, 2014).
With such varying motives, incumbent firms may initiate collaboration with
different types of partners and engage in a varied range of activities (Wassmer
et al., 2017). While managing such collaborations can be challenging due to
tensions and conflicts among partners (Klitsie et al., 2018), engaging in
sustainability-oriented partnerships has been found to benefit firms. For
incumbent firms, their involvement in environmental collaboration positively
improves their environmental performance, environmental management, and
environmental reputation (Albino et al., 2012). For sustainability ventures,
their engagement in partnerships driven by social issues has been shown to
improve their business performance (Cacciolatti et al., 2020). While existing
studies on sustainability-oriented partnerships have discussed the various
engagements of incumbent firms with traditional sustainability partners (van
Tulder et al., 2016) such as NGOs (Austin and Seitanidi, 2012; Dentoni et al.,
2016), government agencies (Alonso and Andrews, 2019; Clarke and Crane,
2018), universities (Klitsie et al., 2018; Trencher et al., 2013), or other large
established firms (Manzhynski and Figge, 2020; Stadtler, 2018), the role of
sustainability ventures remains unexplored.
2.2. Sustainable entrepreneurship
Research on sustainable entrepreneurship has been growing in the past
decade, highlighting the surge of entrepreneurial solutions toward
environmental and social challenges (Cohen and Winn, 2007; Dean and
McMullen, 2007; Johnson and Schaltegger, 2019; Munoz and Cohen, 2018;
Shepherd and Patzelt, 2011). Interest in such challenges has attracted
individuals with entrepreneurial intentions to the setting up of sustainability
ventures (Kuckertz and Wagner, 2010; Stubbs, 2017). For such ventures,
economic goals are viewed as both means and ends (Schaltegger and Wagner,
2011). Sustainability ventures are aimed at the discovery and exploitation of
opportunities to create future goods and services that sustain the natural
environment and advance societal welfare (Patzelt and Shepherd, 2011).
27
Johnson and Schaltegger (2019) further highlighted the potential contribution
of such ventures to the transformational outcome for sustainable
development. The existing literature identifies such ventures as green start-
ups (Demirel et al., 2017) or social ventures (Cacciolatti et al., 2020). In prior
studies, the terms social ventures or social enterprises, included for-profit and
nonprofit organizational forms (Katre and Salipante, 2012; Townsend and
Hart, 2008), with a dominant focus on nonprofit forms (Cacciolatti et al.,
2020). This thesis focuses on for-profit ventures.
Extant studies on sustainability ventures have underlined the existence of
multiple objectives related to social or environmental goals and economic
performance. The multiple objectives are associated with the persistent
features of sustainability ventures as being subject to a dual logic, i.e., market
and non-market logic (Besharov and Smith, 2014; York et al., 2016a). Prior
literature has emphasized that the presence of dual logics creates inherent
tensions that require such ventures to make tradeoffs and to search for
compromises in their early stages of venturing (DiVito and Bohnsack, 2017;
Munoz et al., 2018). Prior studies suggest that dual logic-inherent tensions
strongly influence the interactions of sustainability ventures with external
stakeholders, further determining the outcome of such interactions (O'Neil
and Ucbasaran, 2016; York et al., 2016b).
Many prior studies have depicted sustainability ventures as operating with a
business model where sustainability objectives are achieved by outcompeting
large incumbent firms by offering “greener” alternatives (Hockerts and
Wüstenhagen, 2010; Schaltegger and Wagner, 2011). The research literature
positions such ventures as competitors for the incumbents by proposing a
greener product or service solution, as in studies on sustainable fashion
(DiVito and Bohnsack, 2017), organic food (Jolink and Niesten, 2015), and
renewable energy (York, 2018; York et al., 2016b). However, the potential
role of sustainability ventures as collaborators with the incumbents has not
been explored in the literature. Yet, such relationships would seem to offer
interesting opportunities. Sustainability ventures have the capacity to be
providers and suppliers of sustainability-oriented competences (Klewitz and
Hansen, 2014) to incumbent firms, as they often excel in disruptive
environmental and social innovation (Hockerts and Wüstenhagen, 2010).
28
Furthermore, such ventures possess a highly regarded social reputation.
Hence incumbents may also gain advantages from the reputational spillover
(Stuart et al., 1999).
2.2.1. Venture legitimation and dual logics
Studies in the entrepreneurship literature suggest that legitimacy-seeking
behavior constitutes an important aspect of entrepreneurial activity
(Lounsbury and Glynn, 2001; Singh et al., 1986; Uberbacher, 2014;
Zimmerman and Zeitz, 2002). To generate sufficient legitimacy for their new
ventures, founders engage in social negotiation and interaction with
stakeholders (Suddaby et al., 2017). As newcomers, founders of new ventures
seek to convey their personal credibility, professional organizing,
organizational achievements, and the quality of stakeholder relationships
(Zott and Huy, 2007). Researchers have focused on such forms of action
regarding how new ventures can strategically craft their narratives (e.g.
Martens et al., 2007; Moss et al., 2018; Navis and Glynn, 2011). Narratives
provide means for entrepreneurs to convey the identity of their ventures to
external audiences (Lounsbury and Glynn, 2001; Martens et al., 2007), and
have potentially far-reaching implications for future strategic decision-making
by setting up expectations for their audiences (Garud et al., 2014).
Sustainability ventures face a particular set of challenges and opportunities in
legitimation work related to the dual logics context in which they operate (De
Clercq and Voronov, 2011; O'Neil and Ucbasaran, 2016). As a consequence
of tension arising from dual logics, entrepreneurs in sustainability ventures
may face significant difficulties in obtaining the necessary financial,
administrative, and informational support from stakeholders (Hoogendoorn
et al., 2019). More recent literature, however, suggests that sustainability
ventures may leverage their multiple logics to their advantage (Mongelli et al.,
2019). York et al. (2016b) found that entrepreneurs who had strong personal
convictions regarding the commercial and non-commercial (social or
environmental) aspects of the activities of their ventures were able to reach
out to a wide variety of stakeholders (York et al., 2016b).
Recent studies have highlighted the impact of partnerships on the
performance of sustainability ventures, on maintaining the right balance
29
between performance and the missions of sustainability ventures (Cacciolatti
et al., 2020), and on advancing sustainable development (Schaltegger et al.,
2018). Venture legitimation also plays a decisive role when sustainability
ventures seek to partner with key stakeholders (Weidner et al., 2019). For such
ventures, dual logics may allow a flexibility that facilitates entrepreneurs in
mobilizing commercial and non-commercial values depending on the
stakeholders of interest. Sustainability ventures aiming at collaboration with
incumbent firms may apply such a strategy in constructing their narratives to
establish a formal relationship (Moss et al., 2018). Similarly, in the context of
buyer-supplier relationships, sustainability ventures may construct their offers
in a manner targeted at social or environmental values to achieve a
competitive advantage.
2.2.2. Attributing social values in a buyer-supplier relationship
The success of sustainability ventures in establishing relationships with
various types of stakeholders depends on the firms’ ability to find ways to
combine their business and social logics (minimize frictions, exploit synergies)
(Mongelli et al., 2019; York, 2018) and on their ability to translate social values
into a competitive advantage (Fosfuri et al., 2015). In their role as a supplier,
sustainability ventures may establish value-based relationships with customers
supporting those values.
Engaging with prosocial behavior may strengthen suppliers’ appeal to
customers (Fosfuri et al., 2016). Attribution theory, however, suggests that
the success of such an appeal depends on whether the customer perceives
this behavior as reflecting their internal values (e.g., intrinsic motivation) or
external influences (e.g., social influence). The former infers that one chooses
to behave a certain way; the latter implies that one is compelled to (Crilly et al.,
2016). Consequently, these interpretations influence the customer’s
subsequent attitudes and behaviors.
Attribution has been found to play a central role in shaping the perceptions
of the socially responsible behavior of firms (Crilly et al., 2016) and their
evaluation by external stakeholders (Langan and Kumar, 2019; Ogunfowora
et al., 2018), including customers. Customers may critically evaluate suppliers’
social motives and react more or less favorably depending on whether such
30
behavior is perceived as reflecting the suppliers’ intrinsic value or their
compliance with regulations. In the former circumstances, embedding social
values into products and services offerings can create positive demand
externalities that can translate into premium prices and loyalty to the products
and services of the venture (Fosfuri et al., 2015).
Past studies have found that individual consumers are willing to pay a
premium for products infused with social values (e.g. Didier and Lucie, 2008;
Trudel and Cotte, 2009). While studies addressing customers’ evaluation of
such offers were mainly set in a business-to-consumer (B2C) context (Goebel
et al., 2018), their findings might also be relevant for sustainability ventures
that operate in a business-to-business (B2B) market. With growing attention
to practices of sustainable purchasing and ethical sourcing, many firms are
considering what prosocial suppliers can offer (Quarshie et al., 2016;
Schneider and Wallenburg, 2012). Being associated with sustainability
ventures – known for their clear social mission – may provide the customer
firms, i.e., the incumbent firms, with social legitimacy (Lin and Darnall, 2015).
2.3. Institutional theory of legitimacy
While this thesis combines the use of several theoretical lenses across the
different studies, legitimacy theory is used as the primary lens in analyzing and
discussing the overall findings. Other theoretical paradigms that are mobilized
in the various individual studies are discussed in each paper, including
commonly used perspectives in inter-organizational relationships literature
(Barringer and Harrison, 2000), such as resource-based views and transaction-
cost economics in Paper III. Attribution theory (Crilly et al., 2016) is also
discussed in Paper IV. The following section reviews the central theoretical
paradigm, i.e., the institutional theory of legitimacy.
The theory of legitimacy originates from the domain of new institutional
theory (DiMaggio and Powell, 1983; Scott, 1995). Suchman (1995) defined
legitimacy as a generalized perception or assumption that the actions of an
entity are desirable, proper, or appropriate within some socially constructed
system of norms, values, beliefs, and definitions. Institutional theory suggests
that social justification has a considerable influence on organizational actions
31
through the imposed pressure on the organizations to justify their strategic
actions.
Past studies addressing inter-organizational relationships have illuminated the
prominent role of legitimacy in the formation (e.g. Lin and Darnall, 2015;
Wassmer et al., 2017) and development (e.g. Claassen and Gerbrandy, 2018;
Weidner et al., 2019) of such relationships. In this thesis, I refer to the
construct of legitimacy from two distinct perspectives (Suddaby et al., 2017).
On the one hand, I draw on the concept of legitimacy as property. On the other
hand, I also build on the notion of legitimation, in which legitimacy is defined
as a process.
2.3.1 Legitimacy as property
Here I refer to the notion of legitimacy as a property or trait that characterizes
an organization from the perspective of its external environment (Suddaby et
al., 2017). Legitimacy can be gained through “fit” between the attributes of
an organization and the external stakeholders’ expectations (Suddaby et al.,
2017). For organizations, legitimacy represents a generalized perception that
an organization acts and behaves appropriately according to some culturally
and socially shared definitions (Scott, 1995). Legitimacy may be sourced from
external and internal organization. The former refers to the recognition by
the broader societal environment, which comes from the assessment and
judgment of the external stakeholders on whom the organization depends;
the latter refers to the internal constituents, e.g., the employees (Suchman,
1995). For a business firm, various external and internal stakeholders may
determine its legitimacy, and may further affect its continued existence in the
market. In turn, firms are motivated to increase their legitimacy in exchange
for social endorsement and license-to-operate from these stakeholders, e.g.,
regulatory institutions, societies, and consumers. Hence, legitimacy plays a
major role in firms’ strategic decisions, including decisions regarding their
engagement and collaboration with external organizations.
Inter-firm collaboration may serve different legitimating roles in each
participating firm. Dacin et al. (2007) proposed a categorization for alliance
legitimating roles consisting of social legitimacy, market legitimacy, relational
legitimacy, investment legitimacy, and alliance legitimacy. Social legitimacy
32
refers to a social license-to-operate arising as a result of compliance with
societal rules and expectations. In parallel, market legitimacy refers to the
license to conduct business in a particular market. Relational and investment
legitimacy show the worthiness of a firm to be a partner, and of the business
activity in itself. However, alliance legitimacy tends to demonstrate the validity
of the partnership itself. Apart from the external legitimating function, the
longevity of an inter-organizational relationship may also be determined by
inter-partner legitimacy (Kumar and Das, 2007; Weidner et al., 2019) through
actions demonstrating that their behavior is proper and desirable within the
partnership’s system of norms and values.
2.3.2. Legitimacy as a process
In the previous section, I reviewed the concept of legitimacy as a property.
However, the legitimacy concept has also been regarded as a process
(Suddaby et al., 2017). Drawing from the notion of social construction, the
literature refers to such concept as the process through which legitimation occurs,
which includes social negotiation involving multiple participants, rather than
an outcome of institutional pressures (Suddaby et al., 2017). The actors (i.e.,
organizations) play a prominent role through interaction with the other
participants, or stakeholders, in the process of achieving sufficient legitimacy.
Scholars associate legitimation with a process of persuasion, communication,
translation, and narration (Garud et al., 2014; Nagy et al., 2012; Zott and Huy,
2007). The view of legitimacy as process has been widely used by
entrepreneurship scholars, particularly in the literature on new venture
legitimation (e.g. Delmar and Shane, 2004; Zimmerman and Zeitz, 2002). For
any new ventures, the process of legitimation is critical to overcoming any
liability arising from their newness, to increasing their chances of surviving
the early stages, and to enabling them to acquire various resources (Singh et
al., 1986).
In summary, this section presents my review of the theoretical background
on which I build, i.e., inter-organizational relationships for sustainability and
sustainable entrepreneurship, with the legitimacy perspective as my
theoretical lens. Against this background, this thesis begins by examining the
nature of inter-firm collaboration between incumbent firms and sustainability
33
ventures, particularly in terms of its configuration and development. This
investigation provides preliminary insights into the breadth of such
relationships and serves as the basis for further investigation. To continue
with a closer examination into the interaction between firms, I further
examine the reasons behind the decisions of firms to engage in such
relationships. In particular, I investigate the drivers leading up to the
formation and development of inter-firm collaboration between incumbent
firms and sustainability ventures.
Specific emphasis is given to the extent to which legitimacy concerns are
important in shaping the formation and the further development of
collaboration between incumbent firms and sustainability ventures. Also,
using the legitimacy lens, I investigate the approach of sustainability ventures
to establishing such collaborations with incumbent firms through their roles
in two distinct settings: (1) strategic partnership, and (2) buyer-supplier
relationship. In particular, I focus on examining how sustainability ventures
pursue such efforts by leveraging their dual logics and framing their social
values.
34
35
3. Methodology
This thesis is the result of three different projects (A, B, C), and it is reported
in four different appended papers (I, II, III, and IV) and an overarching
compilation thesis. The four appended papers individually elaborate on the
research methods suitable for their specific research questions. This section
elaborates on the overall research approach, followed by details of the three
empirical studies. At the end of this section, I provide a summary of the
methods applied for each paper in terms of purpose, units of analysis,
methodology, corresponding empirical study, and link to the research
questions.
3.1. Overall research design
The general aim of my research is to investigate inter-firm relationships
between incumbent firms and sustainability ventures. The research presented
in this thesis was conducted with both qualitative and quantitative
approaches. The selection of methods is based on the research questions and
the purpose of the investigation. A qualitative approach facilitates building a
preliminary theory, whereas a quantitative approach is suitable when testing
the theoretically derived predictions. The first paper is based on a dataset
collected using a content analysis method and then analyzed quantitatively.
Paper I serves the thesis by charting a landscape and providing an overview
of how firms leverage external partnerships in their sustainability activities.
The second and third papers are intended to inductively build a preliminary
theory and are based on qualitative data collected through multiple case
studies. Finally, the fourth paper aims to test a set of theoretically derived
hypotheses, using quantitative data collected through a survey with
experimental properties.
The qualitative and quantitative research was based on an epistemological
position based on the post-positivist paradigm (e.g. Phillips et al., 2000). This
paradigm adheres to the notion that an external reality exists independently
of human consciousness, and, at the same time, a dimension exists that
includes our socially influenced knowledge about reality. Post-positivism
conveys the notion that all observations and measurements are fallible, and
36
one’s knowledge about reality is inherently biased due to personal and cultural
experiences. Guided by this approach, I recognize that reality can only be
partially understood and that the findings of my studies are conditioned by
the theoretical and empirical lenses selected and applied in each study.
An overview of the empirical studies conducted for this thesis is presented in
the following sub-section.
3.2. Empirical projects
For this thesis, three separate empirical studies (Projects A, B, and C) were
conducted during the period 2016 to 2019. The findings of Project A are
reported in Paper I; the findings of Project B are reported in Papers II and
III; and the results of Project C are reported in Paper IV.
4.2.1. Project A
Project A addresses RQs 1 and 2. This project seeks to investigate the nature
of collaboration between incumbent firms and sustainability ventures.
Because it aims to investigate the scope, trends, and characteristics of such
partnerships, many samples are required from different years. Due to the
absence of existing databases for such empirical investigation, I built a
compilation database of instances of environmental and social collaboration.
Previous large scale empirical studies have been limited to a database of
project-based partnerships, only within the scope of environmental projects
(Lin, 2012b; Stadtler and Lin, 2017, 2019). Following prior studies in the
related context, I focused on self-reported social and environmental alliances
(Albino et al., 2012). I collected data from company reports on environmental
performance and social responsibility (Albino et al., 2012; Dentoni et al.,
2016; Rondinelli and London, 2003), which are published on a consecutive
basis. This data source allowed me to review all the inter-organizational
sustainability partnerships of an incumbent focal firm, which provide a
relative comparison to the partnership of the firm in sustainability ventures.
The data were collected over a period ranging from 2014 to 2018, following
the emergence of sustainability ventures in recent years (Munoz and Cohen,
2018).
37
This project is set in the context of the European food sector. The food sector
is the largest manufacturing industry in the EU, constituting the largest
employer in half of the member countries (FoodDrinkEurope, 2018). The
food sector also counts as a major contributor to greenhouse gas emissions
(FAO, 2011). Hence, the sector provides a suitable setting for the study due
to its economic and environmental significance. This single sector selection
was made following suggestions in the literature that possible differences in
terms of regulations, enforcement, and customers at industry and country
level may influence the commitment to sustainability. This project is focused
on food retailers due to their high involvement in inter-organizational
collaboration with various stakeholders.
Sample firms were selected from the Corporate Register website. The
Corporate Register is the global online directory of past and present
sustainability reports from a wide range of industries, which has increasingly
been used in recent studies (Sadovnikova and Pujari, 2017; Thorne et al.,
2017). Sampling criteria are based on the location and reporting availability of
firms. Specifically, I include EU based food retailers that have issued annual
sustainability reports written in English in the period 2014–2018. In total, 12
food retailers fulfill the sampling criteria. While all the selected firms have a
major operation in the retail food industry, their line of business may also
involve activities in other industrial sectors. Table 1 presents a list of firms
involved in Project A.
38
Table 1. List of selected firms in Project A
No Firm name Country
1 ICA Sweden
2 Axfood Sweden
3 Tesco UK
4 Carrefour France
5 Casino France
6 Salling Group (Dansk Supermarked) Denmark
7 Colruyt Group Belgium
8 Jeronimo Martins Poland
9 Kesko Finland
10 REMA 1000 Denmark AS Denmark
11 Sligro Food Group Nederland BV Netherland
12 Morrissons UK
I performed data collection using the ATLAS.ti qualitative analysis software
as a tool to run the content analysis. The use of a computer program for
storing and analyzing data supports the transparency and traceability of my
analysis. Such a program allows for the structured storage of a large amount
of data, as well as various versions of interpretation and analysis. A list of
every inter-organizational sustainability partnership was collected for each
firm in the 2014–2018 period. Before the full-scale data collection, I
conducted a pilot study on three firms in three consecutive years to develop
a standardized protocol for data collection. Following an iterative process, I
identified a number of protocols and inclusion-exclusion rules to identify
relevant partnerships. Such protocols and rules were applied for the full-scale
data collection. At this stage, I developed a database listing each partnership
based on partner name, partner category, partnership activities, partnership
year, and quotation in the report referring to the corresponding information.
After the collection of the database of sustainability partnerships, the next
process included a coding stage of: (1) category of partner based on
organizational profile, i.e., sector, legal form, year established, main activity
(e.g., NGO, university, government agency, sustainability venture), (2) scope
39
of activity, according to the available information regarding each partnership
(e.g., philanthropy, policy, awareness, process, product), and (3) specific
topics addressed by the partnership (e.g., healthy eating, child welfare, food
waste, clean water, etc.). When there was a lack of clarity or insufficient
information, I consulted external sources, e.g., company websites, press
releases, and news articles. In this project, while company reports were the
main source of data in establishing the database, I also consulted other
secondary information (e.g., press releases and webpages). During this coding
stage, I referred to previous research that examined different forms of
partnership related to social and environmental issues (e.g. Gray and Stites,
2013; Rondinelli and London, 2003; Stadtler and Lin, 2019). After data coding,
a temporal analysis was carried out with a particular focus on the distinct
characteristics of sustainability ventures, relative to other organizations.
Further detailed information regarding Project A is provided in Paper I.
4.2.2. Project B
Project B addresses RQs 2 and 3. This project investigates the drivers and
processes of the formation and development of collaboration between
incumbent firms and sustainability ventures. For this objective, Project B was
designed using the case study methodology. The case study methodology has
advantages when the researcher has little control over the events, and when
the focus is on a contemporary phenomenon in a real-life context (Yin, 2017).
A case study involves semi-structured interviews with selected respondents.
Such an approach minimizes intervention from the interviewers, hence
reducing interviewer bias. The interviews started with general topics followed
by more specific questions, guided by an interview guideline.
The multiple case study involved eight cases that were selected following a
theoretical sampling. Because the nature of the research is to develop a theory
rather than to test one, theoretical sampling was appropriate (Eisenhardt,
1989). The sample consists of partnerships involving an incumbent firm and
sustainability ventures within the food sector, particularly around the topic of
food waste. All partnerships were selected from the similar type of setting
used in Project A, i.e., the European food sector, which allows for further
development of findings from Project A. Among the eight selected cases,
40
Project B includes 15 firms consisting of six incumbent firms and nine
sustainability ventures. Selected cases consist of ongoing or recent
partnerships, thereby helping to reduce informants’ potential recall bias.
Among the total of eight cases, five cases are studied and reported in Paper
II, while seven cases are included in Paper III. Eisenhardt (1989) suggests that
four to ten cases are required to reach theoretical saturation for case-based
research. While several interviews in the overlapping cases provide insights
for both papers, the supporting documentation is specific to each paper. The
unit of analysis for both papers is the dyad; however, each paper focuses on
a different perspective. Paper II focuses on sustainability ventures. Therefore
supporting documentation includes press interviews and the founder’s video.
Meanwhile, Paper III adopts the perspective of the incumbent firms.
Therefore, documents contain information regarding those firms, such as
company reports, press releases, webpages, news, and workshop material.
Multiple sources of evidence were consulted to ensure construct validity (Yin,
2017). For example, to complement the interviews, data triangulation with
archival sources were conducted. To improve reliability, each interview was
recorded and transcribed. I built individual case records for each case using
the collected data. Individual case records consist of a chronology of events
and activities of each partnership that serves as a chain of evidence for a later
process (Yin, 2017).
Table 2 provides an overview of the information on selected cases. Table 3
presents information regarding the sources of data for Papers II and III.
41
Table 2. Case overview for Project B
Firm Expertise Established Initial project Revenue model
F1 Prepaid corporate services, including employee benefits and lunch tickets
1962 Distribution of doggy bags to restaurants and companies within the F1 network, joint food waste campaign for city events
F1 sponsors S1 to produce doggy bags at a low price; F1 also gets shared revenue from S1 products sold on F1 e-commerce website
S1 Doggy bags producer 2016
F2 Food producer, specializing in wheat-based products
1877 F2 premium packaging made out of wheat waste as a marketing and communication tool
F2 supplies wheat waste for free; S2 produces premium packaging made from the waste; F2 purchases the premium packaging
S2 Sustainable paper-based packaging producer
2009
F3a Supermarket chain 1945 Online platform and in-store food waste campaign for sales of close-to-expiry F3a and F3b products; consumer purchases in F3a and F3b stores
F3a and F3b pay monthly subscription and share revenue from products promoted through S3 platform. F3b Supermarket chain 1967
S3 Online retailer for close-to-expiry products
2015
F4 Supermarket chain 1938
42
S4a Juice producer from fruit waste
2014 Private label juice made from fruit waste collected from F4 warehouse
F4 supplies fruit waste for free; S4a produces juice made from the waste; L4 purchases the juice
F4a Supermarket chain 1938 Affiliation-based alliance; first project includes development of insect-based fish feed grown from F4 potato waste, to feed F4 fish stock; potato and fish are F4 own label products
Non-financial transaction at the data collection stage
S4b Sustainable food producer, including insect-based protein
2016
F4 Supermarket chain 1938 Online platform for close-to-expiry F4 products; consumer purchases on S4 platform
F4 receives shared revenue from products promoted on S4 platform
S4c Online retailer for close-to-expiry products
2016
F5 Furniture retailer & restaurant chain
1943 Food waste measurement and reduction tools in F5 global restaurant chain
F5 pays annual subscription and purchases hardware equipment
S5 Developer of smart meter to measure and reduce food waste
2013
43
Table 3. Data collection and analysis for Project B
Paper Partnership
case
Focal
perspective
Data
collection
Data
analysis
Paper
II
F1 with S1
F3b with S3
F4 with S4a
F4 with S4b
F5 with S5
Sustainability
ventures
21 interviews
9 published
interviews
69
documents
First order,
second
order, and
aggregate
categories
Cross-case
analysis
Paper
III
F1 with S1
F2 with S2
F3a with S3
F4 with S4a
F4 with S4b
F4 with S4c
F5 with S5
Incumbent
firms
26 interviews
6 private
documents
90 public
documents
First order,
second
order, and
aggregate
categories
Process
analysis
In project A, I used the ATLAS.ti qualitative data analysis software for coding
and performing data analysis. This facilitates transparency and traceability. At
the initial stage of data analysis, I followed the Gioia et al. (2013) approach in
developing a data structure for both papers. However, there are notable
differences at the later stage of analysis. Paper II employs a grounded theory
articulation in transforming a static data structure into the building of the
dynamic interrelationships among the emerging theoretical concepts (Gioia
et al., 2013). This stage involved a close iteration between data and literature
to refine the articulation of emergent concepts and relationships (Gioia et al., 2013).
Cross-case analysis was also conducted to examine patterns across the
different cases. In contrast, Paper III follows a processual approach in a
temporal perspective (Langley, 1999). As I reached the stage of emerging
theoretical dimensions, I established a process representation through a
temporal bracketing strategy that facilitates analyzing the development of the
44
partnerships studied (Gehman et al., 2017). Further detailed information is
presented in the methodology section of Papers II and III.
To further improve the quality of this study, I addressed internal and external
validity, as suggested by Yin (2017). First, internal validity is addressed by
establishing causal relationships, particularly by explaining why such causality
exists, as outlined in Papers II and III. The building of causality explanations
was facilitated by following the chain of evidence and providing solid
theoretical foundations to explain the asserted relationships. To further
enhance my interpretation and analysis, alternative explanations for the
findings were also established. For this reason, it was also important to follow
the chain of evidence to eliminate “rival” explanations prior to arriving at the
final explanations and conclusions. Second, external validity was verified by
establishing the domain to which my findings can be generalized. In the case
study, Papers II and III can be generalized in terms of the theoretical
propositions, but not in population terms (Yin, 2017). For instance, the
findings of Paper II can be generalized to a theory of new venture
legitimation, rather than to the whole population of new ventures.
4.2.3. Project C
Project C addresses RQ2 and RQ3. This project is intended to study the
interaction between incumbent firms and sustainability ventures in a buyer-
supplier relationship. This project investigates the approach of sustainability
ventures in a purchasing setting to their role as prosocial suppliers.
While Projects A and B are located in a setting where environmental issues
are prominent, Project C aims to provide a complementary perspective on
the overarching question of the thesis through addressing the social
dimensions. Hence, the setting of the Swedish cleaning service industry was
selected because of its relevance and significance in terms of social issues. The
industry is characterized by widespread problematic working conditions;
fixed-term and part-time contracts are common, and the level of
compensation and working conditions vary greatly. A high proportion of
employees also are exposed to physical and health risks. Labor turnover is
45
very high, and only a few people are currently able to continue working in the
sector until normal retirement age (Skatteverket, 2015).
This project is conducted through a quantitative analysis of data from a survey
with experimental properties. The methodology enables investigation
regarding attitudes and preferences toward social values, which could lead to
social desirability bias (Zizzo, 2010). This project is inspired by prior studies
investigating customer behavior toward offers that induce social or
environmental values (e.g. Goebel et al., 2018; Trudel and Cotte, 2009).
Empirically, this project investigates how buying firms evaluate offers by
sustainability ventures that give their employees better working conditions
than the industry average, i.e., whether buying firms are willing to pay a
premium for such services. This project also investigates whether associating
social value with service quality affects customers’ decisions. With this in
mind, actual purchasers of cleaning services were asked to evaluate a set of
fictional offers, constructed to create differences in the dimensions that are
being studied. By asking respondents to indicate their choice of an offering
within a set of alternatives, bias caused by social desirability can be minimized
(Desarbo et al., 1995; Oppewal et al., 1994). An analysis of respondents’
choices between fictitious tenders should enable us to assess the prevailing
preferences regarding supplier working conditions (Goebel et al., 2018).
Data were collected through a survey-based experiment conducted in a setting
that was familiar to the respondents, i.e., tender procurement for cleaning
services. Individuals purchasing cleaning services on behalf of real estate firms
in Sweden are considered to be a suitable representation of the market for
B2B cleaning services. Through company registers maintained by Bisnode, an
initial identification of the sampling frame revealed that the number of large
incumbent firms is somewhat limited. Therefore sampling also includes
smaller firms, the criterion being a minimum annual turnover of SEK500.000
(approx. €47,000), to ensure a sufficient response rate and an acceptable
number of observations for the analysis. A total of 708 real estate firms in
Sweden were identified as belonging to the sampling frame. Of the 708
identified individual purchasers, 383 agreed to participate and provided an
email address, to which a link to the online survey was sent. After two rounds
46
of reminders, 176 complete answers were obtained, which gives the survey a
response rate of 25 %.
The survey instrument is based on four customized offers that respondents
were asked to consider. The four types of offer include: (1) offer that signals
good working conditions in compliance with standard industry practice, (2)
offer that signals good working conditions as evidence of the supplier’s far-
reaching ambitions and part of business strategy, (3) offer related to the
quality of the service provided outside the scope of working conditions, and
(4) a base offer with the lowest price. For each offer, the price asked is listed.
Factors that are expected to influence respondent’s willingness to pay are also
examined: (1) the institutionalization of ethics in the focal organization, as
regards supply chain responsibility concerns, (2) implicit organizational code
of conduct in favor of taking responsibility for working conditions, and (3)
organization of purchasing, i.e., involvement of third-party purchasers.
A series of control variables was constructed to allow the incorporation of
respondent- and firm-level idiosyncrasy into the analysis. Through survey
questions, a set of variables characterizing the experience of the respondents
was collected, such as purchasing scope and duration, as well as the
demographic characteristics (age, gender) (Carter, 2000; Goebel et al., 2018).
From data in the registers used to establish the sampling frame, a further set
of variables was constructed including size (turnover, employment) and
location of the focal firm. Further details of the empirical project are
presented in Paper IV.
To ensure the research validity, this project also involved close collaboration
with an actual cleaning service provider. For example, the design of the survey
questionnaire was supported by consultation with Clean, a small Stockholm-
based cleaning firm aiming to establish itself as a socially-driven venture.
To conclude this chapter, Table 4 provides a summary of the methods applied
for each paper. For each paper, the summary includes the purpose, unit of
analysis, methodology, corresponding empirical study, and the link to the
RQs.
47
Table 4. Summary of methods in the appended papers
Paper I Paper II Paper III Paper IV
Purpose
Investigating the nature of the partnership
Exploring the formation process of partnership
Exploring the drivers and development of the partnership
Investigating firms’ evaluation of sustainability ventures
Unit of analysis
Industry Dyad Dyad Firm
Research methods
Mixed-methods
Qualitative Qualitative Quantitative
Content analysis
Multiple case studies
Longitudinal process study
Survey experiment
Project A B B C
RQs 1 2 and 3 2 2 and 3
49
4. Summary of the appended papers
This chapter summarizes the four appended papers. The work distribution
between the authors for each paper is detailed in Table 5 below.
Table 5. Authors’ contribution to the paper
Paper Author(s) Authors’ contribution
I Riandita Andra As the sole author, Andra developed the research idea, collected the data, developed the theoretical positioning and contribution, performed the analysis, and wrote the paper.
II Riandita Andra, Broström Anders, Cagliano Raffaella, Feldmann Andreas
Andra developed the research idea, collected the data, developed the theoretical positioning and contribution, performed the analysis, and wrote the paper. Anders provided guidance, feedback, and helped in the writing of the paper. Raffaella provided guidance and feedback throughout the study. Andreas provided feedback during the writing.
III Riandita Andra, Broström Anders, Cagliano Raffaella,
Andra developed the research idea, collected the data, developed the theoretical positioning and contribution, performed the analysis, and wrote the paper. Anders provided guidance and feedback and helped in the writing of the paper. Raffaella provided feedback and guidance throughout the study.
IV Broström Anders, Riandita Andra
Anders and Andra developed the research idea, developed theoretical positioning and contribution, and wrote the paper. Anders led the data collection process and performed the analysis.
50
Paper I
Purpose – Paper I investigates the incumbent firms’ various sustainability
partnerships over time. In particular, the paper looks into the strategic
purpose and partner category of such partnerships in the food retailing sector
Methodology – The paper relies on the results of Project A, an empirical
study consisting of content analysis of the sustainability reports of 12
European food retailers in the five years from 2014 to 2018.
Findings – Paper I identifies a pattern in terms of strategic purpose and
partner category of firms’ sustainability partnerships. The analysis shows that
over this period, the frequency of philanthropic partnerships is subject to a
declining trend. At the same time, firms increasingly use their partnerships to
engage with sustainability-oriented innovation. In undertaking this shift, firms
start engaging with sustainability ventures, whereas the frequency of NGO
partners declines. The changing use of alliances may be interpreted as
reflecting firms’ efforts to move from a mode of more passive support for
system-wide change to a mode of actively engaging with sustainability
initiatives related to their core business activities using product and process
innovation.
Theoretical contributions – This paper contributes to the growing literature
of sustainability-oriented partnerships by providing a systematic investigation
of the development and pattern of such partnerships over time. This paper
also introduces sustainability ventures as an emerging and important partner
for incumbent firms, particularly in terms of sustainability-oriented
innovation engagement.
Practical implications – Paper 1 informs incumbent firms as to which type
of alliance partner can play an active role should they seek to engage with
sustainability-oriented innovation initiatives. The findings provide insights for
managers in leveraging their engagements with sustainability ventures to
complement extant sustainability initiatives at firm-level. This paper also
informs entrepreneurs regarding the competences that they can offer should
they seek to partner with incumbent firms.
51
Contribution to thesis – Paper I generates insights into the nature of
incumbents’ partnerships with sustainability ventures, particularly regarding
extent, scope, and topic. The findings of the paper suggest that such
partnerships increase over time. This corresponds to the pattern of
partnership activities around the core business operation of the firm. This
paper also identifies a specific topic of interest where such partnerships
thrive, i.e., the issue of food waste.
Paper II
Purpose – Paper II investigates the process of partnership formation
between incumbent firms and sustainability ventures. This paper explores the
journey of sustainability ventures when securing their first partnership with
incumbent firms, with particular focus on how ventures navigate between
dual environmental and commercial logics in pursuing legitimation work.
Methodology – The study builds on an aspect of Project B, which involves
five exploratory case studies focused on waste reduction partnerships in the
context of the production and distribution of food. Primary data were
collected through 21 interviews, nine secondary data sources from press
interviews with the start-up’s founder, and 69 public and private documents.
Findings – This study identifies two groups of ventures; one group where
legitimation work is strongly oriented toward the environmental logic, and
one where commercial logic dominates. It is only in the latter group that
ventures strategically utilize both logics in their legitimation work. The paper
argues that, in the absence of goal–tensions conflict, such ventures are not
forced into hybridity by (partial) conflicts between values emanating from
environmental and commercial logics to the same extent as the “typical”
sustainability ventures depicted in existing literature.
Theoretical contribution – The study contributes to the literature of
sustainable entrepreneurship by expanding the existing literature on how
sustainable entrepreneurs may build legitimacy for their new ventures. In
52
particular, the study offers the first examination of how sustainability ventures
can secure a major partnership.
Practical implications – This study provides insights of value to
entrepreneurs active in settings where environmental concerns constitute an
important driver for activity. In particular, this paper highlights how the
mobilization of environmental values may help an early-stage venture to gain
the active support of incumbent firms. As regards political implications, the
study calls for a reconsideration of the requirements in publicly sponsored
schemes supporting early-stage venturing (e.g., pre-incubators).
Contribution to thesis – Paper II offers insights in regards to the
mechanisms of partnership formation between incumbent firms and
sustainability ventures from the ventures’ perspective. The findings of the
paper provide an understanding of the mechanisms of sustainability ventures
to successfully attract incumbent firms and to secure their first major
partnership.
Paper III
Purpose – Paper III aims to investigate the drivers behind incumbents’
engagement with sustainability ventures by focusing on the interplay between
legitimacy-oriented objectives with the more traditional capability- and profit-
oriented objectives.
Methodology – This study builds on Project B, employing a set of
exploratory case studies through seven partnership cases between firms
operating in the food sector. This study relies on several data sources
including (1) 26 interviews with key persons involved in the alliance; and (2)
96 items of archival data, including public and private documents. Data were
analyzed using a processual approach.
Findings – The study has shown that incumbents pursue sustainability-
oriented partnerships following different rationales that evolve over time.
Such alliances are initially driven by legitimacy-seeking and, at a later stage,
evolve into capability-building and the creation of new revenue. The findings
53
indicate that legitimacy-seeking rationales prevail in the formation and
outcome stage, and they can be achieved through fundamentally different,
stage-specific mechanisms. This paper argues that while the legitimacy
rationale plays a key role in bringing sustainability-oriented alliances into
existence, elements related to a resource-based view and to transaction cost
economics are important in understanding how such partnerships may grow
and flourish.
Theoretical contribution – This study provides an in-depth account of the
role of sustainability ventures as a key partner in incumbent firms’
sustainability initiatives. Extending existing literature on the rationales for
sustainability alliances, Paper III demonstrates that, over time, firms derive a
multifaceted set of outcomes from partnerships with green start-ups.
Therefore, the paper complements prior studies on legitimacy-oriented
partnerships by providing insights into how such alliances may be sustained
and thrive over time. While earlier investigations of such partnerships have
been limited to a specific stage, this study extends the observation throughout
the formation, development, and outcomes stage of the partnerships. The
study can, thereby, offer a longitudinal perspective on how such partnerships
can advance incumbent firms’ efforts toward more sustainable business
practices.
Practical implications – This paper offers practical implications by
providing incumbents’ managers with insights about the use of alliances in
pursuing new lines of activity related to sustainability. Managers need to
develop sustainability alliances to continue gaining legitimacy benefits and to
be economically sustainable. To do so, they can exploit such alliances in two
aspects: (1) capability development and (2) new revenue creation. Hence, the
role and continuity of the alliance manager are essential for the longevity of
such alliances.
Contribution to thesis – Paper III offers an understanding of the
incumbents’ drivers in initiating and maintaining alliance relationships with
sustainability ventures. The paper shows that the drivers evolve into a
combination of objectives that involve closer interaction and more complex
shared activities between the partnering firms.
54
Paper IV
Purpose – Paper IV investigates the demand for socially-driven services
offered by sustainability ventures in the context of B2B purchasing. In
particular, the paper studies the factors and contingencies that may determine
a firm’s valuation of different types of supplier’s prosocial behavior based on
“do-good” and “do-no-harm” CSR. The paper further examines how
sustainability ventures may frame their prosocial offers effectively.
Methodology – This study relies on Project C, a survey experiment in the
context of manual service industry. Empirical data is based on 176 responses
from real estate firms out of 708 firms in the sampling frame.
Findings – The paper suggests that the appeal of an offer signaling prosocial
values according to a “do-good” corporate social responsibility (CSR)depends
on three factors. First, the extent to which the buying firms associate a
prosocial orientation with the improved quality of the underlying offer.
Second, the formalization of expectations of buying firms regarding the
underlying prosocial value. Third, the organization of procurement,
particularly in the involvement of third-party firms managing procurement on
behalf of their clients.
Theoretical contributions – The study complements existing literature on
prosocial ventures, which is strongly focused on the supply-side of the
market, by providing insights on the demand-side dynamics for services
offered by sustainability ventures. This study also extends the literature on
socially responsible sourcing. Whereas a small number of previous studies set
in B2C contexts explored related topics, this study is the first to engage with
customers’ evaluations of prosocial values in B2B relationships. Therefore,
the study extends the understanding of customers’ responses to prosocial
behavior in the B2B context and offers an improved understanding of the
microfoundations of how social values translate into a competitive advantage
for sustainability ventures.
55
Practical implications – The study offers particular insights into how
sustainability ventures may effectively set themselves somewhat above the
competition. Through an experimental design, where respondents were
randomly allocated a pitch for a prosocial offer with or without an explicit
connection to service quality, the study was able to establish that the former
is more effective. The results are also of direct interest to entrepreneurs and
managers in the manual service sector. They provide insights into the extent
to which (and how) they can build a successful business case around the
prosocial behavior of providing working conditions above the industry
standard for their employees.
Contribution to thesis – Paper IV generates insights regarding the drivers
of the valuation of incumbents of the offering of sustainability ventures.
Furthermore, the study also contributes to the understanding of the
mechanisms in sustainability ventures’ strategies for securing ties with
incumbents as providers of prosocial services. In particular, this study
demonstrates how such ventures formulate an offering that induces social
value. Therefore, the emphasis on the social dimension presented in this
paper complements Paper II and Paper III that focus more on the
environmental dimensions.
56
57
5. Results and discussion
This thesis explores inter-firm relationships between incumbent firms and
sustainability ventures. As specified in the research questions presented, the
study investigates the configuration, drivers, and measures of the
collaboration. The thesis encompasses four different papers, starting with
Paper I examining the scope, characteristics, and trends in inter-firm
collaboration between incumbent firms and sustainability ventures – as
represented by RQ 1. The results of RQ 1 offer insights regarding the breadth
of such collaborations and serve as a basis for further in-depth investigation
of the collaborations in the following RQs.
RQs 2 and 3 offer a closer look at such collaborations by examining
perspectives from both firms at different stages of the collaboration.
Specifically, RQ 2 investigates the drivers for both firms in engaging in such
collaborations in the formation stage and the development stage. RQ 3
emphasizes the perspective of sustainability ventures, in particular their
approach to successfully establishing ties with incumbent firms. The answers
to both research questions are presented in Papers II, III, and IV.
Finally, RQ 4 focuses on the implications of inter-firm collaboration between
incumbent firms and sustainability ventures. Such implications are discussed
in terms of advancing sustainability in multiple levels of the respective
organization, dyad relation, and society. The results of the previous three
research questions altogether contribute to answering RQ 4. Consequently,
the findings of each paper collectively become building blocks for the final
research question. The details of the correspondence between the papers and
the research questions are presented in Table 6 below.
58
Table 6. Correspondence between papers and research questions
RQ Paper I II III IV
1. What are the scope, characteristics, and trends of inter-firm collaboration between incumbent firms and sustainability ventures?
X
2. What drives the formation and development of collaboration between incumbent firms and sustainability ventures?
X X
3. How may sustainability ventures establish such collaboration with the incumbent firms?
X X
4. How do such collaboration contribute to promoting and advancing sustainability at the firm-, dyad-, and societal level?
X X X X
In the next section of this chapter, I discuss the synthesis of the results from
all four appended papers by following the structure of the research
questions.
5.1. Scope, characteristics, and trends of the collaboration
RQ 1: What is the scope, characteristics, and trends of inter-firm collaboration between
incumbent firms and sustainability ventures?
This thesis starts by highlighting sustainability ventures as a novel and
potentially important type of external partner to the incumbent firms. While
the research literature in sustainability-oriented partnerships has looked into
59
how incumbent firms collaborate with various organizations (e.g. Stadtler and
Lin, 2017; Stadtler and Lin, 2019; Wassmer et al., 2017), sustainability
ventures have not been explicitly studied in the existing literature. My thesis
examines the configuration of inter-firm collaboration between incumbent
firms and sustainability ventures. In particular, I focus on the scope,
characteristics, and trends of such relationships.
I investigated various sustainability partnerships of food retailers, and Paper
I provides evidence that the number of sustainability venture partnerships
grew over time, from 2014 to 2018. This trend was found to be associated
with an increasing focus on linking external partnerships closer to the firms’
core business operation, i.e., process and product innovation. In parallel,
Paper I also shows that the intensity of engagement in cross-sector
partnerships with NGOs (which received most of the attention in early
studies on sustainability-oriented partnerships) is subject to a declining trend.
Paper I further highlights the distinctive feature in comparing sustainability
ventures with other types of partners, e.g., cross-sectoral partners. For
example, partnerships with NGOs are dominated by activities that fall outside
of the core business operation of the incumbent firms, e.g., awareness
campaigns and philanthropy. While sustainability ventures may share similar
features to NGOs in terms of social and environmental objectives (Kolk,
2013), such ventures are also characterized by their achievement of
commercial objectives and their pursuit of radical innovation (Hockerts and
Wüstenhagen, 2010; Schaltegger and Wagner, 2011). This result suggests that
forming ties with sustainability ventures paves the way for incumbent firms
to incorporate their sustainability initiatives into the core business operation.
Paper II demonstrates how sustainability ventures leverage their particular
traits and characteristics, as described above, to thrive as partners with the
incumbent firms. The analysis is grounded on studies of such partnerships in
the context of food waste reduction efforts. The issue of food waste indicates
serious inefficiencies in the dominating systems of production (i.e., in the
incumbents’ business operation) that lead to environmental degradation
(Cohen and Winn, 2007; Dean and McMullen, 2007). As sustainability
ventures discover opportunities in these inefficiencies, they innovate products
60
or services that create environmental and economic value when integrated
into the incumbents’ business operation. For such ventures, environmental
and commercial objectives coincide in that both are driven by the need to
reduce waste in business activities.
In terms of trends, Paper I also demonstrates that the phenomenon of inter-
firm collaboration between incumbent firms and sustainability ventures is
more than a marginal phenomenon. Based on the identified trends in terms
of number and spread across firms, such sustainability-oriented partnerships
are likely to continue to thrive. Having a broad overview regarding such
collaborations from Paper I, this observation leads to the following Papers II
and III that aim to explore such emerging forms of inter-organizational
relationships through closer empirical observation at the dyad level. The two
subsequent sections provide insights regarding the drivers and mechanisms
of such relationships.
5.2. Drivers of collaboration
RQ 2: What drives the formation and the development of collaboration between incumbent
firms and sustainability ventures?
In order to assess the drivers for inter-firm collaboration between incumbent
firms and sustainability ventures, analyzing the role of both partners is
required. Whereas Paper II indicates that sustainability ventures take an active
and dominant role in the early formation phase, Paper III suggests that
incumbent firms play a major role in the further development phase of the
relationships.
6.2.1 Drivers for the formation
I focused on the perspective of sustainability ventures and incumbent firms
separately to evaluate the drivers for the initiation of ties between such
ventures and incumbent firms. Sustainability ventures are born with explicit
aims to achieve multiple goals in terms of social or environmental
sustainability and economic success. They are, therefore, operating in the
context of dual logics (York et al., 2016b). Their dual logics lead sustainability
61
ventures to explore and exploit economic opportunities while simultaneously
contributing to the environment and society (Stubbs, 2017).
The literature depicts the dual logics characteristic as a liability for
sustainability ventures (O'Neil and Ucbasaran, 2016; Stubbs, 2017; York et al.,
2016b). However, Paper II discusses the opposite perspective of the potential
opportunities emanating from the dual logics context. The ventures’
pronounced social and environmental mission plays a significant role in their
efforts to forge a formal relationship with an incumbent. Consequently,
incumbents are interested in supporting and endorsing such missions in
various ways (Zimmerman and Zeitz, 2002), including specific contractual
terms in favor of the ventures. In some cases, the incumbents even play a
“mentor” role to the young ventures, bringing additional privileges beyond
the partnership agreement.
As with any new ventures, sustainability ventures are also subject to the
liabilities of smallness and newness, thereby lacking in legitimacy (Uberbacher,
2014). Paper II suggests that, as sustainability ventures seek to enter a market,
forming ties with an incumbent paves the way for early-stage sustainability
ventures to establish themselves. Success in securing a formal partnership
with large incumbent firms enhances the legitimacy of the early-stage venture
in the eyes of different stakeholder groups (Dacin et al., 2007; Stuart et al.,
1999). The findings of the paper demonstrate how such relationships facilitate
the efforts of sustainability ventures to obtain funding from financial
institutions and engage with regulatory institutions. Affiliation with a highly
reputable firm helps such ventures to build credibility in the market and the
industrial network and to establish future partnerships with other firms
(Dacin et al., 2007).
6.2.2 Drivers for the development
I discover that, at the initial formation phase, the incumbent firms take a
more active role in the further development phase. From the incumbents’
perspective, Paper III implies that their drivers to partner with sustainability
ventures are multilayered and evolve over time. In Paper III, multiple
theoretical lenses are used to study inter-organizational alliances (Barringer
and Harrison, 2000; Lowensberg, 2010), and the findings are discussed in
62
terms of the combination of commonly found drivers in prior studies (Kolk,
2013; Lin and Darnall, 2015; Wassmer et al., 2017), such as legitimacy-seeking,
competence-building, and profit-generating. Paper III applies a temporal
analysis to suggests that the relative importance of different drivers varies by
partnership phase. Different drivers also lead to different types of
engagement between the incumbents and their corresponding ventures.
Paper III further highlights the complex interaction behind the incumbent
firms’ ties with sustainability ventures, where each tie goes through stages of
interaction and negotiation. The initial motivation, as incumbents seek to
build social legitimacy and environmental reputation, is the building of
legitimacy. The relationships, however, continue to integrate further measures
toward developing a broader and more complex mixture of motivations and
strategic objectives. At a later stage, the partnerships evolve to include other
types of activities that are focused around building new competences and
creating new revenue streams.
Drawing on the theory of legitimacy, further analysis conducted in Paper III
suggests two different sources of legitimacy gained by the incumbents. On
the one hand, incumbents may derive legitimacy directly from their
involvement in the alliances with sustainability ventures. Such benefits are
enabled by the social, symbolic, and signaling characteristics of this type of
alliance (Dacin et al., 2007). On the other hand, incumbents also gain social
legitimacy from their transformation into more sustainable businesses
(Dyllick and Muff, 2016a), as enabled by the partnerships.
An investigation of partnership development over time as the partnership
develops suggests that the two forms of legitimacy emerge at different stages.
Whereas legitimacy derived from the introduction of more sustainable
business practices will tend to materialize only in the outcome stage,
legitimacy gained from the formation of a sustainability alliance is potentially
relevant from the initiation phase. The latter type of legitimacy benefits may,
however, be expected to attenuate over time (Drori and Honig, 2013). The
positive image spillover effects of signaling a tie to a sustainability venture
(Stuart et al., 1999), and the expression of intention that the formation of an
alliance conveys, are relatively short-term benefits.
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5.3. Sustainability ventures’ approaches to establishing collaboration
RQ 3: How may sustainability ventures establish desirable relationships with incumbent
firms?
As the “what” and “why” questions have been discussed in prior sections,
this section addresses the “how” question. To answer RQ 3, the results of
Papers II and IV offer insights by taking the perspective of sustainability
ventures. The combination of Papers II and IV demonstrate the sustainability
ventures’ approach to establishing relationships with incumbent firms
through their roles in two distinct settings: (1) strategic partnerships, and (2)
buyer-supplier relationships.
5.3.1. Sustainability ventures’ approach in a strategic partnership
The examination of the approach of sustainability ventures to establishing
strategic partnerships with incumbent firms is centered on the concept of new
venture legitimation. For sustainability ventures, achieving sufficient
legitimacy is critical to their success in securing their first major partnership
with an incumbent firm. Paper II recognizes two types of approaches in the
legitimation work of sustainability ventures, depending on their founding
logic (Ciuchta et al., 2018). In this paper, two groups of sustainability ventures
have been identified, one group where legitimation work is strongly oriented
toward the commercial logic, and one where a non-commercial (i.e., social or
environmental) logic dominates.
In the absence of direct tensions between their dual logics, such ventures may
leverage either commercial or non-commercial (i.e., social or environmental)
values in their legitimation work to attract partners. While the dual logics may
offer flexibility for their legitimation work (Mongelli et al., 2019), the findings
of Paper II suggest that only sustainability ventures founded with a prevailing
market logic may have advantages in the flexibility of utilizing both values.
Further analysis suggests that this pattern can be attributed partly to
organizational imprinting (Ciuchta et al., 2018; Munoz et al., 2018) but also
64
because legitimation work in this context is inherently logic-specific to a
significant degree.
Paper II furthermore implies that the type of legitimation work pursued by
such ventures may influence the process of partnership formation and the
nature of the relationship they achieve with the incumbents. While
legitimation drawing on commercial logic leads to more traditional arms-
length partnerships (Reuer et al., 2006; Yang et al., 2014), legitimation through
non-commercial logic leads to partnerships where the incumbent firm
endorses and supports their venture partner.
In the former group, the skill and competence of the sustainability ventures
are critical factors in making them legitimate partners with the incumbent
firms. The backgrounds of the founders make up for the lack of an
organizational track record in providing the start-ups with sufficient
credibility (Nagy et al., 2012). The incumbent firms, however, require a
formalized confirmation procedure through a sequence of pilot stages before
entering the partnership arrangement. The pilot period gives firms the means
of validation of the perceived credibility and serves as a partner legitimacy
threshold for the start-ups (Fisher et al., 2016b).
In the second group of sustainability ventures, the founders build narratives
around their sustainability mission, their signal passion and commitment
(Davis et al., 2017) to ambitious social and environmental goals (Clark et al.,
2018). Such an approach leads to a partnership stance where incumbent firms
endorse the ventures’ mission by supporting them to grow as a business
(Zimmerman and Zeitz, 2002), which may also play a pivotal role in their
success and survival (Ciuchta et al., 2018).
5.3.2. Sustainability ventures’ approach in a buyer-supplier relationship
Paper IV focuses on the approach of sustainability ventures to their role as a
prosocial supplier in the business-to-business market. This paper evaluates
different strategies in formulating the offerings of such ventures to customers,
including incumbent firms. Built on empirical Project C, Paper IV
complements the other studies of the thesis not only in its distinct buyer-
65
supplier setting but also in its emphasis on the social sustainability dimension,
which is a prevalent concern in the context of the manual service sector.
Theoretical expectations were built regarding the perception of more
ambitious prosocial behavior, whereby social values are embedded in the
venture’s offering when compared to other offerings that do not signal such
values to customers. By investigating customers’ responses to a randomly
allocated pitch for a prosocial offer, with or without an explicit connection to
service quality, Paper IV finds the former strategy to be more effective. The
results of the paper suggest that a sustainability venture can increase the
appeal of its offer by leveraging associations between non-commercial (i.e.,
social) values and commercial (i.e., quality of its services) values. In this
regard, customers may associate the latter values with a perception of
competence (Cuddy et al., 2008), thereby increasing the appeal of such a
prosocial supplier (Shea and Hawn, 2019).
Paper IV further implies that sustainability ventures that operate in a B2B
market may be able to sell their services at a sustainability premium by
embedding social values into their products or services offering, similar to
what has previously been confirmed in the B2C setting (e.g. Didier and Lucie,
2008; Trudel and Cotte, 2009). Aside from the association of prosocial
behavior with quality perception, the paper further identifies two other
factors that strengthen the appeal of an offer signaling social values. The first
arises when a customer has non-formalized expectations regarding the
underlying social value. The second occurs when a customer performs a direct
procurement without the involvement of third-party purchaser. The first
factor refers particularly to a discussion of the implementation of ethical
behavior beyond a formalized policy (e.g. Treviño et al., 1999; Weaver et al.,
1999), such as an implicit organizational code of conduct (Vitell and
Singhapakdi, 2008). Organizational support for such non-formalized
expectations regarding ethical decision-making on behalf of customer firms
may offer interesting opportunities for sustainability ventures as prosocial
suppliers. Such conditions may, however, not apply to decisions made by
third-party purchasers whose actions are constrained by a subcontractor
agreement (van Hoek, 2000).
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5.4. Implications for sustainable development
RQ 4: How do such collaboration contribute to promoting and advancing sustainability at the firm-, dyad-, and societal level?
In the previous section, I elaborated three building blocks of inter-firm
collaboration between incumbents and sustainability ventures through RQs
1, 2, and 3. As I continue to address the final research question, RQ 4, in this
sub-section, I discuss how these separate elements elucidate the implication
of such collaborations for advancing sustainability. The discussion is built
upon the synthesis of results from four independent studies, which are based
on three empirical projects conducted for the thesis. I structure this section
as discussions about how such relationships contribute toward advancing
sustainability on firm level and dyad level, and in society as a whole.
5.4.1. Firm level and dyad level
Inter-firm collaboration between incumbents and sustainability ventures has
different implications for each side. As I synthesize the results from different
studies, my analysis suggests that such relationships mutually benefit both
parties, owing to their contrasting yet complementary organizational
characteristics (Baumann-Pauly et al., 2013; Mousiolis et al., 2015). I analyze
how the relationships benefit each firm separately in the short and long term.
For the incumbent firms, forming ties with sustainability ventures allow
incumbents to build social legitimacy. Social legitimacy is particularly
important as incumbents seek to maintain their social license-to-operate
(Dacin et al., 2007) and to consolidate their environmental reputation (Drori
and Honig, 2013). Incumbents gain legitimacy benefits from, among other
sources, spillover from the high social reputation of sustainability ventures
(Stuart et al., 1999).
Apart from legitimacy gains, incumbents appear to build new skills and
capabilities through their relationships with sustainability ventures.
Sustainability ventures provide incumbents with access to the latest
sustainability trends and sustainability-oriented networks. As they collaborate
with new ventures excelling in disruptive environmental and social innovation
67
(Hockerts and Wüstenhagen, 2010), incumbents learn from their partners,
and they develop sustainability-related competences. Such competences
enable firms to gain economic benefit through measures of new revenue
creation and efficiency improvement from their sustainability partnership
activities, e.g., waste reduction projects and green product development
(Watson et al., 2018).
While sustainability ventures are not the sole sustainability partners of the
incumbents, such ventures create unique relationships that differ from other
external organizations such as cross-sector partners. Engagement with
sustainability ventures allows incumbents to target core operational activities
through joint projects related to process and product innovation. While
previous sustainability partnerships had a dominant focus on add-on and
peripheral activities to the focal firm (Gray and Stites, 2013; Rondinelli and
London, 2003), sustainability ventures facilitate the integration of firms’
sustainability strategy (i.e., CSR) into their core business activities.
In summary, I argue that the combined elements that the incumbents can gain
from their relationships with sustainability ventures enable, and possibly
stimulate, the transformation of the incumbent firms into more sustainable
businesses (Dyllick & Muff, 2015). The illustration of the conceptual model
can be found in Figure 1.
Incumbent
firms
Direct social legitimacy
Sustainability-related
competences
New revenue creation and
cost reduction
CSR integration to core
business
Sustainable
firms
Ties with
sustainability
venturesLeads to
Figure 1. Implications for the incumbent firms
For sustainability ventures, relationships with incumbent firms also provide
legitimacy benefits. In contrast to the incumbents, sustainability firms can
68
gain market, investment and relational legitimacy (Dacin et al., 2007). These
are the types of legitimacy that such ventures require to survive the early
stages of their existence (Zimmerman and Zeitz, 2002). Incumbents
communicate and report their newly-formed ties widely (Baumann-Pauly et
al., 2013; Mousiolis et al., 2015), and sustainability ventures benefit from such
exposure. Many of the incumbent firms involved in the study have a global
presence. Hence collaboration with incumbents may also pave the way for
sustainability ventures to access a broader international market.
From their interaction with the incumbents, sustainability ventures can access
the resources that they lack. Access to research facilities, market information,
a wide network, and a large number of consumers contribute to the
development of new commercially-related competences. My empirical
analysis has also provided evidence of incumbents endorsing the social and
environmental missions of sustainability ventures. Hence, sustainability
ventures benefit from the preferential treatment offered by the incumbents.
For example, incumbent firms lend their support through favorable
contractual terms to help the ventures to establish themselves in the market.
Finally, sustainability ventures can secure their economic viability through
their supplier role to the incumbent firms. Firms that value prosocial behavior
may, under certain conditions, be willing to pay a premium to ventures that
signal high social ambitions. By providing new evidence on the contingencies
for such willingness, the thesis contributes to a debate that is highly relevant
to sustainability ventures: whether prosocial behavior can be a source of
competitive advantage, and eventually whether it pays to be a sustainability
venture (Elms et al., 2010; Goebel et al., 2018; Grewatsch and Kleindienst,
2017).
In summary, all these elements contribute to the success of sustainability
ventures in achieving their dual objectives. The formation and the
development of ties with incumbents lead to opportunities for sustainability
ventures to grow and thrive in the long run. The illustration of the conceptual
model can be found in Figure 2.
69
Sustainability
ventures
Market, relational, and
investment legitimacy
Commercial-related
competences
Preferential treatment
Sustainability premium
Thriving
ventures
Ties with
incumbentsLeads to
Figure 2. Implications for the sustainability ventures
5.4.2. Societal level
As I elaborate on how incumbents and sustainability ventures can work
together and positively influence each other, it becomes clear that both types
of firms have a role to play in contributing to more extensive societal change.
Specifically, it can be argued that ties between incumbents and sustainability
ventures may potentially advance societal transformation toward sustainable
development.
Sustainability ventures are characterized by their competences and a strong
commitment to solving specific sustainability issues (Hockerts and
Wüstenhagen, 2010). However, such ventures typically have limited market
presence, lack access to resources, and are subject to the liabilities of newness
and smallness. Hence, their potential impact in promoting sustainable
development may be limited (Hoogendoorn et al., 2019). In contrast,
incumbent firms typically have a wide global presence, an abundance of
resources, and they excel in mass communication (Hockerts and
Wüstenhagen, 2010). Therefore, the actions of incumbents may have a more
significant potential impact on society. Unlike sustainability ventures,
however, incumbent firms were not born with pronounced social or
environmental objectives. In comparison to such ventures, incumbents are
generally characterized by a lower degree of commitment to social and
environmental performance (Schaltegger and Wagner, 2011).
70
Inter-firm collaboration between the two actors, as discussed in the previous
section, may contribute to promoting and enabling sustainability for each of
the firms involved. On the one hand, the collaboration facilitates incumbents’
transformation into more sustainable businesses (Dyllick and Muff, 2016b),
resulting in the enhanced social and environmental performance of the firm.
On the other hand, the collaboration also enables sustainability ventures to
establish themselves in the market, thereby allowing such ventures to grow
and thrive (Cacciolatti et al., 2020). As sustainability ventures grow their
businesses, their potential impact on society multiplies (Johnson and
Schaltegger, 2019; Schaltegger et al., 2018). Figure 3 illustrates how
incumbents and sustainability ventures transform in the direction that can
potentially contribute toward advancing sustainability at the societal level.
Potential
impact
high
low
SV
IF
low high
Social & environmental
commitment
SV: Sustainability ventures
IF: Incumbent firms
SV-IF
collaboration
Figure 3. Implications for societal-level sustainability
71
I discuss the implications above mainly by addressing the role of the
partnering firms involved. However, an assessment of broader societal
implications may also take implications for other relevant stakeholders into
account. For example, my analysis of partnership patterns in the retail food
industry reveals a shift from charity-based philanthropy partnerships toward
more commercially-oriented partnerships related to process and product
innovation in tackling food waste issues. While it is not evident that charity
resources were directly reallocated into commercial activities, such a trend
may, in the long run, affect the longevity of nonprofit organizations with
social missions, for example, food banks. However, the innovation-based
partnerships in my empirical study also involve sustainability ventures that
offer technological solutions, streamlining the distribution of surplus food
from retailers to many nonprofit organizations. In this regard, such
partnerships may also contribute to society by elevating the impact of other
stakeholders’ roles, i.e., nonprofit organizations.
A final remark regarding my discussion of the societal implications is that they
must be carefully cultivated. While this thesis offers an improved
understanding of the microfoundations of how inter-firm relationships can
contribute to advancing sustainability, such implications are subject to
limitations in the context of this study. I discuss the societal implications by
illuminating specific issues and sets of activities in the relationships between
incumbent firms and sustainability ventures. Incumbent firms may, for
example, seek legitimation concerning other types of social and
environmental issues beyond the scope of this study.
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6. Contribution
The previous chapter elucidated the main arguments and results of the thesis
based on the results of all four papers. In this chapter, by grounding the
findings of the previous chapter in the extant literature, I derive contributions
for theory as well as practice.
6.1. Theoretical contributions
Firms’ initiatives regarding the achievement and communication of more
sustainable practices have intensified in recent years, and significant research
efforts have been made to document and analyze such initiatives. Aspects of
this research seem to suffer from a tendency to treat firms’ sustainability
initiatives as a theoretically separate phenomenon. In carving out its
contribution within this growing domain of research, this thesis approaches
its topics from a position where sustainability-related practices are treated as
parallel to other types of managerial practices. The efforts of entrepreneurial
ventures to develop and market their sustainability-oriented products and
services are related to existing rich bodies of literature on venture legitimation
and on customer perceptions of offerings. The interest of incumbent firms in
forming ties to sustainability ventures is considered parallel to the more
general literature on inter-organizational alliances. By investigating to what
extent firms’ sustainability initiatives can be treated within existing
frameworks, rather than assuming that this phenomenon constitutes a
theoretically distinguishable field of activity, the thesis seeks to contribute to
the maturation of sustainability-driven partnership research.
The specific contributions of the thesis relate to three bodies of literature.
First, the thesis contributes to the field of inter-organizational relationships
for sustainability (Lin and Darnall, 2015; Stadtler, 2018; Stadtler and Lin,
2019; Wassmer et al., 2014) by outlining in some detail the role of
sustainability ventures as a novel type of partner and a key partner for
incumbent firms. This thesis offers a link between firms’ partnership strategy
and their CSR strategy (Dentoni et al., 2016) by introducing such ventures as
an emerging type of sustainability partner for incumbent firms. It highlights
the association between this shifting partnership focus toward firms’ core
74
business activities. In doing so, this thesis offers insights into firms’ strategies
in managing partnerships across social and environmental dimensions,
complementing previous studies that mainly focus on a single dimension (e.g.
Clarke and Crane, 2018; Wassmer et al., 2017).
This thesis extends extant literature regarding firms’ drivers for engaging in
sustainability partnerships by considering how drivers and alliance rationales
may evolve over time. By applying temporal investigation across stages of
formation, development, and outcome (Das and Teng, 2002), I complement
extant studies that typically examine a specific stage of sustainability
partnerships (Klitsie et al., 2018). Thereby, this thesis provides insights on
how inter-firm collaboration between incumbent firms and sustainability
ventures may be sustained and thrive over time, where incumbent firms may
derive a multifaceted set of outcomes from their partnership with
sustainability ventures. As I further discuss the implications for incumbent
firms of engaging in such collaborations, this thesis also offers an
understanding of how such firms may be transformed into more sustainable
businesses (Dyllick and Muff, 2016b).
Second, by closely studying the particular conditions for success applying to
sustainability ventures, the thesis contributes to the literature of sustainability-
driven entrepreneurship (Dean and McMullen, 2007; Johnsen et al., 2018;
Johnson and Schaltegger, 2019; Patzelt and Shepherd, 2011). The thesis
complements extant literature that emphasizes the role of such ventures in
the realm of sustainability as a competitor to incumbent firms (Hockerts and
Wüstenhagen, 2010; Schaltegger and Wagner, 2011). This thesis demonstrates
how sustainability ventures may contribute to advancing sustainable
development through a somewhat contrasting role, i.e., that of collaborators
to the incumbent firms. In doing so, I clarify the conditions where
sustainability ventures are not subject to inherent tensions from their dual
logics (c.f. DiVito and Bohnsack, 2017; Munoz et al., 2018; Stubbs, 2017). I
further show how such ventures may or may not utilize their dual logics in
their legitimation work in their attempts to establish partnerships with
incumbent firms, hence contributing to the literature on new venture
legitimation (Fisher et al., 2016a; O'Neil and Ucbasaran, 2016). By discussing
the implications of engaging in such partnerships with the incumbent firms
75
for the survivability of the sustainability ventures and the advancement of
societal sustainability, this thesis also contributes to the discussion on the role
of entrepreneurship in sustainable development (Johnson and Schaltegger,
2019; Schaltegger et al., 2018).
Finally, by examining sustainability ventures as prosocial suppliers, this thesis
contributes to the literature addressing the prosocial behavior of firms and its
influence on customer decision-making (Sen and Bhattacharya, 2001; Davies
et al., 2012). Whereas a few previous studies set in B2C contexts explored
related topics (e.g. Didier and Lucie, 2008; Trudel and Cotte, 2009), this thesis
is, to the best of my knowledge, among the first studies to engage with
customers’ appreciation of prosocial behavior in B2B relationships (c.f.
Goebel et al., 2018). In doing so, the study offers an improved understanding
of the microfoundations of how sustainability ventures’ prosocial behavior
can translate into a competitive advantage.
6.2. Practical contribution
This thesis offers several implications for managers of the incumbent firms,
and for entrepreneurs of sustainability ventures. Implications for policy-
makers will also be discussed at the end of this section.
6.2.1. Implications for managers
For the incumbent firms, this thesis presents an overview of recent trends in
inter-organizational collaboration for sustainability. I highlight a shift of firms’
partnership strategy in sustainability-driven initiatives and introduce
sustainability ventures as a novel type of partner. Such insights may assist
managers seeking to advance their efforts in addressing social and
environmental issues through external collaboration. In particular, I offer
insights of value for sustainability managers seeking to integrate social and
environmental measures into the value proposition and operations of their
firms to become an aspect of business-as-usual. Managers may leverage the
use of such collaborations in pursuing new lines of activity related to
sustainability.
76
By demonstrating the breadth of drivers and outcomes that can be gained
from their collaboration with sustainability ventures, the thesis suggests that
managers may benefit from investigating the measures that could be taken to
increase their firms’ benefits from such collaborations. In general, managers
may seek to develop such collaborations in two directions: (1) toward
exploitation of opportunities for capability development and (2) toward
identification and development of opportunities for new revenue streams. In
broadening the scope of such collaborations, firms may seek to ensure
continuity, e.g., by assigning responsibility for the development of a
partnership to an alliance manager, or partnership “champion.” However,
when designing an interface with their collaboration partners, firms must also
pay attention to the risk that a partnership may become locked into a specific
contact at the incumbent firm, inhibiting the partnership from developing in
new directions. For example, a partnership defined as the responsibility of a
“sustainability manager” may fail to develop activities that would go beyond
the immediate mandate of that manager. As partnerships studied in the thesis
also demonstrate, an initially insignificant partnership with a new venture may
provide valuable opportunities. To manage a partnership with the necessary
flexibility and to avoid “lock-ins,” firms would be well-advised to seek to
anchor the relationship more widely within the organization.
This thesis also provides insights of value to entrepreneurs active in settings
where social and environmental concerns constitute an essential driver for
activity. Through the different studies, I demonstrate how establishing formal
relationships with a major industry player can be critical to the survival and
growth of a new venture. This thesis highlights how the mobilization of social
or environmental values may help an early-stage venture to gain the active
support of prominent industrial players. For example, such ventures may
benefit from preferential treatment in the form of support and endorsement
from the incumbents. However, being perceived as prosocial may also, to
some extent, restrict a venture. Stakeholders such as collaboration partners
may be less susceptible, or even react negatively, to commercial logic
arguments and actions from a profiled prosocial venture. In this regard, the
thesis further pinpoints how such relationships allow sustainable
entrepreneurs to simultaneously advance socially- or environmentally-
oriented objectives as well as commercially-oriented objectives.
77
The thesis can furthermore inform entrepreneurs as to the competences they
can offer to establish a partnership with incumbent firms, particularly by
demonstrating the incumbents’ interest regarding the technological
competences that result in product and process innovation. Entrepreneurs
may also gain insights into the different strategies to establish and secure such
formal ties in their role as partners and suppliers to the incumbent firms. In
their role as a sustainability partner, entrepreneurs may build their legitimation
narrative in two ways. On the one hand, narratives based on the ventures’
orientation (i.e., mission-driven), and on the other hand, based on the
ventures’ capacity (i.e., problem-solver). In their role as a prosocial supplier,
sustainability ventures may gain insights on framing their offer to effectively
set themselves somewhat above the competition. Specifically, signaling social
values in their offer may positively influence customers’ willingness to do
business with the venture – and even their willingness to pay a premium for
its products and services compared to competing offers from firms that are
not as clearly positioned as actively prosocial. The thesis also demonstrates
that a prosocial supplier may further increase the effectiveness of their offer
by providing arguments connecting their sustainability-oriented
differentiation to product or service quality.
While the supplier role of sustainability ventures was particularly examined in
ventures seeking to offer good working conditions for their employees in the
context of the manual service sector, specific insights can also be derived for
actors in the food sector. Studies that were set in the context of the food
sector offer insights on the specific context of food waste reduction
partnerships that may be of value for both sustainability ventures and
incumbent firms. In particular, this thesis speaks to managers regarding the
inherent potential of waste as a source of new revenue streams. It also speaks
to entrepreneurs regarding waste as a source of new business opportunities.
It is also noteworthy that in the different analyses made in the thesis regarding
the sustainability initiatives of firms in the food retailing sector a pattern of
change can be discerned. Behind the changes in what types of partners firms
engage with and the changes in the motives and outcomes for their
partnerships with sustainability ventures, we may surmise a change in how
firms engage with the underlying sustainability issues. A new generation of
78
new ventures needs to seek answers to the problems and challenges
incumbents need help in addressing when taking the next steps toward more
sustainable business operations.
6.2.2. Implications for policy-makers
This thesis also offers several implications for policy-makers. In regards to
the implications for sustainability policies, efforts to facilitate the incumbent
firms’ transition in more sustainable directions may do well to stimulate the
formation of partnerships with the type of new entrepreneurial ventures born
to address social and environmental issues, here referred to as sustainability
ventures.
As regards the implications for policy on entrepreneurship, this thesis calls
for a reconsideration of the requirements in publicly sponsored schemes for
support of early-stage venturing. Such schemes tend to prioritize the
demonstration of viable, marketable products and services (Autio and
Rannikko, 2016). Despite the absence of a well-defined business model,
findings regarding the ability of sustainability ventures to secure significant
partnerships and receive a form of sponsorship from established
organizations suggest that it may make sense to support nascent ventures with
credible sustainability agendas. In parallel, the same set of findings would also
indicate that the CSR activities of incumbent firms are, in some instances,
maturing to an extent where they actively contribute to promoting (non-
competitive) sustainability champions. Such an indication may call for further
consideration of how public initiatives in the area of social and environmental
entrepreneurship should relate to activities within the private sector.
Finally, the context-specific findings of this thesis also highlight the role of
national legislation in advancing social and environmental sustainability,
fostering the formation of inter-firm collaboration between incumbents and
nascent sustainability ventures. Some of the most important recent
sustainability initiatives in the food sector were enabled and/or incentivized
by legislative change. Examples include Sweden’s newly-introduced
regulation on the use of insect proteins for consumption, as well as Italy’s
recent “anti-waste” law that provides tax incentives for businesses that
eliminate their food waste.
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7. Conclusions
This thesis set out to explore the emerging form of inter-firm collaboration
between incumbent firms and newly-created sustainability ventures. The
thesis presents an examination of trends in firms’ use of partnerships for
sustainability efforts and goes on to demonstrate how firms may benefit from
this trend. I further highlight a shift of practice in terms of firms’ partnership
strategy in addressing social and environmental issues, with a particular focus
on the role of sustainability ventures as collaborators. The thesis focuses on
three aspects that allow such collaborations to thrive and further elaborates
on the implication of these collaborations.
First, the thesis identifies collaborations between incumbent firms and
sustainability ventures as a novel and growing form of inter-organizational
collaboration for sustainability. The thesis elaborates on the scope,
characteristics, and extent of such collaborations. I further explicate how the
development of firms’ sustainability partnership strategy is tied to the firm-
level sustainability strategy. In this sense, sustainability ventures can be said
to assist firms in integrating their sustainability activities into the core business
activities.
Second, the thesis highlights the drivers of such collaborations that evolve in
the formation and development stages, where the initiative in the first stage
is driven by sustainability ventures and in the latter by incumbent firms. I
demonstrate that such drivers are multifaceted and stage-specific, involving
legitimacy-oriented and competence-oriented motives.
Third, this thesis identifies the different approaches that sustainability
ventures may use to engage and collaborate with the incumbents, along with
their implications. In particular, I focus on two distinct roles of sustainability
ventures as a partner and prosocial supplier to the incumbent firms. I
demonstrate how sustainability ventures can leverage their dual logics, and
mobilize commercial and non-commercial (i.e., social or environmental)
values, in their legitimation work and the formulation of a prosocial offering.
Finally, this thesis offers an understanding of how such collaborations
contribute to promoting more sustainable practices for the organizations
80
involved and further contributes to society by advancing sustainable
development. Through such collaborations, incumbent firms may benefit in
terms of gaining direct social legitimacy, developing sustainability-related
competences, creating new revenue streams, improving efficiency, and
integrating CSR to their core business activities. Sustainability ventures may
benefit from such collaborations in terms of gaining market, relational, and
investment legitimacy (Dacin et al., 2007). Incumbent firms support such
ventures in building commercial-related competences, offering preferential
treatments, and rewarding with a sustainability premium. As incumbent firms
transform into more sustainable businesses, and sustainability ventures thrive
in the market, the synergy can potentially contribute to advancing
sustainability at society level.
7.1. Limitations and further research
This thesis is subject to limitations that I believe call for further research to
develop and qualify the results that were obtained. Through the different
studies, the observation and analysis of inter-firm collaboration between
incumbent firms and sustainability ventures are mainly focused on the dyadic
interaction between the two actors. With such a focus, the thesis may lack
discussions regarding firm-level factors that might influence the dyad, e.g.,
sustainability strategy and general partnership strategy. Future research will
benefit from co-evolutionary studies concerning the firm’s general alliance
strategy and its sustainability strategy. Future studies into other
complementary aspects of partnerships are also called for, such as studies
regarding governance, conflict management, and outcomes.
In terms of results regarding sustainability ventures, the thesis is mainly
focused on early-stage ventures. It would be of significant interest to
investigate whether and how a greater maturity may affect the behavior of
such ventures in securing a formal relationship with incumbent firms. An
investigation of how sustainability ventures could act toward different types
of external stakeholders could also be an interesting avenue of research in the
entrepreneurship field.
81
Several empirical limitations are tied to the nature of the methodology
employed. First, the case study in this thesis examines only successful and
ongoing cases. While acknowledging that sampling would be a real challenge,
we believe a study that includes failed partnerships would be valuable.
Examining terminated partnerships could be another way of gaining insights
regarding the dynamics of such collaborations. Second, the sustainability
reports that are the empirical basis for the content analysis may be subject to
scrutiny based on their self-reported nature. Future research could triangulate
with existing partnership databases to check if sustainability reports provide
a complete picture of current partnerships. Third, a limitation of the
experimental study is that while all the respondents involved have an active
role in purchasing, their choices were made for a fictitious procurement
process. Further research should seek opportunities to assess how different
aspects of the results would match data on actual procurement decisions.
A further limitation is that the material that the thesis draws on is related to a
specific type of sustainability issue, i.e., food waste and working conditions in
manual service contexts. Further research may take additional steps to explore
different categories of social and environmental issues that may allow such
inter-firm collaborations to materialize. It is also important to acknowledge
that the data is Europe-centric and that the selection of studies is limited to
the food sector and the manual service sector. As such, the conclusions
regarding generalizability must be assessed carefully. Future research should
explore a different setting, e.g., type of issues, geographical contexts, industrial
sectors.
82
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