maintaining the csr-identity of sustainable
TRANSCRIPT
MAINTAINING THE CSR-IDENTITY OF SUSTAINABLE ENTREPRENEURIAL FIRMS
Case study research on the deployment of corporate governance to maintain the
CSR-identity during business growth
Myrthe Roelofsen
April 21th 2014
Management studies, Wageningen University
Academic supervisor: Dr. Vincent Blok
Academic co-reader: Dr. Emiel F.M. Wubben
MAINTAINING THE CSR-IDENTITY OF SUSTAINABLE ENTREPRENEURIAL FIRMS
Case study research on the deployment of corporate governance to maintain the
CSR-identity during business growth
Student: Myrthe Roelofsen
Student number: 890509700080
Email: [email protected]
Department: Management studies, Wageningen University
ECTS: 33
First academic advisor: Dr. V. Blok
Second academic advisor: Dr. E.F.M. Wubben
Date: April 21th, 2014
ii
Abstract Sustainable entrepreneurial firms (SEFs) are established with the aim to realize CSR-objectives covering
environmental, societal and economical aims. The uniqueness of SEFs is expressed through the corporate
identity, which is called the CSR-identity. Growing SEFs could face problems regarding safeguarding their
CSR-identity. On the one hand, they want to grow their business in order to spread their sustainable
message and serve larger markets (Nazarkina, 2012). On the other hand, there seems to be a serious risk
dilution of core values, partly because the entrepreneur is no longer directly in control of the CSR-identity
of the company (Griseri & Seppela, 2010; Kearins et al. 2010).
In this research it is explored to what extent mechanisms of corporate governance (CG) can be seen as
effective mechanisms to maintain the CSR-identity of growing sustainable entrepreneurial firms in order
to develop an understanding of this phenomenon for both theoretical and practical use. Literature
research has led to four barriers of growth (overtrading, barriers regarding maintenance of control and
delegation, decentralization and formalization, and organizational culture crisis). Besides, five mechanism
of CG (strategy, resource management, organizational culture, monitoring and coordination) are defined.
Case study research at seven SEFs has been carried out, by conducting interviews with (representative of)
the founders and analysing company documents and published articles on the internet. Barriers of
business growth have been used as reference points to indicate any influences on the CSR-identity of the
firm. Multiple case studies (N=7) illustrate how mechanisms of CG are deployed by the SEFs in order to
substantiate the management of the CSR-identity.
The results imply that the CSR-identity of SEFs could be influenced as a consequence of business growth,
both positively as well as negatively. Business growth requires professionalization of the company. While
mechanisms of CG are not deployed with the aim to maintain the CSR-identity during growth, they could
substantiate the management of this identity. Especially strategy (formal) and the organizational culture
(informal) are perceived as closely connected to and important for maintaining the CSR-identity of SEFs.
Key words: Corporate Social Responsibility, sustainable entrepreneurship, corporate identity, CSR-
identity, business growth, corporate governance.
iii
Preface
I am proud to present my Master thesis, which is the final proof of competence for obtaining the Master
of Science degree in Management studies at Wageningen University.
This research would not have been possible without guidance and support of several persons. First, I would
like to thank my academic supervisor, Dr. Vincent Blok (Assistant Professor – Management Studies Group).
Through his close involvement and constructive feedback, the quality of my research and output in the
form of this thesis is increased. Besides, passionate discussions about the content have contributed to my
motivation and improved my research skills. Second, I would like to thank my second academic supervisor,
Dr. Emiel F.M. Wubben (Associate Professor – Management Studies Group). Constructive feedback and
stimulating to take into account different perspectives have helped me to improve my scientific
competences. Thank you for your contributions. Also, I would like to thank the respondents from
Willem&Drees, Tony’s Chocolonely, Dopper, Mywheels, Werkhaus, Van Eigen Erf and Triodos Bank, who
have been willing to participate in this research project. By sharing their knowledge and experiences they
greatly contributed to the realization of this research. I would like to thank all persons who provided me
with tips and access to their network in order to be able to find the right respondents. Finally, thanks to
my family and friends who supported my throughout the duration of this research project.
I hope you will enjoy reading this thesis report on the maintenance of the CSR-identity of growing
sustainable entrepreneurial firms.
Myrthe Roelofsen
Wageningen, April 16th 2014
iv
Executive Summary Sustainable entrepreneurial firms (SEFs) are established with the aim to realize CSR-objectives covering
environmental, societal and economical aims. Corporate Social Responsibility (CSR) is embedded in the
corporate identity of SEFs and operationalized in the core values, strategies and operations of the company
(Lauring and Thomsen, 2009). The uniqueness of SEFs is expressed through the corporate identity, which
is called the CSR-identity. From the establishment of the firms on the CSR-identity is strongly related to
the personal values of the founder (Choi and Gray, 2008). In the early stages of development of these
firms, the founder is fully in control of the CSR-identity of the company. Growing sustainable
entrepreneurial firms (SEFs) could face difficulties regarding how to sustain their CSR-identity during
periods of growth. On the one hand, sustainable entrepreneurs want to grow their business in order to
serve larger markets with sustainable products and services (Nazarkina, 2012). On the other hand, there
seems to be a serious risk of dilution of core values and of an increased focus on economic objectives,
partly because the founder is no longer directly in control of the CSR-identity of the company (Griseri &
Seppela, 2010; Kearins et al. 2010). Therefore an approach is needed to maintain the CSR-identity during
the development of SEFs.
In this research it is explored to what extent mechanisms of corporate governance can be seen as effective
mechanisms to maintain the CSR-identity of growing sustainable entrepreneurial firms in order to develop
an understanding of this phenomenon for both theoretical and practical use. CSR related governance
mechanisms could be seen as an approach to enhance and secure the CSR-identity of growing SEFs.
Extensive literature research on sustainable entrepreneurship and corporate identity (chapter 2), business
growth (chapter 3), corporate governance (chapter 4) is carried out. Multiple case study research is
executed at seven growing sustainable entrepreneurial firms (chapter 7). At each company an interview is
executed with (a representative of) the founder. Besides company documents (if accessible) and published
documents of the company have been processed. Multiple case studies are executed to illustrate how
mechanisms of CG are deployed in practice in order to maintain the CSR-identity.
Literature research is conducted to characterise SEFs. The realization of CSR-objectives covering
environmental, societal and economic issues are expressed through their business activities. SEFs can be
characterized based on the integration of personal values and drivers within their concept, using the
sustainable message to differentiate the company, building an organizational culture that supports the
identity, conscious selection methods of financial resources and emphasize on employee well-being (Choi
and Gray, 2008) (section 2.2). The CSR-identity is based on specific personal values of the founder,
regarding environmental and societal issues. Two components of the CSR-identity are distinguished,
namely the philosophy and the organizational culture of the firm (section 2.3).
Due to business growth, problems regarding control and noticeable differences between the owner-
manager and new managers with regard to commitment to the firm might be faced (section 3.1). Based
on the venture life-cycle process of Scott and Bruce (1997), four barriers that might be encountered as a
consequence of business growth by SEFs are distinguished (section 3.1.2):
Overtrading (uncontrolled growth);
Barriers regarding maintenance and
delegation of control;
Barriers regarding decentralization and
formalization of structures; and
Organizational culture crisis
ii
The CSR-identity should be protected from dilution during business growth for two reasons (section 3.2):
(1) the identity is the fundament of spreading the sustainability message to a larger customer base
(Nazarkina, 2012); and (2) the identity positively contributes to the competitive position of the SEF
(Abimbola and Kocak, 2007). CG that is deployed in SMEs, is defined as a structure of the division of rights
and responsibilities by setting rules and implementing both informal as well as formal mechanisms in order
to steer the way in which decisions are made, organizational objectives are set and objectives are achieved
and monitored (section 4.1). Five different mechanisms of CG are distinguished, which are strategy, human
resource management, coordination, monitoring and the organizational culture (section 4.2). Based on
literature study, the barriers of growth are linked to the mechanisms of CG that are assumed to positively
influence the maintenance of the CSR-identity is given in table 4.1.
Literature study has led to a theoretical framework and propositions (section 5.2) that have functioned as
a basis for multiple case study research. It has been assumed that the CSR-identity of SEFs could be diluted
as a consequence of business growth, caused by a negative relationship between business growth and the
CSR-identity (P1). Besides it is proposed that mechanisms of CG can be deployed to moderate dilution of
the CSR-identity during the growth stage of the venture life-cycle process (P2). First individual case reports
have been written to illustrate which barriers of growth are encountered by each case, if and how this has
influenced their CSR-identity and which mechanisms of CG have been deployed. Then the results are
analyzed and compared among the cases in a cross case analysis (section 7.1) and compared with literature
study (section 7.2).
Case study research has shown that the characteristics of sustainable entrepreneurial firms, as defined by
literature research, are confirmed by the participating SEFs. The core values of the cases do not directly
refer to the CSR-identity, but they do stimulate behavior that fits the CSR-identity. Overtrading
(uncontrolled growth), barriers regarding control and delegation, and barriers regarding decentralization
and formalization could affect the CSR-identity of the firm. Case study results show that the consequences
of the barriers that are encountered during business growth are not necessarily negatively impacting the
CSR-identity. The CSR-identity of SEFs could be negatively affected as a consequence of business growth,
if the company is acting reactively on the barriers of growth. Keeping direct control over managing the
CSR-identity seems to increase the possibility of dilution of the CSR-identity during business growth.
Especially in case the owner-manager is expected to react on barriers of growth, because this leads to
distraction from maintaining the CSR-identity. It can be concluded that barriers of business growth could
distract from managing the CSR-identity, which could lead to dilution of the CSR-identity. Nevertheless, no
negative relationship between business growth and the CSR-identity can be confirmed based on the case
study results. Therefore, P1 (section 5.2) can be partly confirmed.
Five different mechanisms of corporate governance have been discussed during the interviews. Besides
three ‘other mechanisms’ are defined, which are triggering free media attention, social monitoring and
maintaining the personal lifestyle of the founders. The results of the case studies do not provide sufficient
knowledge to link specific mechanisms to specific barriers of growth as moderators. Nevertheless, the
results show that barriers of growth could be managed by deploying mechanisms of CG, because business
growth requires professionalization of the firm. Mechanisms of CG are not deployed with the aim to
ii
moderate a possible dilution of the CSR-identity during business growth. However, the deployment of
these mechanisms could substantiate the maintenance of the CSR-identity. It is concluded that
mechanisms of CG are not generally deployed as moderators of the risk of dilution of the CSR-identity
during business growth, which means that P2 (section 5.2) is not confirmed. However, case study results
illustrate that preventive implementation of corporate governance mechanisms might lead to less or
better manageable barriers of growth and thus lower the risk of dilution of the CSR-identity.
An overall recommendation, based on the results of case study research, is to start deploying mechanisms
of CG to anticipate to the need for professionalization as the firm grows. Although mechanisms of CG are
not deployed with the aim to moderate a negative influence on the CSR-identity caused by business
growth, they could be effective as a means to maintain the CSR-identity in the end. Based on the case
study results, a prioritization of the five mechanisms of CG is made (Section 8.2):
Use strategy as a formal tool to make sure that decisions and business activities are in line with the
CSR-identity.
Use the organizational culture by regularly recalling the sustainability message and core values of the
firm to stimulate employee behavior that is in line with the CSR identity.
Develop a protocol to assess personal values and the level of identification with the firm, but the
importance of professional competences and skill should not be neglected
Decentralization and a more equal division of influence on managing the CSR-identity leads to high
employee-commitment, which could positively influence safeguarding.
Use codes or a set of guidelines to steer behavior of employees, but also as a tool to communicate the
actual activities that are carried out to realize CSR-objectives. Use reporting as a means to share
sustainability performance with internal and external stakeholders.
The results imply that preventive deployment of mechanisms of CG will result in a lower risk of dilution of
the CSR-identity during growth, because it allows the organization to anticipate to barriers of growth
better; the organization will be able to keep focus on the management of the CSR-identity. This assumption
could be tested in future research in order to specify the effect of the deployment of mechanisms of CG
in relation to the maintenance of the CSR-identity.
iii
Table of content 1. Introduction ........................................................................................................................................... 6
1.1 Research background .................................................................................................................... 6
1.2 Problem statement........................................................................................................................ 7
1.3 Conceptual design ......................................................................................................................... 8
1.3.1 Research objective ................................................................................................................ 8
1.3.2 Research questions................................................................................................................ 9
1.3.3 Research framework ........................................................................................................... 10
2. Sustainable entrepreneurship and the CSR-Identity of their firms ..................................................... 12
2.1 Defining sustainable entrepreneurship and the sustainable entrepreneur ............................... 12
2.2 Characteristics of the sustainable entrepreneurial firm ............................................................. 14
2.3 The CSR-identity of the sustainable entrepreneurial firm .......................................................... 15
2.3.1 Defining CSR-identity ........................................................................................................... 15
2.1.2 Components of a CSR-identity............................................................................................. 16
2.4 Conclusion ................................................................................................................................... 17
3 Business growth .................................................................................................................................. 19
3.1 Business growth in SMEs and the venture life-cycle process ..................................................... 19
3.1.1 Growth in SMEs ................................................................................................................... 19
3.1.2 The venture life-cycle process ............................................................................................. 21
3.2 The effect of growth on the CSR-identity of the sustainable entrepreneurial firm .................... 22
3.3 Conclusion ................................................................................................................................... 24
4 CSR related governance mechanisms ................................................................................................. 26
4.1 Defining corporate governance ................................................................................................... 26
4.1.1 Traditional vs. modern corporate governance .................................................................... 26
4.1.2 Applying corporate governance in SMEs ............................................................................. 27
4.1.3 Linking corporate governance to the CSR-practices of SEFs ............................................... 28
4.2 Mechanisms of corporate governance ........................................................................................ 30
4.2.1 Strategy ............................................................................................................................... 30
4.2.2 Resource management ....................................................................................................... 32
4.2.3 The organizational culture of the firm ................................................................................ 33
4.2.4 Monitoring ........................................................................................................................... 34
4.2.5 Coordination ........................................................................................................................ 35
4.3 Mechanisms of corporate governance as moderators ............................................................... 36
4.4 Conclusion ................................................................................................................................... 38
5 Theoretical framework ........................................................................................................................ 40
5.1 Relevant concepts ....................................................................................................................... 40
5.1.1 The CSR-identity of sustainable entrepreneurial firms (SEFs) ............................................. 40
5.1.2 Business growth and barriers of growth ............................................................................. 40
5.1.3 Corporate governance ......................................................................................................... 41
5.2 Theoretical framework and research propositions ..................................................................... 41
iv
6 Methodology ....................................................................................................................................... 44
6.1 Literature research ...................................................................................................................... 44
6.2 Multiple case study research ...................................................................................................... 44
6.3 Case selection .............................................................................................................................. 45
6.4 Operationalization ....................................................................................................................... 49
6.5 Conduction case studies – collecting evidence ........................................................................... 54
6.6 Reliability and validity ................................................................................................................. 54
7 Results and discussion ......................................................................................................................... 55
7.1 Cross case analysis....................................................................................................................... 55
7.1.1 Characteristics of the SEFs and their CSR-identities............................................................ 55
7.1.2 Experienced barriers of growth and the consequences for the identity of the firm .......... 61
7.1.3 Deploying corporate governance to maintain the CSR-identity ......................................... 69
7.2 Discussion .................................................................................................................................... 76
7.2.1 Sustainable entrepreneurial firms and the CSR-identities of their firms ............................ 76
7.2.2 Business growth .................................................................................................................. 76
7.2.3 Mechanism of corporate governance ................................................................................. 77
7.3 Conclusion ................................................................................................................................... 79
8 Conclusions, recommendations, discussion ........................................................................................ 81
8.1 Conclusions .................................................................................................................................. 81
8.2 Recommendations for practice ................................................................................................... 85
8.3 Limitations and future research .................................................................................................. 87
9 References ........................................................................................................................................... 88
APPENDIX A - Case study protocol .............................................................................................................. 93
APPENDIX A1 - Selecting potential cases ................................................................................................ 93
APPENDIX A2 - Call and e-mail protocols ................................................................................................ 96
APPENDIX A3 – Semi-structured interviews............................................................................................ 99
APPENDIX A4 - Interview protocol ........................................................................................................ 104
APPENDIX A5 - Field procedures ........................................................................................................... 107
APPENDIX A6 - A guide for the case study report ................................................................................. 108
APPENDIX B – Individual case reports ....................................................................................................... 110
APPENDIX B1 - Willem&Drees ............................................................................................................... 110
APPENDIX B2 - Tony’s Chocolonely ....................................................................................................... 116
APPENDIX B3 - Dopper .......................................................................................................................... 123
APPENDIX B4 - Mywheels ..................................................................................................................... 129
APPENDIX B5 - Werkhaus ..................................................................................................................... 134
APPENDIX B6 - Van Eigen Erf ................................................................................................................ 139
APPENDIX B7 - Triodos Bank ................................................................................................................. 145
v
List of figures and tables FIGURES
Figure 1.1 - Research framework consisting of five subsequent steps
Figure 5.1 - Operationalization of the CSR-identity
Figure 5.2 - Operationalization of business growth during the growth stage of the venture life-cycle
process
Figure 5.3 - Operationalization of corporate governance
Figure 5.4 - Theoretical framework
Figure 8.1 - Prioritization of mechanism of corporate governance to maintain the CSR-identity
TABLES
Table 2.1 - Characteristics of sustainable entrepreneurial firms
Table 3.1 - Five stages of the venture life-cycle process (Scott and Bruce, 1997)
Table 4.1 - Deploying mechanisms of CG to overcome the impact of growth on the CSR-identity
Table 6.1 - selection criteria case studies
Table 6.2 - Fulfilment of selection criteria
Table 6.3 - General information about SEF and founder
Table 6.4 - Operationalization CSR-identity
Table 6.5 - Operationalization business growth
Table 6.6 - Operationalization corporate governance
Table 7.1 - Scores on characteristics of SEFs (Likert scale 1-5)
Table 7.2 - Core values of the cases
Table 7.3 - CSR-identities divided in environmental, societal and economic aspects
Table 7.4 - comparing experienced barriers of growth
Table 7.5 - Concluding remarks on the possible impact of barriers of growth on the CSR-identity of SEFs
Table 7.6 - Comparing the deployment of corporate governance to maintain the CSR-identity
Table 7.7 - The deployment of strategy as mechanism of CG in relation to the CSR-identity
Table 7.8 - The deployment of HRM as mechanism of CG in relation to the CSR-identity
Table 7.9 - The deployment of the organizational culture as mechanism of CG in relation to the CSR
identity
Table 7.10 - Discussion on the deployment of mechanisms of CG
Table 8.1 - Deployment of corporate governance mechanisms
6
1. Introduction The aim of this chapter is to introduce the subject of this research project. Section 1.1 is going into the
research background by relating corporate social responsibility (CSR) to the concept of sustainable
entrepreneurship and business growth of sustainable entrepreneurial firms (SEFs). Section 1.2 is discussing
the problem statement which leads to the conceptual design, which is discussed in section 1.3.
1.1 Research background
Currently, society is experiencing a transition towards a society in which sustainability becomes more
important. More and more companies pay substantial attention to sustainable development and social
responsible behaviour within their organization and daily business practices. Consequently, sustainable
development (SD) and corporate social responsibility (CSR) are popular themes in scientific research. SD
can be defined as “development that meets the needs of the present without compromising the ability of
future generations to meet their own needs” (Brundtland-rapport, 1987). SD is studied with the model of
the triple-bottom-line, in which economical, ecological and social objectives should be aimed at (Ebner &
Baumgartner, 2006). When private organizations are involved in and contribute to sustainable
development, their behaviour regarding social and environmental issues is called CSR.
CSR refers to corporate behaviour that goes further than economic and legal motives alone (Davis, 1973)
Davis (1973) defined CSR as “the firm’s consideration of, and response to, issues beyond the narrow
economic, technical and legal requirements of the firm”. These considerations regarding CSR cover the
interests of different stakeholders, who can affect or can be affected by the achievement of the
organization’s objectives (Freeman, 2010). Both external stakeholders (e.g., customers, suppliers,
competitors, non-profit organizations, etc.) as well as internal stakeholders (e.g. employees, members,
etc.) to the organization are considered as involved actors (Brickson, 2007). CSR-objectives state that
companies should meet certain requirements of society; these requirements can be related to
sustainability, by clearly addressing needs regarding current social and environmental issues (Choi & Gray,
2008). CSR is often referred to as what companies ‘should do’ to integrate social or environmental friendly
behaviour in their business practices. More interesting is how companies implement and stick to their CSR
related objectives into their firms to actually realize socially responsible behaviour. If CSR is to be more
than words alone, it should be integrated in daily procedures and on-going business practices of the
organization and its employees (Lauring & Thomsen, 2009), which is the exact focus of this research.
CSR can be adopted by mature organizations or it can be integrated right from the start-up phase of a new
venture. The latter is often the case when the entrepreneur translates his specific personal values into an
entrepreneurial mission to contribute to sustainable development. These personal values become the core
values of the company; when the core values and mission are focused on achieving environmental and
social objectives, it is called ‘sustainable entrepreneurship’ (Choi & Gray, 2008; Neck, Brush, & Allen, 2009;
Parrish, 2010). Sustainable entrepreneurs have twofold objectives, namely:
Creating profitable companies;
While achieving environmental and/or social objectives.
According to Lans, Blok, and Wesselink (2013) (p.1) sustainable entrepreneurship is described as “a way
of generating competitive advantage by identifying sustainability as new business opportunities, resulting
7
in new and sustainable products, methods of production or ways of organising business processes in a
sustainable way”.
In most small firms, the founder functions as owner-manager and initially is responsible for all operations
and business activities. As the firm grows, it becomes impossible for the owner-manager to stay in total
control and maintain this responsibility (Flamholtz, 1990; Mazzarol, 2003; Wiklund, 1998 in (van
Koeverden, 2012)). Business growth can be defined as a result of entrepreneurship (Davidsson,
Achtenhagen, & Naldi, 2007), meaning growth in output, sales or “an increase in size or improvement in
quality as a result of a process of development” (Penrose, 1959 in (Davidsson et al., 2007)). It can be
measured through several indicators, such as sales, employees, assets, physical output, market share and
profits (Davidsson et al., 2007). In order to control the firm during and after business growth, corporate
governance can be implemented as a method to govern the company during its development. According
to Del Baldo (2012) corporate governance is about who effectively governs the company in terms of
control and which interests should be favoured. While most literature on CG mainly focuses on large listed
firms, less attention has been paid to corporate governance within small and medium sized privately-held
enterprises (SMEs) (Abor & Adjasi, 2007). In small firms, management and ownership might overlap which
could lead to unclear boundaries between the mechanisms of CG and the owner(s)/other external parties
that contribute to the CG practices of the company (Uhlaner et al., 2007). Access to external resources and
expertise are needed to be able to further develop and grow the company. As a consequence of growth,
the degree of transparency within the firm, monitoring and control should increase (Filatotchev et al.,
2006).
1.2 Problem statement
This research is about sustainable entrepreneurial firms (SEFs) that are founded by entrepreneurs who are
driven by their personal values regarding social and environmental issues (Choi & Gray, 2008), which have
led to the establishment of core values and the development of a corresponding corporate identity. This
corporate identity is called the CSR-identity. When the firm starts to grow, the founder could lose direct
control on how these core values are operated in daily practice (Griseri & Seppala, 2010). One of the
consequences of growth of small businesses is the dilution of a homogeneous business culture and
identity. Dilution of the corporate identity could form a problem when this identity is perceived as a
strategic instrument for the performance of the firm (van Koeverden, 2012). Owner-managers face a
variety of difficulties in decision-making and control when their company starts to grow. On the one hand,
sustainable entrepreneurs want to grow their business in order to serve larger markets with sustainable
products and/or services (Nazarkina, 2012). On the other hand, they need to maintain their CSR-identity
to realize this. Due to growth, a serious risk of the dilution of the CSR-identity and an increased focus on
economic objectives arise. This could be caused by decreasing direct control of the owner-manager (Griseri
& Seppala, 2010; Kearins, Collins, & Tregidga, 2010). When the company starts to grow, the role of the
owner-manager changes with regard to the way he is used to operate and closely work with his employees
and customers (Gundry & Welsch, 2001). Notwithstanding the changing role of the owner-manager, it is
important that the CSR-identity will be maintained during business growth.
8
In order to overcome the risk of dilution of the CSR-identity during business growth, an approach is needed
to maintain the CSR-identity to substantiate the realization of CSR-objectives of the SEF. In this research,
corporate governance (CG) is assumed to function as a possible approach to effectively maintain the CSR-
identity of a company during business growth. CG covers the mechanisms to “govern” managers and to
ensure that actions taken are consistent with the interests of key stakeholder groups (Arjoon, 2005);
Traditionally, the objectives of CG have been focused on the maximization of profits for shareholders from
an agency theory perspective (Friedman, 1970; Spitzeck & Hansen, 2010). However, companies that are
involved in CSR practices turn out to be more stakeholder-oriented than others. For this reason,
stakeholders other than shareholder alone should be taken into account as well regarding directing and
controlling the firm (Spitzeck & Hansen, 2010). Different mechanisms of CG can be deployed in order to
steer the organization in the realization of both traditional and CSR objectives. In this research, the focus
is on mechanisms that are deployed to realize the CSR-objectives of SEFs. When the firm evolves through
the venture life-cycle process, it is important that the right mechanisms of CG are in place and are open to
change along the development of the organization. As mentioned before, the risk of losing direct control
of the CSR-identity due to growth requires an approach to minimize this possible negative impact.
Corporate governance might be an effective mechanism to overcome these negative effects.
In summary, as the sustainable entrepreneur (SE) is both the driver and implementer of the core values,
he or she is fully in control of the CSR-identity of the company from the start-up face. It is assumed that
business growth has a negative impact on the CSR-identity of the company, because of the risk of losing
direct control. Because it is important for sustainable entrepreneurs to maintain their CSR-identity and
stick to their core values and sustainable objectives, this negative influence should be limited to a
minimum. CG has been concerned with effectively governing the company through structures, rules and
procedures that positively influence the setting and realization of long-term objectives. Therefore, the
deployment of CG mechanisms may be an effective approach in order to realize CSR-objectives and
maintain the CSR-identity of the firm. The main problem statement in this research is thus whether it is
possible for SEFs to grow without diluting the core values that motivated the entrepreneur in starting up
his company by deploying mechanisms of corporate governance.
1.3 Conceptual design
The conceptual design deals with determining the subject of the research project and consists of the
research objective, research issues, research framework and the generic conceptual model (Verschuren et
al., 2010). In this chapter, the research objective (section 1.3.1), the research questions (section 1.3.2) and
the research framework (section 1.3.3) are described.
1.3.1 Research objective
The main research objective indicates the central thrust of the research while the sub-objectives identify
the specific issues that are proposed to be examined (Kumar, 2011). The type of research and the research
objectives will be described in this section. The research objective should not be seen as a structured
statement, but rather as an overall objective that will be explored; qualitative research provides the
researcher with the flexibility of approach and the ability to incorporate new ideas while collecting data
(Kumar, 2011).
9
In this research, illustrative and explorative research will be combined. Case study research will allow an
illustration of how mechanisms of CG are deployed in practice in order to maintain the CSR-identity. The
comparison between several cases could lead to findings that build theory (Eisenhardt, 1989). Therefore,
this research should be appointed also as partly explorative as well, because the research is conducted
within an area where little is known still. According to Kumar (2011), exploratory research is conducted
“to develop, refine and/or test theory, measurement tools and procedures”. The relationship between
business growth, CSR and corporate governance will be explored within the context of SEFs that have
experienced or are experiencing a period of business growth. Within this research project, relationships
between the aforementioned concepts will be suggested/determined as result of both literature and case
study research, see section 1.3.3.
The main objective of this research is:
To explore to what extent corporate governance mechanisms can be seen as effective mechanisms to
maintain the CSR-identity of growing SEFs in order to develop an understanding of this phenomenon for
both theoretical and practical use.
The sub-objectives are:
To find out the impact of business growth on the CSR-identity of SEFs.
To explore what mechanisms of corporate governance could be deployed when small firms start to
grow their companies.
To find out to what extent these mechanisms could obviate the assumed negative impact of business
growth on the CSR-identity of the SEF.
1.3.2 Research questions
The research objective is translated into the following main research question:
How can mechanisms of corporate governance be deployed to maintain the CSR-identity of growing
sustainable entrepreneurial firms?
To answer the main research question, four sub questions should be answered. These sub questions (SQ)
will be answered by literature research and empirical research (multiple case study research):
SQ1 How can sustainable entrepreneurial firms and their CSR-identity be characterized?
SQ2 How does business growth, during the growth stage of the venture life-cycle process, effect the
corporate CSR-identity of sustainable entrepreneurial firms?
SQ3 How can mechanisms of corporate governance be deployed in order to steer the realization of the
CSR objectives?
SQ4 How do mechanisms of corporate governance effect the corporate CSR-identity as moderators of
the influence of business growth?
10
In sub-question 4 we explore the effect of the deployment of CG mechanisms on business growth. On the
one hand, the effects of the CG mechanisms could turn out as a moderator of the negative effect of
business growth on the corporate CSR-identity of the firm. On the other hand, the mechanisms could
directly affect the CSR-identity of the firm. Although the moderating effect will be subject of this research,
a possible direct effect will not be neglected.
1.3.3 Research framework
In the research framework, different operational steps that together form a complete research project are
visualized. This research will be executed in four subsequent steps, namely literature research, empirical
research, analysis of the results and the conclusion. The research framework is presented in figure 1.1 and
will be explained further below.
Figure 1.1 - Research framework consisting of five subsequent steps
(a) Literature research; Literature on sustainable entrepreneurship and the CSR-identity (chapter 2),
business growth with regard to the venture life-cycle process (chapter 3) and corporate governance
(chapter 4) will be consulted. The aim of literature research is to develop a theoretical basis on the
individual subjects and their relationships within the frames of the research problem (Kumar, 2011).
Different mechanisms of corporate governance that could influence a negative impact of business
growth on the CSR-identity of SEFs will be distinguished. The results of the literature research will lead
to the development of a theoretical framework (chapter 5).
(b) Empirical research; the theoretical framework will be used as a basis for multiple case study research.
Case study research can be defined as providing insights into the events and situations prevalent in a
group from where the cases have been drawn, under the condition that the selected cases are atypical
of a certain type and are carefully selected by using pre-determined selection criteria (Kumar, 2011).
A total of seven case studies at selected companies will be carried out and compared. Each case study
will be tested by investigating how the selected companies deployed CSR related governance
mechanisms during periods of business growth of their companies and how this has influenced the
CSR-identity of their firm. The methodology and operationalization can be read in chapter 6. The
results and analysis of the case studies can be read in chapter 7.
Literature researchLiterature research Empirical researchEmpirical research Analysis of resultsAnalysis of results ConclusionConclusion
Theoretical framework
Case studies at sustainable
entrepreneurial firms
Analyse results -> impact of mechanisms
of CG on CSR corporate identity Recommendations:
- General - Applied to Dopper
(a) (b) (c) (d)
Case study at Dopper
Sustainable entrepreneurship
Venture life-cycle process
(CSR related) corporate
governance (CG)
(CSR) corporate Identity
Answer on main research question
11
(c) Analysis of results; In this phase of the research project, the results of the case studies are combined
and analysed to determine the effect of the different mechanisms of corporate governance on the
CSR-identity of the SEF. The aim of this step is thus to develop a well-grounded overview of the
moderating effects of several corporate governance mechanisms. Chapter 7 is presenting the cross-
case analysis in which the practical experiences of the participating cases are compared.
(d) Conclusion; Finally, the main question will be answered in chapter 8 by discussing the results of all
previous research steps. Recommendations that are focused on the effects of CSR related governance
factors on both the use of mechanisms of corporate governance to prevent the dilution of the CSR-
identity during the growth process of SEFs as well as on its practical implication.
12
2. Sustainable entrepreneurship and the CSR-Identity of their firms In this chapter, an answer will be provided on sub-question one (How can sustainable entrepreneurial
firms and their CSR-identity be characterized?). The chapter is divided into three sections: the first section
2.1 goes into the definition of sustainable entrepreneurship and a sustainable entrepreneur (SE). Section
2.2 goes into the characteristics of sustainable entrepreneurial firms (SEF) in relation to traditional firms
in order to provide an understanding of these kind of organizations and their specific characteristics.
Section 2.3 goes into the CSR-identity of sustainable entrepreneurial firms. This chapter will end with an
answer on sub-question one in section 2.4.
2.1 Defining sustainable entrepreneurship and the sustainable entrepreneur
In this section, sustainable entrepreneurship will be defined. Sustainable entrepreneurship is a relatively
new type of entrepreneurship in which profitable business opportunities are explored while contributing
to sustainable development (Schaltegger & Wagner, 2011; Zahra, Gedajlovic, Neubaum, & Shulman, 2009).
It has gained more attention because next to social and economic needs, also vital problems regarding the
environment can be addressed through sustainable entrepreneurship (Choi & Gray, 2008). Meaning, the
challenges regarding sustainability, recognized by so called ‘sustainable entrepreneurs’ as business
opportunities, function as a driver for strategic renewal, innovation and venturing (Lans, Blok, & Wesselink,
2013). Entrepreneurs are catalysts that create value by bringing together money, people, ideas, etc.;
Sustainable entrepreneurs can be distinguished from conventional entrepreneurs by the fact that these
entrepreneurs also relate this value creation to environmental progress and market success (Schaltegger
& Wagner, 2011). In section 2.2, the differences between traditional and sustainable entrepreneurs will
be elaborated more extensively.
Sustainable entrepreneurship is characterized by the extent of its influence on the market and society on
the one hand and by prioritizing social and environmental issues as business objectives. Entrepreneurship
can be named as ‘sustainable entrepreneurship’ when the following requirements are met (Schaltegger
and Wagner, 2011):
The first requirement contains the integration of the sustainability performance to the core business
objectives; meaning that the priority of environmental and social issues as business goals is high.
Economic success is strongly linked to their sustainability performance.
The second requirement covers the long term goal of sustainable entrepreneurs to innovate and
develop the organization towards a supplier of products and/or services that have substantial
influence on the market and on society. This can be explained by their focus on the mainstream market
in the long term.
The area between conventional and sustainable entrepreneurship is covered by different forms of
entrepreneurship. A form of entrepreneurship which is comparable to sustainable entrepreneurship is
called ‘ecopreneurship’. Ecopreneurship is characterized as less innovative in terms of technological
orientation (Schaltegger and Wagner, 2011). However, both forms of entrepreneurship are focused on
striving for economic success through offering products and/or services that could change consumption
patterns and market structures to contribute to solutions regarding environmental and societal issues.
Besides, both sustainable entrepreneurship and ecopreneurship devote high priority towards integrating
sustainability issues as core business objectives. In this research, drivers regarding sustainability are
13
considered as more important than the technological orientation of a firm; therefore, ecopreneurship will
be covered by the term of sustainable entrepreneurship as well. Summarizing, integration of sustainability
issues into the core objectives of the company as well as drivers to realize high impact on society and
market on the long term comprise two important criteria for the definition of sustainable
entrepreneurship.
Sustainable entrepreneurship is characterized by its specific strategies and business activities, which are
in line with today’s needs of the firm and its stakeholders while at the same time protecting, sustaining
and reinforcing human and natural resources that are required in the future (IISD et al., 1992 in
Baumgartner, 2009). The strategies and business activities are the result of the objectives of the firm,
which are called ‘CSR-objectives’; CSR-objectives are characterized as follows (Baumgartner, 2009):
They should comprise the reduction of our contribution to pollution and emission.
They should contain the reduction of our contribution to systematic physical degradation of nature.
The realization of the objectives should contribute as much as possible to the human needs of society.
An entrepreneur that recognizes sustainability challenges as business opportunities is called a sustainable
entrepreneur (SE). The personal goals of the SEs themselves are often reflected in the objectives of their
company as well (Schaltegger & Wagner, 2011). SEs are personally driven to address social and
environmental problems by starting up a new venture in order to contribute to (a part of) a solution to the
issue. A firm that implements sustainable entrepreneurship is called a sustainable entrepreneurial firm
(SEF).
An SE is responsible for developing and implementing business strategy in order to realize desired
objectives. Dependent on the context of sustainable entrepreneurship, four types of sustainability
strategies can be distinguished (Baumgartner, 2009):
The introverted sustainability strategy is based on sustainable development that is steered from
outside the company. However, actions taken are primarily organized from internal perspective.
The extroverted/transformative sustainability strategy is concentrated on external relationships of the
firm while focusing on public acceptance.
The conservative sustainability strategy is focused internally and is based on eco-efficiency regarding
the use of materials and energy during production processes of products.
Finally, the visionary sustainability strategy is focused on integration of CSR-objectives within the
vision and within (all) business activities of the firm.
In line with the requirements of sustainable entrepreneurship discussed above, a visionary sustainability
strategy implies that the realization of the CSR-objectives is considered as a high priority since the entire
organization is committed to this. Important to note is that companies that implement sustainability as
supplementary to their core business objectives are not taken into account within this research.
Sustainable entrepreneurship is not only about a simple outward expression of economic, social and
environmental objectives which are combined in the organizational logic of the firm. All actual business
activities that impact the companies’ stakeholders, should be in line with the realization of CSR-objectives
of the firm. Gibbs (2009) in Parrish (2010) warns sustainability is often used as a so called ‘black box’; For
this reason, it is rather important to emphasize if and how the sustainability related aims of the company
are actually accomplished in order to distinguish a positive intention towards sustainability from the
14
companies’ real sustainability performance. In this research, sustainable entrepreneurship is defined as
exploring profitable business opportunities while contributing to sustainable development in terms of
environmentally and socially beneficial initiatives and innovations (Schaltegger & Wagner, 2011);
sustainability objectives are integrated in the core objectives of the firm and the aim is to realize impact
to the market and society in the long term.
2.2 Characteristics of the sustainable entrepreneurial firm
In this section the specific characteristics of a sustainable entrepreneurial firm (SEF) are elaborated. In
general, the process of sustainable entrepreneurship comparable to traditional entrepreneurship; it
comprises acting on opportunities, acquiring resources and building a team to create value (Timmons &
Spinelli, 2004 in Neck et al., 2009). However, SEFs can be distinguished from traditional firms on several
characteristics, which are described by Choi and Gray (2008). They collected information on 21 SEFs from
both existing as well as self-developed case studies. When focusing on decision-making and business
practices of management during the key stages of the development of SEFs, several guidelines are
identified. Below, their most important findings are shortly discussed:
Regarding the identification of the opportunity for the existence of their companies, most sustainable
entrepreneurs do have little or no relevant previous business experience. Often, the concept is
developed based on the founders’ values and personal drive to make a small difference in the world
regarding a certain issue (see section 2.3).
Values and sustainable business practices are used to both promote and differentiate the company
within the market by directly linking the sustainable message to the brand of the products, from the
start-up phase on. This allows SEFs to grow profitably, because sharing the social/sustainable message
allows SEs to sell their products at higher than average prices. The high prices could be used to
compensate for the relatively high production costs that SEFs have.
Regarding the acquisition of resources, SEs are relatively selective in the sources and methods they
use to attract financial resources; they understand the possible consequences of professional investors
that hold a traditional view. Most sustainable entrepreneurs collect financial resources through family
and friends and/or bootstrapping (Peyus, 1999 in Choi and Gray, 2008).
During the development and growth of the company, three characteristics should be highlighted:
▫ The organizational culture of the SEF is supporting their mission and the growth of the
companies.
▫ The well-being of employees is of unconventional importance.
▫ Successful SEs are value-oriented regarding to both the promotion of their products as well as to
innovation. Product-quality is judged as highly important, meaning that higher costs and/or more
effort are not seen as a barrier.
▫ Most sustainable entrepreneurs are successful in balancing between principles and pragmatism
by offering high quality products at the high-end of the market.
The above discussed aspects (Choi and Gray, 2008) characterize SEFs from the perspective of decision-
making processes and the capabilities of SEs themselves. It provides a course of action that can be used to
guide the development of their firms. During the development and growth of SEFs, the entrepreneurs
need to establish, maintain and monitor their sustainable objectives.
15
2.3 The CSR-identity of the sustainable entrepreneurial firm
In this section the CSR-identity is elaborated. First, the CSR-identity will be defined by describing the
concept of corporate identity in relation to SEFs in sub-section 2.3.1. Then the components of a CSR-
identity which are considered as relevant for this research will be described in sub-section 2.3.2.
2.3.1 Defining CSR-identity
Within SEFs, CSR is integrated in daily procedures and on-going business practices of the organization and
its employees (Lauring & Thomsen, 2009). According to Lauring and Thomsen (2009), CSR is often
integrated in the frame of corporate identity (CI) and thus incorporated in the company’s core values. In
the article of Melewar (2003), CI is defined as “the set of meanings by which a company allows itself to be
known and through which it allows people to describe, remember and relate to it”. It covers how the
company presents itself to every stakeholder (Melewar and Karaosmanoglu, 2006). From a more internal
perspective of the organization, the CI can be defined as the organizational members’ shared perception
about the firm’s central, distinctive and during qualities (Brickson, 2007). Cornelissen et al. (2007) are
relating CI to a cognitive frame with regard to the fact that identity consists of common interpretations
and cognitions that function as a guide for individual sense-making within the firm. The CI of the firm is
presenting the organization from internal perspective. It consists of shared perceptions of both internal
and external stakeholders on what the company ‘is’ and ‘who we as an organization are’ (Brickson, 2007;
Irrmann, 2002); this is driving the motivation and the behaviour that is shown by organizational members
(Albert, Ashforth, & Dutton, 2000). Brickson (2007) states that the identity of a firm informs how and why
the company is related to its stakeholders by translating specific social values into coherent actions as an
entity towards others. He argues that companies often have the same identity orientation towards both
internal as well as towards external stakeholders.
When top management is formulating CSR-objectives, it is important to involve both internal and external
stakeholders. By doing so, access to local context and information is created, which leads to a more
contextual stakeholder oriented strategy (Lauring & Thomsen, 2009). Objectives and assumptions of the
company are reflected in the internal organizational structures and processes (Covaleski et al., 1998 in
Brickson, 2007), which influence the role of the firm and its employees both inside and outside the firm.
In other words, the corporate identity functions as a driver for both external and internal relationships.
Within SEFs, the organizational concept is often based on the founders’ values and drive to make a small
difference in the world regarding certain social or environmental issues (Choi and Gray, 2008). If these
companies perform according their well-considered CSR-objectives and values in a consistent way, they
establish a so called ‘CSR-identity’.
The CSR-objectives and the CSR-identity of the firm are closely interconnected with each other. The CSR-
identity functions as a communication and interaction tool within the firm when developing and realizing
CSR-objectives. Therefore, it is important to regularly inform organizational members about the this
identity in order to create awareness, understanding and appreciation of the strategic objectives of the
firm (Lauring & Thomsen, 2009). A positive representation of the CSR-identity of the firm could cause high
morale and productivity; employees play a crucial role in this representation (Gray & Balmer, 1998). Three
different orientations regarding the corporate identity of the firm can be identified, these are (Brickson,
2007): (1) the individualistic orientation in which the organization is based on self-interests and views the
16
firm as a sole entity that is differentiated and separated from other firms; (2) the relational oriented firm,
that concerns about the benefits of specific others and a larger whole with a self-conception of the firm as
an inter-player within a group of specific stakeholders; and (3) the collectivistic orientation, that
concentrates on helping others to realize greater collective welfare with the self-conception of the firm as
a member of a larger group that has generalized ties to other stakeholders. The relational and collectivistic
orientations are fitting best to the aim of SEFs that are realizing CSR-objectives and apply a visionary
sustainability strategy. This research continuous with a focus on safeguarding corporate identity of SEFs
on organizational level and as pioneers within their industry.
2.1.2 Components of a CSR-identity
Actual behaviour and activities to realize CSR-objectives are embedded in the components of CI through
which the uniqueness of the organization can be expressed; these are the philosophy, the organizational
culture, the strategy and the organizational design (Gray & Balmer, 1998).
Gray and Balmer (1998) define the corporate philosophy as a reference to the embraced business values,
norms and beliefs of the firm. The corporate philosophy is used to explain and substantiate the
organizational goals and ethics to the stakeholders of the firm (Melewar and Karaosmanoglu, 2006). It is
the planned and practiced self-presentation of a company through behaviour, communication and
symbolism, both internally and externally (Parum, 2006). The corporate philosophy is often expressed
through the mission statement of the company and covers the core values and beliefs of top management
(Gray and Balmer, 1998). Because the founder’s personal values play an important role when starting the
company, these values form the basis for the establishment of the firms’ philosophy. The mission
statement, as a means to express corporate philosophy, is used for the development of strategy but also
in order to increase their profit and rate of business growth. Also, the mission statement substantiates the
creation of shared expectations between the owner-manager and employees by providing a clear direction
for both managers and other employees (Analoui and Karami, 2002).
Second, the organizational culture is considered as an important element of SEFs, which should reflect the
corporate philosophy of the firm. The SE can be considered as the main source and shaper of the culture
of the firm (Irrmann, 2002). The relation between the organizational culture and the CSR-identity is two-
dimensional. The CSR-identity is be embedded in the organizational culture through the process of
reflecting. At the same time, the organizational culture functions as a basis for expressing the CSR-identity
of the company (Hatch & Schultz, 2002). The culture of the organization is reflected in the artifacts, the
values and basic assumption of the firm (Wilson, 2001 in Baumgartner, 2009). Artifacts function as the
highest level of the organizational culture can be described as: (a) the values that are a foundation of what
the organization rewards, supports and expects; (b) the norms that surround and/or underpin the policies,
practices and procedures of organizations; (c) the meaning incumbents share about what the norms and
values of the organization are (Schneider, 1988, p. 353). In short it comprises the visible structures and
processes that are adapted by the firm. Values have been defined by Schwartz (1994) as “a (1) belief (2)
pertaining to desirable end states or modes of conduct, that (3) transcends specific situations, (4) guides
selection or evaluation of behaviour, people, and events, and (5) is ordered by importance relative to other
values to form a system of value priorities”. The values are present at a deeper and less visible level; these
values are shared by employees and tend to maintain stable over time. The core values influence the
17
behaviour and decision-making within the firm. Finally, at the level of the basic assumptions,
organizational culture is integrated in unconscious, taken-for-granted beliefs, thoughts and feelings that
influence the way in which problems are dealt with and solved. These basic assumptions have proven well
enough to be considered as valid by all employees and are therefore perceived as the way to behave and
think within the company.
Third, strategy can be seen as “Strategy is the direction and scope of an organization over the long term,
which achieves advantage in a changing environment through its configuration of resources and
competences with the aim of fulfilling stakeholder expectations “(Johnson et al., 2009). Strategy functions
as a contract that underpins how the company should organize itself in terms of business units, division of
responsibilities, organizational structures and the overall horizontal business processes in order to achieve
its objectives (Korhonen, 2007). In the context of SEFs, the strategy presents a main plan regarding the
overall CSR-objectives, policies and direction that the company is planning to realize and follow. Corporate
identity has been broadened as a concept in which strategy is linked to communication in the broad sense
(Parum, 2006). Finally, the organizational design comprises all decisions made by the management
regarding the development of the firm (e.g. the number of hierarchical levels, the degree of centralization,
the number of employees and jobs, the internal systems and procedures) (Gray and Balmer, 1998).
Sustainable entrepreneurs constitute and shape the identity of their company (Schaltegger & Wagner,
2011), which is more feasible in small firms. Following the definition of Brickson (2007), corporate
philosophy and the organizational culture of the firm are considered as relevant components of the CSR-
identity within this research. These components are strongly influenced by the founder of the company
and established the identity; The CSR-identity of a firm is based on the corporate philosophy that is
reflected through the culture of the firm.
2.4 Conclusion
In the final section of this chapter, an answer will be provided on sub-question 1 (How can sustainable
entrepreneurial firms and their CSR-identity be characterized?). Literature study is carried out to describe
the characteristics of SEFs and elaborate on the CSR-identity of the firm.
In order to characterize SEFs, the concept of sustainable entrepreneurship is defined in section 2.1.
Sustainable entrepreneurship is understood as an innovative, market-oriented and personality driven form
of creating economic and societal value by integrating sustainability performance to the core objectives of
the firm and realizing substantial influence on the market and society (Schaltegger & Wagner, 2011). A
firm that implements sustainable entrepreneurship is called a sustainable entrepreneurial firm (SEF). This
research is focusing on SEFs that apply a visionary sustainability strategy, meaning that high commitment
to the realization of CSR-objectives is expressed through all business activities of the firm. SEFs can be
characterized by analyzing decision-making processes and the capabilities of sustainable entrepreneurs.
An entrepreneur that recognizes sustainability challenges as business opportunities is called a sustainable
entrepreneur (SE). The characteristics of SEFs are presented in table 2.1.
18
Table 2.1 - Characteristics of sustainable entrepreneurial firms (based on Choi and gray, 2008)
Characteristics of sustainable entrepreneurial firms
Idealism The origin of the company is based on the founders’ personal values and drive to make a small difference in the world regarding certain issues concerning the environment or society
Sustainability as differentiation Sharing the sustainable message of the company as a means to differentiate the company, its sustainability values and associated business practices
Organizational culture The organizational culture is emphasized as supporting instrument during growth.
Employee well-being Within this culture, employee well-being is perceived as highly important.
This research is about safeguarding CSR-related content of the corporate identity during growth, which is
called the maintenance of the CSR-identity of the firm. The personal values of the sustainable
entrepreneurs that have eventually led to the formulation of the CSR-identity and CSR-objectives of a
company are the fundament for the existence of SEFs. The actual performance to realize responsible
behaviour is embedded in:
The philosophy, which is often expressed through the mission statement of the firm; and
The organizational culture, consisting of a specific set of shared values.
The CSR-identity is expressing the uniqueness of the SEF, which can be divided in environmental, social
and economic aspects. The SEF represents itself as a player within a wide group of stakeholders or even
as a player that could contribute to a greater welfare (Brickson, 2007). Therefore, the CSR-identity does
often fit a relational and/or collectivistic orientation. By carrying out case study research, the
characteristics and the aspects of the CSR-identity that are find in literature research will be assessed at
each participating case.
19
3 Business growth This chapter is about business growth of SEFs and how this influences the CSR-identity of the firm.
Literature on business growth, the venture life-cycle will be consulted to provide an answer to sub-
question 3a (How does business growth, during the growth stage of the venture life-cycle process, effect
the corporate CSR-identity of sustainable entrepreneurial firms?). Business growth in SMEs and the
venture life-cycle process will be explained in section 3.1. Section 3.2 is going into the effect of growth on
the CSR-identity of the firm. Nonetheless the fact that research did not pay much attention to the existence
of this link yet, it can be argued that the maintenance of the CSR-identity is of relative importance during
periods of business growth of SMEs. This chapter is completed with a conclusion in section 3.3.
3.1 Business growth in SMEs and the venture life-cycle process
In this section business growth in SMEs is introduced elaborated in sub-section 3.1.1. Then, the growth
stage of the venture life-cycle process and four barriers of growth that might be encountered by SEFs are
described in sub-section 3.1.2.
3.1.1 Growth in SMEs
Organizational growth can be defined as a result of entrepreneurship (Davidsson, Achtenhagen, & Naldi,
2007), meaning growth in output, export and sales or “an increase in size or improvement in quality as a
result of a process of development” (Penrose, 1959 in Davidsson et al., 2007). Growth can be measured
through different indicators, such as sales, the number of employees, total assets, physical output, market
share and generated profits (Davidsson et al., 2007; Nazarkina, 2012). In this research, organizational
growth is measured through growth in the number of employees.
A distinction can be made between high-growth and low-growth firms. Rapidly growing firms are more
common in dynamic industries and regions (Carroll and Hannan, 2000; Davidsson and Delmar, 1997, 2001;
Jovanovich, 1982 in Davidsson et al., 2007). If firms are active in more stagnant industries, rapidly growing
firms can be found in the dynamic niches of those industries (Storey, 1997; Wiklund, 1998 in Davidsson et
al., 2007). In other words, small firms could more easily step into niches that are not saturated yet
(Davidsson et al., 2007). According to the results of the research of Grundy and Welsch (2001),
entrepreneurs of small high-growth firms appear to have a so called ambitious entrepreneurial attitude
when compared to entrepreneurs of low-growth firms. The entrepreneurs show stronger entrepreneurial
intensity, which is understood as the extent to which the entrepreneur is committed to his firm. The
entrepreneurs are willing to accept higher opportunity costs and they are strongly focusing on market
expansion and/or on technological change. They often choose to apply a team-based organizational
structure rather than a functional structure in order to coordinate people, their tasks and responsibilities
(Grundy and Welsch, 2001); combined with structured decision-making approaches, this stimulated
information sharing and delegation. They make use of a wider range of financial resources and put high
priority on strategic success factors, such as the organizational identity, product-service quality, availability
of cash and leadership effectiveness. According to (Grundy and Welsch (2001), growth-oriented
entrepreneurs often pursue more structured organizations, which means that they follow more disciplined
management approaches. Case study research will be carried out in order to assess the organizational
structures of growing SEFs.
20
Entrepreneurs can establish different motivations and goals to grow their organization, such as personal
ambition, creating jobs for others and being innovative (Grundy and Welsch, 2001) and in case of SEFs,
enlarging the reach of their sustainable message by serving larger markets (Nazarkina, 2012). Different
growth strategies can be applied:
Organic growth; Organic growth can be defined as business growth that is the result of adding new
activities or growth in volume of an existing activity of the firm (Davidsson et al., 2006). Organic growth
will generally lead to a relatively smooth pattern of growth (Penrose, 1959 in Delmar et al., 2003).
When growing organically, the founder is able to maintain (full) control over the firm, ensure employee
well-being and preserve the companies’ ‘creative’ atmosphere (Nazarkina, 2012). A disadvantage of
organic growth is the limited ability to optimize innovation capabilities (ibid.).
Acquisitive growth; Since the operating scale is extended through growth, acquisitive growth could
help attracting new capabilities and resources and new geographic markets could become accessible
more easy (Wiklund and Shepher, 2009 in Nazarkina, 2012). A disadvantage of this growth strategy is
the reduction in the spread of the dedication to the mission, because private equity will be invested
in the firm. Besides, if a balance in integration between the acquirer and the acquired company is
lacking, the risk of value destruction rises (Pablo, 1994; Schweizer, 2005; Graebner et al., 2010 in
Nazarkina, 2012).
Hybrid growth strategies such as franchising, licensing and strategic alliances are a possibility to grow
an organization. If the SE desires to grow internationally, franchising is constructive in attracting
competent employees and acquiring knowledge of local markets. The same applies to strategic
alliances, in which cooperation between two similar firms are developed. Strategic alliances proof to
increase survival chances of small firms and improve the competitive position of the firm (Nazarkina,
2012). It provides the SEF with an opportunity to “become big” by “staying small”.
Selling the company to larger mainstream competitors; This growth strategy is often selected to
increase organizational growth; Selling the company provides opportunities to make use of the
resources of the parent company (Wennberg et al., 2010 in Nazarkina, 2012), to acquire financial
resources and develop the right skills and competences (Graebner and Eisenhardt (2004) in Nazarkina
(2012). Because this research is focusing on SEFs that are still owned by the founder or its successor,
this growth strategy is not further taking into account.
Organic growth could be more associated with small and young firms that operate in emerging industries,
while acquisition growth could be more associated with older and larger firms that operate in mature
industries (Davidsson et al., 2006; Penrose, 1959 in Delmar et al., 2003). Since this research investigates
growing sustainable entrepreneurial firms, which often are small and relatively young organizations, the
focus will be organically growing firms. Achtenhagen et al. (2010) in Nazarkina (2012) argues that
entrepreneurs prefer to understand growth as organizational development over growing the number of
employees or increasing sales. In this context, organizational development can be seen as the main goal
of growth which can be measured through an increase in employees and/or sales. In this research the
focus is not on drivers and barriers of growth as such, but rather on the consequences of growth of SEFs,
such as the loss of control which could lead to the dilution of the CSR-identity and their approach to deploy
corporate governance as moderator of this effect.
21
3.1.2 The venture life-cycle process
The venture life-cycle process is an organizational development process consisting of five growth stages,
which are: the inception stage, the survival stage, growth stage, the expansion stage and the maturity
stage. The main goal of the article of Scott and Bruce (1997) was to provide a diagnostic tool in which the
main factors are isolated and the types of crises that might be faced while developing to the next stage
are identified; this could help managers to be able to prepare to successfully plan the future of their
companies. In table 3.1 the five stages of the venture life-cycle process are described.
Table 3.1 - Five stages of the venture life-cycle process (Scott and Bruce, 1997)
Stages Description
Inception stage
During the inception stage, the firm is founded by the entrepreneur and managed through direct supervision and the focus is on establishing a commercially acceptable product and obtaining customers. The firm is unstructured and financial resources are often collected through the owner, his friends and family.
Survival stage
The survival stage is characterized by some main issues, which are: ▫ Possible increase of competition due to low entry barriers ▫ Need to attract financial resources from formal institutions ▫ Increase of scale and market channels.
Growth stage
The growth stage is characterized by managing growth and ensuring sufficient resources. The need for coordination grows and formal organizational structures based on functional lines requires anticipation. Also, research and development could be necessary to start expanding the market and/or product range.
Expansion stage
The expansion stage is characterized by managing further growth, maintaining control and decentralization
Maturity stage In this stage the company might be still growing and the emphasis will finally come on pressure on managers that need to ensure the future of the company to shareholders.
Moving from one stage to the next stage goes along with change and certain crises, which can be
translated to barriers of growth. Managers can only directly influence internal factors regarding the
development of the firm. Therefore, monitoring accurately is key to be prepared for possible change (Scott
and Bruce, 1997). This research is focused on growing SEFs that have entered the growth stage of the
venture life-cycle process. Based on the defined crises of growth by Scott and Bruce (1997) relevant
barriers of growth that might have been encountered by growing SEFs will be discussed below:
Overtrading (uncontrolled growth); when overtrading occurs, the growth should be limited or the
company should move to the next stage and bring growth under control. More control systems need
to be implemented. Overtrading could lead to liquidity problems, even if the product acceptance and
success are high.
Barriers regarding the maintenance and delegation of control; Financing the growth in terms of
expansion into new markets, maintaining control and coordination of the expanded company. The
developments in this stage are often experienced as most demanding on management of the firm.
Delegation of power and control is needed, but this could appear to be hard in practice. Increasing
complexity of expanded distribution channels could cause a need to create a broader customer base
in terms of different types of customers or new geographic locations. The latter broadens the span of
22
control which leads to a change in management style towards ‘supervised supervision’. This means
that more delegation of responsibilities and tasks is required.
Barriers regarding decentralization and formalization of structures; Due to increasing business
activities, more time of the owner-manager is demanded and decentralization to a certain extent
might be necessary. A crisis regarding management style and the need for change in organizational
structure might occur. Supervisory tasks need to be delegated and systems and structures need to be
formalized due to pressure for information. A new management style is required and the existing
power base is threatened.
Organizational culture crisis; A crisis of the organizational culture can be caused due to the fact that
‘professional’ managers need to be hired; These managers will probably do not feel the same
commitment to the company as owner-manager that has been involved from the early stages. Besides,
growing numbers of employees will decrease the possibility to form a homogeneous organizational
culture (Koeverden, 2012).
With regard to the development along the stages of the venture life-cycle process, the owner-manager
has to deal with two main concerns. First, the owner-manager needs to handle the crises that come along
with the development himself. Second, he should learn to manage the ‘new company’ in its new stage.
The above mentioned barriers are mainly concerned with managing growth which leads to the need to
further formalize the company. These stages are demanding on management, which in SMEs is mostly
represented by the owner-manager (the founder), since he needs to start delegating and/or sharing tasks
and responsibilities. Existing gaps of knowledge and skills could be filled in by recruiting and hiring new
managers. As a consequence, decentralization will be needed. Also, the crisis of organizational culture
needs attention since the organizational culture is an important characteristics of SEFs.
3.2 The effect of growth on the CSR-identity of the sustainable entrepreneurial firm
One of the aims of this research is to investigate the effect of organizational growth on the CSR-identity of
the firm. The focus is on the existence of a relationship between the growth of SEFs and the maintenance
of the CSR-identity. Researchers have paid little attention to this relationship up until now. For this reason,
the aim of this section is to gather theoretical underpinning to the formulation of several assumptions on
the effect of growth to the identity of SEFs; these assumptions will form a basis for the case study research
of this research project.
A direct link exists between the identity of the firm, the image and the reputation. As mentioned in chapter
2, the corporate image and the reputation can be translated through the corporate identity of the firm
(Gray and Balmer, 1998). According to Abimbola and Vallaster (2007), the link between the identity, the
reputation and the brand is more important concerning non-listed companies that have a relative small
portfolio of brands; these firms are often categorized as SMEs. They argue that a holistic brand
management approach that is integrated in the strategy of the firm – which covers the management of
the identity, the reputation and the brand – positively affects the competitive position of the firm. Besides,
the creation and management of the identity of the firm plays an important role with regard to the
development and maintenance of internal capabilities and competences (Abimbola and Kocak, 2007). If
the CSR-identity dilutes as a consequence of business growth, a negative influence on customer experience
23
could affect the strength of the brand and the reputation of the firm. Therefore it can be assumed that the
reason to maintain the CSR-identity during business growth is twofold:
Firstly to spread the sustainable message to a larger customer base; and
Secondly to maintain its competitive advantage.
Up until now, researchers have not paid much attention to the effect of growth on the corporate identity
of the firm. However, more research has been carried out on the relationship between control of the
owner-manager and business growth (Koeverden, 2012; Scott and Bruce, 1997; Wiklund et al., 2003). The
owner-manager might experience a decrease in direct control on day-to-day operations as a consequence
of business growth (Wiklund et al., 2003). New hired managers will have a different level of commitment
to the firm than the founder/owner-manager (Scott and Bruce, 1997). This may lead to a differentiation in
interpretation and implementation of the CSR-identity that has been shaped by the owner-manager
(Lauring and Thomsen, 2009). Within SEFs, the CSR-identity of the firm could function as a part of business
strategy. Besides, a clear and stable identity will help management to test whether decisions will be in line
with this identity (Camillus, 2008). Therefore, it is important that the CSR-identity of the firm will be
protected from dilution. If the stability of the CSR-identity will be negatively affected as a consequence of
changes due to growth, negative consequences for the development of the firm might occur. Changes in
the identity of the firm that are based on a short-term perspective, may cause a questioning attitude of
stakeholders on the honesty of the identity (Melewar and Karaosmanoglu, 2006).
In SEFs, the CSR-identity is embedded and expressed through the corporate philosophy the organizational
culture (see section 2.3.2). The philosophy of the firm is relatively important regarding the communication
towards employees, and the creation of commitment to and acceptance of the desired direction of the
firm (Analoui and Karami, 2002). Important to take into account is the risk of a missing link between the
mission statement and strategic purpose of the firm on the one hand and the capabilities of the firm and
the decision-making processes on the other hand. However, it can be assumed that this philosophy should
be nurtured and maintained to steer the development and growth in the desired direction. In SMEs the
management of the corporate identity is often integrated in the function of the founder/owner-manager
of the company. Soft management factors, such as shared values and behavior (Homburg et al., 2003) play
an important role in this regard. The founder often functions as a role model for the organizational culture,
the way of working within the firm and decision-making (Abimbola and Vallaster, 2007). Business growth
requires a change in role of the owner-manager which could influence the organizational culture that has
been established in the small firm. Possible change of the organizational culture might lead to a decrease
in the willingness to grow the company that is experienced by owner-manager. In other words, the firm
could lose its informal, family-like character as a consequence of growth (Davidsson et al., 2007). It can be
assumed that business growth could lead to a change in the organizational culture, which is an important
element of SEFs. This change and dilution of organizational culture, might in turn affect the CSR-identity
of the firm.
24
Melewar (2003) concluded that the corporate identity of the firm needs to be sustainably managed to be
able to build a strong reputation and realize competitive advantage. Besides, through safeguarding the
identity, trust-based relationships with stakeholders can be built (Melewar and Karaosmanoglu, 2006).
Managing the corporate identity of a firm is often experienced as a challenge (Lauring and Thomsen, 2009).
Lauring and Thomsen (2009) argue that this is caused by sequential, sender-oriented and top-down
communication of the corporate identity while little room is left for possible perceptions, interpretations
and interests of employees and other stakeholders. Important to note is that values often are interpreted
differently at lower levels of the firm or due to cultural or national difference; these differences within the
firm could occur when the SEF grows. Therefore, it can be argued that corporate procedures and other
approaches which are developed and implemented to substantiate the CSR-identity of the firm are likely
to be interpreted in various ways by different stakeholders. Safeguarding of the identity within the firm is
necessary in order to represent what the organization is and what it stands for in a unified way (Lauring &
Thomsen, 2009). Formal policies and value statements of the firm do not necessarily lead to a translation
of the corporate identity into actual practices. Since the CSR-identity is a dynamic and conceptual concept,
it is open to individual interpretation and reinterpretation by different organizational members. This leads
to the need to prioritize the ideals and core values of the company among different stakeholders (ibid.).
As the owner-manager loses control due to business growth, prioritizing the company’s core values with
regard to its stakeholders might thus be helpful in maintaining the CSR-identity.
3.3 Conclusion
In this chapter a theoretical answer is provided to sub-questions 3 (How does business growth, during the
growth stage of the venture life-cycle process, effect the corporate CSR-identity of sustainable
entrepreneurial firms?) by carrying out literature study. Due to business growth, problems regarding
control and noticeable differences between the owner-manager and new managers with regard to
commitment to the firm might be faced. Based on the venture life-cycle process of Scott and Bruce (1997),
different barriers that might be encountered by SEFs as a consequence of business growth are listed:
Overtrading (uncontrolled growth)
Barriers regarding maintenance and delegation of control
Barriers regarding decentralization and formalization of structures
Organizational culture crisis
Up until now, researchers have paid limited attention to the relationship between business growth and
preserving the CSR-identity. However, business growth will lower direct control of the owner-manager
which in turn might influence the CSR-identity of the firm. The CSR-identity should be protected from
dilution during business growth for two reasons: (1) the CSR-identity is the fundament of spreading the
sustainability message to a larger customer base; and (2) the CSR-identity of SEFs has a positive influence
on the creation and maintenance of competitive advantage. The following assumptions on the effect of
business growth to the CSR-identity are formulated:
25
If business growth leads to a change in the organizational culture in terms of the level of commitment
and homogeneity of the group, this might affect the CSR-identity of the firm.
The owner-manager will experience a loose in control due to business growth and an expanding
customer base; therefore, prioritizing the company’s core values regarding the communication to
different stakeholder groups might help to maintain the CSR-identity.
It is proposed that the CSR-identity of SEFs is risked to be diluted as a consequence of business growth,
caused by a negative relationship between business growth and the CSR-identity. Managing barriers of
growth will be accompanied by changes within the organization that could affect the CSR-identity of the
firm. The barriers of growth will therefore be used as reference points to indicate any influences on the
CSR-identity of the firm. Using the barriers of business growth as guidance for case study research at seven
SEFs, will provide knowledge on the practical experiences of the effects of business growth on the CSR-
identity of the firm; especially their approaches to anticipate to or avoid the dilution of the CSR-identity
are of particular interest.
26
4 CSR related governance mechanisms The aim of this chapter twofold. First is to distinguish several mechanisms of corporate governance that
could be applied to SEFs that are willing to grow their company while realizing their CSR-objectives and
maintaining their CSR-identity. For this reason it is important to know how CG could be operationalized
and applied within SEFs. In this chapter sub-question 3 (How can mechanisms of corporate governance be
deployed in order to steer the realization of the CSR objectives?) is answered. Section 4.1 is about defining
corporate governance in general and in relation to the context of this research. In section 4.2, five of
mechanisms of corporate governance are distinguished and described. Second is to formulate
assumptions on which mechanisms of CG could be best applied during growth. In section 4.3, sub-question
4 (How do mechanisms of corporate governance effect the corporate CSR-identity as moderators of the
influence of business growth?) is answered. In this section the barriers of growth that are most likely to be
encountered during the growth of SEFs are linked to corporate governance. This chapter is ended with a
conclusion in section 4.4.
4.1 Defining corporate governance
In this section the concept of corporate governance (CG) is defined. First, traditional CG is compared to
modern CG in section 4.1.1. While most existing literature mainly focuses on large listed firms, substantial
less attention has been paid to corporate governance within SMEs (Abor & Adjasi, 2007). Therefore, CG
will be applied to the field of SME practices in section 4.1.2. Finally, corporate governance are linked to
the CSR-practices of SEFs in order to obtain an understanding of the deployment of CG within SEFs in
section 4.1.3.
4.1.1 Traditional vs. modern corporate governance
Following its traditional understanding, corporate governance (CG) is defined as “leadership and control
of a firm with the aim of securing the long-term survival and viability of that firm” (Abor & Adjasi, 2007;
Brink, 2011). A more detailed definition that is adopted by the Organization for Economic Cooperation and
Development (OECD) is that “CG is the system by which business corporations are directed and controlled.
The corporate governance structure specifies the distribution of rights and responsibilities among different
participants in the corporation, such as, the board, managers, shareholders and other stakeholders and
spells out the rules and procedures for decision-making in corporate affairs. By doing this, it also provides
the structure through which the company objectives are set and the means of attaining those objectives
and monitoring performance.” Traditionally, the objectives of CG have been focused on the maximization
of profits for shareholders from an agency theory perspective (Brink, 2011; Friedman, 1970; Spitzeck &
Hansen, 2010). Following the agency theory, the agency problem could arise when conflicts of interest
between managers and owners arise as a consequence of separation between ownership and control of
the firm (Abor and Adjasi, 2007). In other words, agency theory assumes that the owner/shareholders
(principle) cannot be sure that managers (agents) will act according their own interest rather than in the
best interest of the owner/shareholders (Soppe, 2011). In short, traditional CG is based on the agency
theory and focused on maximization of shareholder value.
More recently, modern practices of CG do emphasize the role of other stakeholders, who should be taken
into account in CG as well (Abor and Adjasi, 2007). Following the stakeholder theory, shareholders are just
a proportion of the important stakeholders that are involved with the company. Stakeholders should be
27
considered as important actor within the structure of directing and controlling the firm (Freeman, 1984;
Letza et al., 2004 in Spitzeck & Hansen, 2010). Modern CG can be seen as a broad concept that involves
corporate decision-making that goes beyond the board of directors (Letza et al., 2004; Sison, 2008 in
(Spitzeck & Hansen, 2010); it is about who effectively governs the company, in terms of direction and
control (Spitzeck & Hansen, 2010), and which stakeholder interests should be favoured (Arjoon, 2005; Del
Baldo, 2012; Uhlaner, Wright, & Huse, 2007). In other words, modern CG is not only about the
responsibilities of the firm towards its shareholders, but it also is about the responsibilities towards society
(which covers the firms’ stakeholders). Responsibilities concerning society are translated into business
practices which can be characterized as CSR (see chapter 2).
Within SEFs, creating shareholder value is seen as a final result in order to sustain the company and as an
essential means to realize CSR practices in the long term (Fassin and Van Rossem, 2009). When combining
the definitions of both traditional and modern CG, corporate governance is seen as a structure of the
division of rights and responsibilities of organizational members towards all stakeholders, within which
certain rules and procedures are influencing both the way in which decisions are made and organizational
objectives are set as well as how these objectives are achieved and monitored.
4.1.2 Applying corporate governance in SMEs
Applying CG to privately held SMEs might show some differences related to the application of CG in large
and listed firms. This is partly caused due to the fact that ownership and management often overlap within
SMEs, which could lead to unclear boundaries between the mechanisms of CG on the one hand(see
section 4.3) and the owner(s) and other external parties that contribute to the CG practices of the firm on
the other hand (Abor & Adjasi, 2007; Uhlaner et al., 2007). The overlap between ownership and
management provides the advantage that agency problems are less likely to occur (Abor & Adjasi, 2007).
However, as the firm grows the need for transparency, monitoring and control increases as a consequence
of access to external resources and expertise (Filatotchev, Toms, & Wright, 2006). Owners and managers
of privately held SMEs are expected to perform less formal and more informal advisory and enterprising
tasks (Van den Heuvel, 2006 in Uhlaner et al., 2007). This is in line with the increased recognition that CG
goes beyond accountability of the management team and also goes into enabling management to exercise
entrepreneurship (Filatotchev and Wright, 2005), which is especially relevant for privately held SMEs
(Uhlaner et al., 2007). An example of an informal element of CG is the organizational culture; in SEFs, the
culture functions as a basis for behaviour, attitudes and decision-making that is in line with the desired
values of the firm. A disadvantage of deploying CG within small firms is that it requires the company to
hire employees who can fulfil the roles belonging to coordination and monitoring tasks that come along
with CG (Abor & Adjasi, 2007); this increases the operational costs of the firm, which might form a barrier
for small companies.
To conclude, CG could be defined more explicit when it is applied to SMEs; Since management and
ownership often overlap within small firms, informal CG mechanisms play an important role as well while
a focus on exercising entrepreneurship and a need for transparency, monitoring and control grows as the
firm develops. In this research, CG that is deployed in SMEs, is seen as a structure of the division of rights
and responsibilities by setting rules and implementing procedures, within which both informal as well as
28
formal mechanisms are applied to steer the way in which decisions are made, organizational objectives
are set and how these objectives are achieved and monitored.
4.1.3 Linking corporate governance to the CSR-practices of SEFs
The main objective of this research is to investigate how SEFs could maintain their CSR-identity during
business growth. As explained in the previous section, the need for the deployment of CG grows as SMEs
grows. First, the relation between CG and CSR will be shortly discussed. Then, two different approaches
towards applying CG in SEFs will be discussed below. Both stakeholder governance and sustainable
corporate governance will be elaborated as approaches to maintain the CSR-identity of the firm.
Corporate governance and corporate social responsibility
CG and CSR as concepts have been evolved parallel, but from different origins. CG has been developed
due to the need for transparency and accountability to shareholders, while CSR has been developed as a
consequence of the need for transparency and accountability to other stakeholders as well (Fassin and
Van Rossem, 2009). Relationship between CSR and CG still remain unclear (Aras and Crowther, 2008;
Fassin and van Rossem, 2009); meaning that the relationship is not understood well by many firms (Aras
and Crowther, 2008). Different perspectives to this relationship can be discussed. On the one hand, CSR is
sometimes presented as a model of extended CG by Sacconi (2006). On the other hand, CSR is can be seen
as an important component of CG by (Luo, 2006). Other authors such as Conley and Williams (2005)
categorize the so-called CSR-movement as ‘new corporate governance’. Finally, Morland (2006) see CG as
interrelated with and dependent upon business ethics and sustainability. In this research, different aspects
of CG which are related to CSR-practices of SEFs will be elaborated. Important to note is that the aim of
this research is not to prove a certain kind of relationship between CSR and CG, but rather to investigate
if and how CG could be deployed by SEFs in order to maintain their CSR-identity when growing their
companies.
Stakeholder governance
Companies that are involved in CSR practices behave as responsible players in their local environment as
corporate citizens or as global actors that are taking rights and duties into account within and across
national borders (Wood & Logsdon, 2001). These companies turn out to be more stakeholder-oriented
than traditional firms (Ricart et al., 2005 in (Spitzeck & Hansen, 2010). For this reasons, so called
‘stakeholder governance’ should be taken into account with regard to directing and controlling the firm
(Spitzeck & Hansen, 2010). Stakeholder governance is characterized by two dimensions, namely power
and scope (Spitzeck & Hansen, 2010):
Power refers to the level of influence on corporate decision-making that is exercised by stakeholders.
This level of influence can vary from non-participation of stakeholders to substantial impact of
stakeholders in which the stakeholders have the power to decide.
Scope refers to depth of power in corporate decision-making. This depth can vary from power on
decisions regarding operational issues to power on decisions on strategic issues.
As a probable approach, stakeholder governance could be applied within SEFs as the company grows.
Because stakeholder governance is perceived as a relatively abstract approach of CG, a more
comprehensive approach, which is called sustainable corporate governance, is introduced below.
29
Sustainable corporate governance
‘Sustainable corporate governance’ (SCG) is a form of CG in which stakeholder interests, corporate
democracy and stewardship responsibility are important elements that should fit the sustainable company
(Soppe, 2011). Stakeholder interests can, to a certain extent, influence the defined obligations of the firm
towards society. Corporate democracy is understood as collective decisions made by the organizational
members that have interests at stake. Stewardship responsibility can be defined as an approach to
governance in which pro-organizational and collectivistic behaviour has a higher utility than individualistic,
self-serving behaviour (Del Baldo, 2012; Soppe, 2011). This means that the firm should find a balance
between a desired level of collectivistic behaviour and a desired level of individualistic, self-serving
behaviour that is shown by organizational members.
Six elements to highlight the differences between traditional and sustainable companies regarding control
of their firm can be listed (Soppe, 2011). These elements can be linked to sustainable corporate
governance, because they focus on the control of the firm and address the need to balance between
individual and collective interests through leadership and direction. Below the elements are shortly
described:
The ownership concept; this can vary from a pure shareholder model to a pure stakeholder model in
which all relevant stakeholders are taken into account. Traditional firms are more likely to put
emphasize on the shareholder model, while SEFs are characterized to take into account a broad variety
of stakeholders regarding their business practices. The level and form of (active) engagement with
stakeholders might differ between companies, which leads to various forms of created social value
(Brickson, 2007), see section 2.4.
The mission statement of the company plays an important role in communicating the sustainable
policy. Traditional and sustainable entrepreneurship can be distinguished by the founding mission of
the entrepreneurs and the market impact to realize enterprise. Sustainable entrepreneurs are mission-
driven and influenced by the sources of opportunities, performance metrics and the way in which
stakeholders are prioritized (Neck, Brush, & Allen, 2009). Sustainable entrepreneurs often integrate
the objective to substantially change consumer patterns and/or an industry by offering products that
contribute to social and environmental issues (Lambing and Kuehl, 1997 in Schaltegger and Wagner,
2011).
The ethical framework; where traditional companies might pay less explicit attention to organizational
integrity, SEFs often integrate this within their firms as a necessary condition (Soppe, 2011).
Human nature players; While conventional entrepreneurs see enterprises as a way to profit from the
allocation and exploitation of resources out of self-interest and to generate maximum financial returns
on the short term, sustainable entrepreneurs see enterprises as a way to maintain both human and
natural resources in order to sustain the quality of their functioning on the longest term possible
(Parrish, 2010). In other words, sustainable entrepreneurs base their so called relative altruistic actions
and decisions on the extent of satisficing social passion and contribution to the welfare of others,
notwithstanding their own interests (Jensen, 1994 in van de Ven et al., 2007).
Finally, CSR-practices and social responsible investments are considered as characteristics through
which cooperative human behaviour is emphasized within SEFs and more selfish human behaviour is
emphasized within traditional firms (Soppe, 2011).
30
If an SME is growing, CG could be deployed in order to anticipate to the loss of direct control by the owner-
manager. For SEFs, traditional CG is not sufficient, because these companies need to take care of their CSR
objectives which reaches beyond shareholder interests alone. Stakeholder governance and sustainable
corporate governance are possible approaches to introduce governance systems that take into account
the CSR practices of the organization. To conclude, CG that is applied within SEFs needs a focus on the
management of stakeholder interests and requires a balance between self-serving and collectivistic
behaviour. As CG is understood as controlling the internal organization and CSR is seen as practices that
are more directed outside the organization, CG can be deployed to steer the internal organization as a
means to realize the CSR objectives of the firm. In other words, CG that is applied in SEFs requires taking
into account both shareholder as well as other stakeholder interests; shareholder value is needed to
maintain operating the firm’s sustainable message which represents how the firm directly and indirectly
affects its stakeholders.
4.2 Mechanisms of corporate governance
It is highly important that owner-managers who choose to deploy CG within their firm understand the
principles of it. To apply CG to SEFs, several mechanisms of CG could be set up. A mechanism of CG is
defined as an instrument or structure that supports control over the firm in order to protect the interests
of involved stakeholders (John and Senbet, 1998). One of these interests is the maintenance of the CSR-
identity, the identity covers a set of characteristics that provide stability, coherence and specificity
(Balmer, 1998 in Cornelissen et al., 2007). Mechanisms of CG could steer in minimizing potential
differences in interests of both internal and external stakeholders. A distinction can be made between
internal mechanisms of governance, including mechanisms that impact the internal organization (such as
the organizational culture), and external mechanisms of governance, including mechanism that function
as steering between the organization and its environment (Uhlaner et al., 2007).
The procedures of corporate governance mechanisms that could be developed within the company
determine the role of the management of the firm in order to increase both shareholder value and other
stakeholders’ satisfaction (Aras and Crowther, 2008). In this research five different mechanisms of CG are
distinguished, which will be discussed in sub-section 4.2.1 to 4.2.5:
Strategy in terms of counselling and advice regarding decision-making (Filatotchev, et al., 2006).
Resource management concerning the provision of access to (external) resources, such as financial
resources, human resources, legitimacy, etc. (Filatotchev et al., 2006).
The organizational culture of the firm that has been shaped by the entrepreneur can be seen as an
informal mechanism of CG.
Coordination as a governance mechanism can be deployed in order to steer towards pre-determined
direction by bringing together individual actions and local learning processes.
Monitoring by directors and managers, by for example codes of conduct, accountability and
transparency reports (Filatotchev et al., 2006).
4.2.1 Strategy
Strategy functions as a contract that underpins how the enterprise should organize itself in terms of
business units, division of responsibilities, organizational structures and the overall horizontal business
processes in order to achieve its objectives (Korhonen, 2007). Strategy as mechanism of corporate
31
governance should not be seen as the process of creating strategy (Korhonen, 2007), but rather as
counselling and advice regarding decision-making in implementing and realizing this strategy (Filatotchev
et al., 2006). This mechanism of CG can therefore function as a steering mechanism in order to achieve
the CSR objectives of the SEF. According to Aras and Crowther (2008), corporate governance is an
important means for companies to achieve objectives and implement the related business strategies.
Strategy provides a guide to be followed regarding the management of the identity of the firm both on the
short as well as on the long term; the strategy therefore establishes what the identity of the firm is and is
going to be (Melewar and Karaosmanoglu, 2006). If the CSR-identity of the firm is successfully maintained,
it could function as a stable factor for expanding the product portfolio of the firm (Abimbola and Kocak,
2007). The identity of the firm could provide stability to the management team in decision-making.
In order to apply strategy as a mechanism of CG, it is important to understand the different aspects of
strategy. Strategy as a term can be sub-divided in three different components, namely (Parum, 2006):
Strategy process; the manner in which strategies are set up is called the strategy process. Strategy
process emphasizes how strategy should be formulated, analyzed, implemented, changed and
controlled; it is focused on planning and who is involved.
Strategy content; the overall company and its sub-divisions decide on what the strategy actually is and
should be. This is called the strategy content.
Strategy context; both the strategy process and strategy content are influenced by several (internal
and external) circumstances in terms of the strategy context.
Strategies are applied in order to achieve organizational objectives; within SEFs, these objectives consist
of elements that cover social, environmental and financial elements. If the management of the firm is able
to control decision-making on each element while taking into account the different components of
strategy, it can be assumed that the CSR objectives of the firm will remain a strong position and thus stay
of high priority.
Strategy as CG mechanism can be influenced by several aspects, which should be taken into account by
the owner-manager and other involved managers regarding decision-making processes:
Dependent on the level of influence of stakeholders and the scope of their power in corporate
decision-making, various stakeholders could play a role regarding the strategy formulation and
strategy implementation (Spitzeck & Hansen, 2010).
Communication of strategic direction of the firm to external stakeholders influences stakeholders
understanding of the organizational drivers, which possibly could lead to better judgement of the
existence of shared goals between different parties and could facilitate in setting-up a collaborations
(Freeman and McVea, 2001 in Parum, 2006).
In SEFs, the owner-manager and other managers are supposed to be more collective-serving in
decision-making than in traditional firms. From stewardship theory perspective, these managers
should behave in order to realize value maximization for all shareholders (Rausch, 2011).
Different conceptions of ownership lead to different forms of control and thus to different formulation
and implementation of corporate strategy (Abor & Adjasi, 2007). The ownership structure can be
structured by the distribution of shares that is owned by individuals, which can be insiders or external
stakeholders (Uhlaner et al., 2007).
32
4.2.2 Resource management
Resource management as a mechanism of CG should be understood as the provision of access to (external)
resources, such as human resources, financial resources, legitimacy, etc. (Filatotchev, Toms, and Wright,
2006). Since the growth of a firm is driven by the processes of resource accumulation (Foss & Mahnke,
2000), the acquisition and management of resources requires to be governed in order to be able to
recognize and act on opportunities for growth. The deployment of CG also calls for requisite competences
that should be acquired or developed. It can be assumed that resource management is an important
mechanism of CG that, when organized in a structured way, could positively influence the realization of
the organizational objectives of the SEF.
The human resources of the firm – in terms of knowledge, competences and skills – are influencing the
core competencies which are developed and attracted following the long-term vision and objectives of the
firm. Within small firms, the entrepreneur is in charge of the process of directing and controlling the
creation and accumulation of resources of the firm (Foss & Mahnke, 2000). An important part of this role
is monitoring the acquired resources according the vision and objectives of the firm. If this role is not
carried out, a potential risk of indeterminacy or vagueness does exist regarding the development of the
firm and the proactive interaction between the internal organization and the external business
environment (Foss and Mahnke, 2000). For SEFs, this could lead to a dilution of the CSR-identity. As small
firms grow, the owner-manager could decide to widening the board of directors or forming a management
team to attract managers that could function as counsellors and advisors on complementary (external)
resources (Bennett and Robson, 2004); The decisions regarding bringing certain resources inside the
company instead of keeping them outside the company should be integrated in control over resources as
well.
In this research, resource management is understood as human resource management. Both human
resources and skills are important for the development and growth of a firm (Bennett and Robson, 2004).
Both forming a management team as well as expanding the number of employees is covered by resource
management as a mechanism of CG. Resource management as a mechanism of CG is affected by the
following aspects:
When the firm is growing, the process of resource creation and resource allocation could overlap when
the organization has to deal with dynamic developments and changing environment (Foss & Mahnke,
2000).
A characteristic of the entrepreneurial function is the dynamic capabilities that refer to the ability to
strategically manage and control the acquisition and balance between internal and external resources,
skills and competences. As the business environment of a company is constantly changing, both
developments of the internal organization as well as the external environment should be matched and
organized (Foss & Mahnke, 2000).
A link to ownership structure is important regarding the management of resources. As the division of
shares owned by the owner, insiders and external stakeholders might influence the access to resources
(Uhlaner et al., 2007). This is confirmed by the research of Bennett and Robson (2004), who found that
SMEs often form a board of directors or a management team to attract external knowledge and advice
and to boost the skills of employees and managers as their company grows.
33
4.2.3 The organizational culture of the firm
The organizational culture of SEFs can be seen as an informal mechanism of CG through which the desired
values of the SE are spread among other organizational members within the firm. Small entrepreneurial
firms often rely on informal social controls, based on mutual trust, a shared vision, and commitment to
the firm by owners and management (Uhlaner et al., 2007) which might be complemented or replaced by
more formal mechanisms of CG as the firm grows. As a mechanism of CG, the organizational culture and
the interaction with dynamic settings of individuals, formal and informal organizational bodies and
external parties should be taken into account regarding the business activities that will lead to sustaining
the firm (Parrish, 2010). Within SEFs, CG positions itself at the centre of relationships between
stakeholders, the strategic profile of the firm and its internal processes (Del Baldo, 2012). According to Del
Baldo (2012) corporate governance systems are more transparent and harmonized within SMEs that
practice CSR; the governance systems are influenced by the organizational culture, which is an important
element of SEFs. This reinforces the organizational cohesion, the business climate and commitment to the
firm.
In SEFs that deploy the organizational culture as a mechanism of CG, stewardship theory plays an
important role regarding motivations and behaviour of the owner-manager and other management
functions (Del Baldo, 2012). Stewardship theory is based on trust and focused on the long-term which
often fits to the mission of SEFs. The SE experiences stronger personal commitment to the company and
holds personal power that is linked to authority, compared to external hired managers and employees (Del
Baldo, 2012). This shows the importance of the role of the entrepreneur regarding the establishment of
the organizational culture and his influence on the members of the firm. As described in section 2.3.2, the
organizational culture of the firm is based on artifacts, values and basic assumption. These core values are
the drivers of the entrepreneur and influence the direction of the firm regarding strategy and function as
an important basis for the identity of the firm (Del Baldo, 2012). Because SEFs are strongly based on their
core-values, the implementation of corporate governance is dependent on the interpretation of the
person(s) who govern the firm and are committed to the company (Del Baldo, 2012). Shared principles can
be nurtured if the motivations that have inspired the founder will be explicitly recalled on regular basis
(Sciarelli, 2007 in Del Baldo, 2012).
The culture of the firm can slowly change due to changes in the business environment, the way leadership
and management are practiced, and both formal and informal socialization processes (Schein in Wilson,
2001). An important note that should be made is that values can be used to observe shown behavior,
learning and what people will say in certain situations (Argyris and Schön, 1978 in Baumgartner, 2009).
However, this can be different from what people will actually do when operating these values
(Baumgartner, 2009). In this research organizational culture is seen as an element that can function as a
basis for behavior, attitudes and decision-making which can be influenced by the social interactions among
organizational members and with external parties (Bieker, 2005 in Baumgartner, 2005). The organizational
culture of SEFs could be seen as an informal mechanism to spread the desired values, which are in line
with the CSR-identity, among other organizational members within the firm.
34
4.2.4 Monitoring
The owner-manager of SMEs is often able to be closely involved to the organizational structure and
operational actions (Del Baldo, 2012). This provides an opportunity to frequently share information and
knowledge between the owner-manager, managers and employees. Monitoring can be seen as a function
or process of CG that is executed by the owner-manager and the management team of the firm as
structural bodies (Uhlaner et al., 2007). Similar to the coordination mechanism of CG, monitoring is related
to the incentive mechanism of organizations as well; this should allow the organization to continuously
respond to a turbulent environment (Foss & Mahnke, 2000).
Monitoring can be implemented by using codes of conduct, guidelines, accountability and/or transparency
reports (Filatotchev et al., 2006):
Codes of conduct are likely to dictate certain behaviors to staff members in the workplace. Codes of
conduct mostly are not used as a tool to govern CSR alone, but rather as a tool to govern the realization
of organizational objectives in general (Bondy, Matten, & Moon, 2008). Besides, due to the importance
of stakeholders within sustainable corporate governance in terms of an increased level of
responsibility and accountability to the external environment/society, a code for corporate
governance could function as a tool to steer towards fitting stakeholder relations (Aras and Crowther,
2008).
Corporate guidelines could be developed and maintained as substitute or complementation to codes
of conduct. Corporate guidelines cover the actualization and interpretation of corporate principles
regarding business activities and functions (Melewar, 2003), which can be related to CSR-identity
because the guidelines provide an explanation of the relevance of the content of the identity to the
actions and behavior of the employees, the departments and functions (Schmidt, 1995 in Melewar,
2003).
Accountability documents could serve as illustrator of the core values and vision of the company and
how this is translated into daily practices at operational level (Del Baldo, 2012). These documents have
multiple aims related to improving decision-making processes of various stakeholders:
▫ They could serve as illustrator of the core values and vision of the company and how these
should be translated into daily practices at operational level;
▫ They explain the characteristics of CG of the company in order to reduce or mitigate conflicts
of interest between shareholders and managers that share the responsibility of the strategic
management of the firm;
▫ The documents provide information to stakeholders regarding finance and CSR;
▫ Accountability documents valorise and monitor intangible resources (Del Baldo, 2012).
Transparency/annual reports present the identity of the firm in relation to CG which consist of:
company statements on communication with shareholders and stakeholders; ownership structure and
stakeholder relations (strategy context); statements on the division of tasks, nomination procedures,
qualifications and work processes of the management of the firm (strategy process); and the mission,
vision and strategic intentions of the firm (strategy content) (Parum, 2006).
35
4.2.5 Coordination
Coordination as a governance mechanism can be deployed in order to steer towards pre-determined
direction by bringing together individual actions and locally decentralized learning processes (Foss &
Mahnke, 2000). Within SMEs, the owner-manager serves as the driver of the orientation and direction of
the firm and the rules that govern it (Del Baldo, 2012). If the environment is (radically) changing, the need
for overall planning and broad resource reallocation might require strict hierarchical coordination. This
especially is the case when organizations are starting to grow, which come along with periods of
uncertainty (Foss & Mahnke, 2000). The coordination mechanism of CG should cover the process of
decentralization or centralization at firm level and is particularly about controlling the development and
maintenance of common knowledge (Ibid.).
Parrish (2010) explored how sustainable entrepreneurs are able to reconcile their sustainability-driven
values in order to survive and develop within the market. Successful sustainable entrepreneurs manage to
find a balance between self, other people and nature; resulting in a tension through which the core values
are expressed and the organizational design is formed. Perpetual reasoning turns out to be one of the key
features that differentiates successful from less successful sustainable entrepreneurs (Parrish, 2010).
While the principles of exploitative reasoning (focus on exploiting resources in order to create wealth) can
be applied to conventional entrepreneurs, the principles of perpetual reasoning (focus on the “mutually
restorative, supportive, and enriching function of resources”) can be applied to sustainable entrepreneurs
(Parrish, 2010). Below five principles of perpetual reasoning will be described; these principles could be
applied as generative rules of coordination of the firm that embrace the core values and beliefs, which are
reflecting the CSR-identity of the firm:
The principle of resource perpetuation; Sustainable entrepreneurs see the enterprise as a means to
produce benefit streams by using resources in order to enhance and maintain the quality of their
functioning for the longest time possible.
The principle of benefit stacking; sustainable entrepreneurs are structuring their firms in order to
realize a maximum of beneficial outcomes for as many different stakeholders as possible. The basic
idea is that each organizational activity could have multiple benefits that can be exploited.
The principle of strategic satisficing; Sustainable entrepreneurs use satisficing as a tool to balance and
measure their objectives, because objectives that embrace concepts such as ‘viable’, ‘fair’, or
‘reasonable’ are hard to quantify with hard numbers.
The principle of quality management; Decision-making within SEFs is about how to realize ‘better’
(quality) rather than how to realize ‘more’ (quantity). This leads to the translation of quantitative
issues of growth and finance into qualitative approaches on evaluating and decision-making.
The principle of worthy contribution; Sustainable entrepreneurs structure their firms in order to make
sure that the stakeholders and natural systems that turn out to be most worthy, are benefited by the
organizational outcomes.
Coordination as a mechanism of CG is directly linked to the incentive mechanism, which can be described
as a certain structure that functions as a tool to guide actions taken into a pre-determined direction. In
other words, it represents the ways in which the owner-manager spreads the vision through-out the firm.
It is related to the mechanism of coordination, because so called ‘incentive schemes’ could be used to
36
respond in a coordinated way to stimuli in the business environment. In this way, actions can be
coordinated inside the organization, while at the same time, learning processes are stimulated and trial-
and-error is allowed (Foss & Mahnke, 2000). Coordination could be carried out by a set of rules and
routines, which can be sub-divided in a set of very precise rules that leave little/no room for interpretation
and by a set of rules and routines that allow interpretative ambiguities. The latter is more suitable when
learning processes are to be fostered.
4.3 Mechanisms of corporate governance as moderators
In this section, sub-question 4 (How do mechanisms of corporate governance effect the corporate CSR-
identity as moderators of the influence of business growth?) will be answered. In this section the barriers
of growth that are most likely to occur during the growth of SEFs are linked to CG. As the firm develops,
the right mechanisms of corporate governance should be in place during the development of the firm.
Adapting the mechanisms of CG to the development of the firm is called the life-cycle of corporate
governance (Uhlaner et al., 2007). In other words, the importance of a mechanism of CG can vary
dependent on the stage of the venture life-cycle the company is in. During the start-up and survival stage,
it is probable that a firm doesn’t have and need a monitoring system. While as the firm develops and
moves into the growth stage, monitoring might become a requirement in order to maintain the CSR-
identity of the firm. Other mechanisms of CG, such as resource management, are of high importance in
the early stages of growth already (Uhlaner et al., 2007). The implications of growth are dependent on the
strategy that is implemented in relation to the availability of funding, organizational structure and control
(Nazarkina, 2012). Below, the most occurring barriers of growth are linked to governance mechanisms that
might be deployed to overcome/strengthen the anticipation to the barriers.
Overtrading (uncontrolled growth)
In case of overtrading, the risk that the sustainable message of the firm is not spread in an optimal way
should be taken into account. Increasing sales is an example that could possibly overrun the priority to
spread the sustainable message of the company due to overtrading. In case of overtrading, the first priority
is to continue growth in a controlled way (Scott & Bruce, 1997). Uncontrolled growth could distract the
attention from the CSR-identity of the firm. Valuable knowledge will be to what extent the management
of the firm will take into account the content of the CSR-identity to anticipate to overtrading. If overtrading
results in any consequences for the maintenance of the CSR-identity, it is important to know how these
consequences can be overcome by applying mechanisms of CG. It is assumed that both strategy in terms
of a guide to follow regarding decision-making as well as coordination are effective mechanisms to be
applied during this barrier.
Maintenance and delegation of control
Problems regarding the maintenance of control might occur when the firm expands to new customer
markets and/or to new geographic markets. Direct control is decreasing and supervised control should be
put in place to complement the owner-manager (Scott and Bruce, 1997). When the firm grows, beyond a
certain size and/or a certain period of time, the owner-manager could decide to formulate a management
team. This is also called a transition from charismatic to bureaucratic leadership (Drucker, 1992).
Establishing a management team has some advantages concerning the development and growth of SMEs.
Literature study of Bennett and Robson (2004) shows that “it permits clearer development and definition
37
of the choices facing the business; it allows better presentation to external resources of finance, customers
and suppliers; and it should permit the stronger development of a more open and less oppressive internal
human resource relations structure”. Forming a management team/board has been argued to be an
important step in governance of SMEs (Cadbury, 2000 in Bennett and Robson, 2004).
As the SEF is still small, the owner-manager experiences direct control. This has some advantages, such as:
a personal touch regarding allowance for direct communication of the mission to both internal and
external stakeholders; it supports a flat organizational structure; and it substantiates trustful and ethical
relationships between employees that possess an attitude of learning by doing (Bennett and Robson,
2004). Nevertheless, this close involvement and direct control of the owner-manager could work out
negatively in terms of hindering the development of new practices and the attitude of employees to show
a critical view towards current practices that could be improved. Therefore, the need to delegate power
rises when the firm enters the growth stage; which is often against the nature of the sustainable
entrepreneur.
According to Koeverden (2012), problems concerning delegation of control/authority are experienced by
owner-managers if the amount of employees increases, if the company is expanding geographically or if
the company develops and introduces new products/services to new markets. The model that has been
suggested by Phelps, Adams, and Bessant (2007) consists of three potential problematic consequences of
the delegation of control by the entrepreneur during business growth. These are ‘general span of control’,
‘geographic span of control´, and ´functional span of control’. Regarding the general span of control, both
personal contact and interaction between the owner-manager and the employees are decreasing as well
as the fact that an increase in number of employees could result in a more diverse group of people (van
Koeverden, 2012). With regard to the geographic span of control, a risk of a blurring organizational identity
occurs when employees are working at different locations and thus personal contact with both the owner-
manager and employees is becoming more limited. A change in role of the owner-manager and the
creation of a more formalized structure become a problem when the owner-manager does not prefer this
change or does not have sufficient competences and skills to anticipate to this change (van Koeverden,
2012). Shared responsibilities to maintain the CSR-identity as well as different interests among managers
could dilute the efficient operationalization of the CSR-identity. It is assumed that forming/expanding a
management team and delegating responsibilities could be steered by the allocation of human resources
(resource management), coordination and monitoring in order to maintain the CSR-identity.
Decentralization and formalization of structures
During the start-up and survival stage, personal and direct supervision is allowed due to simple
organizational structures that are created by the founder (Miller and Friesen, 1984 in Davidsson et al.,
2007). From the growth stage on, direct supervision by the owner-manager will be replaced by a
separation between management and control which is a consequence of bureaucratization of the
organizational structure (Davidsson et al., 2007). As the firm grows, the owner-manager’s role will change,
because he cannot maintain his close involvement with customers and employees (Grundy and Welsch,
2001). Formal systems and decentralization could form a barrier between operational action and the
owner-manager who shaped and spreads the CSR-identity throughout the firm. Decisions on the
organization of business units, division of responsibilities, organizational structures and the overall horizontal
38
business processes need to be taken consciously to achieve organizational objectives (Korhonen, 2007).
Strategy, coordination and monitoring as mechanisms of CG might provide the owner-manager a way to
keep control over the CSR-identity of the firm while decision making and responsibilities are being
decentralized and structures are being professionalized.
The organizational culture crisis
The organizational culture influences the kind of organization, the leadership practices, the cohesiveness
within the firm and the existence of the firm (Irrmann, 2002). A crisis of the organizational culture might
occur when the new hired managers or employees are not committed to the firm to the same extent as
the SE himself (Scott and Bruce, 1997). When the firm is in its start-up and survival stage it is easier to
recruit employees that are comparable in their personalities and values. When the amount of employees
starts to increase further, it becomes harder to select employees that will completely fit within the specific
characteristics. The risk of losing homogeneity regarding the organizational culture and identity is caused
by decreasing personal contact with employees and a growing diversity among employees as the number
of employees grows. These problems will increase if the organizational culture is perceived as a strategic
resource to the success of the firm (Koeverden, 2012). Different levels of commitment to the firm and a
heterogeneous organizational culture might dilute the CSR-identity of the firm. Resource management
and the organizational culture as mechanisms of CG could provide guidance to acquire employees and
managers that fit the CSR-identity of the firm.
4.4 Conclusion
Literature study is carried out in order to answer sub-question 3 (How can mechanisms of corporate
governance be deployed in order to steer the realization of the CSR objectives?) and sub-question 4 (How
do mechanisms of corporate governance effect the corporate CSR-identity as moderators of the influence
of business growth?). Therefore the aim goal of this chapter is twofold: first, to distinguish several
mechanisms of corporate governance that could be applied to SEFs that are willing to grow their company
while realizing their CSR objectives and maintaining their CSR-identity; second, to formulate assumptions
on which mechanisms of CG could be best applied during the described barriers of business growth
regarding the maintenance of the CSR-identity.
Within traditional CG, the objectives of CG are focused on profit maximization for shareholders. Modern
CG pinpoints the importance of responsibilities towards society and therefore covers the interests and
stakes of other stakeholders of the firm as well. When applying CG to SMEs, the following aspects should
be taken into account:
Management and ownership often overlap within small firms;
Next to formal mechanisms of CG, informal mechanisms of CG play an important role as well;
A focus on the ability to exercise entrepreneurship is part of CG and a need for transparency,
monitoring and control occur as the firm starts to grow.
In this research, CG that is deployed in SMEs, is defined as a structure of the division of rights and
responsibilities by setting rules and implementing both informal as well as formal mechanisms in order to
steer the way in which decisions are made, organizational objectives are set and objectives are achieved
and monitored.
39
Five different mechanisms of CG are distinguished, which are strategy, human resource management,
coordination, monitoring and the organizational culture. When CG is applied in SEFs, stakeholder
governance puts emphasize on the power and the depth of stakeholder influence. However, stakeholder
governance is considered too narrow within the context of this research. Sustainable corporate
governance extends stakeholder influence with corporate democracy and stewardship responsibility as
important factors of impact. A balance between self-serving and collectivistic behaviour of the
organization is required. The deployment of mechanisms of CG requires the owner-manager and other
managers of the firm to control whether decisions and actions are taken consistently and fit within the
CSR-identity of the firm. Within SEFs, shareholder value is needed to realize the CSR-objectives and spread
the sustainability message which represents how the firm directly and indirectly affects its stakeholders.
It is proposed that mechanisms of CG can be deployed to moderate the risk of dilution of the CSR-identity
during the growth stage of the venture life-cycle process. The barriers of growth could be (partly)
overcome and managed by deploying mechanisms of CG. Based on a summary of the literature study
results, an overview of each barrier of growth and which mechanisms of CG are assumed positively
influence the maintenance of the CSR-identity is given in table 4.1. If and how these mechanisms are
deployed in practice will be investigated by conducting case study research. Case study research could
lead to results in which more, less or different mechanism of CG are deployed in order to maintain the
CSR-identity.
Table 4.1 - Deploying mechanisms of CG to overcome the impact of growth on the CSR-identity
Strategy Resource
management Coordination Monitoring
The organizational
culture
Overtrading
Strategy as ‘decision-making
guide’ during overtrading
Setting a set of rules and
routines (e.g. perpetual reasoning)
Barriers regarding
maintenance and delegation
of control
Forming a management team
and controlling allocation of
resources
Setting a set of rules and
routines (e.g. perpetual reasoning)
Codes of conduct
and reporting
Decentralization and formalized
structures
Organization of business units,
division of responsibilities, organizational structures and
business processes
Setting a set of rules and
routines (e.g. perpetual reasoning)
Codes of conduct
Organizational culture crisis
The extent to which new hired
managers/employees fit within the
established culture
Regular spreading core values among
employees Interpretation of core values
40
5 Theoretical framework The aim of this chapter is to develop a theoretical framework that is based on the results of the literature
study about sustainable entrepreneurship, CSR-identity, business growth and corporate governance. In
section 5.1 the relevant findings of each concept are presented. Based on these aspects, the theoretical
framework is developed in section 5.2.
5.1 Relevant concepts
In this section, the relevant aspects of the concepts of this research are described and the
operationalization is presented. Sub-section 5.1.1. is going into the aspects of the CSR-identity of SEFs.
Sub-section 5.1.2 emphasizes the barriers of business growth followed by the mechanisms of corporate
governance in sub-section 5.1.3.
5.1.1 The CSR-identity of sustainable entrepreneurial firms (SEFs)
Sustainable entrepreneurs are a relatively new type of entrepreneurs (section 2.1) that are operating in
order to realize sustainability objectives and therefore have built a so called CSR-identity (section 2.4). The
characteristics of SEFs that are found in literature are forming an important basis for the context of the
case study research (section 2.2-2.3). The CSR-identity of the firm can be considered as an important
source of the existence and success of SEFs. Therefore, this identity should be maintained during the
development of the firm. The CSR-identity can be operationalized through the components that are
influenced by the personal values of the SE and are the basis of the establishment of the identity of the
firm, see figure 5.1.
Figure 5.1 - operationalization of the CSR-identity
5.1.2 Business growth and barriers of growth
One of the aims of SEFs is to spread their sustainable message to an as large as possible group of customers
and other stakeholders (section 4.2). As a consequence of business growth, the owner-manager loses
direct control over the firm (section 1.1.2). The management and maintenance of the CSR-identity
becomes a responsibility that is shared among different managers and an increasing group of employees.
This research focuses on the growth stage of the venture life-cycle process, which are endogenous
variables in the research framework (figure 5.1). Especially in these stages, the risk of dilution of the CSR-
identity becomes relevant. The stages are operationalized through several crises that might occur, which
should be managed by the owner-manager and in case of availability by other managers that are
employed. In figure 5.2, the crises for both the growth and expansion stage are operationalized.
Organizational culture
Corporate philosophy
CSR-identity
41
Figure 5.2 – Operationalization of business growth during the growth stage of the venture life-cycle process
5.1.3 Corporate governance
SCG is an approach that could be deployed by SEFs when their firms starting to grow. SCG can be
categorized as modern CG, because next to the important of shareholders, stakeholder interests,
corporate democracy and stewardship responsibility are taken into account (section 3.2). Five mechanisms
of CG that could help the owner-manager to govern the firm and to realize organizational objectives
(section 3.3). Empirical research is will focus on how these mechanisms could function as a moderator of
the impact of business growth on the CSR-identity of the firm. Sustainable corporate governance is
operationalized in five mechanisms, see figure 5.3.
5.2 Theoretical framework and research propositions
The aim of this research is to explore to what extent corporate governance mechanisms can be seen as
effective mechanisms to maintain the CSR-identity of growing SEFs. To this end, a comprehensive
literature review is conducted in order to obtain theoretical insights, which will be subsequently
empirically illustrated by multiple case study of SEFs (N=7). In this section both the theoretical framework
and the research propositions are formulated. The main goal of the theoretical framework is to provide
specific boundaries and relationships between the research variables in order to function as a clear basis
for the empirical research (see figure 5.4). With the research proposition, the expected outcomes of the
empirical research is described. Below, three propositions are formulated. The first proposition is to state
the direction and relation of the impact of business growth on the CSR-identity of SEFs. The third
proposition is aimed to state the function of mechanisms of SCG as moderators of the relationship
between business growth and the CSR-identity of SEFs.
Maintenance and delegation of control
Barriers of business growth
Overtrading
Decentralization and formalized structures
Organizational culture crisis
Strategy
Resource management
Coordination
Monitoring
Organizational culture
Corporate governance
Figure 5.3 – Operationalization of corporate governance
42
P1: The CSR-identity of sustainable entrepreneurial firms is risked to be diluted as a consequence of
business growth caused by a negative relationship between business growth and the CSR-identity.
P2: Sustainable corporate governance mechanisms could be deployed as an approach to moderate
the risk of dilution of the CSR-identity during the growth stage of the venture life-cycle process.
Furthermore, four assumption can be formulated by combining and summarizing the results of the
literature study (see section 4.4 and table 4.1). For each crises that might occur during business growth in
the growth and extension stage of the life-cycle process several mechanisms of CG are assumed to be
deployed in order to maintain the CSR-identity of the firm:
Overtrading: Uncontrolled growth could distract the focus of management on the CSR-identity; it is
assumed that both strategy in terms of a guide to follow regarding decision-making as well as
coordination are effective mechanisms to be applied during this crisis.
Maintenance and delegation of control: Shared responsibilities to maintain the CSR-identity as well as
different interests among managers could dilute the efficient operationalization of the CSR-identity; it
is assumed that forming/expanding a management team and delegating responsibilities could be
steered by the allocation of resource (resource management), coordination and monitoring in order
to maintain the CSR-identity.
Decentralization and formalized structures: A barrier between operational action and the owner-
manager due to decentralization could lead to a decrease in the effectiveness of spreading the CSR-
identity throughout the firm, which puts emphasize on the importance of conscious decision making;
Strategy, coordination and monitoring as mechanisms of CG might provide the owner-manager a way
to keep control over the CSR-identity of the firm while decision making and responsibilities are being
decentralized.
Organizational culture crises: Different levels of commitment to the firm and a heterogeneous
organizational culture could dilute the CSR-identity; it is assumed that resource management and
organizational culture as mechanisms of CG could provide guidance to sustain the function of the
organizational culture and maintain the CSR-identity.
The research propositions (P1 and P2) will be tested by conducting multiple case study research in order
to test whether these propositions can be seen as relevant for SEFs in practice. Besides, the four
assumptions in which several mechanisms are selected to be deployed to moderate the effect of the crises
of business growth will be used as guidance for the operationalization of the interviews. However, the
possibility that not-selected mechanisms of CG are deployed to overcome certain barriers of growth is
taken into account. Below, the theoretical framework is developed based on the endogenous variable
‘CSR-identity’ (second left), the exogenous variables ‘business growth’ and ‘sustainable corporate
governance’ (second right), and the operational variables of the exogenous variables (left and right).
43
Figure 5.4 - Theoretical framework
(P2)
(P1)
Overtrading
Maintenance and delegation of control
Decentralization and formalization of structures
Organizational culture crisis
CSR-identity
Barriers of business growth;
Corporate governance (CG)
Strategy
Resource management
Coordination
Monitoring
Organizational culture
Endogenous variable
Exogenous variables
Operational variables
Corporate philosophy
Organizational culture
Operational variables
44
6 Methodology In this chapter, the methodology that is used during this research project is described. Both literature
research (section 6.1) and multiple case study research section 6.2) is carried out. Section 6.3 describes
the selection criteria and methods that have been used to select the participating cases. An
operationalization of the theoretical framework is presented in section 6.4. Finally, the reliability and
validity are discussed in section 6.5.
6.1 Literature research
Literature research is based on existing literature and other secondary data that have been gathered by
others (Verschuren et al., 2010). Literature research has been carried out on sustainable entrepreneurship
and the CSR-identity (chapter 2), business growth and the venture life-cycle process (chapter 3) and
corporate governance with regard to its application in small to medium sized sustainable entrepreneurial
firms (chapter 4). The aim of literature research is to obtain a profound understanding of the core concepts
that are subject in this research. Besides the findings of the literature study have provided a basis for the
operationalization of the empirical research phase, see section 6.2 – section 6.4.
6.2 Multiple case study research
Case study research can be classified as an in-depth research strategy in which the researcher tries to
collect full insight into selected objects or processes within the boundaries of the research framework
(Verschuren et al., 2010). According Verschuren et al. (2010), the advantages of case study research are
twofold. First, it offers the ability to develop and describe a general picture of the research object(s).
Second, the results of case study research are more easily accepted by people in the field, because of the
close involvement to real life situations (Verschuren et al., 2010; Yin, 2003). Since the cases will illustrate
how mechanisms of CG are deployed in practice in order to maintain the CSR-identity, multiple case
studies will increase and improve the possibility to build theory. The comparison between several cases
could lead to findings that build theory (Eisenhardt, 1989). Future research could be carried out to focus
on whether these theories will or will not hold.
Multiple case study research can be seen as an extension of the single case study design, that allows the
researcher to compare and contrast the findings deriving from each of the cases in order to be able to
consider both unique as well as common findings across the cases (Bryman & Bell, 2011). Multiple cases
are often considered as more compelling which makes the overall results of multiple-case studies relatively
more robust (Herriott & Firestone, 1983 in Yin, 2003). The decision to execute multiple case studies
involves following “replication” logic instead of “sampling” logic, which can be defined as the replication
of the findings of a case study by conducting more case studies. The subsequent steps of the replication
approach are (Yin, 2003): (1) Develop theory; (2) Select cases and develop a data collection protocol
(section 6.3); (3) Conduct all case studies by using the data collection protocol (section 6.3); (4) Write
individual case reports for each case (Appendix B); and (5) Draw cross-case conclusions, modify theory and
write a cross-case report (chapter 7). The multiple case study design of this research is using a multiple
holistic case study approach, which means that each participating company is studied in its global nature
regarding the maintenance of its CSR-identity and the deployment of CG mechanism during business
growth (Yin, 2003).
45
6.3 Case selection
When selecting potential cases for participation, one could decide between a minimum and a maximum
number of differences among the cases. Since this research project is partly explorative, it is desirable to
select cases that are similar to each other, meaning a minimum number of differences, in order to generate
generally descriptive statements (Verschuren et al., 2010). The cases have been selected in the
Netherlands and one case has been selected in Germany. The deployment of governance mechanisms will
be explored in companies that are based in different counties; different sociocultural settings (such as
institutions, customs, traditions, value systems, lifestyles, etc.) should therefore be taken into account
(Bryman & Bell, 2011). The selection criteria will be shortly described in table 6.1.
Table 6.1 - selection criteria case studies
Subject Criteria
Sustainable entrepreneur
The companies have been founded by a sustainable entrepreneur and still fit within the characteristics of sustainable entrepreneurial firms: The SE has the aim to contribute to the ecological, social and economic well-being.
The SE recognizes social and environmental issues regarding sustainability as business
opportunities and integrate this in their core objectives.
Business growth
The companies have experienced or are experiencing a period of business growth (increase in turnover/employees) and have at least entered the growth stage of the venture life-cycle process.
Sustainability-driven purpose
The companies should still follow their sustainability-driven purpose (Parrish, 2010). This means that CSR-practices should be integrated to their core business objectives.
‘Successful’ sustainable entrepreneurial firms
To be considered as a ‘successful’ sustainable entrepreneurial firm, the company should be organizationally secure, meaning that they are growing or stable and not declining or at financial risk.
Company age/size
The sustainable entrepreneurial firms should be old enough to have entered at least the growth stage of the venture life-cycle process. Active involvement of the founder and original stakeholders is also important (Parrish, 2010). These companies often fit the criteria of small and medium sized enterprises (SMEs), which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro’ (European Commission., 2005). However, the number of employees is not considered as upper limit.
Location The companies are based in Europe. Taken into account are the governance systems that are applied within Europe. Areas to focus on are The Netherlands, Germany, Austria and Scandinavia.
Selection of potential cases has been carried out by assessment of participants of the Ecostyle Fair in
Frankfurt (August 2013) and by using information of formal network organizations that function as
platform for sustainable entrepreneurial initiatives. See appendix A - case study protocol for a list of
companies that have been assessed, contacted and did participate in this case study research.
Besides, social media, such as Facebook and LinkedIn have been used to spread a call to sustainable
entrepreneurs to participate in this case study research project. The use of social media has resulted in
valuable contact persons and has facilitated the access to the preferred respondents for the case studies.
Below, each participating company will be shortly introduced:
46
Willem&Drees Willem&Drees is a Dutch sustainable entrepreneurial firm that is founded by Willem Treep (respondent)
and Drees Peter van den Bosch in 2009. The aim of Willem&Drees is to connect consumers with regional
food, by developing short food supply chains. The currently have employed 26 employees. The company
is expanding by increasing the selling points of Willem&Drees fruits and vegetables. The individual case
report of Willem&Drees can be read in appendix B1.
Tony’s Chocolonely Tony’s Chocolonely (Tony’s) has been founded by Teun van de Keuken as a statement of journalism in
2005, which formed the basis of the mission of the company: realizing 100% slave-free chocolate industry.
The company has currently employed 20 employees. Tony’s has experienced high growth since the current
director took over the management of the company in 2010. The respondent of this company is the brand
manager, who is responsible for the management of the identity of the firm. The individual case report of
Tony’s can be read in appendix B2.
Dopper Dopper is a fast growing Dutch SEF that is founded by the current owner (respondent) in 2010. The aim of
Dopper is to decrease plastic waste by developing a ‘perfect’ re-usable water bottle that is sustainable and
has an attractive design. By promoting clean drinking water, Dopper contributes to the decrease of the
use of single-use plastic. Currently, 10 regular employees, 3 freelancers and a volunteer are employed in
the Netherlands. Besides, the company is expanding to Asia, Denmark, USA and Germany. Two embassies
are opened in Asia and Denmark. The individual case report of Dopper can be read in appendix B3.
Mywheels Mywheels is a Dutch sustainable entrepreneurial firm founded by Henry Mentink (respondent) in 2003.
The organization was called Wheels4all until it changed to Mywheels in 2010. The aim of the company is
to offer a concept of local car-sharing in order to efficiently organize the proprietorship of second cars in
the Netherlands. Currently, Mywheels has 8 regular employees and about 200 so called ‘car-proprietors’
who are considered as employees as well. The company has experiences stable business growth since its
establishment. The individual case report of Mywheels can be read in appendix B4.
Werkhaus Werkhaus is a German sustainable entrepreneurial firm that is founded by Eva Danneberg (respondent)
and her husband in 1992. The aim of the company is too produce environmental friendly products (e.g.
displays, toys, furniture made of (wood, paper & rubber rings), that can be completely recycled; 100%
made in in house and employment of local asylums and disabled people is stimulating local economy.
Currently, they have employed 160 employees. Sales levels are increasing and customer base is expanded
by opening Werkhaus shops. The individual case report of Werkhaus can be read in appendix B5.
Van Eigen Erf Van Eigen Erf is a Dutch foundation that is founded in 2003 by Iris van der Graaf (respondent). Foundation
Van Eigen Erf has the aim to realize short food supply chains in which organic seasonal products are sold
locally and directly from farmers to customers. The foundation does not work with regular employees but
hires freelancers. The amount of freelancers depends on the activities of the foundation. Currently more
47
than 100, relative small scale-farmers have joined the foundation. The individual case report of Van Eigen
Erf can be read in appendix B6.
Triodos Bank Triodos Bank is a Dutch bank that is founded in 1980 by four people who are called ‘the foundering fathers’.
Two respondents have participated in the interview, which are Thomas Steiner (Head of Corporate
Communications) and Nienke Leenstra (Manager Corporate & Public Affairs). Triodos Bank has the aim to
use money with conscious thought about its environmental, cultural and social impact 1 by creating
transparency. Currently they have employees about 950 employees. They are still growing, with an
average growth rate of 21% over the past ten years. The individual case report of Triodos Bank can be read
in appendix B7.
Quality of selected cases Table 6.2 shows to what extent the selection criteria have been met. The second part of this table is
focused on general characteristics of the selected case studies.
Table 6.2 - Fulfilment of selection criteria
Selection criteria Willem&
Drees Mywheels Tony’s Dopper
Van Eigen Erf
Werkhaus Triodos Bank
Sustainable entrepreneur
At least growth stage have been entered
Sustainability-driven purpose
‘Successful’ SEFs -
SME -
Location NL NL NL NL NL DE NL
General characteristics
Date of establishment 2009 2003 2005 2010 2003 1992 1980
Employees (incl. freelancers)
26 8 + 200 car proprietors
20 13 Freelancers + 100 licensees
160 ±950
Management team Yes Yes Yes Yes No (board of foundation)
Yes Yes
Documenting strategy Yearly
Adapting main
strategy when
required
Yearly; incl. translation
to each department
Yearly
Once; occasionally processing
small changes
Yes, but not
regularly
Yes, strategy (10 year time span) is yearly
translated
Organizational structure
Flat Sociocratic Flat Flat Flat Hierarchical Matrix
1 Company document – Triodos Bank (passport)
48
A few remarks should be made regarding case fulfillment and the selected cases. First, six out of seven
selected cases can be characterized as ‘successful’ in terms of current growth or stability and not declining
or at financial risk. Dopper cannot be marked as successful following this definition, which is caused by the
fact that they have been financially declining during the period of this research project. Currently they are
developing towards financial stability again. Second, each selected case has at least entered the growth
stage of the venture life-cycle process, because they are characterized and financially successful and they
have to manage business growth (Scott and Bruce, 1997). Second, Triodos Bank cannot be classified as an
SME, since they exceed the maximum number of employees and the maximum turnover that are included
in the definition of SMEs. Nevertheless, the number of employees is not considered as an upper limit.
Third, Werkhaus and Triodos Bank are the oldest firms within the sample. The data of the case study
research do not provide exact information to classify the stage these companies are in. Based on an
educated guess, both companies have reached the maturity stage. Since the venture life-cycle is a model
for small business growth, the maturity stage does not imply that the companies have stopped growing.
Fourth, the selected cases have different numbers of employees employed. At Mywheels, both regular
employees as well as car proprietors (which are considered as employees by this firm) are taken into
account. At Van Eigen Erf, only a few employees are employed on freelance basis. The number of
freelancers varies dependent on the projects they are carrying out. Because Van Eigen Erf is a foundation
with associated licensees (farmers) that are part of the organizational culture of the foundation, they are
taken into account as well. Dopper has the lowest amount of employees; this number has increased to 13
during this research project because some freelancers are (temporarily) not hired. Fifth, all companies
have formed a management team, except for Van Eigen Erf. This can be explained because of the fact that
they have a board of the foundation. The foundation is considered too small to form a management team
on top of that. Finally, the organizational structure of four out of seven cases is classified as flat, because
only two or three hierarchical levels exist within these companies (See appendix B1; B2; B3; B4). The
organizational structure of Mywheels is based on the sociocratic circle-organization method. SCM can be
seen as a management tool to efficiently and effectively design and lead an organization. This method is
based on a dynamic process, consisting of three functions that together form a closed circle: (1) leadership;
(2) implementation; and (3) measurement (see appendix B4 for a more extensive explanation of SCM). The
organizational structure of Werkhaus is classified as hierarchical, because the founders have create more
four hierarchical levels in which are connected through management and supervisory functions.
49
6.4 Operationalization
The interviews are conducted to explore relationships between business growth and the CSR-identity on
the one hand and the maintenance of the CSR-identity and the deployment of mechanisms of CG during
the growth and expansion phase of the venture life-cycle process on the other hand. Besides conducting
interviews with the founder (or other representative) of each case company, information from their
websites and company documents (if accessible) are collected and analyzed to gather an in-depth
understanding of the deployment of governance within these firms. The interviews are divided in three
parts, which are described and operationalized below. The complete semi-structured interview can be
read in appendix A3. As part of the case study protocol, an interview protocol is used during the execution
of the interviews, which is presented in appendix A4. The quality, sources and interpretation of the
interview questions is presented in appendix A4 as well.
Part 1
The aim of the first part is to gather information on the background of the founder, his SEF (table 6.3) and
the CSR-identity (table 6.4).
Table 6.3 – General information about SEF and founder
Variables Formulated question/statement
SMEs
SME characteristic variables Bos-Brouwers (2010):
a. Size How many employees, measured in full time equivalents
work at your company? (1-9/10-49/50-259/250 or more)
b. Complexity organizational structure
Simple organization construction – complex organization construction (flat vs. hierarchical structures) -> open question
c. Documentation strategy and management
No written records of strategy and management – all strategy and management recorded in written documents -> open question
d. Decision making You make your own decisions (central decision making) –
employees have delegated decision powers (decentralized decision making) -> open question
e. Short term versus long term focus
My company focuses on maximum one year ahead (short term focus) – my company looks longer than one year ahead (long term focus) -> open question
Variables Formulated question/statement
Sustainable entrepreneurial firms (SEFs)
Choi and gray (2008):
a. Relevant business experience
Could you explain your previous business experience before starting up your firm?
b. Idealism The concept of my business is originated based on idealism
and my personal drive to make a small difference in the world (Likert scale 1-5: Totally agree – totally disagree)
c. Sustainability as differentiation
I actively promote the core values and the sustainable business practices to differentiate my firm within the marketplace (Likert scale 1-5: Totally agree – totally disagree)
50
d. Organizational culture I created an organizational culture that supports the CSR-
identity of my firm (Likert scale 1-5: Totally agree – totally disagree)
e. Employee well-being How do you manage and sustain the well-being of your
employees?
Table 6.4 – Operationalization CSR-identity
Concept Operationalization Variables Question/statement
CSR-Identity
Philosophy
(Melewar, 2003): a. Mission b. (Founder’s) values c. Vision
(Based on Melewar, 2003): What is the reason of the existence/the purpose of the
company? What does the organization stand for in terms the most
important values? How do these values correspond with your personal values?
Where is the company going in terms of the desired future you hope to achieve?
Culture (Baumgartner, 2009): a. Values
(Partly based on Melewar, 2003): What are the core values of your company?
What, in your opinion, are the strengths and weaknesses within the culture of your firm?
Part 2 The second part is focused on the first proposition (P1), which is to explore the relationship between business growth and the CSR-identity of the firm. It is important to know which of the crises (section 3.1.2; 3.3) have been occurred within each participating firm. In case a crisis has been present during the growth of the firm, the consequences for the CSR-identity will be asked subsequently. It is important to know how the company has anticipated to and managed the crises, in order to be able to determine whether they have deployed certain mechanisms of CG during or before these issues. In table 6.5 the operationalization of the semi-structured interviews on business growth can be read.
51
Table 6.5 – Operationalization business growth
Concept Operationalization Variables Question/statement
Business growth
Overtrading Managing uncontrolled growth (Scott and Bruce, 1997)
Did you experience periods of overtrading during the growth of your company? (When?) If yes: What consequences did overtrading have for the identity of your firm? How did you anticipate to and manage this?
Barriers regarding maintenance and delegation of control
(Koeverden, 2012): a. General span of control b. Geographic span of
control c. Functional span of
control
Did you experience problems regarding maintenance and delegation of control due to : An increase in the number of employees (When?) (Likert scale 1-5) Expanding to new geographic areas (When?) (Likert scale 1-5) Expanding to new customer markets (When?) (Likert scale 1-5) Expanding product/service portfolio (When?) (Likert scale 1-5) Forming a management team (When?) (Likert scale 1-5) If yes: What consequences did an increase of employees/ expanding to new
geographic areas/ expanding to new customer markets/ expanding product or service portfolio/ forming a management team have for the identity of your firm?
How did you anticipate to and manage this?
Barriers regarding decentralization and formalization of structures
(Davidsson et al., 2007): a. Separation between
management and control
b. Bureaucratization
Did you experience problems regarding decentralization? (When?) Did you experience problems regarding changes in organizational structures? (When?) If yes: What consequences did decentralization/changing the organizational structures
have for the identity of your firm? How did you anticipate to and manage this?
Organizational culture crisis
a. Level of commitment to the firm (Scott and Bruce, 1997)
b. Homogeneity of organizational culture (Koeverden, 2012)
To what extent did you experience a difference in the level of commitment to the firm between you and employed managers/employees? (When?)
How did the growth of your company influence a shift in the homogeneity of the organizational culture?
What consequences did the differences in the level of commitment/the shift in the homogeneity of the organizational culture have for the identity of your firm?
How did you anticipate to and manage this?
52
Part 3 The third part of the interviews is aimed at the second proposition (P2), which is to explore to what extent the mechanisms of CG are used or
function as moderators on the risk of dilution of the CSR-identity during business growth. In chapter 4.3, five mechanisms that could be applied by
SEFs as mechanisms of SCG have been distinguished. For this part of the interview, the researcher needs to require information of the effectiveness
of each mechanisms as steering instruments regarding the maintenance of the CSR-identity. In table 6.6 the semi-structured interview on
sustainable corporate governance are operationalized.
Table 6.6 – Operationalization sustainable corporate governance
Concept Operationalization Variables Question/statement
Sustainable corporate governance
Strategy and Planning
a. CSR-identity as stability (Abimbola and Kocak, 2007
b. Strategy process/content/context (Parum, 2006)
c. Stakeholder influence (Spitzeck & Hansen, 2010)
d. Counseling & advice (Filatotchev et al., 2006)
e. External communication (Parum, 2006)
The CSR-identity is perceived as a factor of stability to base decisions on when (Likert scale 1-5):
o Developing strategy (process) o What the strategy actually is (content) o How to anticipate to internal/external circumstances (context)
To what extent do the following stakeholders have influence on decision-making regarding strategy (Likert scale 1-5):
o Managers; Employees; Customers; External parties To what extent has strategy and planning been used as steering instrument
regarding decision-making on the management of the CSR-identity? Who is/are involved?
How is the strategy and planning communicated to external stakeholders with regard to the maintenance of the CSR-identity?
To what extent are strategy and planning used to maintain the CSR-identity of the firm?
Resource management
a. Knowledge, competences, skills (Foss & Mahnke, 2000)
b. Personal values (Choy and Gray, 2008)
When hiring a new manager/employee the following elements are of importance (Likert scale 1-5):
o Level of knowledge o Possession of competences and skills o Personal values o Match between core values and personal values of the manager/employee
How do you make sure the new hired managers/employees met your requirements?
To what extent is the acquisition of human resources used to maintain the CSR-identity of the firm?
53
Sustainable corporate governance
Co-ordination
(Parrish, 2010) a. The principle of resource
perpetuation b. The principle of benefit
stacking c. The principle of strategic
satisficing d. The principle of quality
management e. The principle of worthy
contribution f. Incentive mechanism (Foss &
Mahnke, 2000)
To what extent do you select and use resources that fit within the CSR-identity of your firm?
To what extent do you take into account the consequences of the decisions and actions of your company for your stakeholders?
How do you measure the realization of your CSR-objectives? To what extent does your CSR-identity influence decisions to realize ‘better’
(quality) rather than how to realize ‘more’ (quantity)? To what extent are the benefits of the organizational outcomes divided among
stakeholders of the firm? How do you spread the content of the sustainable message through the
company? (what methods used/to whom/how often) To what extent has co-ordination been used to maintain the CSR-identity
during the growth of your business?
Monitoring a. Codes of conduct/ corporate
guidelines b. Reporting
Are there any codes or guidelines that are used by managers/employees in order to monitor if behavior and taken actions fit within the CSR-identity of the firm?
How is reporting used to monitor whether actions are taken following the CSR-identity of the firm?
To what extent has monitoring been used to maintain the CSR-identity during the growth of your business?
Organizational culture
a. Strategic resource (Koeverden, 2012)
b. Values (Melewar, 2003) c. Sharing drivers/values of the
founder (Del baldo, 2012) -> see incentive mechanism
To what extent do you perceive the organizational culture of your firm as a strategic resource?
How do you use different values as a means to maintain the CSR-identity? How often do you spread and repeat your personal drivers and personal values
regarding the CSR-identity of the firm? (what methods used/to whom/how often)
To what extent has the organizational culture been used to maintain the CSR-identity during the growth of your business?
54
6.5 Conduction case studies – collecting evidence
The aim of the execution of multiple case studies is to develop a basis for organization theory
development. Within the context of this research, based on barriers of business growth which are
commonly encountered (section 3.1), it is attempted to show a relationship between business growth and
the risk of dilution of the CSR-identity of sustainable entrepreneurial firms. Also, an attempt is made to
develop theory on the deployment of different mechanisms of CG (section 4.3) as effective mechanisms
to maintain the CSR-identity of sustainable entrepreneurial firms. A list of potential, contacted and
participating SEFs is presented in appendix A1. Contacting potential cases has been done by using call and
e-mail protocols, which can be read in appendix A2.
During the execution of case study research at seven SEFs, interviews are conducted. The interviews have
been semi-structured; taking into account the limited time span per interview of one hour, open-ended
pre-formulated questions have been used to make sure all themes off relevance are discussed. However,
dependent on the provided answers by the respondent, certain themes have been investigated more in-
depth. The semi-structured interviews have been composed by using the operationalization in section 6.4,
which can be read in appendix A3. Besides interviews, documentation and archival records have been
collected if accessible. Also websites of the participating companies have been used to gather data of
relevance. The field procedures are documented in appendix A5, including an overview of the collected
data per participating company and a time schedule for conducting interviews, writing transcripts and
analyzing data. Both individual case reports and a cross-case analysis have been written by using a guide
for case study reports (appendix A6).
6.6 Reliability and validity
To substantiate the quality of this case study research design, three ‘tests’ will be applied. These are the
construct validity, the external validity and the reliability (Yin, 2003), which are discussed below. The
construct validity is increased because multiple sources of evidence have been used during the execution
of case study research. Next to interviews with the founder or a representative, the website of the
company, published articles by others and company documents (if accessible) have been studied and
included in the case study results. Besides, comparing data within and across case studies increases to
validity of multiple case study as well (Eisenhardt, 1989).The external validity is determined by the extent
to which the scientific findings can be generalized (Yin, 2003). One of the aims of case study research is to
analytically generalize a particular set of results to some broader theory (ibid.). To improve the external
validity, multiple case studies are executed. Although multiple cases are investigated, the generalization
of the results of this case study research could be considered as relative low due to the limited number of
cases (7) that have been explored. However, a limited number of cases is required to realize depth. This
research is explorative, meaning that resulting statements could be tested in future research. In order to
increase the reliability of this research and to create the possibility to repeat the operations of the case
study research, a case study protocol has been used (appendix A) and a case study database has been
maintained in order to structure all data that has been collected and processed during the period of case
study research. This database can be requested from the author. An exception is made for the transcripts
of the interviews, which are included in appendix B.
55
7 Results and discussion The aim of this research is to discuss the results of case study research at seven SEFs. In this section, the
cross case analysis is presented in section 7.1. Then the results are compared to literature research in
section 7.2. This chapter is ended with a conclusion in section 7.3.
7.1 Cross case analysis
In this section a cross case analysis report is written. The results of the individual case studies are used as
input to provide a comparative analysis of the sustainable entrepreneurial firms. In appendices B1-B7,
individual case reports of each company can be read. In section 7.1.1, the characteristics of the SEFs and
their CSR-identities are discussed. In section 7.2.2, experienced barriers of growth and their consequences
on the CSR-identities of the case companies are compared. In section 7.2.3, an analysis of the approaches
to the deployment of corporate governance of the different case companies is carried out.
7.1.1 Characteristics of the SEFs and their CSR-identities
Characteristics of SEFs In section 2.2, several characteristics of sustainable entrepreneurial firms are defined. The results of the
individual case reports imply the defined characteristics are confirmed by all cases. In table 7.1, an
overview of the scores of each case is presented, which will be discussed below. A Likert scale (1-5) has
been used to scale the whether or not the respondents recognize each aspect as a characteristic of their
own firm.
Table 7.1 - Scores on characteristics of SEFs (Likert scale 1-5)
Willem & Drees
Tony’s Dopper Mywheels Werkhaus Van
Eigen Erf Triodos
Bank
Organizational concept based
on idealism and personal drive to
make small difference in the world
5 5 5 5 4 5 5
Differentiate by using
core values and sustainability
related business activities
5 5 5 5 4 5 5
Identity is supported by the
organizational culture 4 4 5 5 5 3 4
Employee well-being is
considered as important 3 5 5 5 4 5 4
All respondents argue that their organizational concept is based on idealism and the founders’ personal
drive to make a small difference in the world, which they explain by examples. Willem&Drees have quit
their jobs to realize their dream “to make the world a little prettier”, which stimulated them to commit
their talents to connect people with regional food, which has become the mission of the company. The
founder of Tony’s Chocolonely (Tony’s) has initiated the concept as a journalistic statement, which he
finally translated into the mission of the firm. Dopper is founded because of the founders’ drive to
contribute to a structural solution for the enormous amount of plastic waste, which is explained as follows:
“The concept is originated by myself, it is exactly what I want it to be. I just want to structurally contribute
56
to the world.” Both Mywheels and Van Eigen Erf argue they wanted to share knowledge that has been
created on a small scale, in order to function as an example and spread the concept to a larger public. The
founders of Triodos Bank were personally driven to realize transparency within the financial industry, by
choosing to focus on sustainable investments. Creating transparency allows people to influence the
direction of society. Werkhaus is the only company that scores a 4, which the respondent explains by the
fact that the founders have used their personal, idealistic lifestyle as a basis for the organization.
All cases use their core values and sustainability related business activities as a means to differentiate the
company within the market. The two cases that are most actively doing this, are Tony’s and Dopper. Tony’s
is evaluating customer experiences with regard to their sustainability message in order to learn how to
approach different kinds of customers. Dopper is putting emphasis on the ‘Dopper-message’, which is the
most important aspect of the existence of Dopper and the sales of the bottles. They use a ‘brandbook’ to
differentiate their approaches to different customer groups. Important to mention is that Triodos Bank
sees differentiation within the market as a side-effect of realizing their objectives. Therefore, they
emphasize priority of the mission-driven objectives over differentiating their organization within the
market.
Three out of seven companies confirm their organizational culture to be fully supporting their identity;
they believe their strong organizational culture is built from the start-up phase of the company:
[Dopper] “The representation of Dopper is integrated in the DNA of the company, which is a
strength. So, as far as I know Dopper is experienced as an honest organization.”
[Mywheels] “I considered culture and identity as one and the same thing.”
[Werkhaus] “Our main intention is to be like a real big family that is working together and having a
nice life.”
Willem&Drees, Tony’s and Triodos Bank scored a four on how the organizational culture is supporting the
identity of the firm. The respondent of Willem&Drees considers culture as becoming gradually more
important, which he positively relates to the growth of their firm. The respondent of Tony’s mentions the
organizational culture does support the identity, although it could be improved on several aspects:
[Tony’s] “I really think our company is living/breathing the values and the people are extremely
involved and they really embrace the entrepreneurial aspects of the firm. “
Finally, Van Eigen Erf has scored lowest (3) on this characteristic. The culture that is established among
licensees (farmers) is supporting the identity of the firm (3), but the licensees do have a relatively
individualistic attitude. The results imply that the organizational culture does support the identity of the
cases. However, each company accentuates different aspects within their culture.
The well-being of employees is considered as highly important by five out of seven cases. Dopper and
Tony’s show this by creating a proper balance between work and fun. Werkhaus wants to contribute to
the quality of life of their employees, which is one of the objectives of their firm. The respondents of
Triodos Bank argue that realizing their objectives is inseparably linked to employees that are feeling at
ease. Although the mission of the organization is mainly important over this particular element. The
respondent of Van Eigen Erf believes they should care about people as much as they do about animals,
which is high. Employee well-being is considered as most important by Mywheels. The founder mentions
he considers close involvement of people as highly important several times. All companies are scoring
57
relatively high on this characteristic, except for Willem&Drees, who score a three. Since employee well-
being is part of the organizational culture, this result corresponds with the fact that Willem&Drees believe
their organizational culture is becoming of increasing importance as the firm increases in size.
CSR-identities The CSR-identities of the cases can be compared on their environmental, societal and economic content.
Although the emphasis on environmental and societal issues is different among the cases, they are all
actively striving to contribute to a solution to or the improvement of certain environmental and social
issues. An overview of the CSR-identities is presented in table 7.3. Two notes should be made:
The respondent of Mywheels argues making profit is not about generating economic value but by
striving to realize certain ideals, which require money. Therefore, the economical part of the CSR-
identity of Mywheels differs from the economical part of the CSR-identity of the other companies. In
other words, part of the objectives of the other cases is focused in becoming financially successful.
Van Eigen Erf differs from the other organizations, since their legal form is a foundation. This means
their economical aspect is not focused on generating profit themselves but the CSR-identity is focused
on supporting licensees (farmers) to realize/maintain financial independence and supporting market
development for regional food.
Core values Since the organizational culture is an important element of the CSR-identity of a firm, the core values of
the cases are of interest. During the interviews, each respondent was asked to name the core values of
their firms, which are presented in table 7.2. Willem&Drees have integrated their core values in a so called
‘credo’ (see section 7.2.3 – monitoring). It is remarkable that the core values of Tony’s and Triodos Bank
are immediately explained by the respondents, while the others only name a list of values. One of the
values of Van Eigen Erf is not related to their CSR-identity, but rather to a so called ‘slow food lifestyle’.
The respondent explains that their identity has been broadened over time, in order to put emphasize on
the quality of food as well.
Important to note is that the mentioned core values of each company do not necessarily refer to their CSR-
identities directly, yet most of them stimulate behavior that fits their identity. Except for the values of
Triodos Bank, which can be distinguished in two categories; the first two values that are related to the
CSR-identity of the firm and the final two values that are linked to how the organization is realizing its
mission-driven objectives.
58
Table 7.2 - Core values of the cases
Companies Core values
Willem&Drees Transparency, honesty, mutual trust, interdependence, exploratory, enjoyment and courage.
Tony’s
Entrepreneurship; Tony’s started as a pioneering company, which is still visible through
the fact that they always try finding new ways to do things;
Opinionated, which is translated into doing things in their own way (‘Tony’s twist’);
A critical attitude towards the cacao industry and towards themselves (crazy about
chocolate and serious about people);
Fun along the way (crazy about chocolate and serious about people)
Dopper Honesty and respecting others.
Mywheels Sharing both responsibilities and profit, creating an organization for everybody and together building the future.
Werkhaus The employees should be satisfied, they should take own responsibility and work to realize high quality of work.
Van Eigen Erf Short connections, sustainability in terms of avoiding food to be transported long distances, caring for food.
Triodos Bank
Transparency; They realize transparency by choosing projects to strive for
sustainability and quality of life. When transparency is realized, depositors and
investors are able to influence the direction of society.
Sustainability is translated in advancing quality of life, both regarding the environment
as regarding society.
Excellence represents how Triodos Bank wants to realize its objectives.
Entrepreneurship; Triodos Bank embraces an entrepreneurial attitude in offering
financial services.
Also, the respondents have been asked to what extent the core values of their companies are
corresponding with their personal values. The case study result imply that the personal values of the
founders have been an important driver to establish their company. As an example, the personal values
of Willem Treep (co-founder) can be compared as similar to the core values of the firm. However, the core
values of the firm are defined more narrow since it should fit the business side of the firm as well. The
respondent of Tony’s is the brand manager of the firm; she explains her personal values highly correspond
with the core values of the firm. She experiences that all employees have affinity with the company values
to a certain extent. This result implies that employees of Tony’s are selected based on their personal values
(see section 7.2.3 – HRM). The personal values of the founder of Dopper to structurally contribute to a
solution to plastic waste problems are similar to the core values of the firm. Overall, the personal values
of the founder function as an important source for defining the core values of the firm.
59
Table 7.3 - CSR-identities divided in environmental, societal and economic aspects
2 http://www.tonyschocolonely.com/over-ons/veelgestelde-vragen/ 3 http://www.tonyschocolonely.com/over-ons/veelgestelde-vragen/ 4 http://nl.dopper.com/en/mission/ 5 Company document provided by the respondent - MyWheels als Nieuw Business Model
Companies Environmental (), Societal () and Economic (€) aspects
Willem&Drees
Willem&Drees are contributing to low distance transport by realizing short food supply chains; less CO2 emission. Their products are cultivated by sustainable methods and taking into account biodiversity
By stimulating production of local food that can be sold locally through building long term relationships with stakeholders and connecting farmers with consumers, they support local food supply chains
€ They have the aim to realize entrepreneurship and idealism on the long term by growing into a financial successful and stable organization
Tony’s
The chocolate bars are wrapped with environmental friendly materials such as uncoated, Forest Stewardship Council (FSC) recycled paper 2
They stimulate their suppliers of cacao to implement environmental friendly production methods 3
‘Serious about people’ is expressing their effort to realize a 100% slave-free cacao industry
Tony’s is certified a fair trade company; this is realized through mapping a fully transparent ‘bean-to-bar chain’; They realized this as the first in the cacao industry
€ One of their aims is to show the cacao industry that it is achievable to be a profitable supplier of 100% slave-free chocolate
Dopper
Dopper is BPA free and produced of polypropylene (Dopper Original)/ or stainless steel (Dopper Steel) By promoting the use of (filtered) tap water, Dopper contributes to the decrease of the use of single-use plastic A decrease in single-use plastic bottles leads to less plastic ending in the plastic soup.4 Dopper is compensating for its CO2 emission.
5% of turnover is donated to realize water projects in Nepal € By being economically successful, more people will be able to buy a Dopper through international expansion.
Mywheels
Sharing a car makes people more conscious about choosing a means of transport; they only use a car if necessary All cars owned by Mywheels are certified with an A-label
They are striving for convenient neighborhoods, by decreasing the total number of cars through car-sharing.
People are key to Mywheels; sharing cars provides easy access to a car to everybody € “We all benefit”; Mywheels is about ideals, not about profit. People, planet and money (instead of profit) are seen as equally
important5
60
6 http://report.triodos.com/en/2012/impactandengagement/environmentalreport.html?cat=b 7 http://report.triodos.com/en/2012/impactandengagement/environmentalreport.html?cat=b
Werkhaus
Werkhaus is using environmental friendly materials and production methods only They use green power from renewable energy sources
They are contributing to employment in order to reverse the trend of migration away from their area.
One of the objectives is to create a good life-work balance for employees, which include: ▫ People that asked for asylum (16 different nations). ▫ 25 employees that are limited by physical or emotional disabilities. ▫ They employ young people as apprentices to teach them one of the six professions they offer.
€ Profit realization is not seen as the most important objective, however financial sustainability is important for the existence of Werkhaus
Van Eigen Erf
Low level of CO2 emission due to short distance transport All products that use the brand name of Van Eigen Erf are organically cultivated.
Small-scale farmers get a fair chance of existence through the foundation
The foundation functions as a platform which lowers barriers to collaboration among farmers € The licensees are financially independent € The foundation contributes to increasing the market for regional food by developing a national applicable brand name (Van
Eigen Erf) which increases the value of the products
Triodos Bank
Financing entrepreneurs and enterprises developing innovative ways to combat climate change6 Monitoring of own environmental impact as an institution through an internal environmental policy, an environmental
management strategy and measuring its environmental performance7
Realizing transparency by communicating how they use money that is entrusted to them by depositors and investors.
Financing projects that benefit society € Being profitable because of being sustainable
61
7.1.2 Experienced barriers of growth and the consequences for the identity of the firm
The aim of this sub-section is to illustrate the impact of business growth on the CSR-identity of the
companies that participated in this case study research. Literature study has led to four different barriers
of growth which the SEFs could have encountered during the development of their firms. These barriers
have been used as reference points in order to investigate the impact of growth on the CSR-identity of the
cases. Below, the business growth that has been experienced by the companies is compared first. Then,
an overview of the experienced barriers of growth is presented. Subsequently, each barrier of growth will
be discussed. This section ends with concluding remarks.
Comparing the business growth of the cases As can be seen in table 6.2 (section 6.3) a variation in the age of each case can be noticed. Also, the business
growth they have experienced differs among each company. Six out of seven cases, except for Van Eigen
Erf, did grow by increasing their number of employees. Furthermore, the growth of Willem&Drees is
characterized by an increase in selling points and farmers. The growth of Tony’s has been re-boosted since
2010, when the current director took over responsibilities. Since then, sales has been growing due trying
to balance between crazy about chocolate and serious about people. The growth of Dopper is
characterized by their international expansion, both through sales channels and the opening of three
international branch offices. Also, Triodos Bank has grown through international expansion. Important to
note is that they experienced a stable growth rate of 21% over the past ten years. Werkhaus has doubled
in size in 2008. The production capacity of Werkhaus is still expanding and they have opened seven
‘Werkhaus shops’ throughout Berlin and Hamburg over the past four years. The growth that is experienced
by Mywheels differs from the previous discussed firms, because they have decided to grow with a stable
and relatively slow pace of growth. A milestone which should be named is the platform they have
developed in 2010, which provided access to the concept of sharing cars to an extended public. Finally,
Van Eigen Erf did not grow in numbers of employees, since they only hire freelancers when required.
Although, the number of licensees (farmers) did grow fast in their early years.
Impact of business growth on the CSR-identity By comparing the results of the individual cases, it becomes clear how organizational growth has
influenced the CSR-identity of the case companies. The experiences of each case regarding barriers of
growth lead to results on if and how the CSR-identity has been affected. The barriers of growth that are
experienced by the different companies are organized in table 7.4. Since not all barriers of growth have
directly influenced the CSR-identity of the cases, the barriers are marked in two different ways. The circle
() indicates that a company has experienced a barrier of growth which negatively impacted certain
aspects of the firm, but this has not led to any noticeable consequences for the identity of the firm. The
checkmark () indicates that a company has experienced a barrier of growth which have negatively
impacted certain aspects of the firm and might also have led to certain consequences for the identity of
the firm.
A few notes should be made:
Barriers with regard to the maintenance of control and delegation have been divided in barriers caused
by national growth and barriers caused by international expansion. Since Dopper and Triodos Bank are
62
the only companies that have expanded internationally, questions regarding internationalization were
not applicable to the other cases.
Mywheels did not experience any barriers of growth at all. This could be partially explained by their
stable and relatively slow pace of growth. The application of the sociocratic circle-organization method
(see 6.3 and appendix B4) might contribute to the wish of the founder to spread the concept of the
firm to a wide range of people while remaining close and personally involved, which is common within
small firms.
Triodos Bank is the only case that has experienced barriers of growth, of which none have led to any
consequences for the CSR-identity of the firm. This could be partially explained through the fact that
a large group of people has been involved with the establishment of the firm. Finally, four persons
have been named as ‘the founding fathers’.
Table 7.4 - comparing experienced barriers of growth
Willem & Drees
Tony’s Dopper Mywheels Van
Eigen Erf Werkhaus
Triodos Bank
Overtrading/uncontrolled growth
Mywheels has
experienced no barriers of business growth due
to their relative
stable pace of growth
Barriers with regard to control and delegation (national)
-
Barriers with regard to control and delegation (international)
n.a n.a n.a n.a
Barriers with regard to decentralization and formalization
- - -
Organizational culture crisis - - - - - -
Changes in organizational culture - - - -
Indirect expression of identity - - -
= The company has experienced the barrier of growth without noticeable consequences for the CSR-identity of the firm
= The company has experienced the barrier of growth which might have influenced the CSR-identity of the firm
Below, each barrier of growth will be discussed and the results will be substantiated by relevant quotes of
the respondents.
Overtrading/uncontrolled growth Six out of seven companies, except Mywheels, have encountered periods of overtrading, because they
experienced a certain form of uncontrolled growth. This barrier has influenced the identity of three
companies, namely Willem&Drees, Dopper and Van Eigen Erf. A notable result is that the respondent of
Dopper is the only one who explains to have experienced a negative influence to the CSR-identity.
[Dopper] “Well, if the focus is not on expressing the mission, it is harder to achieve it. […] I am a large
part of the message of Dopper. And this is what I want it to be, because I see it as my task
within the company. But I have been far too busy with internal issues. And that has become
visible through marketing and in telling our story, which is neglected the past half a year.
Growth has led to a winding course.”
63
Another striking result is the consequences of overtrading turning out positively regarding the identities
of Willem&Drees and Van Eigen Erf. At Willem&Drees (W&D), the occurrence of overtrading has led to
decisions that increased the strength of their identity, by more strictly defining it. They have been using
the CSR/identity as guidance to deal with overtrading. This is substantiated by an example regarding the
sales of strawberries to Jumbo (Dutch supermarket).
[W&D] “We have experienced a period in which we could deliver strawberries to Jumbo, provided
that we would meet a certain price. This was not optimal from financial perspective. But, this
led to huge demand in volume, which we couldn’t operationally realize well. […] This has led
to the decision to further define our identity; that we really should focus on more special
products. At first hand, we were willing to bring ‘normal’ food products to local stores as well,
but the risk is too high.”
A sudden growth in licensees (farmers) directly after the establishment of Van Eigen Erf has allowed the
organization to specify the identity with a large group of involved farmers. This has led to high involvement
and commitment on organizational level.
Tony’s and Triodos Bank did encounter barriers as a result of overtrading as well, although no noticeable
negative consequences regarding the maintaining of their identity have been experienced according to
the respondents. Important to note is that the respondent of Tony’s argues they are aware of the
importance to manage the identity strictly during periods of overtrading/uncontrolled growth, which they
are still experiencing at the moment. At Triodos Bank, maintenance of the identity is perceived as a
continuous discussion. This is shown by the fact that employees throughout the organization could ask
whether certain decisions or actions still fit within their identity.
Overtrading/uncontrolled growth has led to a distraction from the management of the CSR-identity at
Dopper. The above presented results imply that overtrading/uncontrolled growth could be managed by
using the content of the identity of the firm as a basis in order to avoid a negative impact on the identity.
Also, being aware of the importance to keep managing the identity of the firm by regularly discussing it
seems of relevant importance.
Barriers regarding control and delegation (national) Growth could lead to problems regarding losing direct control and the need to delegate tasks and
responsibilities. Six out of seven companies have experienced barriers regarding control and delegation.
The results show that the founders of Willem&Drees, Dopper and Werkhaus are keeping direct control.
The founders of Willem&Drees and Dopper keep direct control over maintaining the identity specifically.
Up until recently, the founder of Dopper stayed involved in almost all business processes. As a reaction,
the newly employed business director is documenting function profiles and mapping business processes.
[Dopper] “First, I knew everything, but now I don’t know everything anymore. I don’t want to. And my
employees know this as well.”
This barrier has led to the development of more clear function profiles and business processes, which
provides employees with clearly delegated responsibilities and tasks. Also, it provides the founder with
more time to focus on managing and spreading the identity of Dopper, which he considers as his main
responsibilities.
64
At Willem&Drees (W&D), they have started to delegate tasks and responsibilities more early. The tasks
they have delegated mainly consist of tasks on operational level.
[W&D] “Although we delegate relatively many responsibilities, the real strategic and identity related
decision are made by me (respondent) and Drees (co-founder). So, when we do not agree
with something, it just does not happen.”
They formed a management team that seems to have a merely consultative role. The respondent explains
he is experiencing a change in his role from being an entrepreneur towards being a manager, which he
does not like. The results imply that the founders are still putting effort in maintaining direct control over
the firm.
At Werkhaus the founders prefer to keep direct control by doing things themselves, but they managed this
barrier by delegating certain tasks to other managers, employees or assistants. In order to overcome the
barrier of control and delegation, the founder has selected a person she is familiar with to take over some
of her responsibilities in order to make sure the identity is safeguarded:
[Werkhaus] “I employed a friend of mine to help me with the personnel problems […]. So I can be quite
sure that he is not running away from my concept. It is very important to me, that we are on
the same level.”
Van Eigen Erf has experienced barriers regarding control caused by geographical expansion within the
Netherlands. A discussion regarding the integration of regional names in the brand name would possibly
influence the identity of the firm. It was decided to allow integration of regional names. However, it turned
out that farmers did not use it in practice. Therefore, the brand name of Van Eigen Erf is still represented
as one brand name covering products of licensees throughout the Netherlands.
Tony’s, Mywheels and Triodos Bank are examples of companies that have delegated responsibilities and
tasks in a structured way. Keeping direct control is not the intention director and founder of Tony’s and
Mywheels. The size of Triodos Bank does not allow maintenance of direct control by its CEO. To anticipate
on barriers regarding delegation of tasks and responsibilities, Tony’s is regularly adapting its function
profiles. The sociocratic organizational structure of Mywheels (see appendix B4) is stimulating
decentralization and local control, and it allows close involvement of the founder. At Triodos Bank, growth
leads to differentiation of functions within the firm and increases in numbers of employees lead to the
need to adapt organizational structures. Triodos Bank anticipates to these barriers by further demarcating
the relatively informal function profiles and by being aware of the importance to hire employees based on
their skills rather than based on their intentions alone.
Barriers regarding control and delegation (international) Dopper and Triodos Bank are the only companies that are actively expanding internationally. A contrast
between the companies is the fact that barriers regarding control and delegation regarding international
expansion do influence the maintenance of the CSR-identity of Dopper, while they do not influence the
CSR-identity of Triodos Bank.
Due to the geographical distance, the founder of Dopper experiences barriers in controlling the expression
of the identity at the Dopper embassies:
[Dopper] “When zooming in to Hong Kong, they are really into cleaning plastic waste and they have a
perfect understanding of issues regarding clean drinking water in the world. But, their
65
business skills are less developed, meaning inventory management, invoicing, administration,
and more. In Hong Kong, the identity completely fits. Then, zooming into the other side of the
world; Denmark, these people have highly developed business skills, but they lack the ability
to express the identity of Dopper.”
Other barriers consist of difficulties regarding the recruitment of people who are able to both express the
identity in the right way as well as to build a professional and financial independent embassy. A franchise-
based formula for new ‘Dopper-embassies’ that has been developed by the founder and business director
of Dopper will take down financial risks of Dopper and time invested by the founder on the one hand. On
the other hand, this could lead to a decrease in control on the expression of the CSR-identity abroad. The
founder explains he should anticipate to the decrease in control by often visiting the ‘Dopper-embassies’.
A similarity between Dopper and Triodos Bank is that both companies have experienced difficulties
regarding finding the right people to build up international offices. Although Triodos Bank has positive
experiences with people that initiated the establishment of international offices themselves, they have
experienced that it takes effort to find people that are both able and willing to establish an international
office in a mission-driven way. Triodos Bank has delegated full responsibility to the international offices,
which requires coordination. In the near future Dopper wants to delegate full responsibility at the ‘Dopper-
embassies’ (100% of shares) as well, when new ‘Dopper-embassies’ are opened. However, the difference
is that Triodos Bank still has an executive board that is responsible of the entire Triodos Group including
the international offices (see deploying corporate governance – coordination). Both companies have
chosen to expand internationally by recruiting local people to build up the international offices, rather
than sending Dutch people abroad.
Tony’s has decided to start expanding internationally soon. While the founder and business director of
Dopper are both focussing on international expansion next to their regular responsibilities, the current
director of Tony’s has hired an employee who is fully focused on international expansion. This
substantiates the finding that the founder of Dopper is maintaining direct control, while responsibilities
are more delegated within Tony’s.
Barriers regarding decentralization and formalization Three out of seven companies experienced barriers regarding decentralization and formalization. At
Triodos Bank, they experience a continuous movement from centralization towards decentralization and
the other way around. Currently they are centralizing in order to be able to control growth. The barriers
they encounter regarding this movement do not have any consequences for their identity, but they do
influence the speeds of the implementation of changes.
The respondent of Dopper mentioned they have experienced barriers because of the existence of grey
areas within business processes. Therefore, they started to map business processes as a way of
professionalization. Additionally, due to growth, they had to split the team of employees and use two
office rooms. The founder experiences this as a barrier regarding his intention to spread the identity within
the firm. He recognizes the value of information that is spread within the office during the day:
[Dopper] “I really think that you could hear so many more things concerning the identity when all
employees share the same office room. Separation really has its impact.”
66
Van Eigen Erf did experience a barrier regarding decentralization as well. While it is more common that
companies change towards a more decentralized company due to business growth it is the other way
around at Van Eigen Erf. Centralization has led to a more clear understanding of the identity:
[Van Eigen Erf] “Now, you just have one direction to go that can be shared and followed by everybody.
[…] In the end, it is better for the unity of the organization.”
A consequence that is worth noting is the change in commitment to the organization among licensees.
This has changed from commitment on organizational level when the organization was decentralized to
commitment on operational level when the organization centralized in order to express one clear identity
as a whole. This has improved their ability to represent what the organization is and what it stands for in
a unified way.
Finally, interesting to mention is the impact of the sociocratic circle-method (SCM) that is implemented at
Mywheels. According to the respondent, this has led to high levels of responsibility among
employees/members as well as high commitment to the concept of the organization. Because decision-
making has been centralized since the establishment of Mywheels, it is not experienced as a barrier.
Organizational culture crisis None of the cases experienced a so called organizational culture crisis, which is characterized by different
levels of commitment and interests among managers within a firm. Two out of seven cases (Dopper and
Werkhaus) have experienced barriers regarding certain changes in their organizational culture. At Dopper,
the group of employees is becoming more diversified, which sometimes leads to a decrease in the level of
motivation. At Werkhaus, the high amount of employees leads to increasing anonymity. Nonetheless, the
overall commitment remains high according to the respondents of these firms. Changes in the
organizational culture did not lead to any noticeable consequences for the CSR-identity of these firms.
The respondents of Triodos Bank argue it is necessary to avoid a too homogeneous group of people. People
who have too little affinity with the values of the organization, will eventually leave the company again.
Another interesting result is the fact that the respondent of Tony’s argues that maintaining a group of
employees that share a certain set of values is a prerequisite and is more important within SEFs than in
traditional firms. Although employees at Tony’s do have totally different personalities, everybody shares
the values that fit the identity of the firm.
Other barrier of growth - Indirect expression of identity Just like Willem&Drees, Tony’s is experiencing a barrier of indirect expression of the identity through
retailers. As opposed to the reactive measures of Willem&Drees, Tony’s is taking measures to prevent
retailers from miscommunicating the identity of Tony’s. Dopper does not experience this as a barrier, since
the founder started to accept that the company should not depend on the retailer to spread the message.
The founder of Dopper argues the company should keep on spreading the message of sustainability to
consumers directly:
[Dopper] “I am convinced consumers are not deciding to buy a Dopper when they are in a store.
No, consumers decide they want to buy a Dopper in advance. Then they will go to a store
to buy a Dopper.”
67
Concluding remarks The case study represents a relatively diverse group of companies. Therefore, the experienced barriers of
growth and how this has or has not influenced the CSR-identity of these firms, should be perceived as an
illustration of the possible impact of business growth on the CSR-identity of SEFs. The case study results
show that the identity has been influenced during business growth at some of the companies. In table 7.5,
an overview on each barrier of business growth and a possible impact on the CSR-identity is presented.
The company that has experienced most barriers of growth that have led to consequences of the CSR-
identity of the firm too, is Dopper. The founder of Dopper argues that barriers of growth have led to a
winding course regarding the management of the identity of the firm. Overtrading could lead to both
negative and positive consequences for the CSR-identity. Negative consequences could be caused due to
distraction from managing the CSR-identity, while positive consequences could be caused due to using the
CSR-identity as a basis when anticipating to the barriers. Companies that have experienced the barrier
without any consequences for the identity mention they are aware of the importance to continuously
manage the CSR-identity. Barriers regarding maintenance of control and delegation could lead to negative
consequences for the CSR-identity. The results imply that keeping direct control by staying involved in
most or specific business processes decreases time to manage the CSR-identity during growth. A contrast
is presented between Dopper and Willem&Drees. The founders of both companies maintain direct control,
but Willem&Drees started more early with delegating tasks on operational level. This might have
contributed to the fact that they did not experience negative consequences for the CSR-identity.
Internationalization could negatively impact the CSR-identity when the search for people to build-up the
international offices is not given enough time to find the right people. Decentralization could lead to
negatively affect the CSR-identity according to the founder of Dopper, because he and his employees
cannot stay involved and updated on day-to-day developments regarding the CSR-identity anymore.
Finally, negative consequences of indirect expression of the CSR-identity could be dealt with both
reactively or preventively. This implies that no reaction could lead to negative effects on the CSR-identity.
Dopper experiences no effects, because perceive themselves as responsible for expressing the CSR-
identity.
The organizational culture crisis, which has been defined as a barrier of growth in literature research, has
not negatively influenced the CSR-identity of the cases. Although two out of seven SEFs did experience
changes in their organizational culture, no clear impact on the CSR-identity is be mentioned. This could be
explained by the size of the SEFs, because they have relatively low numbers of employees. Except for
Triodos Bank; the respondents explain that people who do not fit within the organizational culture will
leave the company eventually.
68
Table 7.5 - Concluding remarks on the possible impact of barriers of growth on the CSR-identity of SEFs
Negative (-) or positive (+) influence on CSR-identity No influence on CSR-identity
Overtrading (uncontrolled growth)
(-) Dopper; founder has been distracted from managing the CSR-identity in order to manage this barrier.
(+) W&D; founders decided to more strictly define the CSR-identity. (+) Van Eigen Erf; high increase of licensees after establishment led to
involvement of large group during establishment of CSR- identity.
Tony’s is aware of importance to manage CSR-identity during growth.
At Triodos Bank the urge to avoid dilution is felt, due to open discussion about CSR-identity.
Werkhaus did increase production capacity and is avoiding outsourcing.
Barriers regarding maintenance of control and delegation (national)
(-) Dopper; growth has led to unbounded functions, high work pressure and high involvement of founder in all business processes. This has decreased available time of founder to manage the CSR-identity. Direct control has been maintained.
(-) Werkhaus; growth has led to loss in direct control regarding management of employees, which is an important part of their CSR-identity. When noticed, the founder immediately responded by hiring a friend.
Van Eigen Erf; regional expansion could have led to decreasing the strength of the brand name by adding regional names to it. This has not been implemented in practice.
W&D; difficulties regarding delegation are experienced. No influence on CSR-identity because the founder have the final right to make decisions. Direct control is maintained.
Tony’s; growth in employees requires professionalization. Experience difficulties in separating tasks and responsibilities, therefore function profiles are regularly adapted.
Barriers regarding internationalization
(-) Dopper; difficulties in finding people who can balance between becoming financially independent and expressing the CSR-identity. Geographical distance leads to less direct control over business activities of international branch offices.
Triodos Bank; Finding the right people is dependent on whether locals or the bank itself initiated international expansion to a certain country. The former requires taking a long time to find the right people. Geographical distance requires interaction between the different offices and business units, which need to be of relevance for all parties.
Barriers regarding decentralization and formalization of structures
(-) Dopper; Decentralization has split the team of employees into two different rooms. The decreases sharing day-to-day information regarding the identity. The founder experiences this as losing control.
(+) Van Eigen Erf; A transition from decentralization towards centralization has led to a more clearly defined CSR-identity which is embraced in a unified way.
Triodos Bank; they experience a continuous movement from centralization towards decentralization and the other way around. Growth in employees requires formalization in organizational structures as well. They experience barriers because these changes are not implemented organically.
Indirect expression of the CSR-identity
(-) Willem&Drees; Not all retailers might take care of the presentation of the right products in Willem&Drees boxes. They are anticipating reactive by calling when they get notified.
(-) Tony’s; representation of the CSR-identity by retailers is dependent on the drivers of retailers to sell chocolate. CSR-identity might be underemphasized by some retailers. They anticipate preventive by organizing meetings with retailers.
Dopper; the founder has accepted that cannot expect the retailer to spread the CSR-identity with the same dedication. Therefore they decided to focus on consumers in order to stimulate them to decide to buy a Dopper before going to a shop. Buying a Dopper is not perceived as an impulsive action.
69
7.1.3 Deploying corporate governance to maintain the CSR-identity
The results of the individual case studies show that all organizations deploy at least one of the defined
mechanisms of corporate governance which help to maintain the identity of their firm. An overview of the
mechanisms of CG that are deployed by the cases is presented in table 7.6. Below each mechanism will be
discussed.
Table 7.6 – Comparing the deployment of corporate governance to maintain the CSR-identity
Mechanisms of CG Willem&Drees Tony’s Dopper Mywheels Van
Eigen Erf
Werkhaus Triodos
Bank
Strategy - -
Human resource management
- - -
Organizational culture
-
Monitoring - -
Coordination - -
Other informal mechanisms
Active stimulation of positive media attention/ free publicity
- - - - -
Social monitoring - - - - - -
Maintaining personal lifestyle
- - - - - -
Strategy
Five out of seven cases deployed strategy as a mechanism of corporate governance. Table 7.7 presents
relevant quotes to illustrate how strategy is deployed as a mechanism of CG in relation to the maintenance
of the CSR-identity of the cases.
Table 7.7 - The deployment of strategy as mechanism of CG in relation to the CSR-identity
Quotes
Willem&Drees
“You can actually see that the identity serves the strategy. Our mission is to connect people with local food. Our strategy is to realize this by creating transparency and making it more personal. For our identity, this means we are strongly people oriented. Because we are trying to move something by going against the flow, we are a little dominant in our actions.”
Tony’s
“The limited edition of white chocolate with raspberry and sparkling sugar was highly popular. We still receive daily requests to re-introduce this one. The reason we are not re-introducing is because white chocolate is made of cacao-butter only. We are not able to produce white chocolate according our own norms and quality yet. So we cannot produce slave-free cacao butter. Commercially, white chocolate with raspberry and sparkling sugar would be an absolute winner in terms of turnover, but we choose to keep following our mission, which is 100% slave-free chocolate.”
70
Dopper “It goes back and forth all the time. You are talking or from strategy perspective or from identity perspective […] The Dopper is the identity. And through this identity, strategy is developed.”
Mywheels
“One of the internal sides of a box corresponds with the identity and ‘who’ you are as an organization. This side describes who I am and who I want to be, but also the feelings I connect to my organization. This internal side is translated through the external side of strategy, which is how you are going to realize this identity. Those sides belong together and should always interconnect.”
The CSR-identity of the companies is used as a stable factor for strategy development and content. A
notable result is that identity is told to be leading for decision-making regarding strategy, by Willem&Drees
and Tony’s. The strategy of Willem&Drees is to grow when it fits within the identity of the firm only. A
striking example is the pears-incident of Willem&Drees (Appendix B1), in which the founders have avoided
stakeholders to start questioning the honesty of the identity by taking into account the importance of their
CSR-identity. Tony’s is using strategy to maintain the identity of the firm that is divided into three pillars,
by using a formal method (OGSM); this is considered as a more formal approach of deploying strategy as
a mechanism of CG. Each strategy document is started with a description the identity of the firm in order
to recall the importance of using this as a basis. Tony’s is the only company that translates the strategic
plan to all departments. At Triodos Bank, strategy is not deployed as a mechanism of CG in order to
maintain the identity, but strategy is fully based on the identity of the firm.
Both Dopper and Tony’s have distinguished different customer groups which they approach differently by
emphasizing different aspects of their sustainability message. Also at Triodos Bank, they have formulated
a specific target group in order to be able to express their identity in the right way. The founders of
Mywheels and Dopper argue strategy and identity are closely connected and interrelated. The founder of
Mywheels is explaining this clearly by showing that who you want to be as an organization (CSR-identity)
should be realized by implementing the strategy. At Van Eigen Erf, strategy is seen as a guidance, which is
shown by the projects they are realizing. Since identity is used as a basis for strategy development and
strategy content in all companies, strategy is consequently deployed as a mechanism to maintain the
identity regarding business activities to realize organizational objectives. Overall, strategy is not specifically
deployed to moderate a risk of dilution of the CSR-identity, but is rather deployed to steer business
activities within the boundaries of the identity of the firm.
Human resource management (HRM)
Four out of seven companies (Mywheels, Tony’s, Dopper and Triodos Bank) are deploying HRM as a
mechanism of corporate governance. According to them, the identity should be represented and
expressed well by the employees; both inside as well as outside the company. In table 7.8 relevant quotes
of the respondents are presented in order to show how they relate HRM as a mechanism of CG to the
identity of the firm.
71
Table 7.8 - The deployment of HRM as mechanism of CG in relation to the CSR-identity
Quotes
Tony’s
“Currently, we are more and more conscious about values and norms and the organizational culture which exists within the firm. That this is very important to take into account when hiring new people. It should be integrated in procedures instead of basing it on feelings, experience and competences alone. The personality of a person is highly important as well.”
Mywheels “It is really important. You should represent who you are every day. Employees should do this as well, so on family occasions he should be as enthusiastic about the organization as at the office.”
Triodos Bank “Triodos Bank involves an agency to recruit people for certain functions. And they are really focused on personality, so they are really able to think along regarding how to discover during the interview what the new person actually stands for.”
Tony’s and Mywheels are most actively adapting HRM procedures to hire people that fit within their CSR-
identity. Triodos Bank is putting emphasis on the personality and personal drivers of the new employees
during job interviews, because the level of knowledge and skills can be more easily assessed in other ways.
Additionally, they involve an agency in order to recruit the right employees. Dopper is adapting its HRM
procedures by recruiting on Facebook rather than via an employment agency. The former consists of a
pool of people that are familiar with the Dopper identity already. The respondent of Willem&Drees
recognizes the importance of HRM to maintain the identity, but he explains that he does not consequently
act according to this.
Six out of seven respondents, except for Van Eigen Erf, argue that employees need to identify with the
core values of the firm. However, they do recognize this is dependent on the function; back-office
employees do not need to fit as strongly with the identity of the firm as other functions. Different from
other cases, the founder of Van Eigen Erf argues that she rather hires employees having a certain level of
knowledge, competences and skills than having idealistic values. Another trend in the results is that due
to the need to professionalize the company, the level of knowledge and the possession of competences
and skills are becoming more important as the firm grows. Overall, HRM is considered as a relative informal
way to maintain the identity, since the respondents explain that assessing a fit between the new person’s
values and the core values of the company is mainly based on feelings. However, as the firm grows they
do recognize a growing need to structure this assessment. At Triodos Bank and Tony’s they are (some)
steps ahead in professionalizing business process and function profiles. Within Tony’s function profiles are
currently rewritten for the third time. This helps them in dealing with expanding functions and
demarcation of responsibilities. It can be concluded that HRM is used as an informal mechanism to
maintain the CSR-identity of the company through professionalizing function profiles and the selection of
employees in which the level of knowledge, skills and competences and the affinity with the core values
of the firm are balanced.
72
Organizational culture
Six out of seven cases (except Willem&Drees) deploy the organizational culture as an informal mechanism
of corporate governance. These companies deploy the organizational culture as a means to maintain the
CSR-identity. In table 7.9 an overview of relevant quotes regarding the organizational culture as a
mechanism to maintain the identity of the firm are presented. Tony’s, Dopper and Triodos Bank built a
strong organizational culture from the start, which has become a part of their identity. The respondents
of Triodos Bank consider their organizational culture as a very strong culture, in which the mission and
values are fully integrated. Nevertheless, the openness of the culture can be experienced as ‘closed’ by
new employees at first according to the respondents. The founder of Dopper considers himself as an
important part of the ‘Dopper-message’. Besides he is speaking about ‘Dopper-DNA’ that is embraced by
all employees. The founder is recalling the mission and values of Dopper during daily, weekly and quarterly
meetings. These meetings are part of the Rockefeller habits, which have become a returning habit within
the organizational culture of Dopper.
Table 7.9 - The deployment of the organizational culture as mechanism of CG in relation to the CSR-identity
Quotes
Tony’s “Tony’s has started with such a clear vision and goal, which has become the identity of the firm. It started as a journalistic statement that has been developed into a professional chocolate producing company with a mission. So the culture did feel the identity quite fast.”
Dopper “I think culture is an essential part. There is no other way then this way. That’s why a lot of dedicated people are working her. They sustain the message and therefore they are becoming part of the identity.”
Mywheels “Culture and identity are one and the same thing for me. […] “Culture should be constantly monitored in order to keep it stable. You should handle it with care.”
Werkhaus “You have to be very authentic I think. Because otherwise, the identity of your company is like a flower or something. You have to live everything that you are explaining yourself.”
Van Eigen Erf “These people (licensees) are used to solve their own problems and follow their own directions. It takes more effort to collaborate and to understand the value of it.”
Triodos Bank “It depends on your perspective. Of course some cultural aspects have been changed over time, but the strength is that some cultural aspects have stayed the same over all those years. […] It is not used as a tool, but we are actively steering it.”
Almost all cases deploy the organizational culture as a mechanism of CG nonetheless each founder has its
own perspective on the role of the culture regarding the maintenance of the identity of the firm. The
founder of Werkhaus believes she and the co-founder should act as an example for their employees to
steer the organizational culture. The founder of Mywheels considers organizational culture as similar to
the identity, which is why the organizational culture should be constantly monitored. Through the
implementation of the sociocratic circle-method, he is maintaining the family-like nature that is
characteristic for small organizations. The organizational culture of Dopper has been developed into an
essential component of the identity, according to the founder. At Tony’s, an important interaction
between the organizational culture and the identity exists; the culture is maintaining the identity and the
other way around. The mission driven culture of Triodos Bank is perceived as interrelated to the identity
of the firm. Finally, at Van Eigen Erf, it takes relatively high effort to maintain the identity through the
organizational culture due to the individualistic attitudes of the licensees, but it is yet considered as
73
important in order to be able to express one clear unified identity. The respondent of Willem&Drees
believes the organizational culture has recently started to become a theme of more importance. He
expects it will gradually become more central from now on. Therefore they are not deploying
organizational culture as a mechanism to maintain the CSR-identity yet. Overall, it can be concluded that
the organizational culture is closely connected to the CSR-identity of the firm. Taking into account the
interplay between the organizational culture and the identity of the firm, the culture can be seen as an
informal mechanism to maintain the CSR-identity of the firm.
Monitoring
Five out of seven cases have deployed a certain form of monitoring, except for Mywheels and Werkhaus.
Monitoring is mainly deployed to steer behaviour or provide employees with a road map, a set of
guidelines or code that prescribe how to realize the sustainability related objectives of the firm. Each of
the five companies do use a set of principles/codes/guidelines to steer behaviour internally and to
communicate their actual realization of their CSR-objectives externally. Willem&Drees have formulated a
credo, which is based on ten principles that guide thoughts and actions8 (see appendix B1). Tony’s has its
own code that is used as a road map, divided into three pillars (creating consumer awareness, leading by
example and stimulating the industry to follow). Each pillar has its own plan which operationalized and
planned until 2020. It consists of milestones with concrete points of action. Dopper has developed a
brandbook in order to reorient the focus on spreading the Dopper-message again. Van Eigen Erf makes
use of a set of guidelines which are published on their website9. The aim of the guidelines is to emphasize
the objective to realize short food supply chains between farmer and consumer. Triodos Bank has no
formally documented internal code, but they rather use more informal conditions that are based on
mutual agreements within certain departments.
Reporting is not commonly used by the cases to monitor behaviour of employees and business activities,
except at Triodos Bank. Four times a year each business unit/international office updates a so called
‘support card’ in which different criteria are scored and illustrated. This is processed into the different
reports such as the annual report. The other cases do not actively use reporting as part of monitoring due
to the size of the companies. Although these companies have at least reached the growth stage already,
they have employed too less employees to implement reporting as a means to monitor whether business
activities are in line with the identity. Of these firms, Tony’s is the only company that is actively using
reporting as way to document all sustainability related business activities and share this with both internal
as well as external stakeholders. Willem&Drees are planning to start using reporting in the near future as
well. Since Dopper is the only company that has branch offices abroad, it could be expected that the
founder uses reporting as a means to monitor the business activities of the embassies. However, he prefers
to implement the Rockefeller habits to stay informed about business activities that are executed by the
embassies, just like he did at Dopper NL.
The results show that a code or a set of guidelines are used to steer behaviour and to put emphasize on
the practical implementation of the CSR-identity to external stakeholders. Reporting could be used as a
means to share organizational performance including sustainability related business activities to a broad
8 http://www.willemendrees.nl/ditzijnwij 9 http://www.vaneigenerf.nl/watdoenwe/biologischgoed.php
74
group of stakeholders. It can be concluded that monitoring is deployed in order to provide a boundary that
fits the CSR-identity, in which business activities can be carried out by internal stakeholders. Besides, by
acting according these boundaries, they are communicated externally to show how the CSR-objectives are
realized by the firms.
Coordination
Coordination is actively used by five out of seven cases, except for Werkhaus and Van Eigen Erf. A contrast
in deploying coordination can be concluded from the results of these five companies. The kind of
coordination that is deployed within Triodos Bank differs from the other cases due to the age and size of
the organization. The results of the case study at Triodos Bank imply that they deploy coordination of their
CSR-identity by delegating responsibilities to business units and departments. Regarding
internationalization of Dopper and Triodos Bank, a contrast in coordination of international offices can be
shown. Triodos Bank has deployed a more formal organizational body in order to maintain close
involvement among different countries. While the executive board of Triodos Bank has formal control over
the international offices, the new contractual formula that has been developed by Dopper will allow
informal control over the international offices, which will be partly based on contractual agreements and
benevolence.
Unless the fact that organizational structures of Willem&Drees, Tony’s, and Dopper are flat, decision-
making still is centralized within Willem&Drees and Dopper. Especially with regard to the maintenance of
the CSR-identity of the firms. The results show that the founders of these companies are in control
regarding the identity of the firm. Control is relatively more delegated regarding operational business
activities. As an example, Willem&Drees coordinate decision-making and business activities by making
sure that everything fits within their line of thought. The fact that they are organized relatively centralized
corresponds with the fact that the founder is experiencing some difficulties regarding delegation of
responsibilities. The founder of Dopper sees the expression of the identity as his most important
responsibility, therefore he is putting high effort in maintaining direct control over management of the
CSR-identity. He implemented the Rockefeller habits in order to make sure both the founder as well as the
employees stay informed about the objectives of both the company as well as the personal objectives of
the employees. Keeping control over the identity is corresponding with both respondents who prefer keep
doing things themselves rather than delegating it.
On the contrary, Tony’s and Mywheels are organized more decentralized which leads to more equal
division of influence on the management of the identity. This leads to high commitment to the identity of
the firm by all involved employees. The sociocratic circle-organization method that is applied by Mywheels
leads to some differences regarding coordination. While Mywheels is able to minimize the amount of
meetings required, Tony’s is trying to find a balance in the amount of communication and consultation
among employees. Dopper is even organizing more meetings to coordinate the firm after starting to
professionalize the organization.
When coordination is deployed as mechanism of CG, the following conclusion can be drawn: Founders
who do not like a change in their role from being an entrepreneur towards a manager keep direct control
over their firm. When coordination is deployed as mechanism of CG, this becomes visible through
75
maintaining centralized decision-making regarding the CSR-identity. At the other companies, it seems that
coordination is deployed by more equal influence on the management of the identity, which leads to highly
committed employees.
Other mechanisms of corporate governance
Some of the cases are deploying other methods to support the maintenance of their identity as well. The
informal mechanisms are specifically fitting within their way of working. These methods are not defined
as mechanisms of CG in the literature research as such. Therefore, they are named as ‘other informal
mechanisms’ in this research. Tony’s is actively triggering media to write about their company. This results
in positive media attention which strengthens their CSR-identity. Mywheels is triggering media attention
as well, through stimulation of people to share positive experiences and stories on social media.
Willem&Drees and Dopper are experiencing media attention as well, but they are not actively deploying.
Van Eigen Erf is using a form of social monitoring, which is emerged among the licensees.
[Van Eigen Erf] “Because we all know each other, we keep an eye on the activities of each other. […] It is
more about the values and not transporting food all over the world.”
This results in an informal mechanism that protects the CSR-identity from dilution.
It seems that maintaining the identity is not seen as a challenge by the founder of Werkhaus. The identity
reflects their personal lifestyle, which they will keep living. Because of the strength of this lifestyle and its
influence on the identity of the firm, it is named as an informal mechanism of corporate governance. As
long as all business activities will fit within the philosophy of their lifestyle, the company will remain its
strong CSR-identity:
[Werkhaus] “The most important thing is that we keep our philosophy to have social responsibility for
the people around here. And to have the responsibility for the environment also. So we
can go on in the same way.”
76
7.2 Discussion
In this section the case study results will be compared to the literature study results. Chapter 2-4 is
answering the sub questions of this research project by literature research. Case study research is
executed in order to provide answers on the sub-questions from a practical perspective. Section 7.2.1 –
7.2.3 present a discussion per sub-question.
7.2.1 Sustainable entrepreneurial firms and the CSR-identities of their firms
In chapter 2, literature research has been carried out in order to answer sub question 1 (How can
sustainable entrepreneurial firms and their CSR-identity be characterized?). Four main characteristics of
SEFs are defined based on previous research of Choi and Gray (2008). These are:
The origin of the company is based on the founders’ personal values and drive to make a small
difference in the world regarding certain issues concerning the environment and society
Sharing the sustainable message, sustainability values and associated business practices function as a
means to differentiate the company.
The organizational culture is emphasized as supporting instrument during growth.
Within this culture, employee well-being is perceived as highly important.
Case study results confirm that these characteristics are represented by the participating companies.
Two relevant components of the CSR-identity are distinguished, namely the philosophy, that is often
expressed through the mission statement of the firm, and the organizational culture (Gray & Balmer,
1998). The reason of establishment and the mission statement are investigated, which has led to the
distinction of environmental, social and economic aspects of the CSR-identity. In order to be able to say
something about the organizational culture, the respondents were asked about the core values of the firm.
These values do not directly correspond with the CSR-identity of the firm, but they do underpin behavior
that fits the CSR-identity. Case study result imply that the personal values of the founders have been an
important driver to establish their company. This corresponds to Schaltegger and Wagner (2011), who
argue that the personal values of the founder of SEFs often form a basis for the establishment of the core
values of the firm.
7.2.2 Business growth
In chapter 3, literature research has been carried out in order to answer the second sub-question (How
does business growth, during the growth stage of the venture life-cycle process, effect the corporate CSR-
identity of sustainable entrepreneurial firms?). This has resulted in four barriers that could be encountered
during business growth (section 3.1.2). This chapter has resulted in the proposition that the CSR-identity
of sustainable entrepreneurial firms is risked to be diluted as a consequence of business growth caused by
a negative relationship between business growth and the CSR-identity.
The case study results show that the CSR-identity could be affected during business growth, but no
negative relationship between business growth and the CSR-identity can be confirmed. The results show
that all cases have encountered several barriers of growth, except for Mywheels. Table 7.4 presents the
possible impact of different barriers of growth to the CSR-identity, which could be illustrated by the
experiences of the cases. The results also show, that five out of seven companies have encountered one
or more barriers of growth that have influenced the CSR-identity of their firm. Important to note is that
77
these influences have not necessarily worked out negative for the CSR-identity. Companies such as
Mywheels, Tony’s and Van Eigen Erf did also experience influences that have strengthened their CSR-
identity.
Both the founders of Willem&Drees and Dopper do not like changes from their entrepreneurial role
towards a management role which are caused by growth. Although they are experiencing this change, it
has not influenced the organizational culture in a negative way. This is contrasting with the finding of
Abimbola and Vallaster (2007). Although some companies experienced relative small changes in their
organizational culture, none of the companies did experience these changes as negative. Therefore it can
be concluded that growth does not necessarily lead to influence the organizational culture that has been
established by the founder; the CSR-identity is not diluted through changes in the organizational culture
within the case companies.
Mywheels is able to grow by spreading the concept (increasing the number of cars throughout the country)
while employing relatively less regular employees. The concept of growing big while staying small is
defined in the research of Nazarkina (2012). The sociocratic circle-organization method allows Mywheels
to maintain a personal culture in which high involvement of the founder is manageable.
Overall it can be included that management of the CSR-identity is not perceived as difficult during business
growth by all cases, but it is rather seen as a natural thing that is driven by the mission of the SEF. Although
Lauring and Thomson (2009) argue that challenges regarding the management of the identity can be
experienced due to sequential, sender-oriented and top-down communication, this is not experienced by
the cases as such. Triodos Bank, which is the largest organization within the selected cases, are used to
communicate strategy top-down. However, bottom-up insights are seriously taken into account and could
lead to adapting strategy. Since their strategy is fully based on their CSR-identity, it can be concluded that
this result is contrasting with the finding of Lauring and Thomson (2009). Important to note it that cases
such as Willem&Drees, Tony’s and Triodos Bank are aware of the importance to keep managing the CSR-
identity of their organizations.
7.2.3 Mechanism of corporate governance
Chapter four includes literature research that provide an answer on sub-question 3 (How can mechanisms
of corporate governance be deployed in order to steer the realization of the CSR objectives?) and sub-
question 4 (How do mechanisms of corporate governance effect the corporate CSR-identity as moderators
of the influence of business growth?). Five mechanisms of CG are defined (section 4.2) and assumptions
on which mechanisms could be deployed in order to moderate a possible negative effect of business
growth on the CSR-identity are presented (section 4.3). The chapter resulted in the proposition that
mechanisms of CG can be deployed to moderate the possible risk of dilution of the CSR-identity during the
growth stage of the venture life-cycle process.
All cases deploy at least one of the mechanisms of CG that have been defined by literature study. Besides,
three other informal mechanisms are defined during case study research, which are active stimulation of
positive media attention/free publicity, social monitoring and maintaining a personal lifestyle. In section
4.3 several assumptions regarding the deployment of specific mechanisms of CG that might be deployed
78
to overcome/strengthen the anticipation to the barriers are defined. The results of the case studies do not
provide knowledge to link specific mechanisms to specific barriers of growth. It can be concluded that
business growth requires professionalization, which stimulates companies to deploy mechanisms of CG.
Case study results show that mechanisms of CG are not deployed with the aim to moderate a possible
dilution of the CSR-identity during business growth. However, the deployment of these mechanisms could
substantiate the maintenance of the CSR-identity. In table 7.10, relevant results regarding the deployment
of each mechanism will be shortly compared with the findings of literature research:
Table 7.10 – Discussion on the deployment of mechanisms of CG
Strategy
The results show that CSR-identity and strategy are seen as closely connected. Identity is often used as a stable input for both strategy development and strategy content. This confirms the statement of Camillus (2008) that a clear and stable identity could help management to test whether decisions are in line with the identity.
The approaches of Tony’s, Dopper and Triodos Bank, to distinguish customer groups and approach them differently, correspond with the findings of Lauring and Thomson (2009), who emphasized the need to prioritize the ideals and core values of the company differently for specific stakeholder groups.
HRM
Growth leads to an increasing awareness of the importance of the assessment of different aspects when hiring new people. The results show that the companies are balancing between assessing the level of knowledge, competences and skills on the one hand and a match between the personal values and the core values of company on the other hand.
Organizational culture
The founders of Dopper and Werkhaus see themselves as an example with regard to the representation of the CSR-identity within the organizational culture. This corresponds with the role model that is assigned to the founder according Abimbola and Vallaster (2007).
Through the implementation of the sociocratic circle-method, the founder of Mywheels is maintaining the family-like character that is characteristic for small organizations. This corresponds with the statement of Davidsson et al. (2007).
The results confirm that the organizational culture of SEFs can be seen as an informal mechanism to spread the desired values that are in line with the CSR-identity, among other organizational members within the firm.
Monitoring
The case study results show that monitoring is deployed by the use of codes, guidelines, road maps, mutual agreements and annual reports. Findings of literature research also suggested the use of accountability and transparency reports (section 4.2.4). These forms of coordination are not mentioned by the respondents as tools to substantiate the management of the CSR-identity.
Coordination
Among the cases coordination is deployed differently, which is dependent on the level of centralization and decentralization of each company. Foss & Mahnke (2000) argue that coordination could be carried out by a set of rules and routines, which can be sub-divided in a set of very precise rules and by a set of rules and routines that allow free interpretation. It can be concluded that companies with centralized decision making processes manage a more precisely defined set of rules than companies with more decentralized decision making processes.
The case study results show that the CSR-identity is regularly spread within the organization in order to create familiarity with and commitment to the organization. This corresponds with the statement of Analoui and Karami (2002).
79
7.3 Conclusion
In this section, conclusions will be drawn of the results of case study research at seven sustainable
entrepreneurial firms.
Characteristics of SEFs and their CSR-identity
The characteristics of sustainable entrepreneurial firms which have been distinguished through literature
research are confirmed by the case companies. The CSR-identities of the cases have been divided into
environmental, societal and economic aspects. Among the cases, different level of emphasis are put on
environmental and societal aspects. Although, each company is actively striving to contribute to a solution
to or the improvement of certain environmental and social issues. Although the core values of the
companies do not directly refer to the CSR-identities, yet most of them stimulate behavior that fits their
identity.
The effect of business growth on the CSR-identity
It can be concluded that organizational growth could impact on the CSR-identity of the firm. The results
show that both negative as well as positive influences can be experienced. Therefore, business growth
does not affect the CSR-identity per se. The results show that companies that anticipate to business growth
by using the content of its CSR-identity as a basis, did not experience negative influences on their CSR-
identity. Willem&Drees and Van Eigen Erf did even experience strengthening influences due to the fact
that business growth has led to the decision to more clearly define their CSR-identities. Since no negative
relationship between business growth and the CSR-identity can be confirmed, it can be assumed that not
using the CSR-identity as a basis to act during business growth would lead to less negative impact on the
CSR-identity. Furthermore, the results imply that maintaining direct control over the management of the
CSR-identity could lead to a higher possibility of dilution of the CSR-identity in case barriers of growth are
encountered. This contrasts the companies that are more decentralized, which leads to a division of
responsibilities and positively contributes to the level of commitment of the firm. When direct control is
maintained, the founder is responsible for managing the CSR-identity. On top of this, he is expected to
react on the occurrence of barriers of growth. This could lead to distraction from maintaining the CSR-
identity.
Deploying mechanisms of corporate governance
All defined mechanisms are deployed as mechanisms of corporate governance which substantiate the
maintenance of the CSR-identity of sustainable entrepreneurial firms. However, not all mechanisms are
deployed by all cases. Strategy and the organizational culture are considered as important mechanisms
(5/7 and 6/6 respectively) that could also function as a means to maintain the identity of the firm; identity
is seen as closely linked to both the organizational culture and strategy by the respondents. Human
resource management has been deployed least (4/7) as a mechanism of corporate governance in order to
maintain the identity. Although most respondents do recognize the importance of the personal values of
employees to correspond with the core values of the company, they do base the assessment of new
employees rather on feelings than using a formal method. Therefore, HRM is understand as a more
informal mechanism of CG. The following conclusions can be drawn to the deployment of different
mechanisms of CG:
80
Overall, it can be concluded that the organizational culture is closely connected to the CSR- identity of
the firm. Therefore, the culture should be deployed as an informal mechanism to maintain the identity
of the firm.
The results imply HRM is used as an informal mechanism to maintain the CSR-identity of the company
through professionalizing function profiles and the selection of employees.
Codes, a set of guidelines or mutual agreements are used to steer behavior internally and to put
emphasis on the practical implementation of the CSR-identity to external stakeholders. Although
reporting is deployed by two out of seven companies because of the relatively low number of
employees in most cases, it can be used to share how the company is realizing its CSR-objectives with
a broad group of stakeholders.
Decentralized companies stimulate equal division of influence on the management of the CSR-identity.
This leads to high commitment to the CSR-identity by involved employees. Which in turn could
positively influence its safeguarding.
Dopper is the only company that is deploying mechanisms of corporate governance in order to
anticipate to consequences of growth that have influenced the CSR-identity of the firm in a negative
way. Tony’s is acting preventive by deploying mechanisms of corporate governance, because
organizational growth requires professionalization. The results imply that preventive implementation
of corporate governance mechanisms will lead to less or better manageable barriers of growth.
Regarding internationalization of Dopper and Triodos Bank, a contrast in coordination of international
offices can be shown. Triodos Bank has formal control over the international offices while Dopper is
planning to decrease formal control and deploy more informal control based on mutual agreements
and goodwill.
81
8 Conclusions, recommendations, discussion In this chapter, conclusions will be drawn by answering the research questions of this research project in
section 8.1. The main research question will be answered, followed by recommendations in section 8.2.
The main objective of this research is to explore to what extent corporate governance mechanisms can be
seen as effective mechanisms to maintain the CSR-identity of growing SEFs. This research shows how
business growth could influence the CSR-identity of SEFs. Corporate governance can be seen as an
approach to substantiate the management of the CSR-identity during business growth. This research is
contributing to scientific knowledge by providing insights in how different mechanisms of corporate
governance could be deployed in order to substantiate the management of the CSR-identity of SEFs during
business growth. Literature research (chapter 2-4) is carried out in order to obtain theoretical insights
which are empirically investigated by multiple case study research at seven SEFs (chapter 7). This chapter
is ended with a discussion and recommendations for future research in section 8.3.
8.1 Conclusions
The first sub-research question (How can sustainable entrepreneurial firms and their CSR-identity be
characterized?) is answered in chapter 2 by carrying out literature research. Sustainable entrepreneurial
firms (SEFs) implement sustainable entrepreneurship, which is defined as an innovative, market-oriented
and personality driven form of creating economic and societal value. Sustainable entrepreneurs (SEs)
integrate sustainability performance within the core objectives of the firm and strive to realize substantial
influence on the market and society (Schaltegger & Wagner, 2011). SEFs are established to realize CSR-
objectives covering environmental, societal and economical aims, which are expressed through their
business activities. Literature research resulted in four relevant characteristics of SEFs, which are: (1) the
concept is based on idealism and the founders’ drive to make a small difference in the world, using the
sustainable message to differentiate the company, building an organizational culture that supports the
identity resources and emphasize on employee well-being (section 2.2). These characteristics have been
confirmed in empirical research by all participating cases. The uniqueness of the SEF is expressed through
the corporate identity, which is called the CSR-identity. The CSR-identity is embedded in the philosophy
and the organizational culture (section 2.3.2). Besides, it is closely connected to the CSR-objectives of the
firm. The personal values of the founder are an important basis for the establishment of the CSR-identity.
Case study results show that the core values of the participating SEFs do not directly refer to the CSR-
identity, but they do stimulate behavior that fits the CSR-identity.
The second sub-research question (How does business growth, during the growth stage of the venture
life-cycle process, effect the corporate CSR-identity of sustainable entrepreneurial firms?) is answered in
chapter 3 by carrying out literature research and by conducting case study research (chapter 7). The aim
of this sub-question was to find out the impact of business growth on the CSR-identity of SEFs. This
research is focussing on organically growing SEFs, which are likely to encounter several barriers of business
growth. Based on the venture lifecycle process of Scott and Bruce (1997), the following barriers of business
growth are distinguished: overtrading (uncontrolled growth); barriers regarding maintenance and
delegation of control; barriers regarding decentralization and formalization of structures; and an
organizational culture crisis (section 3.1.2). Business growth leads to a loss of direct control of the owner-
manager which in turn could influence the CSR-identity of the firm. Based on literature research it can be
82
argued that the CSR-identity should be prevented from dilution during business growth for two reasons.
First, the CSR-identity is the fundament of the sustainability message that is spread to a larger customer
base as the firm grows (Nazarkina, 2012). Second, the CSR-identity could positively contribute to the
competitive position of the SEF (Abimbola and Kocak, 2007). The barriers of growth have been used as
reference points during the execution of case study research. Below the most important findings are
discussed:
Overtrading (uncontrolled growth), barriers regarding control and delegation, barriers regarding
internationalization and barriers regarding decentralization and formalization could affect the CSR-
identity of the firm (see table 7.5). However, the consequences of the barriers are not necessarily
negatively impacting the CSR-identity. Business growth could lead to negative consequences for the
CSR-identity for the following reasons: (1) when the founder is maintaining direct control; (2) when
the founder is distracted from managing the CSR-identity; and (3) when difficulties are experienced
regarding finding the right people to build up international offices. Regarding the first point, negative
influences on the CSR-identity might be decreases or avoided when direct control over the CSR-
identity is maintained, while responsibilities on operational level are delegated during business
growth.
Some SEFs did not experience any consequences on the CSR-identity during business growth. This can
be partially explained by the fact that these respondents mention the existence of (high) awareness
of the importance to continuously manage their CSR-identity within their firm.
Furthermore, changes in the organizational culture have been experienced by two out of seven SEFs.
Nevertheless, no clear consequences for the CSR-identity have been mentioned by the respondents.
This might be partially explained by the relative low number of employees at six out of seven cases. At
Triodos Bank, which has employed the largest amount of employees, it is experienced that people who
turn out not to fit completely within the culture and have less affinity with the core values will
eventually leave the organization.
The CSR-identity of SEFs could be negatively affected as a consequence of business growth when the
founder maintains direct control over managing the CSR-identity. Keeping direct control over the firm
seems to increase the possibility of dilution of the CSR-identity during business growth. When the founder
is required to anticipate on barriers of business growth, the founder’s available time to manage the CSR-
identity could decrease and/or the founder could be distracted from managing the CSR-identity. Because
not all cases have experienced negative consequences that could lead to dilution of their CSR-identity
during business growth, no negative relationship between business growth and the CSR-identity can be
confirmed based on the case study results (P1 – section 5.2). Therefore P1 can be partly confirmed.
Sub-question 3 (How can mechanisms of corporate governance be deployed in order to steer the
realization of the CSR objectives?) is answered by literature research in chapter 4 and by conducting case
study research (chapter 7). CG that is deployed by SMEs is defined as a structure of division of rights and
responsibilities by setting rules and implementing both informal as well as formal mechanisms in order to
steer the way in which decisions are made, organizational objectives are set and objectives are achieved
and monitored (section 4.1). Sustainable corporate governance as an approach extends the influence of
stakeholders with corporate democracy and stewardship responsibility as important factors of impact.
Literature study has resulted in five different mechanisms of corporate governance that can be deployed
83
by SEFs during the growth of their firms, namely: strategy, HRM, the organizational culture, monitoring
and coordination. Based on the case study research results (chapter 7), the most important findings on
the deployment of different mechanisms of CG are presented in table 8.1. In this table, each mechanism
of CG is presented by illustrating how different cases have deployed this mechanism within their firm in
order to steer the realization of CSR-objectives. While HRM has been elaborated as a formal mechanism
of CG within literature research, case study results show that this mechanism is merely deployed as an
informal mechanism of CG. Case study results confirm that the organizational culture is deployed as an
informal mechanism as well. Formal mechanisms of CG are strategy, coordination and monitoring.
Strategy allows management and employees to assess decision-making on following the CSR-identity in
order to realize CSR-objectives. Coordination is deployed differently by the cases, which seems dependent
on the level of centralization or decentralization on the one hand and the level of direct or delegated
control over the CSR-identity on the other hand. Monitoring is deployed less extensive as has been
elaborated within literature research.
Table 8.1 - Deployment of corporate governance mechanisms
Mechanism of CG How the mechanisms are deployed
Strategy
Using a formal strategy method which is based on the realization of the CSR-objectives of the firm.
Implementing strategy as the actions taken in order to actually realize the CSR-identity of the firm.
Starting each (strategy related) document with a description of the identity in order to recall its importance.
HRM
Identification of employees with the CSR-identity of the firm is important, yet dependent on the function.
As the firm grows, assessment of new employees should not be based on feelings only; the need for professionalization requires taking into account formal assessment of level of knowledge, competences and tasks.
Organizational Culture
The organizational culture could be seen as an important means to maintain the CSR-identity of the firm which should be actively managed.
Monitoring
Codes or guidelines prove to be a useful tool to make sure that business activities of the company will be carried out in line with the CSR-identity. These codes or guidelines are used to communicate to external stakeholders as well.
Reporting is not commonly used by the case companies. However, Tony’s is experiencing positive consequences of using reporting as documenting and openly sharing their sustainability related business activities.
Coordination
Centralized companies use coordination in order to make sure that all business activities are in line with the identity that is maintained by the founder(s).
Decentralized companies use coordination in order to realize more equal division of influence on managing the identity of the firm.
Adopting a method, such as the Rockefeller habits, to coordinate organizational and personal objectives within the firm.
Actively discussing the maintenance of the CSR-identity by deploying a formal organizational body that is represented by different departments/business units.
84
Sub-question 4 (How do mechanisms of corporate governance effect the corporate CSR-identity as
moderators of the influence of business growth?) has been answered in chapter 4 and by executing case
study research (chapter 7). The deployment of mechanisms of CG requires the owner-manager and other
managers of the firm to control whether decisions and actions are taken consistently and fit within the
CSR-identity of the firm. Table 4.1 (section 4.4) has provided an overview of the assumed moderating
effects of the five mechanisms of CG during business growth. The results of the case studies do not provide
sufficient knowledge to link specific mechanisms to specific barriers of growth as moderators.
Nevertheless, the results show that barriers of growth could be managed by deploying mechanisms of CG,
because business growth requires professionalization of the firm. Mechanisms of CG are not deployed
with the aim to moderate a possible dilution of the CSR-identity during business growth. However, the
deployment of these mechanisms could substantiate the maintenance of the CSR-identity. Since no
pattern of the occurrence of certain barriers of growth which have negatively influenced the CSR-identity
can be recognized, the assumed moderating effects of mechanisms of CG cannot be confirmed. However,
other relevant conclusions can be drawn: Dopper has deployed mechanism of CG to anticipate more
reactive to barriers of business growth. The other companies are deploying mechanisms of corporate
governance more preventive, because they recognize that organizational growth requires
professionalization more early. Mechanisms of CG are not deployed as moderators of the risk of dilution
of the CSR-identity during business growth, which means that P2 (section 5.2) is not confirmed. However,
case study results imply that implementation of corporate governance mechanisms could lead to less or
better manageable barriers of growth and therefore lower the risk of dilution of the CSR-identity.
Answering the sub-questions has led to an answer on the main research question (How can mechanisms
of corporate governance be deployed to maintain the CSR-identity of growing sustainable entrepreneurial
firms?). Although mechanisms of CG are not deployed as specific moderators to maintain the CSR-identity
of the firm, they could be effective as a means to maintain the CSR-identity in the end. Based on the case
study results, a prioritization of the five mechanisms of CG is visualized in figure 8.1. In this figure, the
mechanisms that are considered as most effective to safeguard the CSR-identity of SEFs are presented
according their importance. Based on the results of case study research, it can be concluded that strategy
(five out of seven) and organizational culture (six out of seven) are deployed most actively by the SEFs. The
CSR-identity is seen as closely connected to strategy and organizational culture by most companies. The
CSR-identity is used as a basis for strategy development. Therefore, strategy can be deployed as
mechanism of CG to maintain the CSR-identity; it will allow the management and employees to assess
whether decision-making and business activities are in line with the CSR-identity or not. The organizational
culture reflects the CSR-identity through the core values of the firm, which underpin and stimulate
behaviour that fits within the CSR-identity of the firm. Stimulating specific behaviour by recalling the CSR-
identity and putting emphasize on the core values of the firm, will contribute to the maintenance of the
CSR-identity. Since six out of seven SEFs recognize the importance of corresponding personal values of
employees with the core values of the firm, it is recommended to develop a more formal protocol to assess
new employees, rather than mainly base it on feelings. Besides, the results of the case study show that
the level of knowledge, skills and competences are considered as more important as the firm is growing,
which corresponds with the recognized need to professionalize the company during business growth. A
more equal division of responsibilities for managing the CSR-identity is recommended. Tony’s and
85
Mywheels show that a decentralization has led to high commitment to maintain the CSR-identity among
employees, while growing. Finally, monitoring proves to be an effective mechanism for both internal
steering of behaviour and external communication. Codes or guidelines could be used to make sure that
all business activities will be executed in line with the CSR-identity on the one hand. On the other hand,
they will also provide the owner manager with a tool which might lower the barrier to delegate specific
responsibilities regarding management of the CSR-identity, provided that the codes or barriers are used
accurately.
8.2 Recommendations for practice
An overall recommendation, is to start deploying the mechanisms of CG to anticipate to the need for
professionalization as the firm grows. The prioritization as presented in figure 8.1 could be taken into
account. Besides, based on the case study results, three ‘other mechanisms’ are defined. The results show
that ‘triggering free media attention’, ‘social monitoring’ and ‘maintaining the personal lifestyle of the
founders’ are deployed as mechanisms to substantiate the CSR-identity as well. It is chosen not to take
these ‘other mechanisms’ into account regarding the prioritization, because these mechanisms are
deployed by one or two companies only.
Dopper is the only company that has experienced a negative impact on their CSR-identity during periods
of business growth. Both the founders’ temporarily distraction from the management of the CSR-identity
due to the need to anticipate barriers of growth and maintaining direct control have been contributing to
these negative consequences. Companies that are experiencing negative effects on their CSR-identity
Monitoring
Strategy Organizational
culture
Resource management
Coordination
Use strategy as a formal tool to make sure that decisions and business activities are in line with the CSR-identity.
Use the organizational culture by regularly recalling the sustainability message and core values of the firm to stimulate employee behavior that is in line with the CSR identity.
Develop a protocol to assess personal values and the level of identification with the firm, but do not neglect the importance of professional competences and skills.
Decentralization and a more equal division of influence on managing the CSR-identity leads to high employee-commitment, which could positively influence safeguarding.
Use codes or a set of guidelines to steer behavior of employees, but also as a tool to communicate the actual activities that are carried out to realize CSR-objectives. Use reporting as a means to share sustainability performance with internal and external stakeholders.
Figure 8.1 - Prioritization of mechanism of corporate governance to maintain the CSR-identity
86
during business growth as well or want to substantiate the management of their CSR-identity could use
experiences of the cases as guidelines. The following recommendations are applied to Dopper:
Strategy is considered as one of the more effective mechanisms of CG in order to maintain the CSR-
identity. Using the content of the identity of the firm as a basis in order to anticipate to barriers of
growth can be governed by adopting a formal strategy method, similar to Tony’s, in order to translate
long term CSR-objectives to manageable (sub)-plans. Translation of this plan to different departments
is recommended as well. The latter is implemented by both Tony’s and Triodos Bank.
The organizational culture is considered as one of the more effective mechanisms of CG as well. Since
Dopper is already using the organizational culture by recalling the sustainability message of Dopper
on a regular basis and prioritize spreading this message as a means to sell bottles, it is recommended
to maintain the so called ‘Dopper DNA’ in order to safeguard high commitment and dedication to
realize objectives. By delegating responsibilities regarding the management of the CSR-identity,
commitment of employees could be positively influenced.
A link can be made to human resource management, which needs to be professionalized at Dopper.
Currently, function profiles are documented. It is recommended to regularly update the function
profiles, since business growth leads to the expansion of function and creation of new responsibilities.
Function profiles could help the founder putting emphasize on the level of knowledge, competences
and skills, rather than affinity with the Dopper concept based on feelings only.
The founder of Dopper should consider to delegate certain responsibilities regarding the maintenance
of the CSR-identity and international expansion by extending the management team. While the
founder and business director of Dopper are both focusing on international expansion next to their
regular responsibilities, the current director of Tony’s has hired an employee who is fully focused on
international expansion. Also, it could be considered to hire a brand manager in the future. By doing
so, the founder allows himself to focus on his main responsibilities.
The brandbook is used as guideline to steer behavior regarding spreading the Dopper Identity. This
code could be extended towards a code or a set of principles/guidelines, similar to Willem&Drees and
Van Eigen Erf, which can be used by employees to assess their business activities. When the code is
used accurately, direct control could decrease by decentralization and delegation of responsibilities.
Finally, the informal mechanism of actively triggering media attention and free publicity can be easily
adopted by other SEFs as well. Tony’s explained they are triggering by carrying out certain business
activities in a creative way in order to be noticed by press and consumers. Mywheels is motivating
members/employees to share positive stories they have experienced through the concept of the SEF.
87
8.3 Limitations and future research
This research has led to knowledge on the deployment of mechanisms of corporate governance by SEFs in
order to maintain the CSR-identity during business growth. This research is contributing to scientific
knowledge on the deployment of CG within sustainable entrepreneurial firms, which are often categorized
as SMEs. Based on the results of case study research, practical experience regarding the use of different
mechanisms could be used as guidelines for other SEFs that wish to spread their sustainability message to
a larger customer base by growing their firm. The results imply that deployment of mechanisms of CG
could result in less influences that dilute the CSR-identity during business growth, because it allows the
organization to anticipate to barriers of growth in a professionalized way. This assumption could be tested
in future research in order to specify the effect of the deployment of mechanisms of CG in relation to the
maintenance of the CSR-identity.
The conclusions of this research are drawn based on the experiences of a limited number of SEFs.
Therefore, the findings cannot be generalized to all sustainable entrepreneurial firms. Future research is
needed, in which the case study is repeated, to collect more data to substantiate the conclusions. Another
note that should be made is the difference between Triodos Bank and the other cases. Triodos Bank is
bigger in size and older in years than the other firms. Although the case study at Triodos Bank has been
focused on their history, both the respondents and the researcher might have experienced difficulties to
strictly exclude current experiences from answering the questions and interpreting the results. Six out of
seven cases are Dutch SEFs, while one of the cases is a German SEF. Due to cultural differences and a
language barrier, the possibility of a non-optimal interpretation of the interview questions and the results
should be taken into account.
The CSR-identity is embedded in both the philosophy and the organizational culture of a SEF. In order to
obtain an understanding and describe the organizational culture of each SEF, the respondents are asked
to name the core values and to name both weaknesses and strengths of their organizational culture. It
should be taken into account that measuring less visible aspects of the organizational culture are relatively
time-consuming. Due to the limited time-span of this research, obtaining an understanding of the
organizational culture of the SEFs has been bounded to core values, strengths and weaknesses of the
culture.
The case study results are obtained from an interview with the founder or a representative (60 minutes),
company documents (if accessible), the company website and other published information. Due to the
limited time span of this research project, the researcher has been limited in obtaining full knowledge of
each case in order to prevent (small) deviations from reality. Finally, a note should be made regarding the
level of knowledge of the researcher about one of the case companies (Dopper). Due to the fact that she
has been employed at the company before this research project, this might have influenced the outcomes.
On the one hand, it has increased insight in the concept of sustainable entrepreneurial firms from a
practical perspective. On the other hand, due to a limited time span, it was not possible to obtain an equal
amount of knowledge on the context and experiences of the other case companies.
88
9 References
Abor, J. & Adjasi, C. K. 2007. Corporate governance and the small and medium enterprises sector: theory and implications. Corporate Governance, 7(2): 111-122.
Abimbola, T., & Kocak, A. (2007). Brand, organization identity and reputation: SMEs as expressive organizations: A resources-based perspective. Qualitative Market Research: An International Journal, 10(4), 416-430.
Abimbola, T., & Vallaster, C. (2007). Brand, organisational identity and reputation in SMEs: an overview. Qualitative Market Research: An International Journal, 10(4), 341-348.
Albert, S., Ashforth, B. E., & Dutton, J. E. 2000. Organizational identity and identification: Charting new waters and building new bridges. Academy of Management Review, 25(1): 13-17.
Analoui, F., & Karami, A. (2002). CEOs and development of the meaningful mission statement. Corporate Governance, 2(3), 13-20.
Arjoon, S. 2005. Corporate governance: An ethical perspective. Journal of Business Ethics, 61(4): 343-352.
Aras, G., & Crowther, D. (2008). Governance and sustainability: An investigation into the relationship between corporate governance and corporate sustainability. Management Decision, 46(3), 433-448.
Baumgartner, R. J. 2009. Organizational culture and leadership: Preconditions for the development of sustainable corporation. Sustainable Development, 17(2): 102-113.
Bennett, R. J., & Robson, P. J. A. (2004). The role of boards of directors in small and medium-sized firms. Journal of Small Business and Enterprise Development, 11(1), 95-113.
Boatright, J. R. 2011. The Implications of the New Governance for Corporate Governance. In A. Brink (Ed.), Corporate Governance and Business ethics: 357-370. Dordrecht: Springer Netherlands.
Bondy, K., Matten, D., & Moon, J. 2008. Multinational corporation codes of conduct: Governance tools for corporate social responsibility? Corporate Governance, 16(4): 294-311.
Bos‐Brouwers, H. E. J. (2010). Corporate sustainability and innovation in SMEs: evidence of themes and activities in practice. Business Strategy and the Environment, 19(7), 417-435.
Brickson, S. L. 2007. Organizational identity orientation: The genesis of the role of the firm and distinct forms of social value. Academy of Management Review, 32(3): 864-888.
Brink, A. 2011. Corporate Governance and Business Ethics. Dordrecht: Springer Netherlands.
Brundtland-rapport. 1987. World Commission on Environment and Development - Our common future (http://www.un-documents.net/ocf-02.htm#I). Oxford ; New York: Oxford University Press.
Bryman, A., & Bell, E. (2011). Business Research Methods 3e. Oxford university press.
Camillus, J. C. (2008). Strategy as a wicked problem. Harvard business review, 86(5), 98-101.
89
Choi, D. Y. & Gray, E. R. 2008. The venture development processes of "sustainable" entrepreneurs. Management Research News, 31(8): 558-569.
Conley, J. and Williams, C. (2005) Engage, embed, embellish: Theory versus practice in the corporate social responsibility movement, The Journal of Corporation Law, 31: 1–39.
Cornelissen, J. P., Haslam, S. A., & Balmer, J. M. (2007). Social identity, organizational identity and corporate identity: towards an integrated understanding of processes, patternings and products. British Journal of Management, 18(s1), S1-S16.
Davidsson, P., Achtenhagen, L., & Naldi, L. 2007. What do we know about small firm growth?, The life cycle of entrepreneurial ventures: 361-398: Springer.
Davidsson, P., Delmar, F., & Wiklund, J. (2006). Entrepreneurship as growth; growth as entrepreneurship. Entrepreneurship and the Growth of Firms, 21-38.
Davis, K. 1973. The Case for and against Business Assumption of Social Responsibilities. The Academy of Management Journal, 16(2): 312-322.
Del Baldo, M. 2012. Corporate social responsibility and corporate governance in Italian SMEs: the experience of some “spirited businesses”. Journal of Management & Governance, 16(1): 1-36.
Delmar, F., Davidsson, P., & Gartner, W. B. (2003). Arriving at the high-growth firm. Journal of business venturing, 18(2), 189-216.
Ebner, D. & Baumgartner, R. J. 2006. The relationship between sustainable development and corporate social responsibility. Paper presented at the Corporate Responsibility Research Conference (CRRC), Dublin, Ireland.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of management review, 14(4), 532-550.
Fassin, Y., & Van Rossem, A. (2009). Corporate governance in the debate on CSR and ethics: Sensemaking of social issues in management by authorities and CEOs. Corporate Governance: An International Review, 17(5), 573-593.
Filatotchev, I., Toms, S., & Wright, M. 2006. The firm's strategic dynamics and corporate governance life-cycle. International Journal of Managerial Finance, 2(4): 256-279.
Filatotchev, I. and M. Wright, 2005, The Life-cycle of Corporate; Cheltenham: Edward Elgar.
Governance, Cheltenham: Edward Elgar.Foss, N. & Mahnke, V. 2000. Competence, governance, and entrepreneurship : advances in economic strategy research. Oxford [etc.]: Oxford University Press.
Freeman, R. E. 2010. Strategic management: A stakeholder approach: Cambridge University Press.
Friedman, M. 1970. The social responsibility of business is to increase its profits. New York times magazine, 13(1970): 32-33.
90
Gray, E. R. & Balmer, J. M. T. 1998. Managing Corporate Image and Corporate Reputation. Long Range Planning, 31(5): 695-702.
Griseri, P. & Seppala, N. 2010. Business ethics and corporate social responsibility. Andover: South-Western Cengage Learning.
Gundry, L. K. & Welsch, H. P. 2001. The ambitious entrepreneur: high growth strategies of women-owned enterprises. Journal of Business Venturing, 16(5): 453-470.
Hatch, M. J. & Schultz, M. 2002. The dynamics of organizational identity. Human relations, 55(8): 989-1018.
Homburg, C., Fassnacht, M., & Guenther, C. (2003). The role of soft factors in implementing a service-oriented strategy in industrial marketing companies. Journal of Business to Business Marketing, 10(2), 23-51.
Irrmann, O. 2002. Organizational culture and identity strategies in international management: An interdisciplinary review. Paper presented at the Competitive paper presented at 28th EIBA conference, Athens, December.
John, K., & Senbet, L. W. (1998). Corporate governance and board effectiveness. Journal of Banking & Finance, 22(4), 371-403.
Kearins, K., Collins, E., & Tregidga, H. 2010. Beyond corporate environmental management to a consideration of nature in visionary small enterprise. Business and Society, 49(3): 512-547.
Koeverden, E. 2012. Small business growth and the process of delegation of authority.
Korhonen, J. 2007. On the lookout for organizational effectiveness–requisite control structure in BPM governance. Paper presented at the 1st International Workshop on BPM Governance–WoGo.
Kumar, R. 2011. Research methodology : a step-by-step guide for beginners. London [etc.]: SAGE.
Lans, T., Blok, V., & Wesselink, R. 2013. Learning apart and together: towards an integrated competence framework for sustainable entrepreneurship in higher education. Journal of Cleaner Production(0).
Lauring, J. & Thomsen, C. 2009. Ideals and practices in CSR identity making: The case of equal opportunities. Employee Relations, 31(1): 25-38.
Melewar, T. C., & Karaosmanoglu, E. (2006). Seven dimensions of corporate identity: A categorisation from the practitioners' perspectives. European Journal of Marketing, 40(7/8), 846-869.
Nazarkina, L. 2012. How sustainable are the growth strategies of sustainability entrepreneurs?, Balanced Growth: 105-121: Springer.
Neck, H., Brush, C., & Allen, E. 2009. The landscape of social entrepreneurship. Business Horizons, 52(1): 13-19.
Parrish, B. D. 2010. Sustainability-driven entrepreneurship: Principles of organization design. Journal of Business Venturing, 25(5): 510-523.
91
Parum, E. 2006. Corporate governance and corporate identity. Corporate Governance, 14(6): 558-567.
Phelps, R., Adams, R., & Bessant, J. (2007). Life cycles of growing organizations: A review with implications for knowledge and learning. International Journal of Management Reviews, 9(1), 1-30.
Ramsay, I., & Stapledon, G. (2000). Corporate Governance: The Role of Superannuation Trustees. Report for the Australian Institute of Superannuation Trustees.
Rausch, A. (2011). Reconstruction of decision-making behavior in shareholder and stakeholder theory: implications for management accounting systems. Review of Managerial Science, 5(2-3), 137-169.
Sacconi, L. (2006) A social contract account for CSR as an extended model of corporate governance (I): Rational bargaining and justification, Journal of Business Ethics, 68: 259–81.
Schaltegger, S. & Wagner, M. 2011. Sustainable entrepreneurship and sustainability innovation: categories and interactions. Business Strategy and the Environment, 20(4): 222-237.
Schneider, S. C. (1988). National vs. corporate culture: Implications for human resource management. Human Resource Management, 27(2), 231-246.
Schwartz, S. H. 1994. Are there universal aspects in the structure and contents of human values? Journal of social issues, 50(4): 19-45.
Scott, M. & Bruce, R. 1987. Five stages of growth in small business. Long Range Planning, 20(3): 45-52.
Soppe, A. 2011. Corporate Governance, Ethics and Sustainable Development. In A. Brink (Ed.), Corporate Governance and Business Ethics: 245-258. Dordrecht: Springer Netherlands.
Spitzeck, H. & Hansen, E. G. 2010. Stakeholder governance: how stakeholders influence corporate decision-making. Corporate Governance, 10(4): 378-391.
Uhlaner, L., Wright, M., & Huse, M. 2007. Private firms and corporate governance: An integrated economic and management perspective. Small Business Economics, 29(3): 225-241.
Van de Ven, A. H., Sapienza, H. J., & Villanueva, J. (2007). Entrepreneurial pursuits of self‐and collective interests. Strategic entrepreneurship journal, 1(3‐4), 353-370.
Verschuren, P., Doorewaard, H., & Mellion, M. 2010. Designing a research project: Eleven International Publishing House.
Wiklund, J., Davidsson, P., & Delmar, F. (2003). What Do They Think and Feel about Growth? An Expectancy‐Value Approach to Small Business Managers’ Attitudes Toward Growth1. Entrepreneurship theory and practice, 27(3), 247-270.
Wilson AM. 2001. Understanding organisational culture and the implications for corporate marketing. European Journal of Marketing 35: 353–267.
Wood, D. J. & Logsdon, J. M. 2001. 5. Theorising business citizenship.
92
Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. 2009. A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of Business Venturing, 24(5): 519-532.
WEBSITES:
http://nl.dopper.com/en/mission/
http://report.triodos.com/en/2012/ourgroup/abouttriodosbank/triodosgroupstructure.html
http://www. doen.nl
http://www.bionext.nl/content/missie
http://www.degroenezaak.com
http://www.mvo-nederland.nl
http://www.p-plus.nl
http://www.skal.nl/
http://www.social-enterprise.nl
http://www.tonyschocolonely.com/over-ons/veelgestelde-vragen/
http://www.trouw.nl/tr/nl/14148/Duurzame-100-2013/article/detail/3525594/2013/10/13/Lokaal-als-ideaal-Mooi-maar-lastig.dhtml
http://www.trouw.nl/tr/nl/7844/De-Duurzame-100-2011/article/detail/3010700/2011/11/04/Drees-Peter-van-den-Bosch-nr-36-De-boeren-krijgen-zelfs-kerstkaarten.dhtml
http://www.trouw.nl/tr/nl/8844/De-Duurzame-100/integration/nmc/frameset/duurzame-100-2013/ranglijst.dhtml?personID=84
http://www.vaneigenerf.nl/watdoenwe/biologischgoed.php
http://www.vogelaarverzenders.nl/referenties/triodos/
http://www.werkhaus.de/en/about-us/ethics/
http://www.werkhaus.de/en/about-us/our-story/
http://www.willemendrees.nl/ditzijnwij
http://www.willemendrees.nl/ditzijnwij
http://www.modefabriek.nl/nl/mint/
93
APPENDIX A - Case study protocol The case study protocol is used to guide the data collection during the execution of each case study and is
developed in order to increase the reliability of the research (Yin, 2003). In this appendix, the procedures
and general rules that are to be followed during the execution of the case studies are described. A case
study protocol is especially of high importance when multiple case studies are executed (Yin, 2003). An
overview of the case study project in terms of its objectives and used protocols in order to find
participating cases is given in section 1.1. The field procedures and the case study questions are presented
in section 1.2 and 1.3 respectively. Finally, a guide for both the individual case report as well as the cross-
case report are presented in section 1.4.
APPENDIX A1 - Selecting potential cases
Below a list of SEFs that have been assessed against the selection criteria is presented in table A1.1. This
list has been composed by visiting websites and using social media. In the third column (potential
participants), a distinction is made between companies that have been contacted with a request to
participate in this case study research and the companies that do not meet the selection criteria. To be
able to decide whether a company had to be contacted, the company website (about the company;
mission; vision; etc.), published information on the date of establishment and development of the firm
have been taken into account. In the fourth column (participating), the response to the participation
request is mentioned. The following websites have been used to create a long-list of potential companies:
www.social-enterprise.nl
www.mvo-nederland.nl
www. doen.nl
www.degroenezaak.com
www.p-plus.nl
www.modefabriek.nl/nl/mint/
Table A1.1 - assessed, contacted and participating sustainable entrepreneurial firms
Sustainable entrepreneurial firms Potential participants Participating
1 A beautiful story Yes No, lack of time
2 Africa Report No
3 Agora Partnerships No
4 Apopo No
5 Armed angels Yes No, offer help to interns only
6 ASN Bank Yes No, did not respond to request
7 Avhuis No
8 Bait al KARAMA No
9 Brand Mission No
10 BSAB No
11 Business Partners Rwanda No
12 ChocolateMakers Yes No, turn out to be too small for this research project
13 CooP Africa No
14 Dopper Yes Yes, two interviews with both the founder and the business director.
15 Duurzaam JoCadeau No
16 Duurzame landbouw op Bonaire No
17 Duurzame lifestyle fiets No
18 Ecovative Design No
94
19 Eerste snellaadnetwerk van Europa
No
20 Eetlokaal.nl Yes Yes, interview with founder
21 Effio No
22 Fair + Fair No
23 GIIRS platform No
24 Globe hope Yes No, did not respond to request
25 Granny’s Finest No
26 Green Film Making Competition No
27 Greengraffity Yes No, turn out to be too small for this research project
28 GrownDownTown No
29 Het Planeet No
30 Incentivators No
31 INTI Knitwear No
32 Jannissima No
33 Justnuts Yes Yes, but turn out to be too small for this research project
34 KeepCup No
35 KISS AND TELL No
36 Komodo No
37 Kromkommer op de kaart No
38 LGT Venture Philanthropy No
39 Marqt Yes No, lack of time
40 Miss Green Yes Yes, but turn out to be too small for this research project
41 Mokum Mariteam: vracht door de gracht
No
42 Mud Jeans Yes No, don’t respond to confirmation e-mail
43 Myomy do goods (voorheen Goodforall)
No
44 MyWheels Yes Yes, interview with founder
45 Ocean Republic No
46 Odin Yes No response
47 O-Foil No
48 Oh My Bag No
49 One Acre Fund No
50 OrangeGas No
52 People Tree No
53 PSSP (Program Sustainable Soy and Palm oil)
No
54 Rag-bag Yes No, turn out to be too small for this research project
55 Rank a brand No
56 RIWIK Wind Energy B.V. No
95
57 Root Capital No
58 Sit & Heat Yes Yes, but turn out to be too small for this research project
59 Stadslandbouw Marconistrip No
60 Stichting Doen No
61 Stichting d'ONS No
62 Stichting Progreso Foundation No
63 Studio Jux Yes No, lack of time
64 Studio Tjeerd Veenhoven No
65 Susteen No
66 TAXI-E Yes No, did not respond to request
67 The body Shop Yes No, did not respond to request
68 The New Motion No
69 Tony Chocolonely Yes Yes, interview with brand manager
70 Toogethr No
71 Traced Good No
72 Triodos Bank Yes Yes, interview with corporate communications
73 TWO-O No
74 Van Hulley No
75 Vilcap Nederland No
76 WeGo: particulier autodelen No
77 Werkhaus Yes Yes, interview with founder
78 WFTH No
79 Willem en Drees Yes Yes, interview with founder
80 Wunderwerk No
81 Yellow 108 No
82 Yumeko No
Participating companies are: Dopper, Willem en Drees, Mywheels, Tony’s Chocolonely, Van Eigen Erf,
Werkhaus, Triodos Bank, Justnuts, Sit & Heat and Miss Green. In section 6.3, each participating firm is
shortly introduced.
96
APPENDIX A2 - Call and e-mail protocols
In this sub-section the call protocol, e-mail protocol and the confirmation e-mail are presented
subsequently.
CALL PROTOCOL
a. Opening a. Goedemorgen/middag, Myrthe Roelofsen, Wageningen Universiteit uit Wageningen b. Ik ben op zoek naar [Naam contact persoon] c. Eventueel introductie (zie contact; a.)
b. Contact
a. Introductie: Momenteel uitvoeren van afstudeeronderzoek aan WUR. Behoud van de bedrijfsidentiteit van duurzame ondernemers tijdens groei. Duurzame onderneming als maatschappelijke en/of milieu gerelateerde problemen worden gezien als business opportunity, waarbij het bijdragen aan een oplossing voor deze problemen is geïntegreerd in de kerndoelstellingen van de organisatie. In het bijzonder richt het onderzoek zich op behoud zogenaamde ‘CSR-identity’ tijdens groei d.m.v. het inzetten van corporate governance.
b. Op [website] zag ik dat uw bedrijf MVO heeft geïntegreerd in haar doelstellingen vanaf het moment van oprichting.
c. Ook heb ik op jullie website gelezen dat [naam bedrijf] + [doelstellingen onderneming] d. Om deze reden sluit uw bedrijf heel goed aan bij mijn onderzoek.
c. Informatie over betrekken van case bedrijven bij onderzoek
a. Mijn onderzoek richt zich op het verwateren van de CSR-identiteit tijdens de groei van een duurzame onderneming. Corporate governance kan worden ingezet om het behoud van deze identiteit te sturen en te controleren op het moment dat de directe controle van de eigenaar afneemt en medewerker aantallen groeien.
b. Aan de hand van case studies wil ik in kaart brengen hoe verschillende bedrijven, die idealen met betrekking tot MVO hebben geïntegreerd in de kerndoelstellingen van de organisatie vanaf het moment van oprichting, hierin zijn geslaagd. Onderzoek naar relaties tussen groei en het verlies dan wel behoud van de bedrijfsidentiteit en naar inzetten van verschillende corporate governance methoden.
d. Vraag om deelname
a. Zoals ik aangaf: uw bedrijf sluit goed aan bij mijn onderzoek b. Veel waarde voor mijn onderzoek als ik uw bedrijf mag meenemen in onderzoek c. Hierbij vraag of u wilt meewerken aan afstudeeronderzoek door mee te werken aan
interview van maximaal een uurtje. d. Voorafgaand zal ik een lijst met onderwerpen naar u sturen per e-mail die tijdens het
interview naar voren komen.
e. Beloning
a. Naast uw bedrijf, nog enkele case bedrijven & experts die worden meegenomen in case studie.
b. Resultaten van interviews uitwerken en analyseren c. Resultaat vergelijking waarin uw bedrijf tegen andere duurzame bedrijven wordt afgezet
op het gebied van het behouden van de CSR-identity tijdens groei door middel van het inzetten van corporate governance.
d. Tevens ontvangt u literatuur studie naar duurzame ondernemingen en hun CSR-identiteiten, bedrijfsgroei en verschillende mechanismen van corporate governance.
e. U kunt desgewenst ook anoniem meewerken.
f. Afronding a. Hierbij verzoek of u wilt meewerken aan interview van ongeveer 60 minuten b. Afspraak februari. c. E-mail adres zodat ik u een email kan sturen ter bevestiging.
In geval van afwijzing
a. Binnen uw bedrijf ander persoon b. Tips andere bedrijven, personen binnen die bedrijven
97
E-MAIL PROTOCOL – Participation request
Onderwerp: Deelname Interview Afstudeeronderzoek Wageningen University – Duurzaam ondernemerschap Geachte [Naam], Als onderdeel van mijn afstuderen aan Wageningen University voer ik momenteel een onderzoek uit naar het behoud van de bedrijfsidentiteit van duurzame ondernemers tijdens de ontwikkeling en groei van hun onderneming. Duurzame ondernemingen worden gekenmerkt doordat maatschappelijke en/of milieu gerelateerde problemen worden gezien als business opportunity, waarbij het bijdragen aan een oplossing voor deze problemen is geïntegreerd in de kerndoelstellingen van de organisatie. In het bijzonder richt het onderzoek zich op hoe corporate governance ingezet kan worden om de zogenaamde ‘CSR-identity’ te kunnen behouden tijdens periodes van groei. Praktisch onderzoek ik hoe verschillende bedrijven, die idealen met betrekking tot MVO integreren in de kerndoelstellingen van de organisatie vanaf het moment van oprichting, hierin zijn geslaagd. Uw bedrijf staat bekend als een duurzame onderneming die […] in haar doelstellingen heeft geïntegreerd. Daarnaast biedt uw bedrijf voor mijn onderzoek een uniek voorbeeld hoe […]. Om die reden wil ik [Naam bedrijf] graag meenemen als case study in mijn onderzoek. Hierbij wil ik u vragen of ik u in een eenmalig interview van ongeveer 60 minuten enkele vragen mag stellen over […]. Ik benader u hiervoor omdat u de oprichter bent van [Naam bedrijf] en daarom een belangrijke rol speelt bij de vaststelling van de CSR-identity Hierbij wil ik u vragen of u een bijdrage wilt leveren aan het onderzoek. Mocht u een andere persoon binnen uw organisatie meer geschikt vinden, wil ik u vragen mij hierover te informeren. Alvorens het interview zal ik u per mail een lijst met de onderwerpen toesturen die aanbod zullen komen tijdens het interview. Vertrouwelijke informatie zal niet worden opgenomen in de onderzoek rapportage en na afronding van het onderzoek is er de mogelijkheid voor uw bedrijf de rapportage te verkrijgen. U heeft dan inzage in het literaire- en empirische onderzoek over de impact van corporate governance op het behoud van de CSR-identity van groeiende duurzame ondernemingen. Ik hoor graag van u. *** Hartelijke groet, Myrthe Roelofsen Master student Management studies, Wageningen University (T) 06 4937 1347 (M) [email protected]
98
E-MAIL PROTOCOL - Confirmation of participation
Onderwerp: Bevestiging interview – Duurzaam ondernemerschap en behoud identiteit Beste [Naam], Allereerst heel erg fijn dat ik je mag interviewen voor mijn afstudeeronderzoek. Zoals beloofd een bevestiging van de afspraak voor een interview op [datum] over het behoud van de duurzame identiteit van uw organisatie. Ter voorbereiding hierop zal ik kort aangeven welke onderwerpen ik graag aan bod wil laten komen. Het interview bestaat uit drie delen en duurt maximaal een uurtje: Deel 1: vragen over de achtergrond uw bedrijf en de identiteit van uw bedrijf. Tevens zullen een
aantal vragen ingaan op uw eigen achtergrond in relatie tot het bedrijf. Deel 2: vragen over periodes van groei van uw bedrijf. De vragen gaan in op de meest
voorkomende barrières die men tegenkomt tijdens groei. Specifiek zal ik ingaan op de gevolgen van deze barrières voor de identiteit van het bedrijf en hoe u hiermee bent omgegaan. De volgende barrières worden behandeld:
o Onstuimige groei (denk aan plotselinge groei in vraag, opdrachten, etc.) o Veranderingen in directe controle en delegatie van verantwoordelijkheden; o Decentralisatie en formalisering van structuren; o Verandering in de cultuur van de organisatie; en o Een groeiende noodzaak voor een externe focus.
Deel 3: vragen over verschillende methoden/middelen die u gebruikt heeft om uw identiteit te managen tijdens de groei van uw bedrijf. Deze methoden/middelen verwijzen naar mechanismen van corporate governance:
o Strategie (gefocust op de wijze waarop beslissingen worden genomen) o Resource management (gefocust op het aannemen van nieuw personeel) o Coördinatie o Monitoren (denk aan codes/gedragsregels/principes die gevolgd worden en aan interne
en/of externe rapportage) o De cultuur van de organisatie (dit is een informeel mechanisme van corporate
governance) Desgewenst kan de informatie die je met mij deelt anoniem verwerkt worden. Dat wil zeggen dat de bedrijfsnaam niet wordt genoemd in het rapport en dat er geen uitspraken verwerkt zullen worden die mogelijk kunnen verwijzen naar deelname van [Naam bedrijf]. Ik hoop je hiermee voldoende geïnformeerd te hebben. Er is geen verdere voorbereiding noodzakelijk voor het interview. Indien je vooraf vragen hebt dan beantwoord ik die graag. Ik kijk erg uit naar ons gesprek. *** Hartelijke groet, Myrthe Roelofsen Master student Management studies, Wageningen University (T) 06 4937 1347 (M) [email protected]
99
APPENDIX A3 – Semi-structured interviews
The semi-structured interviews have been composed by using the operationalization in section 6.3. In
table A3.1, four different units of analysis are presented. The interviews that have been conducted for this
case study research include questions of the marked areas. This means that the results of the interviews
will lead to the formulation of conclusions on both the individual perceptions of the respondent as well as
on how the organization works and why.
Table A3.1 - Different units of analysis - design versus data collection (Yin, 2003)
Design
From an individual From and organization
About an individual
Individual behavior/attitudes/ perceptions
Archival records/other reported behavior/ attitudes/perceptions
About an organization
How organization works Why organization works
Personnel policies Organization outcomes
Semi-structured interview Below the case study questions are presented in the form of a semi-structured interview.
Toelichten doel onderzoek Hoe groeiende duurzame ondernemers erin zijn geslaagd om hun bedrijfsidentiteit m.b.t. duurzaamheid te behouden. Die noem ik de CSR-identiteit.
Toelichten verloop interview
Ik heb een aantal vragen over bedrijf zelf en uw achtergrond en over de CSR-identiteit van [naam bedrijf].
Vervolgens over de ontwikkelingen en groei van het bedrijf en bijbehorende barrières van groei.
Uiteindelijk wil ik graag afsluiten met vragen over verschillende methoden van governance die zijn toegepast om de identiteit te behouden tijdens groei.
Aanvullend voor procedure
Noemen dat gegevens indien gewenst anoniem verwerkt kunnen worden
Vragen of interview opgenomen mag worden
DEEL 1 (achtergrond bedrijf, respondent, identiteit) – Max. 15 minuten
Ik begin met een aantal korte algemene vragen over uw bedrijf:
1. Hoeveel medewerkers in fte werken er voor uw bedrijf?
2. Kunt u de complexiteit van uw organisatiestructuur kort beschrijven? (managementlagen en
verschillende afdelingen binnen organisatie).
3. Kunt in aangeven in hoeverre de strategie en managementaanpak worden gedocumenteerd?
4. In hoeverre worden beslissingen gecentraliseerd of gedecentraliseerd genomen? (medewerkers
hebben beslissingsbevoegdheden)
5. Kunt u aangeven of jullie met betrekking tot de strategie zijn gefocust op de lange termijn of juist op
de korte termijn. Hoever kijken jullie vooruit in maanden?
Ik zal nu een aantal vragen stellen over uw achtergrond en uw organisatie als duurzame onderneming
100
6. Wat heeft u gedaan voordat u [naam bedrijf] hebt opgericht? (alleen vragen indien vooraf niet
gevonden in andere bronnen)
In hoeverre bent u het eens met de volgende bewering (1 = helemaal oneens en 5 = helemaal mee eens)
7. Het concept van Tony’s is gebaseerd op idealisme en de persoonlijke drijfveren van mensen die daar werken om een klein verschil te maken in de wereld
8. Ik maak actief gebruik van de kernwaarden en de duurzame boodschap om mijn organisatie te differentiëren in de markt.
9. We hebben een organisatiecultuur gecreëerd die de identiteit van mijn bedrijf ondersteunt.
10. Ik vind het welzijn van de medewerkers wordt gezien als van groot belang
Identiteit
11. Wat is de reden dat [naam bedrijf] is opgericht? (missie)
12. Wat zijn uw belangrijkste persoonlijke waarden?
13. Wat zijn de belangrijkste waarden van [naam bedrijf]? (Hoe tot stand gekomen)
14. Waar is [naam bedrijf] over 10 jaar? (vraag op kort antwoord; visie, gewenst toekomstbeeld, hoger
doel)
15. Wat zijn volgens u de sterktes en zwaktes van de cultuur van uw bedrijf?
DEEL 2 (groei en ervaren barrières tijdens groei) – Max. 20 minuten
Nu zou ik graag verder willen gaan met een aantal vragen over groei en de barrières die je daarbij
tegen kunt komen. Specifiek zal ik ingaan op de gevolgen van deze barrières voor de identiteit van het
bedrijf
OVERTRADING
16. Hebben jullie tijdens de groei van [naam bedrijf] periodes meegemaakt van onstuimige groei?
(Plotselinge groei in vraag, opdrachten, etc.
Als ja:
17. Wat waren de consequenties van deze onstuimige groei (noem specifiek wat respondent heeft
geantwoord in vraag 18) voor het managen van de identiteit van [naam bedrijf]?
18. Wat hebben jullie gedaan om dit op te lossen?
CONTROL AND DELEGATION
19. Hebben jullie tijdens de groei van [naam bedrijf] problemen of barrières ervaren aangaande het
behoud van controle en het delegeren van verantwoordelijkheden? Ik noem een aantal oorzaken op
uit de literatuur die veelvuldig voorkomen, zou je willen aangeven in hoeverre deze van toepassing
zijn geweest op een schaal van 1 tot 5 (1 is helemaal oneens en 5 is helemaal eens)
Code Oorzaak Antwoord
a Groei in aantal medewerkers
b Uitbreiden naar nieuwe geografische gebieden
c Uitbreiden naar andere consumentenmarkten
d Uitbreiden van product/service portfolio
e Het vormen van een managementteam
101
Als ja:
20. Wat waren de consequenties van a, b, c, d, e voor de identiteit van [naam bedrijf]?
21. Wat hebben jullie gedaan om dit op te lossen?
DECENTRALIZATION AND FORMALIZATION
22. Hebben jullie tijdens de groei van [naam bedrijf] problemen of barrières ervaren met betrekking tot
decentralisatie? (scheiding tussen management en control)
23. En met betrekking tot veranderingen in de structuur van de organisatie? (bureaucratie)
Als ja:
24. Wat waren de consequenties van decentralisatie voor de identiteit van [naam bedrijf]?
25. Wat waren de consequenties van veranderingen in de organisatiestructuur voor de identiteit van
[naam bedrijf]?
26. Wat hebben jullie gedaan om dit op te lossen?
ORGANIZATIONAL CULTURE CRISIS
27. In hoeverre ervaar je een verschil in commitment/betrokkenheid bij de organisatie tussen jouzelf en
medewerkers van de organisatie? Is dit verandert tijdens de groei van het bedrijf?
28. Hoe heeft de groei van [naam bedrijf] invloed gehad op de ontwikkeling van de cultuur van de
organisatie? (homogeniteit van de organisatie)
29. Wat zijn de gevolgen van veranderingen in de cultuur van de organisatie op de identiteit van [naam
bedrijf]?
30. Hoe hebben jullie dit gemanaged? Hoe zijn jullie daarmee omgegaan?
DEEL 3 (governance mechanismen) – Max. 35 minuten
We zijn beland bij het laatste deel van het interview. De vragen die volgen gaan over de methoden die
u gebruikt heeft om uw identiteit te managen tijdens de groei van uw bedrijf
STRATEGIE
31. Kun je op een schaal van 1-5 aangeven in hoeverre de identiteit van [naam bedrijf] wordt gebruikt
als al dan niet stabiele factor voor:
Code Element Antwoord
a Het ontwikkelen van de strategie
b De werkelijke inhoud van de strategie
c Hoe wordt gereageerd op interne en externe invloeden
102
32. Kun je aangeven op een schaal van 1 tot 5 in hoeverre de volgende groepen invloed hebben op
beslissingen aangaande de strategie (1=geen invloed – 5 = zeer veel invloed)
Code Element Antwoord
a Managers
b Werknemers
c Klanten
d Externe partijen
(vraag naar voorbeelden als er een score wordt gegeven van 3 of hoger)
33. In hoeverre wordt de strategie gebruikt als stuurinstrument voor het nemen van beslissingen over
het managen van de identiteit van de organisatie? Wie zijn daarbij betrokken?
34. Hoe wordt de strategie gecommuniceerd naar externe stakeholders? En hoe is het management van
de identiteit hierin geïntegreerd?
35. Kun je op een schaal van 1 tot 5 aangegeven hoe belangrijk je strategie vindt als middel om de
identiteit van de organisatie te bewaken/behouden? 1 = niet belangrijk; 5 = zeer belangrijk
HRM
36. Kun je op een schaal van 1-5 aangeven in hoeverre de volgende elementen van belang zijn bij het
aannemen van nieuwe managers en medewerkers: (1 = niet belangrijk; 5 = zeer belangrijk)
Code Element Antwoord
a Kennisniveau
b Bezit van vaardigheden en competenties
c Persoonlijke waarden
d Overeenkomsten tussen de kernwaarden van [naam bedrijf] en de persoonlijke waarden van de nieuwe manager of werknemer
37. Op welke manier zorg je ervoor dat nieuwe medewerkers voldoen aan de voorwaarden van [naam
bedrijf]?
38. In hoeverre wordt er bij het aannemen van nieuwe medewerkers rekening gehouden met het
behoud van de identiteit van [naam bedrijf]?
39. Kun je op een schaal van 1-5 aangeven hoe belangrijk je het sturen van personeelsmanagement
vindt als middel om de identiteit van de organisatie te behouden? 1 = niet belangrijk en 5 = zeer
belangrijk
COORDINATIE
40. In hoeverre hou je rekening met de identiteit van [naam bedrijf] bij het selecteren van financiële
middelen? En bij de selectie van andere middelen?
41. Hoe meten jullie de uitkomsten van de duurzaamheid gerelateerde doelstellingen?
42. Zijn jullie gefocust op groei ik kwaliteit of groei in kwantiteit? In hoeverre wordt dit beïnvloed door
jullie identiteit?
43. Hoe zorg wordt de identiteit van [naam bedrijf] verspreid binnen de organisatie? Welke manier? Aan
wie? Hoe vaak?
103
44. Hoe wordt de duurzame boodschap van [naam bedrijf] gecommuniceerd naar de buitenwereld?
45. Kun je aangeven op een schaal van 1-5 hoe belangrijk je het vindt dat de identiteit van [naam bedrijf]
wordt gebruikt als basis voor het nemen van beslissingen en het uitvoeren van bedrijfsactiviteiten?
1 = niet belangrijk en 5 = zeer belangrijk
MONITORING
46. Gebruiken jullie bepaalde codes of regels om te monitoren of het gedrag en de acties van
medewerkers passen binnen de identiteit van [naam bedrijf]?
47. Hoe wordt rapportage gebruikt om te monitoren in hoeverre ondernomen acties passen binnen de
identiteit van [naam bedrijf]? Zijn dit interne of externe rapportages? (wanneer begonnen)
48. Kun je aangeven op een schaal van 1-5 hoe belangrijk je het gebruik van rapportage vindt als middel
om de identiteit van [naam bedrijf] te behouden? 1 = niet belangrijk en 5 = zeer belangrijk
CULTUUR
49. Kun je uitleggen welke rol de cultuur van de organisatie speelt met betrekking tot de identiteit van
[naam bedrijf]?
50. Hoe vaak verspreid je de belangrijkste waarden van [naam bedrijf] binnen de organisatie?
51. In hoeverre beschouw je de cultuur van de organisatie als een strategisch hulpmiddel voor het
behoud van de identiteit van de organisatie?
52. Kun je aangeven op een schaal van 1-5 hoe belangrijk je de cultuur van de organisatie vindt als
middel om de identiteit van [naam bedrijf] te behouden? 1 = niet belangrijk en 5 = zeer belangrijk
Bedanken voor tijd; vertellen dat resultaten met respondent worden gedeeld; nog tips voor bedrijven
die waardevol zijn om mee te nemen in dit onderzoek?
104
APPENDIX A4 - Interview protocol
The interview protocol contains the general rules and procedures regarding the implementation of the
interview instrument (Yin, 2003).
Guidelines prior to, during and after the interview The following steps are followed prior and after the interviews with the case companies:
An interview is scheduled by contacting the selected companies. Call and e-mail protocols have been
used. Three interviews have been conducted face-to face at the location of the company. Four out of
seven interviews have been conducted via telephone or Skype.
One week before the interviews, a list of subjects concerning the content of the interview questions
is shared with the respondents via e-mail.
Each respondent is asked permission to record the interview. Besides the respondents is asked
permission to process the transcript by taking into account anonymity or not.
At the end of the interview, the respondents are asked to share relevant company documents if
possible.
The following guidelines are followed during the execution of the interviews:
The semi-structured interviews leave room to ask additional questions in order to create an in-depth
understanding of the subject of discussion.
The order if questions is followed as much as possible. Exceptions are made when the respondent
himself/herself elaborates on subjects that will be discussed later on.
Dependent on the experiences during the growth of the firms of the respondents, weighted attention
could be paid to certain subjects. This in order to allow the respondents to elaborate on barriers of
growth they have experienced and on mechanisms of CG they have implemented.
Steering the answers of interviews is avoided.
Prior research on the companies and respondents Prior to the interview, information is gathered on the history, mission and development of the firms. If
possible the background of the respondents is gathered through available information on the internet,
such as interviews, newspaper articles etc. The aim of this prior research is to anticipate to certain
information in order to realize in-depth answers on the interview questions.
Interview introduction Each interview is started with an introduction of the researchers study background and an introduction
of the respondent. Besides an introduction of the research project, the aim of the interview and the
content of the interview is given (see appendix A3).
Quality of the interview questions and scale interpretation The discussion of the quality of the interview is based on the presentation of the semi-structured
interview in appendix A3. In this section, the sources and aim of the questions is discussed.
105
PART 1 – General info on company, respondent, SEF and CSR-identity
General questions about the company:
Questions 1-5 and are based on the research of Bos-Brouwers (2010). The aim of these questions is to be
able to compare the cases on their general characteristics. The diversity of selected cases requires an
informative representation of the differences in size, complexity of the organizational structure,
documentation of strategy, centralized or decentralized decision-making and a focus on the long or short
term.
Background of the respondent
Question 6 is based on the characteristics of SEFs that are based on the article of Choi and Gray (2008).
This question is specifically going into the background of the sustainable entrepreneur, which might
influence the SEF. In case the respondent was not the founder of the firm (Tony’s and Triodos Bank), the
respondent is asked about both his/her own background and about the background of the founder.
The SEF
Question to ten are based on the characteristics of SEFs that are based on the article of Choi and Gray
(2008). The questions are formulated as propositions which could be answered on a 1-5 Likert-scale:
1 = strongly disagree; 2 = Disagree; 3 = No disagreement and no agreement; 4 = Agree; 5 = strongly agree.
In order to substantiate the answers, a direct or indirect explanation is used.
CSR-identity
Questions 11-15 are based on Melewar (2003). The aim of the questions is to be able to define the CSR-
identity of the case. The questions are focused on the mission (reason of establishment), the values of the
firm and the personal values of the respondent, the desired future direction/long term goal and the
strengths and weaknesses of the culture.
PART 2 – Business growth and barriers of business growth
Overtrading; Question 16 is based on (Scott and Bruce, 1997) in order to obtain knowledge on if and
how the firm has experienced periods of overtrading in terms of uncontrolled growth.
Control and delegation; Question 19a-e is based on (Koeverden, 2012), in order to classify whether
barriers regarding control and delegation to a general, geographical or functional span of control.
Decentralization and formalization; Questions 22 and 23 are based on (Davidsson et al., 2007) in order
to obtain knowledge on separation between management and control and on developments regarding
bureaucratization within the company.
Organizational culture crisis; Question 27 is based on (Scott and Bruce, 1997) in order to obtain
knowledge on any changes in the level of commitment among employees/managers within the firm.
Question 28 is based on (Koeverden, 2012) in order to obtain knowledge on any changes in the
homogeneity of the organizational culture of the firm.
Questions 17, 18, 20, 21, 24-26, 29, 30 are used to guide the researcher to ask about the effect of the
barrier in case the company has experienced this barrier and to get understanding of how the firm
reacted to this barrier. These questions are allowed to be adapted regarding the content of the
answers of the respondents.
106
PART 3 – Mechanisms of corporate governance
The aim of the third part of this interview is to be able to determine which mechanisms of CG are deployed
by the firms and how these mechanisms influence the management of the CSR-identity.
Strategy
Question 31a-c is based on Kocak (2007) and Parum (2006) in order to obtain an understanding of the
influence of the CSR-identity on strategy process, content and context. Question 32 is based on Spitzeck
& Hansen (2010) to focus on stakeholder influence on strategy. Question 33 is based on Filatotchev et al.
(2006) in order to illustrate how the firm uses the strategy as means to decision-making regarding the
identity. Question 34 is based on Parum (2006) in order to understand if and how the firm is
communicating its strategy.
HRM
Question 36a-d and 37 are based in Foss & Mahnke (2000) with the aim to understand what aspects are
taken into account regarding hiring new employees. Question 36a-d is answered on a 1-5 Likert-scale
which can be interpreted as follows: 1 = Not important at all; 2 = Low importance; 3 = Neutral; 4 =
Important; 5 = High importance. Question 38 is asked in order to obtain an understanding to what extent
hiring new people is taken into account regarding the maintenance of the CSR-identity.
Coordination
Question 40-44 are based on the scheme of perpetual reasoning of Parrish (2010). The aim of these
questions is to classify whether the companies coordinate decision-making based on different aspects of
perpetual reasoning.
Monitoring
Question 46 and 47 have the aim to obtain an understanding of how monitoring is deployed by the firm.
The respondents are asked if and how they use codes/guidelines and/or reporting as tools.
Organizational culture
Question 49 is based on Del Baldo (2012) with the aim to be able to define the relationship between the
organizational culture and CSR-identity of SEFs. Question 50 is based on Melewar (2003) in order to obtain
information on how the most important values are spread within the firm. Question 51 is based on
Koeverden (2012) in order to understand to what extent the firm is using the culture of the organization
as a strategic tool.
Importance of mechanisms
Questions 35, 39, 45, 48, 52 are included in the interview in order to be able to make a distinction between
the importance of different mechanisms as perceived by the respondents. During the interview it has been
found that these questions could not be answered easily by the respondents. For this reason they have
not been taken into account.
107
APPENDIX A5 - Field procedures
Each single case study has been executed by conducting an interview with the founder, or a representative
who has knowledge on and responsibility for identity management within the company. Besides, relevant
company documents are gathered as data as well. A note should be made that not all participating
companies did share documents. As a third source of data on the single cases, articles, videos and
interviews that are published on the internet have been collected and analyzed as well. Below, an overview
of the collected data per company is given.
Company name Collected data
Willem en Drees Interview with founder (recorded) Artikel Trouw – duurzame top 100 (04-11-2011) Artikel Trouw – duurzame top 100 (13-10-2013) Interview met Drees Peter van den Bosch (NAJK februari
2012) http://www.willemendrees.nl/
Tony’s chocolonely Interview with brand manager (recorded) Tony_s Chocolonely Teaching Case Version Beta http://www.tonyschocolonely.com/
Dopper Interview with founder (recorded) Interview with business director (recorded) Brand book http://nl.dopper.com/en/
MyWheels Interview with founder (recorded) MyWheels als Nieuw Business Model -Transcript of
interview with founder (provided by founder) http://sociocratie.nl/ Sociocratische kringorganisatiemethode (Sociocratisch
Centrum © 2009) https://mywheels.nl/
Van Eigen Erf Interview with founder (recorded) http://www.vaneigenerf.nl/pdf/persbericht_kookboekprijs http://www.vaneigenerf.nl/
Triodos Bank Interview with Head of Corporate Communications and Manager Corporate & Public Affairs (recorded)
Environmental report – Annual report 2012 Company document – Triodos Bank (passport) http://www.triodos.nl/nl/over-triodos-bank/
Werkhaus Interview with founder (recorded) http://www.werkhaus.de/en/home/
108
APPENDIX A6 - A guide for the case study report
In this section the structures of both the individual case reports (section 1.4.1) and the cross case analysis
report (section 1.4.1) are included. The data that have been collected during the execution of the case
studies is stored in a case study database that can be obtained from the researcher. An exception is made
for the transcripts of the interviews, which are included in appendix C.
Individual case reports The results of the individual cases will be processed in an individual case report. These reports will be
based on data collected from several sources. Dependent on the availability of data, the following sources
of evidence are included:
Interview with the founder of the company or a representative that is closely involved in the
management of the CSR-identity of the firm. Below the outline of the individual case reports is
presented.
The website of the participating companies. Relevant information on their mission, vision, objectives
and year reports (if published) will be analyzed.
Archival records that are provided by the participating companies.
Relevant documents that are published on the internet about the company and the founder.
Relevant videos that are published on the internet about the company, including informational videos
or interviews with the founder or other employees of the firm.
Case study results about the participating companies that have been carried out by others.
Important to note is that one of the individual case reports is complemented with experiences and
knowledge of the researcher, which have been obtained during employment at one of the companies.
Part one of the interview can be divided in questions that have the aim to obtain general information
about the cases on the one hand and questions that have the aim to obtain information about the SEF
specific characteristics and its associated CSR-identity. Part two of the interviews is focused on the
experiences with the most common barriers of growth (section 3.1.2) and the consequences on the CSR-
identity of the SEF. The third and final part of the interview is focused on the deployment of the several
mechanisms of corporate governance (section 4.3) in order to steer the maintenance of the CSR-identity.
This results in the following structure of the individual case reports, see table A6.1.
Table A6.1 - structure of the individual case reports
Structure Content
Introducing the company
Part 1 of the interview (questions 1 until 5) is used to introduce the participating companies in both the methodology (section 6.3) as well as in the individual case reports (section 7.1).
The sustainable entrepreneurial firm and its CSR-identity
Part 1 of the interview is included to provide an answer to the first sub-question (How can sustainable entrepreneurial firms and their CSR-identity be characterized?): Questions on the background of the respondent and the characteristics
of SEFs are used to compare the cases to the characteristics of SEFs as defined in literature (section 2.2)
Questions on the CSR-identity are used to be able to describe the content of the CSR-identity of the participating companies
109
Business growth and the CSR-identity
Part 2 of the interview is included in the interview to provide an answer on the second sub-question (How does business growth, during the growth and expansion phase of the venture life-cycle process, effect the corporate CSR-identity of sustainable entrepreneurial firms?) These questions are used to discover which barriers of growth (section
3.1.2) are experienced by the participating company. If a certain barrier is experienced, the researcher will ask for the consequences of this barrier to the CSR-identity of the firm. If a certain barrier is not experienced, the researcher will continue to the interview questions on the next barrier.
Deploying mechanisms of corporate governance
Part 3 of the interview is included in the interview have the aim to provide an answer on sub-questions 3 and 4 (SQ3: How can mechanisms of corporate governance be deployed in order to steer the realization of the CSR objectives?; SQ4: How do mechanisms of CG effect the corporate CSR-identity as moderators of the influence of business growth?): These questions are used to discover which mechanisms of CG have been
deployed or are deployed by the participating company in order to steer the maintenance of the CSR-identity. Dependent on the mechanisms that are applied by the company, the researcher will focus more in-depth on a specific mechanism over the other.
Cross case analysis report The individual case reports will be used as data for the cross case analysis report. In table A6.2, the
structure of the cross case analysis is presented.
Table A6.2 - Structure of cross case analysis report
Structure Content
Characteristics of the SEFs and their identities
This section discusses how the cases score on the characteristics of SEFs as defined by literature research. Also, the CSR-identities of each company is discussed based on the environmental, societal and economic aspects. Finally, the core values of the companies are discussed. These core values are shortly compared to the personal values of the founder of the firm.
Experienced barriers of growth and the consequences for the identity of the firm
In this section, the business growth that has been experienced by the cases is compared. Then the impact of business growth on the maintenance of the CSR-identity is elaborated by comparing the experiences of the cases with each barrier of business growth as defined by literature research. Also other barriers of growth and their influence on the CSR-identity that have been mentioned during the interviews are discussed in this section.
Deploying corporate governance to maintain the CSR-identity
This final section of the cross case analysis discusses the deployment of corporate governance in order to maintain the CSR-identity of the different cases. Each mechanism of CG is discussed separately in order to be able to compare the approaches of each case.
The cross case analysis is followed by a discussion in which the case study results are compared to findings
of literature study. Within this section, answers are provided to sub-questions 1 to 4.
110
APPENDIX B – Individual case reports APPENDIX B1 - Willem&Drees
Introducing the company Willem&Drees is a Dutch sustainable entrepreneurial firm that is
founded by Willem Treep (respondent) and Drees Peter van den
Bosch in 2009. Before the establishment they both studied at Wageningen University and worked at
Unilever for three years. Willem&Drees has the aim to be the chain manager10 in order to connect
consumers with regional food. Willem&Drees has 26 employees. Their organizational structure can be
described as relative simple, because the organization functions as a flat organization. The two directors
have formulated a sub-management team that is involved in decisions regarding strategy. The structure
of the organization is visualized as follows (figure B1.1):
Figure B1.1 - Organizational structure of Willem&Drees
During the interview, the respondent mentions that they are focused on the long term regarding strategy;
building local supply chains together with customers is a long term project. In contrary, they are focused
on the short term regarding operations. The long term goal of the firm (10 year time-span) is to have
developed a profitable organization that offers a connection for consumers with local food producers.
The sustainable entrepreneurial firm and its CSR-identity The concept of Willem&Drees is based on idealism and their drive to make a small difference in the world
(5). This is shown by the fact that both founders have quit their jobs to realize local sales of regional
potatoes, vegetables and fruits and “to make the world a little prettier”. This motive stimulated them to
commit their talents to connect people with regional food, which has become the mission of the company.
Besides, in a newspaper article, honoring a place in the 100 most sustainable Dutch companies, one of the
founders argues that the company is established based on their ideal: “If you do not stick to these ideals,
the company does not survive, because then you will lose differentiation capabilities” 11. They are using
the core values and sustainable message to differentiate in the market (5), by promoting their products as
‘regional and fresh’. The organizational culture does support the identity of Willem&Drees (4), but is
becoming more important now the firm has grown to its current size. The well-being of employees is
considered as medium important (3).
The CSR-identity of Willem&Drees is described in table B1.1. Core values that underpin their identity are:
transparency, honesty, mutual trust, interdependence, discovering, enjoying and courage. All values are
integrated in their credo (see monitoring). Besides, they have hired an employee to help them integrate
10 http://www.willemendrees.nl/ditzijnwij 11 http://www.trouw.nl/tr/nl/14148/Duurzame-100-2013/article/detail/3525594/2013/10/13/Lokaal-als-ideaal-Mooi-maar-lastig.dhtml
Sub-management team
Sales Back-office Transport Other
Willem&Drees
111
at the labor market, despite his relatively low level of competences and low affinity with the company.
This example fits within the values and CSR-identity of the company. The founders believe in creating a
basis for sustainable behavior through local connections and through trust, which cannot be completely
prescribed by rules:
[Willem] “We create a culture among farmers that stimulated sustainable behavior instead of checking
certain sustainability performance measurements such as ‘not printing e-mails’, …, and ‘driving
green lease cars’, which is CSR 1.0. I don’t believe in this kind of sustainability performance. I
believe you have to create an atmosphere in which sustainability is intrinsically integrated in
the business.”
Table B1.1 - CSR-identity of Willem&Drees
CSR-identity of Willem&Drees
Environmental elements
Willem&Drees are contributing to low distance transport by realizing short food supply chains; less CO2 emission.
Their products are cultivated by sustainable methods and taking into account biodiversity
Societal elements By stimulating production of local food that can be sold locally through
building long term relationships with stakeholders and connecting farmers with consumers, they support local food supply chains
Economical elements They have the aim to realize entrepreneurship and idealism on the long
term by growing into a financial successful and stable organization
Business growth and barriers of growth The number of selling points of Willem&Drees products has tripled in the period 2009-201112 and is
increasing still. Currently, their products are produced by more than 90 farmers 13. During the growth of
the company Willem&Drees have experienced periods of disproportionate demand which has led to
problems regarding operations and finance. This can be characterized as overtrading/uncontrolled growth.
According to the respondent this barrier has tightened their identity, because it has led to more strictly
defined selection criteria for their products. This is substantiated by the following quote:
[Willem] “We have experienced a period in which we could deliver strawberries to Jumbo, provided that
we would meet a certain price. This was not optimal from financial perspective. But, this led to
huge demand in volume, which we couldn’t operationally realize well. […] This has led to the
decision to further define our identity; that we really should focus on more special products.
At first hand, we were willing to bring ‘normal’ food products to local stores as well, but the
risk is too high.”
The respondent mentions that he experiences difficulties regarding delegation. He argues that a change is
going on from being the entrepreneur towards being a manager, which he does not like. He rather keeps
doing things himself. Nevertheless, decision-making regarding the identity is still seen as the responsibility
12 http://www.trouw.nl/tr/nl/7844/De-Duurzame-100-2011/article/detail/3010700/2011/11/04/Drees-Peter-van-den-Bosch-nr-36-De-boeren-krijgen-zelfs-kerstkaarten.dhtml 13 http://www.trouw.nl/tr/nl/8844/De-Duurzame-100/integration/nmc/frameset/duurzame-100-2013/ranglijst.dhtml?personID=84
112
of the founders (see corporate governance mechanisms - coordination). Therefore, barriers regarding
delegation and control do not have consequences for the identity of the firm.
The growth of Willem&Drees has shown a change in the drivers of employees of the firm. Willem Treep
mentions that he sees commitment waxes and wanes. In case commitment is decreasing too much, they
anticipate by ending the cooperation. He sometimes sees new employees coming with a level of
engagement that is even higher than his own. Overall, all employees are committed sufficiently still and
the company has not experienced a crisis of the organizational culture.
Due to growth, Willem&Drees products end up in an increasing amount of supermarkets and other stores,
which makes it more difficult to control how their message is spread by retailers. Willem&Drees have to
deal with indirect sales, which means that they are not the final actor selling their products to consumers.
In this sense, they are dependent on how retailers are presenting their products in the stores. The
respondent explains that products that are not harvested in the Netherlands sometimes end up in boxes
of Willem&Drees; this negatively affects their identity. The respondent explains they are lucky they are
often informed about these occurrences; consequently, they just have to contact the retailer to make sure
the right products are presented in Willem&Drees boxes again. This barrier of indirect expression of the
identity through retailers is not mentioned in literature, yet experienced by Willem&Drees.
Table B1.2 provides an overview of the barriers of growth that are experienced by Willem&Drees. Both
the barriers of growth according to literature and other barriers that have been mentioned during the
interview with the founder have been taken into account.
Table B1.2 - Barriers of business growth experienced by Willem&Drees
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth Control and delegation Decentralization and formalization -
Organizational culture barrier -
Other barriers Indirect expression of the identity through retailers
Deploying mechanisms of corporate governance
Strategy
When strategy is developed, the identity functions as a stable factor for both development and its content.
The founders have most influence on decision-making, because the identity is formed by the founders
themselves and decisions are often taken autonomously. The identity is leading when strategic decision
need to be made, which is shown by the following example:
[Willem] “Due to bad harvest of pears, the pears were out of stock. We had to buy pears from France
for two weeks in order to meet the contractual agreements with our customers to deliver
pears. We had to, because unfortunately we did not succeed in convincing the customer that
they didn’t need pears for two weeks. We did not sell those pears using the brand name of
Willem&Drees, of course.”
113
The strategy of Willem&Drees includes to grow when it fits within the identity of the firm only. For
example, they stop selling strawberries when the season is over and demand is still high; otherwise, the
cultivation method does not fit their identity. Overall, strategy is seen as an important mechanism to
maintain the identity of the firm. Decisions are based on both the mission and the strategy. Strategy and
identity are considered as closely connected:
[Willem] “You can actually see that the identity serves the strategy. Our mission is to connect people
with local food. Our strategy is to realize this by creating transparency and making it more
personal. For our identity, this means we are strongly people oriented. Because we are trying
to move something by going against the flow, we are a little dominant in our actions.”
Human resource management
When hiring new people, they are assessed on their level of identification with the firm. Both the personal
values (5) and the match between personal values and the core values of the firm (5) are considered as
more important than the level of knowledge (3) and the level of skills and competences (4). This is
illustrated by the following quote:
[Willem] “If somebody is a really good salesman, but does not care about sustainability and food. I just
don’t believe in it. Somebody who might be a little worse in sales, but who is able to fully
communicate the core of Willem&Drees; this person might sell much better in the end. And
maybe, our customer does not prefer a really good salesman after all.”
A note that is made by the respondent is that assessing the new employee on identification with the values
of Willem&Drees is dependent on the function. A distinction is made between functions that have contact
with external stakeholders and functions that do not have contact with customers. Functions that do not
have direct contact with customers (such as people who apply Willem&Drees stickers) do not necessarily
have to have matching values with the company. Unless the fact the respondent admits he is acting not
consequently when hiring new people, human resource management is considered as an important as a
tool to maintain the identity of the firm.
Culture
The respondent explains the organizational culture is characterized by intuitive operations, which he
considers both as a strength and a weakness at the same time. This implies that they sometimes base their
decisions on emotions rather than based on facts and common sense:
[Willem] “Sometimes, we don’t act because it just doesn’t feel right."
The respondent does not see organizational culture as a strategic tool to maintain the identity of the firm,
because he believes strategy and culture are interdependent. The culture of the firm is not used as a
mechanism to maintain the identity of Willem&Drees. However, the respondent mentions that the role of
culture will change as the company grows further:
[Willem] “I think a culture is built through growth. […] I do think that the creation of a culture will
become a theme of more importance.”
114
Monitoring
Willem&Drees have formulated a credo, which is based on ten principles that guide thoughts and actions14.
These principles emphasize the aspects that are considered as the core of their identity. The credo of
Willem&Drees functions as an important means to steer behavior that fits the identity of the firm. The
credo consists of the following 10 principles: 1) from the neighborhood, as close as possible; 2) Seasonal;
3) Better quality; More fresh, better taste 4) Farmer in the spotlight; Products are produced by people 5)
Respecting the environment, biodiversity and sustainable cultivation methods; 6) Less emission of CO2
due to smart distribution; 7) Sustainable relationships; 8) Entrepreneurship and idealism on the long term;
9) We love transparency, being open and creating trust; and 10) Fun through adventures and discoveries.
Reporting has been used as a tool to communicate business performance to important stakeholders, such
as investors. Currently they are in a transition toward expanding the use of their reports, specifically with
regard to sharing their sustainable impact and performance that is realized by Willem&Drees. The general
year report will be extended by adding their sustainability related performances, which they are
measuring. An example is the maximum distance they are transporting Willem&Drees products. In the
near future, the year report will be spread amongst a broader group of stakeholders.
Coordination
Because decision-making is centralized, Willem and Drees own the final right to decision-making. They still
have direct control over the strategy and management of the identity of the firm. If decisions are made or
actions are taken by the employees, this will be based on the line of thought of the founders. They do have
formed a sub-management team consisting of accurately chosen members. However, the role of the sub-
management team is mainly consultative. This year they started to involve the sub-management team in
developing the year plan. Employees do have less influence on decision-making than the sub-management
team. However, the respondent explains that if employees really disagree they just don’t follow.
Sometimes, customers and other external stakeholders are an important source for strategy development
as well; the respondent explains they listen quite well to important stakeholders.
The founders are spreading and recalling the sustainability message of the firm during weekly meetings
on Monday, by having dinner together once a year and by organizing a party twice a year at which all
stakeholders are invited and by sending a weekly newsletter to those who prefer to receive it. Overall,
coordination is used by central decision-making and regularly spreading the sustainability message within
the firm. In table 7.3, an overview of the mechanisms of CG that have been deployed by Willem&Drees
are marked.
14 http://www.willemendrees.nl/ditzijnwij
115
Table B1.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
Mechanisms of corporate governance
Strategy Human resource management -
Organizational culture -
Monitoring Coordination
Other -
116
APPENDIX B2 - Tony’s Chocolonely
Introducing the company Tony’s Chocolonely (Tony’s) has been founded by Teun van de Keuken as a
statement of journalism in 2005, which formed the basis of the mission of the
company: realizing 100% slave-free chocolate industry. The respondent for this case is not the founder of
the firm, but the brand manager. She is responsible for managing the identity of the firm, both internal as
well as external. She has previous experience as brand management consultant for six years. Currently, 20
employees are employed at Tony’s. The organizational structure can be described as a flat organization,
which is managed by the director and his management team. The structure of Tony’s is visualized in figure
7.2.
Figure B2.1 - Organizational structure Tony's Chocolonely
Strategy is documented in a year plan, which is translated to each department. Decisions regarding
business and strategy are taken centralized within the management team, but operational decisions are
taken more decentralized. Realizing a 100% slave-free cacao industry is a long-term orientation which is
translated to small bits with a one year time scale. Their long term objective (10 year time-span) is to open
a chocolate factory in which the two aspects of the firm (crazy about chocolate and serious about people)
could be brought together in order to create a slave-free chocolate experience.
The sustainable entrepreneurial firm and its CSR-identity The concept of Tony’s is based on idealism and the personal drive of the founder to make a small difference
in the world (5), since the founder has initiated Tony’s as a journalistic statement. The core values and
sustainable business practices are actively used to differentiate the company within the market (5).
However, important to note is that the respondent has mentioned that they are aware of the difference
between what message Tony’s is spreading and what consumers are actually absorbing and experiencing.
The organizational culture that has been created supports the identity of the firm (4), but the respondent
argues that this could be improved by reminding employees about the fact that a critical and an
entrepreneurial attitude are important values which people should embrace when growing together with
the firm. The well-being of employees is considered as very important (5), which is expressed in the second
part of their slogan (crazy about chocolate and serious about people).
Table B2.1 describes the CSR-identity of Tony’s by environmental, societal and economical content. Tony’s
has embraced four fitting core values, which are underpinned by the respondent:
‘A critical attitude’ towards the cacao industry and towards themselves (serious about people)
Director
Finance
Growth and
expanding
abroad
Staff
Supply
Staff
Sales/marketing
Sales
staff
Marketing
staff
Shareholders Management team
117
Entrepreneurship; Tony’s started as a pioneering company, which is still visible through the fact
that they always try finding new ways to do things
Opinionated, which is translated into doing things in their own way, with a so called ‘Tony’s
twist’.
Fun along the way (crazy about chocolate)
Table B2.1 - CSR-identity of Tony’s Chocolonely
CSR-identity of Tony’s
Environmental elements
The chocolate bars are wrapped with environmental friendly materials such as uncoated, Forest Stewardship Council (FSC) recycled paper 15
They stimulate their suppliers of cacao to implement environmental friendly production methods 16
Societal elements
‘Serious about people’ is expressing their effort to realize a 100% slave-free cacao industry
Tony’s is certified a fair trade company; this is realized through mapping a fully transparent ‘bean-to-bar chain’; They realized this as the first in the cacao industry
Economical elements One of their aims is to show the cacao industry that it is achievable to be
a profitable supplier of 100% slave-free chocolate
Business growth and barriers of growth During the development of Tony’s, the director has been switched twice. The founder is a journalist and
decided to pass on the responsibilities of company owner to a new director, who mostly focused on the
‘serious about people’ side of Tony’s. In 2010, the current director took over her responsibilities and is
trying to balance the crazy about chocolate and serious about people sides of Tony’s. Since then, the
growth of the company has been started again.
The company has experienced and still is experiencing periods of high growth, with a growth rate between
50% and 80%. Extension of channels of sales, which leads to high growing turnover has also led to periods
that can be characterized as overtrading/uncontrolled growth:
[Nicole] “Before products are sold, they need to be produced first. Production materials need to be
purchased. These kind of materials need to be purchased in orders that are twice as big, while
turnover of a doubled sales has not been realized yet. So, we are facing this problem at the
moment, and we have faced it last year as well.”
Consequences of overtrading are the need to pre-invest twice as much as they are used to in order to
keep up with the current rate of growth. Overtrading has no specific consequences for the maintenance
of Tony’s identity according to the respondent. However, they are aware of the urge to manage the
identity strictly during these kind of periods.
15 http://www.tonyschocolonely.com/over-ons/veelgestelde-vragen/ 16 http://www.tonyschocolonely.com/over-ons/veelgestelde-vragen/
118
They sometimes experience difficulties when separating tasks and responsibilities with regard to a growing
number of employees:
[Nicole] “Because we are growing so fast, we are constantly scanning how responsibilities need to be
shifted. Because sometimes the function grows in size and sometimes new people who get a
vote in the same subject are hired. […] Now all different kind of functions need to consult each
other, but you want to avoid too much consultation. In that case, no progression will be made.”
The respondent argues that they are trying to balance between consulting each other on the one hand
and making sure that not every small detail is discussed and reconsidered by too many employees on the
other hand. this can be characterized as a barrier of delegation and control. Growth has led to the need to
professionalize the content of functions within the company. To anticipate to this barrier, they are
currently rewriting function profiles for the third time. Although this barrier of growth is experienced, it
has no direct influence on the maintenance of the CSR-identity.
The company is experiencing two more barriers, which have not been identified in the literature study of
this research:
Tony’s is selling both to consumers directly as well as indirectly through retailers. Regarding the latter,
they are dependent on if and how retailers are spreading their message. The respondent explains that
if and how Tony’s message is represented, is dependent on the drivers of retailers to sell their
chocolate. In order to steer a positive representation of their identity, the sales team organizes
meetings with retailers to support them spreading the right message among their customers.
In table B2.2, an overview of the barriers of growth that are experienced by Tony’s is presented. Both the
barriers of growth according to literature and other barriers that have been mentioned during the
interview with the founder have been taken into account.
Table B2.2 - Barriers of business growth experienced by Tony’s Chocolonely
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth Control and delegation Decentralization and formalization -
Organizational culture crisis -
Other barriers
Indirect expression of the identity through retailers
Negative public discussion about fair trade certification
119
Deploying mechanisms of corporate governance Strategy
The objective to realize a 100% slave-free industry, has been divided into three different pillars, which are:
(1) creating consumer awareness about the existence of abuses within the cacao industry; (2) leading by
example in terms of showing other companies that it is possible to produce slave-free chocolate
throughout the whole supply chain while being profitable; and (3) stimulating the industry to follow.
The identity of Tony’s is used as a stable input for both strategy development (5) as well as strategy content
(5). The respondent mentions that this is best visible through the fact that each plan (regarding marketing,
branding, communication, etc.) starts with what Tony’s stands for and where they are going to. This
functions as a basis for each plan that has to be made. The company is working with a specific method for
documenting and structuring its year plan, which is called OGSM (Objectives, Goals, Strategy and
Measures). This strategy system serves as a tool to split the long term goal into short term goals and
accompanying actions.
[Nicole] “The overall objectives are translated to concrete points of action, including desired milestones
and how to measure if these milestones are reached. This plan is documented every year; each
department manager has its own plan which is based on this.”
Tony’s has defined three different groups of customers, which are ‘causies’, who buy chocolate because
they support the mission of Tony’s, ‘foodies’ who buy chocolate because they just like the taste and quality
and ‘trendies’, who buy because they find the brand fresh and trendy. The respondent argues that strategy
is an important means to maintain the identity of the company. Therefore they recognize they should
strategically adapt the approach to different types of consumers; their identity is expressed differently to
match each identified consumer group. According to the respondent it is important to be able to reach
commercial targets while at the same time still be willing to look at themselves in the mirror. For this
reason long term goals, which are based on the identity of Tony’s will always be leading. As an example,
the respondent explains about their decision to not re-introduce a popular taste:
[Nicole] “The limited edition of white chocolate with raspberry and sparkling sugar was highly popular.
We still receive daily requests to re-introduce this one. The reason we are not re-introducing is
because white chocolate is made of cacao-butter only. We are not able to produce white
chocolate according our own norms and quality yet. So we cannot produce slave-free cacao
butter. Commercially, white chocolate with raspberry and sparkling sugar would be an absolute
winner in terms of turnover, but we choose to keep following our mission, which is 100% slave-
free chocolate.”
Human resource management
With regard to the employment of people the respondent mentions that when the company grows, the
functions will extend and people have to develop within their function. Within small organizations,
employment is not necessarily based on education for a certain function or profession, but this could also
be because people happen to have fun and to be good at their job. As the company becomes bigger, there
is a need to start professionalizing. It becomes important to hire people with certain knowledge and
experience from outside the company. Possession of a certain level of knowledge (5), skills and
competences (4) are therefore considered as important when hiring new employees according to the
120
respondent. Next to this, it is very important that new employees can identify themselves with the values
of Tony’s (4-5). The respondent explains that some people who did not completely match with the
company’s value, have been employed in the past. This has been considered as a barrier, which has
stimulated them to consciously create a steady pool of employees that all share a set of values. New
employees are found through connections in the first place. When this does not deliver a proper candidate,
a vacancy is published.
[Nicole] “Currently, we are more and more conscious about values and norms and the organizational
culture that exists within the firm. That this is very important to take into account when hiring
new people. It should be integrated in procedures instead of basing it on feelings, experience
and competences alone. The personality of a person is highly important as well.”
Because they have adapted their procedures, this implies they use human resource management as a
mechanism to maintain the identity of the company through professionalizing function profiles and the
selection of employees.
Organizational culture
The core values and the embracement of ‘crazy about chocolate and serious about people’ are seen as the
strengths of the organizational culture of Tony’s by the respondent. The respondent describes the culture
as informal, yet critical and courageous. Having fun at work is a strength, because this leads to a
enthusiastic and courageous attitude and a weakness at the same time. She argues that people do have a
critical attitude, which might be even more critical sometimes. She also explains that enthusiasm causes
people start to think along immediately instead of acknowledging that aims could be established a litter
higher.
The company has been created by a group of idealistic people who have had an essential influence on the
culture of the firm.
[Nicole] “Tony’s has started with such a clear vision and goal, which has become the identity of the firm.
It started as a journalistic statement that has been developed into a professional chocolate
producing company with a mission. So the culture did feel the identity quite fast.”
Just like strategy, culture is considered as an important means to maintain the identity. Important to note
is that the respondent sees a clear interaction between culture and identity, because the identity and
culture are maintaining each other.
Monitoring
Tony’s has its own code that is used as a road map, divided into three pillars (creating consumer
awareness, leading by example and stimulating the industry to follow). Each pillar has its own plan which
is worked out until 2020. It consists of milestones with concrete points of action.
[Nicole] “For example the supply chain is worked out very specifically, from how many children per
farmer should go to school until marketing in terms of how many people know about our
company. We try to be able to measure each milestone.”
The annual report includes a large section about Tony’s objectives regarding sustainability translated into
their impact. They are not obliged to publish an annual report, but they decide consciously to do so as a
form of reporting. This report is communicated to a wide range of stakeholders during a yearly event,
which is called Tony’s Fair. This fair is divided in two parts, for the day-program important stakeholders
121
are invited during which the annual report is communicated. These stakeholders are welcome to join the
evening-program as well, together with consumers who are willing to celebrate the success of Tony’s.
Furthermore, a balance between crazy about chocolate (limited tastes, production updates, etc.) and
serious about people (reports about slavery within the cacao industry and a blog of an intern in Ghana) is
published on their website and social media. Besides they are regularly available for interviews for
magazines and management journals. Tony’s is using both a code as well as reporting to monitor whether
actions are taken in line with their CSR-identity, which implies that monitoring is an important mechanism
of CG to them.
Coordination
The shares of the company are divided amongst several shareholders. However, the majority of shares is
owned by the director. The management team consists of four members, including the director. Each
member has an equal share of voting regarding decisions about management operations. If necessary, the
director has the right to make a decision himself. When employees have a certain opinion or idea, the
management team is listening to them and will take this into account. With regard to influence of
customer, the respondent mentions the following:
[Nicole] “The judgments of customers that are spreading our story, is higher weighted than the
judgment of customers who are less spreading our story. However, we do have certain interests
regarding the latter kind of customers, because they are increasing our turnover. So, we have
to take into account some of their opinions as well. Ideas that are mentioned during our
consumer panel meetings, which we do like as well, will be taken into account by us.”
Influence of external stakeholders is considered as less important.
[Nicole] “Other parties within our field are allowed to form and express an opinion about us. But, this
won’t be leading for our final actions.”
The values of Tony’s are regularly spread within the firm, during Monday-meetings, and every second
week when an update about the brand and publicity is shared, and during dinners. Tony’s is relatively
decentralized, which leads to equal division of votes within the management team, seriously taking into
account the interests of employees en different customer groups. Besides, the values are regularly recalled
during meetings and other occasions.
According to the respondent, external publicity has to be earned instead of bought. Tony’s gains a certain
goodwill that is associated with the brand, which leads to relative easy (and free) media publicity. Another
reason is the fact that they are always trying to be creative in their actions in order to be easily picked up
by press. The effort that is invested in creativity belongs to the identity of Tony’s according to the
respondent. This kind of external communication turns out to be positive according to the respondent.
This is considered an informal mechanism of corporate governance.
Based on the results of case study research at Tony’s, it can be concluded that they deploy all mechanisms
of CG in order to maintain their CSR-identity. Besides, they trigger media attention in order to attract
positive attention towards their CSR-identity. An overview of the deployed mechanisms of corporate
governance is presented in table B2.3.
122
Table B2.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
Mechanisms of corporate governance
Strategy Human resource management Organizational culture Monitoring Coordination
Other Stimulating positive media exposure/Free publicity
123
APPENDIX B3 - Dopper
Introducing the company Dopper is a Dutch sustainable entrepreneurial firm that is founded in 2010
by Merijn Everaarts (respondent). He previously worked as a freelancer in
the event sector. The founder had the aim to develop a perfect bottle for tap water in order to contribute
to decreasing demand for single-use plastic bottles. The mission of Dopper is to decrease plastic waste by
producing and selling re-usable water bottles. Currently, Dopper has 10 employees employed in the
Netherlands. Besides, 3 freelancers, a volunteer and 4 interns are working for the company. Dopper
consists of a private company and a foundation. The foundation is established to spread the sustainable
message of Dopper and to collect and allocate 5% of turnover in order to realize water projects in Nepal.
The private company has the aim to sell Dopper bottles. The organizational structure of Dopper is
visualized in figure B3.1. Dopper Head Quarter (HQ) and the foundation are located in the Netherlands.
Three branch offices are located in Asia, Denmark and the USA, which are called ‘Dopper embassies’ by
the founder. A note should be made with regard to the temporary time-out of Dopper USA.
Strategy has been documented yearly since 2012, which will become more essential each year according
to the respondent. The long term goal of Dopper is to open 8 ‘Dopper embassies’ throughout 4 continents.
The founder used to have a long term focus regarding the strategy of the company (3 years). Due to recent
financial problems he recognized the urge to focus on the short term as well. Specifically they are strictly
monitoring expenses and the impact on the cash flow.
The sustainable entrepreneurial firm and its CSR-identity The concept is based on idealism and the personal drive of the founder to make a small difference in the
world (5). This is shown by the aim of the founder to contribute to the world, by structural solutions and
help. “The concept is originated by myself, it is exactly what I want it to be. I just want to structurally
contribute to the world.” Dopper is actively promoting their core values and its sustainable business
practices in order to differentiate in the market (5), which is expressed through slogans ‘The bottle is the
message’ and ‘The perfect bottle for tap water’. This implies that Dopper wants to sell a sustainability
message, which they are doing by putting the focus of spreading the Dopper story before selling the bottle.
Also, an organizational culture that supports the identity of the firm has been created (5). The founder
refers to the employees, who according to him have integrated the Dopper story into their ‘DNA’. This
becomes visible through the passionate attitude and behaviour regarding the mission of Dopper. The well-
Board
Volunteer
Dopper HQ (NL) Dopper Asia
Dopper Denmark
(Dopper USA)
Dopper Foundation
Business director
Employees
Sales - administration - graphic design – back office - events
Founder
Waste expert
Figure B3.1 - Organizational structure Dopper
124
being of employees is considered as highly important (5). The founder is actively working on a balance
between work, fun and team building.
The CSR-identity of Dopper is described in table B3.1. This identity is supported by the core values that
are mentioned by the respondent, which are: honesty and respecting others.
Table B3.1 - CSR-identity of Dopper
CSR-identity of Dopper
Environmental elements
Dopper is BPA free and produced of polypropylene (Dopper Original)/ or stainless steel (Dopper Steel)
By promoting the use of (filtered) tap water, Dopper contributes to the decrease of the use of single-use plastic
A decrease in single-use plastic bottles leads to less plastic ending in the plastic soup.17
Dopper is compensating for its CO2 emission.
Societal elements 5% of turnover is donated to realize water projects in Nepal
Economical elements By being economically successful, more people will be able to buy a
Dopper through international expansion.
Business growth and barriers of growth Dopper has been growing in number of employees over the past three years. Their sales is growing fast,
which provided them the possibility to expand internationally. International expansion is translated into
increasing sales channels outside the Netherlands and by opening so called ‘Dopper embassies’ (see figure
B3.1). Dopper has experienced cash flow problems caused by high increase in demand and large
investments at the same time. This can be classified as a period of overtrading. As a consequence, the
respondent explains that the focus was not on spreading the sustainability message of Dopper as much as
it should have been:
[Merijn] “I think it has had quite some influence, because I am a large part of the message of Dopper.
And this is what I want it to be, because I see it as my task for the company. But I have been far
too busy with internal issues. And that has become visible through marketing and in telling our
story, which is neglected the past half a year. Growth has led to a winding course.”
To anticipate to the lack of focus on the identity, a Dopper brand book has been developed. This book has
the aim to guide employees in expressing the identity of Dopper. Besides, a system of forecasting and
monitoring of real time financial data has been implemented. The latter allows them to take into account
the impact of all expenses on the budget.
Due to growth in size and in the number of employees, function profiles became unbounded. This has led
to a decrease in owning responsibility by employees, because they experienced too much work pressure
and responsibilities resting on their shoulders. This can be characterized as a barrier regarding delegation
and control. Recently, a newly employed business director replaced the previous one, is working on
identifying and documenting function profiles, together with the employees. Besides, business processes
are being mapped. The founder did recognise a need for division and allocation of tasks and
responsibilities, which is called delegation of control. This leads to a decrease in direct control of the
founder, since he is not involved in each process anymore. The respondent explains that the need to know
17 http://nl.dopper.com/en/mission/
125
everything has become less high for him, which implies that he has created more time to spread the
sustainability message.
[Merijn] “I always said: everyone is responsible for his/her own work, but nobody was responsible in
the end. Some people were responsible for the website, inventory management and processing
orders, all at the same time. But you cannot be responsible for everything. The result was: I am
responsible but I am not accountable, because I am too busy.”
Dopper is currently expanding abroad. Two embassies, in Hong Kong and Denmark are active at the
moment. The founder explains that he experiences difficulties in monitoring the embassies in finding a
balance between becoming financially independent and successful on the one hand and spreading the
message of Dopper on the other hand.
[Merijn] “When zooming in to Hong Kong, they are really into cleaning plastic waste and they have a
perfect understanding of issues regarding clean drinking water in the world. But, their business
skills are less developed, meaning inventory management, invoicing, administration, and more.
In Hong Kong, the identity completely fits. Than zooming into the other side of the world;
Denmark, these people have highly developed business skills, but they lack the ability to
express the identity of Dopper.”
The respondent explains that the geographical distance leads to less direct control which makes it difficult
to manage because he cannot compensate for the lacking aspects himself. Hong Kong is more successful
compared to Denmark, because Hong Kong is selling the identity of Dopper; this leads to selling bottles.
Denmark is selling bottles first, spreading the sustainability message is not their priority. He argues that it
is hard to find people who are capable to both express the identity and to have well developed business
skills.
[Merijn] “We have to be in search of those people, or look out for a combination of people who could
be connected. This is what we are doing in Australia at the moment. Besides, I told the people
in Denmark to find somebody who is totally into cleaning-up plastic waste.”
The experienced barriers regarding delegation and control are followed up by working on a process of
decentralization, which is managed by the business director. The respondent admits that it is difficult for
him to lose control, but he does recognize the need for decentralization. Professionalizing function profiles
and business processes will results in a more structured organization and decreasing unboundedness.
Another result is caused by the decision to split the employees to work in different office rooms. The
founder explains that he is not completely satisfied about the consequences of working in separated office
rooms. On the one hand, concentration levels go up because of less buzz. On the other hand, he is not
able to bring across the identity as he is used to do.
[Merijn] “I really think that you could hear so many more things concerning the identity when all
employees share the same office room. Separation really has its impact.”
This implies that the founder does not like losing direct control over spreading the CSR-identity internally.
Growth leads to a less homogeneous group of people. According to the founder, less motivated or less
committed people will impact the external appearance of Dopper as well. He explains he is experiencing
difficulties in recognizing differences between the level of commitment to the firm he personally
experiences and the level of commitment he can expect of his employees. In order to prevent employees
126
from getting demotivated, they are working on structuring the organization and changing tasks and
responsibilities of employees. Although levels of motivation and commitment are varying among different
employees, this cannot be characterized as an organizational culture crisis. Nevertheless, the founder
argues that he is experiencing barriers regarding changes in the organizational culture. Therefore,
‘Changes in organizational culture’ is added to ‘other barriers’ in table B3.2. Based on the results, an
overview is presented of the barriers of growth that are experienced by Dopper during the development
of the organization.
Table B3.2 - Barriers of business growth experienced by Dopper
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth
Control and delegation
Decentralization and formalization
Organizational culture crisis -
Other barriers Changes in organizational culture
Deploying mechanisms of corporate governance Strategy
The identity Dopper is used as a stable input for strategy development (5) and its content (5). Both the
founder and the business director have most influence on decision-making regarding strategy (5).
Employees are listened to and therefore have relatively high influence as well (4). Both customers (3) and
other external stakeholders (3) have medium influence according to the respondent. Strategy and the
identity of a company are closely connected according to the founder, which he shortly explains as follows:
[Merijn] “It goes back and forth all the time. You are talking or from strategy perspective or from
identity perspective […] The Dopper is the identity. And through this identity, strategy is
developed.”
Human resource management
When hiring new employees, the personal values are considered as most important (5) by the founder. He
argues that a complete match between personal values and the core values of the firm (4) is not always
possible, but it should be endeavoured. He recognizes the level of knowledge (4) and the possession of
function related skills and competences (4) do become more important as the firm grows. They are now
more focussing on the functions and accompanying competences:
[Merijn] “So, it is not about ‘I have a bit of little experience in marketing communication, and I like to
work for a company like Dopper so I am willing to learn it’. That is how we hired people up until
now. No, I need somebody for marketing communication, […] So I do this by hiring the right
people and by replacing people who do not fit within their function.”
They currently have an open vacancy for the function of personal assistant of the founder, which is
published both on Facebook as well as at an employment agency. Each source results in complete different
kind of people reacting on the vacancy.
[Merijn] “People who are following us on Facebook already are familiar with ‘Dopper DNA’ while other
people just want to become personal assistant; it doesn’t matter for who.”
127
The respondent considers HRM as highly important with regard to the maintenance of the identity of the
firm. However, its importance is dependent on the function. Therefore they recently changed their
recruitment methods and changed the level of importance of certain requirements of new employees.
Culture
The culture of Dopper can be characterized by the integration of the Dopper-message into the ‘DNA’ of
its employees, which is considered as a strength by the respondent. According to him, Dopper is
experienced as a honest organization. However, for customers and business partners it is sometimes not
clear whether Dopper is a commercial organization or a NGO; which he considers as a weakness.
Furthermore, the culture of Dopper is characterized by highly dedicated people, who are working hard to
realize the objectives of Dopper. According to the respondent, culture is an essential part of the identity
of the firm. He recognizes that he needs to actively manage the maintenance of the organizational culture
of Dopper.
Monitoring
In order to reorient the focus on spreading the Dopper-message again, the brand book has been
developed; this book is used for both internal guidance as well as for external communication. Reporting
between Dopper HQ and the embassies is aborted, because it did not work smooth enough. The founder
wants to implement the Rockefeller habits (see coordination) at the embassies as well. This will result in
the founder knowing about the activities carried out by embassies and the embassies knowing about the
activities of the founder. Except for the brand book, monitoring is not actively used to maintain the identity
of the firm.
Dopper is measuring its sustainability performance by counting the number of toilets and water taps that
have been realized in Nepal. Besides, they are currently certifying as a cradle-to-cradle company:
[Merijn] “The tag line of Dopper is: The bottle is the message. But at first hand, it was called ‘the perfect
bottle for tap water’. And I still think all aspects should be perfect. So not only perfect for
drinking water and perfect because we are donating for the realization of water projects in
Nepal. Also, suppliers should be sustainable. All aspects that are involved with Dopper should
be like that.”
Coordination
The management team of Dopper consists of two persons. A clear distinction is made between the
responsibilities of the founder and the business director (his brother). The founder is responsible for the
vision on the soft side, regarding the foundation and spreading the sustainability message. The business
director is responsible for all business operations regarding sales, the back office and the further growth
of the firm. This implies that the founder wants to keep direct control over managing the identity of the
firm.
Within Dopper, the method of the Rockefeller Habits is integrated into day-to-day activities. Each day
starts with a daily, in which all employees share their three most important priorities of that day. Each
week, during the weekly, each employee shares both a personal and a business related highlight. Besides,
other information of importance or concerns can be shared during this weekly. The founder uses the
128
weekly as a moment to remind employees of the identity of Dopper, by recalling the mission and the
objectives of Dopper. He often relates this to a recent development or issue. As the company keeps
growing, these meetings will be continued in sub-groups. Also, a quarterly is held each quarter, to discuss
and measure personal aims of each employee, but also to discuss strategy and future plans of Dopper. The
founder has the intention to implement the Rockefeller habits at ‘Dopper embassies’ in the near future as
well. Next to the dailies, weeklies and quarterlies, more meetings are organized in order to keep control
on managing the organization including its identity.
In order to realize the long term goal of opening eight ‘Dopper embassies’ on four different continents, a
new contractual formula is developed by the founder and the business director. This in order to protect
Dopper NL from high risk expenses. According to the founder, this formula can be compared to a
franchising contract. With this new contractual system, the shares of the embassy will be owned by the
embassy-owner(s) (100%). This embassy won’t necessarily be called ‘Dopper [country name]’, but they will
pay a fee in order to be allowed to use the Dopper brand. This means the founder will have little control
on how the Dopper identity will be expressed. He argues that it will be important for him to visit those
future embassies often. Also, the Dopper message is clearly documented now. At the moment they are
documenting the business processes of the back-office of the Dopper as well. Both will support embassies
in the future.
Dopper is actively spreading its message through education at high schools, colleges, universities and
companies and through stage time on events (Ted(x), festivals, etc.). Both the founder as well as a one of
the employees of the foundation (plastic waste expert) are spreading the Dopper message through stage
time. The Dopper foundation has the aim to create awareness about world issues regarding plastic waste
among consumers. They have developed a program called the ‘plastic waste academy’. Overall,
coordination is deployed through division of responsibilities among the founder and the business director,
the implementation of the Rockefeller habits and actively spreading the message of Dopper at events and
through the ‘plastic waste academy’. Regarding international expansion, a contractual formula has been
developed, which will increase the need to coordinate how the identity is represented abroad.
In table B3.3, an overview is provided of the mechanisms of corporate governance that have been
deployed in order to maintain the identity of Dopper.
Table B3.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
Mechanisms of corporate governance
Strategy
Human resource management
Organizational culture Monitoring Coordination
Other - -
129
APPENDIX B4 - Mywheels
Introducing the company Mywheels is a Dutch sustainable entrepreneurial firm founded by Henry Mentink (respondent) in 2003.
The organization was called Wheels4all until it changed to Mywheels in 2010. Before starting Wheels4all
the founder has been working as market researcher for a pharmaceutical company and for a big seed
company. In 1990 he has started his own consultancy company and he established a local fair trade shop.
Mywheels has regular 8 employees and so called ‘car-proprietors’, who are both member and employee
of the firm as well; this consist of a group of about 200 people. The organization is structured on a
sociocratic basis. Decision-making is based on consensus; decisions are decentralized if possible in which
local operational responsibility is stimulated. The structure of Mywheels consists of the following circles,
which is visualized in figure B4.1:
Circle of business, which can be translated as the management team
Circle of regional and national coordinators
Circles of members which each have a regional coordinator; members can be both employees as well
as investors as well as customers
Documentation of strategy is not a regular activity. New plans are created when necessary, for example at
turning points of the development of the organization. Mywheels is focused on the long term, meaning
several years. This is explained by the fact that they are not focused on quarterly results and showing short
term profit. The long term goal of the firm (10 year time-span) is to maximally spread the concept of local
care sharing; there are one million second cars in the Netherlands, which can be used more efficiently
according to the respondent.
The sustainable entrepreneurial firm and its CSR-identity The concept of Mywheels is based on idealism and the personal drive of the founder to make a small
difference in the world (5). The organization has been established for three reasons: first, the founder had
a personal need to share his car with acquaintances; second, the need to make a living; and third, idealism
in terms of becoming an example for other people. He believes that the use of ‘second’ cars can be
organized much more efficiently. The core values are actively used to differentiate the company within
the firm (5) by expressing their aim to realize ideals instead of profit. The organizational culture that has
been created does fully support the identity (5). This becomes visible within their sociocratic organizational
structure, which results in a transparent and personal culture. Notable is that the well-being of the
employees is considered as most important of all by the founder (5).
Circle of business & strategy
Circle of national and regional coordinators
Circles of members
Figure B4.1 - Organizational structure of Mywheels
130
The CSR-identity of Mywheels is presented in table B4.1.The founder personally values the ability to share
knowledge and the creation of collaborations. This corresponds with the core values of Mywheels, which
are sharing both responsibilities and profit, creating an organization for everybody and together building
the future.
Table B4.1 - CSR-identity of Mywheels
CSR-identity of Mywheels
Environmental elements Sharing a car makes people more conscious about choosing a means of
transport; they only use a car if necessary All cars owned by Mywheels are certified with an A-label
Societal elements
They are striving for convenient neighborhoods, by decreasing the total number of cars through car-sharing.
People are key to Mywheels; sharing cars provides easy access to a car to everybody
Economical elements “We all benefit”; Mywheels is about ideals, not about profit. People,
planet and money (instead of profit) are seen as equally important18
Business growth and barriers of growth In 2010, Wheels4All changed its name to Mywheels. Besides they adapted their concept to be able to
reach a broader group of customers. By hiring the creator of the ‘OV-fiets’ (public transport bikes), a new
platform is realized, which provides access for car proprietors (both customers and organizations) to share
cars. Both possibilities to offer a car and to use a car are available to an extended group of people19.
Mywheels is growing relatively slow. The respondent argues that this might be considered as a weakness,
but he also highlights the positive side of a slowly growing organization. The growth they are experiencing
is a very stable kind of growth. This rate of growth is linked to the identity of the organization, because
sharing cars is organized locally and people need to feel closely connected to the organization. Due to the
pace of growth, they did not experience any crises of business growth. However, a few remarks are of
relevance:
Mywheels has been established as a cooperative in 2003. Due to growth, the cooperative has been
converted to a combined private company and a foundation in 2008. Sociocracy has been applied
within the firm since its establishment.
Geographic expansion is organized by the people who are in demand of the concept, in their local
area. In this way, local commitment to the organization and the concept is created immediately. This
has a positive influence on the identity of the firm.
Decentralization does not form a barrier because of the sociocratic structure of the firm. Decision-
making has been decentralized since the establishment of Mywheels. Agreements are based on the
consent principle, in which no reasoned objection exists. In this way, all people involved in the decision
making process have equal resources to influence the decision taken. Sociocracy will be elaborated
further with regard to the deployment of corporate governance.
The flat and sociocratic organizational structure allows close involvement of the founder.
18 Company document provided by the respondent - MyWheels als Nieuw Business Model 19 Company document provided by the respondent - MyWheels als Nieuw Business Model
131
In order to grow, customers can become investors through crowd funding. Investing €1000,00 has a
return of 500 free kilometers, which can be translated into a return of 8%. This leads to close
involvement with the organization.
In sum, no barriers of growth as described in literature research have been experienced by Mywheels (see
table B4.2). Both the decision to grow relatively slow and the implementation of the sociocratic circle-
organziation method contribute to stable growth of the organization. The latter will be discussed more
extensively in the next section on the deployment mechanisms of corporate governance (strategy).
Table B4.2 - Barriers of business growth experienced by Dopper
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth -
Control and delegation -
Decentralization and formalization -
Organizational culture crisis -
Other barriers - -
Deploying mechanisms of corporate governance Strategy
Mywheels is organized according to a sociocratic structure, which influences formulation and
implementation of strategy. The sociocratic circle-organization method (SCM), introduced by Endenburg
(1981) can be seen as a management tool to efficiently and effectively design and lead an organization20.
This method is based on a dynamic process, consisting of three functions that together form a closed circle:
(1) leadership: shared goals are set, tasks are defined and responsibilities are established (Sociocratisch
centrum., 2009). At Mywheels, shared goals are set by the circle of business & strategy. Tasks and
responsibilities are decentralized and allocated to different circles; (2) implementation: the tasks are
executed by the responsible employees. During the implementation, the employees should be free, within
a set of boundaries, to realize the objectives in their own discretion (ibid.). Each regional circle of members
names a coordinator that is part of the circle of coordinators, who is an intermediate connection between
circles of members and the circle of business. At Mywheels, each region that is in demand for sharing cars,
is allowed to set up its own circle and be part of the organization; and (3) measurement: measuring the
performance and providing feedback, the ‘leaders’ can coordinate the process of implementation in order
to make sure that the shared goals will be reached in the end (ibid.). Mywheels has completely integrated
SCM into their organization. According to the respondent, this leads to both high own responsibility as
well as high commitment to the concept of the organization.
The identity of Mywheels functions as an important basis for formulating strategy, the content of strategy
and the personal way in which it is communicated. The level of influence of different stakeholders is not
seen as an issue by the respondent.
[Henry] “It is not about high or low influence, it is about making sure there is a safe feeling that people
are listened to.”
20 Sociocratisch Centrum 2009 - De Sociocratische Kringorganisatiemethode
132
Regarding the importance of strategy as a mechanism to maintain the identity of Mywheels, the founder
mentions his self-designed method for formulating a business plan. This plan should be visualized as a box,
which has both an inside and an outside. Each face of the box has its internal and external sides. To develop
insights and view an organization from different perspectives. The art is to see both the internal and
external sides at the same time. According to the respondent, strategy and identity are closely linked to
each other.
[Henry] “One of the internal sides of the box corresponds with the identity and ‘who’ you are as an
organization. This side describes who I am and who I want to be, but also the feelings I connect
to my organization. This internal side is translated through the external side of strategy, which
is how you are going to realize this identity. Those sides belong together and should always
interconnect.”
Human resource management
According to the respondent, one of the sides of the box corresponds with people. The external sides
consist of a team of people with specific knowledge and competences. The inner side corresponds with
the values of each person. Again, these sides need to interconnect. Next to assessing the level of
knowledge (4), a match between the new employee and the existing group of employees is considered as
equally important. The respondent explains that new people are assessed through an interview and
probation, just like in every organization. Hiring new people is used as a means to maintain the identity of
the firm. This is explained by the fact that it is important that employees express the sustainable message
of the firm in the right way, both within the firm and also outside the firm.
Culture
The culture of Mywheels has sociocratic fundaments as well. This means that it is a culture of consultation,
transparency and respecting other people. The respondent finds it difficult to name strengths and
weaknesses of the culture of Mywheels, since strengths can be weaknesses and the other way around.
According to him, one should constantly monitor the organizational culture. He sees culture and identity
as one and the same thing. However, he mentions that maintaining the identity is managed through small
aspects, which is visible in the culture of the firm. The respondent believes in the importance of internal
stakeholders spreading the right message. Sociocracy allows the founder to stay directly and personally
involved with employees, even when the organization is growing. This means that the founder is able to
maintain the informal and family-like character of the organizational culture.
Monitoring
Mywheels does not make use of any codes or guidelines, because the founder does not belief behavior
can be steered this way. He rather believes that people should be steered through idealism, ambition or
their qualities. People should do things they like most. Reports are made and shared with members and
the Chamber of Commerce.
The CSR performance of Mywheels has been measured by research and consultancy firms several times,
which is used for external communication. However, the CSR performance is not measured on a regular
basis. The respondent mentioned that they should measure more often. He assesses external
communication as highly important, especially information that is published in social media. The results
imply that monitoring is not actively used as mechanisms of CG by Mywheels.
133
Coordination
The decision to grow slowly is accompanied with a focus on qualitative growth over quantitative growth.
Spreading the identity within the firm is seen as a continuous process, which is highlighted during
meetings. Mywheels does avoid shareholders who are short-term oriented, which is a conscious choice.
They offer their members to become investors against an attractive return, in terms of free kilometers.
The respondent argues that it is essential to take into account the identity of the firm regarding investors:
[Henry] “We are looking for investors that endorse our identity. Expenses above the line are equally
important as expenses below the line.”
Coordination is deployed by regularly spreading the identity, focusing on qualitative growth and accurately
selecting investors.
In the company document that is provided by the respondent21, it is stated that Mywheels is actively using
free publicity in order to spread the message. They particularly focus on people that share positive
experiences and stories on social media. Also specific cars are promoted through social media. This implies
that Mywheels is using an informal mechanism of stimulating positive media exposure/free publicity.
In table B4.3, an overview is provided of the mechanisms of corporate governance that have been
deployed in order to maintain the identity of Mywheels.
Table B4.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
Mechanisms of corporate governance
Strategy
Human resource management Organizational culture
Monitoring -
Coordination Other Stimulating positive media
exposure/Free publicity
21 Company document provided by the respondent - MyWheels als Nieuw Business Model
134
APPENDIX B5 - Werkhaus
Introducing the company and its CSR-identity Werkhaus is a German sustainable entrepreneurial firm that is founded in 1992
by Eva Danneberg (respondent) and her husband. Before the establishment of
Werkhaus, Mrs. Danneberg has been employed as an educator and she has
worked with young and homeless people. Her husband, who is the co-founder
of Werkhaus has owned a company before. Werkhaus produces a wide range of products (e.g. displays,
toys, furniture, office). “All Werkhaus products with the inventive connecting system are made of natural
and environmentally friendly materials (wood, paper & rubber rings) that can be easily separated from
each other and recycled”22. Currently, they have employed 160 people, by producing all products in house,
they are supporting local economy and guarantee 100% made in Germany.
Werkhaus is structured by a division of different halls for production and offices, such as product
development, graphic design book keeping, etc. The founders are supported by a management team that
is actively involved in decision making. The organizational structure is visualized in figure B5.1.
Figure B5.1 - Organizational structure of Werkhaus
The strategy of Werkhaus is documented, but this is not considered as a regular activity. However, a
financial forecast is yearly carried out in order to show financial data to the banks and to get the
organization prepared for the upcoming year. They are trying to focus on the long term (3 years), but
according to the respondent, this turns out to be difficult sometimes. She argues that the growth of the
company can be hard to predict. The long term goal of Werkhaus is to create more environmental friendly
products. Besides, the share of customized products should be decreased while the share of standard
products should be increased. The main reason is to create a balance in the order and production volume.
Another long term goal is to increase the B2C sales.
The sustainable entrepreneurial firm and its CSR-identity The concept of Werkhaus is based on idealism and the personal drive of the founders to make a small
difference in the world (4). This is shown by the fact that the founders used their idealistic lifestyle as a
basis for the organization. They are actively using the core values and sustainable business practices to
differentiate Werkhaus within the market (5), by communicating actively about their environmental
friendly production methods and materials. They created an organizational culture that supports the
identity of the firm (5). The organizational culture is described as a big family that is working together and
22 http://www.werkhaus.de/en/about-us/ethics/
Employees Employees Employees Employees
Hall representatives
HRM assistant
Founders of Werkhaus
Management team
Office representatives
135
supporting each other in order to create a better life. Also, the well-being of employees is considered as
highly important (4), because being an open and family-friendly company is being one of the objectives of
the firm2. Besides, they have employed people with disabilities in order to provide them with a job and a
nice life.
The CSR-identity of Werkhaus is described in table B5.1. As most important values of Werkhaus, the
respondent names that the employees should be satisfied, they should take own responsibility and work
to realize high quality of work.
Table B5.1 - CSR-identity of Werkhaus
CSR-identity of Werkhaus
Environmental elements Werkhaus is using environmental friendly materials and production
methods only They use green power from renewable energy sources
Societal elements
They are contributing to employment in order to reverse the trend of migration away from their area.
One of the objectives is to create a good life-work balance for employees, which include:
o People that asked for asylum (16 different nations). o 25 employees that are limited by physical or emotional disabilities. o They employ young people as apprentices to teach them one of the
six professions they offer.
Economical elements Profit realization is not seen as the most important objective, however
financial sustainability is important for the existence of Werkhaus
Business growth and barriers of growth At first the company grew slowly until they get the first major customers. In 2000 they moved to Bad
Bodenteich to expand to a company site of six hectares. In 2003 the company has been awarded with the
‘European year of people with disabilities 2003’ for its outstanding achievement on this regard. Since 2009
they have signed a contract with Greenpeace Energy, which means that they use green power from
renewable energy sources only. In 2009 they opened the first Werkhaus shop, of which there are 7 spread
through Hamburg and Berlin at the moment 23. Currently they have been constantly growing; they have
been doubled in size (number of employees) since 2008.
Werkhaus is rapidly growing, which is accompanied with periods of high demand and use of full production
capacity, which can be characterized as overtrading. In order to anticipate to this growth they are currently
increasing the production capacity by ordering new machines. An important part of their identity is to
produce everything in house. They avoid outsourcing, except just before Christmas, when demand is too
high. The identity of Werkhaus is leading when dealing with overtrading, therefore it has not led to a
dilution of their identity.
The founder experiences a loss of direct control. She is used to be responsible for all employees, but
because of the growing numbers of employees she hired an assistant who could support her with human
resource management activities. The respondent argues that she is aware of the importance of
23 http://www.werkhaus.de/en/about-us/our-story/
136
maintaining the identity of the firm in terms of the way of working she intents regarding social
responsibility. Therefore, she hired a person she already knew as a friend to be her assistant:
[Eva] “I employed a friend of mine to help me with the personnel problems and with the interviews with
the employees and so on. So I can by quite sure that he is not running away from my concept. It is
very important to me, that we are on the same level.”
In order to overcome the barrier of control and delegation, the founder has selected a person she is
familiar with to take over some of her responsibilities.
The organizational culture of the firm has changed a little due to growth. The respondent explains that the
culture has become more anonymous, because it is not possible anymore to know all employees well. In
order to compensate, a big party is organized twice a year. Growth has led to a change in the organizational
culture and not to an organizational culture crisis. Below, an overview of the experienced barriers of
growth are presented in table B5.2.
Table B5.2 - Barriers of business growth experienced by Werkhaus
Experienced by the company
Barriers of business growth based on literature study
Overtrading Control and delegation
Decentralization and formalization -
Organizational culture crisis -
Other barriers Changes in organizational culture
Deploying mechanisms of corporate governance Strategy
The management team is consulted every two weeks to share their opinions regarding strategy; the
perspectives of the members of the management team are considered as very important by the
respondent. Nevertheless, decisions concerning high expenses are taken by the founders themselves.
Employees are involved if special knowledge is required for a certain decision. Finally, customers’ opinions
are taken into account when they are planning a cooperation with Werkhaus.
The social and ecological aspects of the identity of Werkhaus are always in the minds of the founders when
developing and planning strategy. The respondent explains that this is mainly important to them. This
becomes visible through the fact the all resources are assessed on being the best sustainable alternative
with regard to materials and production methods. Also the well-being of the employees is taken into
account as highly important. Overall, the respondent mentions that strategy is not considered as an
important source to maintain the identity of the firm.
Human resource management
When new people are hired, a protocol is used in order to assess whether the person will fit within
Werkhaus. Besides, current employees that will have to work together with the new employee are
involved to share their opinion about the new person. The level of knowledge is considered as most
important (5). The level of competences and skills (4), the personal values (4) and the match between the
personal values and the core values of the firm (4) are also considered as vital by the respondent.
[Eva] “It is very important that I feel a good connection with them. If they wouldn’t fit to the existing
group of employees, I would not like to employ them.”
137
Although the respondent did not rate human resource management as an important means to maintain
the identity, the results imply that she bases decisions on employing people by using her feelings with
regard to assess a fit between the new employees and the firm.
Culture
According to the respondent, the organizational culture of Werkhaus functions as a big family that is
working together. The strengths are visible within the very social environment in which people help each
other. The large amount of different nationalities is sometimes considered as a weakness, because of the
presence of miscommunication due to cultural differences and language barriers. The organizational
culture is considered as an important means to maintain the identity of the firm. The respondent herself,
wants to function as an example for her employees with regard to expressing the identity of the firm.
[Eva] “You have to be very authentic I think. Because otherwise, the identity of your company is like a
flower or something. You have to live everything that you are explaining yourself.”
Monitoring
Werkhaus does not make use of any form of codes or guidelines, nor from reporting. However they are
working in the implementation of a CSR performance measurement system. They are currently working
on the integration of a new European sustainability system (EMAS) which will provide them with
certification. According to the respondent, this will be positive for the image of the firm in the future.
Coordination
Werkhaus is organized relatively hierarchical, but managers and employees do have a vote in decision
making. Especially when it is concerned the working environment of the company. This implies a partly
centralized and partly decentralized form of coordination. The founders do not recall the values and
objectives of Werkhaus to employees on a regular basis, but if necessary. This is explained by the
respondent as follows:
[Eva] “Sometimes for example it is necessary to repeat some things. Because they might have forgotten
for example that we want to care about the waste. Some people always forget to put the waste in
different boxes and then we have to repeat that we are an environmental friendly company.”
The maintenance of the identity of Werkhaus seems not to be steered through the deployment of formal
corporate governance mechanisms. The social and ecological objectives of the firm are realized through
the strength of the lifestyle of the founders. They both are highly involved with the company and the
realization of a good life for their employees and they highly care for the environment:
[Eva] “The most important thing is that we keep our philosophy to have social responsibility for the
people around here. And to have the responsibility for the environment also. So we can go on in
the same way.”
In table B5.3, an overview is provided of the mechanisms of corporate governance that have been
deployed in order to maintain the identity of Werkhaus.
Table B5.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
138
Mechanisms of corporate governance
Strategy -
Human resource management -
Organizational culture Monitoring -
Coordination -
Other Maintaining the lifestyle
139
APPENDIX B6 - Van Eigen Erf
Introducing the company Van Eigen Erf is a Dutch foundation that is founded in 2003 by Iris van der Graaf
(respondent). Before the establishment, she has studied industrial design at TU
Delft followed by a promotion research on eco-design. After that she has worked
for multinationals as sustainability consultant for about ten years. Foundation Van
Eigen Erf has the aim to realize short food supply chains in which organic seasonal
products are sold locally and directly from farmers to customers. Organic farmers and horticulturalists
(licensees) can join the foundation, that supports the development of their businesses. Each licensee is
responsible for its own sales; the foundation functions as a supportive mechanism to the licensees by
providing a brand name, a strategy and contributing to market development and product introduction in
order to strengthen the position of the licensees within the market.
The foundation does not work with regular employees but hires freelancers. The amount of freelancers
depends on the activities of the foundation. Currently more than 100, relative small scale-farmers have
joined the foundation. Licensees are allowed to join Van Eigen Erf when they are SKAL-certified (quality
mark that guarantees reliable organic food24). The foundation is structured as follows (figure B6.1):
Figure B6.1 - Organizational structure Van Eigen Erf
The strategy is documented in a business plan of the foundation. The long term goal has been unchanged
since its establishment, but the strategy to realize this goal has been a little adapted several times
regarding the way of working. This long term goals can be described as realizing sustainable existence of
small-scale organic farms and providing easy and local access for consumers to the food that is produced
by these farmers.
The sustainable entrepreneurial firm and its CSR-identity The concept of Van Eigen Erf is based on idealism and the personal drive of the founder to make a small
difference in the world (5), which is shown through the fact that she wants to share the knowledge on
short food supply chains and local sales of organic food that has been created within one region with other
regions. The core values and sustainable business practices are used to differentiate the organization in
the market (5). The respondent argues that both the brand name (including its slogan) and the SKAL
certificate are used to differentiate the products of the licensees from others. The organizational culture
of the foundation should be seen as the set of values, norms and attitudes from both the foundation and
24 http://www.skal.nl/
Foundation Van Eigen Erf
Board of min. three farmers
Director (respondent)
Hired freelancers
Partners
> 100 Licensees
(organic farmers
& SKAL certificate)
140
the licensees together. The respondent explains that the culture that is established among licensees is
supporting the identity of the firm (3), but it is not especially build to support it. The well-being of
employees is considered as highly important (5). The respondent believes that they should care about
people as much as they do about animals.
The CSR-identity of Van Eigen Erf is described in table B6.1. The core values of Van Eigen Erf that are
mentioned by the respondent underpin the identity of the organization, they are: short connections,
sustainability in terms of avoiding food to be transported long distances, caring for food. The latter is a
reference to the slow food lifestyle. Besides, the slogans of Van Eigen Erf imply the sustainability related
cause of the organization. These are: ‘directly from the farm’ and ‘tasty from the neighborhood’.
Table B6.1 - CSR-identity of Van Eigen Erf
CSR-identity of Van Eigen Erf
Environmental elements Low level of CO2 emission due to short distance transport All products that use the brand name of Van Eigen Erf are organically
cultivated.
Societal elements Small-scale farmers get a fair chance of existence through the foundation The foundation functions as a platform which lowers barriers to
collaboration among farmers
Economical elements
The licensees are financially independent The foundation contributes to increasing the market for regional food by
developing a national applicable brand name (Van Eigen Erf) which increases the value of the products
Business growth and barriers of growth During the past years, the foundation has been growing by the number of licensees joining the foundation.
The current amount of licensees has reached about 100 farmers spread through different regions within
the Netherlands. The foundation has experienced a period of uncontrolled growth shortly after its
establishment. This was caused by a high need of small-scale farms to join the foundation; a large amount
of farmers joined at the same time. Because they already joined so early, a lot of farmers have been
involved in the development of the business plan and the strategy of the firm. This implies that the identity
of Van Eigen Erf has been established by involving a high number of licensees. After defining the mission
and the aim of the foundation, the brand name has contributed to further express the identity.
Growth in the number of employees has led to barriers regarding continuation of the foundation. The
respondent explains she has had experienced difficulties with regard to finding the right people to employ.
When expanding to new geographical areas, the foundation had to struggle with an issue regarding the
identity of the firm. They had to decide whether to integrate the regional origin of the products into the
brand name (e.g. Van Eigen Erf – Brabant) or to just stick to one national brand name (Van Eigen Erf). This
implies that Van Eigen Erf has experienced barriers regarding control in terms of geographical expansion
of the organization. To react to this barrier, it was decided to allow integration of regional names.
However, it turned out that farmers did not use it in practice.
Due to growth, they have decided to start reaching a broader range of consumer groups next to the
existing customer base of idealists. For example, they now focus on people who are interested in the
141
culinary aspects of regional products by organizing cookery feasts. Besides they have executed a project
to become a supplier of catering and health institutions. This has led to a broadening of the identity of Van
Eigen Erf; they are now profiling themselves as both sustainable and culinary.
The foundation has been started decentralized and changed into a more centralized organization as the
organization developed. At first hand, each region had its own association that functioned as intermediate
between the licensees and the foundation. Licensees joined the foundation through their association.
However, the identity of Van Eigen Erf was not expressed optimally through the associations, because of
their low activity. This is characterized as a barrier of decentralization and formalization. This has been
changed by putting a hold to the associations; nowadays, farmers can join the foundation individually
instead of through the associations. The reason for implementing a more centralized structure had been
the low activities at the associations. Centralization has led to a more clear understanding of the identity:
[Iris] “You just have one direction to go that can be shared and followed by everybody. […] In the end
it is better for the unity of the organization.”
They are sometimes hesitating to change the foundation into a cooperative in order to improve the culture
to better fit the aim of the organization. The reason they decided to stay a foundation up until now is
because a foundation allows for receiving more (financial) resources. Another point of hesitation is to
develop towards a trade partner for the farmers in order to support their development of sales. A
disadvantage would be the fact that some currently connected farmers are too small. This would lead to
a group of about 30 famers only that will experience benefits of Van Eigen Erf as a trade partner.
The group of highly committed licensees has not been changed in size during the development of the
foundation, but in its composition of farmers. According to the respondent, the group of highly committed
farmers used to consist of people who set up the associations, which implies commitment on
organizational level. This has changed to a group of farmers that are actively involved in projects and
activities that are organized by the foundation; this implies commitment on operational level.
Table B6.2 provides an overview of the barriers of growth that are experienced by Van Eigen Erf. Since
growth has led to changes in the organizational culture instead of barriers, the organizational culture crisis
is not considered as experienced.
Table B6.2- Barriers of business growth experienced by Van Eigen Erf
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth Control and delegation
Decentralization and formalization Organizational culture crisis -
Other barriers - -
142
Deploying mechanisms of corporate governance Strategy
The identity is used as stable input for strategy development (5) which, for example, is shown through
‘membership’ conditions. However, the actual implementation of the requirements is sometimes not
strictly followed.
[Iris] “At certain activities, farms that are too small to be SKAL certified can join us. However, there
should always be a good reason to deviate from the ‘membership’ requirements. They have to
have the intention to get certified in the future.”
Formally, licensees have little influence on developing strategy since a foundation has implemented a top-
down approach. A special meeting is organized once a year in which licensees can share their perspective
and interests. Besides, the respondent sees the foundation as an open organization; Licensees can always
call to express their opinions. In case of direct contact with consumers at one of the events or campaigns,
a survey is held in order to get known with their recommendations. The respondent mentions this as an
informal way to involve customers in decision-making. The foundation is taking into account external
stakeholders, such as the University of Wageningen; the chair group of sociology did research on the
foundation which has led to recommendations that are processed into the strategy of the foundation.
According to the respondent, strategy is seen as guidance for maintaining the identity of the foundation,
which is expressed through the projects that are initiated and organized. These projects are organized to
represent the interests of the licensees.
Human resource management
The respondent explains that the requirements of hiring freelancers are dependent on the function they
will fulfil. The level of knowledge and the possession of competences and skills is considered as more
important than the match between personal values and the core values of the foundation with regard to
supporting or administrative functions, while it is the other way around when the function includes
promotional and communicational elements.
[Iris] “When a person has no affinity with the cause of the foundation, it will be hard for him/her to
enthusiastically express the message. However, concerning back office functions, it might even be
better when a person is not idealistic.”
New persons are assessed during the execution of a project of Van Eigen Erf. By doing this, the respondent
gets to know the drivers and values of the new person.
Culture
The organizational culture is seen as an important means to maintain the identity of the organization.
According to the respondent, Van Eigen Erf is a real people-organization. The strengths of the
organizational culture of Van Eigen Erf are that all connected people are highly driven and idealistic, who
all produce differentiated products. A weakness of the organizational culture is the relatively individualistic
attitude of the licensees, which sometimes leads to a barrier for collaboration:
[Iris] “These people are used to solve their own problems and follow their own directions. It takes more
effort to collaborate and to understand the value of it.”
According to the respondent, the individualistic attitude of licensees has a clear impact on the
organization. Therefore, it requires more effort to get all licensees on board for certain actions, such as
143
spreading vouchers for ‘Van Eigen Erf Products’. Both from organizational perspective as well as from
consumer perspective, it is the interest of the organization to express a strong and clear mission that is
embraced by all licensees.
Monitoring
The foundation makes use of a set of guidelines which are published on their website25. The aim of the
guidelines is to emphasize the objective to realize short food supply chains between farmer and consumer.
It includes conditions for using the brandname ‘Biologisch Goed Van Eigen Erf’ (Organic Products of Own
Farm). These rules are considered as important to maintain the identity of the foundation according to the
respondent. The set of guidelines includes three rules regarding the conditions for being called a ‘Van
Eigen Erf shop’ and five rules regarding the conditions for ‘Van Eigen Erf products’4. The website also
mentions that a lot of licensees are working on so called ‘regional food supply chains’ to produce products
that are made of regional ingredients only.
Nowadays, the foundation does not make use of any form of internal reporting anymore. When the
associations still existed, the founder was invited to a yearly meeting at each association. These meetings
resulted in a report.
Because the foundation does not realize quantitative measurable sustainability objectives, they do not
measure their CSR performance. However, they do measure the yearly growth of turnover, which is
collected by Bionext each year. Bionext is a chain organization that supports consumption and quality
development organic food and farming.26 Overall, coordination is not used especially to maintain the
identity of Van Eigen Erf.
Important to note is the respondent mentioning ‘social monitoring’ as a more informal way of control:
[Iris] “Because we all know each other, we keep an eye on the activities of each other. […] It is more
about the values and not transporting food all over the world.”
However this is not formally initiated by the foundation, social monitoring is considered as an informal
mechanism to maintain the identity of the firm (see table 7.18).
Coordination
Decisions are made centralized. However, the respondent realizes that decisions should not be taken when
licensees are not supporting because the foundation has the aim to support the interests of the organic
farmers. Sponsors that are acquired by Van Eigen Erf should be committed to a societal of environmental
objective themselves. The foundation is focused on growth in quality rather than quantity. However,
quantitative growth can be seen as a growing number of licensees as well. According to the respondent,
their main goal is not necessarily to stimulate growth of individual farmers. The respondent does recall the
identity of the firm on occasion. The sustainability message of Van Eigen Erf is spread among the licensees
and external stakeholders during the yearly trade fair (BioVak). Sometimes, the respondent sends a flyer
of the foundation to all licensees in order to recall the cause of the organization.
25 http://www.vaneigenerf.nl/watdoenwe/biologischgoed.php 26 http://www.bionext.nl/content/missie
144
Table B6.3 - Deployment of corporate governance in order to maintain the CSR-identity
Deployed by the company
Mechanisms of corporate governance
Strategy Human resource management -
Organizational culture Monitoring Coordination -
Other Social monitoring
145
APPENDIX B7 - Triodos Bank
Introducing the company Triodos Bank is a Dutch organization that is established in 1980 by four men, which are called ‘the founding
fathers’ within Triodos Bank. This group consists of a banker, an organizational development expert, a
professor in fiscal legislation and a HR manager. The respondents are Thomas Steiner (Head of Corporate
Communication) and Nienke Leenstra (Manager Corporate & Public Affairs). The reason of establishment
was to realize transparency within the financial industry. The aim of Triodos Bank is to realize sustainable
banking, which means using money with conscious thought about its environmental, cultural and social
impacts.27 Currently they have employed about 950 employees. The organization is structured using a
matrix structure, in which both hierarchical and flat structures are combined. The Triodos Group structure
is visualized in figure B7.1. The executive board is head of the entire bank. The head quarter is located in
the Netherlands. Each international office has its own structure in which a managing director and a
management team are on top. Management of the head quarter and management of the international
offices maintain a functional relationship with each other. All managing directors of the offices and
business units are member of a so called ‘international management council’.
Figuur B7.1 - Triodos Group Structure 28
The organization is focused on the long term, which is documented in a strategic plan with a time-span of
ten years. This high-level plan is translated into strategic sub-plans every three years, which are yearly
processed into year plans per country. Regarding the future, the bank is open to developing new business
activities that could contribute to realizing the objectives of the organization.
The sustainable entrepreneurial firm and its CSR-identity The concept of Triodos Bank is based on idealism and the drive of the founders to make a small difference
in the world (5). The respondents explain that the ‘founding fathers’ took their personal drivers to realize
transparency within the financial industry as a basis; they did not take into account whether their
objectives would match with any consumer demands. The core values and sustainable business activities
are used to differentiate the organization within the market (5). Important to note is that one of the
respondents explains that differentiation should be seen as a result of realizing the mission-driven
objectives of Triodos Bank. Differentiation is a side-effect and not a means. The organizational culture does
27 Company document – Triodos Bank (passport) 28 http://report.triodos.com/en/2012/ourgroup/abouttriodosbank/triodosgroupstructure.html
Triodos Bank
Retail & Business Banking
NL - BE - DE - ES - UK
Investment management
Europe - Emerging markets
Private Banking NL - BE
Foundation for the administration of
Triodos Bank Shares
146
support the identity of the firm (4), which becomes visible in the family-like culture is build and maintained.
Finally, the well-being of employees is considered as important (4). Thomas argues that realizing their
objectives is inseparably linked to employees that are feeling comfortable, although the mission of the
organization is mainly important over this element.
Table B7.1 provides an overview of the CSR-identity of Triodos Bank, which is divided into environmental,
social and economic aspects. During the interview, the respondents named four core values that are
embraced within Triodos Bank:
Transparency; They realize transparency by choosing projects to strive for sustainability and quality
of life. When transparency is realized, savers/depositors are able to influence the direction of
society.
Sustainability, which is translated in advancing quality of life, both regarding the environment as
regarding society.
Excellence represents how Triodos Bank wants to realize its objectives.
Entrepreneurship is chosen because Triodos Bank embraces an entrepreneurial attitude in offering
financial services.
Table B7.1 - CSR-identity of Triodos Bank
CSR-identity of Triodos Bank
Environmental elements Investing in projects that benefit the environment and quality of life
Societal elements Realizing transparency by communicating how they use money that is
entrusted to them by depositors and investors Investing in projects that benefit society
Economical elements Being profitable because of being sustainable
Business growth and barriers of growth Triodos Bank has been growing relatively stable over the past ten years, with an average growth rate of
21%29. Their number of employees is growing much more with hurdles. Thomas explains that growth can
be managed by increasing efficiency of the existing pool of employees up until a certain level. When the
level of efficiency has reached its max, new employees are being hired again.
Although Triodos Bank has been growing relatively stable, they have experienced some extremes. Due to
media attention about banks and financial institutions, the number of new customers is sometimes
suddenly increasing. The respondents explain they always have managed to control these periods of
growth, by timely informing customers about relevant issues. They explain that growth has not influenced
the identity of Triodos Bank. Although, important to note is the following:
[Triodos Bank] “Strange enough, you always feel the urge to be careful to avoid dilution of the identity,
although I never noticed it. […] Based on our objectives, we do things differently, but this
has never led to dilution. While it is an obvious thought.”
Overall, it can be concluded that Triodos Bank has experienced periods of high growth, but they managed
to anticipate to it properly.
29 Company document – Triodos Bank (passport)
147
Triodos Bank is expanding internationally and has already opened international offices in five European
countries. A distinction can be made between international offices that are opened through initiatives of
people within the countries (BE, UK, ES) and international offices that are opened through the initiative of
the bank (GE, FR). The latter is integrated within the strategy of Triodos Bank. When Triodos Bank is
expanding internationally, they recruit local people to build up the organization in a specific country.
International expansion did not lead to any consequences for the identity of the firm, since they always
recruit people who are fully mission driven. This has not been experienced as a barrier within the countries
that initiated to open a Triodos Bank themselves, but it has been experienced as more difficult within the
countries that were initiated within their strategic plan. The respondents explain that responsibility is
delegated to international offices themselves. Geographical distance requires interaction between the
international offices and the head quarter. Therefore they need to stay closely involved with each other;
it takes effort to make sure that maintenance of high involvement is seen as relevant and important by all
international offices and business units.
Triodos Bank have experienced barriers regarding the continuous movement from centralization to
decentralization and the other way around. Currently they are in a shift towards more centralization in
order to be able to control growth. The respondent explains these barriers luckily do not influence the
identity of the firm; It rather influences how changes can be realized in a more fast or slow pace. They are
also experiencing barriers regarding formalization of structures, which is shown by difficulties regarding
maintaining manageability and control. A loss in control is experienced due to increases in the number of
employees. This kind of growth leads to the need to adapt organizational structures. New functions and
departments are formed which could cause difficulties, because of uncertainty about defining the next
step. Therefore, these kind of changes do not develop organically, but they develop step by step. According
to the respondents, this barrier has not influenced the identity of Triodos Bank. Growth leads to more
differentiation regarding functions that exists within the organization. While they actually want to provide
employees with the possibility to create their own path of development, growth requires to demarcate
functions and to hire people based on skills rather than on their intentions. Growth caused a need for
professionalization regarding function fulfilment, which leads to a tension regarding the less strictly
defined function profiles within Triodos Bank.
The organizational culture of Triodos Bank consists of a diverse group of people. The respondent argues
this is necessary in order to avoid a too homogeneous group of people. People who have too less affinity
with the values of the organization, will eventually leave the company again30. Triodos Bank has been
established in 1980, with a certain set of values and mission-driven objectives, that are still valid. The
respondent also explains that, dependent on the way it is approached, some cultural aspects have been
changed over time and but others have always stayed the same. He considers this as a strength, which
shows the binding factors of their organizational culture.
In table B7.2, an overview of the barriers of business growth that have been experienced by Triodos Bank
are marked. Triodos Bank managed to avoid dilution of their CSR-identity, because it is an continuous and
30 Authorizes by Triodos Bank
148
active discussion. In practice, people on all levels of the organization are regularly asking the question
whether things do still fit within the company or not. The respondents mention:
[Triodos Bank] “People are hired, because they have a certain ‘DNA’ that fits this behavior. So people that
have certain insights and have the courage to say it out loud.”
[Triodos Bank] “A step towards another direction, which might be perceived as dilution at first, is
discussed and adapted in order to make sure it won’t lead to dilution in the end.”
As an example, the respondent mentions the development of a sustainable mortgage as a financial service.
According to him, a conventional mortgage would definitely lead to dilution of the identity. Because retail
customers asked for a mortgage, they have decided to develop a sustainable mortgage that does fit within
the identity of Triodos Bank.
Table B7.2 - Barriers of business growth experienced by Triodos Bank
Experienced by the company
Barriers of business growth based on literature study
Overtrading/uncontrolled growth Control and delegation
Decentralization and formalization Organizational culture crisis -
Other barriers - -
Deploying mechanisms of corporate governance Strategy
Triodos Bank is mission driven, which becomes visible through the fact that identity forms a basis for
strategy development (5) and strategy content (5). One of the respondents explains this as follows:
[Triodos Bank] “The strategy that we are willing to express is formed through our holistic approach. Who
we are, really is our starting point when looking at strategy. We do not look to what is
asked from us per se, which we find very important ourselves. […] A disadvantage is that
this strategy and what we are going to do could seem very abstract for third parties.”
Strategy is developed top-down, but it sometimes happens that bottom-up feedback on the strategy is
perceived as progressive insights, which could lead to adapting strategy. The respondents argue that the
identity is integrated in the DNA of the organization, which is related to strategy as follows:
[Triodos Bank] “Strategy is covering this as a leading principle regarding how plans and daily steps are
taken.”
Triodos Bank has defined its target group as cultural creatives, who can be described as people that are
conscious about food, the environment and money31. Although every consumer is welcome to become a
customer, they have defined this target group in order to be able to bring across the message in the right
way. Overall, it can be concluded that strategy is not directly deployed to maintain the identity of Triodos
Bank, but identity functions as a leading base regarding strategy.
HRM
When hiring new employees, the level of knowledge (5), skills and competences (5) and the personal
values (5) are considered as equally important according to the respondents. The match between personal
values and the core values of Triodos Bank is seen as a little less important (4), because the respondents
31 http://www.vogelaarverzenders.nl/referenties/triodos/
149
see this as a characteristics that is allowed to be developing over time. Thomas considers a diverse group
of employees as important. However, both respondents argue that new employees are assessed on
whether they fit within the organization or not. According to them, the level of knowledge and
competences is more easy to measure than the personal values of the new employee. Thomas explains
that the latter is not integrated in a protocol, but it is based on a ‘gut feeling’. He assesses this by asking
unexpected questions and monitoring how the person responds to it. Besides, he is taking into account
the existing pool of employees when finding a person that could complement this pool rather than similar
to existing employees. Nienke adds that Triodos Bank involves an agency for recruiting specific functions.
This agency supports in the assessment to figure out what the new person actually stands for. Job
interviews at Triodos Bank are more focused on personality of the person. The results of the interview
imply that HRM is deployed as an informal mechanism to maintain the identity of the firm, because new
persons are actively assessed on their values and the extent to which they fit within the organization.
Organizational culture
The organizational culture of Triodos Bank can be described as a highly mission driven culture. Thomas
explains that it is a family-like culture, which is both a strength and a weakness.
[Triodos Bank] “For new people, it is hard to integrate. It takes a relatively long time before they are
allowed to speak along. Which is the negative side. […] The culture has an informal side,
which is not easy to describe. This is a strength because this means the culture is
developing. Although, it becomes more difficult when the organization grows.”
Because of the informal and close character of the organizational culture, the values are truly felt by all
employees according to Nienke. She explains this as follows:
[Triodos Bank] “Newly hired people do fit within the norms and values, so they fit within the
organizational culture. However, it takes a while before they are fully integrated within
the culture.”
Within the organizational culture, they are trying to find a balance between creating opportunities for
people to develop regarding their desired direction on the one hand and to shape functions profiles based
on the need to fulfill a function in a professional way on the other hand. According to the respondent, this
balance is important:
[Triodos Bank] “If you get a staff member that is pure carrying out is function, it doesn’t match with the
values.”
The respondents see culture as closely connected to the identity of the organization. Monday meetings
have become part of the organizational culture. These meetings are attended by all employees. The
agenda of Triodos Bank is shared which leads to high involvement throughout all levels of the organization.
Besides, new employees follow an introduction program, which is considered as highly important by the
respondents. Thomas argues that it is important to be realistic and be aware of the time it takes to steer
the organizational culture. Because Triodos Bank is actively steering and maintaining its organizational
culture, it is concluded that the organizational culture is deployed as a mechanism of CG.
Monitoring
150
Triodos Bank does not make use of any formal codes, except for general codes that are applied by all
banks. However, the respondents explain that they do have certain conditions within which they act. These
codes can differ between departments and projects that are carried out within the organization. Triodos
Bank has not documented a code to steer behavior, but that these conditions are based on informal
agreements.
The head quarter is producing reports several times a year. Besides, each department is updating a certain
score card on their business activities, also related to sustainability.
[Triodos Bank] “Each department makes a support card every quarter, in which all different kinds of
criteria are scored and illustrated. And this is centrally reported.”
These data are processed in the annual report. The annual report of Triodos Bank includes a section on
their sustainability related business activities in order to show how they actually work according their CSR-
identity. However, important to note is that the respondents argue that they do not want to create a
‘check-the-box mentality’ regarding sustainability performance. They believe it is better to stimulate
people to initiate sustainable behavior themselves.
[Triodos Bank] “We want to stimulate an atmosphere in which people make their own considerations,
which might even lead to ending up higher than on a checklist.”32
Overall, it can be concluded that Triodos Bank is making use of informal conditions that function like a
code, which are based on mutual agreements. Reporting as implemented as a more formal mechanism in
order to monitor the content of business activities of each department.
Coordination
Periods of decentralization and centralization are varying over time. Currently they are centralizing the
organization due to the need to control business growth. A note that should be made is that sustainability
related behavior is stimulated decentralized, by allowing high own responsibility on each business
unit/department. The respondents perceive this as an integrated part within the organizational culture.
Because the international offices are delegated with full responsibility, it is essential to create active
involvement among international offices and business units:
[Triodos Bank] “We have a few organizational bodies that consciously have this conversation with each
other. So it is less formal and more informal. Which sometimes needs to be tightened and
sometimes needs to be steered less regarding the movements of decentralization and
centralization.”
The results imply that Triodos Bank coordinates different business units and international offices by
deploying organizational bodies that maintain high involvement through active discussions on their
business activities.
32 Authorized by Triodos Bank
151
In table B7.3, an overview is provided of the mechanisms of CG that are deployed by Triodos Bank.
Table B7.3 - Mechanisms of corporate governance deployed by Triodos Bank
Deployed by the company
Mechanisms of corporate governance
Strategy -
Human resource management Organizational culture Monitoring Coordination
Other - -
152
APPENDIX C – Transcripts See digital version