positively deviant: identity work through certification

The WellWiki Project

Joel GehmanAssistant ProfessorStrategic Management & Organization

Positively Deviant: Identity Work Through Certification

Matthew Grimes, Joel Gehman, Ke Cao

B Corp Academic Community Roundtable

Rotman School of Management

October 4, 2017

Motivation

Early research on social entrepreneurship often treated social entrepreneurs as a homogenous group.

More recent studies, however, highlight the potential for important identity (Battilana, Dimitriadis, Lee, & Ramarajan, 2017) and contextual differences (Gehman & Grimes, 2016), which might lead to differences in organizational action.

We investigate such differences in the context of the B Corp certification by asking: Why and under what conditions do businesses choose to obtain sustainability certification?

Identity differences

Societal gender expectations can affect one’s orientation toward pro-social and pro-environmental causes (Dietz et al., 2002; Eagly, 2009; Hyde, 2014; Zelezny et al., 2000).

Contemporary values-based differences between genders lead to greater representation of women among social entrepreneurs (Hechavarria et al., 2012); women social entrepreneurs more likely to forego commercial activities to support their growth (Battilana et al., forthcoming).

Contextual differences

Social entrepreneurship spans different industrial and regional contexts, which also vary in their support (or lack thereof) for social and environmental values (Dacin et al., 2011; Gehman and Grimes, 2017; Moroz and Hindle, 2012).

Such differences regarding sustainability values are likely to render the adoption of the B Corp certification as more or less deviant (i.e., non-conforming) relative to a social enterprise’s regional and industrial context.

Core proposition

Identity work refers to “people being engaged in forming, repairing, maintaining, strengthening or revising the constructions that are productive of a sense of coherence and distinctiveness” (Sveningsson and Alvesson, 2003, p. 1165).

Actors pursue sustainability certifications not as a means for overcoming deficits in legitimacy but rather as a form of identity work that affirms those actors’ values which are perceived as contextually distinctive.

We call this positive deviance: “intentional behaviors that significantly depart from the norms of a referent group in honorable ways” (Spreitzer and Sonenshein, 2004: 841).

Hypothesis 1

Hypothesis 1: Woman-owned businesses are more likely to obtain environmental, social, and governance (ESG) certification than non-woman-owned businesses, all else being equal (i.e., “the identity effect”).

Moderating Hypotheses 2-4

Woman-owned businesses are more (less) likely to obtain ESG certification in contexts where: Hypothesis 2, sustainability norms are weaker (stronger); Hypothesis 3, the prevalence of Certified B Corporations is lower (higher); Hypothesis 4, fewer (more) woman-owned businesses operate.

Data and method

Key variables

DV: Certified B Corporation = 1 if the business became certified following assessmentH1: Woman Owned = 1 if the business reported being “woman-owned” on the BIAH2: Weak Sustainability Norms = mean number of ESG concerns for public companies in a given context H3: B Corp Mimesis = count of Certified B Corps in a given contextH4: Prevalence of Woman-Owned Businesses = count of woman-owned businesses in a given context

A note about “context”

CASE B Lab data are de-identified, but inspired by Porac et al’s (1995) Scottish knitwear study, we coded each business into 5 regions and 18 industry groups, resulting in 90 possible region-industry dyads

Following Gehman & Grimes (2016), for H2 we collected data from MSCI ESG STATS, providing sustainability norms for each region-industry

For H3, we tabulate the number of Certified B Corps for each dyad using the CASE B Lab data

For H4, we collected data from the U.S. Census Bureau Survey of Business Owners

Control variables

Revenue (log) = self reported annual revenueEmployees = self reported number of employeesSeeking funding = 1 if seeking outside financingBenefit corporation = 1 if incorporated as a benefit corporation or benefit LLCSurvey completion = averages 98%, range 70-100Public companies = count of publicly-traded companies in a given context Region dummiesIndustry dummies

Model estimation

Our sample includes 1,251 U.S. businesses “at risk” for becoming Certified B Corps, but only businesses scoring ≥80 points on the BIA are eligible to become certified.

Accordingly, we model this choice using Heckman’s (1979) two-stage procedure using Stata’s Heckprobit command

• In Stage 1, a probit regression predicts the likelihood that a business will qualify for certification (≥80 points on the BIA)

• In Stage 2, we model the likelihood a business will become certified, conditional on qualifying to do so

Results: Heckprobit

DV: B Corp

Certification

H1: Woman-Owned Business (Identity Effect)✔

H2: Woman-Owned Business

x Weak Sustainability Norms ✔


x Low Mimetic Pressure ✔


x Low Prevalence of Woman Owned Businesses ✔

H2: Identity Effect xWeak Sustainability Norms

H3: Identity Effect xLow Mimetic Pressure

H4: Identity Effect xFew WO Businesses

Contribution 1

How Women “Jumpstart” the Field of Social Entrepreneurship

Contribution 2

The Importance of Contextual Distinctiveness and Organizational Standards for Understanding Owners’ Identity Work

Contribution 3

Extending Scholarly Understanding of Early-Stage Certification Adoption

Acknowledgements

This work was supported in part by grants from the

Social Sciences and Humanities Research Council;

Office of the Vice President of Research at the

University of Alberta; Canadian Centre for Corporate

Social Responsibility; Alberta School of Business; and

University of Alberta Killam Research Fund.

Extras

3 robustness checks

1. Instead of Heckman models, we simply dropped 232 observations which scored <80 on the BIA and tested probit models. All 4 hypotheses were supported

2. We ”saturated” and “simplified” our Stage 1 selection specification, adding all interaction terms and using only our controls, respectively. All 4 hypotheses were supported in both cases

3. We dropped 415 observations with no reported revenues. These were assumed to be true $0 in the prior analysis; here we assume they are missing. All 4 hypotheses were supported.