INTERNAL AND EXTERNAL ENVIRONMENTAL ...

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INTERNAL AND EXTERNAL

ENVIRONMENTAL INFLUENCES OF

SUSTAINABLE INTERNATIONAL NEW

VENTURE INTERNATIONALIZATION

Master Thesis

MSc. Business Administration – International Management

Supervisor: Dr. Johan Lindeque

Second reader: Dr. Markus Paukku

Student: Cathelijn Lotte Raaijmakers

Student ID: 11197056

Submission Date: 23/06/2017

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Abstract

International Business (IB) research recognizes the opportunities that lie in examining

sustainability, yet approaches it “often in a generic way, without direct relevance for IB”

(Kolk, 2016, p. 32; Kourula, Pisani, & Kolk, 2017). With sustainability being central to

establishing a future in which the economic, environmental and social needs of the society

can be met, sustainable entrepreneurs readily tackle these opportunities (Cohen & Winn,

2007; Dean & McMullen, 2007). Their initiatives have shaped the development of

Sustainable International New Ventures (SINVs), a unique subset of International New

Ventures (INVs). Therefore, to understand the development of SINVs the influence of the

internal and external environment on their internationalization is examined. By breaking

down the framework of Oviatt and McDougall (1994) the internal environment is

characterized by resources, routines and alternative governance structures, and the external by

foreign location advantages. Specifically, SINVs are analyzed from a subnational level of

analysis allowing the in-depth analysis of environmental factors. Through a multiple case

study research design 8 SINVs are interviewed and documentary data is collected for analysis.

The main findings partially indicating that SINVs face additional constraints when

internationalizing, due to the difficulties associated with obtaining sustainable resources and

establishing sustainable routines. Full support is found concerning SINVs’ sustainable

entrepreneurial leadership enabling internationalization. Further, research partially indicates

that global sustainability is discontinuous, yet this is not due to others focus on profit-

maximization. No support is found concerning the influence of global cities, consequently,

the external environment of SINVs requires greater in-depth analysis.

Keywords: Sustainable International New Ventures, sustainability, entrepreneurship,

internationalization, global cities

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Statement of Originality

This document is written by student Cathelijn Lotte Raaijmakers who declares to take full

responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources

other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of

completion of the work, not for the contents.

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Acknowledgements

Hereby, I want to sincerely thank my supervisor Dr. Johan Lindeque for his time, energy and

support. His expertise and guidance are what helped me develop this thesis, and his

enthusiasm triggered its continuous improvement. Additionally, I would like to thank the

SINVs for their time and input, without their cooperation I would not have been able to

produce this final work product.

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Table of Contents

1. Introduction .......................................................................................................................... 8

2. Literature Review .............................................................................................................. 13

2.1. International entrepreneurship ................................................................................. 13

2.2 International new ventures ......................................................................................... 14

2.2.1 International new venture internationalization ....................................................... 15

2.3. Sustainable international new ventures .................................................................... 17

2.4. Internal environment .................................................................................................. 19

2.4.1. Internalization of resources .................................................................................... 19

2.4.2. Alternative governance structures .......................................................................... 21

2.5. External environment ................................................................................................. 23

2.5.1. Foreign location advantages .................................................................................. 24

2.5.2 Global cities ............................................................................................................ 25

2.6. Conclusion ................................................................................................................... 29

3. Methodology ....................................................................................................................... 30

3.1. Ontological and epistemological foundations of research ....................................... 30

3.2. Qualitative multiple case study research design ...................................................... 30

3.3. Case selection ............................................................................................................... 32

3.4. Data collection ............................................................................................................. 34

3.5. Quality criteria ............................................................................................................ 37

3.6. Data analysis method .................................................................................................. 38

4. Results ................................................................................................................................. 40

4.1 Within-case analysis .................................................................................................... 40

4.1.1. Case 1: Closing the Loop ....................................................................................... 40

4.1.2. Case 2: TreeWifi .................................................................................................... 42

4.1.3. Case 3: The CO2 Advisors .................................................................................... 45

4.1.4. Case 4: CocoPallet ................................................................................................. 47

4.1.5. Case 5: Monsak ...................................................................................................... 49

4.1.6. Case 6: Mud Jeans ................................................................................................. 51

4.1.7. Case 7: Firm A ....................................................................................................... 54

4.1.8. Case 8: BBROOD .................................................................................................. 57

4.2 Cross-case analysis and discussion ............................................................................. 59

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4.2.1. Internal environment .............................................................................................. 59

4.2.2. External environment ............................................................................................. 65

4.2.3. Working proposition results ................................................................................... 68

6. Conclusion .......................................................................................................................... 70

6.1. Managerial implications ............................................................................................. 72

6.2. Limitations ................................................................................................................... 72

7. References ........................................................................................................................... 73

8. Appendices .......................................................................................................................... 84

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Index of Tables and Figures

Tables

Table 1: Case Overview ........................................................................................................... 33

Table 2: Matrix Interview Questions ....................................................................................... 35

Table 3: Data Collection Overview ......................................................................................... 36

Table 4: Coding Scheme .......................................................................................................... 39

Table 5: Results Case 1, Closing the Loop .............................................................................. 41

Table 6: Results Case 2, TreeWifi ........................................................................................... 43

Table 7: Results Case 3, The CO2 Advisors ............................................................................ 46

Table 8: Results Case 4, CocoPallet ........................................................................................ 48

Table 9: Results Case 5, Monsak ............................................................................................. 50

Table 10: Results Case 6, Mud Jeans ....................................................................................... 53

Table 11: Results Case 7, Firm A ............................................................................................ 55

Table 12: Results Case 8, BBROOD ....................................................................................... 58

Table 13: Results Cross-Case Analysis, Sustainable Resources and Routines ....................... 60

Table 14: Results Cross-Case Analysis, Governance .............................................................. 63

Table 15: Results Cross-Case Analysis, Location ................................................................... 66

Table 16: Overview of Working Proposition Results .............................................................. 69

Table 17: Interview Questions in English and Dutch .............................................................. 85

Figures

Figure 1: Necessary Elements for Sustainable International New Ventures ........................... 16

Figure 2: Conceptual Model, the Influences of Sustainable International New Ventures’

Unique Internal and External Environment on SINV Internationalization ..................... 18

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1. Introduction Sustainable development is one of the most prominent contemporary topics, as the

exponential growth of business has become an increasing risk for humanity, and does not

create the possibility of a sustainable future (Bocken, Short, Rana, & Evans, 2014;

Evangelista, 2005; Kolk, 2016; Kourula et al., 2017; Shepherd & Patzelt, 2011; World

Wildlife Fund [WWF], 2016). Scholars claim sustainable entrepreneurial action can counter

the negative externalities of current business, as great opportunities lie within these market

failures (Cohen & Winn, 2007; Dean & McMullen, 2007). Overlapping with the concepts of

environmental and social entrepreneurship, sustainable entrepreneurship encompasses social

and environmental goals, as sustainable development considers both needs (World

Commission on Environment and Development [WCED], 1986). Consequently, central to

sustainable entrepreneurship is the

“preservation of nature, life support, and community in the pursuit of perceived

opportunities to bring into existence future products, processes, and services for

gain, where gain is broadly construed to include economic and non-economic

gains to individuals, the economy, and society”

Shepherd & Patzel (2011, p. 142).

Sustainable entrepreneurship has become innovation’s new frontier and transformed the

competitive landscape of business, contributing to the development of Sustainable

International New Ventures (SINVs) (Nidumolu, Prahalad, & Rangaswami, 2015). SINVs are

a unique subset of International New Ventures (INVs), changing business as it is known today

with proactive international sustainability driven strategies. Led by sustainable entrepreneurs,

SINVs aim to lead a path of sustainable development “that meets the needs of the present

without compromising the ability of future generations to meet their own needs” (WCED,

1986). Thus, there is a new need to understand this visionary strategy of sustainability that

“focuses on sustainability issues within all business activities” (Baumgartner, 2009, p. 104),

as International Business (IB) research on sustainability remains “generic and introductory in

nature” (Kolk, 2016, p. 27).

The pressure from the rising global population, increased resources usage and the resulting

negative externalities, have called for this “new breed of entrepreneurial firm, one that is

driven to contribute to a society which is sustainable, not just from an economic perspective,

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but from an environmental and social perspective as well” (Cohen & Winn, 2007, p. 30). Yet,

a new found understanding of how SINVs’ entrepreneurs successfully exploit opportunities is

required (Bocken et al., 2014). A SINV originates from the notion of an INV, defined as a

“business organization that, from inception, seeks to derive significant competitive advantage

from the use of resources and the sale of outputs in multiple countries” (Oviatt & McDougall,

1994, p. 49). This resemblance of SINVs and INVs in terms of internationalization patterns,

small size and limited resources has resulted in a lack of research on SINVs (Sleuwaegen &

Onkelinx, 2014). Uncertainties remain in understanding the challenges of internationalization

faced by sustainable entrepreneurs (Cohen & Winn, 2007; Evangelista, 2005; Hall, Daneke, &

Lenox, 2010, p. 439; Schaltegger, Lüdeke-Freund, & Hansen, 2016). Further, the

fragmentation of this research area is visible in the inadequate understanding of the minimal

presence of SINVs, as they are often characterized as niche market players with significantly

lower market shares (Schaltegger et al., 2016).

Moreover, research remains fragmented as it has only recently begun “to build evidence that

entrepreneurial activities are not evenly distributed across space and between places�

(Bosma & Sternberg, 2014, p. 1019). Indicating that scholars within IB literature have

insufficiently covered SINVs, their internationalization, as well as the importance of their

location choice. Specifically, location choice remains neglected even though it strongly

influences the resource base of SINVs and their internationalization patterns. Therefore, this

research argues that the standard national level of analysis provides inadequate in depth

analysis on location choices (Beugelsdijk & Mudambi, 2013). The constant usage of countries

as the location unit of analysis appears to have significantly limited IB research (Beugelsdijk

& Mudambi, 2013). Even though there is a “growing body of international entrepreneurship

literature, the evolutionary patterns of international new ventures... are not well understood”

(Sleuwaegen & Onkelinx, 2014, p. 106). Therefore, the following three research gaps are

addressed in this study.

Firstly, the gap regarding the necessary advancement of research on SINVs is considered.

Even though the literature on INVs has pronounced theoretical importance, little thought has

been given to the influence of sustainable entrepreneurship on the internal development of

entities such as INVs (Shepherd & Patzelt, 2011; Sleuwaegen & Onkelinx, 2014). Research

indicates that INVs do not reflect the traditional characteristics of Multinational Enterprises

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(MNEs) (Oviatt & McDougall, 1994) and that “only few studies address how the innovation

process [of sustainability] takes place within new organizations” (Keskin, Diehl, & Molenaar,

2013, p. 58), such as SINVs. Large MNEs that have been central to IB have become the basis

of analyses and multiple theories. Yet due to this focus gaps remain in literature,

insufficiently recognizing the internal environmental dimension of the sustainability of INVs

(Hall et al., 2010). Even though “innovators and entrepreneurs will view sustainable

development as one of the biggest business opportunities in the history of commerce” (Hart &

Milstein, 1999), literature does not expand on the details of establishing sustainable

initiatives. Consequently, the concept and development of SINVs requires greater attention,

as gaps remain on what internal environmental factors influence SINVs and distinguish them

from other rapidly internationalizing firms.

Secondly, there appears to be insufficient research on the internationalization process of

SINVs, specifically the environmental factors influencing expansion. Akin to INVs, SINVs

are assumed to internationalize rapidly and early in their life cycle, yet few look further into

this further than as part of the definition. Theory on internationalization evolved largely in the

1970s and 1980s, focusing on the internationalization of large MNEs (Rialp, Rialp, & Knight,

2005). Therefore, lacking theory development on other types of entities has caused rapidly

internationalizing entities to challenge the traditional internationalization view (Rialp et al.,

2005). The primary frameworks are mainly focused on the drivers of internationalization, as

well as the characteristic rapid internationalization rate (Oviatt & McDougall, 1994;

Prashantham & Young, 2009; Zucchella, Palamara & Denicolai, 2007). Yet identification of

the influence of distinct internal strategies or external environmental factors such as location

shaping the organization, and in turn influencing expansion remain vague. Even though

sustainable initiatives are often integrated into the workings of INVs, there appears to be no

“comprehensive view of how firms should approach embedding sustainability” (Bocken et al.,

2014, p. 43). When operating as a sustainable entity there is the need to “fundamentally

rethink their prevailing views about strategy, technology, and markets” (Hart & Milstein,

1999, p. 32). Subsequently, research into the internationalization of SINVs is imperative.

Lastly, there is limited research at the subnational level of analysis. IB has often been

approached from a national level of analysis examining topics on a country-by-country basis,

as IB “continues to suffer from methodological nationalism” (Buckley, 2016, p. 78).

Nevertheless, the expansion of SINVs may be better understood through the detailed

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consideration of environmental influences, thus analyzing internationalization from a

subnational level, bringing a new perspective to IB literature. By taking on the often-

overlooked subnational level of analysis, location theory is challenged and the relevance of

cities as subnational location is accentuated (Buckley, 2016; Goerzen, Asmussen, & Nielsen,

2013). The subnational level of analysis focusing on cities may even capture the international

development of SINVs allowing the city elements that influence SINVs’ development to be

analyzed in greater detail. Further, it may capture how unique Firm Specific Advantages

(FSAs) interact with the context in which SINVs are present, contributing to the early and

rapid internationalization of SINVs across cities.

Accordingly, these three gaps form the basis of new research opportunities. By bringing

together the notion of a SINV and its internationalization process from a subnational level of

analysis, environmental factors influencing this concept can be better understood.

Opportunities lie within understanding the influence of environmental factors on the

development of sustainable entrepreneurship in SINVs. Thus, the following research question

is established:

RQ: How do the unique internal and external environments of sustainable international new

ventures influence their internationalization?

In order to analyze the influence of the unique internal and external environment on SINV

internationalization, the thesis is structured as follows. Firstly, the literature review section

introduces the theoretical background relevant to this study. Then Oviatt and McDougall’s

(1994) framework on the necessary conditions of INV establishment is broken down to

analyze SINVs in-depth, distinguishing the internal environment in terms of sustainable

resources and routines and governance structures, and external environment in terms of

location advantages influencing SINV internationalization. Secondly, the methodology

section presents the study’s qualitative multiple case study research design, defines the

sample of 8 SINVs and the data analysis strategy. The study purposely selects 8 SINVs

allowing data to be collected through semi-structured interviews and it to be supported with

documentary data. Following the interviews are analyzed and thematically coded through

NVivo, allowing within and cross-case analysis.

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Thirdly, the results section presents the analysis of the influence of the internal and external

environment on SINV internationalization. These results indicate that SINVs’

internationalization is partially obstructed due to the difficulties associated with obtaining

sustainable resources and establishing sustainable routines, yet central to overcoming such

difficulties is experience. Further, crucial to SINV internationalization is the presence of

sustainable entrepreneurial leadership, detected in all SINVs acting as sustainable

frontrunners. Nevertheless, acting as frontrunners is not enough to prompt the external

environment, as the notion of global sustainability remains discontinuous and hinders SINV

internationalization, yet this is not due to the profit-maximization attitude of individuals.

Finally, stimulated stakeholders and the advanced technology of global cities do not enable

SINV internationalization. The home institution stimulates certain SINVs, yet obstructs

others, thus these contradictory results do not lend support to the stimulation of the

cosmopolitan environment. Moreover, advanced technology does not play a role as the SINVs

appear to be exceedingly focused on establishing sustainable supply chains. Accordingly,

these results are discussed in-depth and lead to the final concluding section of this study.

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2. Literature Review To understand the origin of SINVs the literature review firstly introduces the international

entrepreneurial field of study. From this notion, the absence of literature on the unique

conditions of SINVs is highlighted. Subsequently, to understand the concept from which

SINVs arise, INVs, their internationalization process and the complexities of INV

internationalization are examined. This is followed by clarifying the unique nature of SINVs,

illustrating their distinction. Following, the next sections categorize the three necessary

conditions for a SINV to be established into the internal and external environment. This

allows the influences within these environments to be examined and allows the effect of the

internal and external environment of SINVs internationalization to be researched.

2.1. International entrepreneurship The “resurgence of entrepreneurial spirit” (Zwilling, 2013) has led to an increase in the

different types of INVs being established, such as SINVs, and created new areas of

investigation within IB literature. The increasing focus on INVs originates from the

international entrepreneurial field of study (Karra, Phillips, & Tracey, 2008; Jones &

Coviello, 2005; Oviatt & McDougall, 1994). This field of study is based on understanding the

international configuration of resources, and thus the “discovery, enactment, evaluation, and

exploitation of opportunities – across national borders” (Oviatt & McDougall, 2005, p. 538).

This field has focused on various areas of INV development by examining those “who

discover, evaluate, and exploit [opportunities]” (Shane & Venkataraman, 2000, p. 218).

Nevertheless, entrepreneurial research halts at the establishment of a general understanding

towards INVs, as entrepreneurs are recognized to contribute to innovation yet scholars have

failed to identify how entrepreneurship actually unfolds (Hall et al., 2010). Hence, insufficient

attention is devoted to the influences of the internal and external environment on these

configurations. Even though the importance of this field originates from the so far achieved

theoretical understanding of entrepreneurial behavior, to sustain its relevance new areas must

be investigated (Zetting & Benson-Rea, 2008). The identification of key entrepreneurial

capabilities, “international opportunity identification, [and] institutional bridging” (Karra et

al., 2008, p. 450), must be further understood to contribute to theory development in the

entrepreneurial field of study.

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Thus, as this field develops greater areas of ambiguity are revealed. Areas concerning the

understanding of contextual variables influencing entrepreneurship, the role of geography and

history, as well as motivation and mental models of entrepreneurs remain indistinct (Zahra,

Korri, & Yu, 2005; Zetting & Benson-Rea, 2008). Specifically, the unique constituents of

SINVs, and the influence of SINVs internal and external environment on internationalization

remain unexplored. Entrepreneurs are known to exploit opportunities associated with

environmental and societal objectives, yet major gaps in knowledge remain, as there is “little

understanding of how entrepreneurs will discover and develop those opportunities” (Hall et

al., 2010, p. 439). Therefore, by thoroughly integrating the international entrepreneurship

within IB research and broadening its boundaries an enhanced analytical approach towards

SINVs can be taken, as “entrepreneurship [is] a panacea for transitioning towards a more

sustainable society” (Hall et al., 2010, p. 439). The international entrepreneurial field of study

is widely recognized “as a significant conduit for bringing about a transformation to

sustainable products and processes” (Hall et al., 2010, p. 439). Thus, it is fundamental to

consider the entrepreneurial core of SINVs, as entrepreneurial judgment is central to the

recombination capabilities that shape unique resources, and thus SINVs internationalization

(Verbeke, 2009).

2.2 International new ventures To understand the distinctive conditions faced by SINVs the concept of INVs from which

SINVs originate must be addressed. INVs are defined as “independently operated and

marketed corporate entities that have no prior corporate history in the industry, and hence no

prior market presence” (Fan & Phan, 2007, p. 1114). INVs and the related born global

concept are intermittently treated as two different business types of early internationalizing

entrepreneurial ventures. Nevertheless, consistent with the term usage of other scholars

(Knight, Maden, & Servais, 2004; Oviatt & McDougall, 1994; Rialp, Rialp, Urbano, &

Vaillant, 2005; Sleuwaegen & Onkelinx, 2014; Zahra, 2005), this study uses the concept of

born global and INV as one, since “arguably these terms have become somewhat

interchangeable” (Crick, 2009, p. 453). INVs are characterized by their young age, proactive

international strategies, and limited resources, in turn causing INVs to be considered as small

and medium enterprises (SMEs) (Knight et al., 2004). INVs prove that large size is not a

requirement for internationalization, and that large size may merely be a form of competitive

advantage or effect of internationalization (Oviatt & McDougall, 1994). Further, INVs are

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defined as international from the point of inception, however it is generally agreed that INVs

internationalize within 6 to 10 years of inception dependent upon the industry in which they

are present (Bantel, 1998; McDougall, Shane, & Oviatt, 1994; Zahra, Ireland, & Hitt, 2000).

2.2.1 International new venture internationalization

Having outlined the state of INVs, allows the consideration of their internationalization

process. Contrary to large MNEs, INVs origins are argued to be international from inception

onwards due to their proactive international strategy and distinctive organization, in turn

making the application of stage theories of internationalization inappropriate (Oviatt &

McDougall, 1994). INVs do not follow known stage theories such as the Uppsala model, in

which internationalization starts close to home in terms of psychic distance, followed by a

gradual expansion abroad through learning and experience (Vahlne & Johanson, 2013).

Madsen and Servais (1997) and Taylor and Jack (2013) suggest that the fundamental

reasoning behind the models is valid, yet such models fail to explain the internationalization

of INVs. It is the dramatic changes in technology improving communication and

transportation “along with homogenization of markets in many countries ... [that] simplify

and shorten the process of firm internationalization” (Oviatt & McDougall, 1994, p. 52).

Consequently, allowing INVs to skip the stages of international expansion (Oviatt &

McDougall, 1994).

The resulting task of building INVs becomes an increasingly complex one, as throughout

internationalization constraints of liability of newness (LON) and foreignness (LOF) are faced

(Mudambi & Zahra, 2007; Zaheer, 1995; Zetting & Benson-Rea, 2008). These constraints are

reflected in the increased costs encountered as newcomer and the resulting competitive

disadvantages, as well as the challenge of finding the balance between knowledge exploration

and exploitation (Lu & Beamish, 2004; Sleuwaegen & Onkelinx, 2014; Zaheer, 1995; Zetting

& Benson-Rea, 2008). Consequently, there is a need to change systems, processes, structures,

as well as mental maps accordingly when abroad (Bartlett & Ghoshal, 1989; Stopford &

Wells, 1973). These complexities of internationalization further constrain INVs

internationalization and must be overcome through the development of FSAs or through

learning by mimicking local competitors (Zaheer, 1995).

FSAs being central to internationalization arise from the unique resources and capabilities of

the firm that make the firm more efficient and superior compared to its competitors (Khalid &

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Larimo, 2012). FSAs are shaped by the four conditions underlying the establishment of INVs.

The four necessary conditions for INVs to be established according to Oviatt and McDougall

(1994) are: (1) the internalization of resources central to survival, (2) alternative ways to

access resources, (3) foreign location advantages, and (4) possessing unique resources. This

framework by Oviatt and McDougall (1994, p. 52) was created to “lead to both theoretical

development and empirical investigation toward greater understanding of international new

ventures”. Consequently, as the unique resources can be interpreted as an outcome of the first

three conditions, and as it refers to the combination of the INV’s resources resulting in its

sustainable competitive advantage, the research focuses on the first three conditions (Oviatt &

McDougall, 1994). The first three conditions reflect the internal and external environment of

INVs, thus these are used as a foundational basis in this study, allowing the examination of

elements within these necessary conditions. Therefore, by analyzing the influences of internal

and external environment on SINV internationalization the focus resides on resources and

routines, governance granting access to these, and location influencing internationalization.

After the nature of SINVs has been clarified in the following section, this framework is used

to understand the influences of the internal and external environment on SINV

internationalization. As depicted in Figure 1, the necessary elements for a SINV to be

established are categorized into the internal and external environment of the SINV.

Figure 1: Necessary Elements for Sustainable International New Ventures

Source: Adapted from Oviatt & McDougall (1994)

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2.3. Sustainable international new ventures Having outlined the standard conditions of INVs and to move towards understanding the

influence of the internal and external environment, the unique conditions of SINVs must be

addressed. What mainly distinguishes SINVs are their unique proactive strategies addressing

the increasing risks of the exponential growth of business, how continuing with the current

state of business is not a possibility for a sustainable future (Bocken et al., 2014; WWF,

2016). To effectively tackle the current challenges a holistic approach is required to make

business sustainable, sustainability being defined as a “normatively defined state of the world

that is to be achieved via a sustainable development of the natural environment, society, and

economy” (Bocken et al., 2014; Schaltegger et al., 2016, p. 265). According to the WCED the

definition of sustainable development encompasses both environmental and social goals, as it

considers the needs of “the world’s poor, to which overriding priority should be given; and

the idea of limitations imposed by the state of technology and social organization on the

environment’s ability to meet present and future needs” (WCED, 1986). Consequently,

SINVs are driven by the innovative capabilities of sustainable entrepreneurs attempting to

establish a business while focusing on society or the environment. This mission driven

process at the heart of SINVs, is further supported by the fact that sustainability driven

innovation may become the new driver of competitive advantage (Nidumolu et al., 2015).

Therefore, SINVs similarly to INVs are characterized by their small size, permitting the

minimal internalization of resources and thus cause the reliance on networks and partners

(Dean & McMullen, 2007). In turn, a great disadvantage of small size and young age becomes

the difficulty in obtaining financial capital, as there is often no existing stream of revenue

(Bohnsack, Pinkse, & Kolk, 2014; Sosna, Trevinyo-Rodríguez, & Velamuri, 2010).

Nevertheless, SINVs unique conditions shift certain disadvantages of small size into

advantages, as their smaller size allows an easier implementation of sustainability due to the

small firms’ flexibility and lessened “pressure from external stakeholders [compared to] large

corporations” (Bianchi & Noci, 1998, p. 272). Consequently, sustainable business can be a

profitable business, as socially and environmentally oriented goals may improve pricing

power, increase value chain efficiency, create goodwill, addresses new potentially profitable

markets, or enhance revenues and lower costs (Epstein & Buhovac, 2014; Nidumolu, et al.,

2015; Prahalad, 2004; Santos, Pache, & Birkholz, 2015).

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Figure 2: Conceptual Model, the Influences of Sustainable International New Ventures’ Unique Internal and External Environment on SINV Internationalization

Source: Author

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Nevertheless, even though the investigated costs and complexities of internationalization are

generally faced by all businesses, SINVs appear to face more specific constraints as markets

continue to be characterized by the presence of few SINVs (Schaltegger et al., 2016; Zaheer,

1995). Even though entrepreneurs develop unique capabilities that are difficult to imitate,

boundaries when internationalizing are faced as internationalization involves “high levels of

uncertainty” (Karra et al., 2008, p. 440; Mudambi & Zahra, 2007). Thus, the current gaps in

literature require further investigation on SINVs internal and external environmental

conditions.

Therefore, to guide the upcoming review, the conceptual model depictured in Figure 2

provides an overview of the elements examined. This model contributes to understanding how

the research question is answered separating the influences of the internal and external

environment, and what factors positively and negatively influence SINV internationalization,

in turn guiding the research in the following sections.

2.4. Internal environment As highlighted in the section above SINVs are subject to unique conditions, thus by

examining their internal environment SINV internationalization can be understood. By

categorizing and breaking down the framework of Oviatt and McDougall (1994), seen in

Figure 2, the influences of the internal environment, the internalization of resources and

presence of alternative governance structures, are recognized.

2.4.1. Internalization of resources

According to Oviatt and McDougall (1994) the internalization of resources is the first of the

four necessary conditions for INVs to be established. The early and rapid internationalization

of INVs originates from the internalization of resources essential to survival, and the presence

of unique resources permitting “organizations with more constrained resources, such as new

ventures, to enter the international arena” (Oviatt & McDougall, 1994, p. 52). Unique

resources create a sustainable advantage that is transferable to new foreign locations, and is

referred to as a FSA (Oviatt & McDougall, 2005, 1994; Verbeke, 2009). FSAs include “both

proprietary know-how (unique assets) and transactional advantages” (Rugman & Verbeke,

1992, p. 762) and are critical to succeeding abroad. Resources in the forms of physical,

financial, human, and reputational resources, as well as upstream, downstream, and

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administrative knowledge shape the unique conditions of the INV (Verbeke, 2009). In turn,

routines “reflect the distinct ability to combine further the above resources, in unique ways”

(Verbeke, 2009, p. 6), shaping the developmental path of the INV. Further, it is the

transferable, and thus non-location bound (NLB) FSA that allows capabilities to be exploited

across borders, leading “to benefits of scale, scope or exploitation of national difference”

(Rugman & Verbeke, 1992, p. 763). Location bound (LB) FSAs solely benefit the INV in

specific locations and enhance local responsiveness (Rugman & Verbeke, 1992).

Thus, SINVs are unique subsets of INVs working towards social or environmental goals and

proactively organizing strategy around sustainability. This is reflected in the resources and

routines of SINVs, and thus the internal environment of the firm, shaping the unique nature

and internationalization of SINVs. SINVs internal environmental conditions are reflected in

the sustainable resources used such as the human capital of sustainable entrepreneurship,

physical commodities such as recycled and upcycled materials, and reputational resources of

for instance B Corporation certifications. Even though certain SINVs aim to do more with

fewer resources to achieve resource efficiency, increase material productivity, or reduce

waste, others require more complex resources (Bocken et al., 2014). The complexity of such

resources is reflected in the struggle of obtaining sustainable materials, the fluctuating supply

of resources, technologies lacking economic viability, up to the inadequate availability of

education on sustainability (Bianchi & Noci, 1998; Bocken et al., 2014; Dixon & Clifford,

2007). Further, obtaining financial capital proves to be burdensome, as sustainable oriented

businesses are new and without precedent (Dixon & Clifford, 2007).

Moreover, the routines of SINVs are reflected in the internal environmental conditions of

SINVs and further shape the nature of the firm. Routines are focused on for instance value

creation from waste, and substituting processes with renewables and natural procedures or

establishing circular resource management (Bocken et al., 2014). Nevertheless, these routines

rely on available technology, knowledge and the skilled input of labor, and these “still face

difficulties in penetrating mainstream markets” (Bohnsack et al., 2014, p. 284). Challenges lie

in the current “strong focus on the technical aspects and business opportunities of product

concepts … but very little consideration of the sustainability implications” (Hallstedt,

Thompson, & Lindahl, 2013, p. 282). Additionally, common knowledge on sustainable

processes remains limited due to missing standard sustainability assessments (Hallstedt et al.,

2013). These promising resources and routines leading to unique recombination capabilities

21

are difficult to obtain and achieve, and thus further hinder SINV development (Bianchi &

Noci, 1998). The “artful orchestration of resources, especially knowledge bundles, as a

response to differences between national and foreign environments, and to satisfy new

stakeholder demands in these foreign environments” (Verbeke, 2009, p. 8) appears to be more

difficult for SINVs as their sustainability dimension lacks significant recognition (Hart &

Milstein, 1999). This prompts the development of first working proposition (WP):

WP1: SINVs are likely to face additional constraints when internationalizing, due to the

difficulties of obtaining sustainable resources or establishing sustainable routines.

2.4.2. Alternative governance structures

The second necessary condition for INVs to be established is an alternative way to access

resources (Oviatt & McDougall, 1994). Due to INVs small size and resulting deficient

resources and power, alternative governance structures must be established (Oviatt &

McDougall, 1994). Organizational governance refers to how the “flows of information,

resources and goods are controlled by the relevant parties, the legal form of organization, and

the incentives to the participants” (Casadesus-Masanell & Ricart, 2010, p. 197).

Consequently, INVs often develop hybrid structures, sharing complementary assets with one

another, or INVs develop network structures, in which they cooperate with multiple partners

(Oviatt & McDougall, 1994). Such structures often indicate a greater flexibility of the

organization and flat organizational structures, due to the small nature of INVs (Doherty,

Haugh, & Lyon, 2014).

Thus, the influence of the internal environment on SINVs is further visible through the

alternative governance structures of SINVs. These governance structures aid in accessing

assets, as seen in INVs (Oviatt & McDougall, 1994). Accordingly, SINVs’ focus on

sustainability influence the governance of SINVs, as governance can be defined by the

presence of common interests of sustainable entrepreneurs (Daneke, 2001). This interest is

needed “either within the set of appropriators or in the surrounding governance structures”

(Daneke, 2001, p. 523), to obtain sustainable assets and successfully manage the firm. As the

most effective way to undertake action towards this common interest is through a top-down

approach, alternative governance structures are needed in which “top management is clearly

committed to strategy” (Epstein & Buhovac, 2014, p. 34). Therefore, sustainable leadership is

imperative, as “strategy and leadership are minimum enablers to successful sustainability

22

implementation” (Epstein & Buhovac, 2014, p. 7). Further, SINVs must be “sure that the

values (practices) and behaviors on the cultural side are aligned to achieve desired business

results” (Tosti, 2007, p. 25). Through ensuring strategy and cultural alignment sustainable

strategies can be successfully executed (Tosti, 2007), as reflected in INV literature “different

INVs are apt to develop specific and unique cultural norms that guide the deployment of their

resources” (Zahra S. , 2005, p. 26). Consequently, sustainable entrepreneurs drive this

alignment, as they “attempt to combine the environmental, economic and social components

of sustainability in a holistic manner and are said to have a different organising logic to more

conventional entrepreneurs” (Gibbs, 2006, p. 64). Thus, for SINVs to further develop

sustainable entrepreneurial leadership must be present, promoting sustainability from within

(Avery & Bergsteiner, 2011).

Therefore, sustainable entrepreneurial leadership is needed to “lead a cultural transformation”

(Epstein & Buhovac, 2014, p. 37), which creates an organizational culture that builds on

sustainability, as reflected in INV literature “it is reasonable to assume that these INVs benefit

from different cultural variables in stimulating and exploiting entrepreneurial activities in

international markets” (Zahra S. , 2005, p. 26). This type of leadership is fundamental to the

creation and survival of SINVs as it reflects their mission to sustain nature, resources, and

communities (Tideman et al., 2013; Shepherd & Patzelt, 2011). Tideman et al. (2013) classify

the six key elements of sustainable leadership to be the following: recognizing context, being

conscious of one’s actions, connecting to serve all stakeholder needs, creating value through

creativity, and embedding sustainability collectively in business (Tideman et al., 2013). These

elements being key to the mission of SINVs indicate the internal need for sustainable

entrepreneurial leadership “as the driver and necessary condition for sustainable

transformation and development” (Tideman et al., 2013, p. 49). Sustainable entrepreneurial

leadership can assist the development of a sustainable culture, and SINV internationalization,

as it successfully promotes the mission of the firm and allows more than just economic

benefits to be developed through aiding access to sustainable assets (Baumgartner, 2009;

Shepherd & Patzelt, 2011).

WP2a: The presence of sustainable entrepreneurial leadership within SINVs is likely to

enable SINV internationalization.

23

Even though there are strong factors within the governance of SINVs enabling their

sustainable expansion, barriers remain, specifically those created by the discontinuity of the

concept of global sustainability (Hart & Milstein, 1999). SINVs are highly dependent on their

environment, as “the more a company is able to involve its business partners in the

development of co-operative environmental plans, the more it is able to achieve the expected

results and improve its performance” (Testa & Iraldo, 2010, p. 961). Sustainable governance

and dedication is required internally and in the SINVs network to access sustainable assets.

Yet the view of sustainable stewardship is not shared as “many managers resist or discount

sustainable development as business driver” (Hart & Milstein, 1999). SINVs reliance on

others, due to their lacking resources and power, proves to be challenging, as cooperation

with others may cause internal tension and mission drift due to the difficulties of pursuing

multiple goals (Keskin et al., 2013; Santos et al., 2015). Unlike INVs, SINVs seek to align

profit and impact when aiming to financially sustain their mission. As the financial survival of

SINVs remains challenging like-minded partners are needed, supporting the goal of profit and

sustainable mission alignment (Santos et al., 2015). Consequently, profit-oriented partners

may hinder sustainable development due to the perceived uncertain viability of sustainable

initiatives, difficulties and potential expenses in changing processes, or if they continue to

consider profit as the only true source of value (Keskin et al., 2013). As Alexander (2007)

notes the functioning of the market and business results in “managers making decisions that

favor practices to insure profit-maximization at the expense of more morally preferable

alternatives”. When actions conflict with that of profit-maximization, entities are less likely to

pursue sustainable initiatives (Alexander, 2007; McWilliams & Siegel, 2001).

WP2b: The discontinuity of the concept of global sustainability and thus focus of others on

profit-maximization is likely to hinder SINV internationalization.

2.5. External environment Having analyzed the influences of the internal environment, the external environmental

factors of foreign location advantages can be considered. The external environment is

analyzed from a subnational level, purposely focusing on the analysis of global cities, as

SINVs appear to be more likely to expand to these interconnected, cultured environments

offering advanced producer services (Goerzen et al., 2013). Consequently, the conceptual

model depicted in Figure 2 is used to further analyze the external environment of SINVs.

24

2.5.1. Foreign location advantages

The third necessary condition and element for the existence of INVs and thus SINVs are

foreign location advantages of the external environment (Oviatt & McDougall, 1994).

Location advantages are the “entire set of strength[s] characterizing a specific location, and

useable by firms operating in that location” (Verbeke, 2009, p. 27) and often known as

Country Specific Advantages (CSAs). According to Oviatt and McDougall (1994) it is

through private and transferable knowledge that INVs can recombine their knowledge with

immobile resources abroad, creating location advantages. The external environment

contributes to the INV’s unique resource base, as the INVs sustainable competitive advantage

is supported and complemented by location advantages (Zahra S. , 2005). Foreign locations

“develop and leverage critical resources” (Sleuwaegen & Onkelinx, 2014, p. 108) and

contribute to the resource base of the firm as INVs seek to derive competitive advantage

through their unique recombination capabilities (McDougall et al., 1994).

Therefore, this necessary condition sheds light on the importance of SINV dependence on the

external environment, as location contributes to the resource base of the firm, intimately

relating location advantages and unique resources (Verbeke, 2009). According to Dunning

(1998) and Verbeke (2009) location has been a neglected factor and must be carefully

reconsidered, as the development of international entities does not occur in spatially

homogenous environments. Location needs to be given more attention, as well as, how,

where, and why firms are located in particular areas (Cantwell, 2009; Dunning, 1998;

Goerzen et al., 2013). Location and its advantages are “instrumental to the type of FSAs that

can be developed by locally operating firms” (Verbeke, 2009, p. 27). Yet the analysis of

location and the “treatment of location and geography remain[s] very partial and fragmented”

(Beugelsdijk, McCann, & Mudambi, 2010, p. 486).

The fragmentation of location research originates from the fact that the “term ‘IB’ invokes the

nation-state as the unit of analysis” (Beugelsdijk & Mudambi, 2013, p. 413-414). The

influence of the external environment, increasingly conceptualized from the national level of

analysis views spatial variation in terms of distance between cultures, institutions, economic

development, and resource bases, thus IB has been persistently focused on examining on

country-by-country basis (Beugelsdijk & Mudambi, 2013). IB literature has long taken

countries as unit of analysis due to the history of countries, importance of national governance

and national institutions (Beugelsdijk & Mudambi, 2013). Nevertheless, IB literature “has

25

serious weaknesses, stemming from its traditional assumption of the country as the location

unit of analysis” (Beugelsdijk & Mudambi, 2013, p. 413). The national level of analysis is too

coarse to provide accurate insight; thus, the subnational level of analysis is necessary to add

critical information to understanding location decisions (Beugelsdijk & Mudambi, 2013;

Goerzen et al., 2013).

Further, the subnational level of analysis allows a finer analysis of SINVs and their tendency

to locate in global cities. As Goerzen et al. (2013, p. 428) state, firms chose a specific location

within a country causing analysis at the country or even regional level to obscure the

understanding of sub-locational decisions. Thus, the subnational level of analysis in this case

“allows a more fine-grained analysis of location” (Beugelsdijk & Mudambi, 2013, p. 413). By

breaking down the national level of analysis greater insight is provided into spatial

heterogeneity, driving location strategy (Beugelsdijk & Mudambi, 2013). The way in which

SINVs chose their location due to their dependence on the external environment requires a

more “nuanced examination of specific location strategy” (Goerzen et al. 2013, p. 428). Thus,

as SINVs are highly dependent on their external environment, the linkages between the

external environment of global cities and SINVs internationalization are further examined in

the following section.

2.5.2 Global cities

The shift to a subnational level of analysis to examine cities acting as favored location for

economic development has long been pressing (Goerzen et al., 2013). Global cities have

arisen out of the structural transformations of globalization, growth of business capabilities,

and consecutive increasing business networks (Goerzen et al., 2013; Sassen, 2005 & 2009).

Cities such as Amsterdam, Berlin, and Paris have been identified as global cities (A.T.

Kearney, 2016; Sassen, 2009). Yet this research has mainly touched upon demographic data,

focusing on the implications of large populations in so-called megacities (Gilbert, 1996;

Goerzen et al., 2013). Another approach of scholars (Goerzen et al., 2013; Sassen, 2005,

2009) has been that of a functional tradition, highlighting the influence of global city

characteristics and interconnections. Consequently, when examining the external

environment this study takes on a functional approach as research recognizes the

interconnected nature of global cities and focuses on the effects of the external cosmopolitan

environment and the availability of its advanced producer services on SINV

internationalization. By analyzing the elements of the external environment this study

26

examines the influence of global cities’ unique talent bridging the interests of diverging

individuals, helping overcome the excess costs of doing business abroad (Goerzen et al.,

2013; Sassen, 2009).

Accordingly, when analyzing global cities’ activities, it appears that SINVs are more likely to

locate in these “privileged site[s] for economic development” (Goerzen et al., 2013, p. 428-

429). Characterized by “global interconnectedness, cosmopolitanism, and the abundance of

advanced producer services” (Goerzen et al., 2013, p. 427), global cities create an attractive

globalized environment for SINVs. Global interconnectedness being defined by connections

expanding beyond national boundaries, create “extensive interconnectedness to global

networks of transportation and communication” (Goerzen et al., 2013, p. 435). Additionally,

cosmopolitanism is shaped by global “characteristics that emerge from politics,

communications, education, culture, and other social factors” (Goerzen et al., 2013, p. 430).

This environment is “closely interlinked to the pooling of specialized managerial capabilities”

(Goerzen et al., 2013, p. 430; Dunning & Norman, 1983). These capabilities being defined as

advanced producer services with high knowledge content addressing the needs of firms and

thus including “banking, insurance and real estate… legal services, technical services,

business and management consulting as well as marketing and advertising” (Tödtling &

Traxler, 1995, p. 185). Therefore, a truly global city defined by “its ability to attract and retain

global capital, people, and ideas, as well as sustain that performance in the long term” (A.T.

Kearney, 2016, p. 1). With global cities being the “motors of ideological change” (Warf,

2015, p. 930), SINVs have the potential to succeed in this environment.

The tendency of SINVs to locate in global cities is reflected in the cosmopolitanism’s, “cross-

national mindset and core values that might speak for a heightened environmental concern

and positive disposition toward sustainable behavior” (Grinstein & Riefler, 2015, p. 697;

Goerzen et al., 2013). This heightened apprehension possibly favors the development and

acceptance of sustainable initiatives, as global cities’ populations are depicted as “a set of

loyalties to humanity as a whole” (Nussbaum, 1994, p. 1). This international environment is

often characterized by stakeholders with an open mindset as they are “adaptive [and] free

thinking” (Goerzen et al., 2013; Knight Frank, 2017, p. 8). These characteristics can

potentially influence SINV expansion, as the cosmopolitan environment produces globally

oriented stakeholders such as institutions and independent organizations that are open to more

international stimuli and have developed world perspectives (Fan & Phan, 2007; Goerzen et

27

al., 2013; Warf, 2015). The cognitive capacity of such environments increase stakeholder

incentive, “mak[ing] people reconsider their own opinions, to understand the perspective of

others, to look past initial dislikes, to accept dissenting ideas, to see more than one side of an

issue, and to reduce the drive to force one’s own views on others” (Warf, 2015, p. 934).

Consequently, for sustainable initiatives to succeed support is required “by the wider

technological system of which they are part, but also by the institutional framework of social

rules and conventions” (Beddoea, et al., 2009; Foxon, 2007, p. 140). Thus, institutions both

formal and informal become central to creating new tools to increase the importance of this

dialogue and support the establishment of sustainable initiatives within cities, as without

institutional support this cannot be achieved (Robinson, 2004). Institutions such as the

government of the Netherlands already support such measures by “boost[ing] the startup

ecosystem through a growing number of initiatives and policies, including favorable tax code

and the introduction of the startup visa” (Startup Genome, 2017, p. 76). Further, institutions

such as that of Germany support the development of its cities, into a hub for international

founders and talent visible in for instance the so far reaped “rewards of Berlin’s healthy, if not

deep, entrepreneurial roots” (Startup Genome, 2017, p. 52). As a “wider community of

caring” (Warf, 2015, p. 927) is established individuals act more humane and thus sustainably

oriented. This mindful community is further reflected in the presence of independent

organizations such as Startup Accelerators. Startup Accelerators act as incubators for growth,

guiding new initiatives and bringing them in contact with stakeholders willing to invest. This

environment thus increases the likelihood that stakeholders push for the support of SINV

establishment, communication of sustainability challenges, education increasing awareness,

and establishment of sustainable culture (Grinstein & Riefler, 2015; Warf, 2015). Thus, it is

the diversity of culture and open mindedness of global cities that stimulate stakeholders to

support sustainable initiatives (Goerzen et al., 2013; Grinstein & Riefler, 2015; Warf, 2015).

WP3a: Increased stakeholder stimulation towards sustainability within the cosmopolitan

environment of global cities is likely to enable SINV expansion.

Moreover, clustering in specific geographic locations has led to the advanced development of

certain environments and, thus their ability “to handle the more complex needs of firms and

exchanges operating across national borders” (Sassen, 2009, p. 4). The presence of advanced

business capabilities and skilled labor in terms of consultancy and technical services, reduce

28

the need to import services from home (Goerzen et al., 2013; Knight Frank, 2017). Advanced

producer services increase the ease of doing business, flow of information, and knowledge

creation as these services’ advanced capabilities allow business to be bridged to new locations

(Sassen, 2009). Global cities’ markets are stimulated by the presence of these specialized

services and investment, thus increase the command functions of such cities aiding in

controlling business (Sassen, 2005). In turn, the strategic roles of global cities ease the

complex management of activities and allow firms to retain control over their dispersed

activities (Sassen, 2009).

Thus, global cities being the “production and innovations centers of advanced producer

services” (Taylor, 2011), have led to the advanced development of technology. The presence

of advanced technology is indicated by the availability of advanced technical services and

consultancy agencies offering business support functions that present “alternative[s] to

knowledge transfer” (Attewell, 1992, p. 8) and offer services such as “cloud computing, big

data and business analytics” (Shao & Lin, 2016). Advanced technology is central to

developing the SINVs technological knowledge, this knowledge being central to success as it

“is important to firms in achieving innovation and competitive advantage” (Prashantham &

Young, 2009, p. 282). Instead of letting technology become a barrier to development the

provision of these services allows SINVs to easily and quickly adopt new measures aiding

internationalization (Attewell, 1992; Shao & Lin, 2016). Technology as service further lowers

the costs and barriers to adopting the newest technology (Attewell, 1992). Thus, allowing

global cities to act true to their characterization, as the “command and control points in the

organization of the world economy” (Goerzen et al., 2013, p. 430; Sassen, 2009). As the

complexity of introducing sustainable initiatives requires great coordination and “its

accumulation is challenging and can be time-consuming” (Prashantham & Young, 2009, p.

284), these advanced capabilities may alleviate the complexity of tasks at hand (Goerzen et

al., 2013; Martinez & Jarillo, 1989; Sassen, 2009). Services such as knowledge management

have been noted to play “important roles in innovations and in the use as well as the creation

and diffusion of new technologies” (Guerrieri & Meliciani, 2005, p. 490-491), thus

potentially influence the location choice of sustainable innovation. These services and the

resulting technology are “generating wealth and innovation at an exponential pace”, as “only

a handful of places in the world are capturing most of that value creation” (Startup Genome,

2017, p. 9). Consequently, due to SINVs dependence on strong environments the

“concentration of startups and their value” (Startup Genome, 2017, p. 10) becomes visible.

29

Further, as sustainable initiatives continue to battle against lock-in mechanisms, as sustainable

innovations “are difficult to achieve because the prevailing system may act as a barrier”

(Carrillo-Hermosilla, del Rio, & Könnölä, 2010, p. 1078). Consequently, SINVs require the

technological knowledge and the advanced expertise of global cities to enable the

establishment of their sustainable initiatives.

WP3b: Advanced technology resulting from the presence of advanced producer services

within global cities is likely to enable SINV expansion.

2.6. Conclusion Having outlined the notion of SINVs and broken down their internal and external

environment allows the analysis of the influence of these environments on SINV

internationalization. Therefore, the research is operationalized by analyzing SINVs based on

the dimensions of the working propositions previously discussed. Having argued that SINV

internationalization is influenced by internal environmental factors, such as the accessibility

of resources and routines, presence of sustainable entrepreneurial leadership, and

discontinuity of sustainability, these factors are separately addressed within and across each

case. Further, the external environment is examined by analyzing the stance of stakeholders

within the cosmopolitan environment and the availability of advanced technology. Therefore,

in the following section these influences are understood by conducting interviews and

collecting documentary data.

30

3. Methodology The research is based on a multiple case study research design grounded on the principles of

Eisenhardt (1989) and Yin (2003). Therefore, the following section introduces the ontological

and epistemological foundations of the research. This section then clarifies the choice of this

study’s qualitative multiple case study approach, the case sampling and data collection

method, as well as the associated quality criteria. Subsequently, the data analysis method is

presented.

3.1. Ontological and epistemological foundations of research The ontological and epistemological foundations of research are key to consider when

establishing the research design, as these determine what is considered as a “valid, legitimate

contribution to theory” (Brannick & Coghlan, 2007, p. 62). The ontology, referring to “the

way we think the world is” (Fleetwood, 2005, p. 197), of the study is objectivist. By

perceiving reality concretely, it is assumed that the outcome of this research cannot be

influenced by the researcher (Brannick & Coghlan, 2007; Morgan & Smircich, 1980). An

objectivist approach, also known as a positivist ontology is appropriate as it focuses the

research on accurately observing and measuring phenomena, and as it is the more “dominant

approach or paradigm in management and organizational studies” (Brannick & Coghlan,

2007, p. 62; Morgan & Smircich, 1980). This ontological foundation of research further

influences the epistemology adopted, “what we think can be known about [the world]”

(Fleetwood, 2005, p. 197). It is argued that full objectivity remains an ideal and that

measurements continue to be subject to inaccuracies (Trochim, 2006). Thus, a post-positivist

epistemological stance is taken, as it is accepted that reality can only ever be known partially

as all measurement is imperfect (Harrison, Birks, Franklin, & Mills, 2017; Yin, 2014). Thus,

this research seeks to be as objective as possible to minimalize the researchers influence on

the outcome, hence a structured and controlled approach is adhered to as expanded on below.

3.2. Qualitative multiple case study research design The ontological and epistemological foundations of research reflecting Eisenhardt’s (1989)

and Yin’s (2003) research approaches construct the ground for this study’s qualitative

research. Qualitative research is established, as it can be a “central contribution to theory

building in management” (Doz, 2011, p. 583; Eisenhardt, 1989; Yin, 1981). Contrary to

quantitative analysis it allows an in-depth investigation of the context of SINVs, as it

31

“investigates a contemporary phenomenon within its real-life context” (Yin, 2003, p. 13).

This theoretical lens allows constant comparisons to be drawn between entities, in turn

enabling progressive theory building on SINVs (Doz, 2011). Thus, as reflected in the post-

positivist epistemological approach deductive logic shapes the research (Shepherd &

Sutcliffe, 2011; Yin, 2003). Deductive reasoning is portrayed throughout the study through

the formulation of working propositions that progress to the data collection and analysis. Such

deductive reasoning is the “most prominent approach for theorizing on organizations”

(Shepherd & Sutcliffe, 2011, p. 361). This approach being central to developing

understanding towards the contextual dimensions of IB is key to examine SINVs internal and

external environments (Cheng, 2007; Doz, 2011). Thus, due to the importance of the

contextual dimension in this research, a case study research design is preferred (Yin, 2009).

A case study as research method highlights the focus on decisions, “why they were taken,

how they were implemented, and with what result” (Schramm, 1971, p. 6; Yin 2003). This

strategy is reflected in the study’s research question, as it deals “with operational links

needing to be traced over time, rather than mere frequencies or incidence” (Yin, 2009, p. 9).

Specifically, a multiple case study research design with embedded units of analysis is used to

investigate the research question, as this provides a more in-depth and focused analysis,

robust outcome, and allows generalization to the theory (Piekkari, Welch, & Paavilainen,

2009; Yin 2003). The case study consists of multiple embedded cases due to the analysis of

the phenomena faced in the internal and external environments of the SINVs (Yin, 2003).

Therefore, through literal replication logic, expanded on in the case selection, 8 cases are

selected making the research akin to that of multiple experiments, producing similar results

(Yin, 2003). Thus, aiming to encompass analytical generalization, reflected in the principles

of Eisenhardt (1989) and Yin (2003), this study builds theory from 8 SINV cases and can be

categorized as an explanatory case study. This nature is reflected in research’s distinct focus

on explaining the influence of SINVs’ internal and external environments on

internationalization. Explanatory case studies look for support behind the occurrence of

events and relationships, and thus the factors driving and inhibiting the internationalization of

SINVs (Saunder & Lewis, 2012). As previously mentioned, context being key to the study

supports the choice of a case study approach, as “there will always be too many ‘variables’

for the number of observations to be made, thus making standard experimental and survey

design irrelevant” (Yin, 1981, p. 59). Consequently, a case study design is highly relevant

when attempting to grasp the complexity of SINV internationalization.

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3.3. Case selection The sample consists of 8 SINVs that are purposely selected. This purposive sampling

technique is often referred to as nonprobability sampling, and is focused on achieving

representativeness and comparability (Teddlie & Yu, 2007). Due to the research’s specific

focus it only “makes sense to choose cases such as extreme situations and polar types in

which the process of interest is ‘transparently observable’” (Pettigrew, 1988 cited in Huber &

van de Ven, 1995, p. 537).

Therefore, 8 cases are selected based on following criteria: (1) Representative SINV, (2)

sustainable mission, (3) global city presence, and (4) international activity, meaning activity

or presence in more than one country. The firm is characterized as a SINV if the firm is led by

a sustainable entrepreneur aiming to fulfill a sustainable mission through a proactive

international sustainability driven strategy (Baumgartner, 2009; Nidumolu et al., 2015).

SINVs internationalize early, derive competitive advantage from their creative solutions and

use of resources from their network across multiple countries (Nidumolu et al., 2015; Oviatt

& McDougall, 1994). The firm’s mission is characterized as sustainable if social or

environmental goals are central to the firm’s functioning (Cohen & Winn, 2007; WCED,

1986). Further, SINVs of Dutch origin and with presence in Amsterdam are selected to

improve the comparability of the sample and gain insight into global city presence. SINVs

must be under the age of 10 years in order to capture the activity of the firm before it reaches

a mature stage (Bantel, 1998; Zahra et al., 2000).

Thus, vivid in Table 1 is the literal replication logic with which the 8 cases have been

selected. The SINVs are selected based on the established criteria so that the influence of the

internal and external environment of these SINVs can be compared. Examining similar cases

allows the embedded units of analysis within the internal and external environment to be

examined. These embedded units of analysis being; the accessibility of sustainable resources

and sustainable routines, the presence of sustainable entrepreneurial leadership, the

discontinuity of global sustainability, the support of stakeholders in the cosmopolitan

environment, and the presence of advanced technology in global cities. These elements are

specifically examined, as they provide detailed insight into the environment of each case and

thus allow an explanation to be established specifically focused on the cases’ internal and

external environments (Yin, 2003).

33

Case Firm Industry* Business Model

Number of Employees**

Sustainable Mission Mission Description Country Presence Global City Presence***

1 Closing the Loop

Environmental services

B2B 2-10 Environmental Making mobile phone usage sustainable by collecting and recycling mobile phones, thus aiming to make mobile phone usage circular (Closing the Loop [CTL], 2017).

Cameroon, Ghana, Guinea, Malawi, Mali, Nigeria, Rwanda, The Gambia, The Netherlands, Uganda, Zambia°

Accra, Amsterdam, Cape Town, Johannesburg, Lagos°

2 TreeWifi Environmental services

B2B, B2C 2-10 Environmental To clean the air of cities, through fighting air pollution by making individuals aware of air quality and rewarding green incentive with free Wi-Fi (TreeWifi, 2017)

The Netherlands° Amsterdam°

3 The CO2 Advisors

Environmental services

B2B 11-50 Environmental Being the game changer of sustainable advice, by making the implementation of certificates for sustainability affordable, accessible and fun (CO2 Advisors, 2017).

The Netherlands° Amsterdam, Brussels°

4 CocoPallet

Environmental services

B2B 3-5 Environmental To make a positive environmental impact by reducing the negative externalities of wooden pallets and waste streams, by offering alternative pallets made from the husk waste of coconuts (CocoPallet, 2017).

The Netherlands, Indonesia° Amsterdam°

5 Monsak Fashion and apparel

B2B, B2C 3-5 Environmental To design and make unique leather bags manually from waste leather, and to shift away from current mass production industry (Monsak, 2017).

The Netherlands° Amsterdam°

6 Mud Jeans

Fashion and apparel

B2B, B2C 2-10 Environmental Creating a world without waste, by shifting towards the circular economy and making jeans in fair factories, using minimal water resources, using laser instead of washing techniques, and producing jeans from recycled material and certified cotton (Mud Jeans, 2017).

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, England, Estonia, France, Germany, Iceland, Italy, Luxemburg, Norway, Poland, South Africa, Spain, Sweden, Switzerland, the Netherlands, the United States

Amsterdam, Barcelona, Berlin, Brussels, Cape Town, Copenhagen, Dusseldorf, London, Melbourne, Munich, Oslo, Prague, Vancouver, Vienna, Zurich

7 Firm A

Food production B2B 2-10 Social To produce a pure product through a social and fair enterprise, striving to offer as many jobs as possible to anyone, no matter what their background is (Anonymous).

The Netherlands, Germany Amsterdam, Berlin, Dusseldorf

8 BBROOD

Food production B2C 51-200 Social Creating quality bread produced with care, and contributing to a more sustainable world by critically assessing products and processes, and giving to society through the Bake It Smart and Simple (B.I.S.S.) project, microfinancing African bakeries. (BBROOD, 2017)

Kenia, Rwanda, The Netherlands, Uganda

Amsterdam, Nairobi

Table 1: Case Overview

Source: Author Notes: *, The industries are defined as following: (1) Environmental services are amenities concerned with the protection of the environment through the reduction of emissions, waste management,

recycling programs, the use of secondary resources and so on; (2) Fashion and apparel refers to the fashion industry ranging from the design to the manufacturing and supply of clothing and

accessories; (3) Food production refers to the process in which raw materials are processed into edible goods.

**, Estimated number of employees according to firms’ LinkedIn profiles.

***, Global city according to Global City Index 2016, by A.T. Kearney (2016).

°, Country and global city presence determined through interviews and documentary data, yet due to business through export, contractual agreements, and on varying basis the cases provided

incomplete data on locational presence.

34

3.4. Data collection

Accordingly, this research design allows data to be collected via interviews, a key method of

qualitative data collection (Zahra & George, 2002; 1995; Yin, 2003). Semi-structured

interviews are suitable as this method is often used to investigate firms, allows detailed data

collection, and is one of the best ways to gain insight in IB research (Leech, 2002; Yeung,

1995; Yin, 2003). Yet criticisms must be noted such as the risk of response bias, reflexivity or

overdependence on one source of information (Yin, 2003). Therefore, a protocol is

established and multiple experts are interviewed, allowing the interviews to be true to their

characterization as “one of the most important sources of case study information” (Yin, 2003,

p. 89). Moreover, an outline of the interview is provided in Table 2, indicating the linkages

between the interview questions and working propositions.

Additionally, to improve the quality of the research documentary data is used as source of

unobtrusive data collection (Yin, 2003). Documentary data provides comprehensive coverage

of the cases and can be repeatedly reviewed (Yin, 2003). Specifically, data was obtained from

the SINVs websites and their publications, newspaper articles, and online publications as

noted in Table 3. This form of data triangulation contributes to the credibility of the research

by using multiple independent sources of data (Saunder & Lewis, 2012). Thus, by combining

the primary source of data from the semi-structured interviews and that of documentary data

the quality of the research can be enhanced.

Therefore, after identifying SINVs through the Internet and personal connections, 38 SINVs

were contacted via phone and e-mails, followed up by phone calls. Consequently, 8 SINVs

responded positively to the request to participate in the research. This led to 8 interviews

conducted with founders and senior management, interviews that lasted approximately 15 to

30 minutes. It must be noted that the duration of the interviews was limited, as the SINVs

were unwilling to dedicate more time to the interview due to their demanding schedules. Of

the 8 interviews, 7 were conducted via telephone and 1 via Skype, 7 of which in Dutch and 1

in English. The translated interview questions clarifying the questions in both English and

Dutch are visible in Appendix 1. Accordingly, after the interviewee was informed on the

content of the interview and signed the consent form agreeing to the recording of the

interview, a protocol was used to guide the interview. Additionally, one of the SINVs chose

to remain anonymous, thus is referred to as Firm A throughout this study.

35

WP1 WP2a WP2b WP3a WP3b General Information When was the firm founded? - - - - - What was the motivation behind establishing the firm? - - - - - What is the mission of the firm? - - - - - What makes the firm a business with a cause? - - - - - How many employees does the firm have? - - - - - How is the mission of the firm financially sustained? - - - - - Internal Environment What type of sustainable products or services does the firm provide? X How are the firm’s resources acquired/services established? X How would you characterize the accessibility of these resources/processes? X How is sustainability promoted within the firm? X X What type of impact does the firm’s mission have on its stakeholders? X How are other firms in the industry and/or partners sustainably motivated? X To what extent do the profit-maximization attitudes of partners’ conflict with the firm’s mission? X External Environment How would you characterize the locations that the firm is active in? X X What cities is the firm active in? X X What was the rationale behind establishing presence in these cities? X X What did the firm consider to be locational advantages and disadvantages in these cities? X X Would you characterize stakeholders in these cities as more open to sustainable initiatives, if so why? X What kind of role did home institutions, host institutions and external organizations play for the firm? X Did the presence of advanced technologies in such locations influence the tendency to establish new sustainable initiatives? X

Table 2: Matrix Interview Questions

Source: Author

Notes:

-, Not applicable to WP

X, Relating to the noted WP

36

Table 3: Data Collection Overview

Source: Author

Notes:

*, Measurement in minutes

Case Firm Number of

Interviews

Interview

Duration* Firm Website

Firm

Publications

Newspaper

Articles

Online

Publications

1 Closing the Loop 1 18 http://www.closingtheloop.eu 5 3 3

2 TreeWifi 1 16 http://treewifi.org 1 5 7

3 The CO2 Advisors 1 15 https://www.co2adviseurs.nl 5 1 4

4 CocoPallet 1 27 https://www.cocopallet.com 1 3 6

5 Monsak 1 30 http://monsak.nl 1 2 4

6 Mud Jeans 1 35 http://www.mudjeans.eu 5 4 3

7 Firm A 1 22 Anonymous 2 1 4

8 BBROOD 1 18 https://www.bbrood.nl 3 4 5

37

3.5. Quality criteria

As indicated in the sections above qualitative research can significantly contribute to theory

development, nevertheless qualitative analysis has been subject to criticism over the years

(Eisenhardt, 1989; Yin, 2009). Opponents argue it has lacked rigor, making it a less favorable

research method (Yin, 2009). Eisenhardt (1989, p. 547) disputes that the “intensive use of

empirical evidence can yield theory which is overly complex”, as well as that “building theory

from cases may result in narrow and idiosyncratic theory”. Nevertheless, as Mintzberg (1979,

p. 587) states, enough relationships are uncovered in hard data, “it is only through the use of

this ‘soft’ data that we are able to explain them”. Case studies generate novel theory and

“improve the likelihood of accurate and reliable theory” (Eisenhardt, 1989, p. 541) through

creating close linkages to the data. Nonetheless, due to the criticisms towards the logic of

qualitative research this study ensures rigor by addressing the following quality criteria:

construct validity, internal validity, external validity and reliability (Yin, 2009).

Firstly, rigor is ensured by construct validity, known as the “extent to which a study

investigates what it claims to investigate” (Gibbert & Ruigrok, 2010, p. 712). This is

established through the data triangulation of interviews and documentary data, as well as by

establishing reviews throughout the study’s write-up (Gibbert & Ruigrok, 2010; Yin, 2003).

Further, a chain of evidence is created by forming working propositions, outlining the data

collection procedure and by presenting the coding scheme visible in Table 4, thus increasing

the understanding of how the research question is answered.

Secondly, internal validity refers to “the presence of causal relationships between variable and

results” (Gibbert & Ruigrok, 2010, p. 713). It is established mainly in the data analysis phase,

and supported by establishing concrete actions visible in the research framework, such as

linking the interview questions to the working propositions as seen in Table 2, and through

subsequent pattern-matching (Gibbert & Ruigrok, 2010). Explanation building, a specific

form of pattern-matching, allows the comparison of patterns within and across the cases and is

expanded on in the analysis section below (Gibbert & Ruigrok, 2010; Yin, 2003).

Following, external validity is established throughout the research design, this is the extent to

which the study’s findings can be generalized (Yin, 2003). Generalizability could be argued to

be limited due to the focus on 8 specific cases. However, it must be noted that this study

38

allows analytical generalization through the multiple case study research design’s literal

replication logic and through the inclusion of multiple data sources (Eisenhardt, 1989;

Piekkari et al., 2009; Yin, 2003). Due to the literal replication logic the cases act in a similar

way as multiple experiments, allowing the findings of similar results, thus generalizability

(Yin, 2003).

Lastly, reliability is achieved throughout the data collection procedure, and is demonstrated in

the study’s ability to repeat operations that result in the same outcomes (Yin, 2003). The

study’s reliability is reflected in the transparency and well-documented research design

(Piekkari et al., 2009). This is further vivid in the establishment of the study’s conceptual

foundation, detailed documentation of research, and establishment of an interview protocol

(Gibbert & Ruigrok, 2010). By making the study’s steps as operational as possible reliability

is ensured (Yin, 2003).

3.6. Data analysis method

Following the research design outlined, data was collected, the interviews were transcribed,

uploaded to NVivo and analyzed. NVivo being a qualitative data analysis program helped

organize the data and identify dominant themes and key notions within these themes, referred

to as sub-codes (Edwards-Jones, 2014). The sub-codes identified further categorized the data,

as depicted in Table 4. Consequently, due to the explanatory nature of the case study

explanation building was used as analytic technique, allowing the themes and sub-codes to

reveal patterns within and across the cases (Yin, 2003). This analytical technique aided in

understanding the data and thus contributed to the primary generation of theory in the within-

case analysis, as well as in the cross-case analysis by pushing analysis beyond primary

assumptions (Yin, 2003). Consequently, inferences could be drawn from significant data in

relation to the research question (Saunder & Lewis, 2012). Accordingly, the analysis in the

following section is based on the synthesis of data collected, the sources of data being

available upon request from the author.

39

Theme Sub-Code WP Description

Sustainable

Resources

and Routines

Resources and

Routines

WP1 Reference to the degree of ease or difficulty in accessing

resources or establishing routines.

Cost Elements pertaining to the costs faced in obtaining resources

or establishing routines.

Governance Sustainable

Entrepreneurial

Leadership

WP2a Indication of manager’s consciousness of actions, recognition

of stakeholders, and innovative value creation (Epstein &

Buhovac, 2014; Tideman et al., 2013; Tosti, 2007).

Internal Norms

and Values

Portrayal of firm’s norms and values, reflected in the firm’s

attitude, behavior and beliefs (Baumgartner, 2009).

External Norms

and Values

WP2b

Portrayal of suppliers/partners/industry’s norms and values,

reflected in their attitude, behavior and beliefs (Baumgartner,

2009).

Profit

Maximization

Indication of profit orientation of suppliers/partners of the

firm, or within the industry (Alexander, 2007).

Location Global cities WP3a,

WP3b

Indication of global city presence (A.T. Kearney, 2016; Knight

Frank, 2017; Sassen, 2005, 2009).

Cosmopolitan

Nature

WP3a Recognition of the global city environment in terms of the

identification of interconnectedness, referral to mindset of

environmental or social concern (Goerzen et al., 2013; Sassen,

2005, 2009; Warf, 2015).

Formal

Institutions

Reference to the role of the home or host institution.

External

Organizations

Reference to the role of external organizations.

Advanced

Producer Services

WP3b Recognition of the global city environment in terms of the

availability of advanced producer services such as consultancy

firms, and technical or creative services (Goerzen et al., 2013;

Sassen, 2005, 2009; Taylor, 2011).

Advanced

Technology

Reference to technological knowledge or the use and

availability of advanced technology.

Table 4: Coding Scheme

Source: Author

40

4. Results

The following section introduces the results of the 8 SINV cases. Firstly, the cases are

individually analyzed based on the themes emerging from the analysis, thus establishing

explanations around the within-case findings. Subsequently, the within-case analyses are

compared across the cases, identifying patterns and establishing explanations around the most

congruent factors influencing SINV internationalization. These factors are then directly

discussed, and the section is concluded by relating the findings to the working propositions.

4.1 Within-case analysis

The goal of the within case analysis is to gain insight into each individual case (Yin, 2003).

By analyzing the individual cases an explanation on the internal and external environmental

influences on SINV internationalization is established. No separate analysis on the effect of

advanced technology is integrated, as the SINVs provided no fitting information. Therefore,

the notion of advanced technology is further elaborated on in the cross-case discussion.

4.1.1. Case 1: Closing the Loop

What became imminently visible was the social orientation of Closing the Loop (CTL).

CTL’s key goal was to achieve sustainability in the Telecom industry through introducing

circularity. Having experienced the e-waste situation in Africa, the founder established CTL

in the global city of Amsterdam. As seen in Table 5 operations were directly initiated in

Africa, as he wanted to “change what [his] previous firm did to something more sustainable”

(Founder CTL, 2017). In turn, reflecting the notion of SINVs being international from

inception and illustrating the unique role of the entrepreneur in understanding the potential of

international opportunities (Oviatt & McDougall, 1994).

CTL was operational in global cities such as Cape Town and Johannesburg, and regular cities

such as Accra, cities where “sustainability [was] definitely not important from an ideological

perspective” (CTL Founder, 2017). Here CTL encountered constraints due to the lacking

availability of recycling procedures, as recycling firms were not willing to invest in these

unstable host locations. Additionally, with the Global City Index ranking Cape Town and

Johannesburg at the lower end, and Accra not being a global city, indicated that constraints

may have resided in the developing nature of these cities (A.T. Kearney, 2016).

41

Case 1: Closing the Loop Code Sub-Code Findings Data

Sustainable Resources

and Routines

Resources and Routines

Resources constrain internationalization, as these are available, however not accessible and establishing routines remains burdensome due to lacking investment initiatives in e-waste recycling factories, and difficulties arranging e-waste transport.

“It was not difficult to find firms that were open to this, but it was to convince them to partake” “It is a subject that is new, as concepts of circularity and sustainability are still developing”

Cost No Evidence

Governance

Sustainable Entrepreneurial

Leadership

Presence of leadership is indicated as a creative solution is drafted to address the issue of e-waste. This leadership stimulates sustainability throughout the firm, manifesting itself in the internal norms and values.

“In my previous firm, I saw an impact that I wanted to solve” “Together with the organization I wanted to change what my previous firm did to something more sustainable and something that would not lead to waste in developing countries”

Internal Norms and Values

“For me it is just logical to be sustainable, not necessarily due to ideology. I find it strange not to be sustainable” “Most people within the firm are pragmatically sustainable”

External Norms and Values

The notion of sustainability remains underdeveloped within the Telecom industry. Clients and partners’ lacking awareness surrounding the issues of e-waste indicate this discontinuity. Bureaucratic processes continue to constrain sustainable change. There is no reference to the role of profit-maximization.

“Everyone enthusiastically and with great interest goes into conversation, but undertaking action, that is a lot more difficult” “Sometimes we work together with sustainable firms such as Fairphone, and sometimes with other firms that have little to do with sustainability, like entrepreneurs in Africa”

Profit Maximization No Evidence

Location

Global cities Global city presence is indicated, but initial expansion was focused on e-waste management in Africa.

“Conversation takes place in the headquarters of ING, in Amsterdam”

Cosmopolitan Nature

External support is received from the Dutch government and external organizations in terms of promotion and funding. However, the constraints created by host institutions in Africa and European regulations outweigh stimulation.

“They are of course targeted earlier” “Especially in African countries many more important things are going on than the recycling of your phone… sustainability is definitely not important from an ideological perspective. It is very pragmatic there, you do not waste what you have” “What we sometimes see is that people come with questions surrounding sustainability, recycling, etc., that we did not think mattered for them. People ask if other waste materials can also be recycled”

Formal Institutions

“In Europe, it is sadly not much better, there are all kinds of rules surrounding waste transport” “But we have gotten support from the Dutch government in promoting our story” “It is very difficult to work together with African authorities, especially concerning new business propositions, when it is about waste, and when it is about the informal sector” “In Africa, we always say the best thing that the government can do is to not work against you”

External Organizations No Evidence

Advanced Producer Services

No Evidence No Evidence

Advanced Technology No Evidence

Table 5: Results Case 1, Closing the Loop

Source: Author

42

Thus, the e-waste had to be exported, yet barriers were faced in establishing logistics, as seen

in Table 5 it was “difficult to work together with African authorities” (Founder CTL, 2017).

African host institutions obstructed CTL, indicating how “institutional conditions and

idiosyncratic environments of developing countries present formidable challenges” (Dahan,

Doh, Oetzel, & Yaziji., 2010, p. 330). Consequently, CTL expanded in Europe to tackle the

sources of e-waste. CTL claimed their presence in Amsterdam to be taken as a given, as large

cities were “of course targeted earlier” (Founder CTL, 2017). Yet, CTL’s internationalization

was difficult, as sustainability was a was still a developing topic. The discontinuity of

sustainability obstructed CTL, as CTL wanted to collect broken mobile phones to reduce e-

waste streams in Africa, yet the broken mobile phones were not accessible. MNEs did not

want to make these accessible for recycling. Therefore, due to the bureaucratic resistance met

within these firms and the lacking pressure to commit time and resources to sustainability, no

change was undergone. In turn relating to the notion of Hansen and Birkinshaw (2007, p. 127)

that new initiatives are hindered, as the “number and diversity of people involved… can

create a risk-averse and bureaucratic process that grinds execution to a halt”.

Therefore, central to CTL’s endurance was sustainable entrepreneurial leadership shaping the

internal environment. Further, Supporting CTL’s internal environment were external

stakeholders such as the Dutch government, Bruggink & Van der Velden funding social

initiatives, and organizations comparable to the Environmental Protection Agency (EPA),

stimulating CTL’s internationalization. Nevertheless, this support did not outweigh the

barriers created by host institutions, reflecting Zaheer’s (1995) notion of LOF, as additional

costs were encountered when operating abroad, and reflecting the influence of emerging

markets on strategy success, as noted by Meyer, Estrin, Bhaumik, and Peng (2009).

4.1.2. Case 2: TreeWifi

On a mission to clean the air of cities, TreeWifi stimulated the sustainable behavior of its

consumers by offering them free internet in exchange for clean air. Having developed sensors

measuring air quality, TreeWifi tackled an invisible problem. With the “air pollution levels in

parts of Amsterdam break[ing] EU standards” (Perry, 2016), Amsterdam was a logical city to

get started. TreeWifi gave the residents of Amsterdam the tools to understand and positively

contribute to sustainable change. In turn, the cosmopolitan environment of Amsterdam

supporting TreeWifi’s establishment, as “the residents of Amsterdam [were] very open to it”

(Founder TreeWifi, 2017), reflecting the city’s community of caring (Warf, 2015).

43

Case 2: TreeWifi Code Sub-Code Findings Data

Sustainable Resources and

Routines

Resources and Routines

Constraints are faced in obtaining resources due to the complex technology required and the cost of acquiring and developing this technology.

“It is a complex project to get going” “It is quite difficult to be sustainable in electronics… to control this we are really too small” “You do not have the supply chain under control overnight” “You do not have a supply chain audit manager that can contact each factory, or go by to check under what circumstances it is being made, or where the raw materials are sourced from… Every startup will face these difficulties” “It is not the plug and play for which you hoped”

Cost “The big problem also for TreeWifi is that the sensor technology is still very expensive and difficult to manage” “Sensor technology is simply very expensive”

Governance

Sustainable Entrepreneurial

Leadership

As the founder tackles an invisible problem his leadership becomes visible. The team’s dedication further shapes the firm’s sustainable motivation.

“I wanted to bring attention to air quality in a fun way and I wanted to do this in a different way than through a boring research project or coming across as an activist” “TreeWifi really received a lot of media attention and this already helped bring the subject of air quality back on the map”

Internal Norms and Values

“We are definitely busy with sustainability, we often have discussion about this” “We constantly consider how we purchase, wat technological materials we use...”

External Norms and Values

Others in the industry do not prioritize sustainability, as TreeWifi indicates by questioning the production processes of others. There is no reference to profit maximization.

“Often with great reluctance we have to order components from China… of which the origin, or how it is made is questionable, but this is really the reality of electronics” “We try to purchase as much as possible from European or American suppliers that we know, but even they use components that originate from China”

Profit Maximization

No Evidence

Location

Global cities TreeWifi has been established specifically for cities and thus is present in the global city of Amsterdam.

“Amsterdam is really an innovative city to be present in”

Cosmopolitan Nature

TreeWifi is stimulated by stakeholders in the cosmopolitan environment of Amsterdam. Formal institutions, external organizations, and the media continue to stimulate TreeWifi’s development.

“The residents of Amsterdam are very open to it”

Formal Institutions

“It has been quite difficult to get the government on board and it still is very complicated” “The government is now a customer of ours”

External Organizations

“I pitched it to the Awesome Foundation and received 1,000 euros from them to build a prototype”

Advanced Producer Services

No Evidence No Evidence

Advanced Technology

No Evidence

Table 6: Results Case 2, TreeWifi

Source: Author

44

Yet launching TreeWifi from project to firm was challenging. As seen in Table 6, TreeWifi

faced a “complex project to get going” (Founder TreeWifi, 2017). The sensor technology was

“expensive and difficult to manage”, and did not function as the “plug and play for which you

hoped” (Founder TreeWifi, 2017). Further, with the sensors of the Dutch government being

beyond their budget, TreeWifi faced significant challenges in becoming affordable. Visible in

Table 6 is how TreeWifi’s deficient supply chain control made it “quite difficult to be

sustainable in electronics” (Founder TreeWifi, 2017). Sustainability was challenging as

components were produced in adverse ways and because others in the industry did not have

sustainable standards. The discontinuity of the notion of sustainability within this industry

created hurdles, as often “with great reluctance … [TreeWifi had] to order components from

China… of which the origin, or how it is made [was] questionable” (Founder TreeWifi,

2017). This indicated how corporate social responsibility (CSR), representative of

sustainability, increased costs, as “embodying products with CSR attributes requir[ed] the use

of additional resources, which result[ed] in higher costs” (McWilliams & Siegel, 2001, p.

123).

Moreover, learning was central to advancing technology and boosting TreeWifi’s

internationalization (Prashantham & Young, 2009). According to Prashantham and Young

(2009, p. 275) central to expansion were the “existing resources represented by stocks of

knowledge and capital”. Consequently, the lack of this caused TreeWifi’s internationalization

to America to be reversed. The discontinuity of global sustainability fueled by the new

presidential elections reversed TreeWifi’s internationalization. Even though North-American

cities score highly in the dimension of innovation in the Global City Rank (A.T. Kearney,

2016), internationalization failed due to the unforeseen political implications hindering

sustainable development. Consequently, TreeWifi’s inadequate speed of learning, and

deficient host country knowledge negatively influenced internationalization.

Nevertheless, TreeWifi did not become obsolete, as despite its challenges TreeWifi’s

sustainable entrepreneurial leadership brought the topic of air quality back into play. By

refocusing on its home environment, the Dutch government was gained as client. Thus,

stakeholders, formal institutions and the Awesome Foundation funding TreeWifi stimulated

internationalization. In turn, reflecting the enabling role of the global city environment.

45

4.1.3. Case 3: The CO2 Advisors

The CO2 Advisors developed due to the founder’s initiative of sharing his sustainable

knowledge through free seminars. Being set up to help others achieve CO2 neutrality the firm

aided others obtain sustainability certifications. Its sustainable entrepreneurial leadership was

reflected in its continuous spreading of the word on sustainability, revealing how accessible

sustainable knowledge was. In turn the founder was a “classic entrepreneur, an individual who

[saw] opportunities where others [did] not” (Dixon & Clifford, 2007, p. 332). Further, his free

seminars reflected literature noting knowledge to be “seen as a vital driver of firm behavior

and growth” (Prashantham & Young, 2009, p. 278).

Yet the notion of sustainability remained discontinuous, constraining internationalization.

Seen in Table 7 is how clients were “skeptical about CO2 and the environment”, and that

“there [were] requirements that they [thought were] nonsense” (Senior Manager the CO2

Advisors, 2017). Yet, contrary to the research’s expectations profit maximization drove

sustainability, as non-adherence to certifications could lead to missing out on financial

benefits. As sustainability was gaining importance, it reflected how “managers should treat

decisions regarding CSR precisely as they treat all investment decisions” (McWilliams &

Siegel, 2001, p. 125). Consequently, the external norms and values of partners became profit

driven, as clients were “more interested in receiving the certification because it raise[d]

money” (Senior Manager the CO2 Advisors, 2017).

Quickly the number of firms certified grew, as with TreeWifi’s “enthusiastic approach it

eventually work[ed] contagious” (Senior Manager the CO2 Advisors, 2017). Multiple clients

in the global city of Amsterdam, and regular cities in the Netherlands, as well as international

clients were gained, as reflected in the literature sustainability was increasingly “viewed as a

form of investment” (McWilliams & Siegel, 2001, p. 119). However, the analysis of location

was increasingly limited as no insight could be gained into the specific locations in which the

firm was operative. However, it was visible how the global city of Amsterdam influenced the

SINV, as it “anchor[ed] various features of globalization” (Sassen, 2005, 36).

Moreover, contrary to the literature of Bocken and Allwood (2012) clients argued that

governments did not implement enough measures to pursue sustainability. Clients continued

to complain about governmental obstruction, as “the government [did] way too little with

sustainability and, also [did] not have sufficient laws concerning this” (Senior Manager the

46

Case 3: The CO2 Advisors Code Sub-Code Findings Data

Sustainable Resources

and Routines

Resources and Routines The SINV being established through the offering of free seminars insinuates that knowledge on sustainability is not difficult to access. No constraints reside in obtaining resources and establishing routines, as information and solutions are readily available.

“He started out by organizing free seminars, with which he freely shared his knowledge” “Clients advise us to other clients” “We are one of the only firms that is very specialized in this area”

Cost No Evidence

Governance

Sustainable Entrepreneurial

Leadership

Leadership is reflected by the founder, his seminars, and through the creation of the foundation the Netherlands CO2 Neutral.

“We want to make as many firms as possible sustainable” “Our goal is to advise clients in an easy, fun, and nice way”

Internal Norms and Values

“We have set up a foundation, it is called the Netherlands CO2 neutral” “We notice that with our enthusiastic approach it eventually works contagious”

External Norms and Values

Competitors and clients are not focused on sustainability. Yet, profit maximization does not act as constraint, but as enabler as certifications increase the client’s profit.

“We are significantly different in our approach compared to other consultancy firms” “You notice that it is difficult with transportation companies… you notice quickly that they are skeptical about CO2 and the environment” “The certification sets requirements, and there are requirements that they think are nonsense” “You sometimes see that they are not willing to cooperate”

Profit Maximization “Some firms are more interested in receiving the certification because it raises money, than that they have a huge green heart”

Location

Global cities Indication of global city presence, but cliental is noted to be increasingly spread out.

“Our clients are a lot of transportation and construction firms and these are not located in cities” “They are reasonably spread out”

Cosmopolitan Nature Stakeholders are not stimulated as the home institution constrains development due to their lacking knowledge, yet it must be noted they are attempting to become more involved.

“You notice it more according to sector… you see that more compared to regions”

Formal Institutions

“This is a complaint that we often receive from our clients, that the government does way too little with sustainability and, also does not have sufficient laws concerning this. So, it really is not organized well enough” “They often say that clients have to do something about it, but they know way too little about it themselves” “This complaint we often receive from clients that they do not receive enough support from the government” “The government in that regard constrains us. Even though, I have to say that we have now certified a governmental agency, so we have the government as client and slowly see their awareness starting to grow, and that more municipalities are coming to us for help”

External Organizations No Evidence Advanced Producer

Services No Evidence No Evidence

Advanced Technology No Evidence

Table 7: Results Case 3, The CO2 Advisors

Source: Author

47

CO2 Advisors, 2017). Nevertheless, some governmental agencies did start to adjust their

practices. The Ministry of Infrastructure and Environment and the municipality of Renkum

gained certifications, and created their own certifications, with which they hoped to stimulate

other governmental agencies to become more sustainable. Even though efforts were

increasing the home institution’s constraints remained strong, thus outweighed stakeholder

stimulation, and obstructed internationalization.

4.1.4. Case 4: CocoPallet

CocoPallet is an impact driven firm tackling the reduction of logging by using the waste

stream of coconut husks, to create a reusable, biodegradable product. The founder was

searching for a natural glue when he came across research highlighting the potential of

coconut husks. Having witnessed the negative impact of logging, and the waste stream of

coconuts being poorly handled in Asia, the founder drafted a creative solution with this new

knowledge. Consequently, as reflected by Zahra (2005, p. 22) the SINVs competitive

advantage lay in the founders’ cognition identifying opportunities internationally and

developing ways to exploit them.

By recombining knowledge and the waste stream of coconuts the founder reflected Verbeke’s

(2009) notion on the importance of value creation through unique recombination, central to

exploiting opportunities abroad. Moreover, CocoPallet vividly reflected the foundations of a

geographically focused startup, as CocoPallet derived “advantages by serving well the

specialized needs of a particular region of the world through the use of foreign resources”

(Oviatt and McDougall’s, 2005, p. 37-38). This region being Asia and the foreign resources

the waste stream of coconuts. Nevertheless, its geographic focus was not on global cities, as

CocoPallet located in rural areas of Indonesia. However, this did not negatively influence

internationalization, as knowledge was developed in Europe, Europe scoring high on the

innovation dimension of the Global City Outlook (A.T. Kearney, 2016).

Even though CocoPallet could readily access its resources, the founder was constrained in

establishing its processes. Obstructing CocoPallet was the development of the machinery.

Many claimed the development of the machine to be “technically impossible”, yet CocoPallet

“continued to fail until [they] succeeded” (Founder CocoPallet, 2017). The main setbacks

were associated with investment, as one “need[ed] money to achieve something” (Founder

CocoPallet, 2017). As noted by Dixon and Clifford (2007, p. 328), “securing funding can be

48

Case 4: CocoPallet

Code Sub-Code Findings Data Sustainable Resources

and Routines

Resources and Routines

Resources are readily available, however constraints in establishing routines are faced as the development of machinery is costly and challenging.

“All of it is not possible… it is technically impossible” “We continued to fail until we succeeded”

Cost “Import and export of the resources cost more money than the transport” “You also need money to achieve something”

Governance

Sustainable Entrepreneurial

Leadership

Leadership is reflected as the founder wants to make a difference and since he has held on to his ideas while everyone doubted him. This is further reflected in the team’s motivation.

“It is an impact driven firm, I founded it because I wanted to make a difference” “It is all about reaching people… where can I really make a difference” “You have to be really honest with yourself and the market” “Scale is very important if you want to make an impact” “If you ask me what is important I would say grit, endurance… it is often underestimated” “Awareness is the first step, even for consumers”

Internal Norms and Values

“Your team is everything… you really need a team that is motivated and supports your idea” “Diversity in the circle of people around you are so important”

External Norms and Values

External norms and values are not focused on sustainability, attempts are made by using recycled wood, yet this remains harmful to the environment. There is no indication of a focus on profit-maximization.

“Others pretend to be sustainable by making pallets from old wood, but they do not tell you about the toxic additives that they have to add to these pallets… creating a product that is 50% synthetic, this is not a solution”

Profit Maximization No Evidence

Location

Global cities Global city presence is noted, yet the SINV targeted customers are Asian exporters.

“We are especially talking with large Asian exporters… and now we are receiving a lot of demand from Latin America”

Cosmopolitan Nature

Stakeholders are stimulated, visible in the willingness of technicians and the University of Wageningen in aiding CocoPallet’s development. Further, host institutions have hindered CocoPallet’s development, yet this is outweighed by the support received from others in its environment.

“Cultural differences are always underestimated” “We work together with many technicians” “We have received a lot of help from the Chinese with which we have built the machine… people also have to think you deserve it”

Formal Institutions “The government and civil servants are the ones that bother us” “Everything that is new or strange they act difficult about… it is so frustrating” “Importation is horrible in such countries, you really have to be stubborn”

External Organizations “Wageningen also thinks we deserve it, deserve it to succeed” Advanced Producer

Services No Evidence No Evidence

Advanced Technology No Evidence

Table 8: Results Case 4, CocoPallet

Source: Author

49

particularly onerous”. Additionally, as seen in Table 8 stakeholder stimulation enabled

progress. CocoPallet received help from technicians, universities, Spring Associates

consultancy, and the Climate KIC Accelerator. Nevertheless, it was notable that the support

received mainly originated from its home environment, again reflecting the impact of this

environment as “Amsterdam [was] increasingly prominent in rankings of European tech

locations” (Knight Frank, 2017, p. 55). Further, as seen in Table 8, Asian formal institutions

obstructed CocoPallet, as “everything that [was] new or strange they act[ed] difficult about”

(Founder CocoPallet, 2017), reflecting the difference between developing and developed

countries impact on strategy, as reflect upon by Meyer et al. (2009).

Further, the high costs of importing machinery and establishing routines in Asia negatively

influenced internationalization. CocoPallet’s processes were constrained, as its solution had to

be cheaper than the production of wooden pallets. Only a cheaper alternative would cause

others to switch to their pallets, as “nobody [would] pay extra for a more sustainable solution”

(van Zoelen, 2016). Others in the industry reflected the discontinuity of sustainability, visible

through the wooden pallets in circulation and the negative externalities of logging. In turn,

reflecting known competitive strategies of how “large scale has become one among any ways

to compete internationally” (Oviatt & McDougall, 2005, p. 33). Contrary to competitors the

founder wanted to “make a difference” (Founder CocoPallet, 2017). Therefore, with its

sustainable entrepreneurial actions CocoPallet hoped to inspire others and see them creating

products from the waste of coconut husks.

4.1.5. Case 5: Monsak

Monsak created handmade bags from waste leather, aiming to reduce its waste production and

that of tanneries by using the unique leftover pieces of leather of others. Therefore,

originating from the founder’s passion for leather material and bags, Monsak created unique

items.

Having come across the supply of waste leather through the founder’s experience in the

industry, Monsak did not face any difficulties in obtaining its resources. This experience

further aided Monsak in finding skilled labor for its handmade items. In turn, highlighting the

importance of experience in enabling success, as noted by Oviatt and McDougall (2005, p.

21) “the evolution of the firm’s mission and resource base are intimately related to managerial

capacity, which, to some extent, is defined by the pre-launch experience”. Therefore, as seen

50

Case 5: Monsak Code Sub-Code Findings Data

Sustainable Resources

and Routines

Resources and Routines

Having simply come across the leftover material, Monsak did not face difficulties in obtaining its resources or its sustainable routines. Materials and skilled labor was readily available.

“No this was not difficult, because I happened to come across it” “No up until now it was not difficult, I succeeded every time in finding interns”

Cost “Whenever I talk about residual material people think that it should be cheaper, than when it would be non-residual material”

Governance

Sustainable Entrepreneurial

Leadership

By giving waste leather a second life and through Monsak’s drive to share its knowledge through workshops this leadership becomes visible.

“I am up to date on the developments of sustainable brands” “I also give workshops and there I clearly talk about the residual materials” “I use and finish wat others necessarily had to order” “That is where the challenge lies, to tell people the story, to tell it in the right way”

Internal Norms and Values

“We absolutely try to make people aware of it. How do you process the materials and how can you optimally use all parts of the material”

External Norms and Values

Sustainability is discontinuous within the fashion industry. Monsak highlights the awareness of others, yet their lacking willingness to change. There is slight indication that this may be due to profit maximization, as firms want to produce items in the cheapest way possible.

“They still see it as waste” “I think that very large brands that have been busy for a long time will not make the change” “I do think that fashion brands will start experimenting earlier… and that they will look at what alternative materials they can use”

Profit Maximization

“I do not have enough knowledge for this, because I do not have contact with tanneries. But, I definitely think that they will try to produce samples in the cheapest way possible”

Location

Global cities There is an indication of activity in a variety of global cities.

“Very different: Germany, Denmark, Switzerland, America, England… the cities I do not know by heart. I do know that in Denmark many of the orders come from Copenhagen, orders are often from the larger cities”

Cosmopolitan Nature

The cosmopolitan nature of cities and stimulated stakeholders do not play a significant role for Monsak, as Monsak has received little to no support from its external environment.

“It is very easy to first expand in your own home town” “Amsterdam is of course a circuit of all kinds of connections”

Formal Institutions “It never crossed my mind” External

Organizations No Evidence

Advanced Producer Services

No Evidence No Evidence

Advanced Technology

No Evidence

Table 9: Results Case 5, Monsak

Source: Author

51

in Table 9, obtaining resources and setting up routines did not obstruct Monsak’s

internationalization, as Monsak “happened to come across it” (Founder Monsak, 2017).

Acting as a frontrunner Monsak promoted a product of which the materials were often

negatively perceived. Being determined to stay away from mass production and in control of

its supply chain Monsak set up workshops in which they “clearly talk[ed] about the residual

materials” (Founder Monsak, 2017), and promoted the second life potential of leather.

This discontinuity was vivid in the norms and values of others in the fashion industry. As seen

in Table 9 Monsak indicated that other brands were aware of sustainability, however “[would]

not make the change”, as “they still [saw leftovers] as waste” (Founder Monsak, 2017).

Moreover, it shows how such firms were focused on profit maximization, as production was

done “in the cheapest way possible” (Founder Monsak, 2017). Even though Monsak indicated

to have limited knowledge on others unsustainable behavior, the market of fast fashion and

the mass production are “well documented for having significant social and environmental

impacts�(Pedersen, Gwozdz, & Hvass, 2016).

Consequently, as reflected by Bocken and Allwood (2012) firms can create needs, thus

sustainable needs can be shaped. Therefore, through the product introductions of Monsak

consumer change was stimulated (Bocken & Allwoord, 2012). Monsak used its supporting

network of Amsterdam, a “circuit of all kinds of connections” (Founder Monsak, 2017), as

well as the interconnectedness of Amsterdam to internationalize to global city such as

Copenhagen. Copenhagen reflecting a global city environment similar to that of Amsterdam,

and thus reflecting the notion of Oviatt and McDougall (2005, p. 37), as “export/import

startups focus on serving a few nations with which the entrepreneur is familiar”. Further,

Copenhagen being ranked highly in the Global City Index as smart city (A.T. Kearney, 2016),

reflected the citizens’ sense of caring for the environment, thus reflecting why this

environment may show interest in Monsak. Further, Monsak’s gave no indication of other

stakeholders being involved in internationalization. This may have been due to its focus on

export, reflecting the stance of an export startup in which “direct investment in any country is

typically kept at a minimum” (Oviatt & McDougall, 2005, p. 37).

4.1.6. Case 6: Mud Jeans

Wanting to positively impact the fashion industry the definition of sustainability lies central to

the mission of Mud Jeans. Having grown from its Lease a Jean project to produce its own

52

jeans from recycled material and certified cotton, Mud Jeans introduced the notion of

circularity to the fashion industry. Mud Jeans indicated that it was possible to create “entire

business models to address the negative impacts of the conventional fashion industry”

(Pedersen et al., 2016, p. 6). Further, it reflected the nature of an INV visible in the

“international vision of the firm from inception, an innovative product or service marketed

through a strong network, and a tightly managed organization” (Oviatt & McDougall, 1994, p.

31).

Yet the fashion industry remained unsustainable and thus constrained Mud Jeans’ supply

chain. Increased costs were faced due to the higher production costs of Mud Jeans compared

to that of others. Mud Jeans faced the challenge of tackling the unsustainable use of cotton, an

example of “one of the world’s most polluting crops” (Pedersen et al., 2016, p. 2). Thus,

introducing sustainable routines, proved to be challenging as “sustainability require[d] gradual

steps” (Founder Mud Jeans, 2017). It was difficult to obtain resources and set up routines to

supply the demand of global cities, as these were not readily available and expensive. Thus,

finding investment constrained Mud Jeans internationalization to new locations, as they “ran

out of money very quickly” (Founder Mud Jeans, 2017). As noted in the literature they lacked

“the resources to sustain a process of experimentation for a longer period of time” (Bohnsack

et al., 2014, p. 285; Sosna et al., 2010). Therefore, the difficulty of working with recycled

materials, adhering to the regulations of certifications and establishing fair factories required

motivation as this path of development was difficult, as seen in the literature most firms’

“tight budgets, conventional thinking, and strict funding criteria combine to shut down most

novel ideas” (Hansen & Birkinshaw, 2007, p. 124).

Due to the discontinuity of sustainability Mud Jeans certified itself as B Corporation, and

developed new routines together with its factories, all to regulate its supply chain.

Nevertheless, Mud Jeans faced constraints as they worked together with external logistic

centers, where they were the customer and could not “imply all [their] rules” (Founder Mud

Jeans, 2017). Thus, even though the notion of sustainability was promoted throughout the

circular supply chain, competitors within the industry and those external to the firm did not

share this vision. Similar to the case of Monsak, there was an indication that profit

maximization was important. Relating to the notions of McWilliams and Siegel (2001, p. 117)

that mangers avoid sustainability “because they believe such efforts are inconsistent with

profit-maximization”.

53

Case 6: Mud Jeans Code Sub-Code Findings Data

Sustainable Resources

and Routines

Resources and Routines

Constraints are faced in obtaining resources, such as certified cotton, and setting up factories and their routines. The main constraint resides in the costliness of these resources and the establishment of these routines.

“You have to start somewhere, and do not expect to be 100% sustainable the next day… sustainability requires gradual steps” “A lot of people want to start, but say it is too big to tackle” “My suppliers have a tough job, because those making the jeans …with the recycled content in it find it is much harder to work with” “You have to be really motivated to start making things from recycled material because it is not always easy”

Cost “I ran out of money very quickly, so first make sure you have all your finances well arranged”

Governance

Sustainable Entrepreneurial

Leadership

Leadership is present as Mud Jeans wants to break away from fast fashion and introduce a circular jeans industry. Sustainability is visible internally through their so said responsibility to the world.

“Everything we put into the market we want to take back and make sure it is used in a circular way” “We try to be an example…we want to show the industry that it is possible to create a company that has a true reason to exist” “We try to make sure our values are followed”

Internal Norms and Values

“We also have a code of conduct that we implement to our partners” “Use your business as a force for good… with this we try to consider all the stakeholders in the chain, we try to treat them well” “We feel responsible for the product we put onto the market”

External Norms and Values

Within Mud Jeans’ supply chain sustainability is stressed. Suppliers, factories and partners are compelled to reflect Mud Jeans’ sustainable mission. Yet others external to their supply chain are less concerned with sustainability and there is a slight indication that profit maximization is of importance, as sustainability in fashion lowers one’s profit.

“One of our factories has a very special water treatment, where they use less water in the dyeing of the material” “We work with the REMO recycle movement they track and trace our recycling content” “We work with an external logistics center. So, I am a customer there and I cannot really imply all my rules, but I am trying to”

Profit Maximization “But I can imagine if you work in a huge company that it is very difficult to start changing things”

Location

Global cities There is a clear indication of global city presence, as millennials are targeted.

“We see hot spots like Berlin, Amsterdam, Copenhagen, Vienna, Bern”

Cosmopolitan Nature

Stimulated stakeholders such as consumers and external organizations support Mud Jeans development. There is no reference to the role of home or host institutions.

“It is easier today to point out who your customers are” “We see this rise in awareness of consumers in general” “They see we are transparent, transparent is a very important thing” “We have been trying to find out why, but I think it is because the target what we are aiming for. As I said before people that are well educated, have children, are interested in traveling, eat bio food – I think they are located more in those areas”

Formal Institutions No Evidence

External Organizations

“We use organic cotton that is certified by GOTS” “We are a part of SAC”

Advanced Producer Services

No Evidence No Evidence

Advanced Technology

No Evidence

Table 10: Results Case 6, Mud Jeans

Source: Author

54

Therefore, central to Mud Jeans’ circularity and internationalization was its sustainable

entrepreneurial leadership. By recognizing the need for change, Mud Jeans acted as curator

sharing its knowledge. As seen in Table 10, Mud Jeans wanted to act as an example and felt

“responsible for the product [they] put onto the market” (Founder Mud Jeans, 2017). Thus,

Mud Jeans represented a true sustainable leader (Tideman et al., 2013).

Further, Mud Jeans internationalization to global cities was stimulated by the stakeholders of

cosmopolitan environments, as Mud Jeans targeted global cities such as Brussels and Berlin.

Mud Jeans noted initial support to become visible through crowdfunding, and its millennial

consumer base’s demand. The global cities enabling nature was reflected in “Berlin’s

international appeal [being] evident in its demographic trends” (Knight Frank, 2017, p. 61), as

well as the creative clusters of London. As illustrated in Table 10 Mud Jeans saw a “rise in

awareness of consumers in general” (Founder Mud Jeans, 2017), and noted its business to

work well in “these hip cities” (Phipps, 2016). Further, being a part of organizations such as

the Sustainable Apparel Coalition (SAC), being certified as B Corporation, and seeking

support from Startup Accelerators various stakeholders stimulated their internationalization.

Interestingly, there was no reference to the role formal institutions, thus these did not appear

to play a role in Mud Jeans’ internationalization. This may have been due to the cosmopolitan

nature of cities providing support, as referred to by Warf (2015, p. 972) as the “wider

community of caring”.

4.1.7. Case 7: Firm A

Firm A was determined to produce a healthy product, while fulfilling its social mission of

creating a workplace for all, irrespective of an individual’s education, age, or heritage. The

founder of Firm A set an example for other sustainable entrepreneurs, as her career switch and

mission to become more involved fueled Firm A’s internationalization. As seen in Table 11,

Firm A strove to make other people happy, and “do more than just making profit” (Founder

Firm A, 2017). Refusing to use automated processes Firm A gave those falling out of the

labor force a new chance. In turn, granting the firm a quality mark of the city of Amsterdam,

solely given to firms characterized as innovative, creative, and sustainable. Consequently,

Firm A was an exemplary cosmopolitan, as “cosmopolitans are moral universalists and insist

upon the inherent worthiness and dignity of all individuals irrespective of their place of birth”

(Warf , 2015, p. 928)

55

Case 7: Firm A

Code Sub-Code Findings Data Sustainable Resources

and Routines

Resources and Routines

Obtaining resources constrains the development of Firm A, as these are costly and difficult to obtain and fair conditions in sourcing cannot be guaranteed. Routines further constrain processes due to the SINVs’ less efficient work processes.

“On the one hand, it was not very difficult. On the other hand, I do have a very specific ingredient from Argentina. That makes it a lot more difficult”

Cost “Ideally you would want to go to Argentina and make local arrangements… but for this we are sadly to small”

Sustainable Entrepreneurial

Leadership

Leadership is present as the founder has changed her profession to pursue her true passion. The internal environment of the firm reflects sustainability, as Firm A’s small team strives to grow even more towards sustainability.

“You can of course be sustainable or socially involved in many ways. And I noticed that I wanted it as the mission of my firm, to offer as many people as possible a job” “I noticed that creating jobs… is wat I really enjoyed and I noticed I could make a lot of people happy with this” “I think you can do more than just making profit”

Internal Norms and Values

“The focus is now especially on ‘what people do you employ’ and ‘how do we create a stable society with one another’” “I want to grow more towards it”

External Norms and

Values

The notion of global sustainability is indicated to be discontinuous. There is a new-found interest for sustainability, however many do not properly follow through. The bio-certification of other firms do not indicate true sustainability and profit appears to remain a key driver for firms.

“A certificate does not always say everything… because this originates from China and that is where I hear the bad stories coming from” “People find it easy to go for an organic quality mark” “There is of course more and more of a certain ideology… but it is also certainly profit driven” “Sometimes it is still a bit new for them”

Profit Maximization

“Generally, I think that profit is the biggest driver of firms”

Location

Global cities Firm A indicates to be present in global cities. “I think that it first gets tried out in the larger cities and that people are more open to it there”

Cosmopolitan Nature

Consumers are stimulated stakeholders, as it is those intrigued that consume Firm A’s product and contribute to the development of the firm. Further the home institution aids Firm A by filling social work spaces.

“I certainly think people here are more open towards sustainable initiatives” “It is the people that think about it that approach it”

Formal Institutions

“No, I do not have much to do with them” “Throughout the growth of the business, I was not so much involved with them” “I do work together with government associated organizations to fill social working places, so that is where they help me out”

External Organizations

No Evidence

Advanced Producer Services

No Evidence No Evidence

Advanced Technology

No Evidence

Table 11: Results Case 7, Firm A

Source: Author

56

Nevertheless, Firm A faced constraints in internationalizing to global cities and other

subnational locations due to the costs associated with obtaining its resources and producing,

as production was very time consuming. It was the labor within production that was

constraining, as Firm A aimed to create a social workplace, which made processes less

efficient. Moreover, as seen in Table 11 they had “a very specific ingredient from Argentina”,

which made sourcing and sustainability difficult. Sourcing constrained the firm, as they would

ideally “want to go to Argentina and make local arrangements” (Founder Firm A, 2017). Yet,

Firm A was still too small and did not have the investment capacity to fully control its supply

chain. Nevertheless, Firm A’s sourcing story was exemplar of INVs, as the founder reflected

an “internationally experienced and alert entrepreneurs [being] able to link sources from

multiple countries to meet the demand of markets that are inherently international” (Oviatt &

McDougall, 1994, p. 30).

Consequently, this need to control the supply chain reflected the discontinuity of

sustainability in the industry, as social and environmental goals were not recognized.

Suppliers and competitors may have had bio-certification, yet as seen in Table 11 these did

not indicate true sustainability, as “a certificate [did] not always say everything” (Founder

Firm A, 2017). Consequently, as others used unsustainable resources and automated processes

it appeared that “profit [was] the biggest driver of firms” (Founder Firm A, 2017). Therefore,

the discontinuity of sustainability and profit orientation of the industry appeared to constrain

Firm A’s internationalization.

Nevertheless, aiding Firm A in overcoming these hurdles was its cosmopolitan environment.

Amsterdam was noted to be its center of support, where the people were that stimulated Firm

A’s development. Seen in Table 11, Firm A thought its products “first [got] tried out in the

larger cities and that people [were] more open to it there” (Founder Firm A, 2017). Potentially

reflecting the reason behind investing in one of the big five global cities of Germany (Knight

Frank, 2017). Berlin being “an evolving food scene” (Knight Frank, 2017, p. 61) and

Dusseldorf also being high in the rank of the Global City Index reflected the nature of

community and opportunities present (A.T. Kearney, 2016). Consequently, the most involved

stakeholders were the consumers, as Firm A thought “people here [were] more open towards

sustainable initiatives” (Founder Firm A, 2017). Moreover, as indicated in Table 11 support

was received from governmental agencies to fill its social workplaces. Thus, as reflected by

Warf’s (2015) the community stimulated Firm A’s internationalization.

57

4.1.8. Case 8: BBROOD

Implementing sustainability, as simply the way to do business BBROOD acts as sustainable

entrepreneurial leader. Having established an environmental friendly bakery in Amsterdam

and bakeries in African cities through its Bake It Smart and Simple (B.I.S.S.) project,

BBROOD is a frontrunner in sustainable entrepreneurship.

BBROOD was established in the global city of Amsterdam. The origin of BBROOD’s raw

materials mattered to them, therefore they demanded sustainable resources from their

suppliers. Initially obtaining such resources constrained BBROOD, however as the firm

developed these constraints were reduced, as “these days the availability of traceable

resources [had] become somewhat easier” (Founder BBROOD, 2017). BBROOD had

significantly risen the awareness of sustainability within the industry by demanding

sustainable ingredients, therefore as reflected in Table 12 the notion of sustainability appeared

to be continuous.

Through this unique bakery, the founder implemented her microfinance B.I.S.S. project, in

which loans were granted, and participants were taught the art of baking in Africa.

Consequently, once operational in Amsterdam BBROOD internationalized to Africa,

specifically to the global city of Nairobi and regular cities such as Kampala and Kigali. Yet,

BBROOD was obstructed by the inaccessibility of resources and difficulties of routine

establishment in African cities, as local resources were not readily available, products and

machinery had to be imported, and the local work force capabilities were constrained due to

cultural differences and lacking expertise. The notion of sustainability remained

underdeveloped here, thus BBROOD’s strict European guidelines and Western mentality

were unlikely to be completely implemented. BBROOD was not supported by the global city

environment in Africa as Nairobi was ranked relatively on the low in the Global City Index

(A.T. Kearney, 2016). Further, host institutions obstructed BBROOD in the importation of

machines through drastically increasing import duties, as seen in Table 12, “in Africa

[institutions were] more of a barrier than that it provide[d] support” (Founder BBROOD,

2017). Once again reflecting how foreign investment strategies were constrained by the

emerging countries’ institutional framework (Meyer et al., 2009).

58

Case 8: BBROOD Code Sub-Code Findings Data

Sustainable Resources

and Routines

Resources and Routines

Considering the initial development of BBROOD, constraints were faced in obtaining resources and establishing routines. Constraints were faced due to the lacking availability and costliness of resources, and difficulty of importing resources and implementing practices abroad.

“Back in the day it was a lot more difficult, but these days the availability of traceable resources has become somewhat easier”

Cost “The resources you use are of course somewhat more expensive, but also because we chose for handmade products instead of using machines. Then of course it is more expensive”

Governance

Sustainable Entrepreneurial

Leadership

There is a clear indication of leadership as BBROOD indicates to share its knowledge, educate others, and integrate sustainability internally as it is simply the way they do business.

“We really have built up a name for ourselves” “In the beginning, we had to explain ourselves a lot, how bread could be sustainable and contain no additives” “In the beginning, we really had to educate our customers”

Internal Norms and Values

“Sustainability is a part of how we manage our business” “Sustainable business is really not something special for us, it has become our standard. But, this of course does not count for everyone”

External Norms and Values

The discontinuity surrounding sustainability does not hinder BBROOD’s development, as they have risen awareness with their demand for sustainable resources. Others are aware, but often do not know how to act. There is no indication that profit maximization hinders development.

“Suppliers have started to assess their own processes more critically” “Especially 10 years ago suppliers developed their resources especially for us… then you really see how the chain works, and how awareness is raised in one section at a time” “You have a lot of people that do not know where to start”

Profit Maximization

“No I do not think so, in the end it is not the easiest way to be profitable. So, I do not think it plays a role”

Location

Global cities BBROOD initially established itself in Amsterdam, yet expansion strategies are also focused on Africa due to its B.I.S.S. project.

“Actually, we just started in Amsterdam and grew here”

Cosmopolitan Nature

The firm recognizes that its consumers are more stimulated and open to their concept. However, no significant stimulation is noted to come from institutions or external organizations. Host institutions are noted to act more as barrier to development.

“The demand here is a lot greater, so of course that is where our supply reacts to” “It is also because the consumer is becoming more critical” “I definitely think that in Amsterdam the consumers come into more contact with it, so are also more open to it”

Formal Institutions

“In Holland, not and abroad also not” “In Africa, it is more of a barrier than that it provides support”

External Organizations

“We only work together with our partners, so these are not really external organizations”

Advanced Producer Services

No Evidence No Evidence

Advanced Technology

No Evidence

Table 12: Results Case 8, BBROOD

Source: Author

59

Consequently, what kept BBROOD going was its sustainable entrepreneurial leadership, as

seen in Table 12 BBROOD “really had to educate [its] customers” (Founder BBROOD,

2017). The embeddedness of the firm’s sustainability was visible, as sustainability was their

standard. This standard was reflected in its coffee cups and shopping bags being bio-

degradable up to the stores being energy efficient. In turn reflecting the importance of

addressing organizational values, as “without this, it will be difficult to bring the organisation

beyond a compliance-based approach to corporate sustainability” (Pedersens et al., 2016, p.

13). Further, by entering the African market BBROOD made a true social contribution

through sharing its knowledge and creating a new source of income for locals.

Additionally, stimulation from its home consumers and institution was crucial. BBROOD’s

establishment in Amsterdam supported its internationalization, as “the demand here [was] a

lot greater, so of course that is where [their] supply react[ed] to” (Founder BBROOD, 2017).

As reflected in Table 12 the consumers in Amsterdam were becoming more aware of

sustainability. Further, the Dutch government encouraged foreign investment, visible in

BBROOD’s subsidies received. Yet, even though significant support was received from

BBROOD’s home environment the obstruction of the host environment outweighed others

stimulation, again illustrating the impact that host locations can have on strategy success

(Meyer et al., 2009).

4.2 Cross-case analysis and discussion

Central to the multiple case study design is the cross-case analysis. Having analyzed each

case separately, patterns across the cases can be identified (Yin, 2003). Therefore, through

highlighting these patterns the discussion of the findings is integrated into this section, and

thus concludes the analysis by relating the findings to the working propositions.

4.2.1. Internal environment

Firstly, when considering the accessibility of sustainable resources and establishment of

sustainable routines significant constraints can be identified across the cases. As anticipated

and seen in Table 13 the majority of SINVs faced additional constraints within their internal

environment when internationalizing. As reflected by Testa and Iraldo (2010) SINVs were

hindered due to the difficulties associated with implementing sustainable practices. As

60

Code Sub-Code Findings Case 1: CTL Case 2: TreeWifi

Case 3: The CO2 Advisors

Case 4: CocoPallet

Case 5: Monsak

Case 6: Mud Jeans

Case 7: Firm A

Case 8: BBROOD

Sustainable Resources

and Routines

Resources and

Routines

Constraints are faced in obtaining resources, as these are expensive and because SINVs lack supply chain control. Constraints are faced in establishing routines as technology is unavailable and facilities are difficult to set up. The CO2 Advisors and Monsak did not face constraints due to their experience within the industry.

Difficulties are faced in obtaining resources, as these are available, however not accessible. Establishing routines remains burdensome due to lacking investment initiatives in e-waste recycling factories, and burdensome logistical arrangements.

Constraints are faced in obtaining resources, due to the complex technology required and the cost of acquiring and developing this technology.

The firm being established through the offering of free seminars insinuates that knowledge on sustainability is not difficult to access. No constraints reside in resources and routines, as information and solutions are readily available.

Resources are readily available; however, constraints are faced in establishing routines as the development of machinery is costly and challenging.

Having come across the waste material, no constraints are faced in obtaining its resources or establishing routines, as skilled labour is readily available.

Constraints reside in obtaining resources, such as certified cotton, establishing fair factories and their sustainable routines, and the associated costs of these resources and routines.

Obtaining resources constrains development, as these are costly and difficult to obtain and fair sourcing cannot be guaranteed.

Throughout the initial development of the firm constraints were faced in obtaining resources and establishing routines and these still obstruct business in Africa.

Cost

Table 13: Results Cross-Case Analysis, Sustainable Resources and Routines

Source: Author

61

expected significant similarities were found across the SINVs, as CTL, TreeWifi, CocoPallet,

Mud Jeans, Firm A and BBROOD faced constraints in obtaining resources and establishing

routines. As insinuated by the literature the SINVs’ sustainable missions increased expenses,

as resources were difficult to manage and as routines did not fit standard process,

consequently constraining internationalization (Bohnsack et al., 2014; Dixon & Clifford,

2007).

CTL, TreeWifi, CocoPallet, and Mud Jeans were concerned about finances negatively

influencing internationalization. The SINVs small size and diminished financial capital were

constraining for these businesses without precedent, as reflected in the literature great

investment was required to support their high development costs, experimentation with

creative solutions, and subsequent internationalization (Bohnsack et al., 2014; Prashantham

& Young, 2009). Other similarities across the SINVs were noted in the excessive time

required to establish the production processes of Firm A and BBROOD, impacting the time

to market, and thus internationalization of their products. Therefore, the previously

mentioned constraints negatively influenced internationalization, as entering host locations

was dependent upon the availability of the final products or services. As reflected in the

literature of Oviatt and McDougall (1994) access to resources was key in developing the

SINV and enabling internationalization.

Yet, contrary to the research’s expectations the CO2 Advisors and Monsak did not face these

constraints, as their resources were readily available and routines easily established. Oviatt

and McDougall (1994, p. 32) note that experience was central to success, as experience was

“generalizable to the new arena”, and knowledge seen as a “vital driver of firm behavior and

growth” (Prashantham & Young, 2009, p. 278). Therefore, as Zahra (2005, p. 21) further

notes the success of the SINVs mission was “intimately related to managerial capacity,

which, to some extent, [was] defined by the pre-launch experience”. Contrary to the

research’s expectations these SINVs reflected how experience was central to “creating

effective linkages that facilitate new-ventures internationalization activities” (Mudambi &

Zahra, 2007, p. 339).

Yet the experience of the CO2 Advisors and Monsak did not influence the development of

sustainable entrepreneurial leadership, as expected and seen in Table 14 all SINVs reflected

this alternative governance structure. The SINVs’ internal environments reflected the top-

62

down approach identified by Epstein and Buhovac (2014), thus demonstrating sustainable

strategy and leadership, as the founders were deeply committed to their missions and

internationalizing their initiatives. Organizational alignment was key, as SINVs behavior had

to be “supportive of what is needed to successfully deliver the company strategy” (Tosti,

2007, p. 21).Fortunately, strategy and culture alignment was facilitated, as “with founder-

owners in control, new knowledge does not have to struggle for management’s attention and

acceptance” (Zahra, 2005, p. 26). Thus, these factors enabled SINV internationalization to

various host locations.

Consequently, as expected these elements positively influenced SINV internationalization,

allowing SINVs to be international from inception. As predicted, sustainable entrepreneurial

leadership played a significant role, as the definition of this and the notion of INVs both

encompass the drive to exploit opportunities (Schaltegger & Wagner, 2011; Shepherd &

Patzelt, 2011; Oviatt & McDougall, 1994; Zahra, 2005). Noted in the literature is how the

founders’ cognitions, would aid SINVs in uncovering competitive advantages (Oviatt &

McDougall, 1994; Zahra, 2005). Consequently, allowing opportunities to be identified, thus

enabling internationalization through the exploitation of opportunities, abroad. This being the

“foundation of a competitive advantage in global markets” (Zahra, 2005, p. 22). Therefore,

this pushed SINVs to internationalize to global cities, regular cities, as well as developing

regions. Yet, as subsequently expanded on internationalization in other locations contrasted

the research’s expectations, as sustainable entrepreneurs were expected to seek environments

with compatible mindsets, open to their initiatives.

Yet even with the influence of these SINVs, the concept of global sustainability remained

discontinuous. Firms with significant power in the industry remained “less inclined to adopt

more environmentally friendly technologies” (Dean & McMullen, 2007, p. 63). Similar to the

indications of Alexander (2007), clients, partners, or others within the industry characterized

change as difficult and often did not see sustainability as profitable. What became apparent

were the different levels of obstruction moving from customers up to the incoherence of the

industry. In turn, significantly constraining internationalization as SINVs were highly

dependent on their networks. According to Oviatt and McDougall (1994) ventures such as

SINVs should seek partners or networks willing to share their resources. Further, the

importance of relations was reflected by Zahra (2005, p. 25), as “building relationships and

gaining access to existing networks can help to shorten and expedite INVs learning”.

63

Code Sub-Code Findings Case 1: CTL Case 2: TreeWifi

Case 3: The CO2

Advisors

Case 4: CocoPallet

Case 5: Monsak

Case 6: Mud Jeans

Case 7: Firm A

Case 8: BBROOD

Governance

Sustainable Entrepreneurial

Leadership

Leadership is identified across all cases, reflected in the SINVs’ missions, founders’ creative solutions, their drive to raise awareness and determination to create positive change.

The presence of leadership is noted as a creative solution is drafted to address e-waste. Leadership stimulates sustainability throughout the firm, manifesting itself in internal norms and values.

As the founder tackles an invisible problem leadership becomes visible. The team’s dedication further shapes the firm’s sustainable motivation.

Leadership is reflected by the founder, visible in his seminars and through the creation of the foundation the Netherlands CO2 Neutral.

Leadership is indicated, as the founder wants to make a difference and shows endurance. This is further reflected in the team’s motivation.

By giving waste leather a second life and through the firm’s knowledge sharing through workshops leadership is visible.

Leadership is present as the firm wants to break away from fast fashion and introduce circularity. Sustainability is visible internally through their so said responsibility to the world.

Leadership is vivid, as the founder has changed her profession to pursue her true passion. The internal environment of the firm reflects sustainability as social integration lies central.

Leadership is reflected as the firm shares its knowledge, educates others, and considers sustainability as simply the way they to do business.

Internal Norms and Values

External Norms and Values

Global sustainability is discontinuous, as others lack awareness or find it too difficult and costly to change. The importance of profit-maximization is solely reflected by Monsak, Mud Jeans and Firm A. Further, profit drives sustainable change for the CO2 Advisors.

The notion of sustainability remains underdeveloped within the Telecom industry. Clients and partners’ lacking awareness of issues surrounding e-waste indicate this discontinuity. There is no reference to profit-maximization.

Others in the industry do not prioritize sustainability, indicated through noting the questionability of others production processes. There is no reference to profit-maximization.

Competitors and clients are not focused on sustainability. Yet, profit maximization does not act as constraint, but as enabler as certifications increase profit.

External norms and values are not focused on sustainability, attempts are made by using recycled wood, yet this remains harmful to the environment. There is no indication of focus on profit-maximization.

Sustainability is discontinuous in the fashion industry. The awareness of others is indicated, yet their willingness to change is absent. There is slight indication that this is due to profit-maximization.

Within the supply chain sustainability is emphasized. Suppliers, factories and partners are compelled to reflect this. Those external to the supply chain are less concerned with sustainability. There is slight indication that profit-maximization plays a role.

There is a new-found interest for sustainability, however many do not properly follow through indicating the discontinuity of sustainability. The bio-certifications of others do not indicate true sustainability and profit appears to remain a key driver.

Discontinuity of sustainability does not hinder development, as the firm increases awareness through their demand for sustainable resources. Others are aware of sustainability, but do not know how to act. There is no indication that profit-maximization hinders development.

Profit Maximization

Table 14: Results Cross-Case Analysis, Governance

Source: Author

64

Consequently, CTL, TreeWifi, the CO2 Advisors and CocoPallet struggled with the lacking

awareness of its consumers on sustainability, awareness being “essential to ensure long-term

business success” (Hallstedt et al., 2013, p. 277). As illustrated by Bocken and Allwood

(2012) and Pomfret (2009) gaps remained between consumer knowledge and behavior. The

discontinuity further constrained CTL, TreeWifi, Mud Jeans and Firm A, as others were

unaware of how to establish sustainable routines. As reflected by Testa and Iraldo (2010) and

noted by Bocken and Allwood (2012, p. 119) “strategies need[ed] to be developed to

encourage greater levels of green supply chain management”. Additionally, CTL, TreeWifi,

Monsak and Mud Jeans faced even greater constraints as sustainability challenged the whole

industry, as indicated by Bohnsack et al. (2014) their processes challenged current systems.

These findings can be understood through Hansen and Birkinshaw (2007), illustrating

innovation as a sequential process, consequently difficulties may be faced in the diffusion of

sustainability throughout the supply chain. Further, as indicated by Testa and Iraldo (2010, p.

961) “the more a company is able to involve its business partners in the development of co-

operative environmental plans, the more it is able to achieve the expected results and improve

its performance”.

Further, solely Monsak, Mud Jeans and Firm A reflected the research’s expectations that the

internal environmental was constrained by the profit maximization of others. As reflected in

the literature both these industries had “vested interests in profiting from unsustainable

business practices� (Bohnsack et al., 2014, p. 284), thus greater obstacles were faced in

achieving sustainable change. Consequently, this constrained internationalization as

competitors produced cheaper alternatives, and because sustainable demand was

characterized as weak, consequently influencing its profit potential (Testa & Iraldo, 2010, p.

961).

Contrary to these results the CO2 Advisors positively associated profit-maximization with

sustainability, as profit-maximization became a driver of sustainability. As reflected in the

literature sustainability improved efficiency, and reduced costs and risks, thus increasing the

profit (Shepherd & Patzelt, 2011; Testa & Iraldo, 2010). Yet, this was not the case for all, as

noted by Testa and Iraldo (2010) efficiency does not always increase profit due to the large

investment costs of change. Lastly, BBROOD contradicted the research’s expectations

indicating sustainability to be continuous. As it had seen significant changes in the industry,

65

due to its own changing demand, as well as industry trends demanding traceable raw

materials the “increasingly widely-diffused practice among companies” (Testa & Iraldo,

2010, p. 953) became vivid. These results were not expected, yet explicable by reflecting on

the notion of industry change and sustainable demand of Testa and Iraldo (2010).

Therefore, the internal environment played a significant role for all SINVs

internationalization. The internal environment was central to succeeding internationally, as

reflected by Oviatt and McDougall (1994) the internalization of resources was the first and

foremost necessary condition to establish INVs, thus SINVs. Consequently, the

internalization of and access to resources, as well as support of sustainable entrepreneurial

leadership significantly influenced internationalization.

4.2.2. External environment

These findings indicating the importance of the internal environment led to the further

analysis of the influence of global cities as depicted in Table 15. All SINVs were operational

in global cities, however contrary to the research’s expectations the extent of their focus on

global cities varied significantly. Solely TreeWifi and Mud Jeans explicitly focused on

internationalizing to global cities, as their target markets consisted of global city millennials.

The other SINVs focused on finding opportunities across host locations, opportunities where

they could successfully introduce products or services. The rationale behind SINVs

internationalizing to regular cities may be explained by Oviatt and McDougall (1994), as they

highlight INVs’ abilities to identify opportunities across multiple markets.

As reflected in the literature sustainability can be “stimulated by market demand, induced by

the need to guarantee full compliance with more stringent environmental regulations, and by

community groups” (Testa & Iraldo, 2010, p. 953). Therefore, home institutions stimulated

the internationalization of CTL, TreeWifi, CocoPallet, Firm A and BBROOD. The results

further reflected literature noting that “governments may also act as exemplars” (Bocken &

Allwood, 2012, p. 120). Yet contrary to expectations formal institutional stimulation was

centered in the home location and global city of Amsterdam. This may be justified by looking

at the CITIE survey rating Amsterdam as “one of the five most innovative cities in the world”

(Knight Frank, 2017, p. 55). Further, with Amsterdam ranked in the top 10 business centres

of global cities identifies its function as global city (Sassen, 2009), as well as how “a healthy

start-up ecosystem is being fostered” (Knight Frank, 2017, p. 55).

66

Code Sub-Code Findings Case 1: CTL Case 2: TreeWifi

Case 3: The CO2

Advisors

Case 4: CocoPallet

Case 5: Monsak

Case 6: Mud Jeans

Case 7: Firm A

Case 8: BBROOD

Location

Global cities

All SINVs are present in global cities. The cases of CTL, CocoPallet and BBROOD are also focused on expanding in developing regions of Africa and Asia.

Global city presence is indicated, but initial expansion was focused on e-waste management in Africa.

Being specifically designed for cities global city presence is indicated.

Indication of global city presence, but cliental is increasingly spread out.

Indication of global city presence, but SINV targets Asian exporters.

Clear indication of global city activity.

Global city presence is notable, as millennials here are targeted.

Indication of global city presence, due to consumers’ interest in their product.

Global city presence is indicated, due to consumers’ interest. Yet this SINV is also focused on expanding in Africa.

Cosmopolitan Nature

Half of the cases are stimulated by stakeholders such as external organizations and home institutions. Yet, the other half are obstructed by home and host institutions.

External support is received from the Dutch government and external organizations in terms of promotion and funding. However, the constraints created by host institutions and European regulations outweigh the stakeholder support.

Stimulation is received from the citizens of Amsterdam, formal institutions and external organizations, as well as from the media as they stimulate development.

The home institution constrains development due to their lacking knowledge on sustainability, yet they are attempting to become more involved.

Stakeholders are stimulated, visible in the willingness of technicians and the University of Wageningen. Further, host institutions hinder development, yet this is outweighed by stakeholder support.

Stimulated stakeholders do not play a significant role, as little to no support has been received from the external environment.

Stakeholders are involved, as global cities are purposely targeted. Stakeholder emphasis is on the consumer and external organizations, there is no reference to the support of home or host institutions.

Consumers are stimulated stakeholders, those intrigued consume the product and contribute to development of the firm. Further, the home institution supports by filling the firm’s social work spaces.

Consumers stimulate the firm, as they are open to this initiative. However, host institutions obstruction outweighs support received from others.

Home Institution

Host Institution

External Organizations

Advanced Producer Services

No Evidence No Evidence No Evidence No Evidence No Evidence No Evidence No Evidence No Evidence No Evidence

Advanced Technology

Table 15: Results Cross-Case Analysis, Location

Source: Author

67

Moreover, SINV internationalization was stimulated by both formal and informal institutions.

This was visible in the support that CTL, TreeWifi, CocoPallet and Mud Jeans received from

Startup Accelerators’ entrepreneurial roots, consumers’ awareness and demand, and

universities’ knowledge capacity. Reflecting how both “government and NGOs have

important enabling roles to accelerate industry change” (Bocken & Allwood, 2012, p. 118).

In turn, highlighting the cosmopolitan environment’s stakeholders “adaptive [and] free

thinking mindset” (Knight Frank, 2017, p. 8). Again, contrary to the expectations stimulation

was mainly received from the global city of Amsterdam. This is should have been expected

as Amsterdam “is considered a European hotspot in the global startup scene” (Startup

Genome, 2017, p. 77). However, these results were not predicted as stakeholder stimulation

was expected to be received across global cities, due to the centrality of recombination

capabilities in SINVs. As Zahra (2005, p. 21) indicates there is a “need to gain access to

various resources without actually owning them” (Zahra, 2005, p. 21), therefore one would

expect relationships to be built across cities to “help to shorten and expedite INVs’ learning”

(Zahra, 2005, p. 24).

Further, contrary to the research’s expectations institutions also obstructed

internationalization. Literature notes that even though there are multiple governmental

interventions to increase sustainability, these have not been implemented yet (Bocken &

Allwood, 2012). This being reflected in the stakeholder obstruction outweighing stimulation

in the cases of CTL, the CO2 Advisors and BBROOD. Interestingly, the CO2 Advisors was

obstructed by the Dutch government, as reflected in literature “current institutions and

instruments fail[ed] to address the real crisis, they accomplish[ed] mutually reinforcing goals

that move[d] [firms] in the wrong direction” (Beddoea, et al., 2009, p. 2484). Further, CTL

and BBROOD were obstructed by their African host institutions, illustrating the risks

associated with internationalizing to developing regions. The risks and challenges of entering

such areas already being high, was further intensified by host institution stringencies (Dahan

et al., 2010). The research did not expect SINVs to internationalize to developing regions,

and the obstruction of these locations. Yet, as noted by Meyer et al. (2009) it was in these

developing regions that the influence of constraints of institutions were noted.

Finally, all cases were unable to answer the questions concerning the influence of advanced

technology. Contrary to the expectations SINVs were not stimulated by the presence of

advanced technology, as they did not appear to be dependent on advanced technological

68

knowledge. Even though “new ventures require knowledge in various forms, notably market

and technological knowledge” (Prashantham & Young, 2009, p. 276), the SINVs did not

seek this in global cities. This may have been because the SINVs did not operate in the

technology-based industry, thus were not “pressurized into accelerating their learning efforts

because of competitive dynamics, shortened product life cycles, and client demands”

(Prashantham & Young, 2009, p. 279). As Zahra et al. (2000) indicate advanced technology

can positively affect performance, yet this was not the case. SINVs creative solutions were

not associated with the advanced technology, or the technical services aiding in the

development of technological operations. The SINVs were mainly focussed on establishing

sustainability within their supply chain and did not appear to need advanced technology.

Consequently, due to the varying results on both dimensions it is difficult to determine the

influence of the external environment on SINVs. The role of stimulated stakeholders was

vivid, however did not occur as expected. Across the majority of SINVs the stakeholders of

the global city of Amsterdam was central to their internationalization reflecting that

“institutions are much more than background conditions” (Meyer et al., 2009, p. 61). Yet, as

reflected by Dahan et a. (2010) developing regions constrained internationalization, as

behavior significantly differed here. Additionally, as previously noted advanced technology

did not influence SINV internationalization, however this may also have been due to the

SINVs unexpected focus on other locations, as well as industry presence. Consequently,

research on the external environment must be further developed, as location and its

advantages remain “instrumental to the type of FSAs that can be developed by locally

operating firms” (Verbeke, 2009, p. 27).

4.2.3. Working proposition results

Therefore, as depicted in Table 16 the discussion of the cross-case analysis allows the

findings to be related to the working propositions. The findings lend partial support to WP1,

as the majority of SINVs faced additional constraints when internationalizing, due to the

difficulties of obtaining sustainable resources or establishing sustainable routines. Only

partial support was found as the CO2 Advisors and Monsak did not face such constraints.

Further, full support was found for WP2a, as the presence of sustainable entrepreneurial

leadership was central to enabling SINV internationalization. Additionally, WP2b was

partially supported as the majority of the SINVs indicated the notion of global sustainability

to be discontinuous, and because the explanations of this discontinuity widely varied.

69

Further, the analysis of the cosmopolitan environment of global cities did not lend support to

WP3a. Increased stakeholder stimulation towards sustainability within the cosmopolitan

environment of global cities was not likely to enable SINV expansion, as results were

contradictory. Finally, no evidence was found concerning the influence of advanced

technology enabling SINV expansion, as the focus of the SINVs resided in controlling their

supply chain, thus WP3b was not supported. Consequently, even though the SINVs were

operational in global cities, they were not more likely to internationalize to global cities.

WP Description Results

1 SINVs are likely to face additional constraints when internationalizing,

due to the difficulties of obtaining sustainable resources or establishing

sustainable routines.

Partially

Supported

2a The presence of sustainable entrepreneurial leadership within SINVs is

likely to enable SINV internationalization.

Supported

2b The discontinuity of the concept of global sustainability and thus focus of

others on profit-maximization is likely to hinder SINV

internationalization.

Partially

Supported

3a Increased stakeholder stimulation towards sustainability within the

cosmopolitan environment of global cities is likely to enable SINV

expansion.

Not

Supported

3b Advanced technology resulting from the presence of advanced producer

services within global cities is likely to enable SINV expansion.

Not

Supported

Table 16: Overview of Working Proposition Results

Source: Author

70

6. Conclusion By analyzing how the unique internal and external environment of SINVs influences their

internationalization, new insight has been gained in understanding how sustainability is

embedded within the firm and influences SINV internationalization. By answering the

research question through breaking down the framework of Oviatt and McDougall (1994) the

flaws of current literature on sustainable entrepreneurship and gaps in research from the

subnational level of analysis have been analyzed. The research aimed to develop the

understanding of the notion of a SINV, and the internationalization of these sustainable

initiatives. Thus, through the framework of Oviatt and McDougall (1994) the internal and

external environment were investigated in greater depth, enabling theory development.

Accordingly, research investigated the influence of sustainable resources and routines,

sustainable entrepreneurial leadership, the discontinuity of global sustainability, stimulated

stakeholders of the cosmopolitan environment and the advanced technology of global cities.

These elements were examined through a qualitative multiple case study research design, in

which 8 similar SINVs were purposely selected and investigated through semi-structured

interviews. The data from these interviews was supplemented with documentary data aiding

in the deductive analysis of the research. Consequently, the analytical strategy of pattern

matching allowed progressive theory building on the influences of internal and external

environment (Doz, 2011; Eisenhardt, 1989; Yin, 1981). By addressing the environmental

elements separately, the research question could be adequately answered.

The internal environment shaped by the SINVs’ sustainability was predicted to be

constrained due to the anticipated difficulties of accessing sustainable resources and

establishing sustainable routines. This notion was partially supported, as SINVs faced

constraints within their supply chain, difficulties were encountered in obtaining sustainable

resources, accessing financial support, and setting up sustainable routines. Not all SINVs’

internationalization processes were constrained, since the experience of two SINVs reduced

their constraints, attributable to their experience. Further, as all 8 SINVs indicated the

presence of sustainable entrepreneurial leadership, their strategy and leadership being shaped

by the key elements of Tideman et al. (2013). Nevertheless, this advocacy did not reach those

external to the firm, as others were not open to integrating sustainability, as change was

difficult and costly, thus constraining SINV internationalization. Yet, only partial support was

71

found concerning the discontinuity of global sustainability, as the profit-maximization

attitude of others did not play a role.

Furthermore, due to the resource-dependence of SINVs, need for an international

environment, and open-minded stakeholders SINVs were anticipated to primarily

internationalize to global cities (Goerzen et al., 2013; Sassen, 2009). Specifically, the

cosmopolitan environment being of interest, as its citizens’ mindset indicated the presence of

stimulated stakeholders, enabling SINV expansion (Goerzen et al., 2013; Grinstein & Riefler,

2015; Warf, 2015). Nevertheless, research did not support this notion as varying results were

found, since SINVs did not solely internationalize to global cities and stakeholders stimulated

certain SINVs yet hindered others. Moreover, the advanced producer services of global cities

were assumed to indicate the presence of advanced technology. This advanced technology

was predicted to enable SINV expansion through increasing their technological knowledge

by offering them technical services (Attewell, 1992; Shao & Lin, 2016). Yet, no evidence

was obtained, as the SINVs were mainly focused on establishing sustainability within their

supply chain, they were not present in the technology-based industry, and results were

potentially influenced by the research’s inadequate question formulation. Consequently,

research provided minimal insight into the influence of the external environment of SINV

internationalization.

Nonetheless, the research contributed to understanding the influence of the internal

environment and thus to the advancement of IB literature. By analyzing the internal

environment new influences on SINVs development were discovered, and new light was shed

on impact of SINVs internal environment on internationalization, especially on the

importance of sustainable entrepreneurial leadership. Moreover, through using the

subnational level of analysis locational influences could be thoroughly addressed. Therefore,

the research contributed to the progressive theory building on sustainable entrepreneurship,

and highlighted the importance of internal mission alignment and the development of

sustainability within the firm. In turn, illustrating the potential of research in sustainable

entrepreneurship to influence the future internationalization of sustainable initiatives.

72

6.1. Managerial implications Due to the early described conclusions, sustainable entrepreneurs can derive managerial

implications from the findings of this research. Specifically, this research indicates the

importance of considering the internal and external environment. Implying that the internal

environment of SINVs is of utmost importance, as central to succeeding internationally is the

alignment of leadership, strategy and culture. Additionally, the findings suggest that finances

must be thought through, as here the earliest impediments of internationalization are faced.

Sustainable entrepreneurs must have a wide network of access, to overcome barriers such as

that of finance and gain access to the resources of others. This in turn reflects the importance

of the external environment, as stakeholders can provide significant support, yet this requires

the development of the environment as a whole towards sustainability. Lastly, this research

indicates the importance and beneficial use of the subnational level of analysis, showing

managers that the importance of location and subnational elements must not be

underestimated, as they can significantly constrain or enable internationalization.

6.2. Limitations The limitations of this research must be considered to provide suggestions for future research.

The influence of advanced technology was not adequately expressed in the interview

questions, thus provided limited data. The interview should have integrated more questions,

provided examples to ensure the respondents understood the notion, and perhaps focused the

sample on the technological sector to better examine this. Further, the research could include

more elements of global cities and could have emphasized the subnational level of analysis

more in the interview, as often SINVs shifted to talking about internationalization from the

national level. Through increasing the duration of the research and further developing the

interview, more elements of the external environment could have been examined, allowing

the research to go into greater depth on the influence of the external environment of global

cities. Furthermore, one of the main limitations consisted of the unwillingness of SINVs to

partake in the research, this led to sample criteria adjustment and cases being selected in

different industries. This can be improved by again increasing the duration of research,

dedicating more time and resources to finding SINVs in the same industry. Lastly, the

literature reflected on in this research was often focused on MNEs, limiting analyses and

highlighting the need for more research on SMEs. Consequently, these limitations indicate

the range of opportunities that lie within further examining sustainable entrepreneurship and

new ventures in IB research.

73

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8. Appendices

English Dutch

General Information Algemene Informatie

1. When was the firm founded?

2. What was the motivation behind

establishing the firm?

3. What is the mission of the firm?

4. What makes the firm a business with a

cause?

5. How many employees does the firm

have?

6. How is the mission of the firm

financially sustained?

1. Wanneer is het bedrijf opgericht?

2. Wat was de motivatie achter de oprichting

van het bedrijf

3. Wat is de missie van het bedrijf?

4. Welke verschil maakt het bedrijf op het

gebied van maatschappelijk/ sociaal/ groen

verantwoord ondernemen?

5. Hoeveel medewerkers heeft het bedrijf?

6. Op welke manieren wordt de missie van het

bedrijf financieel ondersteund?

Internal Environment Interne Omgeving

1. What type of sustainable products or

services does the firm provide?

2. How are the firm’s resources acquired/

services established?

3. How would you characterize the

accessibility of these

resources/processes?

4. How is sustainability promoted within

the firm?

5. What type of impact does the firm’s

mission have on its stakeholders?

6. How are other firms in the industry

and/or partners sustainably motivated?

7. To what extent do the profit-

maximization attitudes of partners’

conflict with the firm’s mission?

1. Welke duurzame producten of diensten

biedt het bedrijf aan?

2. Op welke manier worden de grondstoffen

voor het bedrijf verworven/diensten

opgezet?

3. Hoe zou je de toegankelijkheid van deze

middelen/processen omschrijven?

4. Hoe wordt duurzaamheid binnen het bedrijf

gepromoot?

5. Wat voor een effect heeft de missie van het

bedrijf op stakeholders?

6. Hoe kijken andere ondernemers in de branche aan tegen verantwoord ondernemen?

7. In hoeverre botst het winstoogmerk van

partners met het bedrijf en zijn

verantwoorde missie?

85

External Environment Externe Omgeving

1. How would you characterize the

locations that the firm is active in?

2. What cities is the firm active in?

3. What was the rationale behind

establishing presence in these cities?

4. What did the firm consider to be

locational advantages and

disadvantages in these cities?

5. Would you characterize stakeholders in

these cities as more open to sustainable

initiatives, if so why?

6. What kind of role did home institutions,

host institutions and external

organizations play for the firm?

7. Did the presence of advanced

technologies in such locations influence

the tendency to establish new

sustainable initiatives?

1. Hoe zou u de omgeving waarin in het

bedrijf actief is karakteriseren?

2. In welke steden is het bedrijf actief?

3. Wat is de voornaamste redenen dat het

bedrijf actief is geworden in deze steden?

4. Met betrekking tot deze steden; waren er

grote voor- en nadelen die overwogen

werden?

5. Zou u stakeholders in deze steden

karakteriseren als meer open voor duurzame

initiatieven, zo ja waarom?

6. Welke rol hebben de plaatselijke gemeente,

de overheden en externe organisaties

gespeeld voor het bedrijf?

7. Heeft de aanwezigheid van hoogstaande

technologieën uw locatiekeuze beïnvloed?

Table 17: Interview Questions in English and Dutch

Source: Author