DEVELOPING A SUSTAINABLE SAMOAN BUSINESS MODEL Brendan Gray Centre for Entrepreneurship, University of Otago, New Zealand Suzanne Duncan Te Tumu – School of Maori, Pacific and Indigenous Studies, University of Otago, New Zealand Corresponding author: Professor Brendan Gray Centre for Entrepreneurship, School of Business, University of Otago PO Box 56, Dunedin 9054, New Zealand Email [email protected] Key words: Sustainable entrepreneurship, sustainability, business models, family entrepreneurship, community development

SUMMARY

Radical innovations are often sparked by extreme situations. The Pacific Islands, along with other low-lying tropical countries, are at the forefront of climatic changes that have resulted in severe environmental events. Traditional business models are unsustainable due to the constraints imposed by these extreme situations. Therefore, it is appropriate to investigate how enterprises can adapt to increasingly turbulent ecological, social and market storms. This paper helps address this question by blending insights from several theoretical sources, including the dynamic business model and sustainable entrepreneurship literatures, to produce an innovative sustainable business process model for entrepreneurship development agencies in climate-challenged markets. The usefulness of our conceptualization is explored in a case study of Women in Business Development Incorporated, a non-governmental organisation that helps families in Samoa to establish sustainable enterprises. Implications for sustainable business models for family and community-focused economic development agencies in other climate-challenged markets are discussed.

INTRODUCTION

Women in Business Development Incorporated (WIBDI) is a successful family entrepreneurship development organisation based in Samoa, a small developing country in the South Pacific that lies approximately 3000 kilometres north of New Zealand. The country’s GDP in 2010 was approximately $US 550 million or about $US 3,000 per person. Samoa is largely rural, with its main industries related to subsistence agriculture, fishing, tourism and low-level services. Its population of less than 200,000 people is spread over two main islands. The country relies heavily on remittences from families who have emigrated to New Zealand, Australia and the USA. Foreign aid is another large contirbutor to the economy. The country is facing a worsening balance of payments deficit, due to a combination of high imports, declining income from indigenous exports as a proportion of GDP, and the effects of natural disasters such as the tsunami in 20091.

The original purpose of WIBDI, when established in 1991, was to help a group of entrepreneurial women to access finance so they could set up their own businesses. However, a series of enviromental catastrophies caused WIBDI to adopt a more outwardlooking stance and to refocus its attention on the alleviation of poverty amongst rural Samoan families through sustainable economic development. The organisation’s successes include being the preferred provider of virgin coconut oil to The Body Shop internationally. As a result, it has attracted news media attention and has been the subject of several studies. However, our study is the first to collate the findings of previous research, along with other documentary evidence, to assess how WIBDI has evolved to adapt to extreme climatic and other environmental events. We also interviewed key stakeholders to help interpret the results. Studies such as ours are particularly important in impoverished regions to help policy makers gain a better understanding of how entrepreneurship can stimulate recovery and economic development after natural disasters and raise the esteem of disadvantaged groups (Galbraith & Stiles 2006).

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Source: Australian Government Department of Foreign Affairs and Trade (http://www.dfat.gov.au/geo/samoa/samoa_brief.html) 1

The remainder of the paper is organised as follows: First, we describe our research question, epistemology and methodolgy. Second, we provide a descriptive, historical account of WIBDI and the critical incidents that influenced its development. Third, we reflect on the relevant literatures, including sustainable entrepreneurship and dynamic business model development, that provide insights into the organisational response mechanisms highlighted in the case and develop a sustsainable business process model for this context. Fourth, we explore the usefulness of our conceptualization in the WIBDI context. Finally, we suggest some adaptations to our initial conceptualization and suggest areas for future research. We also suggest how WIBDI’s own business model might be adapted to other cultural contexts. QUESTION AND METHOD

Our overarching research question is: “What are the organisational response mechanisms that enable a community-based entrepreneurship development agency to develop a sustainable business model?” Although sustainable entrepreneurship is an emerging area of inquiry, there is a lack of research about how community-based agencies can sustain themselves in the face of extreme environmental events so that they, in turn, can encourage their clients to develop sustainable enterprises. The editors of a special issue of the Journal of Business Venturing concluded that there is a need for further research that investigates the conditions under which entrepreneurship can “simultaneously create economic growth, while advancing social and environmental objectives” (Hall, Daneke & Lenox 2010, p445). A notable absence in the special edition, though, was any study which explored “entrepreneurial dynamics in impoverished communities within developing and emerging economies” (ibid, p445). This paper helps to address that gap by assessing how critical incidents have influenced the policies and practices of WIBDI, a non-governmental community development organisation that assists families in the small South Pacific country of Samoa to develop entrepreneurial enterprises that are ecologically, financially and culturally sustainable.

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Our epistemology could be described as being both critical realist (Bhaskar 1975), in that we acknowledge the limitations that occur in trying to understand social reality using purely objectivist methodologies, and also pragmatist (Rorty 1979, West 1989), in that we also acknowledge that the choice of research methods is often based on social conventions and usefulness. Thus we blend both inductive and deductive approaches in a single study. This approach is supported by researchers such as Buchan and Bryman (2007, p484) who observe that the growth of mixed methods in organisational research “has problematized, if not ruptured, the relationship between epistemology and method, weakening confidence in and preoccupation with those links (Teddie & Tashakkori 2003). Consequently, method is increasingly located in the context of wider and more fluid intellectual currents, discouraging rigid adherence to epistemological positions, encouraging a more pragmatic ... approach to methods choice”. This reinforces the need to adopt a flexible, iterative approach to case study research and to be prepared to be surprised by some findings (Eisenhardt 1989). However, we are mindful that utilizing an opportunistic approach can also be a weakness if the case study process is not well documented (Seuring 2008).

We also employ an embedded design (Rowley 2002) in a single, revelatory case. Our study is embedded in the sense that there are three distinct phases in the research process and multiple units of analysis, including a variety of documentary sources plus interviews with key stakeholders who represent the organisation’s governance, management, customers, network partners and funders.

In the first phase we have utilized an historical research approach that included examination of previous studies by academics and aid agencies. A content analysis of the documentary evidence, which also included the annual reports of WIBDI and its main funders, was supplemented with in-depth interviews with key stakeholders to aid interpretation of the results. Pettigrew (1990) argues that “theoretically sound and practically useful research ... should explore the contexts, content and process of change together with their interconnectedness through time” (p268). Thus, an historical study of 3

a single illustrative case such as ours of an organisation which is rare, if not unique, and which also serves a revelatory purpose (Ragin 1999, Dube & Pare 2003, Yin 2003), can be justified as an appropriate means to explore our research question. The initial, inductive phase of our study is phenomenon-driven due to a lack of plausible theory (Eisenhardt & Graebner 2007) about how critical environmental incidents influence the development of sustainable business models in this context. Pettigrew (1990) stresses that historical research methods should aim to understand mechanisms and processes though which changes are created, rather than just recording episodes or snapshots, and that researchers need to be aware that context and action may be linked and separate (i.e. the latter can also be affected by individuals’ motives). He also notes: “Power, chance, opportunism, accident are as influential in shaping outcomes, as are design, negotiated agreements and master plans” (p268). Writing from a marketing history perspective, Savitt (1980) notes: “The writing of history requires the analysis and explanation of the causes and consequences of events with particular concern for change ... The conclusions of historical study can form the basis of prediction, to the extent that extrapolation to future cases is desirable and realistic” (p53). In a study of the macro-institutional contextual influences on the founding and subsequent strategic decisions of entrepreneurial enterprises in China, Supapol, Fischer and Pan (2008) argue that “an organisation’s history is crucial to its future development, and that organisations can only be understood in light of their early phases” (p242). Although historical research techniques are largely descriptive, analysis can address important questions about explanation, relationships and the consequences of events (Savitt 1980). However, researchers need to be cautious in using insights gained about the relationships between past events and outcomes to predict future scenarios: “Historical studies are not deterministic in the sense of an equilibrium model. Probable cause, rather than deterministic cause, describes historical relationships” (Savitt 1980, p53).

It is worth noting that some authors omit historical studies from their typologies of case study methods. For example, Grunbaum (2007) classifies a wide range of case study approaches in organisational research, but concludes that there are some generic 4

characteristics, including: the study of people’s perceptions of phenomena, studied in their natural environment; contemporary phenomena, not historical studies; holistic, contextual explanations; descriptive, exploratory and/or explanatory (theory generating or leading to modification of theory); researcher has no control over crucial events; involves numerous data sources (triangulation); and thick, rich accounts are produced. The omission of historical studies appears counter-intuitive, though, as this is at odds with the generally-accepted recommendation to triangulate data sources through the use of documentary evidence (Yin 2003) and multiple units of analysis (Eisenhardt 1989, Grubaum 2007). The use of historical data also helps address the call for more longitudinal case study research (Yin 2003). Given that the need to adapt to climate change is a contemporary phenomenon, but organisational responses evolve over time, then it would appear that the use of historical data in our case study methodology is both pragmatically and theoretically justifiable.

In this first, inductive stage we avoid prior commitment to any theoretical models but allow theoretical insights to emerge from the analysis (Eisenhardt 1989, Miles and Huberman 1984). Our primary purpose here is to understand how critical environmental incidents have influenced the development of WIBDI’s sustainability policies and practices.

The critical incident technique (CIT) has a long history in industrial psychology. One of its major proponents, John C. Flanagan (1954), noted that the technique originated with Sir Francis Galton in the late 19th century, but that its modern form grew out of a series of aviation psychology studies with US Air Force pilots in the 1940s. Since Flanagan’s influential treatise on how to conduct reliable and valid critical incident research, the technique has been applied to a wide range of studies, including communications, job analysis, counselling, education and teaching, marketing and organizational learning (Butterfield et al. 2005). The technique has evolved in the last half century and some studies no longer rely solely on interviewing, observing or surveying key informants about important incidents or actions that have changed their lives, but also include documentary evidence (Butterfield et al. 2005). Flanagan also conceded that the 5

technique “should be thought of as a flexible set of principles that must be modified and adapted to meet the specific situation at hand” (1954, p.335).

In their 50 year review of the use of CIT in counselling psychology research Butterfield et al. (2005, p.488) note: “The criteria for incidents to be included in a study are commonly thought to be: (1) they consist of antecedent information (what led up to it); (2) they contain a detailed description of the experience itself; and (3) they describe the outcome of the incident”. While acknowledging these guidelines, we also utilize information in prior studies and annual reports as well as perceptions of key informants.

One of the key outputs of the first phase was a comprehensive research report that captured WIBDI’s corporate history and which could be used for staff induction and client training purposes. As the deputy director Karen Mapasua explained: “Yeah, I’d actually like to see us be able to use this as ... a tool for new staff coming into the organisation, because I mean that’s a real challenge for us now. We have grown so much, so the old staff have the institutional memory and they have a feeling for what we do, and then you suddenly have all these new staff and the balance changes. So to be able to give them ... a more thorough understanding of where we’ve come from and what people have seen in us and all of those sort of things I think would be really beneficial. And I guess also to pull it all together at this point. I mean a lot of it is in Adi’s head, and I’ve only been here for six years, so I don’t know what was done before that really. So to get all that together in one place and particularly now when we’re actually starting to organise documents and filing systems and things like that, would be really useful”. In line with the organisation’s own motto of “technology, tradition, trade”, this study is grounded in the community that WIBDI aims to serve. We hope the results will be translated into Samoan to make them accessible to all the organisation’s stakeholders.

The second phase of our study, which is also inductive, involves a review of the relevant literatures which, on reflection after the initial descriptive stage of our study, could help 6

us build theory in this area. In particular, we focus on recent studies on sustainable entrepreneurship, sustainable opportunity recognition and dynamic business models that are relevant to this context.

In the third, more deductive phase, we explore the usefulness of our blended research model in the WIBDI context. We revisit our intitial documentary and interview data to assess the extent to which the posited model helps explain the organisation’s business development process. We also reflect on additional factors, not included in our original research model, that could be incorporated in an augmented model to guide future research.

It is worth noting that multiple interviews were held with the founder and executive director Adi Maimalaga Tafuna’i and her deputy Karen Mapusua at the start of the project, as well as during and after thematic analysis of the documentary evidence in order to help interpret the findings, as well as to provide policy, strategy and other contextual information. Interviews were also held with Ruta Sinclair, the president of the WIBDI board, plus representatives of the Small Business Enterprise Centre (SBEC), which provides financial and management support for WIBDI clients, and New Zealand Aid, one of WIBDI’s main donors. In addition, interviews were conducted in Samoa with an SBEC client who is developing an export fruit and vegetable business and in New Zealand with a Samoan entrepreneur who is developing a large-scale agricultural enterprise. The latter two informants are operating independently of WIBDI and felt they could comment critically about the constraints of using the organisation’s services, such as limiting producers’ endeavours to organic and niche markets, as well as the advantages, such as ensuring cultural sensitivity, providing business training and access to start-up finance. One of the two exporters has decided to forego organic certification in order to concentrate on a larger-scale project that may require the use of artificial fertilizers, pesticides and herbicides to boost production and ensure product consistency.

Most interviews were electronically recorded and then transcribed. Where electronic recording was not possible (e.g. during initial interviews with WIBDI and NZ Aid 7

managers, as well as with an exporter who was also a prospective WIBDI client) then one of the two interviewers took comprehensive notes which were later transcribed. The two lead researchers then conferred regularly over the thematic analysis of the documentary evidence and interview data in order to reach a common understanding of the critical incidents that WIBDI faced and the organisation’s responses to these events. Although we did not use a database program such as NVivo or Nu*Dist to organise and map the data, we did devise thematic codes and used data reduction (Miles & Huberman 1984, Strauss & Corbin 1990) to select relevant data for inclusion in construct tables of evidence (Eisenhardt & Graebner 2007). Data matching (Yin 2003) was used in the third, deductive phase to compare the empirical pattern to the one predicted by our posited conceptual model. Internal validity should be enhanced when the patterns coincide (Dube and Pare 2003).

As mentioned earlier, we also used a triangulated research design (Jick 1979, Sackett & Larson 1990, Scandura & Williams 2000, Yin 2003), which involved multiple data sources to investigate the research question and to improve the rigour and relevance of the study. In this case, triangulation involved interviews with multiple actors inside and outside the organisation (Eisenhardt & Graebner 2007), supplemented with content analysis of historical documentary evidence from a variety of sources. This incorporated multiple data points to provide a dynamic linkage of data with theoretical results to ensure testability, empirical validity, and replicability of the study (Eisenhardt 1989, Yin 2003, Eisenhardt & Graebner 2007). It is worth noting that our research process was not quite as “linear” as the previous discussion suggests, but was an iterative process that involved frequent consultations with the two senior managers of WIBDI and between the researchers involved at different stages of the research process. This is in line with the more inductive, flexible, phenomenological approach of Eisenhardt (1989) and Miles and Huberman (1994) and is less rigid than the more positivist, linear, theory-driven approach of Yin (2003). As Buchan and Brymen (2007, p.500) reflect in their study of contextual influences of methods choice in organisational research: “Choice of method is not a stand-alone 8

decision reached at an early stage in the research process but evolves as a project unfolds, as the researcher's understanding of the issues and also of the organizational research setting develops. The widely espoused view, reinforced in methods texts and elsewhere, that the research process (sampling, data collection method, analysis) flows logically and inexorably from research questions, is an oversimplification when this range of influences on an investigation is considered”.

PHASE ONE: HISTORICAL ANALYSIS “Fa’amatagi” is a Samoan proverb that literally means “from the direction of the wind” and metaphorically means to tell a story from the beginning. It denotes the importance of understanding the origin of events, the lessons learned along the way and also the impact the past has on future decision-making. In line with fa’amatagi, this initial stage of our study employs an historical research approach to identify critical environmental incidents that have influenced WIBDI’s development. Historical analysis can help to explain the reasons behind organisational change, and also help to predict future outcomes.

When WIBDI was first established (the initial NGO was registered as the Women in Business Foundation in 1991), it aimed to help a group of aspiring female entrepreneurs who felt they were disadvantaged by the prevailing institutional environment, which made it difficult to access finance or gain the business skills needed to develop and grow new ventures. Therefore the organisation’s initial emphasis was on business training, accessing funds, creating jobs and applying new technologies to female-owned entrepreneurial ventures (Fairbairn-Dunlop 2005, Fairbairn-Dunlop et al. 2009). However, the deprivation caused by three natural disasters in the early 1990s – two devastating cyclones that caused widespread damage to the country’s infrastructure and a taro leaf blight that nearly destroyed the subsistence agricultural economy – spurred WIBDI to reorient its original internal focus to an external one so it could help a much wider group of people (e.g. women, families and disadvantaged social groups), particularly in rural areas. 9

These disasters led to increasing numbers of people migrating from rural areas to the main town of Apia, as well as to New Zealand and other countries, in search of employment. Remittances from family members working in Apia and overseas have become important sources of funds for many rural communities. The natural disasters two decades ago coincided with the country’s transition from a subsistence economy to a cash economy. Therefore, the initial training that WIBDI has to provide to new clients relates to financial literacy, followed by production and marketing training. Once clients show they can manage their household finances and save money, they become eligible for a micro-finance program. As businesses grow they outstrip WIBDI’s ability to provide the necessary finance, at which point they graduate to the Small Business Enterprise Centre (SBEC), a business development trust that receives support from NZ Aid and the Samoan Government to help businesses expand and contribute more significantly to the families and communities connected to them. The relationship between WIBDI and SBEC has been close and productive. For example, SBEC has provided training for WIBDI field workers to improve their understanding of small business and financial management concepts. SBEC also acts as a broker and guarantees bank loans for clients who graduate from the WIBDI micro-finance program.

The most recent natural disaster, the September 2009 tsunami, spurred WIBDI to leverage its community empowerment and economic development knowledge, skills, processes and networks to add greater social value to disaster recovery projects. A particularly successful venture is WIBDI’s development of organic virgin coconut oil, which has exploited increasing consumer preferences for organic products. This product epitomises the organisation’s core objectives of developing sustainable, organic, fair trade enterprises that generate much-needed income for rural families. This innovation has enabled WIBDI to develop a strong business partnership with The Body Shop Community Trade Program. In September 2007, after visits from Graham Clewer from The Body Shop International and Andrew Walter from Earth Oil, WIBDI was confirmed 10

as a preferred supplier (WIBDI Annual Report 2008). The company buys the virgin coconut oil for its Coconut Bath and Body range. The virgin coconut oil is also being marketed by WIBDI to other manufacturers as an alternative to the more common (and lower grade) copra oils. In order to ensure continuity of supply, WIBDI is also training and contracting suppliers in other Pacific Island countries.

Growers, their families and local village communities have benefited financially from WIBDI’s principle of adding value to products. For example, organic certification and the virgin cold pressing process (that is, producers only press the coconuts once) differentiates WIBDI’s virgin coconut oil from similar products. To reinforce the upmarket positioning of the new product, WIBDI has produced brochures highlighting research into the health benefits of virgin coconut oil. Finding global niche export markets has proven successful, encouraging WIBDI to introduce other traditional crops to its organics program (Tafuna’i 2010). Samoa’s transition towards a cash economy and accompanying social changes has threatened the survival of some traditional arts and crafts. For example, ’ie Samoa or fine mats were long held as prestigious gifts and sources of pride within the Samoan community. In previous generations mats were also exported to other Pacific Island countries such as Tonga which valued the artefacts as gifts. The ’ie Samoa had no functional purpose, distinguishing them from other mats, and were gifted at funerals and other important events such as weddings, births and title making (Cahn 2006). Traditionally, fine mat weavers were regarded highly within Samoan society, but in recent times their status diminished as the popularity of the art form declined. The fine mats were replaced with coarser, functional mats and the concept of quantity, rather than quality, took over.

The Fine Mats Project was developed to provide women in economically-challenged rural areas with an income as well as to revitalise a dying art form. Regular training and business support has helped to re-invigorate the tradition (Cahn 2006). WIBDI staff members first learn the art of weaving and then pass the skill on to women in rural 11

communities. WIBDI approaches prominent women in selected villages and helps them to publicise and run workshops. These workshops not only focus on transferring weaving skills but also include financial and time management training for the weavers and their families. It became apparent early in the project that it was important to help family members to take over the day to day running of households so weavers could concentrate on producing fine mats (Cahn 2006).

Upon completion of their training, weavers are linked with sponsors who commission the making of fine mats. If the weavers meet their progress goals they are given a weekly income. This requires intensive monitoring by WIBDI field workers to ensure progress is on track and a high level of quality is maintained. A majority of the weavers are based on the island of Savai’i as there are fewer alternative opportunities for income generation there (Cahn 2006). Many potential issues have been identified, including the continued motivation of the weavers, and ensuring that quality standards and quotas are met. Another concern is making sure that the income from fine mat weaving is spent well and is creating positive changes within families.

The project has contributed towards the revitalisation of traditional Samoan art and culture. The weavers and their families have also reported significant social and economic benefits in the “Most Significant Change” project. Several weavers noted that the weekly incomes they generated enabled them to pay school fees and make improvements to their homes. Installing new water tanks and showers, for example, have significantly improved the lives of families. Also, weavers reported increased social status and feelings of self-worth, as well as a greater appreciation of their contributions to village life.

WIBDI is also encouraging the revival of other handicrafts, and has found regular overseas buyers for products such as tapa cloth, carving and woven baskets (WIBDI annual report 2008). Other projects aimed at supporting indigenous products, as well as encouraging self-sufficiency and import substitution, include local markets for organic

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foods2. WIBDI has also formed a partnership with the philanthropic Tindall Foundation to develop an export pathway for organic Misiluki Bananas (also known as Ladyfinger Bananas) to health food stores in New Zealand. The Organics Project is central to the WIBDI ethos of sustainability and coincides with increasing international concerns about environmental degradation, global warming and rising seas levels, as well as growing interest in healthy foods and lifestyles. From an environmental perspective, organic practices ensure that land used for export products is managed properly and not destroyed through chemical contamination and soil exhaustion. From an economic perspective, the organics markets and products developed by WIBDI allow for sustainable production. Because organics markets are generally niche markets, low-volume Pacific growers are able to maintain quality of supply. Producers also find it easier to make the shift to exporting as they are not competing with larger companies (Oxfam NZ 2010).

An important part of the WIBDI story is the lessons learned and the practical measures taken following natural disasters. The islands of the Pacific are susceptible to global warming and subsequent sea-level rises as well as other natural disasters, putting the livelihoods of many communities at risk. WIBDI is working to promote organics production in neighbouring countries to ensure an uninterrupted supply to export markets in case further environmental catastrophes hit Samoan producers. Of particular concern is the need to maintain export pathways for products such as virgin coconut oil. Cooperation with producers in countries such as Tonga and Fiji would enable WIBDI to guarantee its supply of oil to The Body Shop and help retain this important market (Hiller-Garvey 2010). While the development of a wider Pacific organics network is extremely important, it is still in its early stages.

Following the September 2009 tsunami, WIBDI was called upon to assist in the recovery operation. The organisation’s valuable contribution to the tsunami relief effort is noted in official Oxfam reports and in the stories of WIBDI clients who were supported during 2

It is worth noting that although Samoa has relatively good soils, rainfall and fishing grounds, and could in theory be self-sufficient, it imports large quantities of fresh and processed food and beverage products which add to the country’s financial deficit problems (http://www.dfat.gov.au/geo/samoa/samoa_brief.html).

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this time. The medium to long-term efforts have been focused on relocating people and re-establishing lost crops and incomes. As a result of the four natural disasters that have struck Samoa in the past 20 years – two large cyclones, the taro leaf blight and tsunami – WIBDI has set up a Disaster Response and Recovery project. Its overarching goal of is “to contribute to building safer communities by more effectively managing risks” (WIBDI Annual Report 2010). The organisation also worked closely with Oxfam before the 2009 tsunami to develop a Disaster Preparedness Program to protect the vulnerable families that WIBDI works with. The project assists communities to identify mitigating strategies to minimize damage to houses, gardens and water supplies so that the communities are not as debilitated as they have been in the past. Workshops also invite communities to explore traditional and modern methods of mitigating the effects of primary and secondary hazards. Discussions focus on the revival of traditional disaster management practices and the promotion of community-based solutions (WIBDI Annual Report 2007, Oxfam NZ 2007).

One a negative note, NZ Aid decided to reduce its funding to WIBDI in 2012, in line with changing New Zealand Government policies towards Samoa, as it was considered that the tsunami disaster effects were largely ameliorated. This financial shortfall is a threat to WIBDI’s existence in its current form as it now carries a large but underfunded aid infrastructure.

A further institutional barrier appears to be the local political infrastructure, with its village chief-dominated system of communal decision-making which can constrain the entrepreneurial development of individuals through conformity pressures. WIBDI seeks to circumvent these political barriers by working directly with families.

In conclusion, it is worth reflecting on the results of this descriptive, historical phase of our study. As mentioned earlier, the critical incident technique is useful in identifying antecedent information, providing detailed descriptions of experiences, and describing the outcomes of incidents (Flanagan 1954, Butterfield 2005). Table 1 summarises our 14

findings. The main antecedents are ecological, economic, institutional and social; the main experiences relate to frustrations and/or hardships caused by environmental, institutional and social factors; while the main outcomes relate to the development of more sustainable family-based entrepreneurship initiatives that have economic, social and ecological benefits.

Table 1: Summary of critical incidents Incidents

Antecedents

Aspiring female entrepreneurs seek mutual support

Limited infrastructural Frustration at inability support for to access finance and entrepreneurship business training

Cyclones Ofa (1990) and Val (1991)

Global warming and sea level rise lead to increasingly violent storms, high tides, inundation

Taro leaf blight 1993

Dangers of monoDestruction of staple culture food food crop leads to production overlooked greater hardship

Awareness of acute problems in rural areas spurs WIBDI to adopt a more sustainable, community-oriented focus

Growth of cash economy

Economic, social, emigration, tourism pressures force Samoa to move away from its traditional subsistence and barter economy Educated, environmentally aware consumers push for more sustainable supply chains

WIBDI realises that many prospective clients lack financial literacy and basic business skills

WIBDI develops financial literacy and basic business training

WIBDI realises that greatest opportunities lie in niche markets

WIBDI introduces certification schemes to ensure organic, sustainable, fare trade quality; develops local and international markets

Growing international interest in sustainability

Experiences

Widespread infrastructural damage and economic hardship

Outcomes Formation of Women in Business to help urban female entrepreneurs Growing awareness of effects of storms spurs WIBDI founders to rethink priorities

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Visit by Body Shop representatives

Development of virgin coconut oil Consumer demands for sustainable products

WIBDI negotiates to become preferred supplier for the Body Shop internationally

WIBDI expands network to other Pacific Islands to ensure supply lines; investigates other organic export market opportunities (e.g. vanilla, coffee, cocoa, bananas, nut oils, pepper)

Loss of cultural identity

Economic, social and demographic changes lead to loss of traditional art forms

WIBDI revives fine mat weaving, basket making and carving crafts

Social and economic benefits to artists and families are noted

Tsunami (2009)

Massive earthquake off coast of Samoa

Widespread coastal destruction and loss of life leads to increasing calls for assistance

WIBDI scales up its disaster recovery and mitigation operations; leads to growing interest in climate smart village concept

PHASE TWO: REFLECTING ON THE RELEVANT LITERATURE Radical innovations in business products, processes and models are often sparked by extreme situations. The Pacific Islands, along with other low-lying tropical areas, are at the forefront of climatic changes that have resulted in severe environmental events. Traditional business models are unsustainable due to the constraints imposed by these extreme situations. Therefore, it is appropriate to investigate how organisations can adapt to increasingly turbulent ecological, social and market storms.

In this section we blend insights from several streams of literature to produce a sustainable business process model for entrepreneurship development agencies in climate-challenged markets. Our conceptualization incorporates elements of sustainable entrepreneurship (Hall, Daneke & Lenox 2010), sustainable development opportunity recognition (Patzelt & Shepherd 2011), sustainable market orientation (Mitchell, Wooliscroft & Higham 2010), sustainable business model development (Teece 2010), dynamic capabilities (Teece, Pisano & Shuen 1997, Augier & Teece 2009), and sustainable competitive advantage (Day & Wensley 1988). 16

First, it is worth considering what constitutes a “business model”. The term has often been used by managers and consultants but has only recently been the subject of substantial research. For example, a special edition of the Long Range Planning journal included 18 conceptual and empirical articles. Two of the authors, Baden-Fuller and Morgan (2010, p156), argue that models “provide means to describe and classify businesses; to operate as sites for scientific investigation; and to act as recipes for creative managers”. A recent review of 108 academic articles by George and Bock (2011) found that business models are usually concerned with organisational design, core capabilities and resources, narrative and sense-making, the

nature of innovation, the nature of

opportunity, and/or transactive structures (e.g. exchanges between a firm, its suppliers and customers). Following their refection on a subsequent survey of 182 managers of Indian firms attending a business training course, the authors offered the following definition, which also appears to support previous research: “practitioner discourse reveals that a business model is an organization-wide phenomenon, an architecture or design that incorporates subsystems or processes to accomplish a specific purpose” (Baden-Fuller and Morgan 2010, p97). This purpose is often related to how firms identify and exploit market opportunities: “The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit” (Teece 2010, p172).

To be sustainable, business models need to evolve to cope with changing market opportunities and environmental threats (Chesbrough 2010, Teece 2010). This view has obvious links to the theory of dynamic capabilities (Teece, Pisano & Shuen 1997, Augier & Teece 2009). The ability to adapt organisational architectures and processes is important in contexts such as Samoa, which has experienced high levels of ecological, social and economic turbulence. However, Teece’s customer and profit-oriented view has severe limitations in the context of socially and/or ecologically focused organisations in climate-challenged developing economies where many entrepreneurial ventures are promoted and/or undertaken by non-profit organisations focused on improving ecological, social and/or economic conditions. 17

Organisations can also employ more than one business model to exploit market opportunities, and sometimes these may appear to be contradictory or paradoxical, as in the case of the USA Today media organisation which has developed hard copy, Webbased and broadcasting businesses (Smith, Binns and Tushman 2010) to deliver news and sell advertising. As we shall see in the next section, WIBDI appears to employ complementary and overlapping business models for its business development and disaster aid and mitigation initiatives.

In recent years theorists and practitioners have turned their attention to addressing market failures and the limitations of traditional aid programmes in poor communities through the development of innovative business models that address economic, social and/or ecological problems. Examples include the Grameen (meaning ‘village’) Bank micro credit scheme in Bangladesh (Yunis, Moingeon & Lehmann-Ortega 2010), “bottom of the pyramid” business opportunities (Prahalad 2010), and community development initiatives such as the Wharton Societal Wealth Program that helps create markets in emerging economies (Thompson & MacMillan 2010).

Sustainable entrepreneurship is an emerging field that is concerned with applying business techniques to the solution of climatic, ecological, social and economic problems. It has been defined as “focused on 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 & Patzelt 2011, p142). However, there has been little research to date into how this might unfold (Hall, Daneke & Lenox 2010).

The definition by Shepherd & Patzelt (2010) suggests that sustainable entrepreneurship may be a panacea for both ecological and economic problems. Indeed, this argument suggests that both aims – protecting increasingly threatened natural environments as well as improving the economic well-being of entrepreneurs and their local communities – 18

may be achieved simultaneously. At first glance, this appears to address the dual economic and ecological concerns raised by a number of institutions, including the OECD (e.g. Towards Green Growth 2011). An alternative view is that “green growth” is an oxymoron. The environmental economist Tim Jackson (2009) argues that a more realistic aim, from a sustainability perspective, is for prosperity without growth. Indeed a key tenet of sustainable development is that natural systems have limits and any attempts to improve human well-being must be undertaken within those limits (Hall, Daneke & Lenox 2010).

The emerging area of sustainable market orientation suggests how market-focused activities might still deliver social, ecological and economic benefits. Market orientation (MO) has traditionally focused on addressing the needs of customers, with benefits accruing to both the firm and its customers. The two most influential models of market orientation (Narver & Slater 1990, Kohli & Jaworski 1993) have been synthesised in the Canadian (Deng & Dart 1994) and New Zealand contexts (Gray et al. 1998), suggesting that the main components are customer orientation, competitor orientation, interfunctional co-ordination, responsiveness and profit emphasis. However, the social and ecological influences and consequences are often ignored in traditional economicallyfocused MO models. The need for marketers to address sustainability issues has been captured in a model developed by Mitchell, Wooliscroft & Higham (2010), which synthesises the emerging research in sustainable market orientation (see Figure 1). The authors argue that incorporating ecological and societal concerns in a market-oriented business model is both desirable and practicable.

19

Figure 1: Sustainable market orientation (Mitchell, Wooliscroft & Higham 2010)

This complements the view of Shepherd and Patzelt (2011) that the recognition of sustainable development opportunities should focus on what should be sustained (nature, sources of life support and communities) and what should be developed (economic, health and socio-cultural gains). Their model (Figure 2) addresses the knowledge and motivation required and also acknowledges the roles that socially and/or ecologically focused organisations play in improving community well-being

Figure 2: Sustainable opportunity recognition (Shepherd and Patzelt 2011)

KNOWLEDGE: Natural/Communal environment

Recognition of sustainable development opportunities MOTIVATION: Perception of threat of the natural/communal Environment

KNOWLEDGE: Entrepreneurship

Altruism toward others

20

However, it is debatable whether entrepreneurship knowledge is an antecedent or a moderating influence in the recognition of sustainable development opportunities. It could be argued that prior entrepreneurial knowledge, skills and experiences aid the recognition and exploitation of opportunities (Shane 2000). These capabilities are also likely to assist the development of sustainable business models. In line with the sources of advantage, market position and performance model of Day and Wensley (1988) organisational learning and performance feedback loops ensure that original sources of advantage (e.g. knowledge, skills and motivations) are continually renewed in turbulent environments. We have incorporated these factors in an holistic conceptualisation of the process

of

sustainable

business

model

development

for

community-based

entrepreneurship organisations in ecologically, socially and economically-challenged environments (see Figure 3).

Figure 3: Process of sustainable business model development

KNOWLEDGE/SKILLS: Natural/Communal Environment Sustainable development Organisational learning

Market orientation Entrepreneurship Recognition of sustainable development opportunities

Sustainable business model (s)

MOTIVATION: Perception of threat of the natural/communal Environment

Performance

Altruism toward others Success (environmental, social and/or economic gains)

21

PHASE THREE: HOW USEFUL IS OUR MODEL IN THE WIBDI CONTEXT? We assess the usefulness of our blended model (Figure 3) in an in-depth case study of Women in Business Development Incorporated, a non-governmental organisation that helps families in Samoa to establish sustainable enterprises. We have utilized a more deductive, theory-driven research approach (Rowley 2002, Yin 2003) for this phase of our study. Triangulation is achieved through the use of multiple data sources and viewpoints. We utilized a case protocol and maintained a case study database to improve reliability (Yin 2003). We have also followed recommended guidelines for drawing valid meaning from qualitative data through data reduction, data display, pattern matching, and the drawing and verifying of conclusions (Miles & Huberman 1994, Strauss & Corbin 1988, Yin 2003).

Samoa is a small developing country in the South Pacific. The country is largely rural, with its main industries related to subsistence agriculture, fishing, tourism and low-level services. The country relies heavily on remittences from families who have emigrated abroad, while foreign aid is another large contributor. The country is facing a worsening balance of payments deficit due to high imports, declining income from indigenous exports, and the effects of natural disasters3 such as devastating cyclones in 1990 and 1991, the taro leaf blight in 1993, and the earthquake and tsunami in 2009.

Developing countries are particularly vulnerable to environmental degradation caused by extreme climatic events as well as the unintended consequences of economic development activities (Arrow et al. 1995). Pacific Island communities are threatened by sea level rises and increasingly violent storms and high tides, as well as other natural disasters. It is timely, then, to investigate how organisations can develop sustainable business models that might benefit these communities in the future. Hence the focus of this phase of our study is on understanding the relationship between external and internal organisational change drivers (Pettigrew 1990), the identification of sustainable development opportunities (Patzelt & Shepherd 2011) and the development of a dynamic 3

Source: Australian Government Department of Foreign Affairs and Trade (http://www.dfat.gov.au/geo/samoa/samoa_brief.html) 22

business model (Teece 2010) for a family-based entrepreneurship development agency such as WIBDI. The results are summarised in Table 2.

The following discussion relates to the six main factors identified in our posited conceptualization of sustainable business model development: motivation, knowledge and skills, opportunity recognition, business model creation, organisational learning, and performance. In terms of motivation, the perceived threat to the natural and social environments has been a constant concern for WIBDI for the past 20 years. The level of altruism has also increased as the organisation moved from an inward to outward focus and received widespread plaudits for this. Positive feedback from the successful development of family-based enterprises has also reinforced the organisation’s sustainability motivations. Experiential learning (i.e. learning from mistakes as well as successes) has enabled the organisation to continually improve the knowledge and skills needed to manage natural and social environmental pressures as well as to develop sustainable development, market-oriented enterprises. “This is before my time, but one of the original projects was a micro-finance project and it was a Grameen bank model project and it failed dismally, because it just doesn't work here without the opportunities. But I think that helped with the development of the philosophy of that we needed [was] to be able to create the opportunity and link people to market, and that was what was missing in all the work that was happening in-country,” says Karen Mapasua.

WIBDI has managed to identify and exploit niche market opportunities and to focus largely on developing international supply and distribution chains (70% of its activities are export-oriented). “We focus on adding value to ‘organics’ and ‘fair trade’ products and services, which is why we’re exploring new crops like vanilla and essential oils, as well as sustainable tourism”, says Adi Tafuna’i.

As well as learning from its own mistakes and successes, WIBDI has also learned from the mistakes of other aid and development projects that were community (i.e. village) 23

based rather than family based and which largely failed. The latter initiatives build on the traditional socio-economic structures, while the former appear to have confused political structures with economic effectiveness. “Well, one of the things that Adi has discovered, and I fully agree with, is in Samoa, you don’t work as a village; you work as a family. And the family in Samoa doesn’t mean the same idea of family as you have in New Zealand. So sometimes people from outside tend to confuse that. Because the family’s so big, they think it’s the whole village, but it’s not. You know family has got tentacles that go out to different families within the village, so it may appear like the village, but it’s very much a family. And that’s why village co-ops have never worked in this country. And that’s why WIBDI works, because you work with the family, not the village”, says Ruta Sinclair.

In terms of its disaster relief and mitigation model, WIBDI is applying knowledge derived from its economic model and empowering families to take the initiative. This includes encouraging families to plant fetau trees near coastal areas as these trees not only help prevent erosion from high tides and floods, but also produce nuts with essential oils that have export potential. “Fetau is a calophyllum ... it’s a large coastal tree with a nut and you press oil from the nut and it’s valued in the cosmetic industry, so really rich, beautiful oil. So we’re starting to develop that out. And we’re trying to replant that because it offers really good coastal protection. We’re trying to get it back on the coasts. We learnt in the tsunami that where there was a fetau tree, things behind it survived much better than in other areas”, says Karen Mapasua.

In terms of performance, WIBDI has developed family-based entrepreneurial ventures that have succeeded where other aid initiatives have failed. This is partly because its economic business model – identifying and exploiting sustainable products that produce economic, cultural, social and/or ecological benefits – is grounded in the local culture. The organisation’s own culture also constrains it from engaging in projects that have a purely economic development focus, and instead encourages initiatives that also have 24

cultural, social and ecological benefits (e.g. an Asia Development Bank proposal was turned down because it did not fit with WIBDI’s sustainability ethos).

However, there are also cultural barriers, including traditional views towards money (usually controlled by village chiefs or male heads of families) and fair trade (family members usually worked in the plantations for no wages and were only given money by village or family heads when and if needed for essential items). Earnings by newlyempowered women could also cause jealousy from husbands. “And now of course we have weavers whose weaving is the only source of income for the family and so all of a sudden, they’re in quite a powerful position and it has caused some husbands to feel quite threatened and disturbed by this event. So helping them understand that this was an important role ... traditionally, has helped them adjust to that,” says Karen Mapasua.

Financial constraints include traditional gifting obligations, which mean that families are often called on to donate relatively large sums to their local church and to support important social events, removing potential capital for investments.

Political constraints include the village chief-dominated system of communal decisionmaking which can constrain the entrepreneurial development of individuals through conformity pressures. WIBDI seeks to circumvent this by working directly with women and families.

Table 2: Opportunity recognition & sustainable business model development Factors Influences MOTIVATION: Perception of threat of the natural/communal environment

Altruism toward others

Environmental disasters forced WIBDI to re-examine initial corporate culture, focus and strategies (which were inward-looking), and to transform business model to develop more of an outward-facing, community-based, sustainable approach. Institutional expectations changed markedly after the most recent disaster, with politicians, churches and governmental and non-governmental agencies pressuring WIBDI to devote fewer resources to sustainable business development and more resources to disaster relief. Core values of WIBDI leaders have been transferred to the organisation: e.g. helping families to improve their economic and social standing while

25

making best use of sustainable resources. WIBDI has occasionally turned down offers of support from large, overseas organisations (e.g. World Bank, Asia Development Bank) that do not meet organic, fair trade and sustainability criteria.

Success (environmental, social and/or economic gains)

Social embeddedness assisted WIBDI to develop better understanding of key stakeholders’ limited opportunities and capabilities and their need for financial literacy, and business and production management training. Success of initial business training and development of clients’ sustainable, fair-trade, organic micro-businesses encouraged WIBDI to explore larger opportunities (e.g. virgin coconut oil production for The Body Shop), to revive dying arts (e.g. fine mat weaving) and to branch out into disaster relief and recovery work.

KNOWLEDGE/SKILLS: Environmental disasters forced WIBDI to develop disaster relief Natural/Communal Environment

capabilities and international business capabilities that enabled it to help mitigate risk (e.g. improve disaster preparedness of client families and villages, encouraging growers in other Pacific Islands to become virgin coconut oil suppliers). Cultural awareness – and knowledge of failed village-based projects by various aid agencies – that sustainable business projects have to be family-based rather than community-based (i.e. family is core economic unit, whereas village is broader political entity).

Sustainable development

Social embeddedness assisted WIBDI to identify economic and ecological concerns – e.g. depletion of rural populations, loss of traditional arts and crafts, transformation from subsistence to cash economy, ecological problems caused by increasing use of artificial fertilizers and chemicals, lack of markets – and to develop strategies to address these issues.

Market orientation

Environmental disasters forced WIBDI to examine environmental scanning processes and to improve marketing and communication capabilities. Also, to examine business management processes, and to improve fund raising, financial management and marketing and distribution capabilities for itself and clients. Also focused more efforts on connecting families with markets.

Entrepreneurship

WIBDI has developed innovation and new venture development skills.

LINKING:

Focus on identifying niche opportunities and linking producers to markets.

Recognition of sustainable development opportunities

International ethical consumption trends mean that WIBDI’s focus on helping families develop niche, sustainable businesses becomes more economically viable.

and

Social embeddedness constrains WIBDI to focus on activities that are culturally sensitive and favour sustainability over unbridled economic/ financial growth (i.e. a conservation versus exploitation focus).

Development of sustainable business model (s)

Current institutional expectations are that WIBDI should continue to innovate and continually improve its sustainable entrepreneurship development activities and disaster mitigation/relief activities. There is also an expectation from some funders, such as NZ Aid, that WIBDI should become more financially self-sufficient. Institutional enablers included economic development agencies such as

26

SBEC and aid agencies such as Oxfam NZ as well as international firms such as The Body Shop which assisted WIBDI to transform its policies and business models in three main stages: assisting urban female entrepreneurs => promoting and enabling sustainable land-based and culture-based entrepreneurship => combining entrepreneurship with disaster relief capabilities. Social embeddedness assisted WIBDI to develop an open innovationoriented business model where value is co-created with clients/suppliers, aid donors, business development agencies and distributors. Requests for assistance after the most recent earthquake and tsunami disaster, prompted WIBDI to review its policies, practices and business models. WIBDI is developing wider Pacific networks due to publicity over its organic and fair trade certification promotion and facilitation expertise, as well as the need to protect supplies of virgin coconut oil.

FEEDBACK: Organisational learning

Ability to transform organisation from an inward to outward looking one involved reflection on core values and goals, in light of social embeddedness and institutional pressures. Much of the learning needed to develop family business development and disaster mitigation capabilities was experiential, involving experimentation and learning from mistakes. WIBDI has also learned from the mistakes of other aid and development projects that were community (i.e. village) based rather than family based. The latter build on the traditional socio-economic structures, while the former confuse political structures with economic effectiveness.

and

International researchers who included WIBDI in economic, environmental, cultural and/or disaster relief studies also provided useful insights. Social embeddedness assisted WIBDI to identify areas of weakness (e.g. disaster relief capabilities, protection/revival of traditional arts and crafts) and strength (e.g. sustainable certification capabilities) to develop new capabilities in the former and leverage capabilities in the latter areas.

Performance

WIBDI has succeeded in developing family-based entrepreneurial ventures that have succeeded where other aid initiatives have failed. This is partly because its business model – identifying and exploiting sustainable products that produce economic, cultural, social and/or ecological benefits – is grounded in the local culture. However, although WIBDI is not yet financially sustainable – its economic initiatives break even but its disaster initiatives require aid funding – its clients have managed to make substantiative economic and social gains. Institutional enablers include SBEC which assists WIBDI with financial training for its staff and clients, as well as sourcing development finance. In addition, aid agencies such as NZ Aid and Oxfam NZ provide funds for economic development initiatives as well as disaster mitigation and relief schemes. International “ethical consumption-oriented” firms such as The Body Shop and smaller enterprises in New Zealand (e.g. a fair trade coffee retailer and distributor based in Christchurch) were also looking for partnership opportunities in the Pacific Islands. Institutional barriers included a lack of industry and market data sources. Changing policies by some aid donors such as NZ Aid which will hamper

27

levels of reinvestment in continuing innovation and lengthen the time it will take for WIBDI to become financially self-sufficient. A further institutional barrier appears to be the local political infrastructure, with its village chief-dominated system of communal decision-making. WIBDI seeks to circumvent this by working directly with families. A further constraint was that differing values and goals caused some potential clients to focus on more exploitative, non-sustainable business strategies. Cultural barriers include traditional views towards money (usually controlled by village chiefs or male heads of families) and fair trade (family members usually worked in the plantations for no wages and were only given money by village or family heads when and if needed for essential items). Earnings by women could cause jealousy from husbands. Also, traditional gifting obligations mean that families are often called on to donate relatively large sums to their local church and to support social events, removing potential capital for entrepreneurial investments. Financial constraints include traditional gifting obligations, which mean that families are often called on to donate relatively large sums to their local church and to support important social events, removing potential capital for investments.

The organisation’s sustainable business development and disaster mitigation models can be summarised in terms of an adaptation of the Teece (2010) dynamic capabilitiesoriented conceptualisation, where a sustainable market orientation (Mitchell, Wooliscroft & Higham 2010) and non-economic goals and benefits are introduced into the business model planning and execution cycle (see Figures 4 and 5). Another departure from the Teece model is that identifying opportunities comes before the development of technical solutions. In the Teece model technological innovation spurs a search for market opportunities and market segmentation (i.e. a technology driven rather than market driven approach).

28

Figure 4: WIBDI’s sustainable business development model Identify sustainable market opportunities Learn how to capture ‘added value’ in ways that support both clients and WIBDI economically, culturally, socially and ecologically

Develop organic, fair trade & sustainable products and services, as well as the necessary support mechanisms

Link family-based producers with markets

Educate and assist families in culturally-sensitive ways

Figure 5: WIBDI’s disaster response model Identify disaster aid, prevention & mitigation opportunities Learn how to capture ‘added value’ in ways that support clients economically, culturally, socially and ecologically

Link family-based producers with relief providers

Develop disaster prevention and mitigation plans that encourage “climate smart” village development solutions

Educate and assist families in culturally-sensitive ways

What has become evident from our analysis, though, is that factors such as social embeddedness and institutional enablers and constraints have influenced both the direction and the effectiveness of WIBDI’s policies and strategies (see Table 2). Introducing insights from the social embeddedness literature (e.g. Giddens 1984, Jack & Anderson 2002) and institutional theory literature (e.g. Hall & Taylor 1996, DiMaggio &

29

Powell 1996) would help overcome some of the limitations of our initial model (see Figure 6 for an amended model).

The institutional view not only considers the infrastructural, political and social pressures (e.g. enablers and barriers) on organisational policies and strategies, but also how societal expectations may influence organisational development (Hall & Taylor 1996) and management behaviour (Karlsson & Honig 2009). It also acknowledges that coercive (e.g. political, legitimacy), mimetic (e.g. standard responses to uncertainty) and normative (e.g. professionalization) pressures can pressure organisations to conform to isomorphic forms or convergent patterns of behaviour (DiMaggio & Powell 1996).

Community-based enterprises also tend to be closely tied to the values and aspirations of focal socio-cultural groups, particularly indigenous, ethnic and/or disadvantaged communities (Peredo & Chrisman 2006). As a result, non-economic aims related to community and/or ecological well-being tend to predominate, with economic and financial benefits (for communities rather than individuals) playing a secondary role. This social embeddedness (Giddens 1984, Jack & Anderson 2002) is also a feature of intuitional theory (DiMaggio & Powell 1983, Hall & Taylor 1996, Karlsson & Honig 2009), although it is receives little mention by dynamic capabilities and business model innovation theorists such as Teece. The importance of temporal (i.e. historic) considerations is also acknowledged.

Therefore, future research should utilize a modified model that includes social embeddedness and intuitional factors that are likely to influence sustainable business model innovation and development (see Figure 6).

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Figure 6: Augmented sustainable business model KNOWLEDGE/SKILLS: Natural/Communal Environment Sustainable development INSTITUTIONAL ENABLERS & BARRIERS

Market orientation

Organisational learning

Entrepreneurship

Recognition of sustainable development opportunities

SOCIAL EMBEDDEDNESS

Sustainable business model (s)

MOTIVATION: Perception of threat of the natural/communal Environment

Performance

Altruism toward others Success (environmental, social and/or economic gains)

CONCLUSIONS AND LIMITATIONS To recap, our overarching research question was: “What are the organisational response mechanisms that enable a community-based entrepreneurship development agency to develop a sustainable business model?” The results suggest that our holistic conceptualisation of the process of sustainable business model development (Figure 6) can provide a useful lens to investigate how nongovernmental organisations such as WIBDI can develop the requisite knowledge, skills and processes to aid at-risk communities in developing countries. Our model incorporates elements of sustainable market orientation (Mitchell, Wooliscroft & Higham 2010), sustainable business model development (Teece 2010), dynamic capabilities (Teece, Pisano & Shuen 1997, Augier & Teece 2009), sustainable competitive advantage (Day & Wensley 1988), and sustainable development opportunity recognition (Patzelt & Shepherd 2011).

We also posit that social embeddedness (Giddens 1984, Jack &

Anderson 2002) and intuitional theory (DiMaggio & Powell 1983, Hall & Taylor 1996, 31

Karlsson & Honig 2009) are likely to be important antecedents to the process of sustainable opportunity recognition and development.

The organisational response mechanisms relate to key stakeholders in an organisation having the necessary motivations to respond to perceived threats to the natural and social environments, altruism (‘other’ rather than ‘self’ centered) and expectations of success, as well as requisite knowledge and skills to understand and adapt to changing natural and social

environments

and

to

implement

sustainable

market

orientation

and

entrepreneurship practices.

Our nascent theory of sustainable business model development (described visually in Figure 6) suggests that social embeddedness and institutional enablers and barriers influence the motivation and knowledge and skills required to identify sustainable development opportunities and the subsequent business models that evolve to exploit sustainable opportunities. Organisational learning and performance outcomes then act as feedback mechanisms that encourage the organisation to adapt and renew its core capabilities, in line with the resource-based view of the firm (Penrose 1959, Wernerfeldt 1984, Barney 1991), to cope with changing environmental situations.

In addition, our research has also clarified the business models that WIBDI currently employs in its business development and disaster response activities (Figures 4 and 5). These overlapping models vary from the technology driven and financial outcome seeking dynamic business model innovation conceptualizations of Teece (2010) and Chesbrough (2010) by emphasizing a more market-driven and added value approach that aims to produce socio-cultural and ecological benefits as well economic outcomes. In line with the sustainable entrepreneurship (e.g. Hall, Daneke & Lenox 2010), sustainable opportunity recognition (e.g. Patzelt & Shepherd 2011) and community-based entrepreneurship literatures (e.g. Peredo & Chrisman 2006) the WIBDI business development and disaster response models are also more outward looking or ‘other’ focused than the more inward looking or ‘self’ focused models used in purely business related (i.e. non sustainable, economic) contexts (e.g. Chesbrough 2010, Teece 2010). 32

We acknowledge that our study has a number of limitations. Although a single revelatory case can help inform theory development (Eisenhardt 1989, Yin 2003), the findings are not easily generalisable. It is also difficult, in a single study, to fully explore all the mechanisms inherent in an holistic model such as ours (see Figure 6). A case in point was the emergence in our analysis of the likely importance of institutional and social embeddedness as influences on motivations, expertise, and opportunity recognition and exploitation. Our data did not enable us to explore these influences in any depth, nor were we able to explore the trade-offs and compromises that are likely to occur when one tries to balance competing social, ecological and economic concerns. These issues should be addressed in future studies. Finally, the findings from this WIBDI study suggest that our conceptualization for the development of sustainable business models for family or community focused entrepreneurship development agencies could be applied to other country contexts. In particular, communities in similar ‘front line’ climatic situations such as the Caribbean and Arctic could be expected to benefit from WIBDI-like organisations. The likelihood of this is already becoming evident from the growing number of inquiries and visits to WIBDI by female and family based entrepreneurship development organisations from a wide variety of developing countries who see WIBDI as a possible best practices template (Tafuna’i 2010, 2011). The emerging importance of social embeddedness and institutional influences from our own study suggests that these would be key factors that would have to be considered in order to adapt WIBDI’s business development and disaster response models for different socio-political contexts.

Although our conceptualisation of the process of sustainable business model development was developed with sustainable entrepreneurship development agencies in mind, it is likely that the conceptualization could also be applied to individual business and social enterprises. We would encourage other researchers to explore these possibilities, too.

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