Abstract
Sustainable entrepreneurs intend to create environmental and social value while they build their financially viable business. With this in mind, they are embedded in multiple institutionalized value systems (i.e., institutional logics) that provide them with different, often contradictory values, beliefs, and guiding principles. Adhering to these value systems and integrating multiple forms of value into a coherent business model is a key task for sustainable entrepreneurs, yet current efforts lack insight into how this can be achieved. To address this, the article utilizes the institutional logic perspective in conjunction with the componential approach to business models. By analyzing a longitudinal in-depth case study, this article develops a novel theoretical model linking shifts in the entrepreneur’s perception of institutional logic to business model alterations, and emphasizes the underlying mechanisms and behavior of the sustainable entrepreneur. Sustainable entrepreneurs integrate and blend institutional logic through multiple business model transitions, which are characterized by a personal reorientation of the entrepreneur and new practices to implement change. Furthermore, our findings show that the entrepreneur’s habitus, the pre-change business model, and the change-specific dominant logic are integral and previously overlooked concepts that contextualize their business model transition. The findings and discussion advance the theoretical and practical understanding of the processes through which sustainable entrepreneurs integrate multiple forms of value into their business models. With that, the article contributes to research on sustainable entrepreneurship, institutional logic and business models.
Highlights
“I recognized that one should pay attention to those things that are important in the ‘normal world, i.e., the business world’, but that there are other values to which you can attach importance and still be successful”. (Simon)
Having to prioritize and balance multiple value systems to create environmental, social, and economic value can lead to tensions and conflicts that need to be ameliorated within a coherent business model [13,14]
To answer these research questions, we introduce the concepts of the institutional logic perspective, sustainable entrepreneurship, and business modelling
Summary
“I recognized that one should pay attention to those things that are important in the ‘normal world, i.e., the business world’, but that there are other values to which you can attach importance and still be successful”. (Simon). The institutional logic (In this article we use ‘institutional logics’ and ‘logics’ interchangeably) perspective allows an exploration of the cultural embeddedness of sustainable entrepreneurs, and locates the entrepreneur in the wider social, cultural, and institutional context [25] It aims to understand how individuals deal with multiple and often contradictory values, beliefs, and norms [19,26,27]. In this vein, sustainable entrepreneurship research has started to acknowledge the embeddedness of the entrepreneur within multiple institutional logics (e.g., environmental protection, social welfare, and commercial market logics) at the same time, potentially leading to tensions between different forms of value creation [6,7,9,14,20]. We derive theoretical and managerial implications, discuss the limitations of our study, and present potential avenues for future research
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