JOURNAL OF ETHICS ENTREPRENEURSHIP - …homepages.utoledo.edu/mmallin2/ExternalDossier/Publications/23...Leadership. at focus can be found in the Journal of Ethics & Entrepreneurship

JOURNAL OF

ETHICS &ENTREPRENEURSHIP

Center for Ethics and Entrepreneurship Vol. 2 No. 1, Spring 2012

Editorial rEviEw Board

Editor – Donald W. Caudill,Godbold School of Business, Gardner-Webb University

[email protected]

Associate Editor – James E. Littlefield, Pamplin College of Business, Virginia Tech

[email protected]

M. Jill AustinMiddle Tennessee State University

Laquita C. BlocksonCollege of Charleston

Wendy CukierRyerson University

Alex F. DeNobleSan Diego State University

Rodney D’SouzaNorthern Kentucky University

Eugene FregettoUniversity of Illinois at Chicago

Timothy HattenMesa State College

Daniel T. HoltMississippi State University

Jeffrey S. HornsbyKansas State University

K’adamawe A. H. N. K’nifee University of West Indies

Susan KrumlMillikin University

Robert P. LambertBelmont University

Fred H. MaidmentWestern Connecticut State University

Martha MattareFrostburg State University

Maria MinnitiSouthern Methodist University

Stephen Moore Central Piedmont Community College

Michael H. MorrisOklahoma State University

Luis Rivera OyolaUniversity of Puerto Rico

Nancy RossiterJacksonville University

Mark T. SchenkelBelmont University

Dianne H. B. Welshe University of North Carolina Greensboro

Rebecca J. Whitee University of Tampa

Densil A. Williamse University of West Indies

Monica Zimmerman TreichelWest Chester University of Pennsylvania

Journal of Ethics and Entrepreneurship

Journal of Ethics and Entrepreneurship

ContEnts

volumE 2, numBEr 1 spring 2012

Editorial Review Board 2From the Dean of the Godbold School of Business 4From the President of Gardner-Webb University 4From the Editors 8

guEst EditorialIs Entrepreneurial Ethics an Oxymoron? 5Laquita C. Blockson

artiClEsEntrepreneurial Social Performance: Toward Measuring 9the Social Impact of Entrepreneurial Firms Abigail McWilliams and Rodney C. Shrader

Preparing and Complying with Institutional Review Board 21Protocols for Integrated Research and Entrepreneurship Ventures in Developing CountriesCarey Bell, Rachel Dzombak, Tara Sulewski, and Khanjan Mehta

e Entrepreneurial Nature of Salespeople: 37How they Justify Unethical BehaviorsMichael L. Mallin and Laura Serviere-Munoz

Inter-Industry Ideological Groups and the Emergence 55of Innovative Sustainable Business Practices Kathryn Aten, Suzanne G. Tilleman and Jennifer Irwin

e Role of Creativity in Sales: 73Current Research and Future DirectionsEllen Bolman Pullins, David Strutton and Iryna Pentina

Invitation to Review Manuscripts 88Subscription Form 89GWU Information 90About the Editors 93Call for Papers 95

From tHE dEan oF tHE godBold sCHool oF BusinEssIn 2008, the John and Linda Godbold School of Business Endowment was created at

Gardner-Webb University to fund initiatives for education, culture, tradition, faith, scholarshipand leadership. Among the projects created was a Center for Ethics and Entrepreneurship. Andone of the projects of the Center was to publish a journal that featured scholarly articles aboutthe connection between business ethics and entrepreneurship. Mr. Godbold, an astute and well-respected entrepreneur, had proven that it was possible to create enterprises that were bothextremely profitable and uncompromisingly “ethical” at the same time (see his essay on page 5).

It is my pleasure to present the inaugural issue of the Journal of Ethics & Entrepreneurship( JEE). e mission of JEE is to publish high-quality (double-blind, peer reviewed)interdisciplinary scholarly research (conceptual, theoretical, empirical) or teaching cases thatconnect entrepreneurship and ethics and appeal to both the academic and the practitioner.

With the strong leadership and enthusiasm of Dr. Don Caudill–professor of marketing in theGodbold School of Business, JEE is now a reality. Of course, the adage that “a tree does notmake a forest” applies here as well–many people have assisted. We extend our gratitude to Mr.John and Mrs. Linda Godbold for their vision and generous support; to Dr. Frank Bonner,GWU president; to the Senior Staff for their support; to the authors of the six articles featuredin this issue; the Associate Editor Jim Littlefield and the distinguished Editorial Review Board.Finally, we extend special thanks to Kathy Martin, assistant director of graphic design at GWU,for her exceptional layout and design work completed under extraordinary time constraints,Matt Renfer, our copy editor; Bob Williams, Ron rash and Lynette Camby of BP SolutionsGroup in Ashville, N.C. for their excellence in printing and binding the journal. We hope youenjoy this inaugural edition.

-Anthony Negbenebor

From tHE prEsidEnt oF gardnEr-wEBB univErsitYWith social, economic and political issues growing more and more challenging, it is difficult

to imagine how there could be a greater need for character-based leadership. at need isrevealed almost daily in the news. We must have leaders with principle, integrity and courage.

is is why Gardner-Webb University seeks to prepare and to inspire such leaders. As we seekto carry out our mission of service “For God and Humanity,” our focus is on Faith, Service, andLeadership. e life of faith brings with it a commitment to serve—to serve the greater good, tomake other people’s lives better, as well as our own. Strong, faith-based leadership makes suchservice successful. Oen, such leadership is expressed in entrepreneurship, in business as well asin social entrepreneurship.

As exemplified through the Center for Ethics and Entrepreneurship, the Godbold School ofBusiness demonstrates, in a very effective manner, the University’s focus on Faith, Service, andLeadership. at focus can be found in the Journal of Ethics & Entrepreneurship.

As President of Gardner-Webb University, I am extremely pleased that our mission and ourprinciples are advanced so effectively by the Godbold School of Business and by this journal.

-Frank Bonner

Journal of Ethics and Entrepreneurship4

5

Guest Editorial

Is Entrepreneurial Ethics an Oxymoron?

Laquita C. Blockson

When I teach my entrepreneurship course, I ask the class, “Can entrepreneurs think andbehave ethically?” I pose a similar question when leading my business ethics course: “Canethical businesspeople think and behave entrepreneurially?” When asked these questions,most of my students respond initially the same way most people generally would, which iswith a not-quite-resounding “yes.”

While some students opine “no” or provide an “I don’t know” answer, it intrigues memost that those who provide a “yes” answer oen do so unemphatically.

Why does this happen? Have my students received mixed messages from various sourcesabout the role of entrepreneurship and the role of business ethics? Do my students – andpeople in general — believe that entrepreneurship and business ethics are independent,mutually exclusive concepts? Do people perceive that entrepreneurs and business ethicistsoperate generally at opposite ends of the sociopolitical continuum, where entrepreneurs arefocused on self-interested aspirations and business ethicists are concerned about collectiveinterests? Or, have they simply not been exposed to the concept of entrepreneurial ethics?

laquita C. BloCkson is an Assistant Professor of Ethics and Entrepreneurship in theSchool of Business at the College of Charleston, 5 Liberty Street, Charleston, SC 29424.Telephone: 843.953.6662 E-mail: [email protected]

Journal of Ethics and Entrepreneurship, Vol. 2, No. 1 (Spring 2012), pp. 5-7©Gardner-Webb University. All rights reserved.

6 Journal of Ethics and Entrepreneurship

Entrepreneurial ethics has garnered recent attention because of its influence and effecton individual entrepreneurs, the ventures they create and lead, and the contributions theyand their ventures make toward promoting innovation, commerce and employment withinsociety. No doubt, many people – including some entrepreneurs – believe thatentrepreneurial ethics (or, alternatively, ethical entrepreneurship) is an oxymoron. Wescholars and practitioners of entrepreneurial ethics recognize and assert that this is notnecessarily the case. Nonetheless, my students’ not-quite resounding “yes” response reflectspartially the opinion some scholars and businesspeople hold that business ethics shouldhave limited – if any – influence on entrepreneurship, whether it is because entrepreneursoperate under a different set of guidelines or because entrepreneurs should operate freelywithout restriction.

For example, Hicks (2009) asserts that the primary concern of ethics should not be socialresponsibility. He defines entrepreneurs as “those self-responsible and productiveindividuals who create value and trade with others to win-win advantage” (49); and, thatthe character traits and value-producing activities of these entrepreneurs implicitly informan ethic. In this capitalistic light, he notes that business ethics should focus first oncreativity, productivity, and trade. Culkin (2010) provides a complementary perspective,where a static, rule-based view of entrepreneurial ethics may be inappropriate in a dynamicsociety. Reflecting upon Brenkert (2002) and Aristotle (1984), Culkin argues that ifentrepreneurs are viewed as engaging in creative destruction, then does a reason exist forwhy this notion might not apply also to the law and morality? us, Culkin asserts thatone can justify the premise of entrepreneurs breaking some rules, laws and/or ethicalguidelines if it ultimately leads to a greater good.

Hicks is correct in that many entrepreneurs embody a number of moral virtues,including rationality, courage, integrity, and productivity; however, is it appropriate toprioritize entrepreneurial processes and outcomes over enacting these moral virtues? Doentrepreneurs who prioritize entrepreneurship — to the detriment of ethics — threatentheir ability to form trusting, mutually beneficial relationships with their stakeholders toobtain the necessary resources, knowledge, and skills to create, operate, and grow theirventures?

I also agree with Culkin in that some rules and values evolve over time and/or need to bechallenged; Culkin’s example of Muhammad Yunus’ creation of Grameen Bank could beviewed by some as a

compassionate act of civil disobedience, given that Yunus’ efforts of providing loans toBangladeshi women caused an uproar among conservative clergy. Nevertheless,considering the growing number of entrepreneurs who are creating and growing venturesthat address societal needs and/or adopt socially responsible business practices, most ofthese entrepreneurs would argue that upholding and practicing personal ethics-based valuesat the corporate level rarely stifle creativity, innovation and growth.

With these considerations in mind, I provide my students insight that helps to dispel theentrepreneurial ethics oxymoron myth. I demonstrate that many entrepreneurs – especiallysocial entrepreneurs — maintain an appropriate balance between the values of self-interestand collective interest (Mair, Robinson and Hockerts, 2006). I tell my students that manyethical entrepreneurs employ practices that minimize harms to others, encouragephilanthropy and goodwill, and strives to achieve the “triple bottom line” (a term coined byJohn Elkington in 1994) of financial performance, social responsibility, and environmental

7Blockson

stewardship, while simultaneously benefitting from their meritocratic efforts. I share withmy students that, while all entrepreneurs are expected and encouraged to act in aSchumpeterian (1950) manner, these entrepreneurs also recognize that they do not – andcannot — pursue opportunities or create ventures in a vacuum. I give examples to mystudents of how numerous entrepreneurs’ expressions of spirituality and heightened humanconsciousness manifest themselves through such entrepreneurial activities as opportunityrecognition, venture creation, venture operation, and venture growth ( Jackson & Konz,2006; King-Kauanui et al, 2008).

Along with other scholars and practitioners, I will continue to explore the intersection ofethics and entrepreneurship and the myriad of philosophical and practical questions thatentrepreneurial ethics raise. In doing so, I will keep my students’ not-quite-resounding“yes” responses in mind. As they complete their studies and become entrepreneurs andbusiness leaders, they now understand better that they can dispel the entrepreneurial ethicsoxymoron myth by adopting entrepreneurship practices that balance creativity with socialresponsibility.

rEFErEnCEsAristotle, 1984. Nicomachean Ethics. In e Complete Works of Aristotle, edited by

Jonathan Barnes. Princeton, NJ: Princeton University Press.Brenkert, G. 2002. Entrepreneurship, Ethics, and the Good Society. Ethics and

Entrepreneurship: Society for Business Ethics Ruffin Series No. 3.: 5-44.Culkin, N. July 2010. By Whose Rules Should We Judge Entrepreneurs? Enterprising

Matters. Hicks, S. R. C. 2009. What Business Ethics Can Learn from Entrepreneurship. e Journal

of Private Enterprise, 24 (2): 49-57.Jackson, J. J., & Konz, G. N. 2006. Spirituality and entrepreneurship. Journal of

Management, Spirituality & Religion, 3 (3): 242-257.King-Kauanui, S., omas, K. D., Sherman, C. L., Waters, G. R., and Gilea, M. 2008.

Exploring entrepreneurship through the lens of spirituality. Journal of Management, Spirituality & Religion, 5(2): 160-173.

Mair, J., Robinson, J., and Hockerts, K. 2006. Social Entrepreneurship. Hampshire, England: Palgrave Macmillan.

Schumpeter, J. 1950. Capitalism, Socialism and Democracy. 3rd ed. New York, NY: Harper & Brothers.


e views expressed in the Journal of Ethics and Entrepreneurship are the personal views of theauthor(s) of the individual articles and are not intended to reflect the views of the Editors, members of theEditorial Review Board, the Godbold School of Business or Gardner-Webb University.

A. Frank BonnerPresident

Benjamin C. LeslieProvost and Executive Vice President

Anthony I. NegbeneborDean of the Godbold School of Business

Gayle B. PriceAssociate Provost for Schools

Earl LeiningerAssociate Provost for Arts and Sciences

R. Van GrahamAssociate Dean of the

Godbold School of Business

gardnEr-wEBB univErsitY aCadEmiC lEadErsHip

From tHE Editors

Vol. 2, No. 1 of the Journal of Ethics and Entrepreneurship presents papers on a varietyof topics regarding for-profit and not-for-profit firms. Covered are:

1. Potential ethical considerations and problems in doing research in developing countries.

2. Ethical problems caused by and lurking in the entrepreneurial nature of the salespersons job.

3. e presentation of considerable strides toward measuring the impact of Entrepreneurial firms on society.

4. Progress to date in measuring the impact of Inter-Industry groups on sustainable business practices.

5. An evaluation of the progress to date of measuring the impact of creativity on salesperson effectiveness and suggestions for future research.

e editors of JEE are pleased with the acceptance of our new journal in the academicand business communities. We welcome manuscripts covering any aspect of ethics andentrepreneurship in the broad fields of marketing and management and in the even broaderfields of business, healthcare, society, and not-for-profit firms.Getting a new journal startedis never easy, but we have been helped a great deal by the many contributions of ourmanuscript contributors, our Editorial Board and by many helpful people inAdministration and (insert your Department name) at Gardner-Webb University.

-Don Caudill & Jim Littlefield

9

Entrepreneurial Social Performance:Toward Measuring the Social Impact

of Entrepreneurial Firms Abigail McWilliams and Rodney C. Shrader

aBstraCtWhen large, for-profit firms engage in social value creation, this is referred to as

corporate social responsibility (CSR) and the measure of social value created is calledcorporate social performance (CSP). For many firms CSR is a philanthropic aside, not acore business objective and therefore they leave the measurement of CSP to outsideinstitutions such as mutual funds for socially responsible investing, special interest groupsand business publications.

For social ventures, creating social value is not an aside but their core reason forexistence. While other entrepreneurs are motivated by producing private value (profit),social entrepreneurs create new ventures to pursue social value and view profit as a meansto creating social value—not as an end in itself. ey are motivated more by solving socialproblems than by maximizing personal gain/profits.

e role of entrepreneurial ventures in creating social value is less well understood thanthat of larger, established companies. Research on social entrepreneurship is oen based oncase studies and focuses on immediate external value. Few attempts have been made toobjectively measure social performance. Established measures of CSP have not beenapplied. We integrate literatures on CSR, CSP and entrepreneurship to highlight the needto measure entrepreneurial social performance (ESP) in ways that capture both private andsocial value creation.

aBagail mCwilliams is Professor of Management in the College of Business Administration at the University of Illinois – Chicago, 601 South Morgan Street, Chicago, IL 60607-7122. Telephone: 312.996.5201 Email: [email protected]

rodnEY C. sHradEr is Professor and Denton orne Chair in Entrepreneurship in the College of Business Administration at the University of Illinois – Chicago, 601 South Morgan Street, Chicago, IL 60607-7122. Telephone: 312.996.1139 Email: [email protected]

Editor’s note: is paper won the Journal of Ethics and Entrepreneurship Best Paper in Ethics and Entrepreneurship Award at the 2012 United States Association for Small Business and Entrepreneurship (USASBE)Conference in New Orleans, Louisiana.



introduCtionWhile there is a rich literature about corporate social performance (henceforth, CSP), it

has primarily been concerned with large, for-profit organizations. is has caused tensionfor managers as they increasingly have been expected to demonstrate good CSP as well asmaximizing returns for shareholders. Many managers feel ill-equipped to balance thedemands of shareholders with the sometimes divergent demands of employees, suppliers,special interest groups and other stakeholders, while stakeholders feel they deserve someconsideration for allowing these large firms to control and affect vast resources in anenvironment that seems increasing vulnerable.

Freeman defined stakeholders as “any group or individual who can affect or is affected bythe achievement of the organization’s objectives” (1984: 46). Stakeholders include thosedirectly affected such as shareholders, employees, consumers, competitors and suppliers aswell as those indirectly affected such as potential employees and investors, those living in thecommunity, governments, and environmental groups. Environmental groups have longwarned about the global effects of production and distribution and the recent financialcrises have been a reminder of how connected the economies of the world are (a lesson firstlearned in the Great Depression of the 20th century).

Social activists and scholars work to educate managers about the needs of stakeholdersand to inform stakeholders about the responsible and irresponsible actions of managers. epurpose of educating managers about social responsibility is to elicit corporate socialresponsibility (henceforth CSR) actions and behaviors. e internet and social media haveplayed a major role in informing the public about social issues and firms responsible andirresponsible actions. Just as TV brings war to our living rooms, making it harder for us toignore, the internet has brought social issues to desktops, making it hard for managers toremain disengaged.

e purpose of informing stakeholders about the responsible and irresponsible actions ofmanagers is also to elicit socially responsible behavior. When firms are “punished” forirresponsible actions, managers will change their behavior or firm actions (such as Nike’sposting the identity of all suppliers on its website to facilitate labor condition monitoring)or the firms will change their managers (e.g. replacing the CEO of BP following the oil rigdisaster in 2010). When firms are rewarded for responsible behavior, managers areencouraged to continue or increase such behavior. When “punishment” takes place in theopen market, not only will the irresponsible firms take corrective action, but the effects canalso be expected to spill over to firms that compete for similar resources, such as customers,investors, and employees. As an example of this, Baron and Diermeier (2007) suggest thatboycotts are more effective if single firms are sequentially targeted because this leavesconsumers with options, while making it clear that other firms in the industry are similarlyvulnerable.

Stakeholders, especially current and potential investors, can be informed about CSRthrough measures of the firms’ social performance--that is, CSP. e primary sources ofinformation about CSP are companies’ annual reports, but there are external sources as well,including KLD’s Company Profiles, Fortune’s reputation ratings, government and specialinterest group reports and the media. Information is readily available about large,established firms whose impact, both economic and social, is expected to be large and longlasting. However, little if any information will be available about the performance andimpact of small, entrepreneurial firms.

11McWilliams and Shrader

social EntrepreneurshipEntrepreneurialism has long been held in high regard and for good reasons.

Entrepreneurs are important to the functioning of a market economy; they fill consumerneeds and desires in new ways, create jobs and generate tax revenue. ey take on risks thatmanagers may not be willing or able to assume. Putting it succinctly, Schumpeter notedthat “e mechanisms of economic change in capitalist society pivot on entrepreneurialactivity” (1947: 150).

Seen in this light, it is clear that entrepreneurialism contributes to social welfare whetherit is engaged in for private return (profits) or for social return. Increasingly, though, we areseeing entrepreneurialism addressing social “problems” or needs. e first printed referenceto the concept of social entrepreneurship appears to be in Banks (1972) and the term“social enterprise” was first used by Drucker (1979, p. 453). Bill Drayton popularized theconcept in the US and founded Ashoka (www.ashoka.org), a non-profit organization, forthe support of social entrepreneurship in 1981. ere are probably innumerable reasons forthe phenomenal growth in social entrepreneurship.

One reason may be that many markets in developed countries, such as the US, arematuring. Without dramatic changes in technologies, there is little “space” for newventures to supply traditional goods and services. We see changing faces, as the localChinese restaurant is replaced with a Sushi bar and retail giants buy local firms, changinglittle but the name on the marquee (e.g., when Marshall Fields in Chicago became Macy’s).But we see little need for more products and services for the average consumer.

Another reason is the increase in discretionary income. As consumer income increasespreferences change, leading to more emphasis on quality and more willingness to lookbeyond personal needs to social needs such as a cleaner environment, fair trade, andpoverty alleviation.

e aging of the Baby Boom generation in the U.S. has also provided a significantnumber of retired but unretiring individuals who see themselves as being active andcontributing for many more years (Freedman, 2007). is group includes many who haveboth creativity and empathy to spare. ey retire from their traditional employment with awealth of knowledge and skills that they can bring to solving social problems asentrepreneurs.

Recognizing social problems is facilitated by the low cost of media such as the internet.Technology allows the media to cover social problems and catastrophic events quickly andintensively. No one can remain isolated from the poverty, conflict and hardships of themajority of the world’s peoples. Neither can one stay ignorant of the effects of consumerismon the environment.

Another factor is the failure of governments -- whether due to lack of resources,creativity or commitment -- to address social problems leaving observable gaps in theprovision of goods and services in many markets (such as health care in the US) along withobservable depletion of common resources (world supply of fossil fuels). is leads toincreasing demand for social goods and solutions to global problems.

A new breed of social entrepreneurs sees opportunity in addressing social problems orthe personal needs of the less advantaged. Some of these social problems result fromeconomic development and spreading wealth, such as pollution, crime, obesity and otherhealth challenges, while others are problems of poverty and disaffection of those “lebehind” by development (see, for example, Leroux, 2005). Social entrepreneurs are


recognizing the opportunity to “make markets” (Casson, 2003) in which one set ofconsumers (those with sufficient discretionary income) will support the consumption ofanother set of consumers (those in need) or will pay “extra” for products and services thatare produced via sustainable technologies.

defining social EntrepreneurshipMany definitions of Social Entrepreneurship have been suggested (see Trivedi, C. 2010a

and 2010b; Dees 1996 and 1998)). For the sake of simplicity, we adopt the definitionoffered by Dees; “Social entrepreneurs are one species in the genus entrepreneur. ey areentrepreneurs with a social mission” (2001:2). is very simple, concise definition has justtwo criteria. First, the individual must be an entrepreneur. is means that most not-for-profits are not engaged in social entrepreneurship, even though their mission may be tocreate social value. Second, there must be a social mission. is means that mostentrepreneurs are not social entrepreneurs, because their mission is to create private value,even though they likely will also create social value (as a spill-over or externality).

Dees further clarifies the definition by pointing out that, for social entrepreneurs,“mission-related impact becomes the central criterion, not wealth creation” (2001:2). It isimportant to make this distinction because there is growing pressure for all firms to engagein “socially responsible” behavior which may include pure philanthropy, compliance withlaws and regulation, progressive human resource policies, use of alternative fuels,development of clean air technology, etc. (McWilliams and Siegel, 2001). It has beensuggested that complying with these demands may be a way to differentiate a firm’sproducts, enhance its reputation, and avoid further regulation (McWilliams et al, 2006).at is, corporate social responsibility (CSR) may be an important element in a firm’sstrategy to create and sustain competitive advantage (McWilliams & Siegel, 2011). Wherethe goal is to respond to the demands of stakeholders such as consumers, employees andcommunity special interest groups, in a manner that creates additional revenues or lowercosts for the firm, we view this as traditional business savvy (McWilliams & Siegel, 2001).Where the primary goal is to create social value and revenues are a secondary, althoughnecessary concern, we view it as social entrepreneurship.

Examples of social entrepreneurship abound, but some are quite notable for impact,innovation and mission. One is Craigslist (www.craigslist.com). is for-profit companywas started in San Francisco by soware engineer Craig Newmark in 1995. One of thelargest web sites worldwide (with a volume of 20 billion page views each month), theprimary purpose of Craigslist is to facilitate “people helping people” by posting classifiedads on line. Most ads are posted free-of-charge and only a modest charge is collected foremployment ads in a few large cities. is innovative use of the internet preceded thedevelopment of social networking sites like Facebook and MySpace by several years and hasa distinctive mission of helping people rather than just providing a convenient socialconnection.

TOMS Shoes (www.toms.com), founded in 2006 by Blake Mycoskie pioneered aconsumer practice of “buy one-give one” to those in need or “one-for-one.” For each pair ofshoes purchased, TOMS gives a pair of shoes to a child in need, so that they can attendschool and walk without fear of infection from soil-borne pathogens. TOMS Shoes is a for-profit company, but the social mission comes before profitability, with revenues supportingthe sustainability of the company so that it can continue its social mission. Mycoskie’s


entrepreneurial innovation was to choose a sustainably produced product that wouldattract socially conscious consumers who have the discretionary income to “buy one-giveone.”

Kiva, a not-for-profit founded in 2004 by Matt Flannery and Jessica Jackley, is notablefor its social mission of alleviating poverty by facilitating micro lending around the globe.By the end of 2010, Kiva had made it possible for over 500,000 individuals in 209 countriesto lend money to over 470,000 entrepreneurs in 50 countries world-wide through theinternet (www.kiva.org). ese entrepreneurs, like Craig Newmark, also recognized a wayto use the power of the internet to solve a social problem (widespread poverty). Using theinternet to collapse geographic distances allows Kiva to connect individual lenders who canloan small amounts (as little as $25) to entrepreneurs who need small, short-term loans. Onthe Kiva site the entrepreneur’s picture, a brief bio and a statement of how they will use theloan is posted so that individual lenders can “connect” with the borrows. Kiva also connectswith Facebook to allow geographically disperse lenders to come together as a group toleverage resources to support common causes.

For socially entrepreneurial firms, we would expect to find that they achieve better socialperformance than firms whose primary mission is not tied to social value. is seemsunassailable but it leaves many unanswered questions, including, how to measure successfor socially entrepreneurial firms, how to measure social value created and how todetermine whether the appropriate amount of resources (such as land, labor, capital, andequipment) are allocated to social entrepreneurship. e last is an important question forfuture entrepreneurs, investors and public policy makers.

mEasuring pErFormanCE

Firm/organization successere is not a single, one-purpose-fits-all, criterion for measuring organization success.

Some organizations are for-profit and some are not-for-profit. Some organizations have amission to create private value and some organizations have a mission to create social value.e criterion for measuring success must “fit” the mission and form of the organization. InFigure 1, we show different combinations of mission and organization.

FigurE 1. ComBination oF mission and organization

For proFit not For proFit

social value Craig’s List Kiva

private value McDonald’s Trade Associations


For all organizations survival is a necessary, but insufficient, measure of success. All must,therefore, secure revenue/funding. is funding, for not-for-profits can come from salesrevenue, donations, grants, loans, etc. For for-profits, funding will come primarily from salesrevenue, investment and loans. Success for a for-profit firm will usually be expressed interms of profitability and growth. Success for not-for-profits will usually be expressed interms of charitable donations and grants, efficiency (in serving clients) and attainment ofthe mission.

A for-profit firm with a mission to create private value (such as McDonald’s) is successfulif it survives, grows and is profitable, all of which require its creating sufficient private valuethrough products (menu items). A for-profit firm with a mission to create social value (suchas Craigslist) is successful if it is has sufficient sales revenue and efficiency to survive and itattains its social mission of facilitating people helping other people.Similarly, a not-for-profit organization with a mission to create private value (such as a trade association) will besuccessful if it survives, usually through membership fees and if it provides the private valuethat is required by the members, including such things as networking and professionaldevelopment opportunities. A not-for-profit with a social mission (such as KIVA) issuccessful if it survives, through donations and grants, is efficient (in matching donor andrecipients) and achieves its social mission-of alleviating poverty worldwide.

traditional measures of organizational performance:For for-profit firms, the primary measures of success are profitability and increase in firm

valuation. Profitability is usually determined by accounting metrics such as return on assets(ROA) and return on equity (ROE) while stock price and book value track increases infirm valuation. ese are all well-defined metrics with accessible data sources. If the primarygoal of a for-profit is to maximize profits, then efficiency is a necessary, but insufficientcondition for attaining this goal. erefore, profit maximizers are assumed to be striving forefficiency, that is, the least resources required to obtain the desired level of output.

Social Entrepreneurs may organize their firms as for-profits but not have profitmaximization as a primary goal. For these firms, attainment of the social mission, such asalleviation of poverty, will be the primary measure of performance, while efficiency andsurvival will be secondary but important considerations ( June, 2007). In reference to firmsthat put profits first or on an equal basis with social performance, this has been referred toas the “double bottom line” -- economic and social (Alter, 2000). However, because thereare no well-defined metrics or accessible data sources for measuring the success of socialentrepreneurial enterprises, it is difficult to determine their relative effectiveness andwhether further investment in them is socially responsible.

For not-for-profits the primary measures of success, in addition to survival, are tied to themission of the organization. ese may be counts such as number of clients or patientsserved, they may be measures such as quantity of pollution reduction or they may beperceptions such as increased feelings of safety, stability and well being. Some of thesemetrics are not well defined and the data sources may not be obvious. However, if the not-for-profits are to survive they have to report some measures of performance. ese measuresof performance should also subsume efficiency; that is, they should take into account theresources used to achieve the mission. Social Entrepreneurs who organize as not-for-profitsface the same difficulties in demonstrating effectiveness and “investment” worthiness.


Corporate social performanceCorporate Social Performance (henceforth CSP) has been defined as “a construct that

emphasizes a company’s responsibilities to multiple stakeholders, such as employees and thecommunity at large, in addition to its traditional responsibilities to economic shareholders”(Turban & Greening, 1996). Carroll (1979) offered an early theoretical model of CSP thatincludes four categories of responsibilities including economic, legal, ethical anddiscretionary.

As the interest in socially responsible firms increased over the last 30 years, sources ofinformation about their social performance developed as well. Firms added informationabout social responsibility to their annual reporting, business media began to reportregularly on social performance (Fortune’s 100 Best Companies to Work For) and someanalysts added social performance to their list of firm information to track.

One of the first firms to offer systematic information on CSP for investors, KLDResearch & Analytics tracks the performance of firms using multiple criteria and developsindices according to the criteria of interest to clients/investors, such as sustainability, valuesand the environment. To create these indices, KLD-now a division of MSCI-collectsinformation from a number of sources, including direct communication with companyofficers, media, research partners, governmental agencies, and public documents such asannual reports. Information is gathered about seven general social issues areas including theenvironment, community, corporate governance, diversity, employee relations, humanrights, and product quality and safety (www.msci.com/products/esg/).

Entrepreneurial social performance (Esp)Currently used measures of CSP are typically not available for entrepreneurial ventures

and are not really appropriate for determining the social performance of organizationswhose primary mission is social benefit rather than profit-maximization. erefore, we areproposing a new concept for measuring the social performance of these innovativeventures, which we call Entrepreneurial Social Performance (henceforth, ESP). Anorganization’s ESP would be a measure of the social value created and would be a guide todetermining future investments (both private and public) in the organization or similarorganizations. Hence, it would inform consumers, entrepreneurs, investors and policymakers.

e value Social Entrepreneurs create for society (social value) has multiple levels.erefore, measuring the total value will be complicated and possibly difficult. On theprimary level jobs are created, products/services are provided and taxes are paid -- whatCarroll (1979) calls economic responsibility. Traditional measures are available fordetermining these primary level contributions to society, including prices of products andservices (where the goods and services are provided free-of-charge, comparison prices canbe used), wages and tax revenues. is is relatively straight forward but represents only aportion of the social value created.

Additionally, some Social Entrepreneurs create value through innovation in thedevelopment or adaption of green or sustainable technologies to avoid harming ordepleting natural resources, which results in a saving of social (or common) resources --what Carroll (1979) calls ethical responsibility. ese savings represent social value, butcalculating the value is not straight forward because there are no market exchanges


involved. ere is an established, albeit imperfect, methodology for determining the valueof such goods. is method, known as contingent valuation, is a survey-based techniquethat is used to determine the value of goods that are not traded in markets. e techniquewas first proposed by Ciriacy-Wantrup (1947) as a way to value soil conservation. Since the1980s the US government has made wide use of the technique to determine the amount ofdamages owed when natural resources are polluted. A prominent example of this use was inthe trial of Exxon for the damage caused by the oil spill in Prince William Sound in 1989(Carson, et al., 2003). It is clear that the method could be used in the reverse direction, thatis, to determine the value of natural resources that are not polluted or depleted.

e technique requires surveying relevant consumers to determine how much they valuethe common good. For example, we can consider a firm that reduces air pollutionemanating from their production facility. To conduct a contingent valuation study, the firmwould first host focus groups of residents of the community to determine how they viewclean air and its value to them. e firm would then analyze the information gathered fromthese residents to construct a written survey that would be sent to all local residents. Fromthe results of the written survey, the firm could estimate the value of the CSR action tosociety (Reinhardt, et al., 2008).

It may be difficult to accurately measure the social value of goods and services based onthe contingent valuation method. is method is based on the assumption that surveyrespondents understand the good in question and will reveal their preferences in this“contingent” market in a similar manner as they would in an actual market. However, manypeople are unfamiliar with assigning a dollar value to an environmental or social good,which could distort the estimate of its true social value. Some conventional economists areuncomfortable with the use of this method, pointing out that there is likely to be afundamental difference between a hypothetical decision (inherent to the use of thecontingent valuation method) and an actual decision. And, if conducted in a rigorousmanner, a contingent valuation study can be expensive and time-consuming, given the needfor extensive pre-testing and survey work. Recognizing these difficulties, the USgovernment still sees the value in these studies because communities must make informeddecisions about how to allocate resources to the best advantage of society and the planet.Encouraging and supporting social entrepreneurs may be one of their alternatives, making itimportant that we develop reasonable measures of ESP.

For goods that are provided through innovative means such as the buy one-give oneconcept of TOMS shoes, the difficulty comes from measuring the social value of the “given”shoes. A first approximation of the value of the given good would be the price of thepurchased good. However, this would under-value the “given” good. e “law ofdiminishing marginal utility” tells us that (all else being equal) the value of the first pair ofshoes one owns is higher than the value of the second pair, which is higher than the value ofthe third pair, etc. Because the purchased pair of TOMS Shoes is likely to be one of manypairs, while the donated pair is likely to be the first pair owned, the “given” pair shouldcarry a higher value than the price of the purchased pair. Add to that the fact the donatedpair increases social welfare beyond the value to the recipient (more educated and healthierchildren), and we can see that the value to society of the donated pair is higher than thevalue of the purchased pair.

McWilliams and Shrader 54

is brings us to the issue of valuing the social aspects, or indirect effects, of theinnovations of Social Entrepreneurs. ese can be very broad and also difficult to measure,including effects such as the increase in stability and civility in a community that interactsthrough Craigslist, the community spirit and personal satisfaction that is created throughKiva lending groups, the increased productivity of the villages whose children receiveTOMS shoes and the like. Additionally, there is social value created for the givers.According to Brooks “Economists and psychologists have found that charitable givingmakes people healthier, happier, and even more financially successful” (2009: 107). Acomprehensive estimate of ESP would include some valuation of these indirect effects aswell.

To develop measures of these indirect effects, we would start with the social mission ofthe enterprises. For example, Kiva’s mission is to alleviate poverty, so we would look togovernment statistics on poverty in the communities that benefit from Kiva loans. ForTOMS shoes we would look to government or nongovernment organization reports oneducational attainment and economic growth in the villages whose children receive TOMSshoes. For technological innovations that improve air, land or water quality, we would lookto data from government and nongovernmental agencies on improved quality.

e Silicon Valley Network, a nonprofit launched in 1992, has generated social capitalthat supports collaboration among participating organizations and across sectors(Squazzoni, 2008). Alvord, Brown, and Letts (2004) report on seven cases of successfulsocial entrepreneurship including Plan Puebla (initiated in Mexico in 1966), GrameedBank (established in 1976 in Bangladesh), and the Highlander Research and EducationCenter (founded in 1932 in the Southern Appalacians). While these investment companiesare themselves social ventures, they would also be excellent sources of data on the socialperformance of the ventures in their investment portfolios.

As noted above, government reports could be a source of information about the value ofsocial entrepreneurship. Governments typically gather and report on criteria such asaverage life span, poverty, literacy, and pollution. Special reports on education and healthmight contain richer information on school attendance, grade attainment, average heightand weight, illnesses, etc. e value of improvements in specific criteria might be used toestimate the value of some social entrepreneurship. In addition, non-profit advocacy groupsalso publish data related to their causes.

In addition, measuring the social performance of a specific venture would requireconducting surveys or interviews of a comprehensive list of stakeholders includingconsumers, community groups, and institutions such as schools (e.g., to measure theenrollment and grade level attainment of children wearing Tom’s shoes).

summarY and FuturE rEsEarCH dirECtionsWe have argued that Social Entrepreneurship is a growing focus of both researchers and

practitioners and that its primary motivation is the creation of social value (Renko, 2011).We have also argued that because social value is the raison d’etre for social ventures,measures of ESP must be different than existing measures of CSP. We have summarizedthese differences in Table 1.


taBlE 1. mEasurEs oF pErFormanCE

Traditional Performance Economic measures (ROA, ROE, ROI, EVA)

Corporate Social Performance KLD ratings, Fortune rankings, etc.

Entrepreneurial Social Economic (compensation, sales Performance and tax revenues)

Contingent valuation (for non-market-traded outputs)

Qualitative (perceptions of increased quality of life, etc.)

We have also shown that measures of Entrepreneurial Social Performance (ESP) have notyet been developed or employed. Consequently, discussions of ESP are usually subjectiveand based on anecdotal evidence from case studies. We surveyed and extended theliteratures on CSR and CSP to suggest basic elements that should be addressed in measuresof ESP.

In this paper we spotlighted the need to measure ESP, we suggested some facets of socialvalue creation that must be addressed in measures of ESP, we suggested measures that couldbe used, and we suggested data sources that might be used. We also highlighted the fact thatbecause social ventures are mission driven, measures of ESP must be mission specific andtherefore are necessarily unique to each social venture. Future research is needed to furtherelaborate on these basic premises, to develop and empirically examine robust measures ofESP that might be common to all social ventures, and to develop and empirically examineventure specific measures of ESP.

rEFErEnCEsAlter, K. 2000. Managing the Double Bottom Line: A Business Planning Guide for Social

Enterprises. San Francisco: Creati ve Commons.Alvord, S.H., Brown, L.D. & Letts, C.W. 2004. Social entrepreneurship and societal

transformation: An exploratory study. e Journal of Applied Behavioral Science,40(3): 260-282.

Banks, J.A. 1972. e Sociology of Social Movements, London, MacMillan. Baron, D. & Diermeier, D. 2007. Strategic activism and nonmarket strategy. Journal of

Economics and Management Strategy, 16: 599-634.Brooks, A.C. 2009. Social Entrepreneurship, A Modern Approach to Social Value Creation,

New Jersey, Pearson Prentice Hall.Carroll, A.B. 1979. A three-dimensional conceptual model of corporate social

performance. Academy of Management Review, 4(4): 497-505.Carroll, A.B. 1991. e pyramid of corporate social responsibility: Toward the moral

management of organizational stakeholders. Business Horizons, July-August: 39-48.


Carson, R.T., Mitchell, R.C., Hanemann, M., Kopp, R.J., Presser, S. & Ruud, P.A., 2003. Contingent valuation and lost passive use: Damages from the Exxon Valdez oil spill. Environmental and Resource Economics, 25: 257-286.

Casson, M. 2003. e Entrepreneur: An Economic eory, 2nd edition. Massachusetts, Edward Elger.

Ciriacy-Wantrup, S.V. 1947. Capital returns from soil conservation practices. Journal of Farm Economics, 29: 1181-1196.

Dees, J.G. 1996. e Social enterprise spectrum: Philanthropy to commerce, background note. Harvard Business School Publishing, 396-343

Dees, J.G. 1998. e meaning of social entrepreneurship. Kaufmann Center for Entrepreneurial Leadership and Ewing Marion Kaufmann Foundation. Also available as 2001. e meaning of “Social Entrepreneurship,” downloaded from www.caseatduke.org.

Doh, J.P., Howton, S.D., Howton, S.W., & Siegel, D.S. 2010. Does the market respond to an endorsement of social responsibility?: e role of institutions, information, and legitimacy. Journal of Management, 36(6): 1461-1485.

Drucker, P. 1979. e Practice of Management. London: Pan Books.Freedman, M. 2007. Encore: Finding Work that Matters in the Second Half of Life, New

York, PublicAffairs. Freeman, R.E. 1984. Strategic Management: A Stakeholder Approach, New York,

Basic Books. Leroux, K. M. 2005. What drives nonprofit entrepreneurship?: A look at budget trends of

metro Detroit social service agencies. e American Review of Public Administration, 35(4): 350-362.

McWilliams, A. & Siegel, D. 2000. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21, 603-609.

McWilliams, A. & Siegel, D. 2001. Corporate social responsibility: a theory of the firm perspective. Academy of Management Review, 26: 117-27.

McWilliams, A., Siegel, D. & Wright P.M. 2006. Corporate social responsibility: International Perspectives. Journal of Business Strategies, 23: 1-7.

McWilliams, A. & Siegel, D. 2011. Creating and capturing private and social value: Strategic corporate social responsibility, resource based theory and sustainable competitive advantage, Journal of Management, 37(5): 1480-1495.

Reinhardt, F., Stavins, R. & Vietor, R. 2008. Corporate social responsibility through an economic lens. Review of Environmental Economics and Policy, 2(2): 219-239.

Renko, M. 2011. Early challenges of nascent social entrepreneurs, Entrepreneurship eory and Practice, forthcoming.

Schumpeter, J.A. 1947. e creative response in economic history. Journal of Economic History, 7(2): 149-159.

Siegel, D. S. 2009. Green management matters only if it yields more green: An economic/strategic perspective. Academy of Management Perspectives, 23(3), 5-16.

Squazzoni, F. 2008. Social entrepreneurship and economic development in Silicon Valley: A case study on the joint venture: Silicon Valley Network. Nonprofit and Voluntary Sector Quarterly, 38(5): 869-883.


Trivedi, C. 2010a. Towards a social ecological framework for social entrepreneurship. Journal of Entrepreneurship, 19(1): 63-80.

Trivedi, C. 2010b. A social entrepreneurship bibliography, Journal of Entrepreneurship,19(1): 81-85.

Turban, D.B. & Greening, D.W. 1996. Corporate social performance and organizational attractiveness to prospective employees, Academy of Management Journal, 40(3): 658-672.

Waldman, D.A., Siegel, D., and Javidan, M. 2006. Components of CEO transformational leadership and corporate social responsibility. Journal of Management Studies, 43: 1703-1725

Zyglidopoulos, Z.C., Georgiadis, A.P., Carroll, C. & Siegel, D. 2009. e evolution of corporate social performance and the role of media visibility, available at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1514385

21

Preparing and Complying with InstitutionalReview Board Protocols for Integrated

Research and Entrepreneurship Ventures in Developing Countries

Carey Bell, Rachel Dzombak, Tara Sulewski, and Khanjan Mehta

CarEY BEll is a J.D. candidate at the University of Pennsylvania Law School with an expected graduationdate of May 2014. Email: [email protected]

raCHEl dzomBak is pursuing a B.S. in Bioengineering at the Pennsylvania State University with anexpected graduation date of May 2012. Email: [email protected]

tara sulEwski is a graduate student in the MNE Department and an Instructor of Engineering Designat the Pennsylvania State University, 213W Hammond Bld, University Park, PA 16802, Telephone:419.367.9392 Email: [email protected]

kHanJan mEHta is the Director of the Humanitarian Engineering and Social Entrepreneurship (HESE)Program at the Pennsylvania State University, 213U Hammond Building, University Park, PA 16801.Telephone: 814.863.4426 Email: [email protected]

aBstraCtIncreasing numbers of colleges and universities are designing academic research and

entrepreneurial engagement programs to engage students in developing solutions foralleviating global poverty. While these efforts have potential for dramatic positive impact,they can also result in enormous and unintended negative consequences. To guard againstthis, Institutional Review Boards (IRBs) evaluate proposed research projects to ensure thesafety of participants and their communities as well as the scientific and ethicalappropriateness. e Humanitarian Engineering and Social Entrepreneurship (HESE)Program at Penn State is engaged in several student ventures that integrate teaching, research,and entrepreneurial outreach to educate entrepreneurial global citizens and create sustainablevalue for developing communities. is paper shares insights into planning and executingIRB-approved international research ventures with similar programs at other universities.Based on their experiences conducting multiple IRB-approved research ventures in Kenya, theauthors provide recommendations for navigating the process of gaining IRB approval andconducting research in developing communities as well as discuss some of the larger conflictsthat researchers and entrepreneurs will have to face in their own ventures.



introduCtionSignificant and unchecked levels of human deprivation in developing communities

represent one of the world’s greatest challenges. Almost half the world’s population lives onless than $2.50 per day. Millions of people do not have access to clean water, sufficientamounts of food or adequate health care services (Shah, 2010). Engineers have the power toameliorate this situation by melding technological innovation with contextually appropriatedesign. However, 90% of the world’s engineering efforts currently impact only 10% of theworld’s population (Smithsonian, 2010).

In an effort to address this discrepancy and foster innovation and global awareness in theirstudents, increasing numbers of colleges and universities are designing academic programsthat engage students in developing solutions to these complex problems. e collective powerof these efforts has the potential to create dramatic, positive global impact. However, thesesame ventures, regardless of their intentions, also have the potential to result in negativeconsequences in the communities where they are undertaken. Lack of familiarity with, andthe inherent unpredictability of, these foreign environments can further complicate thedesign and implementation of integrated research and outreach projects.

Universities and research institutions have set up Institutional Review Boards (IRBs) toevaluate proposed research projects involving human participants for scientific and ethicalappropriateness. is paper discusses the issues encountered, lessons learned, and conflictsexperienced by a team of Penn State students while designing and implementing four IRB-approved research and entrepreneurship ventures in Kenya in the summer of 2010.

One team, comprised of both students and healthcare professionals, field-tested Mashavu:Networked Health Solutions, a telemedicine system that connects rural communities withdoctors. Another team field-tested a cell-phone based social networking system calledWishVast: Building Trust and Social Capital using Cellphones. A third team constructedvarious appropriate technologies including low-cost anaerobic digesters, greenhouses andirrigation systems. Each project had several research studies associated with them, with thepurpose of informing the design of the system and generating and sharing knowledge toencourage and inspire more entrepreneurs. Besides these integrated research andentrepreneurship efforts, two research-only efforts were also undertaken. Both of the researchprojects were related to entrepreneurship among street-dwelling youth in the urban area ofNairobi. Our primary host in Kenya was the Children and Youth Empowerment Center(CYEC), a public-private organization that cares for former street-dwelling youth in Nyeri,Kenya. Several CYEC youth between the ages of 18 and 26 worked shoulder-to-shoulderwith the Penn State team.

similar EFFortsIn recent years, several academic programs have emerged to help meet the needs of

underserved populations. Academic programs like Humanitarian Engineering and SocialEntrepreneurship at Penn State are also on the rise. e Humanitarian EngineeringLeadership Projects program at Dartmouth, the D-Lab at MIT, the HumanitarianEngineering program at the Colorado School of Mines, Global Resolve at Arizona State, andthe Mortenson Center in Engineering for Developing Communities at the University ofColorado at Boulder are some examples. Students and faculty from these programs have beeninvolved in numerous ventures such as working to provide clean water in regions of Tanzania

23Bell, Dzombak, Sulewski, and Mehta

and Kenya, generating solar power in Belize, designing solar ovens and drip irrigation systems,and producing hydroelectricity and biogas in Rwanda (Dartmouth HumanitarianEngineering Projects, 2008; MIT: About D-Lab, 2010; Humanitarian Engineering:Colorado School of Mines, 2010; Arizona State University, 2011). Several programs integrateapplied research initiatives with the entrepreneurial ventures. Research projects span frominnovative technologies to appropriate business models, effective stakeholder managementstrategies and design tools.

In an effort to guide researchers working in developing communities, Desai & Potter(2006) and Scheyven & Storey (2003) provide introductory guides to the numerouspractical, ethical, and contextual issues of performing research in developing communities.Oakes (2002) and Gordon (2003) identify problems typically encountered by internationalresearchers seeking IRB approval and ways to overcome them. Cargo & Mercer (2008)evaluate existing participatory research literature and provide recommendations. is paperbuilds upon these efforts by sharing insights into issues encountered in the IRB approvalprocess and practical challenges encountered while conducting the studies in East Africa. eauthors believe that the IRBs serve a very important function by protecting participants andhelping researchers preserve the integrity of their research endeavors. At the same time, theIRBs are not fundamentally designed for developing country contexts and hence presentunique challenges that researchers must navigate.

tHE institutional rEviEw BoardInstitutional Review Boards (IRBs) are “responsible to review and approve, require

modifications in, or withhold approval of research involving human participants.” An IRBcommittee is composed of five or more individuals of diverse backgrounds. ough typicallya part of a research organization such as a university, these bodies operate independently fromtheir parent structure and in compliance with federal regulations in order to maintainlegitimacy (Oakes, 2002).

History of irBse initial drive for human research protections arose out of the horrors of Nazi

experimentation revealed at the Nuremberg trials following WWII. In the wake of the trials,the Nuremberg Code was draed to set guidelines for human research (Oakes, 2002). In1964, the World Health Organization endorsed the use of review boards to protect humansubjects from risk in the Declaration of Helsinki (Hamburger, 2004). Pressure for humansubject protections in the US grew as the public became increasingly aware of unsafe andunethical research practices then in wide use, particularly with the exposure of the Tuskegeesyphilis study. us, in the 1970s, the US government began to require research studies to begranted IRB approval in order to receive federal support (Hamburger, 2004). Since then,IRBs have proliferated and are now a mainstay at most research institutions (Oakes, 2002).

Benefits of irBsFirst and most obviously, IRBs help ensure the safety of human research participants, a

consideration which should be foremost in the mind of any researcher. Furthermore, IRBshelp to standardize research methods and protocols for addressing ethical dilemmas. IRBapproval lends credibility to research and helps teach students proper research methods.Despite numerous efforts on the part of a team of investigators, subject risks and liabilities


can find their way into the research design unnoticed. In the case of international research,attention to cultural norms and local authority structures in experiment design is paramountand can be improperly treated due to the researcher’s unfamiliarity with the context. Whenfaced with such diverse constraints, fundamental human participant rights such as voluntaryinformed consent can be compromised. IRBs exist as a check against such naturally occurringlapses in judgment. A simple but significant issue is that IRBs are responsible for appropriateconduct of research, and are not directly providing oversight for publication.

e many current controversies surrounding practices in human subject research in thedeveloping world point to the continued need for rigorous ethical evaluation of proposedprojects. e debates over proper research participant compensation and the use of placebo-controls in clinical trials like those undertaken by US Centers for Disease Control andPrevention and National Institutes of Health sponsored trials of Zidovudine serve as primeexamples (Shaffer, et al., 2006; Levine, 1998). By applying uniform regulations drawn largelyfrom federal guidelines, the IRB serves to eliminate discrepancies in the application ofresearch protections which, if unchecked, could ultimately harm human subjects (Oakes,2002).

e exact number of IRBs currently in existence is unclear; however, Oakes cites Amdurand Bankert as putting the figure at over 4,000 in the year 2002 (Amdur & Bankert, 2002;Oakes, 2002). e growing use of IRBs as a means of research approval and standardizationlends increased credibility to IRB- approved research studies while casting doubt on thosewithout it. A 2001 report by the National Bioethics Advisory Commission called for an endto government funding of any clinical research in the developing world that is not approvedby an ethics committee or fails to conform to a number of Belmont Report inspired, IRB-likeregulations (NBAC, 2001). At Penn State, any research requiring IRB approval, conductedwithout securing such approval, is not generally publishable. Such an act might jeopardizefuture use of the data and also lead to disciplinary sanctions against the researchers. oughthere are some situations where the data might still be used, it is at the discretion of the IRB,and cannot be taken for granted. IRB approval is thus a critical step in the legitimization ofany research effort. Additionally, by guiding students step by step through the design of aresearch study, the IRB process helps teach students the fundamental considerations involvedin that process. As a result of the pre-planning required by the IRB process, studies are betterdesigned, and for those being conducted internationally, more ready for implementationimmediately upon arrival in the host country.

Critiques of irBDespite the long and positive history of IRBs in guiding research and protecting human

subjects, much of the literature surrounding them focuses on ways the regulatory efforts ofthese committees impede research, particularly in the social sciences. Part of this problemstems from the fact that the regulations upon which IRBs are based were written bybiomedical researchers who consider only applications within their own field of research. issort of regulation is considerably less applicable to social science research (Oakes, 2002).

Some researchers fear that the labor-intensive IRB process could have a “chilling effect” onsocial science investigation by thwarting efforts at research, particularly the efforts ofundergraduate and graduate students who find themselves under strict time constraints(Barzilai, 2007, p. 6). e IRB approval process can take months and in some instances citedby Barzilai (2007), years. is could be due to the nature of the study, or the responsiveness ofthe researchers and/or the IRB. As a result, students might shy away from research for which


they feel they cannot gain timely approval. Attempts to circumvent the IRB either by alteringresearch methods or ignoring it altogether can create further problems through less accurate,less contextually and ethically appropriate research (Barzilai, 2007).

research in developing Communitiesere is growing concern that research undertaken by industrialized country organizations

and institutions in developing communities exploits participants. Researchers in both the USand developing countries have expressed concern that US IRBs are too procedurally-orientedand focus insufficiently on content. Many cite IRBs’ frequent insistence on individual’swritten consent as an example. Researchers have also questioned whether US IRBs aresufficiently familiar with the cultural contexts in these communities to effectively guideresearch initiatives (Hyder, 2004) (Kass, Dawson, & Loyo-Berrios, 2003).

Related works have discussed many of the difficulties that can arise while conductingresearch in developing communities. Anokwa et al. detail the most common challengesencountered by a group of nine North American researchers in developing communities.Chavan (2005) emphasizes the importance of contextually appropriate design and Russo &Boor (2003) provide insights into communicating through translation. Other commonlyhighlighted issues include: written vs. oral consent, levels of risk, use of audiotapes,recruitment of subjects, vulnerable populations, and de-identification and destruction of data.

navigating tHE irB proCEss For rEsEarCH in dEvEloping nations

In many ways, the frustration with the IRB process stems from an incompleteunderstanding of it (Oakes, 2002). is section details key points in the IRB-approvalprocess.

irB structures and timelinee IRB process can be extremely time-consuming. For instance, IRB committees meet on

a pre-determined schedule and review a number of studies each time. e frequency ofmeetings depends on the size and nature of the institution. As a result, reviews andmodifications may take weeks or months, not days. is is particularly true in the springsemester when IRB committees receive large numbers of submissions for research to takeplace in the summer. It is best to begin the IRB process as early as possible to ensure timelyapproval.

research approval at the local levelAs per federal regulations, the IRB application requires researchers to explain how they will

gain local approval for the proposed research. An IRB will ask for documentation of thisapproval prior to the departure of the research team. is requirement can prove exceedinglydifficult as many cultures rely largely on oral communication and face-to-face meetings thanon written letters and email. ough some countries have their own IRBs, these are devotedto medical research and the timelines and procedures for social science research may, as aresult, require several months or years. Many of these IRBs do not review social scienceprotocols.


Institutional IRB approval also requires documentation of research approval from any localIRB or ethics committees and mandates compliance with any locally-established researchprotocols. In the absence of any such local body, IRB will require letters of collaboration fromlocal partners. Some institutions may require letters of local collaboration in addition todocumented compliance with the requirements of local protocols. Our projects received IRBapproval only aer collaboration letters from our local partner - the Children and YouthEmpowerment Center (CYEC) were submitted. e CYEC obtained verbal approval fromappropriate authorities in the Ministry of Public Health and Sanitation before providing thesupport letters to us.

Conducting appropriate and ethical research requires going beyond IRB stipulations.Although we had already obtained verbal consent for the study through our partner, our firststep in Kenya before conducting any research was to meet with local and provincialgovernment officials. Details of the studies were discussed with several local, district andprovincial chiefs. A letter of approval, draed by our team was edited and signed by theseofficials and then forwarded to all local entities. is was the actual protocol for localapproval – which could be conducted only when we were actually on site and ready toconduct the study.

letters of CollaborationLetters of collaboration are required to document the understanding and willing

cooperation of research partners in the host country. is documentation is oen difficult toobtain since the required level of understanding and cooperation can be difficult toadequately convey through a letter. e letter must bear an original signature and that mayprove problematic as well. Most US institutional IRBs do not oen realize that developingcountries have unreliable courier and postal services. When working in rural, developingcountry communities, it may take a very long time to get a letter with an original (ink)signature. Oen, local authorities will expect to meet with researchers once they arrive in thecountry, rather than having to sign-off on a project months in advance. e IRB must also beassured that the local collaborator possesses adequate authority to consent to the proposedresearch and provide assistance to the researchers. A classic catch-22 situation happens whenthe IRB needs letters from local partners while the local partners are waiting on letters fromIRB. In a situation like this, the IRB might be able to grant approval with stipulations that thenecessary letters be turned in at a later date, but before commencing the research study.Providing detailed information about the larger picture of the study is likely to alleviate IRB’sconcerns and increase the likelihood of approval.

We obtained one letter of support from our local partner at the primary research site. Wewere unable to provide additional letters of support because, at the time of IRB application,we were unsure of the additional locations in which we might be working. Our team hadpreviously conducted research studies in several other countries and we knew it is customaryfor the local partners to request us to dra the support letters and provide them in a ready-to-sign format. Typically, the local partners do not seriously review the research protocol or offersuggestions; but merely conduct a perfunctory review, then sign and return the letters.

location of researchIRB requires that the location of proposed research be provided along with relevant

contact information. Determining research locations oen requires additional coordinationwith local partners aer arrival in the host country. In these instances, providing an exact


location in advance can be impossible. We knew prior to departure that we would be workingextensively at a specific site in Nyeri and we provided that information in our proposal.However, we knew that we would be holding clinics in additional locations to reach a largerand more diverse sampling of participants. Our application stated that we would beconducting research in two additional locations and was approved. Without one concreteaddress and local contacts, it is doubtful that the protocol would have been approved. eIRB is likely to approve studies where altering the exact location (within a larger defined area)does not affect the nature of the study and the participants, or does not lead to a substantialchange in the demographic or the topic.

Biomedical devices and researchDepending on the kind of biomedical device incorporated into research, the IRB might

require that a non-biased, non-affiliated expert write a letter certifying the device(s) as low-risk. A key factor is whether the researchers are using FDA-approved devices in their intendedway. In our case, an electrical engineer provided validation of the medical devices used as partof the telemedicine system. e IRB will also question whether or not a device requires FDAapproval to be included in the study. We were initially required to gain FDA approval for ourdevices. is requirement was removed once we explained that we would be using FDAapproved devices to support our own low-risk, proof-of-concept devices and that healthinformation provided to participants would always be drawn from the FDA-approvedcommercial devices.

data storage, de-identification, and disposalIRB requires that proposals describe the exact means of data storage, de-identification and

disposal. Researchers are allowed to keep the data indefinitely, with or without identifier.However, the researchers must make their intent very clear and provide sound rationale.ese are seemingly small issues but procedures must be put in place to secure IRB approval.We detailed all of this information, including the building and room number of the computerat Penn State where the data would ultimately be stored. is is particularly challenging whenlarge student teams need access to low-risk non-identifiable data.

photosAs part of the data disposal procedure, IRB requires that all photos taken of research

participants be disposed off as well. However, photography is a standard expectation ofinternational student ventures. ere were numerous instances in Kenya where students tookpictures of participants outside the context of the research, either for personal reasons orbecause the participants themselves requested them. ese photos represent a priceless part ofthe student’s international experience. With the growing popularity of camera-phones, thereis virtually no way to regulate student (and participant) photography and ensure that allpictures are destroyed. Participant permission for using photographs in publications must besought separately than the IRB recruitment and consent processes.

managing risk of protocol rejectionIf research projects contain multiple studies, we suggest dividing the activities across

multiple IRB applications. By decoupling the sub-projects across multiple protocols, the riskposed by the rejection of a single research protocol is minimized. Rather than an entireproject being disapproved, only one portion of it might be rejected. Since we were working


with a relatively short (two month) timeline, we prepared separate IRB applications for thedifferent portions of our projects depending on the level of risk involved. While many ofthese applications were approved early on, one was not approved until the day of ourdeparture. Had that application not been approved, we would still have been able to continuewith the other aspects of our studies. is would not have been the case had we submitted asingle IRB application for our combined research initiatives.

meet with irB staff prior to application An initial face-to-face meeting will help identify any possible issues with your protocol.

Eliminating these issues before a protocol is submitted for review can save valuable time.Furthermore, face-to-face meetings provide researchers with an opportunity to allay the fearsand concerns of IRB reviewers. A major source of confusion is the research proposal that isuploaded with the IRB protocol. It is common to have a proposal “spun” in various ways toseek funding from organizations with different objectives. In that case, the research protocolmight not conform completely to the proposal and could lead to confusion and incorrectassumptions. Simple terminology and avoiding jargon help the IRB understand the intentand associated risks better. For instance, initially the IRB assumed that we planned to havesick patients participate in the telemedicine clinic. is would not have qualified it as a low-risk study. e protocol would then have gone through a full review and requiredclarifications on patient treatment, access to medical professionals, etc. In fact, we intended toprovide personal health information to healthy patients only. Once this was explained, and aprotocol was designed to provide services for any sick individuals outside the research process,the protocol was approved. e IRB staff was extremely helpful in advising us on the course ofaction. e face-to-face meeting and explaining the potential benefits of the studies to theparticipants helped establish us as socially responsible researchers.

issuEs EnCountErEd wHilE ConduCting tHE studiEs in kEnYa

recruitment and ConsentConsent forms and recruitment scripts are two critical parts of the IRB protocol. For each

portion of a study involving a participant, the individual has to be recruited and provided fullinformation about the study. e participant must understand the information presented andagree to participate. Obtaining written consent is a general standard of IRBs, but in theKenyan context it was not appropriate to request signed consent because it would not beviewed as normal or appropriate in East African culture (Gordon, 2003). Both Gordon andOakes in their discussions of informed consent mention the Euro-centricity of the concept ofwritten consent (Gordon, 2003; Oakes, 2002). In the East African context, the use of writtenconsent would have generated a lot of trust issues. Written and signed documents are mostoen associated with land titles and other legal documents, so research participation formswould have been treated with suspicion, especially considering that they would have beenprinted in English, the second or third language of those individuals recruited for the study.

Because of these cultural differences, we used verbal consent rather than written consent. Aletter from our local partner helped make the case for verbal consent to the IRB. e processwas that aer someone went through the recruitment procedure, the investigator reiteratedthe terms of the study and asked “Do you agree to take part in this study? A “yes” constituted


consent. is process was conducted in English, and when necessary, was facilitated by atranslator to ensure full participant understanding.

As per IRB requirements, the recruitment script had to be read verbatim. e approvedrecruitment script was written in very formal English, as is the norm for research conductedin the United States. However, the Kenyan research participants, even those who spokeEnglish very well, oen did not fully understand the recruitment script but agreed toparticipate anyway. is problem became clear almost immediately as individuals arrived atthe first stages of the clinical appraisal still unsure of exactly why they were there. Ifparticipants do not have a clear idea of the research being conducted and their role in it, thenthe principle of informed consent is violated and participants are being taken advantage of.To address this problem, aer reading the official script, the team began to paraphrase therecruitment script in simpler understandable English to explain the study to each participantindividually. e participants then understood our goals and their role in our research. As aresult, they began to ask questions and offer feedback even before they went through theMashavu system itself. e simple verbal explanation significantly improved trust andcommunication and was absolutely necessary in order to adhere to the standard of voluntaryinformed consent.

Challenge of interviewing individualsIn some situations, it was particularly difficult to interview individuals because oen a

crowd would immediately surround the researcher. As a result, questions posed to anindividual were invariably answered by the group. Suggestions to sit down in a restaurant tobe interviewed were not heeded. e participants, in one case, insisted that they livedtogether and were friends, and should therefore be interviewed together.

Comfort with conducting medical researchQuestions of a personal nature that would be essential to ask in a real-world telemedicine

system proved difficult and awkward for students to ask. e doctors we were working withneeded this information, but the students asking those questions were uncomfortable doingso. We resolved this situation by having the doctors ask those questions if they felt themnecessary following their examination of the participants’ health information. In a true trialof the system, the kiosk worker would have asked these questions, but due to the nature ofour research study, this was not feasible.

language BarrierWe realized very quickly upon our arrival in Kenya that we would require intermediaries

who spoke both English and the local language to conduct our research. Our belief prior toarrival, and one that was largely validated, was that a majority of the younger Kenyans spokeEnglish. However, we did not consider that we would be hosting clinics primarily onweekdays, when most young people were at work or school. is meant that our primarydemographic for these clinics shied from younger, English-speaking community membersto older individuals from rural areas who spoke significantly less English.

Youth affiliated with our local partners facilitated the interviews but a number ofcommunication issues arose. At times, the patient would respond to a question with a longanswer, sometimes speaking for over a minute, and the students would translate the responseas “e patient said he liked it.” One might expect that in the face of this problem,translation would take place sentence by sentence, but this proved a difficult concept toexplain and even more difficult to implement. Medical and technical terms were also a source


of difficulty. Translators were at times unable to come up with an equivalent term for somesymptoms during the medical history portion of the exam or had difficulty describing theexact nature of a biomedical device. Any data obtained through incomplete or inaccuratecommunication was not included in our final data set.

Community recruiter translation issueTo mobilize research participants we met with local community leaders, explained our

project and asked that they help us recruit participants. ese community leaders weretypically very excited about the project and helped to spread the word about it. However, theMashavu message was now migrating from English into Swahili and other local languagesthrough multiple intermediaries. As a result, we had numerous potential participants arrivewith a somewhat inaccurate idea of why they were there. e word ‘clinic’ was oen used todescribe our activities, both by us and by those spreading the word about Mashavu. However,‘clinic’ also implied doctors and medicine to local residents. ough two US doctors (withpermission to practice in Kenya) and a local medical professional were with us at all times, ourpurpose was not treatment. is fact was not well communicated to people prior to theirarrival. We solved this problem by communicating to everyone upon their arrival the exactnature of the project, their potential role as participants and the potential benefits of theMashavu telemedicine system.

Clinic logisticsOen our community recruiters were so effective that more potential participants arrived

at the telemedicine clinic than we had time or space to accommodate. Because this situationhad occurred in previous years, we prepared in advance for this possibility. Each step of theclinic process, from where participants would line up to the timing of the post-clinicinterviews, was planned and streamlined for efficiency. Even with careful preparation,circumstances required that our plans be continuously modified. For example, we had initiallyset up the two telemedicine booths with only a single person to collect and record medicalinformation. is allowed only two participants to have their medical information collectedand transmitted to a doctor at one time. In our first clinic we changed our approach andemployed multiple operators so that each medical device was continually in use thus allowingus to see considerably more people.

However, even with these measures in place, a situation arose at one clinic, where morepeople arrived than we could screen in a single day. We informed attendees, some whom hadtraveled a significant distance for medical advice, that we would not be able to see them.Ultimately, we decided to forgo any further research data collection and focus exclusively oncollecting participant health information and transmitting it to the doctors who could thenprovide health recommendations. While we did not collect nearly as much information thatday as we could have, we were able to connect every participant who arrived with a doctor.is approach also built more trust with the local partners by reinforcing that the socialimpact was more important to us than the research studies.involvement Criteria

Completing an IRB protocol requires a detailed description of exactly who will participatein the proposed study. Children under the age of 18, currently incarcerated persons, sickpeople, or pregnant women are specially protected and require additional detailedexplanations to justify their inclusion. e age of majority varies across cultures and countriesand hence the age threshold for parental approval varies too. In many cultures it is customaryfor a community elder or person in authority (e.g. tribal chief or school headmaster) to give


approval for working with minors in a school or community setting. We agreed not toinclude any of these protected groups in our studies. We realized that the stipulation that noparticipants should be under the age of 18 would create some issues because many of theelderly participants are also the primary caregivers for the children in their (extended) family.ese elderly participants would bring the children over with them and expect that theyreceive a consultation too. Declining the children participation altogether would have beenconsidered impolite. To solve this problem, we wrote into our IRB proposal that we would setup a children’s clinic where they could participate in a minor activity and no informationwould be recorded. is simple, IRB-approved solution worked without any problems.

research participation incentives Research incentives like material compensation and the opportunity to advance knowledge

can be inherent or incidental to participation. One contentious form of incentive is financialcompensation. No federal guidelines exist in regard to financial compensation for researchparticipation and individual institutions have varying regulations. In most contexts,participants expect some form of compensation for participation. Local custom oen dictatesthat a beverage or a meal be shared as part of the (data collection) conversation. Manyparticipants expect some sort of tangible benefit for their time and insights. Typically, weprovided beverages as a part of the participation experience and we also provided allparticipants with a notecard detailing their health measurements. We did not provide directfinancial compensation.

Only two issues arose with research compensation over the course of the data-collectionphase. Students from a local university that participated in the studies expected to receivesome sort of letter or certificate documenting their participation. Another situation occurredwith a student conducting interviews with street youth in Nairobi. e researcher would offerto share a soda with the youth while the interview was being conducted. Oen theinterviewee would request alcohol instead, as the price was similar. In these instances theresearcher explained that university regulations would not allow him to purchase the localbrew. In no case did this prove to be a significant barrier to the interview, but it represents animportant contingency not considered in the design and planning phases of the research.

largEr ConFliCts and CHallEngEs“Hit-and-run” research

Research conducted in developing communities has increasingly been accused of being“hit-and-run,” meaning that researchers “parachute in, conduct research on communitymembers, and leave without providing any information or assistance” (Cargo & Mercer,2008, p. 326). Critics also contend that developing countries are oen chosen as the site ofresearch because researchers are subject to decreased legal and financial liability, cheaper costsof conducting research, and less scrutiny in regards to safety and ethics (Mugerwa, Kaleebu,Mugyenyi, & Kotongole-Mbidde, 2002). In such instances, developing communities are notresearch partners, but are the victims of exploitation (Zimmet, 2000). Even when the researchsite is chosen because ultimately the research aim is to benefit that community, it is stillimportant that the host community be engaged in the research process and benefit in thetransfer of knowledge and experience (Cargo & Mercer, 2008). Additionally, communityengagement will increase the likelihood that the host community will embrace and utilizeresearch findings and applications (Cargo & Mercer, 2008).


Our research initiatives in Kenya are based upon a four-year collaboration with our primarylocal partner and seven years of engagement in the country. Staff from the partneringorganizations advised us in the development and implementation of the research projectswhile Kenyan youth assisted in the research projects, as well as in the entrepreneurial ventures.Community members who were engaged in the studies saw the potential short-term andlong-term benefits and were happy to participate. e community members trusted our localpartners which helped open doors for our team. e trusting environment and anunderstanding of the perceived benefits helped us connect with more participants and getmore accurate and valid data from them. On the other hand, we have witnessed first-handsituations where participants get agitated because several researchers come knocking on theirdoors. e people do not know who the researchers are, how their communities wouldbenefit, or if their responses might have negative consequences. Situations like these are fairlycommon in some of the well-known slums like Kibera in Nairobi. One of the researchparticipants estimated that on any given day, at least fiy groups of researchers are conductingsome sort of survey in the slum. Such studies have a negative effect on the local people’sinterest and comfort level in participation. It also brings the validity of the data and ethicalappropriateness of the research endeavor into question. e situation is further compoundedwhen a substantial amount of money is paid to participants as compensation. How many ofthese research endeavors lead to any benefits for the people or result in useful publications?

e strictures of the irB and those of a student research Budget Conforming strictly to IRB regulations on the budget of a student venture is virtually

impossible. In spite of numerous grants and a substantial amount of self-funding, we foundthe goals of our research to be incompatible with the demands of the IRB. A perfect IRBapplication would have detailed exactly where all of our research would have taken place andexactly who would participate and would include letters of support from all local officialsacross all the research sites. Due to cultural constraints previously mentioned, this would haverequired having a team in Kenya to conduct face-to-face meetings with collaborators andsecuring their written support of the project prior to receiving IRB approval and schedulingthe remainder of the team’s activities. Even then, officials are not likely to have signed supportletters until the full team was in Kenya and a meeting had been held. Once we arrived inKenya we did receive these letters of support and wholehearted collaboration and support ateach of our research sites, but to provide this documentation prior to our departure would nothave been feasible.

e IRB asks if researchers speak the same language as participants. We responded yes,bearing in mind that we intended to communicate in English. However, English is not thefirst language of most Kenyans and this poses communication difficulties, especially when anyjargon is involved. All documents provided to participants should have been ideally translatedinto Kiswahili and the three local languages of the regions we intended to visit. Finding fluentspeakers of both English and each of these languages who would be willing to help is animpossible and expensive task. Collecting appropriate and valid data for the study andperfectly protecting participants at the same time are extremely difficult to achieve on ashoestring budget.

e Collision of Circumstance and ‘appropriate research’Striking a balance between acting appropriately in an international context, conducting a

scientific research experiment, and advancing an entrepreneurial venture can be a verycomplicated task. Each aspect is equally important and needs to be performed with the same


amount of integrity. An IRB protocol strictly outlines the proposed research method.However, in the developing world, chaos and entropy pervade any sort of researchexperiment. Conditions and circumstances influencing the research effort change constantly.Despite all attempts to adhere to the plan outlined in an IRB protocol, it is not alwayspossible.

Entrepreneurial ventures are chaotic by nature, requiring fast adaptation to changingcircumstances and demands. Our venture strategy was recalibrated on a daily basis dependingon the accomplishments of the day and partner dynamics. We frequently found ourselvesunder pressure to adapt the IRB protocol in order to gather relevant and useful data.However, IRB requires that any changes to the research plan must be approved by them - atime-consuming process. In the middle of a clinic, circumstances oen arose that required usto alter the procedure or risk neglecting the needs of clinic participants. e incredibleflexibility required by entrepreneurial ventures and developing country research endeavorsdirectly contradicts the stringent requirements of the traditional research methods and theIRB.

For example, although we had many partners and connections in Kenya prior to our arrival,the process of making more local connections continued aer we were in Kenya. As a result,we had an opportunity to hold clinics in more locations than just the CYEC and the twoother sites approved by IRB. is would have allowed us to field-test the telemedicine systemfurther and to collect a greater number of responses from a more diverse sampling. From aresearch and business perspective this would have been a positive outcome, but it was notIRB-appropriate. Primarily due to our interpretation of IRB limitations, we were ultimatelylimited to three locations. However, aer return from Kenya, while deliberating with IRBstaff, we realized that we could have held more clinics because we were not altering the studyin any substantive manner. e IRB’s function is to protect all research stakeholders, whichincludes participants, researchers, the institution, etc. e IRBs have a considerable amount ofwiggle room in evaluating and approving protocols. It is essential for researchers to lay out thebig picture about the study and demonstrate a thorough understanding of the culture, abilityto identify risky issues, the probability of risk and impact.

ConClusionis paper presented insights and lessons learned from integrated research and

entrepreneurship endeavors in developing communities. Several larger themes emerge: theimportance of contextual considerations in any research effort within a foreign culture, theimportance of regulatory oversight, and the inherent contradictions and challenges of theIRB system. A complementary challenge is the lack of accessible educational materials thateducate researchers on how to successfully navigate the IRB process rather than focus on abinary classification of what is allowed and disallowed. New educational initiatives, like theScholarship and Research Integrity (SARI) program at Penn State are being designed to “offergraduate students comprehensive, multilevel training in the responsible conduct of research,in a way that is tailored to address the issues faced by individual disciplines.” An encouragingparadigm shi is the evolution from a ‘culture of compliance’ to a ‘culture of concern’. Severalchallenges remain, but the IRBs are getting friendlier and more approachable as they realizethat being pro-active in working with researchers is the best way to create a win-win situationfor all stakeholders.


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University.(NBAC), N. B. (2001). Ethical and Policy Issues in International Research: Clinical Trials in

Developing Countries. Bethesda, MD: National Bioethics Advisory Commission.Dartmouth Humanitarian Engineering Projects. (2008). Retrieved September 17, 2010, from

ayer School of Engineering at Dartmouth: http://www.dartmouthhelp.org/projects.html

Humanitarian Engineering: Colorado School of Mines. (2010). Retrieved September 18, 2010,from Colorado School of Mines: http://humanitarian.mines.edu/

MIT: About D-Lab. (2010). Retrieved September 17, 2010, from D-Lab: Development through Dialogue, Design, and Dissemination: http://d-lab.mit.edu/about

Amdur, R., & Bankert, E. (2002). Institutional Review Board: Management and Function. Boston: Jones and Bartlett.

Anokwa, Y. e. (n.d.). Stories from the Field: Reflections on HCI4D Experiences.Arizona State University. (2011). Global Resolve. Retrieved 10 10, 2010, from ASU College

of Technology and Innovation: http://globalresolve.asu.edu/Barzilai, G. a. (2007). e Impact of Institutional Review Boards (IRBs) on Law and Society

Researchers. Berlin: Report of the Membership and Professional Issues Committee to the Board of Trustees of the Law and Society Association.

Bringle, R. G. (1996). Implementing Service Learning in Higher Edcuation. Journal of HigherEducation.

Cargo, M., & Mercer, S. L. (2008, January). e Value and Challenges of Participatory Research: Strengthening Its Practice. Annual Review of Public Health, 29, 325-350.

Chavan, A. (2005). Another Culture, Another Method. HCI International.Desai, V., & Potter, H. (2006). Doing Development Research. ousand Oaks, CA: Sage

Publications.Gordon, E. J. (2003). Trials and Tribulations of Navigating IRBs: Anthropological and

Biomedical Perspectives of Risk. Anthropological Quarterly, Accessed online.Green, L. W. (2001, June). From Research to "Best Practices" in other Settings and

Populations. American Journal of Health Behavior, 25(3), 165-178.Hamburger, P. (2004). e New Censorship: Institutional Review Boards. e Supreme

Court Review, 271-354.Hyder, A. A. (2004). Ethical Review of Health Research: A Perspective from Developing

Country Researchers. Journal of Medical Ethics, 68-72.Kass, N., Dawson, L., & Loyo-Berrios, N. I. (2003). Ethical Oversight of Research in

Developing Countries. IRB: Ethics and Human Research, 1-10.Levine, C. (1998, November 6). Placebos and HIV Lessons Learned. e Hastings Report, pp.

43-48.Mugerwa, R., Kaleebu, P., Mugyenyi, P., & Kotongole-Mbidde, E. (2002, January 26). First

Trial of the HIV-1 Vaccine in Africa: Ugandan Experience. British Medical Journal, 324(7331), 226-229.

Oakes, J. M. (2002, October). Risks and Wrongs in Social Science Research: An Evaluator's Guide to the IRB. Evaluation Review, p. 443.


Russo, P. a. (1993). How Fluent is your Interface:Designing for International Users. Proceedings of the INTERACT 93' and CHI 93' Conference on Human Factors and Computer Systems, (pp. 342-347).

Scheyvens, R., & Storey, D. (2003). Development Fieldwork: A Practical Guide. ousand Oaks, CA: Sage Publications.

Shaffer, D. N., Yebei, V. N., Ballidawa, J. B., Sidle, J. E., Greene, J. Y., Meslin, E. M., et al. (2006, January). Equitable Treatment for HIV/AIDS Clinical Trial Participants: A Focus Group Study of Patients, Clinician Researchers, and Administrators in Western Kenya. Journal of Medical Ethics, 55-60.

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Smithsonian. (n.d.). Design for the Other 90%. Retrieved September 19, 2010, from Cooper Hewitt: http://other90.cooperhewitt.org/

Victora, C. G., Habicht, J.P., & Bryce, J. (2004, March 1). Evidence-Based Public Health: Moving Beyond Randomized Trials. American Journal of Public Health, 94(3), 400-405.

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acknowledgements: We would like to thank Dr. Audrey Maretzki (Emeritus Professor, FoodScience), Jodi Mathieu (IRB Research Compliance Coordinator, Office of Research Protections)and Rosie Qin for their inputs and critiques that helped strengthen this manuscript and make itmore accurate.


37

The Entrepreneurial Nature of Salespeople:How They Justify Unethical Behaviors

Michael L. Mallin and Laura Serviere-Munoz

aBstraCte purpose of this paper is to introduce a theoretical model in which salesperson ethical

behavior is moderated by techniques of neutralization. Sales people are risk takers, pursuenew ventures and thus deal with constant change. Such an entrepreneurial setting can makesalespeople vulnerable to the use of neutralizations. e techniques of neutralization, are a setof rationalizations that people use to justify their illegal or unethical behavior. In addition, tounderstanding the circumstances under which neutralization techniques are more likely to beemployed, a series of propositions are developed. e general theory of marketing ethics isused as a general framework.

introduCtionEthics is a relevant concept that has been widely discussed and researched among business

disciplines (Valentine, 2009). Out of many of these disciplines, marketing has been especiallyvulnerable to disapproval and criticism because of the high propensity of unethical activitiesin some of its areas such as advertising, personal selling, pricing, marketing research, and

37

miCHaEl l. mallin is an Associate Professor of Marketing and Sales in the Edward H. Schmidt School ofProfessional Sales at e University of Toledo, 2801 W. Bancro Street, Toledo, OH 43606.Telephone: 419.530.4737 Email: [email protected]

laura sErviErE-munoz is an Assistant Professor of Marketing in the Division of Urban and ProfessionalStudies at the University of North Texas at Dallas, 7400 University Hills Drive, Dallas, TX 75241. Telephone: (972) 338-1809 Email: [email protected]



international marketing (Vitell & Grove, 1987). In fact, in organizational settings, marketingis perceived to have a greater opportunity to move farther from ethical behavior, due to itsnumerous boundary spanning contacts, than other areas (Ferrell & Gresham, 1985).

One marketing area in which ethics is vastly researched and valued is personal selling. Asnoted by Ingram, LaForge and Schwepker (2007), ethics in personal selling is crucial becausesalespeople typically operate with minimal supervision and direction and must manage theircustomer base in a very entrepreneurial fashion. Moreover, this entrepreneurial approachspills over to the environment in which salespeople operate; they become boundary spanners,risk takers, constantly pursue new ventures and typically prefer a flexible structure. e needto make daily decisions that impact their “bottom line” forces salespeople to face ethicalchallenges, many times resulting in unethical outcomes. In fact a recent study by Darrat,Amyx, and Bennet (2010) cites that an alarming 40% of sales reps studied admitted to acts ofworkplace indiscretion and even more troublesome is that 66% of these salespeople felt thattheir behaviors would result in no negative consequences. is might be one of the reasonswhy sales have long been associated with questionable activities (Hair, Anderson, Mehta, &Babin, 2009). An additional reason for the importance of ethics in sales activities resides inits ability to create new customers and sustain and enlarge relationships with currentcustomers (Ingram, LaForge, & Schwepker, 2007), an issue that is especially critical forentrepreneurs as they try to pursue new ventures or extend the ones in existence.

More importantly, personal selling spans across many business activities due to its cross-boundary nature and has a significant impact for entrepreneurs and their activities.Entrepreneurs understand that on certain occasions, such as when pursuing new ventures orpotential investors, they have to adopt a sales orientation to be able to convey the value oftheir efforts. Entrepreneurs and their employees also adopt a sales orientation whencapitalizing on strengths of personal selling to adopt marketing strategies such as marketpenetration and market development when trying to increase demand and extend marketshare for their ventures. In a more specific way, entrepreneurs are involved in the day to dayoperations of their ventures and can be involved as coaches of their employees conducting thesales function. In the role of coach, an entrepreneur must help salespeople identify andcorrect selling deficiencies (Mallin & Mayo, 2006) as well as continue to encourageprofessional development.

Despite the increased interest in sales ethics in business research (Hair, Anderson, Mehta,& Babin, 2009), virtually no known research has been conducted on justification techniquesor attitudinally incongruent behavior in general (Holland, Meertens, & Van Vugt, 2002). Apromising answer for justification of attitudinally incongruent behavior lies in neutralizationtheory (Sykes & Matza, 1957), which describes the mechanisms that facilitate behavior by“justifying” or “neutralizing” a person’s illegal or unethical actions. Neutralization theoryconsists of five techniques that are used to justify the behavior that conflicts with social orlegal norms (Sykes & Matza, 1957). Neutralization theory has been applied in variouscontexts but little work has been done in marketing. For example, one of the few studies thataddressed neutralizations in the field of consumer behavior has been Chatzidakis, Hibbertand Smith (2007) who applied the techniques to explain the attitude-behavior discrepanciesthat they found regarding consumers’ fair trade purchase behavior. In a different study,Strutton, Pelton, and Ferrel (1997) found that consumers used neutralization techniques to

39Mallin and Serviere-Munoz

justify unethical behavior in retail settings. Overall, the inclusion of neutralization theory is acontribution that promises to help explain more appropriately how people justifyincongruent or illegal behavior (Chatzidakis et al. 2007).

In addition, efforts to identify variables that potentially moderate important relationshipsin the ethical decision-making relationships and models are scarce. As noted by O’Fallon andButterfield (2005), when reviewing the ethical-decision making literature, there is anunexpected lack of emphasis on studying moderating relationships; especially in personalsales, in which paying attention to such moderators could largely advance our understandingof general ethical attitudes, the ethical reasoning process, and “ethical context-job attitudes”relationships (Valentine, 2009). us, Neutralization theory might prove to offer significantmoderating variables in existing theoretical models of personal sales. e theory may accountnot only for the discrepancies that occur in attitude-behavior models, but could also providean understanding of why, at times, intentions turn into behaviors.

e purpose of this paper is to build a conceptual model using the general theory ofmarketing ethics as a framework to explain salespersons’ unethical behaviors. In addition,neutralization theory is proposed to play an a priori moderating role that leads to unethicalbehaviors. e model proposes, based on prior research from various disciplines, thatneutralizations will moderate the ethical judgment-intention-behavior links and enables us tobetter understand the conditions in which salespeople justify their unethical acts. We alsoexpect to contribute to entrepreneurship research by providing further insight on issues thataffect the sales function among those pursuing attractive opportunities and bring attention tomarketing issues that may have to be re-framed when set in an entrepreneurial environment.

BaCkgrounde Entrepreneurship and professional selling interface

When defining entrepreneurship, or being entrepreneurial, scholars define it as having abusiness orientation or intensity that is innovative, proactive and risk-accepting (Miller, 1983;Morris & Paul, 1987). It is also defined as the engagement in opportunity discovery orcreation, assessment and exploitation of interesting and attractive opportunities (Shane &Venkataram, 2000). Based on definition alone, there lies commonality with the professionalselling function. According to Jones, James, and Chonko (2000), selling involves the processof developing opportunities by discovering prospective customer needs and providingsolutions to those needs to the mutual and long term benefit of both parties. Moreover,researchers have recognized that entrepreneurs can be influenced by positive states, that leadsthem to be risk takers and a latent need for greater personal achievement and growth (Herron& Sapienza, 1992), and by negative states, such as dissatisfaction or frustration with a job ortheir personal situation , in creating or pursuing new ventures Shapero, 1984; Serviere 2010).is parallels some of the sales research that depicts successful salespeople as those who seekchallenging opportunities while avoiding situations that might cause role confusion orambiguity (Weitz, Castleberry, & Tanner 2006). Further, as entrepreneurs decide to pursuenew ventures benefits are experienced at the personal, local, and national economic levels asthey are commercializing regional or national products and creating employment that leads toa better living of all those involved (Serviere, 2010). Likewise, as professional salespeople arerelationship managers and problem solvers, their positive impact is realized as they explore


and address opportunities that have a direct benefit to the customers and organizations thatthey serve (Weitz, Castleberry, and Tanner 2006).

Researchers have also concluded that critical advances in entrepreneurial research include ashi from the entrepreneurs’ characteristics to the consequences and results of their acts.Such advances provide a greater understanding of how entrepreneurs use knowledge,networks, and resources to build organizations; and a more inclusive and advancedcategorization of environmental forces at several levels of analysis, such as population,community, and society (Aldrich & Martinez, 2001). In comparison, sales research hasadvanced to contrast a transactional selling versus a relationship selling approach (Saxe andWeitz 1982) and has offered frameworks based on improved knowledge and adaptive sellingbehavior to impact sales effectiveness (Weitz, Sujan, and Sujan 1986). It is also clear thatentrepreneurs cannot succeed alone and among the fields that provide benefit, sales can havea profound interface with entrepreneurial activities. For example, small and medium sizedenterprises oen approach sales and marketing in a different manner than their largercounterparts (Carson & Gilmore, 2000) leading to entrepreneur-driven activity. Suchactivities are seen as intersecting as entrepreneurs pursue relationships and network creationwith other members of the marketing system (Carson & Gilmore, 2000; Hultman & Shaw2003; Stokes, 2000). is is also supported by Morris, Miles and Deacon (2010) whoaugment the value of this interaction by pointing out that marketing is critical and effective inentrepreneurial organizations. All this can be summarized by illustrating that in thedisciplines of sales, marketing, and entrepreneurship, the common focus is on discovering andexploiting opportunities of mutual benefit to both salesperson/entrepreneur and thecustomers that they serve. Given this background highlighting the entrepreneurship-salesinterface and the importance of addressing customer opportunities, we turn our attention tohow ethical decisions among salespeople are made.

Ethical decision making among salespeoplee ethical decision-making literature has experienced a substantial interest, and thus

growth, from academicians who try to understand the field (Chatzikadis, Hibbert, & Smith,2007) and its implications in a number of contexts. In their classic work, Hunt and Vitell(1986) introduced the general theory of marketing ethics in which ethical judgment isproposed to ultimately influence a person’s behavioral intentions. e theory proposes that ifan individual has an ethical problem at hand, the individual will engage in a deontologicalevaluation, assess the perceived alternatives, and take action based on a teleological evaluationof perceived consequences.

In addition to Hunt and Vitell’s (1986) theory, which has become widely accepted inmanagerial and organizational contexts, there are many other valuable frameworks. Forexample, Rest (1979) provided a 4-step moral judgment model consisting of: moral issuerecognition, judgment making, choosing most salient moral concerns, and acting on thosemoral concerns. Trevino (1986) proposed a person-situation interactionist model thatemphasized the importance of reasoning and organizational culture in the decision-makingprocess. Ferrell and Gresham (1985) modeled a contingency framework in which individualand organizational factors, as well as the unethical opportunities act, alter, or affect anindividual’s ethical decision-making. Within the same stream, Jones (1991) introduced asequential model where behavior is ultimately influenced by the individual’s perceivedintensity of the issue (for a review see O’fallon & Butterfield, 2005).

Within the personal selling and sales management literature, ethical decision making has


also received much attention. Ethics, which involves judgments based on right versus wrongor fair versus unfair (Hunt & Vitell, 1986), is uniquely significant to salespeople because aspart of their job they face several ethical challenges which are sometime resolved in aquestionable manner (Ingram, LaForge, & Schwepker, 2007). According to Roman and Ruiz(2005), ethical salesperson behavior should focus on the interests and well-being of thecustomer. Ethical salespeople should communicate in a truthful and accurate manner, offerproducts and services that will truly benefit the customer, treat and maintain customerinformation in a confidential manner, and promise only what can be delivered (Hansen &Riggle, 2009). If salespeople act in an ethical manner, they will be able to build and sustainstrong customer relationships and their customer base will experience higher satisfaction,trust, and commitment levels with them (Roman & Ruiz, 2005).

e techniques of neutralization Neutralization theory explains how individuals mute or eliminate the negative impact of

their norm-violating behavior (Sykes & Matza, 1957) and has become one of the most knownand cited theories within the deviant behavior literature (Chatzidakis, Hibbert, & Smith,2007). e theory, which was originally introduced by Sykes and Matza, challenged thepredominant school of thought about the idea of a delinquent sub-culture. is subculturewas believed to be a “system of values” that represents an inversion of the values held byrespectable, law abiding society. ey also pointed to the overwhelming evidence that asignificant portion of delinquents experience guilt or shame and should not be discarded as amanipulative gesture towards the authority that apprehended them.

Sykes and Matza (1957) further claimed that a large part of delinquent acts are based onjustifications, which are oen unrecognized by others, that serve as a defense for the crime inthe criminal’s mind. e criminal thinks that the act is valid even though the legal system orsociety does not share this view. Oen, such justifications are portrayed as rationalizationsthat occur aer the deviant behavior as protection from self-blame and the blame fromsociety. Sykes and Matza strongly emphasized that these justifications may well occur beforethe deviant behavior is executed, and thus rationalizing the action.” Within the consumerbehavior area, Strutton, Pelton, and Ferrell (1997) suggest that consumers use neutralizationsbefore committing unethical acts. Once internalized, neutralizations alleviate guilt or self-blame (Sykes & Matza, 1957; Strutton et al. 1997). It is by learning these techniques thatthese individuals turn into delinquents (Sykes & Matza, 1957). ese neutralizationtechniques not only precede delinquent behavior but, based on the circumstances, make thebehavior possible because the behavior is then perceived as acceptable, right, or fair (Sykes &Matza, 1957). Moreover, even though neutralizations do not necessarily involve delinquency,Matza (1964) acknowledged that under extenuating circumstances delinquency might takeplace. is view is shared by Agnew (1994) who concluded that there is a greater chance thatneutralization will lead to delinquency among those who: deem that in some situationsneutralizations are valid, embrace some commitment to established beliefs (i.e. censure ofviolence), come across opportunities for delinquency, and long to commit the actual offense.

e neutralization techniques constitute a framework that identifies and explains howindividuals justify or eliminate the consequences that their norm deviant behavior could haveon them and on social relations (Vitell & Grove, 1987). e framework is based on fivetechniques which are: denial of responsibility, denial of injury, denial of victim, condemningthe condemners, and appeal to higher loyalties. It is critical to point out that individuals mayemploy more than one technique as a means to justify culpability for an act that is publicly


unacceptable. ese values, also called subterranean values, are acquired via a process ofsocialization where individuals learn their usage through verbal symbols and socially-sharedrationalizations (Vitell & Grove, 1987). In the sections to follow, each technique is furtherexplained.

denial of responsibilityWhen turning to this neutralization technique, individuals reject any responsibility for

their deviant actions by turning to negations of personal responsibility. For example, theymight claim the act was an “accident” and that they did not mean it. is technique focuseson being able to deter the blame involved with violations of social norms and not on howvalid the action might be. In addition, the individuals see themselves as “acted upon” insteadof “acting” due to forces that are outside or beyond their control (Sykes & Matza, 1957). eindividual thus sets the path for deviance from the normative system without a directconfrontation of the norms: “I couldn’t help myself, I was desperate” (Vitell & Grove, 1987,p.434). In sum, the link or association between the individual and the act is broken, leadingto a denial of responsibility about deviant acts.

denial of injuryis technique centers on the harm derived from the delinquent act and questions

whether anyone was injured by the behavior (Sykes & Matza, 1957). In an unclear way, theindividual does not perceive that the behavior in question caused major or any damages at all.For example, individuals employing this technique might see vandalism as simply mischiefand say “nobody was really hurt.” Contrary to denial of responsibility, where the linkbetween individual and act is broken, denial of injury does establish a link between thesetwo. However, the link between act and injury is the one broken or nonexistent.

denial of victimAer a deviant act, denial of victim occurs when the individual alleges that there is no

victim. In contrast with denial of responsibility and denial of injury, the individualacknowledges responsibility for his or her actions and the injury or damage they caused(Sykes & Matza, 1957). However, any “moral indignation” is neutralized or justified bymaintaining that there was no wrongful act or injury under the circumstances because theissue is a matter of punishment or rightful retaliation, not a matter of injury; where thevictim deserved the injury: “they had it coming.” e individual becomes an avenger and thevictim a wrong-doer. As noted by Vittel and Grove (1987), not only the existence of a victimis denied but the victim is perceived as a person that deserved to be hurt or injured.

Condemning the Condemners Using this technique, the center of attention is shied away from the individual and the

act to those who condemn the deviant actions and their motives (Sykes & Matza, 1957). econdemners are critiqued, and thus condemned, because they are hypocrites, crooks, or aresimply motivated by spite or personal malice. Such a view functions as a deflection of thenegative sanctions that go along with norm violation (Sykes & Matza, 1957). Furthermore,because the individual’s orientation has shied towards those in charge of norm enforcing,they eventually experience cynicism against them as well. e individual simply represses thewrongfulness of the deviant behavior by attacking others: “I was only doing what others doall the time” (Vitell & Grove, 1987, p.434).


appeal to Higher loyaltiesHere, the individual justifies internal and external social controls by conceding preference

to the demands of social groups to which the individual belongs (Sykes & Matza, 1957). Acommon misconception when addressing this technique is to assume that the individualrejects the norms and imperatives of the society at large. On the contrary, the delinquentmight accept them but be faced with the dilemma of who are they loyal to. is dilemma issolved by turning to this technique; the individual fails to follow the law or societal norms tocomply with the norms of the group to which the individual belong (Sykes & Matza, 1957).When appealing to higher loyalties, the individual denotes a higher loyalty to his or hergroup than to the society because this group matters more than the society at large.

Conceptual Framework and propositionse theory’s impact is such that Sykes and Matza’s (1957) work is one of the most

frequently cited articles within deviant behavior research and offers a medium forunderstanding how employees of all types employ arguments to justify and/or exoneratethemselves from self-blame and social criticism when displaying unethical behavior (Vitell &Grove, 1987). According to Vittel and Grove, the understanding that the techniques bringto unethical behavior is one of the techniques’ key contributions. Furthermore, the authorsdeveloped a series of propositions regarding ethics in marketing and the techniques ofneutralization. First, they proposed that there is a greater likelihood of engaging in unethicalbehavior when individuals employ one or more of the techniques as part of their decision-making process (and it is probable that the techniques were internalized). An additionalproposition arises from the idea that the techniques are a function of unethical behavior.is proposition suggests that aer an unethical behavior, individuals might turn to one ormore of the techniques as a way of explaining such behavior. It is important to note thoughthat the usage of the techniques on a post-decision basis indicates that the individual stillpossesses sensitivity to the unethical part of the behavior (Vitell & Grove, 1987).

In marketing and management, few business-to-business studies have been devoted toaddress the techniques and their role in unethical behavior. Most of the work here has beendone in the business-to-consumer setting. For example, Strutton, Pelton, and Ferrel (1997)concluded that in retail settings consumers used neutralization techniques to justifyunethical behavior. e results show that across generations, “thirteeners” (the thirteenthgeneration to know the American flag and constitution), turned with greater frequency tothe techniques to justify their unethical behavior when compared to their parents.Moreover, the results showed that denial of victim and condemning the condemners wereamong the most popular techniques and that consumers neutralize any self-blame beforecommitting unethical behaviors. In a more recent study, Chatzikadis, Hibbert, and Smith(2007) turned to the techniques to explain fair trade purchase behavior. e authors proposethat the inconsistencies exhibited by the consumers regarding their attitudes and behaviortowards fair trade can be explained by the techniques. Specifically, it is suggested that thetechniques moderate the link between consumers’ attitudes, subjective norms, and perceivedbehavioral control on one side of the spectrum and the behavioral intentions on the other(Chatzikadis, Hibbert, & Smith, 2007).

Given, this background, we proposed a conceptual framework of marketing ethics inwhich the role of neutralization techniques is explored. is framework describes themoderating role of the neutralization when a salesperson is acting on an ethical decision (seeFigure 1). e following discussion describes this model.

FigurE 1. proposEd FramEwork – gEnEral tHEorY oF markEting

EtHiCs and nEutralization tHEorY

e Ethical Judgment — Ethical intention — Ethical Behavior linkse General eory of Marketing Ethics (Hunt & Vitell, 1986) is one of the most

accepted ethical theories in the marketing field. e theory suggests the possible elements ofthe decision-making process when an individual faces an ethical issue. Hunt and Vitellproposed that once an individual recognizes an issue as ethical, the individual will evaluatethe behavior to form a judgment. e evaluation consists on deontological evaluations, toassess the perceived alternatives, and on teleological evaluations, to assess perceivedconsequences. In turn, ethical judgment will influence ethical intentions and ethicalintention and situational constraints will determine behavior (Hunt & Vitell, 1986).

e notion that ethical judgment influences ethical intention and this, in turn, influencesethical behavior has been widely supported throughout the literature. Dubinsky and Loken(1989) proposed that ethical decision making in the marketing environment is also asequential process in which an individual makes a moral judgment and then establishesmoral intent which leads to the moral behavior as the outcome. Rest (1986) proposed amodel where ethical judgment, intention, and behavior links are included but argued thatsuccess in one step does not guarantee success in the next one. In addition, Rest (1986)pointed out that the model is easily generalized to organizational environments. Jones(1991) acknowledged this sequential process of judgment - intention - behavior in ethicaldecision making in organizations and extended it by suggesting that moral intensity, aconstruct that encompasses the situation’s moral imperative, influences every step orcomponent of moral decision making.

e entrepreneurial setting of personal selling has not been the exception in addressingthe ethical judgment - intention - behavior model. Hunt and Vasquez-Parraga (1993)reported that managers turned to ethical judgments to discipline or reward a salesperson’sbehavior. More recently, Valentine and Barnett (2007), McClaren (2000) and Ferrell,


EtHiCal JudgmEnt EtHiCal intEntion EtHiCal BEHavior

nEutralizations modErating rolE


Johnston and Ferrell (2007) supported this model as well. However, Valentine andBarnett proposed that perceived organizational ethics will impact judgment andintention, and McClaren (2000) and Ferrell, Johnston, and Ferrell refer to the judgment -intention link as the moral decision structure. us, the basic premise that this paperproposes for ethical decision making among salespeople is:

P1: When faced with an ethical issue, a sales person will form a positive or negative ethical judgment

P2: Salesperson positive ethical judgment will increase the likelihood of ethical intentions while negative ethical judgment will increase the likelihood of unethical intentions.

P3: Salesperson ethical/unethical intentions will be positively related to ethical/unethical behavior.

e moderating role of the techniques of neutralizationHunt and Vitell (1986) argued that individuals will experience guilt as a result of their

intentions and behavior not matching their ethical judgments. However, there are timesthat individuals are able to soen or block this guilt by neutralizing any applicable normsand thus eliminate or reduce guilt. is is the building block in Sykes and Matza’s (1957)theory of neutralization: the theory emphasizes that deviant individuals are not thatdifferent from those who abide by the law or commit to conventional norms. Just like anyother behavior, Sykes and Matza argued that unethical behavior is learned whenimmersed in social interactions and that individuals could also learn to neutralize theirbehavior. Neutralization theory explains how individuals, who are still committed toconventional norms, remove any negative impact or exonerate themselves from theirinappropriate behavior by neutralizing their thoughts and behavior. Denial ofresponsibility, denial of injury, denial of victim, condemning the condemners, and appealto higher loyalties are the five techniques of neutralization employed by the individualscommitting the deviant behavior to justify their behavior (Sykes & Matza, 1957).

Even though many areas have benefited from the study of the techniques ofneutralization, the entrepreneurship, personal selling and sales management fields havelargely ignored the potential impact that neutralizations could have on salespersonsoperating in these environments, especially when making an ethical decision. Because ofthe nature of their job, salespeople must balance their own interests with those of theirbuyers while being financially efficient. us, salespeople oen face a significant numberof ethical dilemmas (Hansen & Riggle, 2009) and may use some of the techniques tojustify their behavior. Neutralizations might also be especially appealing if most of theirwork is conducted in an entrepreneurial environment – where decision making involvesrisk, independence, and personal judgment.

When originally proposed, the techniques of neutralization were strongly positioned aspreceding deviant behavior (Sykes & Matza, 1957). More recent research, (e.g., Piquero,Tibbetts and Blankenship (2004), Strutton, Pelton and Ferrell (1997), and Vitell andGrove (1987) also supports the notion of neutralization preceding unethical behavioramong both consumers and professionals. More specifically, the neutralization techniqueshave been argued to moderate the relationship between ethical judgment and ethical


intention as well as between ethical intention and ethical behavior as the techniques ofneutralization become keys to reinstate balance when individuals consider behaving in a waythat is inconsistent with their convictions. For example, Chatzikadis et al. (2007) suggestedthat neutralization plays a moderating role in explaining why consumers do not buyproducts that are known to come from countries that do not practice fair trade policies. Insum, research suggests that situations entailing unethical acquisition and dispositionbehaviors were more likely to elicit or activate the use of neutralization techniques(Strutton, Pelton, & Ferrell, 1997). erefore, it is proposed that salespeople will turn tothese neutralization techniques before considering and behaving in an illegal or unethicalmanner. e techniques serve to justify the deviant behavior as they tend to soen oreliminate any guilt or remorse that the salesperson experiences when acting on his or herethical intentions. ese relationships can be summarized by the following proposition:

P4: e techniques of neutralization will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior.

specific applications of neutralization and propositions in the domain of salesAs mentioned earlier, the role of neutralization techniques on salesperson ethical

behavior has received very little attention within the sales and management literature.However, many studies conducted within the professional or white collar workenvironment support the role that neutralization plays prior to a person committing anunethical act. In this section, we draw upon previous research in the professional setting topropose scenarios where each of the five neutralization techniques are more likely to beemployed in the sales domain. ese are illustrated in Table 1 and described in the sectionto follow.


taBlE 1. appliCations oF nEutralization

tECHniquEs in proFEssional salEs

proFEssional salEs arEas & appliCations

sales promotionBehavior

Customer relationshipBuilding &

maintenance Behavior

sales organizationBehavior

nEutralization

tECHniquE

Piquero, Tibbets & Blankenship 2005

Evans & Porche 2005;Gauthier 2001;

Sykes & Matza 1957

Rosecrance 1988; Pershing2003 Vittel & Grove 1987;Piquero,Tibbets & Blankership2005; Hollinger 1991

Denial of responsibility * * *

Denial of injury * * *

Denial of victim * *

Condemning the *condemners

Appeal to higher * * *1

loyalties *2

notes:*1 Pershing reported that individuals who chose to report their peers’ misconduct appealed to

higher loyalties. However, the study recognized the possibility that those who did not report peermisconduct might be appealing to higher loyalty as well. In this case, loyalty to their peersupersedes loyalty to the institution.

*2 In addition to employing some of the techniques proposed by Sykes and Matza, Piquero,Tibbetts, and Blankenship reported that older or more experienced professionals were influencedby two additional justifications: the most important issue at stake is profit and anything is justifiedto make such profit.


sales promotion BehaviorsSales promotion is one area which sales people might engage in behaviors where

unethical acts may be rationalized through various neutralization techniques. e work ofPiquero, Tibbets, and Blankenship (2005) demonstrates this. eir research evaluated thelikelihood of individuals to engage in the promotion and sales of a hypotheticalpharmaceutical drug that was about to be recalled. ey reported that neutralizationsinvolving denial of responsibility, denial of injury, and appeal to higher loyalties weretechniques selected by the respondents as a rationale to justify their behavior. Denial ofresponsibility and denial of injury were also linked to salesperson behaviors by Vitell andGrove (1987). eir study revealed that for salespeople who reported unethical promotionpractices by competitors (e.g., “they are doing it too”), those salespeople felt “acted upon” or“forced to” misbehave just to be able to keep up with the competition. In these instances,the issue is no longer a matter of personal choice but the outcome of a non-negotiablecondition leading to deny any responsibility. Denial of injury was exhibited by salespeoplewho tried to justify the use of excessive expenditures on sales promotion activities such asentertainment and travel for clients. eir claim that, “aer all, no one is hurt by this”,exemplifies the use of this neutralization technique (Vittel & Grove, 1987). e followingproposition summarizes these effects:

P5: When a salesperson is faced with unethical behavior involving sales promotion activities, the neutralization techniques of denial of responsibility, denial of injury, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior.

Customer relationship Building and maintenance BehaviorsRelationship selling has emerged as the key to building long-term partnerships between

salespeople and their customers (Weitz, Castleberry, and Tanner 2006). For salespeopleoperating within an entrepreneurial environment this is especially important because thegrowth and sustainability of the small to medium enterprise depends on repeat business andword of mouth reputation. For these salespeople who have successfully built suchrelationships, unethical behavior toward their customers is likely to impinge on the trustthat has been bestowed upon them. Inasmuch as little has been done to study howsalespeople in an entrepreneurial setting rationalize unethical behavior toward their clients,we can turn to some of the research in other professional domains. For example, accordingto Evans and Porche (2005), professionals such as speech, occupational, and physicaltherapists who develop and maintain a direct and close relationship with their clients,turned to some neutralization techniques to justify some fraudulent practices. eir studyidentified that denial of responsibility and denial of injury were the techniques used tojustify cutting therapy sessions short but charging the full rate or, charging individualsession rates for group therapy sessions. In an earlier study, Gauthier (2001) identified thatwhen veterinarians engaged in circumstances that could be considered unethical practice(e.g., providing substandard care to animals), they commonly reported using techniquessuch as denial of injury and denial of victim to justify their questionable actions.


Salespeople are the “face” of their company and its offerings. As much as they are likedand trusted by their customers, sometimes the reputation of their offerings, company, andeven profession stands in the way of relationship building and maintenance efforts. Forexample, an over-subscribed service offering, an understaffed customer service department,or a product built with defecting components could turn relationship building efforts intoan exercise of futility. us, to combat the negative perceptions that customers might have,salespeople may turn to neutralization techniques in justifying their unethical behavior.ere is some evidence of this in other professional domains where client relations areinvolved. rough interviews and fieldwork study, Rosecrance (1988) demonstrated thatpublic defenders turned to neutralizations to cope with the notion that their services wouldalways be inferior to those provided by private counsel. To cope with such a negative image,public defenders turned to all five neutralization techniques when representing theirclients.

Salespeople also build and maintain relationships with customers with whom they haveno direct physical contact. Positions such as inside sales focus a salesperson’s efforts onmanaging a relationship via the telephone or internet (Weitz, Castleberry, and Tanner2006). One aspect of neutralization research centers on situations where behavior isrationalized when a person denies the existence of a victim, especially when the victim is“physically absent, unknown, or a vague abstraction (Sykes & Matza, 1957, p. 668).” Indenial of victim, the person accepts wrongdoing and takes responsibility for his or heractions. However, by a subtle alchemy, the individual positions himself as an avenger andwhoever was originally a victim becomes a wrongdoer - a person who deserves the injury.e likelihood of turning to denial of victim is greatly augmented when the awareness orexistence of the victim is weakened because, as just mentioned, such victim is physicallyabsent or unknown. is diminished awareness as to who the victim is contributes to theperson employing the denial of victim technique (Sykes & Matza, 1957). For salespeople,this diminished awareness of a possible victim might be important when dealing with newcustomers whose long-term value has not yet been established. is technique might alsobe used with competitors who might be seen as an “abstract concept” to the salesperson.Denial of victim could be especially prone to use towards new competitors, as thesalesperson “does not really know them,” or when the salesperson is assigned to a newterritory (“I have yet to meet the customer”).

e above examples suggest that neutralization is used among professionals to justifybehaviors while attempting to build and preserve the relationships with their customers(both directly and indirectly). Extending these finding into the sales domain, the followingis proposed:

P6: When a salesperson is faced with unethical behaviors involving building and maintaining customer relationships, the neutralization techniques of denial of responsibility, denial of injury, denial of victim, condemning the condemners, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior.


sales organization BehaviorsSalespeople engage in behaviors that impact the interactions with members of the

organization -namely peers, superiors, administrators, and business owners. Eachinteraction involves behaviors where unethical practices are assessed and potentially carriedout. For example, salespeople might turn to neutralization when faced with conflicting peerloyalty as to how they respond to the misconduct of others. As reported by Pershing (2003)in other domains, when confronted with questionable occupational conduct of their peers,U.S. naval academy members, employed denial of responsibility and appeal to higherloyalties to justify whether they reported their peers’ occupational misconducts. ose whoturned to denial of responsibility pointed out that “time constraints” prevented them fromfiling misconduct reports. is time constraint is in line with Sykes Matza’s argument thatan individual denies responsibility because deviance is “due to forces outside the individualand beyond his control (1957, p.667). In this case, time constraints are the force beyond theindividual’s control and thus, it is not their responsibility to report misconducts. Relative tosales, the decision as to whether a salesperson reports the occupational misconduct of theirpeers might be impacted by neutralization techniques used to try to soen or completelyblock any guilt for violating social norms about reporting unethical behavior witnessed oftheir peers.

Another sales organizational factor is the age or career stage of the employee. eorganizational behavior literature suggests that as professionals become more experiencedand older, the intent to engage in unethical behavior increases. For example, Hollinger(1991) reported that older professionals had a greater likelihood to use neutralizationtechniques in corporate environments when justifying property the than their youngercolleagues. Piquero, Tibbetts and Blankenship (2005) also supported this notion whenexamining corporate crime in the promotions/sales area. eir findings exposed thatrespondents over 35 or older are significantly more influenced to neutralize deviantbehaviors by turning to denial of responsibility, denial of injury, and appeal to higherloyalties to justify further marketing of a hypothetical drug that was about to be recalled bythe U.S. Food and Drug Administration. Appeal to higher loyalties was also linked to olderexecutives by Vitell and Grove (1987). Retired executives relied on this technique becausethey felt greater loyalty to their corporation and corporate superiors than to thegovernment. Vitell and Grove also suggested that salespeople might appeal to higherloyalties when trying to justify product misrepresentation in order to align with their firm’sgoal to increase product sales.

Finally, because salespeople incur travel, promotional, and customer hosting expenses,opportunities to misrepresent expense account transactions are prevalent. One example ofthis represents a situation in which a salesperson might rationalize unethical behavior ininflating his or her expense account. According to Vittel and Grove (1987), salesrepresentatives might justify this behavior by relying on condemning the condemner.Specifically, salespeople might argue that the company engages in the same behavior by“overcharging” their customers. By claiming that the company “is just as guilty”, salespeopleare able to protect their self-concept by redirecting the attention to others (Vittel and Grove1987). Such behaviors may be more prevalent in small to medium organizations wherefewer employees interact and the formal and informal interaction among employees can


have an impact on the salesperson’s disposition to learn and exhibit neutralizations. efollowing proposition summarizes how sales people might use neutralization techniqueswhen engaging in sales organization behaviors:

P7: When a salesperson is faced with unethical sales organizational behavior, the neutralization techniques denial of responsibility, denial of injury, denial of victim, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior.

ConClusionSmall to medium enterprises are a vital part of a nation’s economy. ey provide

opportunities for business growth for both entrepreneur and the customers that they serve.is paper began by highlighting the importance that sales and marketing has onentrepreneurial activities by pointing out the interface and intersection of professionalselling and entrepreneurship. By focusing on effective professional selling practice,entrepreneurs can develop mutually beneficial buyer-seller relationships based on acustomer orientation. It is this that affects the players and the environment where businessactivities take place. In pursuit of knowledge within this domain, it is important to notethat salesperson intention and behavior can be modified by many variables; some of whichcan lead to negative and unethical outcomes (Serviere 2010). In addition, the literature hasrecognized the importance of ethics in sales because of its role in acquiring new andmaintaining existing customer relationships (Ingram, LaForge, & Schwepker 2007).Ethical salesperson behavior leads to increased buyer trust and commitment, and thus to anincreased share-of-customer, buyer communications, and word of mouth (Ingram,LaForge, & Schwepker, 2007; Valentine, 2009). Due to this, understanding what motivatesa salesperson to act ethically or unethically in an entrepreneurial setting is of greatimportance to research and practice. is research represents a first step toward this goal.e overall purpose was to present in a comprehensive, yet parsimonious manner, aconceptual framework that builds upon the general theory of marketing ethics to illustratethe moderating role of neutralization theory in explaining unethical salespersons behavioracting in an entrepreneurial environment. e applications to sales promotion, relationshipbuilding and maintenance, and sales organizational behaviors provide some practicalperspectives as to how neutralization techniques may be used by salespeople to justifyunethical behavior.

For entrepreneurs acting as practicing sales managers, it is important to emphasize thatthe techniques are learned responses that tend to be socially reinforced to protect anindividual from self-blame (Vitell & Grove, 1987). erefore, entrepreneurs must not turna blind eye to salesperson behaviors. Occasionally monitoring a salesperson response to asituation involving judgment (e.g., a customer request for price concessions, reporting anexpense for a business lunch, responding to a competitor claim, etc.) may be advised.Especially for newer sales reps, who may not yet fully understand the ethical landscape,managerial coaching and training on acceptable ethical practice is important. Managersshould be on alert for employees using phrases like, “I did it because it was better for all


concerned,” “I did it for myself,” “I didn’t mean it,” or “they asked for it.” is could be asignal that the employee is utilizing a neutralization technique to justify an unethical act.

A logical follow up to this conceptual research would be an empirical study to test theframework. To do this, scales to measure a salesperson’s propensity to utilize each of the fiveneutralization techniques would be developed. A scenario based survey where typicalentrepreneurial selling situations would be provided to a professional sample. Scenarioswould describe situations where fictitious employees acted in an unethical manner. Subjectswould be asked to rate the degree to which they viewed the behavior as ethical/unethical.To measure neutralizations, subjects would be presented with multiple statements(reflective of each neutralization techniques) and asked to rate their level ofagreement/disagreement (e.g., “this salesperson’s actions were justified since it caused no-one harm”, “this salesperson’s actions were justified because the customer had it coming”,etc.). e empirical data gathered via this method would allow for testing of thepropositions presented in this paper.

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55

Inter-Industry Ideological Groups and the Emergence of InnovativeSustainable Business Practices

Kathryn Aten, Suzanne G. Tilleman and Jennifer Irwin

aBstraCtWhile the notion that corporations’ obligations for environmental stewardship extend

beyond adherence to specific regulations is now generally accepted, entrepreneurs,government officials, and scholars continue to struggle to find ways to establish genuineimprovements in business environmental performance. However, successes do exist. Weargue that endogenous change in business environmental performance—change notrequired by governmental regulation—derives from the ideology of institutionalentrepreneurs as a mechanism for institutional change.

We draw on diverse literature of institutional entrepreneurship, business environmentalperformance, and strategic groups to introduce the concept of an inter-industry ideologicalgroup. We discuss how such groups emerge and present a model to explain the processthrough which they improve firm environmental performance. We illustrate our modelwith examples from the case of 1% For the Planet (1% FTP) which we argue is an inter-industry ideological group, founded by entrepreneur and Patagonia, Inc. founder YvonChouinard.

katHrYn atEn is an Assistant Professor of Management in the Graduate School of Business and Public Policy at the Naval Postgraduate School, 555 Dyer Road, Monterey, CA 93943. Telephone: 831.656.3238 Email: [email protected].

suzannE g. tillEman is an Assistant Professor of Management in the School of Business Administration at the University of Montana, 32 Campus Drive, Missoula, MT 59812. Telephone: 406.243.2915 Email: [email protected]

JEnniFEr irwin is a doctoral candidate in the Lundquist College of Business at the University of Oregon, 1208 University of Oregon, Eugene, OR 97403. Telephone: 541.346.9068 Email: [email protected]

e authors express gratitude to the Lundquist College of Business at the University of Oregon and the faculty inthe Department of Management for their support during the authors’ doctoral studies at which time the ideas andmodel for the paper were developed.



We conclude by discussing how inter-industry ideological groups can influence theemergence and diffusion of new environmental norms and innovative practices through andacross industries. Understanding the process of change enacted by inter-industry ideologicalgroups provides knowledge to assist entrepreneurs and policy makers seeking to improvecorporate social responsibility and environmental performance in particular. We highlighthow entrepreneurs can change the institutional pressures on other firms through their ownexceptional environmental performance. By becoming members in groups of firms withsimilar ideologies, entrepreneurs enhance their performance and the performance of otherfirms.

introduCtionUntil recently, an axiomatic premise of the traditional North American business model

was that businesses exist solely to maximize profit. In the face of increasing environmentalconcerns, members of the public interest, business, government, and academic communitieshave argued that businesses are responsible for more than generating profits and shouldrespond to the needs of multiple stakeholders, including the communities in which thebusinesses operate (Freeman, 1984). From this perspective, businesses should beaccountable for environmental sensitivity and the responsible use of resources, among otherthings. However, while the notion that businesses’ obligations for environmentalstewardship extend beyond adherence to specific regulations is now generally accepted,entrepreneurs, government officials, and scholars continue to struggle to find ways toestablish genuine improvements in business environmental performance.

Successes do exist. A few well-known firms such as Patagonia, e Body Shop, and Benand Jerry’s (Mirvis, 1994) have become public icons—business environmental superstars—known to the public through case studies and media profiles. However, while case studiesand profiles in the popular and academic press document the specific actions taken by theseindividual entrepreneurs, we know much less about the roots of their environmentalcommitment; how they developed their environmental strategies; how their strategies haveco-evolved with those of other business environmental superstars, and how, or if, theirenvironmental strategies influenced less environmentally concerned firms.

Current social and environmental dilemmas such as global warming, declining naturalresource reserves, poverty in developing nations, and the worldwide drive for economicdevelopment indicate the extreme need for improved environmental business performance.Establishing genuine change that extends beyond a few unique firms will require theinstitutionalization of new norms, rules, and organizational practices through and acrossindustries. Institutional change has been viewed as rare, slow, and largely driven byexogenous changes in policy (Scott, 2001). Such explanations provide limited hope forthose seeking significant improvement in business environmental performance, asgovernments oen prove slow or reluctant to enact regulations. However, recentconceptions suggest that individuals and organizations acting as institutional entrepreneurs(Aldrich & Fiol, 1994; Powell & DiMaggio, 1991) are a mechanism for institutionalchange.

We draw on these recent conceptions of institutional change to explore how the actionsof a few exemplary entrepreneurial firms might generate improvements in environmentalbusiness performance. We argue that endogenous change in business environmentalperformance—change not required by governmental regulation—derives from the ideology

57Aten, Tilleman and Irwin

of institutional entrepreneurs. We draw on diverse literature to introduce the concept of aninter-industry ideological group. We discuss how such groups emerge and present a modelto explain the process through which they improve firm environmental performance. Weillustrate our model with examples from the case of 1% For the Planet (1% FTP) which weargue is an inter-industry ideological group, founded by entrepreneur and Patagonia, Inc.founder Yvon Chouinard. We conclude by discussing how inter-industry ideologicalgroups can influence the emergence and diffusion of new environmental norms andinnovative practices through and across industries.

is paper is organized as follows. We begin by briefly reviewing the literature exploringthe role of institutional entrepreneurs in influencing change and the role of firms inimproving environmental performance. We then discuss ideologically driven environmentalperformance, introducing the concept of inter-industry ideological groups and presentingour model explaining how such groups influence firms’ environmental performance. Weconclude by discussing the implications of our model, detailing the role of group memberorganizations, which act as institutional entrepreneurs (Aldrich & Fiol, 1994) to effectwider change and, suggesting areas for further research.

institutional EntrEprEnEurs and FirmEnvironmEntal pErFormanCE

e acceptance of the notion that businesses’ obligations for environmental stewardshipextend beyond adherence to specific regulations is driven by changes in underlyinginstitutions—the social rules, norms and rituals—that govern and support NorthAmerican business (Hoffman, 2001). Likewise, significant improvements in firmenvironmental performance require changes in institutionalized practices and criteria.However, the taken-for-granted nature of institutions suggests that they are very difficultand slow to change.

e role of institutional Entrepreneurs in institutional Changee central argument of institutional theory is that institutions matter: organizations are

influenced by an environment made up of taken-for-granted institutions and otherorganizations responding to the institutional environment and each other (Scott, 2001).e focus on the taken-for-granted aspect of institutions led to criticisms that institutionaltheory could explain only static, homogenous populations whereas observation illustratesthat institutions change over time and are challenged and contested (Dacin, Goodstein, &Scott, 2002). e seemingly contradictory problem of how institutionalized norms andpractices change has been the focus of increasing interest in entrepreneurship andorganization studies.

Arguing that to explain institutional change researchers must consider interested actors,DiMaggio (1988) introduced the concept of institutional entrepreneurship. A criticalprinciple of institutional entrepreneurship is that institutional change may be attributableto the efforts of intentional actors (DiMaggio, 1988; Garud & Karnoe, 2003). ese actorsmay be people, groups of people, or organizations who participate in defining andadvocating the new institution. e topic of institutional change has since emerged as acentral focus for management researchers of organizations (Dacin et al., 2002).Subsequently, institutional entrepreneurship has been identified as mechanism oforganizational and social change (Campbell, 2005; Davis & Marquis, 2005).


Recent research has demonstrated that through their “perceptions, interpretations, andenactments of institutional logics…[actors] give meaning and life to institutions” (Dacin etal., 2002, p. 47). Acknowledging the requirements of collective action and the similaritiesbetween the creation of new institutions and social movements, researchers have called forthe application of social movement theories and methods to the study of institutionalchange (Dowell, Swaminathan, & Wade, 2002; Swaminathan & Wade, 2001). osepromoting new institutions “Oen…overcome substantial obstacles through collectivestrategies that bear an uncanny resemblance to activities and strategies adopted byorganizations that spearhead social movements” (Dowell et al., 2002, p. 286).

Social movement scholars have noted that groups protesting around such non-class issuesas the environment did not have long-standing collective interests based on an essentialaspect of identity such as nationality or race, but rather had to construct a new collectiveidentity (Polletta & Jasper, 2001). is has led to an increasing interest in the constructionof collective identities and their role in these types of social movements. Identityconstruction in these movements involved collective agency, changed social norms, andcreated mobilizing networks. Similarly, institutional entrepreneurship involves collectiveagency as a transformation mechanism enacting change from micro to macro levels(Hedstrom & Swedberg, 1998).

Scholars of identity based social movements note that these movement collectives areconsciously self-reflexive (Laraña, Johnston, & Gusfield, 1994; Melucci, 1997). In thesetypes of movements, identities are constructed as individuals intentionally coordinate theiractions. is “collective agency” involves a conscious sense of the group as an agent, effortsto control and transform the social environment, and enactment in a moral space (Cerulo,1997).

Business Environmental performanceResearchers of organizations and the natural environment have identified factors that

influence environmental performance. ese include influences at the firm and industrylevels (Etzion, 2007). is research has identified attributes associated with superior firmenvironmental performance, demonstrated the competitive advantages that accrue to suchfirms, and supported the need to understand the role of important stakeholders such asconsumers and regulators. However, genuine, extensive improvements in environmentalperformance also require an understanding of the mechanism through which theunderlying norms, rules, and innovative practices emerge and develop.

Researchers have devoted considerable attention to identifying specific firm attributesthat are associated with superior environmental performance. In a review of this literature,Etzion (2007) identifies the following key attributes: innovativeness, workforce perception,integration of multi-stakeholder perceptions, and knowledge and information flow. Etzionargues, “the unifying theme of these attributes is their complexity and inimitability,suggesting that improved environmental performance is made possible through possessionof rare resources” (p. 640).

An integrated and sincere focus on proactive environmental strategies leads to thedevelopment of inimitable, nontransferable, and sometimes valuable resources for the firm(Barney, 1991; Russo & Fouts, 1997). Drawing heavily on the resourced-based view (RBV)(Barney, 1991), this literature suggests that when firms perceive environmental issues asopportunities to improve competitiveness, their tendency to develop forward thinking

59

environmental strategies is enhanced (Sharma, 2000). An integrated and sincere focus onproactive environmental strategies leads to the development of inimitable, nontransferable,and sometimes valuable resources (Barney, 1991; Russo & Fouts, 1997). Because thesincere commitment to the generation of strategies to improve environmental performancedevelops over a long time period, these strategies are difficult to imitate (McGee, 1998).

While this literature shows that sincere attempts to improve environmental performancecan increase firm competitiveness, questions important to those researching at theintersection of entrepreneurship and the natural environment and those seekingwidespread acceptance of sustainable business objectives remain unanswered. While weknow that the end result of a commitment to environmental performance may lead toincreased competitiveness, observation indicates that this is rarely the initial motivationbehind such strategies (Bansal, 2005). ere are businesses that successfully improve theirenvironmental performance, but these entrepreneurs are not motivated to capture thegreen consumer or even able to demonstrate an ex ante profit potential, but because theyare environmentally progressive and are seeking to change the way in which they dobusiness (Mirvis, 1994; Prakash, 2001). Accumulated evidence shows that increasedenvironmental performance leads to increased competitiveness but does not explaincompletely how improvements in environmental performance arise. A betterunderstanding of how the innovative practices which lead to enhanced environmentalperformance emerge and are adopted will contribute to the body of research exploringorganizations and the natural environment and provide knowledge to assist entrepreneursand policy makers seeking to improve corporate social responsibility and environmentalperformance in particular.

Given the far-reaching environmental impacts of certain industries, considerableattention has been devoted to research at the industry level of analysis. Not surprisingly,many have focused their attention on industries with greater environmental impact(Christmann, 2000; Hoffman, 1999; Hoffman, 2001; King & Lenox, 2000; Orsato, denHond, & Clegg, 2002; Russo & Fouts, 1997; Sharma, 2000). Highly environmentallydegrading industries, such as chemical and energy, are oen regulated. e environmentalprogress fostered by regulatory policies varies greatly across industries (Hunt, Auster, &Winter, 1990). Likewise despite isomorphic pressures, industry regulation results invarying degrees of environmental performance (Milstein, Hart, & York, 2002) as managersinterpret requirements differently (Delmas & Toffel, 2004). us, regulation alone cannotbe counted on to result in progressive environmental strategies.

Similarly, truly innovative environmental performance does not result from stakeholderpressure or industry self-regulation. Managers and entrepreneurs selectively adopt beyond-compliance policies heterogeneously as a result of institutional and stakeholder pressures(Prakash, 2001). Stakeholders who seek environmental performance improvements arerarely driven by a desire for the same outcomes as businesses. ese constituencies evaluatepractices and outcomes through different lenses, designated by their particular beliefs, andhave competing agendas, which are oen resolved by compromise resulting in less thanoptimal improvement (Prasad & Elmes, 2005).

Industry self-regulation has generated mixed results. Businesses oen join self-regulationgroups to signal environmental concern rather than to make substantive changes (King &Lenox, 2000; Orsato et al., 2002). Such “greenwashing” is unlikely to lead to continuousimprovements in environmental performance. Additionally, environmental laggards may

Aten, Tilleman and Irwin


use industry self-regulation groups, such as associations, to signal strategies rather thaninvest in them. Furthermore, the operational guidelines of self-regulatory groups are usuallynonbinding (Christmann, 2004). While one much studied, notable exception, the chemicalindustry’s Responsible Care program, does police its members (Hoffman, 2001; King &Lenox, 2000), the overall effect of self-regulatory groups on environmental performance isat best unpredictable and varied. Additionally, industry self-regulation does not encouragethe spread of innovative environmental practices beyond industry boundaries. Despitethese challenges, positive change does occur.

Positive change can result from both external forces and internal processes. As stated byGriffin, “ough external factors create incentives and expectations for firms, intrafirmdynamics are likely to influence how managers perceive, interpret, and translate theseexternal pressures into actionable items.” (2000, p. 485). Prakash (2001) has examined howmanagerial interpretation of external pressures in conjunction with the mechanisms ofpower base and leadership base adoption processes lead to heterogeneous selection beyondcompliance policies for corporate social responsibility within firms. Selective beyond-compliance policies are adopted because of managerial interpretation of external pressures.Rather than examining intrafirm responses to external pressures, our paper examines themechanism of institutional entrepreneurship and how it changes external pressures toinfluence change within and across industries.

Progressive organizations have changed the institutional pressures on other firms throughtheir own exceptional environmental performance. Mirvis (1994) identified severalbusinesses with superior environmental performance, including Ben & Jerry’s, the BodyShop, and Patagonia. e author conducted a case analysis to develop dimensions ofenvironmentalism in progressive businesses. e study highlights the influences ofentrepreneurs on firm environmental performance but does not explore how the innovativepractices of these firms might diffuse through and across industries to generate widespreadimprovements. Mirvis emphasizes the value of studying how inter-organizationalpartnerships and networks influences change in environmental practices and attitudes(1994, p. 98). We know little of the mechanisms behind the emergence of suchpartnerships or how they influence the diffusion of new environmentally sensitive norms,rules and practices.

idEologiCallY drivEn EnvironmEntal pErFormanCE

Researchers in organization theory have used the term ideology in varied and conflictingways (Weiss & Miller, 1987). In our discussion, we take ideologies to be “logicallyintegrated clusters of beliefs, values, rituals, and symbols” in accordance with the definitionoffered by Starbuck (1982, p.3). Specifically, we are examining the role of organizationswith a sustainable business orientation, which we identify as a pro-environment ideology. Apro-environment ideology encompasses an overarching concern for protecting theenvironment such as indicated by the mission of 1% For the Planet: “Use market forces todrive positive environmental change by inspiring companies to give” (1% For the Planet,2007).


In light of growing consumer concern with green products, entrepreneurs cannot helpbut be aware of the impact of their environmental behavior, or at least consumers'perceptions of their behavior. While for many entrepreneurs, this recognition may lead toattempts to meet the environmental demands of stakeholders, firms cannot achievecompetitively important outcomes simply by interacting with stakeholder groups. Becausethe natural environment is a socially constructed idea, and so has no representativestakeholder able to speak authoritatively for its needs (Goldman & Schurman, 2000),stakeholder groups are not uniform in their requests, and in fact have widely varyingexpectations and interests.

Individuals involved in environmentally focused businesses are oen motivated byideology (Hoffman & Ventresca, 2002) and are likely to seek real performanceimprovements, irrespective of the demands of stakeholder groups. However, as businesspeople in for profit organizations, they channel their ideological motivations through aneconomic lens. Entrepreneurs must consider their financial success when examining theirenvironmental performance. ey cannot simply base their environmental performance ontheir ideals, but must also consider technical, competitive, and strategic outcomes(Howard-Grenville, 2002). us, firms must innovate to create new norms and practicesthat support traditional business outcomes as well as their ideologically driven goals.

inter-industry ideological groupsWhile institutional theorists have shown that mimetic pressures within organizational

fields lead to isomorphism, observation shows that heterogeneity in strategy andperformance exist. Seeking to account for intra-industry variation in both firm behaviorsand performance, Hunt (1972) examined differential performance of firms in theAmerican home appliance industry. Hunt proposed that the existence of strategicgroups—groups of firms within an industry following the same or a similar strategy—explains the behavior and performance differences. We draw on this literature to suggestthat differences in environmental performance, which distinguish environmentalsuperstars from their within-industry competitors, arise when similarly interested firmsfrom different industries form an inter-industry ideological group.

We define inter-industry ideological groups as groups of firms from different industriesunited by a common ideology and desire to act on it. While we draw on concepts of thestrategic group literature, we emphasize that we are conceptualizing a group of like-mindedfirms across industries. We argue that in the case of an inter-industry ideological group, acommon ideology replaces industry membership to form the basis for a collective identity,behaviors, and strategies in a manner similar to that of industry strategic groups.

Researchers have argued that strategic groups are based on managers’ categorizations oftheir competitors (Porac & omas, 1990; Porac, omas, Wilson, Paton, & Kanfer,1995). Strategists from rival firms develop similar mental models of the competitive arenawhen they face similar technical and material problems and exchange information. Socialexchange leads to a shared understanding of how to compete throughout a community offirms (Baum & Lant, 2003; Porac, omas, & Badenfuller, 1989).

is shared understanding between members of the strategic group becomes an industryrecipe, the group’s collective agreement on how to compete successfully within theindustry ( James, 1997; Porac & omas, 1989). Recipes are industry level, supra-


individual cognitive structures, which suggest business strategies and practices ( James,1997) born of influential professionals united by shared beliefs. ese individuals form an“epistemic community” and their consensus is legitimized by their reputations.

We argue that inter-industry ideological groups emerge and operate in a similar fashion,with ideology providing the initial attraction between group members. Because the firmsare not competing directly with each other in an industry, competition takes the form of“friendly rivalry.” Firms with similar ideologies identify and categorize other like-mindedfirms. ose categorized as “like-us” on the focal issue become referents. Influentialindividuals from “rival” firms develop similar mental models of the ideological arena whenthey face similar technical and material problems and exchange information. As with astrategic group, social exchange leads to a shared understanding of how to achieveperformance on the issue throughout a community of firms. An inter-industry ideologicalgroup of institutional entrepreneurs diffuses new norms and practices changing theinstitutional environment.

1% For the planet1

In order to illustrate this concept, we use examples from 1% FTP as an inter-industryideological group and its founder, Yvon Chouinard, as an institutional entrepreneur. 1%FTP is a not-for-profit, inter-industry group founded by Yvon Chouinard. eorganization seeks to improve the health of the environment and to encourageenvironmentally sustainable business practices. It grew from its founder’s experience in hisfor-profit company, Patagonia, Inc. and his desire to join with like-minded business people.Chouinard founded his first for-profit business, Chouinard Equipment, with Tom Frost in1965. By 1970, the company was the largest U.S. supplier of climbing hardware and anenvironmental villain. Pitons, comprising 70% of the company’s business, did irreparableharm to climbing routes.

In 1972, Chouinard made his first risky business decision in favor of environmentalconcerns. He stopped supplying pitons arguing instead in favor of non-damagingaluminum chocks. e decision was a success. e piton business dried up and chocksbecame the industry standard. In the early 1970’s when the number of clothing items,which were originally focused on climbers, grew, Chouinard founded Patagonia, Inc. toexpand the clothing line. Early on, a group of Patagonia employees attending a city councilmeeting to help protect a local surf break heard a young biology student speak in supportof protecting the Ventura River from proposed development. e company gave thestudent office space, a mailbox, and small donations and the development project wasthwarted. In 1986, Patagonia made a commitment to donate 10% of profits, later changedto 10% of profits or 1% of sales, to grassroots environmental efforts such as the one thatprevented the development that threatened the Ventura River. e company then begansteps to reduce its own pollution, switching to recycled paper for the catalogs anddeveloping a fleece made of recycled polyester.

In addition, Chouinard founded two not-for-profit organizations to supportenvironmental causes and advocate a more sustainable business model: 1% FTP—analliance of diverse businesses “committed to leveraging their resources to create a healthierplanet” (1% For the Planet, 2005)—and e Conservation Alliance—an organization ofoutdoor businesses that support grassroots citizen-action groups and their efforts toprotect wild and natural areas. Like Patagonia, these organizations advocate a new businessmodel as illustrated on the 1% FTP website: “1% FTP has been receiving a steady stream


of inquiries from potential new business members …We hope this groundswell of actioncontinues and results in a redefined way of doing business!” (1% For the Planet, 2005).

rough these three organizations, Chouinard and the organizations he founded haveacted as institutional entrepreneurs, actively seeking to mobilize other for-profitorganizations to generate and share innovative practices to increase firms’ environmentalperformance. e mobilization efforts included the generation of a “sustainable business”identity supported by a common pro-environment ideology as illustrated by the followingexcerpts from the organizations’ web pages.

Become a member of this socially and environmentally progressive group… affect real change…receive other benefits: e satisfaction of paving the way for more corporate responsibility in the business community and the recognition, support and patronage of conscientious consumers who value members' serious commitment to the environment (1% For the Planet, 2005)

Membership in our own industry's conservation organization sends a strong message to consumers, competing interest groups and government decision makers about our industry's commitment to the jobs, and spiritual and recreational values contained within our nation's open spaces. Ultimately, the Alliance believes that more than any other group, this industry should be giving back to the landscapes on which its customers recreate, and the Conservation Alliance is the ultimate venue by which to do so. (e Conservation Alliance, 2005)

a model of inter-industry ideological group developmentWe propose that a mechanism for continuous improvement of firm environmental

performance occurs when a deviation-amplifying process (Maruyama, 1963) unfoldsacross the network of similarly interested firms we have defined as an ideological inter-industry group. Such cycles involve mutual casual relationships that amplify aninsignificant or accidental initial deviation. is initial deviation builds, such thatoutcomes may diverge significantly from the initial condition. ese types of processes areubiquitous: they are so-called viscous cycles when the results they generate are perceived asnegative. Positive results from such processes include capital accumulation in industry, theevolution of living organisms, and rise of cultures (Maruyama, 1963).

As explained by Maruyama (1963), the outcomes of such processes do not transpire as aresult of either the initial conditions or deviation alone. Rather, they accumulate as a resultof the interaction and feedback between the two. A deviation-amplifying process amplifiesan initial deviation in a cycle whereby the influence exerted by one element of the processloops back to itself through other elements. us, an increase in one element of the process(A) leads to increases in another element (B), which in turn leads to an increase in theinitial element (A). Importantly, the effects can accrue in the opposite direction as well. Adecrease in an element (A) will lead to a decrease in element (B), which will in turn lead toa decrease in element (B).

As depicted in Figure 1, we conceptualize this process as composed of elements –communication, benchmarking, innovation, and environmental performance – driven bya common ideology. e black arrows in the model depict the direction of influence and


the +’s indicate that a change occurs in the same direction, but not necessarily positively.us, a + indicates that an increase in one element leads to an increase in the other and adecrease in the element would lead to a decrease in the other. So for example, as we willexplain in detail below, an increase in communication generates an increase inbenchmarking which generates an increase in innovation, which in turn generates anincrease in performance, leading back to an increase in communication. Ideology forms asupporting context indicated by the background oval. Additionally, the ideology bothsupports and is strengthened by the other elements as indicated by the dashed grey arrows.

FigurE 1. idEologiCallY drivEn improvEd EnvironmEntal pErFormanCE

e loop formed by the arrows indicates the presence of mutual causal relationships. Amutual causal relationship exists when a change in the size of any of the elements influencesthe size of the others (Maruyuma, 1963). us, changes in each element are both cause andoutcome. So, for example, an increase in firm environmental performance—our outcomeof key interest—results from increases in the other elements and eventually causes furtherincreases in firm environmental performance. Additionally, as depicted by the backgroundgray circle, we argue that ideology forms a context and shared identity, which facilitates thecreation of inter-industry ideological groups. e inter-industry ideological groups fuelinstitutional entrepreneurship changing institutional pressures on other firms.

Ideology. Ideology forms a context facilitating an initial attraction between individualsand initiating development of inter-industry ideological groups. It provides a foundationfor the development of a collective identity, “cognitive, moral and emotional connectionswith a broader community, category, practice or institution” (Polletta & Jasper, 2001, p.284). Social recognition of a collective identity can change dominant normativeexpectations. Scholars of social movements have observed that in some movementsparticipants seek recognition for new identities rather than political or economic

Ideology

Communication Benchmarking Innovation EnviromentalPerformance

+ + +

+

65

concessions (Melucci, 1997). An identity is not imposed on these groups by political orlegal systems, rather these groups, such as feminists and environmentalists, construct newidentities. ey seek to change normative and cultural codes by gaining recognition for thenew identity (Polletta & Jasper, 2001).

By recognizing the existence of “environmentalists,” society acknowledges an ideologymade up of a set of values and perceived problems and solutions. Whether or not oneagrees with the values advocated by the newly identified collective, widespread recognitioncreates expected norms for that group. Specific behaviors and values are expected ofenvironmentalists.

Intra-industry ideological groups promote a set of expectations and values congruentwith their ideology. For example, according to Chouinard, sustainable businesses are thosethat seek to reduce their impact on the environment, support environmental causes andcivil democracy, and attempt to influence other companies (Chouinard, 2005).Membership in 1% FTP, Chouinard states, "…allows customers to distinguish betweenserious environmental commitment and empty rhetoric” (1% For the Planet, 2005).

Ideology is also an element of our model. An increase in any one of the other elementswill support a strengthening of ideology. For example, while Patagonia founder YvonChouinard had a long interest in environmental causes, the firm did not originally projecta strong environmental ideology. e firm’s decision to provide office space, a mailbox, andsmall donation in support of an environmental cause was amplified when that initialinnovation was successful, generating increased communication and visibility andencouraging similar actions. With each success, the pro-environment ideology wasreinforced encouraging additional action.

Communication. Innovators in an emerging network face a unique problem of seeking toform collective support for innovations and activities for which there may be no widelyunderstood language (Hill & Levenhagen, 1995). Communication must occur about thenew something, which does not yet exist. A shared ideology facilitates the creation ofcommon terminology and mental models across the network.

Once businesses have started interacting through their common interest in an ideology,and develop a common lens with which they approach this issue, greater communicationdevelops over this network of interested businesses. It has been shown repeatedly that theinternal flow of information improves firm environmental performance (Lenox & King,2004; Sharma, Pablo, & Vredenburg, 1999). e same improvement is true for flow ofinformation: as information flow improves, for example, as firms seek out and receiveexpert information from suppliers, environmental performance improves (Geffen &Rothenberg, 2000). Many studies have shown that networks assist organizational learningby establishing conduits for passing tacit knowledge, learning, and innovation (Hamel,1991; Kogut, 1998; Powell & Brantley, 1992). In addition, valuable information is morelikely to be effectively transferred if the source of the information is known to the recipient(Levitt & March, 1988). e development of inter-industry ideological groups will thusenhance communication and the transfer of valuable information applicable to theorganizing ideology.

Benchmarking. e common terminology supports the development of an informationarchitecture, which supports benchmarking against one another’s environmentalperformance. Increased performance in environmental sustainability, like any other area of



performance, is enhanced by interaction with other organizations pursuing similar goals, inthis case, other progressively environmental businesses. Referent groups are used byorganizations for benchmarking. (Ketchen, Snow, & Hoover, 2004) and it has been shownthat imitation follows network ties (Ahuja, 2000).

Referent groups within industries, as discussed in the strategic groups literature, provideno incentive in pushing firms to overcome the institutional pressures within their industry.However, inter-industry ideological groups are not harnessed to a single industry'sinstitutional norms, instead creating referent groups between and beyond industryinstitutions. is allows firms to benchmark across industries, outside of the conformity-inducing norms, and therefore to exceed industry standards in the area the ideologicalgroup addresses. Ideologically motivated organizations are thus able to benchmark againstthe best businesses in a given area, such as environmental sustainability, rather than thebest in their industry. is inter-industry diffusion of practices results in greaterenvironmental performance improvements.

Inter-industry benchmarking allows firms to escape the mimetic pressures of theirindustries, generating innovative practices and implementing innovations developed inother industries leading to enhanced environmental performance. Exceptionalenvironmental performance positions these firms as environmental leaders in their homeindustry, further reinforcing their commitment to a pro-environment ideology, andcreating an impetus to make further improvements.

Innovation. Because of their commitment to the ideology of environmentalsustainability, inter-industry ideological group members will work to improve not onlytheir individual environmental performance, but also that of all members of the group.Because the inter-industry ideological groups include members who are not in directcompetition, they are particularly likely to share knowledge across organizationalboundaries (Bouty, 2000). Competing for recognition and glory rather than resources,fosters improvements without limiting collaboration and information sharing.

Many studies of biotechnology highlight innovation that occurs within the networks oforganizations (i.e. Powell, Koput, & Smith-Doerr, 1996). Knowledge sharing is possiblebecause the network connections are developed and enhanced through shared ideology,communication, and mutual success, allowing the group to share critical resources, such ascompetencies (Dyer & Singh, 1998). Increased innovation leads to improvedenvironmental performance (Christmann, 2000; Sroufe, Curkovic, Montabon, & Melnyk,2000).

Improved Environmental Performance. When firms within the group achieve improvedenvironmental performance, they are encouraged to communicate their successes andmethods by their shared ideology and friendly competition. As discussed previously, theshared ideology supports an interest in improving the performance of all group memberstoward the end goal, in the case of this discussion, widespread business sustainability, andenvironmental protection. Friendly competition, the inter-industry ideological groupcorollary to strategic group rivalry, also encourages the communication of environmentalperformance improvements and methods among group members. is completes the cycleof deviation amplification through mutual causal relationships. An increase in any one ofthe elements leads to amplification of environmental performance and a continuation ofthe cycle and a re-dedication to the ideology of environmental sustainability.

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ConClusionWe have argued that current literature does not explain the process through which a few

widely known environmental superstars achieved performance successes. To address thisgap, we have introduced the concept of an inter-industry ideological group and presented amodel illustrating the mechanism for increasing firm environmental performance in adeviation amplifying cycle within such a group. We argue that endogenous change inbusiness environmental performance—change not required by governmental regulation orexisting industry norms—derives from the ideology of institutional entrepreneurs.

We speculate that the improvements made by members of the inter-industry ideologicalgroup also influence the expectations and performance of their home industries suggestinghow change might then diffuse within industries. Because they innovate outside theinstitutional limitation of their industry, group members become industry leaders inenvironmental performance. If successful, these higher standards can become new industrynorms, leading other firms within the industry to conform, and spreading higher standardsfor environmental performance.

We have illustrated our discussion with an example of one inter-industry ideologicalgroup. 1% For the Planet highlights the importance of ideology as an attractive force forthe creation of an inter-industry ideological group. is is the beginning of our research tounderstand inter-industry influences on corporate social responsibility by firms. We intendin future studies to identify additional inter-industry ideological groups in order to testour model. Finding tractable data is challenging, but potential sources of empirical datacould be comparative case studies or business communications.

is paper contributes to the understanding of how industries can endogenously changeand how practices can be adopted across industries. rough our model, we have shownthat endogenous change occurs within industries because of outside networking andbenchmarking driven by ideology. In the area of organizational theory, this modelinfluences our understanding of institutional change and institutional entrepreneurship. Inthe area of entrepreneurship this model explains how individuals can shi the industriallandscape, dramatically affecting firm performance. Ultimately, the proposed model seeksto explain how the actions of a few exemplary entrepreneurs can generate endogenousimprovements across multiple industries.

note:1. Patagonia Inc.’s history is excerpted om the organization’s web page.

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73

The Role of Creativity in Sales: Current Research and

Future Directions

Ellen Bolman Pullins, David Strutton and Iryna Pentina

aBstraCte role that creativity may play in facilitating selling success or customer retention has

received little attention in the sales or sales management literatures. Yet, given recentchanges in the nature of the selling role, creativity itself may be increasingly important. eact of creation is – or, as reasoned below, absolutely should be – part of the professionalsalesperson’s job and selling arsenal. Based on the current sales and organizational creativityliteratures, a classification of timing versus type of creativity is developed and used to deriveeight research propositions. Each proposition is related to possible consequences associatedwith greater sales creativity.

EllEn Bolman pullins is Director of the Schimdt School of Professional Sales, Schmidt Research Professor ofSales & Sales Management and Professor of Marketing at the University of Toledo, 2801 West Bancro Street, MS 103, Toledo, Ohio 43606. Email: [email protected]

david strutton is a Professor of Marketing and Director, New Product Development Scholars Program at theUniversity of North Texas, P.O. Box 311396, Denton, TX 76203-1396. Email : [email protected]

irYna pEntina is an Assistant Professor of Marketing at the University of Toledo 2801 West Bancro Street, MS 103, Toledo, Ohio 43606. Email: [email protected]



e academic sales and sales management literatures are replete with models explainingwhat makes salespeople perform more effectively (e.g. Zoltners, Sinha and Lorimer 2008).Earlier studies focused on personality characteristics and appearance (Lamont andLundstrom 1977), adaptive selling capabilities (Weitz, Sujan and Sujan 1986), andflexibility (Castleberry and Shepherd 1993). More recently, relationship development skills(Marshall, Goebel and Moncrief 2003) and the ability to function within a sales team(Deeter-Schmelz and Ramsey 1995) have been identified as key success factors. However,the role of a salesperson’s or a sales team’s creativity has been largely ignored (Wang andNetemeyer 2004). is is especially troubling since today’s world of selling has beenradically reshaped by increased global competition, cutting-edge sales technologies, rapidempowerment of buyers, and fragmentation of markets (Moncrief and Marshall 2005).Such new approaches as relationship selling, value-added and consultative selling arecritical to sales function-based competitive advantage in an increasingly commoditizedbusiness world, and require sufficient strategic planning that can benefit greatly if salesagents and teams exhibit more creative approaches at each step of the selling process (Piercyand Lane 2005). Taking this even one step further, business publications are beginning torecognize that collaborative salespeople have the real advantage: solving problems, creatingsolutions and co-creating with their customers (Ehmann, 2010).

e role of creativity in enhancing business processes and functional outcomes has longbeen recognized. By 1943, Joseph Schumpeter was already writing that capitalism evolvesprimarily through “creative destruction” that produces, through mutations from within,innovative technologies and organizations. Organizational creativity has since been linkedto outcomes such as organizational learning (Levinthal and March 1993), strategicdifferentiation and sustainable competitive advantage (Porter 1996), as well as improvednew product performance (Im and Workman 2004), with these relationships becomingstronger in turbulent environments characterized by high uncertainty and competiveness(Ford, Sharman and Dean 2008). e evolution of sales from a marginal activity to astrategic value-creating function responsible for integrating internal departments andcustomer-facing channels for increased organizational productivity (Geiger and Guenzi2009) and competitive differentiation (Piercy and Lane 2005) logically evokes the need forcreativity research in the sales context. Although practitioner-oriented sales literatureemphasizes the need for creative, problem-solving sales practices as markets evolve andtechnology advances (Wang and Netemeyer 2004), very little conceptual, empirical, ortheoretical sales literature investigates the role of sales force creativity. To address this gap,the current paper attempts to explore the extant general creativity research in order toderive a series of testable research propositions that would aid us in better understandingcreativity’s role in selling success today, and could provide new insights for the practicing

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managers and salespersons regarding the role of creativity in developing customer solutionsand satisfaction, and in securing customer delight and profitable relationships (Zoltner,Sinha and Lonmer 2008).

e remainder of this paper begins with an overview of the state of creativity research asit may relate to professional selling today. Following this, a framework is developed leadingto testable research propositions that stem from the research gaps in current sales literatureand may help marketing scholars develop theory in the area of sales creativity.

Creativity literature as it relates to sales and sales managementTraditional creativity literature originated in the area of psychology and can be traced

back to Galton’s (1869) work on hereditary genius profiling and Royce’s (1898) discussionof inventions. Later, Guilford’s (1950) calls for creativity research emphasized definitionsof the concept and its antecedents. ese aspects were consequently addressed by fivemajor research streams in management and business academic literatures. Creativityconceptualized as a collection of personality traits and behavioral elements focused onintuition, internal motivation, tolerance of ambiguity and risk, as well as innovative (asopposed to adaptive) problem-solving behaviors (e.g. Barron 1969; Kirton 1989). e viewon creativity as cognitive processing centered on “outside the box”, divergent thinking and“lateral” associations (e.g., de Bono 1991). Researchers also considered both motivation(e.g., Ford et al. 2008), and the role of knowledge and expertise (e.g., Stern 1989) infostering creativity. Finally, research focusing on organizational drivers of creativityconsidered social climate (e.g., Csikszentmihalyi 1988), and organizational culture andwork environment (e.g., Amabile 1988; Mumford and Gustafson 1988) as factorspromoting individual and team creativity (See Table 1 for examples of some of the majorresearch findings in each stream).

Pullins, Strutton and Pentina

76 Journal of Ethics and EntrepreneurshipJournal of Ethics and Entrepreneurship

pErsonalitY-BasEd Findings

CrEativitY rEsEarCH

Amabile (1988); Barronand Harrington (1981);Galton (1869);Simonton (1975;1986); Singh (1986);Woodman andSchoenfeldt (1989)

Specific sets of biographical variables are associated with creative achievement

Personality data interact with biographical data to predict creativity

Antecedent conditions influence personal and cognitive characteristics of individuals

Broad interests, attraction to complexity, high energy, independence of judgment, autonomy, intuition, self-confidence of the individual affect creativity

Persistence, intellectual honesty, internal locus of control are important for creativity

Basadur, Graen andGreen (1982); Basadur,Wakabayashi and Graen(1990); Carrol (1985);De Bono (1991); Ford(1996); Guilford (1977;1984); Hammond et al.(1986); Sawyer (1991);Sutton and Hargadon(1996)

Associative fluency, fluency of expression, figural fluency, ideation fluency, speech fluency, word fluency,originality are related to creativity

Associative thinking (leaps as opposed to following structured paths) helps finding innovative problem solutions

Ability to generate alternative solutions is a fundamental process underlying creative productivity

Flexibility and elaboration are essential to divergent production

Divergent thinking must combine with convergent thinking for a creative person

Training organizational members in creative thinking causes improved divergent thinking

Systematically employing brainstorming facilitates the creativity of new product proposals

Contextual ambiguity freed people to explore alternative causal relationships

Forces of causal reasoning that restrict attention may results either from individual or the social context thatrigidly defines acceptable strategies, provides negative sanctions for failure, or guards against considering alternative explanations

Cognition-BasEd Findings

CrEativitY rEsEarCH

taBlE 1. ExamplEs oF somE maJor rEsEarCH Findings in various strEams

77Pullins, Strutton and Pentina

motivational Findings

CrEativitY

rEsEarCH

Amabile (1979;1988; 1990);Barron andHarrington(1981); Ford et al.(2008); Kanferand Ackerman(1989); Kurtzbergand Amabile(2001); Mumfordand Gustafson(1988); Oldhamand Cumming(1996); Woodmanet al. (1993)

Intrinsic motivation is a key element in creativity Environmental settings that provide opportunities and

absence of constraints foster creativity Environmental settings that provide rewards foster

creativity Goals influence motivation through self-regulatory

mechanisms Creative performance may be undermined by expectation

of evaluation Culture, resources, technology, strategy, and rewards affect

organizational creativity Individuals whose dispositions make them more likely to be

affected by a favorable work environment are more creative. e creativity of all individuals is raised by a supportive

environment. Interpersonal interactions in teams, group diversity and

group conflict can lead to positive (synergy) as well as negative (groupthink) effects

Creative strategic choices arise in response to managers’ perceptions of uncertainty and competition; creativity may improve the ultimate effectiveness of strategic choices by 5-10%

rolE oF knowlEdgE Findings

and ExpErtisE

Amabile (1988);Stein (1989)

Both domain-relevant skills (knowledge, technical skills and talent)and creativity-relevant skills (cognitive skills andpersonality traits) are important for creativity

ough previous experience can prevent from producing creative solutions, no creative behavior can be knowledge-free

Invention can be conceptualized as a new combination of previous experiences

The presence of both individual and organizational creativity mechanisms led to the highest level of innovationperformance.

Meaningfulness dimension rather than the novelty dimension of creativity is of greater importance.

organizational- FindingslEvEl

CrEativitYoutComEs

Bharadwaj andMenon (2000); Im and Workman(2004)


More recent work in the area of organizational creativity emphasizes its effects on socialand organizational outcomes, including strategic and tactical competitive advantages (Fordet al. 2008), new product success (Bharadwaj and Menon 2000; Im and Workman 2004),and marketing communications effectiveness (Zinkhan and Watson 1996). Currentcreativity research also addresses cognitive processes underlying creativity at multiple(individual, group, and firm) organizational levels (e.g. Amabile 1996; Drazin, Glynn andKazanjian 1999; Hargadon and Bechky 2006), as well as a manager’s role in promotingteam creativity (Kurtzberg and Amabile 2001). Other studies attempt to capture creativitydimensions and to arrive at its more comprehensive definition. For example, DiLiello andHoughton (2008) propose to combine the opposing views on creativity as an intention andan outcome into a two-dimensional construct, with potential and practiced creativityrepresenting different aspects of organizational resources that could boost innovation andproductivity.

Little work in the academic sales arena has specifically explored creativity amongprofessional salespeople. Moncrief (1986) concluded preliminary evidence existedsuggesting that creativity affects performance. Weilbaker (1990) explored the cognitive andperceptional selling abilities for missionary salespeople. Creativity was one of nine abilitiesidentified as important by salespeople, sales managers, and their customers. He wasparticularly concerned with creativity as it relates to how they identify customer needs andinnovate the ways they approach customers. In 1997, Atuahene-Gima noted thatsalespeople selling new products require the same high level of creativity as the productlaunch in the market place. He found that salespeople with an intuitive problem-solvingstyle are more likely to adopt the new product and better support the selling effortassociated with it (Atuahene-Gima 1997). Perhaps the most focused creativity research insales has been conducted by Wang and Netemeyer (2004). ey proposed that creativity isessential to such tasks as finding new prospects, identifying the real needs of a customer,and seeking tailored solutions to customer problems. eir findings supported the notionthat customer sales depend on understanding problems and tailoring solutions. Whensalespeople integrate greater creativity into their sales activities, they may be more likely toprovide prospects or customers with innovative, useful and thus more desirable solutionsthrough which their problems can be solved and situations improved (Wang andNetemeyer 2004).

Clearly, a problem-solving approach to selling has been accepted for sometime (e.g.,Weitz 1998). Eliashberg, Lilien and Kim (1995) noted that since problem-solvingincreases the likelihood of sales encounters and long-term relationships, most studies haveemphasized the value of using a problem-solving sales approach. As the psychologicalliterature has demonstrated, successful problem-solving is strongly correlated with creativeproblem-solving (Amabile 1998). Now, couple the fact that little is known about creativityin traditional selling situations with the expanded role of selling today (Piercy and Lane2005). More strategic thinking requires intensive problem-solving (Beatty 1998), and withmore problem-solving comes more need for creativity.

Today’s salesperson oen must coordinate many needs across multiple functions in boththe buying and selling organization. She or he needs to be able to balance two separate setsof objectives and develop win-win alternative solutions so that both parties are satisfied.is salesperson then becomes an integrator of the two firms, not boundary spanning inthe traditional sense (Piercy and Lane 2005), but serving as a conduit for a seamless system

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of problem-solving. e ability to identify information or problems and generatealternative solutions becomes very important, escalating the need for creativity.

One other clearly relevant generalized change is arising within the sales profession.Market sensing requires that successful salespeople be capable of looking beyond theirtypical role and day to day operations, and understand what is happening in the externalenvironment that is important to the selling firm, much like creative thinkers must si andsort multiple levels of information to “sense” out what is relevant to the problem at hand(De Bono 1993); to identify information and problems. Also, in the midst of integratingmultiple functions, salespeople should be able to both sense relevant information, anddevelop multiple alternatives that meet a variety of differing criteria if they are to besuccessful. is requires high levels of creativity.

Being creative entails “sensing” information and responsively generating multiplealternatives. Creativity also involves the ability to combine these sensing and generationalactivities successfully. Given the variety of activities that salespeople may engage in and thechanging nature of the role, an initial distinction related to the timing of creativity needs tobe made. A distinction is made between ‘real-time’ and ‘multi-stage’ creativity (Drazin,Glynn and Kazanjian 1999; Ford 1996). Real-time creativity eventuates - largelyspontaneously - during the brief time frame in which salespeople operate in the actualpresence of customers. By contrast, multi-stage creativity unfolds more deliberately. ere,sufficient time exists for more judicious generation, evaluation and selection of creativeideas and approaches through which any resulting solutions are presented to customersmore creatively, consistent with the building and maintenance of customer relationshipsover time.

A second distinction may also be relevant within the sales arena. Creative thinking canbe classified into two distinct categories (Woodman et al. 1993). e first, divergentthinking, encompasses the intellectual predilection and applicable abilities of salespeopleto create (i.e., originate) numerous inventive, fully-elaborated and diverse ideas. esecond, convergent thinking encompasses the intellectual discipline and applicable abilitiesof salespeople to rationally evaluate, critique and identify those best ideas from any batchcreated during the divergent creative stage (Woodman et al. 1993). Divergent thinkingappears essential to ensuring the novelty and appeal of creative sales solutions, as well asproblem-solving. Yet as a necessarily complementary factor, convergent thinking may beevery bit as essential as a means to ensure the appropriateness and practical suitability ofany ideas selected for pursuit. Few sales professionals are likely to innately possess theintellectual, functional or temporal prerequisites necessary to engage naturally andoptimally in divergent and convergent creativity. Yet arguably, most sales professionalscould acquire the requisite creativity-inducing predilections and skill sets, if theirleadership purposively managed or taught their subordinates in accordance with thosefacilitating factors (Epstein, Schmidt and Warfel 2008).

When we consider that salespeople need both divergent and convergent thinkingprocesses and that creativity needs to occur in both real time and multi-stage timing, wecan consider how these two classifications interact. Combing the two concepts would giveus two boxes (see Figure 1). Each of these combinations would result in unique positiveoutcomes in the selling relationship, which we explore below and present as researchpropositions.



Figure 1. outcomes of Creativity Classification

Creativity, ideas and sales success: research propositions Based on the classification in figure 1, eight propositions were developed. Ultimately,

each proposition might be examined empirically in follow-up research. Hopefully, thesepropositions can help establish a research agenda to direct future research in this area.ese propositions are structured such that, collectively, they should ensure that researchconducted on creativity focuses on topics that should most benefit sales managers as theytry to accommodate the changes facing today’s sales professionals.

Salespeople should be motivated to create myriad opportunities - for customers,themselves and the firm they represent. Success in selling today requires the creation of newmodes of thinking about customers, and their problems and core issues. e mostsuccessful salespeople may tend to create (or innovatively unearth) customer wants or needswhere none previously existed (or was known to exist). More successful salespeople maytend to create new solutions or original variations on existing solutions, through convergentthinking. Oen, successful ones may create new messages or productive variations onexisting messages, and deliver either through newly created approaches (Moncrief andMarshall 2005). Compared with less creative counterparts, creative professionals mayconfront evolving environmental challenges more readily and responsibly (Strutton 2008).Best case, creative salespeople should more willingly originate and take ownership of new –and potentially useful - sales ideas that yield solutions superior to the status quo. Even worstcase, creative salespeople appear less likely to hold fast to debilitating tenets such as, ‘that’snot how we sell around here’, even when things are not going well. ey must be able tothink creatively under the pressure of the face-to-face (real time) sales interaction.

Salespeople are also supposed to create value, satisfaction and success for their customersand firms. Given that salespeople routinely encounter challenging yet only looselystructured tasks, many creative ways to satisfy customers exist (Wang and Netemeyer,2004). In fact, most have yet to be created. Successful salespeople may tend to derive the

Creativity type Convergent divergent

real time

multi-stage

Increased adaptabilityBetter Solutions(improved benefit tocustomer)

More selling timeGreater differentiation

Increased customersatisfactionIncreased accountpenetration

Longer relationshipsStronger (more resistant)relationships

Creativity timing

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most effective means of satisfying customers’ problems (De Bono, 1993), through realtime, divergent thinking.

So what should salespeople be creating? One practically significant answer is ideas(Amabile 1988). Wang and Netemeyer (2004, p. 806), in fact, describe salespersoncreativity as “the amount of new ideas generated … by the salesperson in performing jobactivities”. Ideas are neither new products nor new solutions. Yet when properly nurturedand evolved, ideas might culminate in either, or both, desirable outcomes. e pursuit andexecution of new ideas may facilitate selling success. e best ideas, those most capable ofcreating genuine differentiation-engendering value, naturally are rare. Original and usefulideas don’t exist - and thus cannot be emulated - until someone creates them. Any originalsales idea’s value is always determined primarily by favorable or unfavorable perceptionsthat develop inside buyers’ minds. Logically, then, such ideationally-based sorts ofperceived value cannot be possibly matched by competitors until aer initial sales effortshave been executed and relationships entered, strengthened or at least sustained as a futurepossibility (or prospect). When salespeople differentiate themselves or their offerings basedon the practical (i.e., useful) value of new ideas they have created, the prospects ofcompetitive bidding or effective competitor responses should be lessened.

Proposition One: Salespeople who demonstrate more creative alternatives in real timesettings will obtain higher levels of differentiation of their solution.

Another singular advantage may accrue to salespeople who learn how to distinguishthemselves based on their ideational creativity (Rasmusson 1999). In a man-bites-doginversion of what one might expect, this advantage could emerge, oen to a salesperson’seventual benefit, because customers can and oen will reject genuinely creative ideas rathereasily! e rationale is this: when less creative individuals - call them ‘traditionalists’ - makepresentations to customers they typically deliver many reasons why their product should bepurchased. A case is presented, usually grounded in evidence supporting their productsolutions’ superiority to competing solutions. e presumed buyer offers opposingarguments, which traditional salespeople attempt to counter. Unfortunately, in suchsessions, buyers function as both judge and jury, and their word – especially, their no – isfinal. Case closed. And unfortunately, the best reasons to buy have already been presented.Sales opportunity, as well as an opportunity to call again, both lost – perhaps for a longtime. Deriving a new case, a new rationale, for re-entering this particular judge’s‘courtroom’ may prove more difficult for more traditional sales thinkers.

But when more creative salespeople are selling based on the originality and potentialusefulness of their ideas, even when those ideas are rejected, in theory there is alwaysanother reason and reasonable opportunity to see the customer again. at’s becausecreatively-oriented salespeople can derive new ideas more easily. And creativity-inuredsalespeople would understand those new ideas always need to be convertible into new andpotentially useful solutions. As compared to less creative counterparts, then, creativesalespeople may derive more attractive customer solutions that yield additional reasons andrationales to present to customers. us, even if their initial ideas are rejected, creativesalespeople may be more likely to earn additional opportunities to meet and sell tocustomers again.



Proposition Two: Salespeople who demonstrate more creative alternatives in real timesettings will obtain more selling time with customers.

Arguably, during customer presentations, creative salespeople should focus customerattention on the desirability of their original idea - rather than on reasons for buying theproduct. If properly derived and vetted, each creative idea should be perceived, rightfullyand logically, as being unique to the targeted customer. Naturally, customers then shouldbe more likely to talk about how the idea applies (or not) to their specific needs orproblems. As prospects discuss their concerns, core issues and, ultimately core objectives,more creatively predisposed salespeople ought to productively reshape their originalcreative ideas (via convergent thinking) to address them, sometimes in real-time creativeprocesses. ey should be more capable of achieving this outcome.

Proposition ree: Salespeople that exhibit higher levels of creativity evaluation should be more adaptable in their selling presentations.

In addition to being more adaptable, using convergent thinking (creative evaluation) in areal time setting should also result in better overall solutions with the customer. A majorpart of the selling process today is joint problem solving. Being able to work together tomatch solutions to real customer needs should improve the quality of the solution andprovide additional customer benefits from decisions made. We should actually see betterbuying decisions on the customer’s part because of being engaged in this real timeconvergent process.

Proposition Four: Salespeople that exhibit higher levels of creativity evaluation in the actual customer interaction, should help the customer obtain better solutions (more benefits).

Novel, useful and viable economic solutions - an innovative genre derivable only fromgenuinely creative ideas - cannot be commoditized, at least in the short run. Whenrelationships are created or strengthened based on ideation-based differentiation, it appearsless likely that prices would need to be cut to sustain or grow customer share. So whendivergent thinking is applied over time in a customer relationship, the prospect of retainingor expanding customer share is improved (Palmatier, Scheer and Jan-Benedict 2007). eability of salespeople to cra distinguishing value by anticipating, identifying andunderstanding customers’ problems, opportunities or threats more creatively and morestrategically through multi-stage processes, and then, based on their own original thinking,engendering and properly selecting unique solutions that address those issues may keepcompetitors a step behind. Customers will be more satisfied with the salesperson asconsultant, and ultimately do more business with the salesperson.

Proposition Five: Improved divergent thinking by salespeople over the course of the relationship with the customer will result in increased levels of customer satisfaction.

Proposition Six: Improved divergent thinking by salespeople over the course of the relationship with the customer will result in increased levels of account penetration.

83

Whatever their origins, ideas are potentially transformable into creative and highlydesirable solutions for current or future customer problems. is is accomplished throughstrong convergent thinking capabilities. Oen, those customer problems were themselvesdiscovered creatively, originating as sales ideas. e prospects for more easily sustainable,and thus longer-term, relationships with existing customers or prospects thus shouldexpand.

Proposition Seven: Over time, effective use of creative evaluation by salespeople increases the salesperson’s effectiveness at developing long term relationships with customers.

Proposition Eight: Over time, effective use of creative evaluation by salespeople increases the salesperson’s effectiveness at developing stronger (more resistant, sustainable) relationships.

ese eight propositions are intended to underscore the importance of and possiblebenefits associated with becoming more creative as a salesperson.

ConClusionsIn this paper, several propositions related to the consequences of sales creativity were

developed. Hopefully, in the future, these propositions can be examined empirically invarious future practitioner and theoretical contexts.

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a Brief History of gardner-webb university

On December 2, 1905 the Boiling Springs High School was chartered as a result of aninitiative sponsored by the Kings Mountain Baptist Association (Cleveland County) and theSandy Run Baptist Association (Rutherford County). ree years later, the first campusstructure, the Huggins-Curtis building, was completed.

In 1928 in response to the changing educational needs of the area, the institution wastransformed into the Boiling Springs Junior College. e Great Depression created manyobstacles for the College, but its survival was secured by the sacrifices of many loyal supporters.One such instance occurred in 1932 when the school contracted with teachers to run theCollege on the condition that the teachers pay all expenses for food, books, supplies, heat, water,and lights and then accept for their own pay what was le from fees and gis. ere were at leasttwo occasions in the 1930’s when trustees made motions to close the school. e proposalsfailed (once by a single vote) and the college survived.

Shortly thereaer, North Carolina Governor, O. Max Gardner, began devoting his energy,time, and wealth to strengthening and guiding the college. On June 15, 1942 the trustees votedto change the name to Gardner-Webb Junior College in honor of Gardner and his wife FayWebb-Gardner. During the following year, the institution embarked on a $300,000 financialcampaign. At the conclusion of this initiative, the trustees announced that the school was debt-free.

Enrollment stood at 1300 when Gardner-Webb was granted senior college status in 1969. In1971, the first graduates of Gardner-Webb Senior College received their Bachelor degrees.During this same year, the Christian Service Organization was established to providescholarships to students preparing for ministry.

e institution became a pioneer in distance learning in 1978 with the establishment of theGOAL (Greater Opportunity for Adult Learners) Program. In 1980, the first Master Degreeprogram was offered - a Master of Arts in Education with concentrations in early childhood,middle school, and physical education.

In 1991, Gardner-Webb was recognized by the John Templeton Foundation as a characterbuilding school. e School of Divinity was established in 1992, with the initial group ofstudents enrolling in Spring 1993. Two other significant events occurred during 1993 - theschool changed its name to Gardner-Webb University and the Master of BusinessAdministration program began in earnest.

e University began offering its first doctoral program in 2001 - the first graduates with theDoctor of Ministry degrees received their diplomas at the May 2004 commencementceremonies. A second doctoral degree program, the Ed.D. in Educational Leadership, was addedin 2004. e Doctor of Nursing Practice was first offered in 2010.


statement of values

CHristian HEritagEAcknowledging One God – Creator and Sustainer of life, and Jesus Christ as Savior and

Lord; committing to self-giving service displayed in Christ-like moral action that respects thedignity and value of every person.

Baptist HEritagEAffirming historic Baptist values such as the freedom of individual conscience and the right of

people to worship God as they choose, the authority of Scripture in matters of faith andpractice, the priesthood of every believer, the autonomy of the local church, and the separationof church and state.

aCadEmiC ExCEllEnCEEncouraging visible enthusiasm for knowledge, intellectual challenge, continuous learning,

and scholarly endeavors; inviting pursuit of educational opportunities within and beyond theclassroom for the joy of discovery; and inspiring accomplishment within one’s field of study.

liBEral artsOffering broad-based exposure to the arts, humanities and sciences and to each field’s unique

challenges, contributions, and life lessons; complementing the acquisition of career- relatedknowledge and skills with well-rounded knowledge of self, others, and society.

tEamworkWorking collaboratively to support and promote shared goals, assuming responsibility

willingly, meeting commitments dependably, handling disagreement constructively, andpersevering despite distraction and adversity.

studEnt-CEntErEd FoCusProviding students an environment that fosters intellectual and spiritual growth; encourages

physical fitness, service, social and cultural enrichment; strengthens and develops moralcharacter; and respects the value and individuality of every student.

CommunitY EngagEmEntAssisting campus, local, national, and global communities through education, outreach, and

research; fostering dialogue and action in support of human welfare and environmentalstewardship.

divErsitYStudying and celebrating our world’s rich mix of cultures, ideologies, and ethnicities;

respecting and welcoming students without regard to ethnicity, gender, religious commitment,national origin, or disability.

91

gardner-webb university at a glance

GWU, a private Christian University, is located 50 miles west of Charlotte in the Piedmontarea of Western North Carolina. Main campus of 200 acres is located in Boiling Springs, NC.

EnrollmEnt: Over 4,000 students including the day program, graduate studies, and theGOAL program (Greater Opportunities for Adult Learners). 63% female, 37% male.Geographic distribution: 39 states, 24 foreign countries.

FaCultY: 140 full-time, 79% with Ph.D. or equivalent. Faculty to student ratio is 1:13.CurriCulum: A total of 5 professional schools, 2 academic schools, and 11 academic

departments offer nearly 60 undergraduate and graduate major fields of study. Approximately33% of students major in business field, 30% in social sciences, and 17% in nursing.

atHlEtiCs: NCAA Division I; member of the Big-South Conference.HistorY HigHligHts: Founded in 1905 as Boiling Springs High School; became Boiling

Springs Junior College in 1928; renamed Gardner-Webb College in 1942 in honor of GovernorO. Max Gardner and his wife Fay Webb Gardner; became a university in 1993; hosted 1996U.S. Olympic Trials- Cycling; completed $34 million capital campaign in 1998; reclassificationto NCAA Division I athletics in 2000; added first doctoral program (Doctor of Ministry) in2001. Gardner-Webb celebrated 100 years of educational service in 2005.

prEsidEnt: Dr.A. Frank Bonner ( July 1, 2005 - Present)gEograpHiC distriBution: 37 states and 21 foreign countries.

did You know?Gardner-Webb University has once again been ranked as one of the “Best Universities” in

the South that offer “a full range of undergraduate and master’s programs” in the 2011 edition of“America’s Best Colleges” from U.S. News and World Report.Gardner-Webb was selected by the Carnegie Foundation for the Advancement of Teaching

for its prestigious Community Engagement Classification, recognizing the University’sinstitutionalized commitment to service. GWU is one of only 311 institutions nationwide tohave earned the distinction.Gardner-Webb was one of only 528 universities and colleges nationwide to be named to the

President’s Higher Education Community Service Honor Roll (for the fourth consecutive year).Gardner-Webb was selected in 2011 by the White House for the President’s Interfaith and

Community Service Campus Challenge. GWU is one of just over 300 schools to participate inthis yearlong community service initiative. Gardner-Webb’s core curriculum ranks in the nation’s top two percent for quality and

breadth, according to the 2011-2012 What Will ey Learn? study by the American Council ofTrustees and Alumni (ACTA). Gardner-Webb was awarded the North American Mission Board’s (NAMB) Courts

Redford Award for 2010, which recognizes the nation’s top 10 universities for mobilizingstudent missionaries through NAMB. e Big South Conference honored Gardner-Webb’s Carrie Long (women’s track and field)

with the prestigious George A. Christenberry Award for Academic Excellence in 2011.Summer Hess, a 2006 honors graduate from Gardner-Webb (English major), was named a

prestigious 2010-11 Fulbright Scholar. Hess is the first GWU graduate to receive this award. Gardner-Webb Women’s basketball won the Big South Conference Championship in 2011,

earning the University’s first ever berth in the NCAA Division I Women’s Championshiptournament.


aBout tHE Editors oF tHE

Journal oF EtHiCs & EntrEprEnEursHip

dr. donald w. Caudill is a Professor of Marketing inthe Broyhill School of Management in the Godbold Schoolof Business at Gardner-Webb University in Boiling Springs,North Carolina. Previously, Dr. Caudill was a Professor ofBusiness and Leadership and Chair of Marketing,Management and Leadership, and E-Business andEntrepreneurship at Bluefield College in Virginia and aProfessor of Marketing and Director of the AppalachianLeadership and Entrepreneurial Center at Bluefield StateCollege in West Virginia. He was also an Associate Professorof Marketing and Honors Professor at Belmont University inNashville, Tennessee. Dr. Caudill served as an AssistantProfessor of Marketing at Southern Arkansas University, theUniversity of North Alabama and the University of Tennessee at Martin. He began histeaching career as an Instructor of Marketing at Virginia Polytechnic Institute and StateUniversity in 1981. Dr. Caudill was a member of the graduate faculty in the Jack C. MasseyGraduate School of Business at Belmont University, and has taught classes via satellite(distance learning) for West Virginia Graduate College, evening, weekend, and onlinegraduate courses for Averett University, the University of Tennessee at Knoxville andMountain State University (WV). In addition to 30 years of teaching at the university level,Dr. Caudill has worked in selling, retail management, and marketing research. Further, hewas a principal in a small advertising agency.

A Virginia native, Dr. Caudill earned a B.S. degree in Business Administration from BereaCollege (Kentucky), a M.B.A. from Morehead State University (Kentucky), a M.S. inmarketing from the University of Memphis (Tennessee), and a Ph.D. from VirginiaPolytechnic Institute and State University. He is a member of Pinnacle, Phi Eta Sigma, DeltaMu Delta and Sigma Beta Delta academic honor societies and e Gamma Beta Phi Societyand Alpha Kappa Psi.

Dr. Caudill has had nearly 100 articles published in professional journals and tradepublications. He has authored four seminar manuals and several business/leadership bookmanuscripts. Dr. Caudill’s research has been cited in business communications and sellingtextbooks and in numerous referred journals. He has been interviewed for several newspaperand magazine articles and on radio and television talk shows. Dr. Caudill has been aconsultant for small and large businesses and a workshop leader and speaker at state, regional,and national conferences and conventions.

Dr. Caudill has been on the editorial review boards of the Journal of Business andEconomic Perspectives, Small Business Reports, Trade Show and Exhibit Manager, theBusiness Education Forum, the Journal of Managerial Issues (Ad Hoc Reviewer), and otherjournals. He is or has been a member of the United States Association for Small Business andEntrepreneurship (USASBE), the American Marketing Association, the Association ofConsumer Research, the Academy of Marketing Science (a Fellow), and numerous otherorganizations. He is a frequent conference presenter, paper reviewer, discussant, session chairand panelist.

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JamEs E. littlEFiEld is Emeritus Professor of Marketing atVirginia Tech in Blacksburg, VA. Jim retired aer twenty-eight yearsat Virginia Tech and eighteen years at the University of NorthCarolina at Chapel Hill. He served as Department Head at eachinstitution.

He is the author or coauthor of eight books and numerous researcharticles in marketing and international marketing. Much of Jim’scareer was spent abroad, having lived, researched, and taught in fourcountries and traveled in seventy countries. A major activity wasdeveloping and taking students on study abroad programs toSwitzerland and other places in Europe, China, Vietnam, Cambodia,

and other parts of Asia, and Chile. His industrial experience was with General Motors inDetroit, the B.F. Goodrich Company in Akron, and numerous consulting assignments in theU.S. and abroad.

Dr. Caudill is a former American Marketing Association Hugh G. Wales National FacultyAdvisor of the Year, a life member of Pi Sigma Epsilon (National Fraternity in Marketing, SalesManagement and Selling) and Sigma Pi (Social) Fraternity, and the winner of theHigginbotham Award for Outstanding Service. He has been named to Who’s Who inAdvertising, Who’s Who in the South and Southwest, Who’s Who Among American Teachers,Who’s Who Among Emerging Leaders of the World, Who’s Who in American Education,Who’s Who Among Young Professionals, and twice selected as an Outstanding Young Man ofAmerica.

Dr. Caudill has traveled throughout the United States and studied marketing in numerousforeign countries including Canada, e Bahamas, Aruba, Mexico, Belize, Honduras, Brazil,Argentina, Paraguay, France, Israel, Italy, Germany, Switzerland, Austria, England, Greece,Spain, Australia, Hong Kong and China. Dr. Caudill was a Visiting Advertising Professor toFitzgerald and Company in Atlanta, GA and served an internship at Wisdom Media. He hasbeen an advisor to Phi Beta Lambda and is a Sam Walton Fellow of Students in Free Enterprise(SIFE). His students have won numerous awards and honors.


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Documents

JOURNAL OF ETHICS ENTREPRENEURSHIP - …homepages.utoledo.edu/mmallin2/ExternalDossier/Publications/23...Leadership. at focus can be found in the Journal of Ethics & Entrepreneurship