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«PROACTIVE ENVIRONMENTAL STRATEGIES IN SMALL BUSINESSES: RESOURCES, INSTITUTIONS AND DYNAMIC CAPABILITIES Jan Lepoutre Promotor: Prof. Dr. Aimé Heene ...»

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8.3. Limitations Having the goal to answer the generic question how small businesses successfully execute proactive environmental strategies, this dissertation reported a literature review and two empirical studies that drew on one empirical multi-case study database. Whereas the first empirical study explored how firms in the Belgian ornamental horticulture sector were able to execute proactive environmental strategies when the odds were against having one, the second further explored how the firms had interacted with their institutional context in particular.

Despite vigilant care on the design, execution, analysis and reporting of these two empirical studies, some choices inevitably had to be made that present limitations to our research findings.

8.3.1. Methodological limitations The quality of case study research depends on the level of richness it can bring in the account of the phenomenon of interest (Eisenhardt & Graebner, 2007; Siggelkow, 2007;

Weick, 2007). As such, case studies ideally assure a triangulation of multiple data sources and perspectives of the case (Yin, 2003). Earlier studies have therefore engaged in a process of combining interviews with the firm’s CEOs, board members, employees and external stakeholders knowledgeable about the firm or the phenomenon of interest (Eisenhardt, 1989b;

Isabella, 1990; Gilbert, 2005; Eisenhardt & Graebner, 2007; Zott & Huy, 2007). In our cases, however, sources for data triangulation were very limited. First, often only the ownermanager was aware of the firm’s strategic decisions with regards to the natural environment.

Employees are frequently low-skilled laborers that are not included in the strategy making

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process. Second, little or no valuable archival material could be found that would further be useful for understanding the firm’s PES. Third, the profession of ornamental horticulture is rather solitary. As a result, the only constituents that are knowledgeable about a firm’s strategies and practices would be the independent advisors, supplier advisors and input vendors, government advisors that have frequent contacts with firms and, in the case of VMS members, the VMS directors. In order to maximize the number of perspectives and data sources of the firm, we employed four strategies. First, whenever archival material was necessary through internet or professional magazines, we included them in our case study analyses. Furthermore, when more people were in fact knowledgeable about a firm, we did additional interviews as long as this was needed to reach theoretical saturation. Second, we interviewed the owner-managers twice about their firms, with at least one year between each interview. Whereas we could have used these interviews for a longitudinal analysis of the cases, we maintained focus during the second interview on the time of the first interview. This process allowed not only to increase the depth of the data collected (by adding additional and new details that emerged on the discussions of the first interview), but also to assess whether the stories presented by the owner-managers had remained consistent over time. As a third means to increase depth of the data, I deliberately ended the formal part of the interview before really stopping to ask questions. During this time, the firms often gave additional impressions that had been left out of the interview, gave reflections on my approach or asked about other firms. Since there is a lot of information “out there” about the firm, these additional 15 minutes often yielded the most interesting and unexpected leads for new reflections about the data and the interview.

8.3.2. Contextual limitations The empirical research of this dissertation took place in the confined setting of the Belgian ornamental horticulture, and reflects the dealings of a small sample of firms active in this industry prior to the winter of 2005-2006. Besides reasons of a purely practical nature, confining the research to this sector and geographic area also presented theoretical advantages. First, establishing access to small business population is often a difficult task (Curran & Blackburn, 2001). As a researcher of a government-sponsored, yet independent university-based think tank, the Policy Research Centre for Sustainable Agriculture, I had been able to establish quick and trust-based access to a number of key informants in the sector. It was only with the help of these key informants that easy access with the interviewed firms could be established. Second, the restricted study area yielded a ceteris paribus

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situation, holding the factors beyond the phenomenon of interest constant. In so doing, I was able to focus on developing the depth and richness required to generate some important research findings. Unfortunately, this contextual bias raises some relevant questions with regards to the generalizability of the study’s findings. In particular, our study was executed in a mature and traditional Belgian production sector that has mainly business-to-business transactions. Furthermore, the sector was clearly in a state of decline with many firms going out of business and producing in an increasingly uncertain environment. As a result, traditional practices and expectations not only had had a long time to settle in as taken-forgranted assumptions, yet were also strongly embraced in the uncertain conditions the firms were operating in. These contextual factors inform to what extent our findings may be generalized to other contexts as well.





First, since the study was executed in Belgium, a Western and developed country, the implications of this study may be limited only to this specific context. However, we have strong indications that the validity of our findings may extend to other developed and developing country contexts as well. Firstly, the market for ornamental plants is a European and very integrated market. As such, the firms in this research do not experience any different market opportunities for environmentally friendly plants than those in most other European countries. Secondly, the regulatory requirement to keep exported plants free of pests is a European regulation and is therefore no different in Belgium than in any other European country. The only potential difference that may exist between countries is the national institutional support for environmentally friendly production. For example, MPS, the Dutch mother organization of VMS, has a far larger membership base in the Netherlands than in any other country in Europe. Interviewees and information we found in reports related this success to the Dutch regulatory requirement of having a registration system on the firm. Although growers are free to choose which registration system they wish to apply, the MPS system is accepted as an appropriate solution. As a result, the MPS system could have moved from a status of proto-institution to a well established institution in the Dutch sector. How this has had an impact on the capability requirements of the industry, however, is an interesting research question that would require further research. Thirdly, the findings in this dissertation may also be relevant for small firms in developing countries. Given that resources and institutional support in developing countries is lower in general, this should not come at a surprise. Yet, whereas the companies in our study had been able to engage in munification by tapping into networks that were available within Belgium or in the neighboring countries, companies in developing contexts may have to reach out to networks at much further distance

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to realize the same result. As such, even though the same processes may apply in both developing and developed country contexts, additional research would be required to fully investigate the impact of the contextual differences.

Second, questions can be raised with regards to the generalizability of this research across other industry contexts. The industry context was peculiar in nature as a result of the strong forces for isomorphism, institutional inertia and few opportunities for capitalizing on PES. Therefore, the findings of this dissertation will be particularly applicable to companies that find themselves in contexts with similar features. Although the cases in our own study may represent extreme cases, merely engaging in the uncertain process of questioning established practices for the sole improvement of a non-financial objective will encounter healthy skepticism from any investor or fellow owner-manager. As a result, it can be expected that the relative importance of organicity, munification and the multiple processes of institutional non-conformity may be different across industries - depending on the relative presence of internal resource capital, external resource capital and institutional capital – but will nevertheless be present in some way another.

Third, the latter remark also presents a last contextual condition of our findings. The present study was focused on those types of environmental strategies that were proactive in nature. As soon as certain environmental practices and expectations become mainstream and become a kind of new Olympic minimum, we can expect entirely new capabilities to become important. As it has been shown in earlier research, environmental strategies require the policing and peer-pressure to keep firms from free-riding other colleagues’ environmental practices (Olson, 1965; Ostrom, 1990) and will require communal strategies (Barnett, 2006) to keep firms from defecting to the established standards. Furthermore, given that it is not in their interest to be ahead of legal or normative expectations, firms without PES will not need to engage in the complex and intensive processes of developing alternative institutional logic exposure, engaging in multiple roles in the institutional field, collaborating with peers to create inexistent resources and the like. Rather, resources will have to be dedicated more to following up what the legal requirements are, and assessing solutions how proactive firms went about dealing with new environmental challenges. As such, the late adopters can benefit from the high risks that the proactive firms were ready to take (Rugman & Verbeke, 1998), yet they will also probably be too late to capture the early mover advantages that proactive firms could potentially have reaped (Nehrt, 1998).

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8.4. Future research Before concluding this dissertation, this section takes the opportunity to highlight some potential avenues for future research. Although I hope the research in this dissertation has contributed to answering some pertinent questions, it has also uncovered some new research questions.

First, I repeat the call as made in chapter 5 to investigate the fine line between obstinacy and foolhardiness. For every company that has succeeded in persistenly wanting to realize its objectives, one can imagine that others have failed. Future research could therefore ask the question: how far can a firm go in being committed to its proactive environmental intentions? Are there any indications in the external environment firms can follow up to assess the likelihood of finding emerging solutions? In a similar vein, research may ask the question: how much non-conformity can a firm get away with when realizing a proactive environmental strategy? For example, the genetic modification of crops has been promoted as a beneficial environmental technology due to lower toxic pesticide need as a result of genetic pest resistance. However, since genetically modified crops remain mostly illegal in Europe, there are legal barriers to the institutional non-conformity a firm could develop in this perspective. Even if a firm has the best intentions to reduce the impact of pesticides on the natural environment by using genetically modified plants, the law requires the firm’s obstinate commitment to stop at some point. Yet the most path-breaking knowledge breakthroughs have come some obstinate non-conformists (e.g. Copernicus, Darwin and Vesalius). How firms may go about regulative institutional non-conformity (in other words, breaking the law) in order to realize their good intentions remains a question for future research.



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