Sustainable Entrepreneurship (SE): A Revised Model … · International Journal of Academic Research in Business and Social Sciences June 2012, Vol. 2, No. 6 ISSN: 2222-6990 294 Izaidin

International Journal of Academic Research in Business and Social Sciences June 2012, Vol. 2, No. 6

ISSN: 2222-6990

293 www.hrmars.com/journals

Sustainable Entrepreneurship (SE): A Revised Model Based on Triple Bottom Line (TBL)

Izaidin Abdul Majid Universiti Teknikal Malaysia Melaka, City Campus

Email: [email protected]

Wei-Loon Koe Universiti Teknologi MARA, Malacca City Campus

Email: [email protected]

Abstract Throughout the years, researchers have suggested several fields of entrepreneurship studies, such as regular entrepreneurship, green entrepreneurship, social entrepreneurship and sustainable entrepreneurship. This literature review focused on sustainable entrepreneurship, in which a definition was proposed. Then, based upon the concept of triple bottom line, a revised model of sustainable entrepreneurship was suggested at the end of paper. The model consisted of four domains, namely economical, social, ecological and cultural. Thus, in order to be acknowledged as true sustainable entrepreneurs, they are required to give equal priority to all of the four domains suggested in the model. Keywords: Cultural, Ecological, Economical, Entrepreneurship, Social, Sustainable, Triple bottom line Introduction Entrepreneurship has received the attention from researchers for many years. Traditionally, it has been linked to wealth generation and economic growth. Then, this study has gone through a process of development throughout the years. Many fields of entrepreneurship have emerged; for instance, one of them is sustainable entrepreneurship (SE). SE can be considered as an emerging and new field in entrepreneurship study (Gibbs, 2009; Hall et al., 2010; Hockerts and Wüstenhagen, 2010; Richomme-Huet and Freyman, 2011). Specifically, it links the objective of sustainable development to wealth accumulation among entrepreneurs (Tilley and Young, 2009) and has changed the ways entrepreneurs perceived on environmental resources issue (Graham, 2010). Many extant studies on SE have used the concept of triple bottom line (TBL) coined by Elkington in 1994 to describe what SE is all about (eg: Schlange, 2006; Dixon and Clifford, 2007; Tilley and Young, 2009; Hall et al., 2010; Hockerts and Wüstenhagen, 2010). Nonetheless, there is a significant shortcoming of using TBL to describe SE as it does not mention clearly about the

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degree of emphasis that should be given to the domains identified in the model. Furthermore, some important domains have also been disregarded in the model. As such, this paper aims to propose a revised model of SE based upon the concept of TBL. As this paper regards SE as an extension of entrepreneurship, it starts with proposing a definition for entrepreneurship. Then the paper goes on with concepts related to SE and its definition. Lastly, a revised model of SE is presented at the end of this paper. Basic Concepts Of Entrepreneurship Definition of Entrepreneurship In every field of study, defining the key term is always a challenging task for all the researchers. For instance, defining “entrepreneurship” is not an easy task as well due to its multi-faceted nature and multi-disciplined boundary (Schaper et al., 2011). Moreover, there is a lack of consensus on the definition of “entrepreneurship” (Carsrud and Brännback, 2007; Gartner, 1988; Veciana, 2007). Throughout the years, numerous definitions of entrepreneurship have been produced by researchers from various disciplines. However, to date, there is a general agreement that no universally accepted definition of entrepreneurship has been produced so far (Carsrud and Brännback, 2007; Gartner, 1988; Veciana, 2007). Though difficult and challenging, identifying a definition for entrepreneurship is necessary. The reasons are simple, as Richomme-Huet and De Freyman (2011) point out, defining “entrepreneurship” clearly is a prerequisite in identifying new emergent trend in the field. Moreover, the definition is useful in developing a boundary of the field of entrepreneurship and to differentiate it from other field of studies and to develop more theories related to it (Bruyat and Julien, 2000). Entrepreneurship is considered as the essence of enterprise and the concept has existed for centuries. It is important to the development of modern economic and social life (Stokes et al., 2010). However, it has only become popular as a business buzz word since 1980s. Began from 18th century, researchers have tried to define entrepreneurship for nearly two centuries. The word “entrepreneurship” is derived from the French word “entreprendre”, which means “to undertake” or “to do something”. Some early works on defining “entrepreneurship” could be dated back to 18th century by a group of economists, such as Richard Cantillon, Adam Smith, Jean Baptiste Say, John Stuart Mill, and Carl Menger Hermann (Veciana, 2007). A commonly cited early definition of entrepreneurship is from Schumpeter (1934), which emphasizes on “innovative creative destruction”; whereby new innovation businesses are replacing the traditional businesses and thus making them obsolete. In the later years, several gurus in entrepreneurship study have tried to produce their own definitions; for instance, Kirzner, (1973), Gartner (1988), Stevenson and Jarillo (1990), Shane and Venkataraman (2000) and Hisrich and Peters (2002), to name but a few. For the past few decades, more than a dozen of definitions have emerged and flourished the literature. Most of the definitions found were incomplete and required further scrutiny because they focused solely on individual perspective which covers only the characteristics or activities of entrepreneurs (Schaper et al., 2011).


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Nevertheless, recently Stokes et al. (2010) have taken the effort to define entrepreneurship from a comprehensive perspective by categorizing the existing definitions into three main dimensions. According to them, the different definitions of entrepreneurship are focused on (i) Processes; (ii) Behaviors and, (iii) Outcomes. The first category of definition is focusing on “what entrepreneurs do”. The definitions has centered on activities or processes of entrepreneurship, such as “creating something new” (Hisrich and Peters, 2002), “pursuing opportunities” (Stevenson and Jarillo, 1990), “discovering, creating and exploiting opportunity for future goods and services” (Venkataraman, 1997). Meanwhile, the second category is focusing on “who are entrepreneurs”. The definitions highlight the specific behaviors of individuals, for examples “competitive and drive market process” (Kirzner, 1973) and “creative and innovative” (Schumpeter, 1934). Lastly, not to forget about the outcomes- or results-focused category of definitions, which focusing on “what entrepreneurs produced”. The outcomes are normally referred to contributions such as “creation of new organizations” (Gartner, 1988). By referring to Stokes et al. (2010), this study attempts to define entrepreneurship by synthesizing works from previous researchers with focus attention on behavior, processes and outcomes. As such, this study defines entrepreneurship as follow A process of identifying, evaluating and pursuing opportunities through creativity, innovativeness and transformations to produce new products, processes and values that are beneficial. Contributions of Entrepreneurs Many researchers agree that entrepreneurs have contributed significantly to the world’s society, economy as well as human kind. For instance, Baron and Shane (2008) name entrepreneurs as “engine of economic growth”. One of the early gurus in entrepreneurship, Schumpeter (1934) describes entrepreneurs as innovators who bring “creative destructions”. According to him, entrepreneurs innovate new products or procedures to replace the old ones; thus, they have helped to improve people’s quality of lives. In addition, Fayolle (2007) mentions that entrepreneurship has significantly contributed towards economic development; for examples, job creation, business opportunities utilization and product innovation have improved the economic condition of a country. Specifically, for example, the growth of Taiwan as one of world’s important economies also relied heavily on the development of small and medium enterprises (SMEs), or to be precise, the entrepreneurs (Boulton and Turner, 2005). Due to its many positive contributions on economic development, entrepreneurial activities have been promoted in many Asian developing and emerging economies, such as Thailand, China, India and of course, including Malaysia. It is undeniable that entrepreneurs have brought many benefits and positive contributions to humankind, but they have also caused many negative impacts to the society. In recent years, a new perspective in regards to entrepreneurs’ contributions has aroused, that is the environmental degradation as a negative consequence of entrepreneurial activities due to market failures (Cohen and Winn, 2007; Dean and McMullen, 2007). As such, there are


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researchers who claim that the environmental degradation caused by entrepreneurs should be and could be resolved by them (Hall et al., 2010; Hockerts and Wüstenhagen, 2010; O’Neil and Ucbasaran, 2011; Parrish, 2010; Tilley and Young, 2009).

Current Development of Entrepreneurship Most of the early entrepreneurship studies were focused on the traditional views on that entrepreneurs are profit orientated, opportunistic and business minded. Due to the rapid development in entrepreneurship, this point of view is undergoing processes of change. In recent years, there exists a group of researchers who comment that entrepreneurial activities are causing environmental degradation due to the effects of market failures (Cohen and Winn, 2007; Dean and McMullen, 2007). Moreover, as mentioned by Pacheco et al. (2010), literature on welfare economics has also concluded that entrepreneurial activities actually contribute to environmental degradation. Specifically, environmental discontinuities such as pollution, land degradation and climate change are examples of effects from entrepreneurial activities in the society (Chick, 2009). Then, some researchers start to argue that despite the negative contributions to social and environment, entrepreneurs are also playing a significant role in leading the business activities towards sustainability (Hockerts and Wüstenhagen, 2010; O’Neil and Ucbasaran, 2011; Parrish, 2010; Tilley and Young, 2009). Specifically, as Hall et al. (2010: 440) assert “entrepreneurship may be a panacea for many social and environmental concerns”. Furthermore, Pacheco et al. (2010) also agree that entrepreneurs are important force for social and ecological sustainability. From the above arguments, it can be concluded that there exist more than one type of entrepreneurs (Anderson, 1998). Indeed, the field of entrepreneurship can be categorized into several sub-fields (Richomme-Huet and De Freyman, 2011; Tilley and Young, 2009), such as: (i) Regular/economic entrepreneurship; (ii) Green/environmental entrepreneurship; (iii) Social entrepreneurship; (iv) Sustainable entrepreneurship. Table 1 summarizes the basic characteristics of each type of entrepreneurship. It is noticeable that these fields of entrepreneurship are overlapping with each other; however, they actually have their main primacies. For instance, all categories of entrepreneurships above are required to survive economically. Furthermore, while social entrepreneurship focusing on contributing to social or public welfare and creating social values (Austin et al., 2006); green or environmental entrepreneurship concentrating on handling environmental or ecological issues (Chick, 2009; Dean and McMullen, 2007). Sustainable entrepreneurship is much more complicated and more confusing compared to the others, because a holistically and equally contributions to economic, social and environment is required (Tilley and Young, 2009; O’Neill et al., 2009). In short, the extension of entrepreneurship is also slowly evolving from focusing on only one sub-area, such as eco- or social-entrepreneurship, it is now starting to include all of them to get a holistic effort, and that is what we called “sustainable entrepreneurship”.


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Table 1: Sub-field of Entrepreneurship

Sub-field Description

Regular/economic Being economically orientated by discovering and exploiting opportunities to make profit, through processes of venture start-up, risk assumption, product or process innovation and resources management.

Green/environmental Being environmentally or ecologically embedded by preserving natural resources and creating economical development.

Social Being socially embedded by complementing social and profit goals.

Sustainable Being future orientated by balancing the efforts in making contributions to produce economic prosperity; social justice and social cohesion; as well as environmental protection.

Source: Richomme-Huet and De Freyman (2011) and Tilley and Young (2009) Transition in Entrepreneurship Based upon the discussion in the previous sub-sections, it can be seen that entrepreneurship is undergoing a process of change. This change has brought in many new practices in entrepreneurship. Among others, entrepreneurial practices do not have to associate to economic growth or profit generation only (Tilley and Young, 2009). In other words, entrepreneurs are slowly transforming themselves to include other fields which were deemed not related to them previously. One of the significant transitions is that entrepreneurship is slowly moving from merely fulfilling economic needs in its initial stage to integrating sustainability practices in the latter stage. Obviously, this transition is very much in contrast to Friedman’s (1970) view on business contributions. Friedman (1970) has given his famous (or infamous) quote in New York Times Magazine, where he mentions “the social responsibility of business is to increase its profits”. Though contradicting, this transition is slowly being accepted by entrepreneurs; due to the wave of “greening the industry” took place in Europe and other industrialized countries around the world in mid-1990s (Schick et al., 2005) and increasing awareness of sustainability development among entrepreneurs (Hall et al., 2010). Specifically, Parrish and Foxon (2009) also argue that sustainable entrepreneurs can act as the catalysts for transitioning from current economy to a sustainable economy and fill the gaps left by businesses and governmental agencies in providing critical social and environmental goods and services. However, some believed that there are a number of the so-called sustainable entrepreneurs are actually contributing to sustainability development with a business cause (Cohen and Winn, 2007; Dean and McMullen, 2007). In other words, there are entrepreneurs who are motivated by the profitable opportunities of linking businesses activities to sustainability development (Gibbs, 2009; Krueger, 2005; Schaper, 2002; Schick et al., 2005). To some entrepreneurs,


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sustainable practices are regarded as unmet customer needs which provide great opportunities for their business to exploit and prosper further (Crals and Vereeck, 2004). It is undeniable that such a group of entrepreneurs do exist; however, due to the increasing awareness in the sustainability development among entrepreneurs, the perception of reconciling entrepreneurship and sustainable development is changing. As pointed out by Parrish (2010), due to the increasing awareness in sustainable development since 1970s, entrepreneurs are frequently asking themselves what role they can play in rectifying the problem of social and ecological degradation. The author further notes that there exists a group of entrepreneurs who are actually driven by motivation to make direct contributions to sustainable development through their enterprising actions. Without doubt, Parrish’s statement has remarkably brought a new insight of sustainable entrepreneurship in the current business world.

Overview Of Sustainable Entrepreneurship (Se) Defining Sustainable Entrepreneurship (SE) SE is a concept that links sustainability development to entrepreneurship. SE can also be considered as an umbrella term for environmental entrepreneurship, green entrepreneurship, ecopreneurship and social entrepreneurship; however, these terms are overlapping and difficult to draw a clear-cut among them (Gibbs, 2009) and sometimes they are simply ambiguous (Hall et al., 2010). It can be noticed that many existing studies of SE are focusing too much on “environmental entrepreneurship” (eg: Cohen and Winn, 2007; Dean and McMullen, 2007; Dixon and Clifford, 2007; Gibbs, 2009; Krueger, 2005; Schick et al., 2005; Schlange, 2006). While it is not absolutely wrong to do so, it is deemed inappropriate because it may cause confusion. Furthermore, these two terminologies carry different meanings and have different primacies (Tilley and Young, 2009). As such, some distinctions among these two categories of entrepreneurship have to be found. Some significance definitions have been suggested by scholars in recent years. As such, a definition provided by Crals and Vereeck (2004) reads like this: the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of workforce, their families, the local and global community as well as future generations. Clearly, apart from profitable “economic” domain, this definition has included the maintenance of quality “social” domain and is “social focused”. Meanwhile, Dean and McMullen (2007: 58) defined it as “the process of discovering, evaluating and exploiting economic opportunities that are present in market failures which detract from sustainability, including those that are environmentally relevant.” Similarly, this definition also mentions about the “economic” domain, but “environmental” domain has been added and made this definition “environmental focused”. The above two definitions have limited SE to be either social or environmental orientated. Nonetheless, Tilley and Young (2009) are among the researchers who argue that the practice of


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“sustainability entrepreneurs” is not only limited to “ecological entrepreneurs” or “social entrepreneurs”. They assert that eco- or social-entrepreneurs are having some primacies that override sustainability practices and not combining all components of sustainable development equally, holistically or integratively. In addition, Hockerts and Wüstenhagen, (2010) also support that SE should not only focus on the dimension of environmental protection, but social and economic dimension should be included as well. Meanwhile, Cohen and Winn (2007) and Woodfield (2010) have also urged that SE should go beyond merely “corporate greening initiative”. Thus, in defining SE, it is important to not only focusing on “green” or “social” domains. For instance, Abrahamsson (2007) calls SE as “sustainopreneurship”, in which he further explains that it is concept emphasizing on three dimensions: (i) Seeking, finding and/or creating innovations to solve sustainability related problems; (ii) Get solutions to the market through creative organizing and; (iii) Adding sustainability vaue with respect for life support systems. The explanations on “sustainopreneurship” have indeed shed some lights on the concepts by taking a broad view of sustainability. However, they have not denoted the “sustainability problems” clearly. In simple words, what problems are deemed as real “sustainability problems” has not been discussed in details. Therefore, some improvements are needed for the definition suggested by the author. In a recent study, Hockerts and Wüstenhagen, (2010: 482) have defined it as “the discovery and exploitation of economic opportunities through the generation of market disequilibria that initiate the transformation of a sector towards an environmentally and socially more sustainable state.” Similarly, Shepherd and Patzelt (2011: 142) define it as “focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products, processes and services for gain, where gain is broadly construed to include economic and non-economic gains to individuals, the economy and society.” These two definitions are deemed as more complex as compared to the previous definitions, because they have collectively taken the “economic”, “environment” and “social” contexts into consideration. In order words, the definitions are in line with the urge of Cohen and Winn (2007) and Woodfield (2010), whereby the definition should go beyond just merely “green” or “social”. Most importantly, the contexts which should be sustained by entrepreneurs have been delineated clearly. A definition given by O’Neill et al. (2009: 34) is definitely different from the rest, as they explained, “sustainability entrepreneurship is a process of venture creation that links the activities of entrepreneurs to the emergence of value-creating enterprises that contribute to the sustainable development of the social-ecological system.” They further assert that the cultural characteristics play a significant role in influencing the “values” that sustainable enterprises would like to create. This definition provides a new insight of SE by including “cultural” as a context that should be sustained. Indeed, as pointed out by Nurse (2006), culture should be incorporated into the SE along side with social equity, environmental responsibility and economic viability.


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Based upon the above definitions, it can be said that SE covers the main issue of “what entrepreneurs can do in preserving economics, environment, social and culture, in entrepreneurial ways?” Whereby, entrepreneurial ways mean being innovative, creative, trying out new methods, taking risk, making profits etc. By referring to the above studies, this study defines SE as follow:

A process in which entrepreneurs exploit the opportunities in an innovative manner for economic gains, society equity, environmental quality and cultural preservation on an equal footing.

There are two main components which require further explanations in this definition. First, sustainability covers the preserving the domains of economic, social, environmental and cultural in an equal manner through continuous commitment from the entrepreneurs. In other words, these four domains are to be emphasized equally. Second, entrepreneurs are those who are innovative enough to make a change in their businesses, processes or products for sustainability. They can be opportunity driven or merely sustainability driven to start-up a business. Triple-Bottom-Line (TBL) and Sustainable Entrepreneurship Triple-Bottom-Line (TBL or 3BL) is a concept coined by John Elkington in 1994 with the aim to search for a new language to express the expansion of sustainable values in business practices. He later explained the concept thoroughly in his book entitled “Cannibals with Forks: The Triple Bottom Line of 21st Century Business” in 1997. The author concludes that there are three main value creating aspects in the sustainable conduct, namely: (i) Economic prosperity; (ii) Environmental quality and; (iii) Social justice. The concept has further been developed into “3P formulation” which consists of “people, planet and profit” (Elkington, 2004). Nevertheless, Elkington has not developed any diagram to illustrate TBL; as such, many researchers have developed their own versions of graphical illustrations of TBL with inspiration from Elkington. No doubt, TBL concept has been popularly used by many scholars to explain “sustainable development” (Chick, 2009). In fact, the use of TBL is not only limited to explain or describe sustainability development in a conceptual manner. It is well accepted that businesses play a significant role in showing commitment towards society, environment and economic; and TBL serves as a useful tool in helping businesses to do so (Mark-Herbert et al., 2010). Currently, there is an increasing use of TBL as a tool or device for sustainable reporting under the headings of environmental quality, social justice and economic prosperity by organizations; due to its ease in monitoring the effects of business activities on the three dimensions in TBL (McCartney and Rouse, 2004; Mitchell et al., 2007). Similarly, Slaper and Hall (2011) also elaborate that the flexibility of TBL make it a suitable tool to be used by businesses, non-profit organizations and government agencies to measure sustainability performance, according to their specific needs. However, both Mitchell et al. (2007) and Slaper and Hall (2011) have further commended that


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one major shortcoming of TBL is the lack of measurements to assess the firms’ sustainability on economic, environment and social aspects. Years after the establishment of TBL, quite a number of researchers have also produced their own model of SE based-upon the concept of TBL. It can be found from the extant literature that TBL has been adopted and adapted by researchers in conducting studies pertaining to SE (eg: Schlange, 2006; Hockerts and Wüstenhagen, 2010). One of the significant works that used TBL to explain SE was done by Dixon and Clifford (2007). Although the word “ecopreneurship” was used, it actually carried the meaning of “sustainable entrepreneurship”. The authors developed a model based on the trinity of social, environmental and economic to examine whether the entrepreneurs could operate an economically viable venture whilst retaining their environmental and social values. They conclude balancing among the three aspects of social, environmental and economic remains as the main challenge for most businesses. Apart from that, the value-based model developed by Tilley and Young (2009) also looks very alike to TBL model, in which they argue that sustainable entrepreneurship should be treated as the combined effort of the 12 individual values that drive sustainability. Furthermore, Hall et al. (2010) also adopted TBL in explaining sustainability development among entrepreneurs. They mention that sustainable entrepreneurs should place the three domains of TBL, namely social, environmental and economic objectives on “equal footing”. However, reconciling these three domains in an equal manner remains difficult and challenging. Additionally, there are some researchers such as Crals and Vereeck (2004) and McDonald (2009); in which they describe SE by using a 3Ps formulation which includes people, profit and planet. A Revised Model of Sustainable Entrepreneurship It is undeniable that TBL has received much acceptance as a tool in explaining SE by researchers. Nonetheless, it is not without any limitations. As suggested by Cohen and Winn (2007), linking TBL to SE research requires further investigation. Furthermore, researchers such as O’Neill et al. (2009) has also identified that some important domains were not being emphasized in TBL. For instance, Austin et al. (2006) suggest for future studies to investigate about the impacts of certain contextual factors, such as country and community forces, on social entrepreneurship. The authors have not mentioned the word “culture” directly in their works, but it is worth arguing that country and community forces are very much associated to cultural forces. It is undeniable that culture shapes and makes a community distinctive (Shepherd and Patzelt, 2008; 2011). Thus, it deserves further investigations on the impacts of cultural forces roles on social entrepreneurship, and also SE. Later, in the works by Shepherd and Patzelt (2008; 2011), they argue that it is important for sustainable entrepreneurs to know the “constructs” to be sustained and developed. They further explain that besides “nature” and “life support”, “community” is another element that should be preserved by the sustainable entrepreneurs. Although both Austin et al. (2006) and Shepherd and Patzelt (2008; 2011) have mentioned the importance of including “community” in the study, the latter have clearly pointed out “culture” as an important variable. They explain that community is to be sustained, when community is sustained, culture is preserved to create


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distinctiveness for the community. No doubts, works by Shepherd and Patzelt (2008; 2011) have suggested a new variable to be investigated in SE research, but they themselves have not done any further investigation on it. As such, it can be said that SE research in regards to culture still remains nascent. Nurse (2006) points out that in dealing with sustainability issues, developing countries tend to rely heavily on Western scientific knowledge, which is actually a cause of the social problems. Meanwhile, the traditional “sacred wisdom” which can be regarded as solutions for sustainable development problems has often been neglected and forgotten. It is important to note that the overused of Western scientific concepts in managing sustainability can lead to the lost of traditional or indigenous knowledge, which can have significant impacts on the efforts of preserving culture. Thus, the author proposes that cultural aspect should not be neglected in the sustainability model. The framework by Nurse (2006) proposes to put culture not only as the fourth pillar in sustainable development, but at the central of it. It is well understood that viewing culture as the central pillar of sustainable development could help the people to deal with sustainability issues in one’s own way, because “culture shapes what we mean by development and determines how people act in the world” (Nurse, 2006:37). However, putting culture at the central raises the issues of to what extent it should be concentrated and to what extent the other domains should be concerned? Could it be just another type of eco-preneurship or socio-preneurship, which overly focused on one aspect of sustainability and inaccurately being treated as sustainable entrepreneurs because the concept of “equal footing” is not discussed in the framework suggested? O’Neill et al. (2009) may not be the first to include cultural domain in explaining SE, but they definitely can be considered as the pioneers in doing so. Based upon a sustainability model developed by Navajo FlexCrete, a native-American corporation, the authors argued that “cultural domain” should be included in explaining SE, in addition to the existing three domains of economical, social and environmental. As such, they suggested that SE should be analyzed from four domains, namely (i) Economic; (ii) Social; (iii) Environmental and; (iv) Cultural. It can be seen that the model is an extension of TBL, but with a few limitations. For instance, the model has not mentioned clearly about the extent that should be emphasized for each of the domain; further, it has not been tested empirically as well. In short, the works of the existing researchers of SE were either not including the cultural domain (eg: Crals and Vereeck, 2004; Dixon and Clifford, 2007; Hockerts and Wüstenhagen, 2010; McDonald, 2009; Tilley and Young, 2009) or no further investigation has been done on the domain of culture (eg: Nurse, 2005; O’Neill et al., 2009; Shepherd and Patzelt, 2008; 2011), particularly in regards to influence of culture on SE process. Thus, a modified sustainable entrepreneurship model based upon TBL is proposed; which can be used to explain sustainable entrepreneurship. It is worth mentioning that “equal footing” or “balancing act” must prevail in emphasizing on the four domains of SE. Figure 1 illustrates the model and it will be further discussed in the following sections.


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Figure 1: The Revised Model of Sustainable Entrepreneurship Economic Dimension The economic dimension or “economic viability” deals with the flow of money or simply financial matters (Dixon and Clifford, 2007; Slaper and Hall, 2011). Entrepreneurs are not doing charity works; they cannot survive without financial resources, and so for sustainable entrepreneurs. It is worth mentioning that there is a group of entrepreneurs who emphasize heavily on profit or economic gains and different labels have been tagged to this group of entrepreneurs; for instance, “commercial entrepreneurs” (Austin et al., 2006) or simply “economic entrepreneurs”. The authors further explain that these entrepreneurs focused on the economic functions of entrepreneurship, such as exploiting opportunity and utilizing resources for profit gaining. As such, this group of entrepreneurs should not be called as sustainable entrepreneurs because their primacy is economic gains. Although profit should not be treated as the sole target of sustainable entrepreneurs, being economical viable still remains as the main challenge (Dixon and Clifford, 2007). Indeed, researchers such as Crals and Vereeck (2004), Austin et al. (2006) and Hall et al. (2010) have also mentioned the importance of being economical viable for the survival of businesses, including sustainable businesses. Specifically, Shepherd and Patzelt (2008; 2011) have included “economic gains” as one of the perspectives that need to be developed in sustainable entrepreneurship. Moreover, Richomme-Huet and De Freyman (2011) have also stressed that sustainable entrepreneurs should create values that produces economic prosperity, together with social justice and environmental protection. In other words, there should not be a zero-sum game or tradeoff between profit and other non-profit aspects, such as environmental well being or social welfare. Thus, according to the revised model proposed, the economic dimension should be given an equal weight as compared to other dimensions, such as social, ecological and cultural.


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Social Dimension Friedman (1970) has made an argument stating that “the social responsibility of business is to increase its profits”. This statement has undoubtedly affected the ways businesses were performed in those old days. Businesses believed at they have contributed towards social development through activities such as job creation, product development and tax payment. However, businesses in today’s business world have changed their views on social responsibility of businesses, due to the development and popularization of corporate social responsibility (CSR). For instance, Crals and Vereeck (2004) have mentioned that “people” as one of the domain to be sustained in sustainable entrepreneurship. They assert that businesses are required to deal with issues in society, such as human rights, gender and child labor. Meanwhile, Spence et al. (2010) have asserted that sustainable entrepreneurship is closer to CSR and environmental development, which specifies on entrepreneurs’ contribution towards social and environmental surrounding. In addition, Richomme-Huet and De Freyman (2011) have also discussed that to be considered as a sustainable entrepreneur, one has to produce “social cohesion”, which refers to fulfilling individual and community needs. It is worth explaining that there should not be any confusion between “social entrepreneurship” and “sustainable entrepreneurship” because both of them have different agendas. As the name suggests, social entrepreneurs are having a primacy for social objectives, welfare and cohesion. As Austin et al. (2006) explained, social entrepreneurship refers to entrepreneurial activity with an embedded social purpose and can occur within or across business, non-profit or governmental sector. The cross-over of social entrepreneurs to non-profit or governmental sector may cause the “entrepreneurial essence” embedded in entrepreneurship to be lost. Therefore, sustainable entrepreneurship should not only concentrate on the social aspect. By referring to the model, economic, environmental and cultural should also been given equal concentration by all sustainable entrepreneurs.

Ecological Dimension This is the dimension which draws the attention of most researchers in SE studies. Some researchers argue that ecosystem is the basis of environmental system because natural resources, such as air, water and energy are part of our environmental system (Shepherd and Patzelt, 2008 & 2011; Slaper and Hall, 2011). These resources are scarce and non-renewable; therefore, they need to be preserved. Sustaining the environmental, ecological or nature dimension has now gained more attention from the businesses (Schaper, 2002; Shepherd and Patzelt, 2008 & 2011). Researchers such as Isaak (2002), Schaper (2002), Krueger (2005), Schlange (2006), Dean and McMullen (2007), Dixon and Clifford (2007), Gibbs (2009) and Pacheco et al. (2010), just to name a few; have used the terms “sustainable”, “ecological”, “environmental” and “green” inter-changeably.


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However, there is a need to distinguish between sustainable and the others because they actually carry different meanings. One confusion that people have on sustainable entrepreneurship lies between “sustainable development” and “entrepreneurial” (Woodfield, 2010). The author further argues that centering the businesses on “sustainable development”, such as making the world a better place to live or preserving the nature for future generations, have neglected the “entrepreneurial” aspect in entrepreneurship. Furthermore, as refer to Shepherd and Patzelt (2008; 2011), nature and environment are just considered as other aspects that need to be sustained in sustainable entrepreneurship. Richomme-Huet and De Freyman (2011) have also included “environmental protection” as one of the values produced by sustainable entrepreneurs. Thus, it clearly explains that SE is not only concentrating on “sustainability development” or simply “nature preservation”, other aspects should be included as well. Therefore, by referring to the proposed model, “sustainable” should not only mean “ecological”, “environmental” and “green”. In short, for any entrepreneurial enterprise, focusing solely on the environmental aspect is not enough to make the business a sustainable one. Other dimensions in the model, such as economic, social and cultural should be given equal attention to be a true sustainable entrepreneur. Cultural Dimension Over the years, researchers have claimed that SE should emphasizes on economic viability, environmental preservation and social development (Elkington, 2004; Crals and Vereeck, 2004; Tilley and Young, 2009; Richomme-Huet and De Freyman, 2011). This point of view was mainly affected by the concept of triple-bottom-line (TBL) coined by Elkington in 1994, in which “economic prosperity”, “environmental quality” and “social justice” have been used to describe sustainability in business. Lately, a handful of researchers have suggested that a new domain should be added into the sustainable entrepreneurship framework. For example, Nurse (2006) mentions about sustaining traditional or indigenous knowledge is important to prevent the lost of culture and over-dependence on Western culture. The author further explain that the culture should be considered as the forth pillar in sustainability development in order to achieve harmony among cultural diversity, social equity, environmental responsibility and economic viability. O’Neill et al. (2009) have suggested to extent the model of sustainable entrepreneurship by including the cultural context, because culture influences all aspects of sustainable entrepreneurship process. In addition, Shepherd and Patzelt (2008; 2011) have also mentioned that sustainability is definitely broader than natural environment. They further assert that sustaining the culture of a particular community is important to prevent that the lost of personal and community identity. In short, apart from the previous three contexts, cultural context should also be included into the SE framework.


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Although Nurse (2006) has mentioned the existence of “cultural entrepreneurs”, this group of entrepreneurs should not be regarded as sustainable entrepreneurs because they are mainly from art sector or cultural industries which could be not-for-profit and non-entrepreneurial oriented. Therefore, cultural dimension should not be over-emphasized in sustainable entrepreneurship framework. Similar to the previous dimensions discussed earlier, cultural dimension should also be given equal weight as compared to the others. Conclusion The aim of this paper was to propose a model to describe sustainable entrepreneurship (SE) clearly. SE is considered as a new and emerging field in entrepreneurship. Throughout the years, many researchers have described SE in various ways. Nonetheless, the description of SE still remains blurred. Based upon the concept of triple bottom line (TBL), a revised model has been suggested to delineate the domains in SE. The domains suggested are economic, social, ecological and cultural. It is worth mentioning that equal weight has to be given to all the four domains in order to be regarded as true sustainable entrepreneurs. Lastly, it is hoped that this model can give a better understanding and new insights to the field of SE. Most importantly, it can also be developed further in future studies. Acknowledgement The authors would like to thank Universiti Teknikal Malaysia Melaka (UTeM) for funding this research project under PJP/2011/FPTT(5A)/S00911 short term research grant. References Abrahamsson, A. (2007). Researching Sustainopreneurship - Conditions, Concepts, Approaches,

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Sustainable Entrepreneurship (SE): A Revised Model … · International Journal of Academic Research in Business and Social Sciences June 2012, Vol. 2, No. 6 ISSN: 2222-6990 294 Izaidin