exploring multi-value creation in practice: a study on
TRANSCRIPT
EXPLORING MULTI-VALUE CREATION IN PRACTICE: A
STUDY ON DUTCH BUSINESSES INVOLVED IN
DEVELOPING REGIONS
Master Thesis
January 2019
MSc International Business & Management
Faculty of Economics and Business
University of Groningen, The Netherlands
Author:
E.M. (Emile) van der Veen
Student number: 2546183
First supervisor:
B.J.W. Pennink
Second supervisor:
J. Canello
ABSTRACT
Only decades ago, the concept of Corporate Social Responsibility (CSR) made its appearance
into the field of international business. Although subject to large criticism, the concept of CSR
has been widely adopted by the businesses sector. At that time, CSR was dominantly focused
on the responsibility of the entrepreneur.
In the present time, we experience a shift from traditional CSR perspectives to perspectives that
incorporate social and environmental dimensions into contemporary business models. Here,
social and environmental issues are not organized at the peripheries, but become an integral
part of the business, defined as multi-value creation.
Empirical evidence of multi-value creation remains largely unexplored, especially concerning
practices in developing regions. This study bridges that gap, as it provides an in-depth
understanding of multi-value creation in developing regions, as well as identifying the influence
of the Circular Economy (CE) and the Sustainable Development Goals (SDGs) on businesses
that engage in multi-value creation. Through a series of interviews with businesses, experts and
civil servants, the existing literature is linked to empirical evidence, resulting in new
perspectives.
Keywords: multi-value creation, developing regions, Dutch businesses, Circular Economy,
Sustainable Development Goals, New Business Models
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ACKNOWLEDGMENTS
First of all, I would like to thank dr. Bartjan Pennink for his supervision. I greatly appreciate
your enthusiasm, positive attitude and constructive feedback throughout the process of writing
this thesis. Second, I’m very grateful to all the interviewees for clearing their schedules and
making time for this study. The interviews were useful, but above all, very interesting and
inspiring. Third, the research direction of this thesis partly came from SDSP, a foundation that
promotes responsible business activities in West-Papua. To all people from SDSP, thanks for
involving me in your activities. It is inspiring to see how motivated your group is to safeguard
West-Papua’s biodiversity and to improve the living conditions of the local community of this
extraordinary country. Fourth, thanks to my friends and family for their support and all the
feedback that they provided me with. Finally, I would like to thank Mr. Canello for taking the
time to read this master thesis.
List of abbreviations:
CSR = Corporate Social Responsibility
TBL = Triple Bottom Line
CE = Circular Economy
SDGs = Sustainable Development Goals
BMC = Business Model Canvas
TLBMC = Triple Layered Business Model Canvas
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Table of Contents
Table of Contents .................................................................................................................................... 4
1. Introduction ......................................................................................................................................... 7
2. Literature Review ................................................................................................................................ 9
2.1 Research on multi-value creation .................................................................................................. 9
2.1.1 Multi-value creation ............................................................................................................... 9
2.1.2 Perspectives on multi-value creation ...................................................................................... 9
2.1.3 Aligning environmental dimensions ..................................................................................... 11
2.1.4 Multi-value in investment decisions ..................................................................................... 12
2.1.5 Adopted perspective in this study ......................................................................................... 13
2.1.6 Creating value collectively ................................................................................................... 15
2.1 Interaction involved actors .......................................................................................................... 16
2.1.1 Identifying the actors ............................................................................................................ 16
2.1.2 The role of the government and citizens in modern society ................................................. 18
2.2 Sustainable Development Goals .................................................................................................. 19
2.2.1 The role of businesses in achieving SDGs ........................................................................... 20
2.2.2 Integration SDGs in business models ................................................................................... 20
2.3 Circular Economy ........................................................................................................................ 22
2.3.1 Integrating the CE in business models ................................................................................. 22
2.3.2 CE in de developing regions ................................................................................................. 23
2.4 Business Model Canvas ............................................................................................................... 25
2.5 Exploratory study on the Conceptual Model ............................................................................... 26
3. Methodology ..................................................................................................................................... 28
3.1 Data collection procedure ............................................................................................................ 29
3.2 Sampling ...................................................................................................................................... 29
3.3 Data analysis................................................................................................................................ 30
3.4 Research Criteria ......................................................................................................................... 30
4. Empirical findings ............................................................................................................................. 31
4.1 How has multi-value creation evolved? ...................................................................................... 31
4.2 What social, environmental and economic value do businesses create? ..................................... 32
4.3 What role does Circular Economy play in the business model? ................................................. 35
4.3.1 CE – perspectives of actors .................................................................................................. 36
4.3.2 CE in business models .......................................................................................................... 36
4.4 Will multi-value creation be more profitable compared to solely pursuing economic value? .... 37
4.5 To what extent is multi-value creation organized collectively? .................................................. 38
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4.6 What role do Sustainable Development Goals play in businesses that engage in multi-value
creation? ............................................................................................................................................ 39
4.6.1 Perspective of businesses ..................................................................................................... 39
4.6.2 Perspectives of other actors on SDGs................................................................................... 40
4.7 How is multi-value creation reflected in the Business Model Canvas? ...................................... 40
4.7.1 Perspective of businesses ..................................................................................................... 41
4.7.2 Perspectives of other actors on Business Model Canvas ...................................................... 41
4.8 How do businesses experience the interaction between the business sector, the public sector, and
the citizen sector? .............................................................................................................................. 42
4.8.1 Citizen sector ........................................................................................................................ 43
4.8.2 Public sector ......................................................................................................................... 43
4.9 How do businesses experience the partnership with foreign developing regions? ..................... 44
4.10 Findings beyond the initial scope .............................................................................................. 45
4.10.1 What price are we paying? ................................................................................................. 45
4.10.2 Achieving social and environmental value by rewarding systems? ................................... 46
5. Discussion ......................................................................................................................................... 47
5.1. Multi-value creation ................................................................................................................... 47
5.2 Interaction public-, business- and citizen sector .......................................................................... 49
5.3 Sustainable Development Goals .................................................................................................. 50
5.4 Circular Economy ........................................................................................................................ 51
5.4 Business Model Canvas ............................................................................................................... 53
5.5 Examining the Conceptual Model ............................................................................................... 54
6. Conclusion ......................................................................................................................................... 57
6.1 Limitations ............................................................................................................................... 57
6.2 Future research ........................................................................................................................ 58
7. References ......................................................................................................................................... 59
9. Appendix ........................................................................................................................................... 67
Appendix 1 – Sampling overview ..................................................................................................... 67
Appendix 2 – Interview guide ........................................................................................................... 68
Appendix 3 – The Business Model Canvas (Osterwalder, Pigneur, & Clark, 2010) ........................ 69
Appendix 4 – The Analytical Hierarchy, based on the work of (C. Charmaz, 2006) ....................... 70
Appendix 5 – The Triple Layered Business Model Canvas (Joyce & Paquin, 2016) ....................... 71
Appendix 6 – Transcripts and open coding ................................ Fout! Bladwijzer niet gedefinieerd.
Appendix 7 – Axial coding ........................................................ Fout! Bladwijzer niet gedefinieerd.
Appendix 8 – Selective coding ................................................... Fout! Bladwijzer niet gedefinieerd.
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List of Figures
Figure 1 Triple Bottom Line (TBL) by Elkington (1997) ..................................................................... 10
Figure 2 ESG Criteria and the Creation of Financial Value (Barman, 2018), based on (Business for
Social Responsibility, 2008). ................................................................................................................. 13
Figure 3 Principles of Value Creation (Jonker, 2015) ........................................................................... 14
Figure 4 BBO-Model (Citizens, Businesses, and Government) (Jonker, 2015) ................................... 16
Figure 5 Division of actors in studying social entrepreneurship (Bjerke & Karlsson, 2015) ............... 17
Figure 6 Division of actors by Teegen, Doh & Vachani (2004) ........................................................... 17
Figure 7 Generic business model strategies for sustainability targets by Raith & Siebold (2018) ....... 21
Figure 8 TLBMC: Horizontal and Vertical coherence (Joyce & Paquin, 2016) ................................... 26
Figure 9 Conceptual Model for Exploratory Study ............................................................................... 27
List of Tables
Table 1 Five elements of successfully collective value creation adopted by Kramer & Pfitzer (2016) 15
Table 2 The Sustainable Development Goals (UNDP, 2015) ............................................................... 19
Table 3 Strategies to integrate CE in business models (Bocken et al., 2016) ....................................... 24
Table 4 Sub-questions for Empirical Stage of Research ....................................................................... 27
Table 5 Cross-comparison of multi-value creation among interviewed businesses .............................. 33
Table 6 Interviewed businesses classified using framework by Raith & Siebold (2018) ..................... 51
Table 7 Interviewed businesses classified by adopted strategies proposed by Bocken et al. (2016) .... 52
Word count main body: 16.885
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1. Introduction
Around the globe, resources become more and more depleted and therefore increasingly
expensive. It is for that reason that untouched natural-rich regions become highly attractive for
investment purposes. This development demands a tailored strategy that considers the effects
on nature and the local community. This study investigates the process of business activity in
developing regions in accordance with the principles of multi-value creation.
In order to promote development in developing regions, entrepreneurial activity is needed,
which has been proven to positively correlate with economic growth, prosperity and wealth
(Baumol, 2012; Schumpeter, 1934). Development in these regions, in terms of social, political,
economic and demographical aspects, can be achieved by businesses that create value for all
stakeholders, including the local community. The motivation to do so is related to the concept
of social entrepreneurship, as this type of entrepreneurship is not solely focused on generating
profits, but creating value for multiple stakeholders (Bjerke & Karlsson, 2013). Social
entrepreneurship in developing regions requires a business model that supports sustainable
development. Sustainable development in a sense that does not differ from the most cited
definition, namely development that meets the needs of the present without compromising the
ability of future generations to meet their own needs (Brundtland, 1987). What remains is the
question of how businesses can translate this perspective into a business model that addresses
social and, not to forget, environmental issues. Especially in current times, when numerous
developing countries face a trade-off between social development and environmental protection
(Muller & Kolk, 2009).
The concepts of entrepreneurship and sustainability have received significant attention since
recent years. Interesting is the approach of Jonker (2015), introducing New Business Models:
a field of research that aims to reorganize the way businesses create value by complying to the
transitions that business is facing. In this book, the practice of addressing multiple values, next
to pursuing solely economic value, is introduced as multi-value creation.
In the field of New Business Models, the introduction of the Circular Economy (CE) to the
business sector is particularly interesting. This theory describes the transition from a linear
economy to a circular economy, or as Mr. Potočnik (2014) , EU Environment Commissioner,
formulates it: “We need to move from a linear economic model, where we extract, produce use
and throw away to a circular model, where waste from one stream becomes the raw material
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for another”. Related to multi-value creation, this concept becomes interesting as the
implementation can address environmental value (Park, Sarkis, & Wu, 2010).
Although not emphasized in the work of Jonker (2015), multi-value creation is now increasingly
related to the Sustainable Development Goals (Raith & Siebold, 2018; UNDP, 2015) as well.
The SDGs could function as a guideline for the organizational implementation of social and
environmental value creation in business models, as they comprise globally shared beliefs
(Santos, Pache, & Birkholz, 2015).
Porter & Kramer (2011) state that it is the duty of companies to bring business and society
together, but this matter still lacks an overall framework. Current efforts focus on Corporate
Social Responsibility (CSR) in which societal or environmental issues are not the core, but on
the periphery.
This exploratory study, focused on Dutch businesses operating in developing regions, will
provide empirical insights on businesses engaging in multi-value creation in the context of
developing regions. In addition, this study will develop an understanding of involved actors and
analyze the influence of current trends in the field of multi-value creation. In addition, this study
will identify the consequences of multi-value creation on a traditional business model template,
the Business Model Canvas.
Henceforth, the research question that follows is:
Dutch businesses in developing regions: what values do they create, how do they interact with
different actors, how does this influence their business model and to what extent play SDGs a
role?
In order to answer the research question, this study presents an overview of relevant concepts
in literature, followed by an exploratory model and sub-questions that serve as a starting point
for the interviews. In the next stage, the empirical evidence collected aims to shed light on the
sub-questions. Finally, the findings are discussed, followed by a conclusion, limitations and
future research directions.
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2. Literature Review
Central to this study is the concept of multi-value creation, as mentioned in the introduction.
Around this concept revolve several concepts and theories, which are expected to interact with
businesses engaging in multi-value creation. The identification of these elements has largely
been based on the work of Jonker (2015).
In each of the following paragraphs, the identified elements – multi-value creation, involved
actors, SDGs, CE, and Business Model Canvas - are studied based on current literature.
Thereafter, these identified elements are represented in a conceptual model, that serve as the
starting point for the empirical data collection.
2.1 Research on multi-value creation
This section will introduce the concept of multi-value creation, followed by the identification
of several perspectives in literature and conclude with the adopted perspective of this study.
2.1.1 Multi-value creation
For the purpose of approaching the concept of multi-value creation gradually, first defining
‘value creation’ contributes to a more comprehensive understanding. Value creation emerges
“through inputs from capitals that transform them through business activities and interactions
to produce outputs and outcomes that, ‘over the short, medium and long term, create or destroy
value of the organization, its stakeholder, society and the environment” (Baldarelli, Del Baldo,
& Nesheva-Kiosseva, 2017, p.118). In the past, researchers have mainly explored how
businesses can achieve economic performance (Barney, 1991). At this time, the empirical
evidence on how business models address social and environmental issues remain to be largely
unexplored according to Norman & MacDonald (2018).
All this may be true, except that in last decades, qualitative research on multi-value creation has
been evolving in several research streams and received increasingly attention from science and
business. Given these developments, it appears that the time of Friedman’s (1970), “the only
responsibility of businesses is to maximize its profits” is over, whereby a new business spirit is
introduced.
2.1.2 Perspectives on multi-value creation
One well-acknowledged stream in literature is that of the Triple Bottom Line (TBL). This
perspective was first introduced by Elkington (1994) in a publication addressing sustainable
win-win business models and later well-established in his book Cannibals with Forks: The
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Triple Bottom Line of 21st Century Business (Elkington, 1997). The TBL is summarized as a
focus within business practices on societal and environmental values, along with the economic
value that they create (Elkington, 1997). Central to this vision is collective wealth and
environmental protection, directed by a sustainable approach. In a next stadium, Elkington
named the TBL as People, Planet, Profit, which was later adopted by Shell for their first
Sustainability Report in 1997.
Reviewing this perspective, Norman & MacDonald (2018) label the principles of TBL as
‘vague’. Although this may be true, Hart & Milstein (2003) emphasize that the unfamiliarity
forms a huge opportunity for businesses and research in this field.
A second well-cited concept on creating multiple values is the idea of Shared Value, which
corresponds largely with TBL. Shared Value involves creating economic value in a way that
also creates value for society by addressing its needs and challenges (Porter & Kramer, 2011)
(p.64). Shared Value is not a synonym for a redistribution approach. Instead, it is aimed at
enlarging the total value created on the economic and social level. For example, a fair trade
program is mostly focused on redistributing the revenue, by giving back to the farmers. The
principle of Shared Value would be focused on investing in the farmer, in terms of efficiency,
production capacity et cetera, in order to enlarge the total value created. Environmental issues
are considered as societal issues by Porter & Kramer, as they state “society’s needs are huge –
health, better housing, improved nutrition, help for the aging, greater financial security, less
environmental damage.” (Porter & Kramer, 2011, p.67).
The concept of shared value leads to criticism as well. Crane & Spence (2014) claim that the
authors of shared value have a tendency to simplify addressing societal and environmental
Figure 1 Triple Bottom Line (TBL) by
Elkington (1997)
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issues, which give a distorted picture of the outcomes. Furthermore, the authors claim that the
concept of shared value creation fails to acknowledge tensions between social and economic
values. As Crane & Spence (2014) argue: “Given the complexity of social and environmental
problems, their uncritical analysis as to new sources for profit might indeed drive corporations
to invest more in easy problems and decouple communication strategies than in solving broader
societal problems” (p.137).
Similar to the aforementioned perspectives, another study revealed how economic value can be
created through voluntary social and environmental activities (Schaltegger, Lüdeke-Freund, &
Hansen, 2012). In this study, the authors label this practice as ‘a case for sustainability’,
whereby three criteria have to be met. First, the activity that addresses societal or environmental
issues has to be employed voluntarily. Second, the activity must generate economic value.
Third, it must be clearly arguable that a specific management activity was the basis, the main
driver, of the social/environmental and economic value. Meeting these three criteria creates
economic value, by directly addressing social and environmental issues.
Whereas these above-mentioned perspectives equally value the environmental and social
dimension, Lüdeke-Freund & Boons (2013) adopt a view that is more focused on social
business models. This type of business models emphasize not only social value, but as well
engage in multi-value creation by addressing environmental and economic issues and
subsequently promotes equitable relationships among stakeholders by doing business through
a fair revenue model. In support, Yunus, Moingeon, & Lehmann-Ortega (2010) state that social
businesses are traditional businesses, self-sufficient and engaged in regular selling of goods or
services, but differ in its main objective as it primarily serves society and improves the lot of
the less fortunate.
2.1.3 Aligning environmental dimensions
Provided that not every perspective equally balances social and environmental dimensions,
Muller & Kolk (2009) indicate that businesses can experience a trade-off between social
development and environmental protection. As a number of studies (Lüdeke-Freund & Boons,
2013; Yunus et al., 2010) largely focus on social value, Lovins, Lovins, & Hawken (1999)
suggest four transformations in the business paradigm, which helps to align environmental
needs with business needs. The first holds the increase in productivity of natural resources, by
achieving major resource savings and higher profits. Second, imitations of biological
production models, by closed production systems promoting re-use within the loop or becoming
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input for another product. Third, adopting a solutions-based business model, promoting a shift
from the acquisition of goods to providing quality, utility, and performance. Lastly, businesses
have to reinvest in nature capital, by restoring, sustaining and expanding the planet’s ecological
system so that the planet can be a vital resource in the future.
2.1.4 Multi-value in investment decisions
Approaching multi-value creation from an investment perspective leads to the notion of Social
Responsible Investing (SRI). This conceptualization refers to decision-making and investing in
accordance with social and environmental goals (Sparkes, 2001). The approach describes the
process of investing whereby investors actively pursue social objectives next to financial
objectives (Heese, 2007).
In general terms, the roots of SRI date back to the period between the 1960s and 1980s, when
the western world was subject to turbulent times fueled by peace and green movements which
led to increased attention for social responsibility and accountability when doing business
(Schueth, 2003). Last decade, this focus of attention extended to concepts of human rights,
working condition, and global warming.
Research by Barman (2018), identifies three dimensions that form the basis of critical indicators
of responsible investments, namely Environmental, Social & Governance (figure 2). The
environmental dimension describes the way corporations minimize their environmental impact,
the social dimension views how corporates manage their social relationships with stakeholders
and the governance dimension describes how corporations implement policies to ensure good
governance (Eccles & Krzus, 2010).
For decades, investors and businesses believed in the trade-off between ‘social
entrepreneurship’ and economic value. Nonetheless, research reveals that corporates that
perform well on Environmental, Social and Governance (ESG) dimensions are able to minimize
firm costs and risks and maximize benefits and opportunities which will lead to the creation
and capturing of higher long-term financial value (Figure 2) (Barman, 2016; Business for Social
Responsibility, 2008; United Nations Global Compact, 2004; United Nations Principles for
Responsible Investment, 2016; WBCSD, 2010).
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Figure 2 ESG Criteria and the Creation of Financial Value (Barman, 2018), based on (Business for Social Responsibility, 2008).
Analyzing the incentives of businesses to incorporate social and environmental factors in
investment decisions, it appears that two categories of incentives can be distinguished (Schueth,
2003). The first category includes investors that invest their money increasingly in line with
their personal values and priorities, where the second category states that investors find ways
that improve the quality of life. Investors in the latter category are especially interested in
“social change” in terms of positive changes for society at large and finding out how
investments can promote this.
2.1.5 Adopted perspective in this study
As discussed above, numerous studies have provided a variety of perspectives on creating
multiple values. Although the wide support for the use of the ESG criteria, the model of Barman
(2018) is focused on large multinationals and investment decisions, which is not in line with
the research scope of this study. Hence, this research adopts a multi-value creation perspective,
in which it investigates the economic, social and environmental values in line with the well-
known Triple Bottom Line of Elkington (1997).
The main reason for adopting the Triple Bottom Line-perspective is that it is widely understood,
which increases its utility for research purposes (Joyce & Paquin, 2016). The work of Jonker
(2015), that is central to this study, does not explicitly differentiate between these three specific
values, but acknowledges the need for addressing these issues.
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Furthermore, we follow the philosophy of Jonker (2015), which describes how multi-value
creation is organized. According to Jonker (2015), transforming businesses into ‘sustainable’
enterprises demands for a revised structure of value creation. This structure needs to be guided
by three principles of value creation in New Business Models. First, we need to move to multi-
value creation, which holds that the purpose is not only to create economic value for the
business, but value for both society and business by means of economic, social and
environmental value. Second, the way of creating multi-value can be achieved by shared value,
which holds that the economic value created, also creates value for society by fulfilling
society’s needs and deals with society’s challenges. It should not be seen as a CSR approach to
value, but it directly involves the core activities of an enterprise. This concept will redefine the
relationship between society and businesses (Porter & Kramer, 2011).
Additionally, as Jonker (2015) states, the concept of shared value can only be organized in a
collective way. This implicates that the principles of value creation have to be borne by all
involved parties and that the only way to create multi- and shared value, is to organize this
together, in a collective way.
Figure 3 Principles of Value Creation (Jonker, 2015)
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2.1.6 Creating value collectively
To clarify, Kania & Kramer (2011) mentioned the concept of making impact collectively first
in 2011, where collective impact was defined as ‘the commitment of a group of important actors
from different sectors to a common agenda solving a specific societal problem’ (p.36), whereby
economic opportunities can emerge which competitors miss out on. In his later work, he
elaborates that collective impact solves social problems by the coordinated efforts of different
actors, ranging from government bodies and businesses to the affected local community. The
mutual efforts of resources from involved actor result in businesses not bearing all costs, but
might as well benefit from economic opportunities that arise (Kramer & Pfitzer, 2016). In order
to address the collective process successfully, five elements have to be fulfilled, which are
stated in table 1.
Table 1 Five elements of successfully collective value creation adopted by Kramer & Pfitzer (2016)
Elements Explanation
Common agenda Actors must share their vision of addressed issue and solution
Shared measurement system A common understanding of indicators that determined success
Mutually reinforcing activities Each actor addresses a different aspect of the problem, which
ultimately will reinforce progress to change
Constant communication Continuous, structured and unambiguously communication to
assure trust and coordination among involved actors
Dedicated “backbone” support Independent funded team dedicated to the initiative is essential to
guide, strategize, support, measure and mobilize all elements and
actors of the initiative
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2.1 Interaction involved actors
The three main actors that will be studied in this research are businesses, citizens and the
government. In the next section follows a legitimization of this classification and a brief
introduction to the actors.
2.1.1 Identifying the actors
The question is which stakeholders apart from businesses come into play in the process of multi-
value creation. To answer this question, we first make use of the BBO-model (figure 4),
introduced in work of Jonker (2015). This view of involved actors identifies three actors that
play a role in the entrepreneurial process of new business models: citizens, businesses and the
government (in Dutch abbreviated as “BBO”).
The adoption of this model can be legitimized by emphasizing the support of this division in
other studies. Research by Bjerke & Karlsson (2015), identify three similar actors: the public
sector, the business sector, and the citizen's sector (figure 5). The division is based on sectors
where the authors identified parties that act as entrepreneurs in the context of entrepreneurship.
By this classification, three types of entrepreneurs emerge: entrepreneurs in the public sector,
business entrepreneurs and citizen entrepreneurs. The first type are people that are employed
in the public sector, but strive to make a difference for the common good. The second type are
entrepreneurs and innovators that are initially financially driven and focus on market &
competitive forces and fulfil the needs on the market through new products and services. The
Figure 4 BBO-Model (Citizens, Businesses, and Government)
(Jonker, 2015)
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third type are citizens that are innovative and enterprising, idea-driven and interested in
fulfilling social needs by exploiting new solutions or activities. A third model in this field,
designed by Nicholls (2006), is identical regarding the identification of these three forces,
capturing the three involved actors under the same conditions.
In support, Teegen, Doh & Vachani (2004) identified these specific sectors as well (figure 6).
However, the authors’ framework identifies the citizens' sector differently than before-
mentioned studies. Here, Teegen et al. merge NGOs and the civil society as one actor. The
legitimatizing of NGOs in this model is described by the importance of NGOs, as these entities
are able to comprehend specific needs and act accordingly (Stromquist, 1998), mainly when the
market is not able to meet or ignores these needs (Armitage, 1991) or when the public
mechanisms are not able, for any reason, to fulfil those needs (Keck & Sikkink, 1998; Meyer,
1999).
Figure 5 Division of actors in studying social entrepreneurship (Bjerke & Karlsson, 2015)
Figure 6 Division of actors by Teegen, Doh & Vachani (2004)
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In conclusion, the classification of the three actors, in line with the BBO-model, received large
support. Therefore this model is adopted to capture the interaction between the different actors
in the empirical data collection stage. The model serves as a starting point for studying the
interaction between the involved actors, in which we do not rule out the possibility of other
actors to be overlooked.
2.1.2 The role of the government and citizens in modern society
Jonker (2015) explains that the role of the government changes over time, stating that the
government is not able to solve all societal problems independently, but that a collective,
combined effort from society is the solution. The government must change to effective
practices, whereby society gives shape and input to these practices. It is in the past, that society
waits for the government to take on societal issues, but Jonker observes that society takes the
initiative and start selling products and services. Crucial to these shifts is that the interaction
between the government and other actors works on a basis of equal footing, in which collective
value can emerge.
The change, which involves the governments turning into facilitative institutions, goes along
with the rising phenomenon of citizen entrepreneurship, where Jonker (2015) observes that
citizens increasingly take over duties that earlier belonged to the government. Individuals
become a significant, and growing, productive force in the economy (Zwass, 2010).
Analyzing the growing importance of the citizen sector, Murray (2009) stresses that the citizen's
involvement was strong during the nineteenth sector, but that this has weakened in the twentieth
century. However, the last 30 years the citizen sector experienced a resurrection: the role of
citizens becomes increasingly important since governments and markets are unable to tackle all
environmental and social issues that modern society faces (Murray et al., 2009). To enumerate,
this development is a consequence of three reasons:
1. The consumer has become its own producer to a large extent. The citizen sector is
changing from passive consumers to producers of their own products using, among
others, programmable machinery. In line with this, businesses integrate more and more
their users into the production process (Murray et al., 2009).
2. The phenomenon of increased social imperatives. There is increased pressure on the
state-driven system that is supposed to provide social services. There is a growth in scale
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and demand for services that deal with societal and demographical trends, i.e. obesity,
chronic diseases, demographic aging (Murray et al., 2009).
3. The green revolution. The green movement has been harder to avoid. The scale and
intensity of the environmental movement lead to new types of organizations and a
renewed social economy. A massive agenda now emerges based on the transition in
food, energy, transport et cetera. In each of these areas, the citizen's sector has their own
role in terms of protest, production, and consumption (Murray et al., 2009) (p.19)
2.2 Sustainable Development Goals
Within the research question that is ought to be answered in this research, the role of the SDGs
in the process of multi-value creation will be studied. The Sustainable Development Goals
(table 2) comprise seventeen goals that form the worldwide agenda to fight the global
challenges for the people, planet, and prosperity (UNDP, 2015; United Nations, 2015). The
goals form the basis for worldwide sustainable development in terms of economic growth,
inclusiveness, and environmental protection (Stafford-Smith et al., 2017).
Table 2 The Sustainable Development Goals (UNDP, 2015)
Nr. SDG Nr. SDG
1 No Poverty 10 Reduced inequalities
2 Zero Hunger 11 Sustainable cities and communities
3 Good Health and Well-Being 12 Responsible consumption and production
4 Quality Education 13 Climate action
5 Gender Equality 14 Life below water
6 Clean water and sanitation 15 Life on land
7 Affordable and clean energy 16 Peace, justice and strong institutions
8 Decent work and economic growth 17 Partnerships for the goals
9 Industry, innovation, and infrastructure
2.2.1 The role of businesses in achieving SDGs
The aim of adding this element is to analyze to what extent the entrepreneurial activity is
integrating the goals. This particular view of study remains largely unexplored. The SDG
agenda calls for action, whereby all countries and stakeholders, including governments public
bodies, businesses, and the civil society need to join forces to achieve the goals and targets
(Gusmão Caiado, Leal Filho, Quelhas, Luiz de Mattos Nascimento, & Ávila, 2018). Current
literature is rather focused on the implementation of SDGs by bodies within the public sector
(Aitsi-Selmi et al., 2016; Waage et al., 2015), than identifying how businesses integrate
Sustainable Development Goals.
Research by Chakravorti (2015) states that businesses should consider the Sustainable
Development Goals for three reasons. First, for businesses that are interested in emerging and
frontier markets, the Sustainable Development Goals form a major opportunity for long-term
growth. According to estimates by McKinsey (2012), the annual consumption of emerging
markets will grow to thirty trillion dollars in 2025. Since 2011, emerging markets have
experienced slower growth and social discontentment, which complicates the achievement of
30 trillion dollars (Atsmon et al., 2012). Implementing Sustainable Development Goals in your
businesses process could help address several of these obstacles that are giving rise to “trapped
value” in developing regions (Chakravorti, 2015).
Second, many businesses have already stated that they will integrate the goals in their business
models, which gives rise to a ‘competitive pressure’. Therefore, if businesses move quickly, the
first adopters can take advantage of this in terms of partnership and branding purposes. Being
a follower in this process could lead to competitive disadvantages, by being left out of strategic
relationships and missed opportunities from a brand equity perspective.
Third, the costs of achieving the Sustainable Development Goals are estimated to be 3 trillion
a year up until 2025. As we learn from the past, this bill cannot be paid solely by governments,
as this actor has often coped out on similar areas. Therefore, the business sector is vital to
progress-making and co-financing the achievement of SDGs.
2.2.2 Integration SDGs in business models
Interesting is to analyze how business models can be built around Sustainable Development
Goals. Raith & Siebold (2018) developed four business generic business model strategies that
are built from the perspective of the “conscious entrepreneur”, described in Pavlovich & Corner
(2014) as entrepreneurs that are motivated to create shared value instead of emphasizing
21
economic value. The business models are economically sustainable and built around a mission
centered on SDG’s, in line with principles of the TBL of Elkington (1997).
Raith & Siebold (2018) distinguish in this framework two dimensions, which ultimately lead
to four business strategies. The first dimension relates to the way the sustainability target is
reflected in the process of value creation, where the researchers distinguish between a
supportive mode and an integrative mode. The supportive refers to value-creation for a target,
where the latter refers to value-creation with a target (Dohrmann, 2015). The second dimension
refers to the process of value-capturing, in what form revenue or income is generated. Hereby
the authors differentiate between a commercial mode of value capturing through the market,
for example by market revenues, and a social mode of value-capturing through the mission, for
example by monetary donations. These two dimensions bring us to four different business
models (see figure 7).
1. Provision: organizations in this category are characterized by creating social value by
means of directly working on a sustainability target through the free provision of goods
and services. Positive externalities will follow when the target is of sufficient social
concern or does well. The income will consist of donations, either in-kind or monetary.
Examples of organizations that fall into this category are charities and homeless shelters.
2. Self-Help: organizations in this category are characterized by integrating the target in
the process of value creation. Organization in this group substitute a missing market for
Figure 7 Generic business model strategies for sustainability targets by Raith &
Siebold (2018)
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resources that the target can deliver itself, in other words: the target is able to provide
the input to create value. One example that Raith & Siebold (2018) mention is the
“Ocean-Clean-up”, whereby the ocean cleans itself by making use of its currents and
specific geographical locations being designed to capture the plastic.
3. Deployment: organizations in this category are characterized by the integration of
multi-value creation into the selling of consumer goods for commercial purpose, which
leads to economic sustainability (Haigh, Kennedy, & Walker, 2015). This hybrid
business model is based on fusing social and commercial elements resulting in economic
value. Examples of this type of business-model are National Parks or employing
disadvantaged target groups.
4. Promotion: organizations in this category are characterized by its social value creation,
whereby it finances this social value creation by selling a commercial product. This can
happen through either a “1-on-1” construction, where customers engage in a “buy-1-
donate-1” proposition or, in general, the revenues of the marketing captures are
supporting the sustainability target (Marquis & Park, 2014).
2.3 Circular Economy
Over the last decades, the concept of CE received growing attention, introducing alternative
solutions for the so-called “take-make-dispose” economy that currently dominates the world
economy (Ghisellini, Cialani, & Ulgiati, 2016; Ness, 2008). The field of CE remains young and
emerging (Blomsma & Brennan, 2017), which results in an ongoing discussion about a
workable definition of CE. The EU (EU Commission, 2018) defines CE as an economy where
“the value of products is maintained for as long as possible”. The Chinese Government, who
actively promoted the CE in its five-years plan National Economic and Social Development,
defined the Circular Economy as “a general term for the activity of reducing, reusing and
recycling in production, circulation, and consumption” (Jintao, 2009; p.1).
2.3.1 Integrating the CE in business models
For the implementation of the CE, Bocken, de Pauw, Bakker, & van der Grinten (2016)
distinguish two business models whereby the CE takes shape.
The first strategy is labeled as slowing resource loops: by extending product-life or creating
ever-lasting products, businesses can increase the period of use of a product or intensify the
product’s lifetime. Both options will result in a slowdown of the flow of resources (Bocken et
23
al., 2016, p.3) The second strategy is called closing loops: by making product loops fully
circular, for example through recycling, the loop between the stage after product lifetime and
input for production is being connected or closed. This implementation will make the
production loop circular. Within these categories, six business model strategies were developed
to introduce circularity in business models (Bocken et al., 2016). An outline of the presented
strategies is provided on the next page, table 3.
2.3.2 CE in de developing regions
Current literature does not provide large empirical evidence of circular activities in developing
regions. Andersen (2007) finds that practices of the CE can lower the input of resources and the
costs and at the same time reduce environmental pollution. These implications are able to
contribute to solutions in Sri Lanka, where the inadequate handling of waste and wastewater
has led to disease prevalence, loss in biodiversity and an increase in environmental pollution
(Danthurebandara, Passel, & VanAcker, 2015). Gusmão Caiado (2018) manifested in his work
that CE, embraced globally through a global sustainable network between countries, would add
significant value to the poorest of our societies. The above-mentioned findings regarding the
CE form a major opportunity to solutions of societal and environmental problems in developing
regions.
Table 3 Strategies to integrate CE in business models (Bocken et al., 2016)
Category Strategy Implementation Examples
Slowing resource
loops
Access and performance
model
Based on user-needs, offering solutions whereby
the user does not need to own physical products
Car sharing, leasing cars, clothes leasing
Extending product value Exploiting residual value of products, by
remanufacturing and refurbishing practices
Remanufacturing parts in the automotive industry,
refurbished phones or other electronics, return clothing
iniative
Classic long-life model Providing ever-lasting products, whereby
durability and repair practices extend product-life
Watches or wash machines where long-lifetime is promised
Encourage sufficiency Stimulating consumers to reduce consumption by
means of durability, upgradability, service and
warrantees in order to prolong product lifetime
Water companies, energy service companies, high service &
quality brands
Closing loops Extending resource value Exploiting residual value of products, but focused
on transforming waste into new forms of resources
Using fishing nets as raw material for carpets, rewarding
customers for recycling products
Industrial symbiosis Process-focused solutions, whereby residual output
of an industrial process becomes input for another
industrial process, whereby geographical factors
could benefit this process
Eco-industrial parks, internal waste-value practices between
businesses
2.4 Business Model Canvas
A business model is a conceptual blueprint of a firm which enables to create an understanding
of how a firm does business (Osterwalder & Tucci, 2005). It conceptualizes how a firm converts
resources and capabilities into economic value (Teece, 2010).
In its field, The Business Model Canvas, presented by Osterwalder & Pigneur (2010) is the
most popular mode of business modeling (John, Kundisch, & Szopinski, 2017; John &
Szopinski, 2018; Strategyzer, 2011), see appendix 3. The Business Model Canvas consists of
nine interrelated elements – key partners, key activities, key resources, value propositions,
customer relationships, channels, customer segments, cost structure, and revenue streams.
However, along with the rise of sustainability, the Business Model Canvas received criticism
for being profit-oriented and lack the identification of social value (Coes, 2014). Bocken (2013)
argues that contemporary business models only focus on one value, i.e. economic or
environmental value; whereby the field of innovative sustainable business models remains
largely unexplored. A small number of researcher have explored the integration of sustainable
practices into business models and hardly have researchers associated this research direction
with the Business Model Canvas. A new holistic business model is demanded which
incorporates economic, social and environmental perspectives.
To bridge this gap, studies have ‘simply’ added social and ecological benefits and costs as
components to the Business Model Canvas (School for Change, 2018). This practice did not
receive major support, in contrast to the study of Joyce & Paquin (2016), which adopts a TBL
perspective to the Business Model Canvas and proposes a Triple Layer Business Model Canvas
(TLBMC), see appendix 3.
The TLBMC is a conceptual tool that aims to integrate economic, environmental and social
elements into a holistic view (Joyce & Paquin, 2016). Instead of integrating all three value
components in one single canvas, the TLBMC consists of vertical and horizontal layers which
all interact. The model analyses each layer from one perspective, either from an economic,
social or environmental perspective and enables to generate an in-depth understanding of the
process of value-creation.
Essential to TLBMC is the ‘horizontal and vertical coherence’, whereby the authors refer to
horizontal coherence as the exploring the actions and relationships across the nine components
of each layer (see figure 8). Vertical coherence refers to the alignment of each layer across the
26
canvas, whereby businesses can align their economic activities with environmental and social
concerns.
Figure 8 TLBMC: Horizontal and Vertical coherence (Joyce & Paquin, 2016)
On one hand, TLBMC appears to respond to criticism of the Business Model Canvas, as it
incorporates economic and social dimensions into the Business Model Canvas. On the other
hand, the model becomes increasingly complex and too extensive to use for the interviews. For
this reason, as the Business Model Canvas is expected to be either recognized or easily be
explained, during the interviews this study uses the Business Model Canvas. Thus, the aim here
is not to develop an alternative canvas, but to analyze the influence of multi-value creation on
the traditional canvas.
2.5 Exploratory study on the Conceptual Model
To conceptualize the findings in the early stage of this research, in this section a conceptual
model is created that represents the discussed elements and serves as a starting point for this
exploratory research, see figure 9.
This conceptual model is focused on analyzing the activities of businesses, citizens and the
government and the influence that these activities have on the creation of multiple values. In
addition, it explores the role of the CE and the SDGs in the context of businesses engaging in
multi-value creation. Finally, it analyses the influence of multi-value creation on the traditional
Business Model Canvas.
27
Figure 9 Conceptual Model for Exploratory Study
To arrive at a comprehensive answer to the main research question, sub-questions are
formulated. The sub-questions relate to the specific elements in the exploratory model or
provide context-related information about relationships embedded in figure 9. Below, in table
4, the sub-questions are enumerated a visualized in the conceptual model.
Table 4 Sub-questions for Empirical Stage of Research
Nr. Sub-question In relation to figure 9, this sub question
provides…
1 How has multi-value creation evolved? …background information on trends over
time regarding multi-value creation
2 What social, environmental and economic
value do businesses create?
… concrete evidence in what way the three
values are created
3 What role does circular economy play in
the business model?
…an illustration of to what extent this
concept currently influences business
processes
4 Will multi-value creation be more
profitable compared to solely pursuing
economic value?
…an expectation of tot what extent
businesses that engage in multi-value
creation will be most profitable in the
future
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5 To what extent is multi-value creation
organized collectively?
…insights on how the actors in the BBO-
model collectively engage in multi-value
creation
6 What role do Sustainable Development
Goals play in businesses that engage in
multi-value creation?
…insights on ‘if’ and ‘how’ businesses
adopt the SDGs into their business
strategy
7 How is multi-value creation reflected in
the Business Model Canvas?
…insights on how multi-value creation
influences traditional business modeling
templates
8 How do businesses experience the
interaction between the business sector,
the public sector, and the citizen sector?
…insights in two issues: how interviewees
experience the interaction and the validity
of the model is attested
9 How do businesses experience the
partnership with foreign developing
regions?
…insights in the relationship and
collaboration between the Dutch business
and the foreign partner
3. Methodology
This section describes the methodological framework of this study. The interviews are held to
find answers to the “how”, “who” and “why” that are related to our research direction, which
is the essence of qualitative research and can be approached as an open question (Doz, 2011).
The methodology of this study is based on the foundations of grounded theory. Grounded theory
is a research method which is aimed to develop a well-integrated set of concepts that provide a
thorough theoretical explanation of phenomena under study (Strauss & Corbin, 1990a). In this
manner, grounded theory research is aimed at developing a theory that can be useful in practice
(Strauss & Corbin, 1998).
Research using grounded theory can be characterized by two elements. First: the constant
comparison method, whereby each finding or result is repetitively compared to existing
literature (Hallberg, 2006). Second, theoretical sampling, which includes the collection of data
to explain the phenomena under study (C. Charmaz, 2006).
29
The constant comparison method can be traced back in the analytical hierarchy, see appendix
4, where is visualized how findings are consequently compared to existing literature. As
proposed by Charmaz (2006), the theoretical sampling in this study is conducted by the
continuous collection of data to elaborate or refine themes or categories.
The role of the concepts in this conceptual model can be characterized as sensitizing, which
holds the concepts in our conceptual model serve as indicators for the research direction and
will develop over time during the course of study (Jonker & Pennink, 2010; Strauss & Corbin,
1990b). The concepts that are formulated will guide the path of research and serve as a starting
point for this exploratory research. Furthermore, the research will strive to increase the utility
factor, by emphasizing the managerial implications of the research.
3.1 Data collection procedure
The data collection will consist of primary and secondary data, respectively data collection
through interviews and through an extensive literature study. In the literature review, different
concepts and theories have been discussed to collectively form the basis for the conceptual
model. The second data component will consist of empirical data by means of interviews.
The following groups will be interviewed:
A. Experts on doing business in developing regions: this group is able to provide us
with experience that would increase the reliability of this proposed conceptual
model.
B. Entrepreneurs and businesses that have experience with investing in developing
regions: this group will examine our model by their experience. This group can
validate whether our model is reflecting reality and their experiences support the
proposed conceptual model.
C. Experts on business in developing regions from the public sector: this group is able
to provide us with information that would contribute to the understanding of the role
of the public sector within the proposed conceptual model.
3.2 Sampling
Interviewees within the sample of this study have been selected, based on the principles of
Ground Theory sampling. This sampling method differs itself from other ways of sampling in
that it selects interview subjects by their properties, dimensions or variation. First, the
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phenomena under study are being analyzed and framed. Based on this analysis, the relevant
persons involved in the research phenomenon are carefully being selected (Strauss & Corbin,
1990). In this study, the interviewed entities are selected by their role in multi-value creation
and related concepts presented the conceptual model (see paragraph 2.5). For the sample size,
we follow the principles of saturation, whereby the sample size is expanded until new data no
longer contributes to discovering new phenomena (Jonker & Pennink, 2010).
For an overview of the sample of this study, see appendix 1.
3.3 Data analysis
The analytical hierarchy of this study, based on the principles of grounded theory, is presented
in appendix 4. As follows from this hierarchy, the interviews are analyzed using the analytical
process of coding. This coding process has been conducted by three stages: open coding, axial
coding and selective coding as described in Strauss & Corbin (1990). The first analytical stage
holds the process of extracting the transcribed interviews into categories and subcategories so
that similar phenomena are grouped together. The second stage involves the process of axial
coding. This stage entails the process whereby the categories and subcategories are being
further related to the proposed relationships in the initial stage of research. In the final stage of
the coding process, the selective coding process takes place, whereby the data is related to the
core variables and patterns are being discovered. The open, axial and selective coding processes
can be found in appendix 6, 7 and 8. The transcripts are included in the open coding process.
3.4 Research Criteria
First, in order to enhance reliability and validity in this study, this study is subject to data
triangulation, defined as the collection of different sources of information in the same study
(Guion, 2002; Jonker & Pennink, 2010). The different sources in our study consist of the three
stakeholder groups that are interviewed, as presented in paragraph 3.1. Second, by interviewing
parties that have invested in different developing regions, the author strives to enhance external
validity: the model would be generalizable to other developing regions and will expand
knowledge about investing in developing regions in general. Third, in order to make this
research controllable, the interview guide, transcripts, and coding schemes are available in the
appendix for the assessors, by which we account for transparency (Jonker & Pennink,
2010).Finally, in order to enhance transferability of this research, defined as to what extent the
findings are applicable to other contexts (The Writing Studio, 2018), this study provides
contextual-features that interact with findings.
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4. Empirical findings
In this section, the data that is collected through interviews is examined using the sub-questions,
as formulated in paragraph 2.5. The aim of the interviews was to collect empirical evidence that
provides input for the sub-questions and ultimately give an in-depth understanding of the
exploratory model.
4.1 How has multi-value creation evolved?
Engaging in multi-value creation and social entrepreneurship is one of the challenges that all
organizations in the Netherlands face, according to expert 1. More and more people stand up
for this challenge, whereby economic literature more and more embrace economic models
where limitless growth is not the most important thing, but inclusiveness, equality and a clean
society is more important. The descending trust of people in society, in institutions, is one of
the causes of this trend, according to expert 1.
Multi-value creation is much more integrated than the Dutch derivative Maatschappelijk
Verantwoord Ondernemen, which entail how you can be a profitable organization, satisfying
potential financiers, employees, and customers, but as well can adopt a societal issue. In
addition, Maatschappelijk Verantwoord Ondernemen has a more green component and is not
so much associated with societal issues.
As expert 3 elaborates, the first publication emphasizing the societal role of business was
published in 1954. That publication did nothing more than seeking attention for the
responsibility of organizations to society. Over time, environmental components have added to
this movement and it is being named CSR, and only in the Netherlands: Maatschappelijk
Verantwoord Ondernemen. According to expert 3, CSR differs from Maatschappelijk
Verantwoord Ondernemen, as CSR is dedicated to the responsibility of the entrepreneur.
Consequently, an important publication was ‘The Profit of Values’ (Sociaal-Economische
Raad, 2000), published by the Dutch Social Economic Council. This publication symbolizes
that the Dutch were the trendsetter in this debate, but unfortunately the Dutch have dramatically
lost this race. The Dutch have talked ages about the non-committal, woolly debates about
responsibilities of the entrepreneur. What followed is a multi-track policy, where an ethical
perspective is adopted as well as the introduction of CE. We now observe a commercialization
of the sustainability issue, where economic value, is being considered as well in the field of
social entrepreneurship.
32
As stated in the literature review, it remains vague how CSR is defined. Expert 4 regards this
as follows: “The question that we have got to ask ourselves is: why do we do what we do?
Everybody needs to do corporate social responsibility, you must. Is expected of them. But what
do you do? (..) Are you building a bridge? Are you building a road? Are you supporting a
school? (..) And every entrepreneur argues something different: this is not CSR, this is definitely
CSR. So it is just really vague.” This quote illustrates that the interpretation of CSR remains
subject to discussion.
In summary, over time we have ruled out economic value in this debate, where it now makes
its re-introduction. Vagueness remains about the concept of CSR, whereas this concept remains
ill-defined in practical terms.
4.2 What social, environmental and economic value do businesses create?
On the next page, a cross-comparison of interviewed businesses that create economic, social and
environmental impact is presented, see table 5. The table presented contains per business how their
entity creates economic, social and environmental value.
All businesses were asked in what way their entity captures value in terms of social,
environmental and economic sense. All of the businesses that were interviewed, have indicated
that to be commercially feasible, is a prerequisite for their businesses. However, for all
businesses, it remains clear that social and environmental value creation is of (almost) equal
importance, as business 3 indicates: “of course, profit is the ultimate goal. But one can make a
profit in a lot of ways, we want to have a good feeling about it”.
How social value emerges, differs significantly. In some organizations, social value creation is
at heart of the organization. For business 1, the customer service is employed by youth that
have poor job prospects and who otherwise would not be able to work. Business 2 has set up a
dentist clinic for their workers on the field in Mexico. For business 3, the living conditions of
those farmers within their chain is significantly better than farmers that are not. Given these
responses, we can conclude that social value creation is largely created in terms of
improvements in living conditions.
Table 5 Cross-comparison of multi-value creation among interviewed businesses
Businesses Economic Social Environmental
BUSINESS 1 By selling re-usable bottles
by means of a private
company.
Customer service is employed by youth that experience
poor job prospects.
Reduce plastic pollution., a
partnership with sustainable shipping
business.
BUSINESS 2 Selling fair chocolate by
means of a private company.
Local partner developed microcredit.
Empowering local community, and creating labor
opportunities.
Living conditions of farmers within chain significantly
better.
Only biological purchasing prevents
local farmers from exposure to
chemicals and pesticides.
Re-usable and biodegradable
packaging, CO²-free shipping.
BUSINESS 3 Selling fair coffee, tea &
chocolate by means of a
franchise model.
Set up a dentist Clinique in México.
Fair wages for farmers by buying responsibly
Planting trees in India to improve
biodiversity & donated cows in India
which improves soil fertility.
By building a factory, farmers can
focus on biological cultivation
Biodegradable packaging and CO²-
free shipping.
BUSINESS 4 Selling prostheses by means
of a franchise model.
Mobile protheses enable doctors to go to patients to treat
them & developed an app with protocols and standards, as
many clinics did not meet standards and faced closure.
Educating people about the Majicast is easier, which makes
it accessible for more people.
-
34
BUSINESS 5
Recycling used cell phones,
by means of a private
company.
Creating labor opportunities in Africa.
Customers in Africa received money for trade-in cell
phones.
Reducing e-waste in Africa.
BUSINESS 6 Providing water, by means of
a limited company.
Educating Indonesians how to run and repair drinking
water facilities. Setting up a school near a drink water
business to educate mechanics and factory workers.
Giving sourcing fields a second
function as a nature reserve,
increasing natural value and living
conditions for flora and fauna.
Stimulates citizens to use less water.
Only uses wind energy as well as
striving to reduce energy
consumption.
Reducing water leakage problems in
Indonesia.
BUSINESS 7 Selling beverages by mean
means of a private company.
Brewery in Ethiopia creates labor opportunities and
improvement in living conditions (sanitary facilities,
electricity et cetera).
Generates own electricity, using
resting head to stoke their own
maltings and purifies water in a
sustainable way.
BUSINESS 8 Selling a variety of fish
products.
Improving work & living conditions by a foundation that
business is associated with
Innovation in fishing methods to
reduce fuel & emphasize the use of
certificates so that sustainable
practices are guaranteed
Considering the interview cases, environmental value creation is often related to the key
resources that the businesses are handling. This can be the transport, as business 2 and 3
engaged in CO²-free shipping, but can also express itself in innovations in fishing methods, as
business 8 demonstrates. An interesting finding is that the interviewee of business 5 was
convinced that eco-innovation is a lot more important than eco-efficiency. Business 6 affirms
this belief, claiming that it is difficult to influence the citizen, but that it believes in innovation
for reducing water usage.
Thus, the way environmental or social value is embedded into the business’ activities differs
per business. Part of the interviewed businesses address these values central to their activities,
by creating economic value through social or environmental value. For example, the main
activity of business 5 is to reduce electronic waste (old cell phones), by recycling as businesses
pay them for doing this. In like manner, the main activity of business 6 is to increase access to
prostheses in developing regions, by offering a franchise model. Both businesses aim to
improve the world and do this in a way that is economically profitable for them.
Based on the sample that has been interviewed, multi-value creation is created as well in the
Netherlands as in the developing regions where the businesses are active. As an illustration, in
the Netherlands, business 6 minimizes its negative effects on nature, by turning water-collection
areas into natures reserves. In Indonesia, business 6 reduces water leakage problems in two
regions as well as educating Indonesians how to repair water constructions, which combine
social and environmental value creation.
In summary, all businesses state that creating economic value is essential for their business. It
differs in what way businesses create social and environmental value, however, the latter is
mostly based on the resources that the businesses manage. Furthermore, whether enviornmental
or social value is embedded into the core business’ activities differs as well. For a number of
businesses it is central to their main activities, as for other businesses it is created in the
peripheries.
4.3 What role does Circular Economy play in the business model?
This section will elaborate on the role of CE in business model, both from the perspective of
involved actors and businesses.
36
4.3.1 CE – perspectives of actors
To begin with, expert 2 explains that at this moment, we find ourselves for 99% in a delayed
linear economy. We will get to the circular economy, but we still have a long way to go. The
modern economy is a waste economy, caused by welfare, where we forgot how to see value in
things.
At this point in time, many of the businesses are not ready to receive used product after lifetime
to flow back into the business. Businesses have to rethink about products that they sell in the
coming years: how can we assure that the product will be endlessly in the loop? Expert 2 claims
that business must come together with all their partners in their chain to solve the circular
problem whereby it is essential that businesses trust each other.
Expert 2 proceeds claiming that there is also a responsibility for the government as well, who
have to consider whether is it is legally feasible to force businesses to design their products in
such a way that raw materials can remain in the loop. According to expert 2, the government
should have a facilitating role in this transition, where law and regulation are aligned with the
new system of thinking. At this moment, we’re having outdated law and regulation and a
million things have to be changed yet.
On one hand, expert 2 states that we need behavioral scientists that influence the behavior of
the consumer, in order to make responsible consumer choices. On the other hand, expert 2 admit
that customers often do not have much choice within the current marketing offering, quoting
expert 2: ´Consumers do not want to spill at all. But If I go to the supermarket and I can only
grab my potatoes and fruit in plastic, then I have no choice”.
From a government perspective, civil servant 1 explains that in 2016 the Netherlands have been
chairman of the European Union. CE has been a major topic that year for promotion purposes.
On a national level, the ministry compiled a government-wide policy for CE with independent
goals and projects, where the role of the government should be to facilitate and stimulate
circular initiatives for businesses.
4.3.2 CE in business models
Based on the interviews can be concluded that businesses largely identify opportunities to make
their business models circular based on their resources. However, the extent of integrating
circularity in business activities differ significantly within the sample of this study.
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In the case of business 7, circular activities are aimed at the flow of water within their business.
The business initiated a multi-actor project that facilitates the circular flow of rest water into
the ground of farmers of nearby plots of arable land. Furthermore, they are actively measuring
circular KPI’s which entail among others waste management and circular purchasing.
Similarly to differences in how multi-value creation is embedded within the business activities,
the same phenomenon is observed for CE. Business 1 and 3 make their loop of product flow
circular, by introducing a trade-in programme. Only the scale and purpose of the trade-in
programme differs, as for business 1 this trade-in programme is a service, while for business 3
it is their business proposition.
In a few businesses, only small-scale circular initiatives within the business models are
observed on the basis of the interviewed businesses. For example, business 2 and 5 sell resides
from production for re-use, where the resides are input for a new production process. Likewise,
business 2 and 4 make use of biodegradable or reusable packaging.
At the same time, the interviews uncovered a number of constraints on the implementation of
the circular economy. The products that business 1 sells aim at reducing plastic in the sea and
other forms of plastic pollution, except the product in itself are not made of recycled plastic.
When asked why this is not the case, business 1 explains that the quality of recycled plastic is
simply not sufficient yet. Expert 2 affirms this constraint and states that there exists only one
business in the Netherlands, at this time, that is able to produce high quality recycled plastic.
In summary, although experts emphasize the urge to engage in the CE, moving to CE remains
a large challenge for businesses and the government. Even though businesses experience
constraints on implementing CE, numerous businesses have embraced circular initiatives in
their business activities.
4.4 Will multi-value creation be more profitable compared to solely pursuing
economic value?
One of the questions that is interesting for the future of multi-value creation, is whether this
form of value creation has future potential. Business 1 thinks this remains a difficult question,
nonetheless, it would be a bright reality: only buying goods that improve the world’s condition.
But in reality, as business 1 clarifies, businesses still earn major profits by selling trash.
Business 7 expects that if businesses deal well with people, energy, and resources, that on the
long-term, businesses will be more prosperous. Perhaps, on a short-term, from a financial
38
perspective, it could be disadvantageous, as you invest in your relationships. But on the long-
term, the interviewee believes this strategy would be winning strategy. In support, business 2
exemplifies that many people come to their store as they know how they do their business and
that they pay a fair price to the partners in their chain.
In summary, there is no consensus on whether businesses that engage in multi-value will be
more profitable on the long-term.
4.5 To what extent is multi-value creation organized collectively?
The empirical data is analyzed based on to what extent the processes to multi-value creation are
collectively created. In order to do so, the interviews on multi-value creation are analyzed based
on cases where multiple actors were involved. Three cases were identified that all together give
an answer to this research question.
• Case one refers to a coffee plant where business 2 was involved. In order to improve
processing techniques, the Dutch government and business 2 have built a coffee plant
in Uganda. The initiative benefited all actors, as the development aid of the Netherlands
was considered as a proper investment, the local community experienced cost
reductions and business 2 benefited from improved quality of resources. This initiative
exemplifies how value creation is being created collectively and not solely by one entity,
in this case, business 2.
• Case two refers to a cacao plant in Peru, where business 4 was involved. In the activities
of business 4, a significant role is observed for cooperatives. Together with the
cooperatives, business 4 has set up a cacao plant which makes it possible to fabricate
chocolate in Peru. This effort exposes a shift in where the value is added in the chain;
from retailer/manufacturer up in the chain to the farmer, in Peru. Both parties benefit in
this process, as the manufacturing process is cheaper in Peru, which decreases the costs
related to business activities of business 4 and leads to an increase in income for local
farmers in Peru. Furthermore, for business 2 and 4 applies that the cooperatives offer
purchasing practices to the businesses whereby local farmers in developing countries
directly benefit.
• Case three refers to a brewery in Ethiopia, where business 7 was involved. Together
with Ethiopian initiators, a group of Ethiopian friends, business 7 build a brewery. The
initial start-up of the brewery project was initiated by the group themselves. However,
39
as time passed by, the group realized that is was difficult to build a brewery on their
own. They lacked knowledge and needed a partner, that is when business 7 joined the
collaboration.
In summary, above-mentioned cases show how businesses engage in multi-value creation
collectively, in which they co-operate with different actors, e.g. cooperatives, governments or
the local communities.
4.6 What role do Sustainable Development Goals play in businesses that engage in
multi-value creation?
In this section, the empirical findings are tested on what role SDGs play in businesses that
engage in multi-value creation.
4.6.1 Perspective of businesses
According to business 3, the SDGs make it easier to concrete certain ambitions and to get to
work with these goals, therefore business 3 promotes the goals on their website as well.
Business 3 has also been a guest at the UN conference in June 2017 where it received positive
feedback claiming that business 3 is a great example of concrete action regarding the SDGs.
Business 7 points out that the SDGs play a major role in their business as well. Business 7
clearly makes a distinction between direct and indirect consequences of their efforts. Directly,
the business contributes to two major pillars: water and energy. But by bringing labor
opportunities in Ethiopia, the business also reduces hunger, which indirectly contributes to goal
two.
In the data collection process, it appears that business 7 is the only business among the
interviewees that connected their business model to the achievement of the SDGs in their annual
report. The business clearly illustrates the input of the business processes, the business
activities, the outputs and consequentially connects these outputs to certain SDGs.
In addition, business 7 also has the ambition to integrate the SDGs in their innovation processes.
When asked about this, the interviewee responds with the following: “Integrating that (SDGs,
red.) is difficult, but yes, that is what we will do. It gives a higher purpose to innovate. You
actually contribute to something.”
In line with business 7, business 3 extensively reports about their efforts to contribute to the
Sustainable Development Goals on their website. In contrast to business 7 and 3, business 2
40
indicates that they did a lot of effort to contribute to the SDGs, however, they did not promote
this at all and realize that the business should have been more transparent about this.
For business 5 it is the government that expects them to work on the SDGs. Business 5 has
created a pact with the government that it will take on the responsibility to connect ten million
people to water systems in developing regions. By means of this pact, business 5 is actively
contributing to goal 6 of the SDGs.
4.6.2 Perspectives of other actors on SDGs
Expert 1 stresses that SDGs are important for businesses for two reasons: first, it is something
to hold on to for businesses, in a way that it can provide guidance. A second important factor is
that the goals are being monitored worldwide. In that way, according to expert 1, it is able to
give us insights into whether we are making progress or not.
Expert 4 points out that the SDGs remain a theory. The reason that goals are being chosen by
businesses is that it looks good for buyers, for example by building a school. Furthermore,
expert 4 argues that nobody in Ethiopia talks about the SDGs, which according to the
interviewee, proves that CSR is deployed at random, instead of strategically.
Expert 2 and 3 agree on SDGs often being used as ‘checklists’. Expert 2 clarifies that these
checklists are often being used in financing situations, whereby the financial institutions or
investors demand these checklists for providing funding.
To end with, expert 1 argues that the created value that contributes to SDGs is not necessarily
bound to foreign countries, but as well contribute to development in the Netherlands where we
experience these issues as well.
In summary, it largely differs to what extent businesses integrate SDGs. Ranging from
businesses that integrate SDGs into its main activities, to businesses that do not consider SDGs
at all. Although expert 1 emphasizes the importance of SDGs, other experts regard the goals as
‘checklists’.
4.7 How is multi-value creation reflected in the Business Model Canvas?
In this section, the author thrives to search an answer to the question of how multi-value creation
is reflected in the Business Model Canvas (Osterwalder & Pigneur, 2010).
41
4.7.1 Perspective of businesses
In order to achieve multi-value creation, the interviewees of business 2 and business 4
emphasized that it is very important which partners you choose in your chain. This holds for
purchasing decisions, but as well as for partners that you collaborate with.
In addition to that, the interviewees indicated that according to them sustainability must be
integrated through the entire chain. A giveaway promotion using a plastic button from the
headquarters of business 2 exemplifies that in their chain, sustainability is still not fully
embedded. Expert 1 underlines the importance of the right partners and adds that the value
proposition of your business cannot be ‘good’ when you do not work with the right partners.
Overall, according to business 4, in every decision throughout the business model, business 4
considers the most sustainable possibility and not the cheapest. They reveal that according to
the contemporary business models in the sector, we do not have chocolate anymore in about a
thousand years. Business 4 wants to guarantee chocolate in the future, therefore they argue that
resources and key activities are there most important cells for creating value. However, in the
past, the business focused too much on the partners. According to the interviewee, this is not
feasible in the long-term.
Business 5 indicates that the efforts for multi-value creation are embedded in both the value
proposition and the key partners that they co-operate with. In their case, their main partner,
which is the government, expects them to take on part of the development aid that the
government is focused on. Next to this, business 5 emphasized that part of their multi-value
creation can be traced back to their value proposition: clean tap water.
For business 7, the process of multi-value creation mainly emerges out of the key activities and
the key resources. In addition, business 7 indicates that key partners play a role as well. In
contrast to business 5, business 7 does not consider their impact reflecting in their value
proposition, as could be a form of window-dressing according to the interviewee. Nonetheless,
according to business 7, the story which emerges out of the impact of value creation could
emerge in your value proposition.
4.7.2 Perspectives of other actors on Business Model Canvas
Expert 1 stresses that multi-value creation can be expressed in the value proposition, as the
value proposition is much broader than just the product. If this multi-value creation cannot be
42
identified in this cell (referring to cells in the canvas), then the efforts are organized in the
peripheries of the business and the business will ultimately tumble.
Expert 2 stresses that many entrepreneurs do not use the Business Model Canvas, as it is not
the ‘language’ that entrepreneurs practice. In line with businesses 2, 5, 7 and expert 1, expert
2 argues that the cell of ‘Key Partners’ is the most important cell in light of (mostly) multi-
value creation. The only difference is that the context of expert 2 concerns the introduction of
circularity in your chain.
Expert 3 argues that the Business Model Canvas brings everything back to a cost-benefit
analysis. Every value that matters next to economic value, is being left out of The Business
Model Canvas. Social, and environmental values are not integrated into the Business Model
Canvas, as long as the values are not monetized. The model simply does not work with the three
proposed values. In the words of expert 3, this leads to the impoverishment of entrepreneurship.
Expert 4 argues that it differs a lot per sector, how multi-value emerges in the Business Model
Canvas which makes it difficult to generalize. Instead of taking the perspective of the business,
identifying where the multi-value creation takes place, the interviewee takes the perspective of
the local government and community and argues that these two actors often complain that the
businesses are polluters, which he expects to fall under Key Activities. This is caused by the
perception of those actors that the businesses always do harm, often-environment-related.
In summary, it appears that multi-value creation is mostly associated with the cells key partners,
key resources and key activities. Contradicting views exist to whether multi-value creation can
emerge in the value proposition. In addition, the use of the Business Model Canvas is
questionable, since it transforms value-creation to a cost-benefit analysis, and it is expected that
findings differ per sector.
4.8 How do businesses experience the interaction between the business sector, the
public sector, and the citizen sector?
This section illustrates how the interviewees regard the interaction between the business,
government, and citizens, in the context of multi-value creation. Specifically, this section is
structured in two parts, whereby first the role of citizens is being analyzed, where after next the
role of the government is being analyzed. The relation of businesses to other businesses is of
minor interest in this study.
43
4.8.1 Citizen sector
According to the vision of business 1, 2, 4, 5 and 7, the citizen sector has a ‘certain’
responsibility as well. All of these businesses emphasize that either the mindset of the consumer
or customer behavior should be subject to change, in terms of responsible purchasing or
responsible behavior.
To clarify, business 2 and 4 insinuate that it would be desirable if the customer makes a more
responsible decision in the buying process. Business 2 asks itself whether customers really think
about what products they consume, in which he assumes that customers do not think about this.
Business 4 argues that they do not have the ability to change the industry, but at least the
business is able to show how things can be done differently. Then it is the responsibility of the
consumer to make the right choice.
Business 5 is focused on stimulating citizens to use less water, as well as business 1 educates
youth at schools on the use of water and plastic pollution. Business 5 emphasizes that this
change is very difficult as behavioral change is almost impossible. However, expert 1 argues
that as long as a major of people stand up, a business sector can twist.
Regarding the changing role of the citizen in modern society, expert 1 states that organizational
boundaries fade away and that systems get more open and transparent. What follows is a more
participatory role to play for citizens and customers, where the customers are not part of the
profit model but will be more like a partner.
4.8.2 Public sector
Regarding foreign governments in developing regions, business 3, 4 and 8 experience
difficulties in their interaction with public bodies. Business 4 and 8 emphasized that corruption
is still widespread in many countries, which complicates the businesses, and manifests itself in
e.g. bureaucracy. Business 3 describes that it is complicated to ship their e-waste through all
different countries as the practice requires lots of paperwork and import permits. When
discussing this with expert 1, the interviewee indicates as well that the government could
stimulate entrepreneurs which work on social issues by reducing paperwork and offering tax
advantages.
In the Netherlands, business 4 indicates that is frustrating that the big corporations receive a
major amount of monetary fund, while they are partly responsible for the problems that are
experienced in the cacao sector. Expert 1 recognizes this phenomenon and acknowledges the
44
fact that the government is pampering the big organizations. The interviewee continues stating
that for solving societal issues, the government first turn to the public sector and society instead
of the big corporations.
Next to difficulties, business 1 & 6 see little involvement of the government in their activities.
According to business 1, they also do not immediately see how the government could be of
added value to their organization. Partly in line with this, business 6 indicates that the public
sector is not essential, or needed, for their practices. In contrast to difficulties or no involvement,
expert 4 experiences that the Ethiopian government functions as some kind of a sounding board
and discussion partner for the Dutch entrepreneurs in Ethiopia.
Civil servant 1 has given us a few insights on how the government experiences the interaction
with businesses and citizens. Within the transitions that the Dutch government identifies, the
government aims to behave as a partner in these transitions, not as an ivory tower. According
to the interviewee, the government is embedded in outdated structures which make the
transitions more difficult. The outdated structures are part of the linear economy, as well as
their relationship with multinationals, referring to the frustration among interviewees regarding
the relationship between the government and big corporations.
The reason why expert 3 supports the BBO-model, is that these three actors are the most
important. The government, businesses, and citizens are universal, but as expert 3 explains, for
certain businesses it could be useful to add other actors. The interviewee emphasizes that the
model must not be too extensive as it is not possible to communicate with 30 or 32 stakeholders.
In summary, the interviewees emphasize the growing responsibility of citizens and the role of
the government within the transitions faced. In addition, frustration among businesses towards
the government, both in the Netherlands and in developing regions, influence the relationship
between businesses and governments.
4.9 How do businesses experience the partnership with foreign developing regions?
Business 1 emphasizes that local partners are essential to make an impact in developing
countries, but that it is difficult to find partners as physical distance complicates this.
The ability to understand each other is an often-mentioned barrier in the business relationship
between the Dutch business and the foreign partners according to business 2, 5 and 7. Business
7 adds that across nationalities people think differently and that not understanding each other is
the most experienced barrier.
45
Business 2 and 5 both indicate that there is always a difference in culture. Business 2 argues
that a major difference is the directness of the Dutch what they are renowned for or deviant
interpretations for quality. For business 5, the difference in culture expresses in e.g. patience:
the Indonesians always think that the Dutch are too quick or information that is being withheld
by Indonesians due to several underlying reasons. After all, business 2 concludes that it differs
per country.
In light of this topic, business 5 emphasizes the urge of getting yourself familiar with the local
systems in order to overcome obstacles, quoting the interviewee: “Twenty years ago, we have
installed a water purification plant. (..) The day it was being opened, it had been demolished
by the mayor that night. (..) He had the monopoly on water in that village, and we ignored that.
By not looking into the local system, we shifted the local equilibrium”.
In summary, although it differs per country, differences in culture and the ability to understand
each other are the main barriers experienced in the relationship with foreign partners. Yet,
business 1 emphasize that local partners are essential to make an impact, but physical distance
complicates finding one.
4.10 Findings beyond the initial scope
In the process of collecting empirical data, the author encountered two interesting concepts that
were not accounted for. These findings derive from the interviews, whereby the interview guide
mainly dictates the content, but as a result of the exploratory research characteristisc, it is not
unlikely that additional interesting phenomena come forward.
4.10.1 What price are we paying?
An interesting topic that came forward in several interviews, was the topic of eco-costs, which
make up the costs of the environmental harm that a product demands. Business 4 is frustrated
due to the fact that businesses do not pay for the pollution that they cause. Quoting the
interviewee: “If we have major issues in this sector, who were involved? Can we then talk about
the costs that are passed on to society? Can we charge those businesses for these costs? And
that basic principle, that is what we ignore as society”.
Expert 1 recognizes this, stating that is unacceptable that one business pollutes and the other
business pays for this. The interviewee also expresses that purely economic goals might not be
considered as genuine profit, as it is purely monetary and short-term sighted. Many
environmental costs are not taken into account.
46
When asked what will happen when you rule out the environmental and social concerns of
business 4, the interviewees point out that the business then will start generating large profits.
Expert 3 reflects on this dialogue in the following way: “Absolute fiction of course. We have an
economy that is based on excluding a major number of different costs. So fictionally, we will
make more profit. But we do that at the expense of a lot of other things”.
Expert 4 claims that we have to redefine our value-evaluation and should rethink what we
interpret as costs within this economy, whereby the interviewee not directly refers to the
practice of eco-pricing or whatsoever, but takes a more general approach.
4.10.2 Achieving social and environmental value by rewarding systems?
In the interview with expert 2, the interviewee indicated that one of the tools to influence people
or businesses in order to become circular or achieve sustainable targets, is to adjust the reward
systems. Which rewards specifically and how to influence these, remains unspoken during the
interview.
Weeks later, business 7 was interviewed. In its annual business report, business 7 stated that a
small share of the rewarding system within the business is based on the achievement of
sustainability goals. When asking the interviewee, he emphasizes that salary should not be the
motivator, nonetheless, he admits that salary could be a demotivator. The interviewee continues
that it is most effective to be intrinsically motivated, inspired by helping to make the world a
better place. Finally, he adds that this policy indicates the importance of the sustainability goals
for business 7, quoting: “We find it so important, that even your salary depends on this. That is
how important we regard this as a business”.
A few weeks after the interview, Shell announced that it will link climate targets to executives’
pay (NOS, 2018). Thereby it aims to reduce their climate footprint, increase transparency and
generate a benchmark. When discussing this announcement with expert 3, he applauds this
change in policy. The interviewee emphasizes that it now becomes very concrete, where people
get rewarded for reducing CO²-emissions and the challenges that we nowadays face become
part of the rewarding structure.
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5. Discussion
In the following paragraphs, each element of the conceptual model (figure 9) is independently
discussed. The interviews have contributed to several findings related to the concepts, as
proposed in the conceptual model. In this section, the findings are interpreted, linked the
existing literature and examined on their significance.
5.1. Multi-value creation
The concept of multi-value creation was investigated on the basis of three sub-questions: how
has multi-value creation evolved, what values do businesses create and will multi-value creation
be more profitable compared to solely economic value.
According to expert 1, there is more and more attention for integral business models where
limitless growth is not the outcome, and where terms as inclusiveness or equality will thrive.
Expert 3 stresses that we have ruled out the economic value creation from what we called CSR
and focused on the responsibility of the entrepreneur. At the present time, we are experiencing
commercialization of the sustainability issue, where economic value is being re-introduced.
These statements are in line with current dynamics in literature, whereby a significant number
of business perspectives integrate these three components and suggests that economic value can
be created along with addressing societal and environmental needs (e.g. J Elkington, 1997;
Lüdeke-Freund & Boons, 2013; Schaltegger et al., 2012).
Regarding the definition of CSR, expert 4 states that at this moment it is still very unclear what
exactly CSR is, which is also a discussion that received large attention in literature (Hack,
Kenyon, & Wood, 2014; Sheehy, 2014). Based on our interviews and the literature review, we
observe that CSR is not an often-practiced perspective anymore, as the term has evolved to in
an integrated model that has been commercialized.
In support of literature, based on our interviews, we can conclude that all businesses create
economic value, as well as value for the environment and society in line with the TBL
dimensions (Elkington, 1997). An explanation for this finding is the method of sampling, as the
researcher opted for a ground theory sampling theory, whereby the sample has been carefully
selected based on the phenomena under research.
In our empirical data, we have found no evidence of entrepreneurs that claimed to experience
tension between addressing societal and economic values, as Crane & Spence (2014) criticized
the concept of shared value for. Nor have we found evidence that business experience a trade-
48
off between social development and environmental protection. However, the relationships
between the three dimensions differ per business case. Businesses 1, 2, 4 and 7 are selling
consumer goods, whereby the sold product does not directly create social value, but rather
economic value. In contrast, business 6 sells a product that directly creates a social value for
consumers. Correspondingly, business 3 sells solutions for reducing e-waste in Africa, which
create direct environmental and social value, as it provides clean income and less waste.
In support of Lovins et al. (1999), evidence was found for the four transformations that the
researchers propose in order to align environmental needs with business needs. First, businesses
within our sample increased the productivity of national resources, for example by improving
soil fertility. Secondly, resources became input for other processes, especially in the agricultural
context. Third, experts within our sample underlined the importance of moving to a solution-
based business model and lastly, businesses have reinvested in natures capital, for example by
investing in nature reserves in order to improve biodiversity.
Elaborating on these transformations: the first transformation involves the aim of increasing the
productivity of natural resources, in literature interpreted as ‘eco-efficiency’. Expert 3 extends
on this transformation by stating that at this moment eco-innovation is much more important
than eco-efficiency, as our efforts to increase eco-efficiency has reached its limits. Although
context may be slightly different, respectively reducing water usage and reducing fuel usage,
business 6 and 8 affirm the importance of eco-innovation in their business sector.
In line with the literature, the interviewees acknowledge that in numerous cases, value creation
could not have been done without other actors. Examples of this include the coffee and cacao
plants in Uganda and Peru, and a brewery in Ethiopia. In line with literature (Kania & Kramer,
2011; Kramer & Pfitzer, 2016), economic opportunities have emerged for involved business.
Due to time limitations, the interviewees were not extensively asked about these initiatives,
which implicates that this study is not able to test the five elements that Kramer proposes
(Kramer & Pfitzer, 2016). This limitation opens up a future research direction, as might be
interesting to gain an in-depth understanding of the interplay between actors in light of societal
change and the economic opportunities that arise. The question is whether the common agenda,
that Kramer & Pfitzer propose, results in tensions between actors as businesses might be over-
interested in the economic opportunities. A potential malpractice that is partly in line with Crane
& Spence (2014), who stress the tension between societal development and economic value.
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5.2 Interaction public-, business- and citizen sector
In the literature section of this study, the BBO-model was introduced, which consists of
governments, businesses and citizens and which was supported by literature (Bjerke &
Karlsson, 2015; Jonker, 2015; Nicholls, 2006). This identification is line with empirical
evidence, as this classification appears to identify the most important actors within the activities
of the interviewed businesses.
As this model is the only model that has been proposed during the interviews, it might be true
that this finding is subject to a confirmation bias, which means that the research consciously or
unconsciously avoids information that contradicts or disagrees with the currently held
viewpoint (Gatlin, Hallock, & Cooley, 2017, p.12), whereas the BBO-model is our initial held
viewpoint.
Only in one case, an NGO was mentioned, which played a minor role in business processes.
This is contradictory to the model proposed by Teegen, Doh & Vachani (2004), whereby this
study describes that NGOs are able to fulfil specific needs that the market is not able to meet or
ignores. A possible reason why NGOs become less important, in the field of interaction of
businesses, might be because they now address societal issues by themselves.
An interesting finding is an emphasis that the interviewees place on the responsibility of the
citizen, which must change over time. The mindset of the customers, in our research limited to
the Netherlands, needs to be changed in order to make responsible businesses dominate over
irresponsible businesses.
Literature reveals that one of the reasons for the growing citizen involvement is the green
revolution, whereby Murray (2009) argues that a massive agenda emerges based on the
transition in food, energy, transport et cetera. The empirical data frequently underline the
importance of this emerging agenda, which supports this claim.
The responses on how businesses regard the interaction with the public sector differ per
businesses. Based on the interview, we conclude that a common understanding, both from the
government and businesses, is that the government should have a facilitating role in the
entrepreneurial activities of the businesses. Jonker (2015) states that the government is
changing and is not able to solve societal problems solely. Instead, collective action is part of
the solution whereby it is crucial that interaction with actors is based on equal footing. This
view is in line with civil servant 1, as the interviewee states that the Dutch government wishes
50
to find solutions for current transitions in collaboration with societal actors as a ‘partner’ and
not from the ivory tower.
Among businesses, we found two frustrations that prevail which are addressed to the Dutch
public bodies. The first one is the pampering attitude of the Dutch government towards big
Dutch corporations, which creates a feeling of injustice among small- and medium-sized
responsible entrepreneurs. Secondly, the government should re-evaluate laws and regulations
regarding major economic trends: policies that stimulate the circular economy, less
bureaucracy, and reduced paperwork for social entrepreneurs. For developing regions, this
frustration emerges mostly as a consequence of corruption or bureaucracy.
5.3 Sustainable Development Goals
The aim of adding the Sustainable Development Goals to the conceptual model in figure 9, was
to analyze what role these goals play in businesses that engage in multi-value creation. As stated
in the declaration of the Sustainable Development Goals, the business sector is urged to
contribute to changing unsustainable consumption and production patterns (UNDP, 2015).
Current literature states that the SDGs guide the world to sustainable development in terms of
economic growth, inclusiveness and environmental protection (Stafford-Smith et al., 2017).
However, as a large body of literature is focused on the governmental role in the achievement
of the goals (Aitsi-Selmi et al., 2016; Waage et al., 2015), literature lacks evidence on adopting
the goals from a business perspective.
Based on empirical evidence, it appears that it differs per business to what extent the SDGs are
integrated into current business models. For a number of businesses, these goals are very
important and play a role in their main activities, whereby two businesses as well promote it
extensively in their public promotion channels. In contrast, for other businesses, the goals do
not influence their decision-making at all.
Although the above-mentioned businesses did explicitly mention that the goals play a major
role in their business processes, expert 3 and 4 emphasize that many businesses use the goals
for ‘checklist’ purposes and imply that a large part of the business sector is not actively involved
in achieving these specific goals.
In order to gain an understanding of how the SDSs are integrated into business models, table 6
provides an overview of how the interviewed business can be classified according to the
framework designed by Raith & Siebold (2018). Analyzing this table results in two conclusions.
51
First, within our sample, the most popular strategy is the promotion strategy, whereby
businesses sell commercial products, however part of the revenue address social or
environmental issues. Second, the provision strategy is not being identified. A reason that might
explain this, is the sampling method, whereby economic value was part of the selection criteria,
which is not central to the provision strategy.
Table 6 Interviewed businesses classified using framework by Raith & Siebold (2018)
Business Adopted strategy of Raith &
Siebold (2018)
Implementation
1, 2, 4, 5,
7, 8
Promotion strategy (&
deployment strategy)
Businesses sell a commercial product,
however, the revenues of this are partly
financing sustainability targets. One could
argue that business 1, 2 and 4 also fit the
deployment strategy, as these businesses
combine social and economic value as well,
respectively by deploying youth that have
poor job prospects (1) or selling fair and
biological products (2 & 4).
3 Promotion strategy The business provides “1-one1” strategy
where customers buy a product and pay an
additional fee for recycling another product.
6 Deployment strategy The business sells a product that combines
social and commercial value by earning
market revenues.
5.4 Circular Economy
An increasing number of businesses introduces the concept of circularity into their businesses
for environmental or financial reasons. As for the implementation of the SDGs, it also differs
per interviewee how their business implements CE.
The question is to what extent the circular economy has gained ground within the sample of
this study. The main answer to this question is that all businesses are aware of the concept of
52
CE, but the degree and mode of implementation differ significantly. As circularity is at the heart
of the business proposition of business 3, business 7 finds itself in a transition to be more
circular, as it appears from their attempts to achieve new circularity goals.
Based on business models that Bocken, de Pauw, Bakker & van der Grinten (2016) propose for
implementing CE, it is interesting to examine the different businesses on circularity and
demonstrate the various modes of CE being implemented. The results, shown in table 7 indicate
that businesses in this simple have largely adopted strategies that fit within the proposed
strategies of Bocken et al. (2016).
Table 7 Interviewed businesses classified by adopted strategies proposed by Bocken et al. (2016)
Business Adopted strategy of Bocken et
al. (2016)
Implementation
1 & 3 Extending resource value Business 1 uses trade-in programmes to
recycle, business 3 collects e-waste which is
being recycled.
2, 4, 8 Industrial symbiosis strategy Residues of outputs from one process flow
back in another process as input, for both
businesses this concerns flow of water that is
being reused for different other processes.
5 Extending resource value and
Encourage sufficiency strategy
The business sells residual value of resources
for re-use to other business. Next to this, the
business actively seeks to reduce end-user
consumption trough principles of durability.
7 Industrial Symbiosis strategy and
Extending product value
The water of the main process flows back to
transform to be input for other processes.
Next to this, the business participates in the
Dutch container-deposit program whereby
packages are being trade-in and re-used.
Although the field of study is proposing limitless solutions for introducing CE (Ghisellini et al.,
2016), expert 3 points out that we still find ourselves in a delayed linear economy. Yet turn-in
53
practices are one of the solutions for CE, according to experts 2 and 3, only a minor part of
businesses at this moment enable customers to turn-in their products after lifetime,
According to expert 2, there is a responsibility for the government to examine whether is legally
feasible to design their product so that raw materials can remain in the loop. The government
has a facilitating role in this transition, according to expert 2. Empirical evidence from the
government is in line with this view and stress that since 2016, the Netherlands have been
actively facilitating and stimulating circular initiatives, on a government-wide level.
In addition, based on the interviews it follows that businesses also face constraints on the
implementation of circularity. Many products are still not able to be produced of recycled
plastic since recycled plastic does not meet the norms of quality yet. Another constraint might
be the behavior of the consumer, as it does not prefer circular-organized products. On the
contrary, expert 2 illustrates that consumers often do not want to spill, but they do not have
much choice within the current market offering.
Considering the opportunities that the CE poses for developing regions, Anderson (2007)
dictates that lowering the input of resources and costs can at the same time reduce
environmental pollution. In that way, CE is able to add significant value to the poorest of society
(Gusmão Caiado et al., 2018). The empirical collection of data shows that circular initiatives
are able to reduce waste and improve biological elements in foreign developing countries
(respectively business 2, 3, 4 and 7).
Given the above, the CE both provide opportunities and show constraints. Research on specific
business cases could give an answer to the role of CE per sector, per business or per region.
5.4 Business Model Canvas
One of the sub-questions of the interviews was to identify in which cells multi-value creation
takes place, a question that remains largely unexplored in literature. Based on empirical data, it
appears that the Key Partners of the businesses were the most important component in order to
achieve multi-value creation, which make up the partners that you purchase of, but as well the
partners that you co-work with. Other two essential cells were the key resources and key
activities. In conclusion, Dutch businesses that operate in developing regions address social and
environmental concerns mainly on the ‘input’ side – key partners, key resources and key
activities – of their businesses.
54
Another interesting insight is that the multi-value creation can be expressed in the value
proposition. As expert 1 explains, if this multi-value creation cannot be identified in the cell,
then the efforts are organized in the peripheries of the business and the business shall tumble.
In contrast, business 7 considers multi-value creation emerging in the value proposition as
‘window-dressing’.
Despite above-mentioned findings and conclusions, it is questionable whether it is really helpful
to get the Business Model Canvas involved. Expert 2 stresses that entrepreneurs never use a
Business Model Canvas, whereby expert 3 adds that the Business Model Canvas brings the
business model back to a cost-benefit analysis. Every value that matters, like social and
economic value, is not integrated into the Business Model Canvas.
As the Triple Layered Business Model Canvas is too extensive, we have not tested or discussed
this model with the interviewees. However, the empirical stage of this research showed that
business processes have an impact on the environmental and social components that Joyce &
Paquin (2016) claim to be underlying the traditional Business Model Canvas, such as materials,
end-of-life, use-phase, local communities, employees and social value. Therefore, potential
research would extend this field of literature by testing this business model on business across
different sectors.
5.5 Examining the Conceptual Model
The aim of this study is to gain a deep understanding of processes within businesses that engage
in multi-value creation. The research question, based on literature and current trends, is
formulated as:
Dutch businesses in developing regions: what values do they create, how do they interact with
different actors, how does this influence their business model and to what extent play SDG’s a
role?
To answer this question, the researcher designed an conceptual model, that has been studied
using literature and empirical data, see figure 9.
55
Figure 9 Conceptual Model of Exploratory Study
In this section, the researcher will elaborate on each element in the conceptual model,
respectively – multi-value creation, the interaction of the public-business- and citizen sector,
the role of SDGs, the CE and the Business Model Canvas.
• Multi-value creation: It appears that in current business dynamics, multi-value creation
is widely practiced. Social and environmental value have been received great attention,
along with the creation of economic value. The adoption of the Triple Bottom Line
perspective enabled the researcher to gain an in-depth understanding of different
economic, social and environmental values to be addressed. However, based on
empirical data, we conclude that creating economic value is still a prerequisite for
business.
• Interaction involved actors: The identification of actors that interact with businesses
engaging in multi-value creation, is in line with the BBO-model, respectively citizens,
businesses and government bodies. This classification appears to be supported by
empirical evidence. Nevertheless, interviewees emphasized that mapping these
interactions is still dependent on which business is subject to study. The interviewees
emphasize the growing responsibility of the citizen, hence this illustrates that the focal
point of responding to current trends and changes might shift to some extent to citizens.
The government is demanded a facilitating role, whereby interviewees repeatedly
pinpoint the need for revised legislation.
• Role of SDGS: Founders of the SDGs agenda highlight the role of businesses in the
achievement of the goals, however, the SDGs are not deeply integrated into the
56
interviewed businesses. On one hand, a number of businesses do emphasize their
involvement and highlights the importance by its public expressions, but on the other
hand: the interviews suggest that many businesses remain using the goals for ‘checklist’
purposes. Although businesses can be classified using the framework of Raith & Siebold
(2018), the question remains whether this framework assesses specific ambitions to
contribute to SDGs or that achievement of SDGs is due to personal beliefs to improve
the world.
• Role of CE: expert 2 claimed that we still find ourselves in a delayed linear economy.
However, the introduction of the CE can certainly be traced back to processes in the
interviewed businesses. Empirical evidence, in line with the literature, proves that the
business sector is able to benefit from introducing circularity, which could result in cost
reductions and address environmental value, despite the constraints provided in the
analysis.
• Reflecting on Business Model Canvas: We have found that businesses are mainly
concerned with their input side – Key Resources, Key Partner and Key Activities – as
it comes to multi-value creation. In current literature, there is still no consensus of how
to integrate sustainable elements into the Business Model Canvas, nonetheless, the
question is how valuable it is to investigate this, as empirical evidence prove that only
a minor part of businesses utilize conceptual tools to analyze their business.
57
6. Conclusion
The rise of multi-value creation can be described as the commercialization CSR. Multi-value
creation involves the integration of the different value dimensions into your business model,
instead of compensating your original business model.
Although corporate social responsibility and social entrepreneurship have been widely
introduced to the literature, the combination of social, environmental and economic value is
still largely unexplored. The business models which engage in multi-value creation have proven
to address environmental and social issues for both Dutch and foreign local communities,
besides making a profit for their business as well. As the findings of this research illustrate, the
CE might offer beneficial opportunities for businesses that engage in multi-value creation.
Empirical evidence shows that the SDGs play a minor role in this trend, but that personal
motivation is just as important.
The business sector shifts from creating solely economic value to multi-dimensional value,
whereby the future initiative lies with the public sector and the citizen sector. For the
government to design legislation, among others for the introduction of the CE and to stimulate
responsible entrepreneurship. For the citizen sector to adopt a mindset whereby irresponsible
businesses do not flourish, but where citizens prefer responsible businesses over irresponsible
businesses.
6.1 Limitations
This study contributes to the existing literature by providing an in-depth analysis of businesses
engaging in multi-value creation, within a research setting that explores the role of actors, the
CE and the SDGs. In addition, this study tempts to analyze how multi-value creation is reflected
in the traditional Business Model Canvas (Osterwalder & Pigneur, 2010).
However, this research is subject to a number of limitations. First of all, the interviewed
businesses were all from the Netherlands. The research does not contain any businesses that
originate from other countries. The second limitation is related to the actors that were studied
in this particular study, particularly their businesses and their operations. The interviewers are
chosen by means of Ground Theory Sampling, which holds that the interviewees were selected
based on the concepts subject to the study. Both mentioned limitations reduce the
generalizability across other geographical areas or different businesses or sectors.
58
A final limitation is the formulated scope of this research, as well as the framework that has
been used. The scope only included a small number of elements of businesses that engage in
multi-value creation, whereby other essential elements might be overlooked.
6.2 Future research
For future research purposes, first, it is interesting to gain an understanding of differences
between businesses that engage in multi-value creation compared to those that do not. The
sample that is used in this research does not contain businesses that solely focus on economic
value. Second, as the sample size within groups were not of equal size, this opens a future
research direction to verify whether equal sample sizes within stakeholder groups find similar
evidence. Third, interesting is to analyze whether findings differ per home country. In this case,
the Netherlands served as the home country of businesses within the data sample. In future
research, other countries could be subject to study. Fourth, as stated in the discussion (paragraph
5.1), it might be interesting to analyze what the specific role of each actor is in the process of
value-creation. For example, the five different elements proposed by Kramer & Pfitzer (2016)
could provide an in-depth understanding of the collective creation of value.
59
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9. Appendix
Appendix 1 – Sampling overview
68
Appendix 2 – Interview guide
Below, on can find the basic interview guide which has been compiled based on the sub questions of the
research question.
For every interviewee, the author has compiled a tailored interview guide which took into account
available time, expected knowledge of topics, role of the interviewed person et cetera. This tailored
interview guide included lots of desk research which has been conducted beforehand.
Multi-value creation
- What is motivation to create multiple values?
- In what ways is social value created?
- In what ways is environmental value created?
- In what way is economic value created?
- How did the local community in the foreign developing region specifically benefited?
- What other people are involved in multi-value creation efforts?
Foreign partnerships
- What were the needs of the local partners?
- How did you experience the foreign partnership?
- What were barriers in this partnerships?
Interaction public-, citizen- and business sector
- What is the role of public sector in your business processes?
- What is the role of the citizen in your business processes?
- What is the role of other businesses in your business processes?
- In what ways do you interact with these three sectors?
Circular Economy
- To what extent does Circular Economy play a role in your business activities?
- How do you measure circularity?
Sustainable Development Goals
- What role do the Sustainable Development Goals in your business processes?
- How do you integrate these?
Business Model Canvas
- In what cell does multi-value creation emerge?
- What cells are most involved in this process?
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Appendix 3 – The Business Model Canvas (Osterwalder, Pigneur, & Clark, 2010)
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Appendix 4 – The Analytical Hierarchy, based on the work of (C. Charmaz, 2006)
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Appendix 5 – The Triple Layered Business Model Canvas (Joyce & Paquin, 2016)