JOURNAL OF ETHICS ENTREPRENEURSHIP - University of Toledo

JOURNAL OF

ETHICS & ENTREPRENEURSHIP Center for Ethics and Entrepreneurship

Vol. 2 No. 1, Spring 2012

Journal of Ethics and Entrepreneurship

Editorial rEviEw Board Editor – Donald W. Caudill, Godbold School of Business, Gardner-Webb University [email protected] Associate Editor – James E. Littlefield, Pamplin College of Business, Virginia Tech [email protected]

M. Jill Austin Middle Tennessee State University

Fred H. Maidment Western Connecticut State University

Laquita C. Blockson College of Charleston

Martha Mattare Frostburg State University

Wendy Cukier Ryerson University

Maria Minniti Southern Methodist University

Alex F. DeNoble San Diego State University

Stephen Moore Central Piedmont Community College

Rodney D’Souza Northern Kentucky University

Michael H. Morris Oklahoma State University

Eugene Fregetto University of Illinois at Chicago

Luis Rivera Oyola University of Puerto Rico

Timothy Hatten Mesa State College

Nancy Rossiter Jacksonville University

Daniel T. Holt Mississippi State University

Mark T. Schenkel Belmont University

Jeffrey S. Hornsby Kansas State University

Dianne H. B. Welsh e University of North Carolina Greensboro

K’adamawe A. H. N. K’nife e University of West Indies

Rebecca J. White e University of Tampa

Susan Kruml Millikin University

Densil A. Williams e University of West Indies

Robert P. Lambert Belmont University

Monica Zimmerman Treichel West Chester University of Pennsylvania


ContEnts

volumE 2, numBEr 1

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

spring 2012

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guEst Editorial Is Entrepreneurial Ethics an Oxymoron? Laquita C. Blockson

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artiClEs Entrepreneurial Social Performance: Toward Measuring the Social Impact of Entrepreneurial Firms Abagail McWilliams and Rodney C. Shrader

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

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e Entrepreneurial Nature of Salespeople: How ey Justify Unethical Behaviors Michael L. Mallin and Laura Serviere-Munoz

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

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e Role of Creativity in Sales: Current Research and Future Directions Ellen Bolman Pullins, David Strutton and Iryna Pentina

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Invitation to Review Manuscripts Subscription Form GWU Information About the Editors

88 89 90 93

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From tHE prEsidEnt oF gardnEr-wEBB univErsitY With social, economic and political issues growing more and more challenging, it is difficult to imagine how there could be a greater need for character-based leadership. at need is revealed almost daily in the news. We must have leaders with principle, integrity and courage. is is why Gardner-Webb University seeks to prepare and to inspire such leaders. As we seek to carry out our mission of service “For God and Humanity,” our focus is on Faith, Service, and Leadership. e life of faith brings with it a commitment to serve—to serve the greater good, to make other people’s lives better, as well as our own. Strong, faith-based leadership makes such service successful. Oen, such leadership is expressed in entrepreneurship, in business as well as in social entrepreneurship. As exemplified through the Center for Ethics and Entrepreneurship, the Godbold School of Business demonstrates, in a very effective manner, the University’s focus on Faith, Service, and Leadership. at focus can be found in the Journal of Ethics & Entrepreneurship. As President of Gardner-Webb University, I am extremely pleased that our mission and our principles are advanced so effectively by the Godbold School of Business and by this journal. -Frank Bonner

From tHE dEan oF tHE godBold sCHool oF BusinEss It is my pleasure and an honor to present the Volume 2, Number 1 issue of the Journal of Ethics & Entrepreneurship ( JEE) published by the Center for Ethics and Entrepreneurship in the Godbold School of Business at Gardner-Webb University. e mission of the JEE is to publish high quality (double-blind, peer-reviewed) interdisciplinary scholarly research (conceptual, theoretical, empirical) or teaching cases that connect entrepreneurship and ethics and appeal to both the academic and the practitioner. I believe you will agree that the Editor and Associate Editor – Dr. Don Caudill and Dr. Jim Littlefield – have done an excellent job in exceeding the mission with quality articles. We commend them for their dedication and hard work. We also extend our gratitude to the authors of the five articles and one guest editorial featured in this issue and the distinguished Editorial Review Board. We especially thank Mr. John and Mrs. Linda Godbold for their vision and for establishing an endowment that made JEE a reality. Further, we thank the President of GWU, Dr. A. Frank Bonner and the Senior Leadership for their support of the Center and JEE. Finally, we thank Katherine F. Lovelace, Associate Director of Creative Services at GWU and Kathy Martin, Assistant Director of Graphic Design at GWU, for their exceptional layout and design work and Bob Williams, Ron rash and Lynette Camby of BP Solutions Group in Asheville, NC for their excellence in printing and binding the journal. -Anthony Negbenebor

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

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Guest Editorial

Is Entrepreneurial Ethics an Oxymoron? Laquita C. Blockson

When I teach my entrepreneurship course, I ask the class, “Can entrepreneurs think and behave ethically?” I pose a similar question when leading my business ethics course: “Can ethical businesspeople think and behave entrepreneurially?” When asked these questions, most of my students respond initially the same way most people generally would, which is with a not-quite-resounding “yes.” While some students opine “no” or provide an “I don’t know” answer, it intrigues me most that those who provide a “yes” answer oen do so unemphatically. Why does this happen? Have my students received mixed messages from various sources about the role of entrepreneurship and the role of business ethics? Do my students – and people in general — believe that entrepreneurship and business ethics are independent, mutually exclusive concepts? Do people perceive that entrepreneurs and business ethicists operate generally at opposite ends of the sociopolitical continuum, where entrepreneurs are focused on self-interested aspirations and business ethicists are concerned about collective interests? Or, have they simply not been exposed to the concept of entrepreneurial ethics?

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

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Entrepreneurial ethics has garnered recent attention because of its influence and effect on individual entrepreneurs, the ventures they create and lead, and the contributions they and their ventures make toward promoting innovation, commerce and employment within society. No doubt, many people – including some entrepreneurs – believe that entrepreneurial ethics (or, alternatively, ethical entrepreneurship) is an oxymoron. We scholars and practitioners of entrepreneurial ethics recognize and assert that this is not necessarily the case. Nonetheless, my students’ not-quite resounding “yes” response reflects partially the opinion some scholars and businesspeople hold that business ethics should have limited – if any – influence on entrepreneurship, whether it is because entrepreneurs operate under a different set of guidelines or because entrepreneurs should operate freely without restriction. For example, Hicks (2009) asserts that the primary concern of ethics should not be social responsibility. He defines entrepreneurs as “those self-responsible and productive individuals who create value and trade with others to win-win advantage” (49); and, that the character traits and value-producing activities of these entrepreneurs implicitly inform an ethic. In this capitalistic light, he notes that business ethics should focus first on creativity, productivity, and trade. Culkin (2010) provides a complementary perspective, where a static, rule-based view of entrepreneurial ethics may be inappropriate in a dynamic society. Reflecting upon Brenkert (2002) and Aristotle (1984), Culkin argues that if entrepreneurs are viewed as engaging in creative destruction, then does a reason exist for why this notion might not apply also to the law and morality? us, Culkin asserts that one can justify the premise of entrepreneurs breaking some rules, laws and/or ethical guidelines if it ultimately leads to a greater good. Hicks is correct in that many entrepreneurs embody a number of moral virtues, including rationality, courage, integrity, and productivity; however, is it appropriate to prioritize entrepreneurial processes and outcomes over enacting these moral virtues? Do entrepreneurs who prioritize entrepreneurship — to the detriment of ethics — threaten their ability to form trusting, mutually beneficial relationships with their stakeholders to obtain the necessary resources, knowledge, and skills to create, operate, and grow their ventures? I also agree with Culkin in that some rules and values evolve over time and/or need to be challenged; Culkin’s example of Muhammad Yunus’ creation of Grameen Bank could be viewed by some as a compassionate act of civil disobedience, given that Yunus’ efforts of providing loans to Bangladeshi women caused an uproar among conservative clergy. Nevertheless, considering the growing number of entrepreneurs who are creating and growing ventures that address societal needs and/or adopt socially responsible business practices, most of these entrepreneurs would argue that upholding and practicing personal ethics-based values at the corporate level rarely stifle creativity, innovation and growth. With these considerations in mind, I provide my students insight that helps to dispel the entrepreneurial ethics oxymoron myth. I demonstrate that many entrepreneurs – especially social entrepreneurs — maintain an appropriate balance between the values of self-interest and collective interest (Mair, Robinson and Hockerts, 2006). I tell my students that many ethical entrepreneurs employ practices that minimize harms to others, encourage philanthropy and goodwill, and strives to achieve the “triple bottom line” (a term coined by John Elkington in 1994) of financial performance, social responsibility, and environmental stewardship, while simultaneously benefitting from their meritocratic efforts. I share with

Blockson

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my students that, while all entrepreneurs are expected and encouraged to act in a Schumpeterian (1950) manner, these entrepreneurs also recognize that they do not – and cannot — pursue opportunities or create ventures in a vacuum. I give examples to my students of how numerous entrepreneurs’ expressions of spirituality and heightened human consciousness manifest themselves through such entrepreneurial activities as opportunity recognition, venture creation, venture operation, and venture growth ( Jackson & Konz, 2006; King-Kauanui et al, 2008). Along with other scholars and practitioners, I will continue to explore the intersection of ethics and entrepreneurship and the myriad of philosophical and practical questions that entrepreneurial ethics raise. In doing so, I will keep my students’ not-quite-resounding “yes” responses in mind. As they complete their studies and become entrepreneurs and business leaders, they now understand better that they can dispel the entrepreneurial ethics oxymoron myth by adopting entrepreneurship practices that balance creativity with social responsibility.

rEFErEnCEs Aristotle, 1984. Nicomachean Ethics. In e Complete Works of Aristotle, edited by Jonathan Barnes. Princeton, NJ: Princeton University Press. Brenkert, G. 2002. Entrepreneurship, Ethics, and the Good Society. Ethics and Entrepreneurship: Society for Business Ethics Ruffin Series No. 3.: 5-44. Culkin, N. July 2010. By Whose Rules Should We Judge Entrepreneurs? Enterprising Matters. Hicks, S. R. C. 2009. What Business Ethics Can Learn from Entrepreneurship. e Journal of Private Enterprise, 24 (2): 49-57. Jackson, J. J., & Konz, G. N. 2006. Spirituality and entrepreneurship. Journal of Management, Spirituality & Religion, 3 (3): 242-257. King-Kauanui, S., omas, K. D., Sherman, C. L., Waters, G. R., and Gilea, M. 2008. Exploring entrepreneurship through the lens of spirituality. Journal of Management, Spirituality & Religion, 5(2): 160-173. Mair, J., Robinson, J., and Hockerts, K. 2006. Social Entrepreneurship. Hampshire, England: Palgrave Macmillan. Schumpeter, J. 1950. Capitalism, Socialism and Democracy. 3rd ed. New York, NY: Harper & Brothers.

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From tHE Editors Vol. 2, No. 1 of the Journal of Ethics and Entrepreneurship presents papers on a variety of topics regarding for-profit and not-for-profit firms. Covered are: 1. e presentation of considerable strides toward measuring the impact of entrepreneurial firms on society. 2. Potential ethical considerations and problems in doing research in developing countries. 3. Ethical problems caused by and lurking in the entrepreneurial nature of the salesperson’s job. 4. Progress to date in measuring the impact of inter-industry groups on sustainable business practices. 5. An evaluation of the progress to date of measuring the impact of creativity on salesperson effectiveness and suggestions for future research. e editors of JEE are pleased with the acceptance of our new journal in the academic and business communities. We welcome manuscripts covering any aspect of ethics and entrepreneurship in the broad fields of marketing and management and in the even broader fields of business, healthcare, society, and not-for-profit firms. Getting a new journal started is never easy, but we have been helped a great deal by the many contributions of our manuscript contributors, our Editorial Board and by many helpful people in the administration and the Godbold School of Business at Gardner-Webb University. -Don Caudill & Jim Littlefield

gardnEr-wEBB univErsitY aCadEmiC lEadErsHip A. Frank Bonner President

Gayle B. Price Associate Provost for Schools

Benjamin C. Leslie Provost and Executive Vice President

Earl Leininger Associate Provost for Arts and Sciences

Anthony I. Negbenebor Dean of the Godbold School of Business

R. Van Graham Associate Dean of the Godbold School of Business

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


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Entrepreneurial Social Performance: Toward Measuring the Social Impact of Entrepreneurial Firms Abagail McWilliams and Rodney C. Shrader aBstraCt When large, for-profit firms engage in social value creation, this is referred to as corporate social responsibility (CSR) and the measure of social value created is called corporate social performance (CSP). For many firms CSR is a philanthropic aside, not a core business objective and therefore they leave the measurement of CSP to outside institutions such as mutual funds for socially responsible investing, special interest groups and business publications. For social ventures, creating social value is not an aside but their core reason for existence. While other entrepreneurs are motivated by producing private value (profit), social entrepreneurs create new ventures to pursue social value and view profit as a means to creating social value—not as an end in itself. ey are motivated more by solving social problems than by maximizing personal gain/profits. e role of entrepreneurial ventures in creating social value is less well understood than that of larger, established companies. Research on social entrepreneurship is oen based on case studies and focuses on immediate external value. Few attempts have been made to objectively measure social performance. Established measures of CSP have not been applied. We integrate literatures on CSR, CSP and entrepreneurship to highlight the need to measure entrepreneurial social performance (ESP) in ways that capture both private and social value creation.

aBagail mCwilliams is Professor of Management in the College of Business Administration at the University of Illinois – Chicago, 601 South Morgan Street, Chicago, IL 60607-7122. Telephone: 312.996.5201 Email: [email protected] rodnEY C. sHradEr is Professor and Denton orne Chair in Entrepreneurship in the College of Business Administration at the University of Illinois – Chicago, 601 South Morgan Street, Chicago, IL 60607-7122. Telephone: 312.996.1139 Email: [email protected] Editor’s note: is paper won the Journal of Ethics and Entrepreneurship Best Paper in Ethics and Entrepreneurship Award at the 2012 United States Association for Small Business and Entrepreneurship (USASBE)Conference in New Orleans, Louisiana.

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introduCtion While there is a rich literature about corporate social performance (henceforth, CSP), it has primarily been concerned with large, for-profit organizations. is has caused tension for managers as they increasingly have been expected to demonstrate good CSP as well as maximizing returns for shareholders. Many managers feel ill-equipped to balance the demands of shareholders with the sometimes divergent demands of employees, suppliers, special interest groups and other stakeholders, while stakeholders feel they deserve some consideration for allowing these large firms to control and affect vast resources in an environment that seems increasing vulnerable. Freeman defined stakeholders as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (1984: 46). Stakeholders include those directly affected such as shareholders, employees, consumers, competitors and suppliers as well as those indirectly affected such as potential employees and investors, those living in the community, governments, and environmental groups. Environmental groups have long warned about the global effects of production and distribution and the recent financial crises have been a reminder of how connected the economies of the world are (a lesson first learned in the Great Depression of the 20th century). Social activists and scholars work to educate managers about the needs of stakeholders and to inform stakeholders about the responsible and irresponsible actions of managers. e purpose of educating managers about social responsibility is to elicit corporate social responsibility (henceforth CSR) actions and behaviors. e internet and social media have played a major role in informing the public about social issues and firms responsible and irresponsible actions. Just as TV brings war to our living rooms, making it harder for us to ignore, the internet has brought social issues to desktops, making it hard for managers to remain disengaged. e purpose of informing stakeholders about the responsible and irresponsible actions of managers is also to elicit socially responsible behavior. When firms are “punished” for irresponsible actions, managers will change their behavior or firm actions (such as Nike’s posting the identity of all suppliers on its website to facilitate labor condition monitoring) or the firms will change their managers (e.g. replacing the CEO of BP following the oil rig disaster in 2010). When firms are rewarded for responsible behavior, managers are encouraged to continue or increase such behavior. When “punishment” takes place in the open market, not only will the irresponsible firms take corrective action, but the effects can also be expected to spill over to firms that compete for similar resources, such as customers, investors, and employees. As an example of this, Baron and Diermeier (2007) suggest that boycotts are more effective if single firms are sequentially targeted because this leaves consumers with options, while making it clear that other firms in the industry are similarly vulnerable. Stakeholders, especially current and potential investors, can be informed about CSR through measures of the firms’ social performance--that is, CSP. e primary sources of information about CSP are companies’ annual reports, but there are external sources as well, including KLD’s Company Profiles, Fortune’s reputation ratings, government and special interest group reports and the media. Information is readily available about large, established firms whose impact, both economic and social, is expected to be large and long lasting. However, little if any information will be available about the performance and impact of small, entrepreneurial firms.

McWilliams and Shrader

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social Entrepreneurship Entrepreneurialism has long been held in high regard and for good reasons. Entrepreneurs are important to the functioning of a market economy; they fill consumer needs and desires in new ways, create jobs and generate tax revenue. ey take on risks that managers may not be willing or able to assume. Putting it succinctly, Schumpeter noted that “e mechanisms of economic change in capitalist society pivot on entrepreneurial activity” (1947: 150). Seen in this light, it is clear that entrepreneurialism contributes to social welfare whether it is engaged in for private return (profits) or for social return. Increasingly, though, we are seeing entrepreneurialism addressing social “problems” or needs. e first printed reference to the concept of social entrepreneurship appears to be in Banks (1972) and the term “social enterprise” was first used by Drucker (1979, p. 453). Bill Drayton popularized the concept in the US and founded Ashoka (www.ashoka.org), a non-profit organization, for the support of social entrepreneurship in 1981. ere are probably innumerable reasons for the phenomenal growth in social entrepreneurship. One reason may be that many markets in developed countries, such as the US, are maturing. Without dramatic changes in technologies, there is little “space” for new ventures to supply traditional goods and services. We see changing faces, as the local Chinese restaurant is replaced with a Sushi bar and retail giants buy local firms, changing little but the name on the marquee (e.g., when Marshall Fields in Chicago became Macy’s). But we see little need for more products and services for the average consumer. Another reason is the increase in discretionary income. As consumer income increases preferences change, leading to more emphasis on quality and more willingness to look beyond personal needs to social needs such as a cleaner environment, fair trade, and poverty alleviation. e aging of the Baby Boom generation in the U.S. has also provided a significant number of retired but unretiring individuals who see themselves as being active and contributing for many more years (Freedman, 2007). is group includes many who have both creativity and empathy to spare. ey retire from their traditional employment with a wealth of knowledge and skills that they can bring to solving social problems as entrepreneurs. Recognizing social problems is facilitated by the low cost of media such as the internet. Technology allows the media to cover social problems and catastrophic events quickly and intensively. No one can remain isolated from the poverty, conflict and hardships of the majority of the world’s peoples. Neither can one stay ignorant of the effects of consumerism on the environment. Another factor is the failure of governments -- whether due to lack of resources, creativity or commitment -- to address social problems leaving observable gaps in the provision of goods and services in many markets (such as health care in the US) along with observable depletion of common resources (world supply of fossil fuels). is leads to increasing demand for social goods and solutions to global problems. A new breed of social entrepreneurs sees opportunity in addressing social problems or the personal needs of the less advantaged. Some of these social problems result from economic development and spreading wealth, such as pollution, crime, obesity and other health challenges, while others are problems of poverty and disaffection of those “le behind” by development (see, for example, Leroux, 2005). Social entrepreneurs are

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recognizing the opportunity to “make markets” (Casson, 2003) in which one set of consumers (those with sufficient discretionary income) will support the consumption of another set of consumers (those in need) or will pay “extra” for products and services that are produced via sustainable technologies. defining social Entrepreneurship Many definitions of Social Entrepreneurship have been suggested (see Trivedi, C. 2010a and 2010b; Dees 1996 and 1998)). For the sake of simplicity, we adopt the definition offered by Dees; “Social entrepreneurs are one species in the genus entrepreneur. ey are entrepreneurs with a social mission” (2001:2). is very simple, concise definition has just two criteria. First, the individual must be an entrepreneur. is means that most not-forprofits are not engaged in social entrepreneurship, even though their mission may be to create social value. Second, there must be a social mission. is means that most entrepreneurs are not social entrepreneurs, because their mission is to create private value, even though they likely will also create social value (as a spill-over or externality). Dees further clarifies the definition by pointing out that, for social entrepreneurs, “mission-related impact becomes the central criterion, not wealth creation” (2001:2). It is important to make this distinction because there is growing pressure for all firms to engage in “socially responsible” behavior which may include pure philanthropy, compliance with laws and regulation, progressive human resource policies, use of alternative fuels, development of clean air technology, etc. (McWilliams & Siegel, 2000). It has been suggested that complying with these demands may be a way to differentiate a firm’s products, enhance its reputation, and avoid further regulation (McWilliams et al, 2006). at is, corporate social responsibility (CSR) may be an important element in a firm’s strategy to create and sustain competitive advantage (McWilliams & Siegel, 2011). Where the goal is to respond to the demands of stakeholders such as consumers, employees and community special interest groups, in a manner that creates additional revenues or lower costs for the firm, we view this as traditional business savvy (McWilliams & Siegel, 2001). Where the primary goal is to create social value and revenues are a secondary, although necessary concern, we view it as social entrepreneurship. Examples of social entrepreneurship abound, but some are quite notable for impact, innovation and mission. One is Craigslist (www.craigslist.com). is for-profit company was started in San Francisco by soware engineer Craig Newmark in 1995. One of the largest web sites worldwide (with a volume of 20 billion page views each month), the primary purpose of Craigslist is to facilitate “people helping people” by posting classified ads on line. Most ads are posted free-of-charge and only a modest charge is collected for employment ads in a few large cities. is innovative use of the internet preceded the development of social networking sites like Facebook and MySpace by several years and has a distinctive mission of helping people rather than just providing a convenient social connection. TOMS Shoes (www.toms.com), founded in 2006 by Blake Mycoskie pioneered a consumer practice of “buy one-give one” to those in need or “one-for-one.” For each pair of shoes purchased, TOMS gives a pair of shoes to a child in need, so that they can attend school and walk without fear of infection from soil-borne pathogens. TOMS Shoes is a forprofit company, but the social mission comes before profitability, with revenues supporting the sustainability of the company so that it can continue its social mission. Mycoskie’s


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entrepreneurial innovation was to choose a sustainably produced product that would attract socially conscious consumers who have the discretionary income to “buy one-give one.” Kiva, a not-for-profit founded in 2004 by Matt Flannery and Jessica Jackley, is notable for its social mission of alleviating poverty by facilitating micro lending around the globe. By the end of 2010, Kiva had made it possible for over 500,000 individuals in 209 countries to lend money to over 470,000 entrepreneurs in 50 countries world-wide through the internet (www.kiva.org). ese entrepreneurs, like Craig Newmark, also recognized a way to use the power of the internet to solve a social problem (widespread poverty). Using the internet to collapse geographic distances allows Kiva to connect individual lenders who can loan small amounts (as little as $25) to entrepreneurs who need small, short-term loans. On the Kiva site the entrepreneur’s picture, a brief bio and a statement of how they will use the loan is posted so that individual lenders can “connect” with the borrows. Kiva also connects with Facebook to allow geographically disperse lenders to come together as a group to leverage resources to support common causes. For socially entrepreneurial firms, we would expect to find that they achieve better social performance than firms whose primary mission is not tied to social value. is seems unassailable but it leaves many unanswered questions, including, how to measure success for socially entrepreneurial firms, how to measure social value created and how to determine whether the appropriate amount of resources (such as land, labor, capital, and equipment) are allocated to social entrepreneurship. e last is an important question for future entrepreneurs, investors and public policy makers.

mEasuring pErFormanCE Firm/organization success ere is not a single, one-purpose-fits-all, criterion for measuring organization success. Some organizations are for-profit and some are not-for-profit. Some organizations have a mission to create private value and some organizations have a mission to create social value. e criterion for measuring success must “fit” the mission and form of the organization. In Figure 1, we show different combinations of mission and organization.

FigurE 1. ComBination oF mission and organization

For proFit social value

Craig’s List

private value

McDonald’s

not For proFit Kiva Trade Associations

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For all organizations survival is a necessary, but insufficient, measure of success. All must, therefore, secure revenue/funding. is funding, for not-for-profits can come from sales revenue, donations, grants, loans, etc. For for-profits, funding will come primarily from sales revenue, investment and loans. Success for a for-profit firm will usually be expressed in terms of profitability and growth. Success for not-for-profits will usually be expressed in terms of charitable donations and grants, efficiency (in serving clients) and attainment of the mission. A for-profit firm with a mission to create private value (such as McDonald’s) is successful if it survives, grows and is profitable, all of which require its creating sufficient private value through products (menu items). A for-profit firm with a mission to create social value (such as Craigslist) is successful if it is has sufficient sales revenue and efficiency to survive and it attains its social mission of facilitating people helping other people.Similarly, a not-forprofit organization with a mission to create private value (such as a trade association) will be successful if it survives, usually through membership fees and if it provides the private value that is required by the members, including such things as networking and professional development opportunities. A not-for-profit with a social mission (such as KIVA) is successful if it survives, through donations and grants, is efficient (in matching donor and recipients) and achieves its social mission-of alleviating poverty worldwide. traditional measures of organizational performance: For for-profit firms, the primary measures of success are profitability and increase in firm valuation. Profitability is usually determined by accounting metrics such as return on assets (ROA) and return on equity (ROE) while stock price and book value track increases in firm valuation. ese are all well-defined metrics with accessible data sources. If the primary goal of a for-profit is to maximize profits, then efficiency is a necessary, but insufficient condition for attaining this goal. erefore, profit maximizers are assumed to be striving for efficiency, that is, the least resources required to obtain the desired level of output. Social Entrepreneurs may organize their firms as for-profits but not have profit maximization as a primary goal. For these firms, attainment of the social mission, such as alleviation of poverty, will be the primary measure of performance, while efficiency and survival will be secondary but important considerations (Baron& Diemeier, 2007). In reference to firms that put profits first or on an equal basis with social performance, this has been referred to as the “double bottom line” – economic and social (Alter, 2000). However, because there are no well-defined metrics or accessible data sources for measuring the success of social entrepreneurial enterprises, it is difficult to determine their relative effectiveness and whether further investment in them is socially responsible. For not-for-profits the primary measures of success, in addition to survival, are tied to the mission of the organization. ese may be counts such as number of clients or patients served, they may be measures such as quantity of pollution reduction or they may be perceptions such as increased feelings of safety, stability and well being. Some of these metrics are not well defined and the data sources may not be obvious. However, if the notfor-profits are to survive they have to report some measures of performance. ese measures of performance should also subsume efficiency; that is, they should take into account the resources used to achieve the mission. Social Entrepreneurs who organize as not-for-profits face the same difficulties in demonstrating effectiveness and “investment” worthiness.


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Corporate social performance (CSP) Corporate Social Performance has been defined as “a construct that emphasizes a company’s responsibilities to multiple stakeholders, such as employees and the community at large, in addition to its traditional responsibilities to economic shareholders” (Turban & Greening, 1996). Carroll (1979) offered an early theoretical model of CSP that includes four categories of responsibilities including economic, legal, ethical and discretionary. As the interest in socially responsible firms increased over the last 30 years, sources of information about their social performance developed as well. Firms added information about social responsibility to their annual reporting, business media began to report regularly on social performance (Fortune’s 100 Best Companies to Work For) and some analysts added social performance to their list of firm information to track. One of the first firms to offer systematic information on CSP for investors, KLD Research & Analytics tracks the performance of firms using multiple criteria and develops indices according to the criteria of interest to clients/investors, such as sustainability, values and the environment. To create these indices, KLD-now a division of MSCI-collects information from a number of sources, including direct communication with company officers, media, research partners, governmental agencies, and public documents such as annual reports. Information is gathered about seven general social issues areas including the environment, community, corporate governance, diversity, employee relations, human rights, and product quality and safety (www.msci.com/products/esg/). Entrepreneurial social performance (Esp) Currently used measures of CSP are typically not available for entrepreneurial ventures and are not really appropriate for determining the social performance of organizations whose primary mission is social benefit rather than profit-maximization. erefore, we are proposing a new concept for measuring the social performance of these innovative ventures, which we call Entrepreneurial Social Performance. An organization’s ESP would be a measure of the social value created and would be a guide to determining future investments (both private and public) in the organization or similar organizations. Hence, it would inform consumers, entrepreneurs, investors and policy makers. e value Social Entrepreneurs create for society (social value) has multiple levels. erefore, measuring the total value will be complicated and possibly difficult. On the primary level jobs are created, products/services are provided and taxes are paid -- what Carroll (1979) calls economic responsibility. Traditional measures are available for determining these primary level contributions to society, including prices of products and services (where the goods and services are provided free-of-charge, comparison prices can be used), wages and tax revenues. is is relatively straight forward but represents only a portion of the social value created. Additionally, some Social Entrepreneurs create value through innovation in the development or adaption of green or sustainable technologies to avoid harming or depleting natural resources, which results in a saving of social (or common) resources – what Carroll (1979) calls ethical responsibility. ese savings represent social value, but calculating the value is not straight forward because there are no market exchanges involved. ere is an established, albeit imperfect, methodology for determining the value of such goods. is method, known as contingent valuation, is a survey-based technique

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that is used to determine the value of goods that are not traded in markets. e technique was first proposed by Ciriacy-Wantrup (1947) as a way to value soil conservation. Since the 1980s the US government has made wide use of the technique to determine the amount of damages owed when natural resources are polluted. A prominent example of this use was in the trial of Exxon for the damage caused by the oil spill in Prince William Sound in 1989 (Carson, et al., 2003). It is clear that the method could be used in the reverse direction, that is, to determine the value of natural resources that are not polluted or depleted. e technique requires surveying relevant consumers to determine how much they value the common good. For example, we can consider a firm that reduces air pollution emanating from their production facility. To conduct a contingent valuation study, the firm would first host focus groups of residents of the community to determine how they view clean air and its value to them. e firm would then analyze the information gathered from these residents to construct a written survey that would be sent to all local residents. From the results of the written survey, the firm could estimate the value of the CSR action to society (Reinhardt, et al., 2008). It may be difficult to accurately measure the social value of goods and services based on the contingent valuation method. is method is based on the assumption that survey respondents understand the good in question and will reveal their preferences in this “contingent” market in a similar manner as they would in an actual market. However, many people are unfamiliar with assigning a dollar value to an environmental or social good, which could distort the estimate of its true social value. Some conventional economists are uncomfortable with the use of this method, pointing out that there is likely to be a fundamental difference between a hypothetical decision (inherent to the use of the contingent valuation method) and an actual decision. And, if conducted in a rigorous manner, a contingent valuation study can be expensive and time-consuming, given the need for extensive pre-testing and survey work. Recognizing these difficulties, the US government still sees the value in these studies because communities must make informed decisions about how to allocate resources to the best advantage of society and the planet. Encouraging and supporting social entrepreneurs may be one of their alternatives, making it important that we develop reasonable measures of ESP. For goods that are provided through innovative means such as the buy one-give one concept of TOMS shoes, the difficulty comes from measuring the social value of the “given” shoes. A first approximation of the value of the given good would be the price of the purchased good. However, this would under-value the “given” good. e “law of diminishing marginal utility” tells us that (all else being equal) the value of the first pair of shoes one owns is higher than the value of the second pair, which is higher than the value of the third pair, etc. Because the purchased pair of TOMS Shoes is likely to be one of many pairs, while the donated pair is likely to be the first pair owned, the “given” pair should carry a higher value than the price of the purchased pair. Add to that the fact the donated pair increases social welfare beyond the value to the recipient (more educated and healthier children), and we can see that the value to society of the donated pair is higher than the value of the purchased pair. is brings us to the issue of valuing the social aspects, or indirect effects, of the innovations of Social Entrepreneurs. ese can be very broad and also difficult to measure,


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including effects such as the increase in stability and civility in a community that interacts through Craigslist, the community spirit and personal satisfaction that is created through Kiva lending groups, the increased productivity of the villages whose children receive TOMS shoes and the like. Additionally, there is social value created for the givers. According to Brooks “Economists and psychologists have found that charitable giving makes people healthier, happier, and even more financially successful” (2009: 107). A comprehensive estimate of ESP would include some valuation of these indirect effects as well. To develop measures of these indirect effects, we would start with the social mission of the enterprises. For example, Kiva’s mission is to alleviate poverty, so we would look to government statistics on poverty in the communities that benefit from Kiva loans. For TOMS shoes we would look to government or nongovernment organization reports on educational attainment and economic growth in the villages whose children receive TOMS shoes. For technological innovations that improve air, land or water quality, we would look to data from government and nongovernmental agencies on improved quality. e Silicon Valley Network, a nonprofit launched in 1992, has generated social capital that supports collaboration among participating organizations and across sectors (Squazzoni, 2008). Alvord, Brown, and Letts (2004) report on seven cases of successful social entrepreneurship including Plan Puebla (initiated in Mexico in 1966), Grameed Bank (established in 1976 in Bangladesh), and the Highlander Research and Education Center (founded in 1932 in the Southern Appalacians). While these investment companies are themselves social ventures, they would also be excellent sources of data on the social performance of the ventures in their investment portfolios. As noted above, government reports could be a source of information about the value of social entrepreneurship. Governments typically gather and report on criteria such as average life span, poverty, literacy, and pollution. Special reports on education and health might contain richer information on school attendance, grade attainment, average height and weight, illnesses, etc. e value of improvements in specific criteria might be used to estimate the value of some social entrepreneurship. In addition, non-profit advocacy groups also publish data related to their causes. In addition, measuring the social performance of a specific venture would require conducting surveys or interviews of a comprehensive list of stakeholders including consumers, community groups, and institutions such as schools (e.g., to measure the enrollment and grade level attainment of children wearing Tom’s shoes).

summarY and FuturE rEsEarCH dirECtions We have argued that Social Entrepreneurship is a growing focus of both researchers and practitioners and that its primary motivation is the creation of social value (Renko, 2011). We have also argued that because social value is the raison d’etre for social ventures, measures of ESP must be different than existing measures of CSP. We have summarized these differences in Table 1.

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taBlE 1. mEasurEs oF pErFormanCE Traditional Performance

Economic measures (ROA, ROE, ROI, EVA)

Corporate Social Performance

KLD ratings, Fortune rankings, etc.

Entrepreneurial Social Performance

Economic (compensation, sales and tax revenues) Contingent valuation (for nonmarket-traded outputs) Qualitative (perceptions of increased quality of life, etc.)

We have also shown that measures of Entrepreneurial Social Performance (ESP) have not yet been developed or employed. Consequently, discussions of ESP are usually subjective and based on anecdotal evidence from case studies. We surveyed and extended the literatures on CSR and CSP to suggest basic elements that should be addressed in measures of ESP. In this paper we spotlighted the need to measure ESP, we suggested some facets of social value creation that must be addressed in measures of ESP, we suggested measures that could be used, and we suggested data sources that might be used. We also highlighted the fact that because social ventures are mission driven, measures of ESP must be mission specific and therefore are necessarily unique to each social venture. Future research is needed to further elaborate on these basic premises, to develop and empirically examine robust measures of ESP that might be common to all social ventures, and to develop and empirically examine venture specific measures of ESP.

rEFErEnCEs Alter, K. 2000. Managing the Double Bottom Line: A Business Planning Guide for Social Enterprises. San Francisco: Creative Commons. Alvord, S.H., Brown, L.D. & Letts, C.W. 2004. Social entrepreneurship and societal transformation: An exploratory study. e Journal of Applied Behavioral Science, 40(3): 260-282. Banks, J.A. 1972. e Sociology of Social Movements, London, MacMillan. Baron, D. & Diermeier, D. 2007. Strategic activism and nonmarket strategy. Journal of Economics and Management Strategy, 16: 599-634. Brooks, A.C. 2009. Social Entrepreneurship: A Modern Approach to Social Value Creation, New Jersey, Pearson Prentice Hall. Carroll, A.B. 1979. A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 4(4): 497-505. Carroll, A.B. 1991. e pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, July-August: 39-48.


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Carson, R.T., Mitchell, R.C., Hanemann, M., Kopp, R.J., Presser, S. & Ruud, P.A., 2003. Contingent valuation and lost passive use: Damages from the Exxon Valdez oil spill. Environmental and Resource Economics, 25: 257-286. Casson, M. 2003. e Entrepreneur: An Economic eory, 2nd edition. Massachusetts, Edward Elger. Ciriacy-Wantrup, S.V. 1947. Capital returns from soil conservation practices. Journal of Farm Economics, 29: 1181-1196. Dees, J.G. 1996. e Social enterprise spectrum: Philanthropy to commerce, background note. Harvard Business School Publishing, 396-343 Dees, J.G. 1998. e meaning of social entrepreneurship. Kaufmann Center for Entrepreneurial Leadership and Ewing Marion Kaufmann Foundation. Also available as 2001. e meaning of “Social Entrepreneurship,” downloaded from www.caseatduke.org. Doh, J.P., Howton, S.D., Howton, S.W., & Siegel, D.S. 2010. Does the market respond to an endorsement of social responsibility?: e role of institutions, information, and legitimacy. Journal of Management, 36(6): 1461-1485. Drucker, P. 1979. e Practice of Management. London: Pan Books. Freedman, M. 2007. Encore: Finding Work that Matters in the Second Half of Life, New York, PublicAffairs. Freeman, R.E. 1984. Strategic Management: A Stakeholder Approach, New York, Basic Books. Leroux, K. M. 2005. What drives nonprofit entrepreneurship?: A look at budget trends of metro Detroit social service agencies. e American Review of Public Administration, 35(4): 350-362. McWilliams, A. & Siegel, D. 2000. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21, 603-609. McWilliams, A. & Siegel, D. 2001. Corporate social responsibility: a theory of the firm perspective. Academy of Management Review, 26: 117-27. McWilliams, A., Siegel, D. & Wright P.M. 2006. Corporate social responsibility: International Perspectives. Journal of Business Strategies, 23: 1-7. McWilliams, A. & Siegel, D. 2011. Creating and capturing private and social value: Strategic corporate social responsibility, resource based theory and sustainable competitive advantage, Journal of Management, 37(5): 1480-1495. Reinhardt, F., Stavins, R. & Vietor, R. 2008. Corporate social responsibility through an economic lens. Review of Environmental Economics and Policy, 2(2): 219-239. Renko, M. 2011. Early challenges of nascent social entrepreneurs, Entrepreneurship eory and Practice, forthcoming. Schumpeter, J.A. 1947. e creative response in economic history. Journal of Economic History, 7(2): 149-159. Siegel, D. S. 2009. Green management matters only if it yields more green: An economic/strategic perspective. Academy of Management Perspectives, 23(3), 5-16. Squazzoni, F. 2008. Social entrepreneurship and economic development in Silicon Valley: A case study on the joint venture: Silicon Valley Network. Nonprofit and Voluntary Sector Quarterly, 38(5): 869-883.

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Trivedi, C. 2010a. Towards a social ecological framework for social entrepreneurship. Journal of Entrepreneurship, 19(1): 63-80. Trivedi, C. 2010b. A social entrepreneurship bibliography, Journal of Entrepreneurship, 19(1): 81-85. Turban, D.B. & Greening, D.W. 1996. Corporate social performance and organizational attractiveness to prospective employees, Academy of Management Journal, 40(3): 658-672. Waldman, D.A., Siegel, D., and Javidan, M. 2006. Components of CEO transformational leadership and corporate social responsibility. Journal of Management Studies, 43: 1703-1725 Zyglidopoulos, Z.C., Georgiadis, A.P., Carroll, C. & Siegel, D. 2009. e evolution of corporate social performance and the role of media visibility, available at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1514385


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

aBstraCt Increasing numbers of colleges and universities are designing academic research and entrepreneurial engagement programs to engage students in developing solutions for alleviating global poverty. While these efforts have potential for dramatic positive impact, they can also result in enormous and unintended negative consequences. To guard against this, Institutional Review Boards (IRBs) evaluate proposed research projects to ensure the safety of participants and their communities as well as the scientific and ethical appropriateness. e Humanitarian Engineering and Social Entrepreneurship (HESE) Program at Penn State is engaged in several student ventures that integrate teaching, research, and entrepreneurial outreach to educate entrepreneurial global citizens and create sustainable value for developing communities. is paper shares insights into planning and executing IRB-approved international research ventures with similar programs at other universities. Based on their experiences conducting multiple IRB-approved research ventures in Kenya, the authors provide recommendations for navigating the process of gaining IRB approval and conducting research in developing communities as well as discuss some of the larger conflicts that researchers and entrepreneurs will have to face in their own ventures.

CarEY BEll is a J.D. candidate at the University of Pennsylvania Law School with an expected graduation date of May 2014. Email: [email protected] raCHEl dzomBak is pursuing a B.S. in Bioengineering at the Pennsylvania State University with an expected graduation date of May 2012. Email: [email protected] tara sulEwski is a graduate student in the MNE Department and an Instructor of Engineering Design at the Pennsylvania State University, 213W Hammond Bld, University Park, PA 16802, Telephone: 419.367.9392 Email: [email protected] kHanJan mEHta is the Director of the Humanitarian Engineering and Social Entrepreneurship (HESE) Program at the Pennsylvania State University, 213U Hammond Building, University Park, PA 16801. Telephone: 814.863.4426 Email: [email protected]

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introduCtion Significant and unchecked levels of human deprivation in developing communities represent one of the world’s greatest challenges. Almost half the world’s population lives on less than $2.50 per day. Millions of people do not have access to clean water, sufficient amounts of food or adequate health care services (Shah, 2010). Engineers have the power to ameliorate this situation by melding technological innovation with contextually appropriate design. However, 90% of the world’s engineering efforts currently impact only 10% of the world’s population (Smithsonian, 2010). In an effort to address this discrepancy and foster innovation and global awareness in their students, increasing numbers of colleges and universities are designing academic programs that engage students in developing solutions to these complex problems. e collective power of these efforts has the potential to create dramatic, positive global impact. However, these same ventures, regardless of their intentions, also have the potential to result in negative consequences in the communities where they are undertaken. Lack of familiarity with, and the inherent unpredictability of, these foreign environments can further complicate the design and implementation of integrated research and outreach projects. Universities and research institutions have set up Institutional Review Boards (IRBs) to evaluate proposed research projects involving human participants for scientific and ethical appropriateness. is paper discusses the issues encountered, lessons learned, and conflicts experienced by a team of Penn State students while designing and implementing four IRBapproved research and entrepreneurship ventures in Kenya in the summer of 2010. One team, comprised of both students and healthcare professionals, field-tested Mashavu: Networked Health Solutions, a telemedicine system that connects rural communities with doctors. Another team field-tested a cell-phone based social networking system called WishVast: Building Trust and Social Capital using Cellphones. A third team constructed various appropriate technologies including low-cost anaerobic digesters, greenhouses and irrigation systems. Each project had several research studies associated with them, with the purpose of informing the design of the system and generating and sharing knowledge to encourage and inspire more entrepreneurs. Besides these integrated research and entrepreneurship efforts, two research-only efforts were also undertaken. Both of the research projects were related to entrepreneurship among street-dwelling youth in the urban area of Nairobi. Our primary host in Kenya was the Children and Youth Empowerment Center (CYEC), a public-private organization that cares for former street-dwelling youth in Nyeri, Kenya. Several CYEC youth between the ages of 18 and 26 worked shoulder-to-shoulder with the Penn State team.

similar EFForts In recent years, several academic programs have emerged to help meet the needs of underserved populations. Academic programs like Humanitarian Engineering and Social Entrepreneurship at Penn State are also on the rise. e Humanitarian Engineering Leadership Projects program at Dartmouth, the D-Lab at MIT, the Humanitarian Engineering program at the Colorado School of Mines, Global Resolve at Arizona State, and the Mortenson Center in Engineering for Developing Communities at the University of Colorado at Boulder are some examples. Students and faculty from these programs have been involved in numerous ventures such as working to provide clean water in regions of Tanzania

Bell, Dzombak, Sulewski, and Mehta

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and Kenya, generating solar power in Belize, designing solar ovens and drip irrigation systems, and producing hydroelectricity and biogas in Rwanda (Dartmouth Humanitarian Engineering Projects, 2008; MIT: About D-Lab, 2010; Humanitarian Engineering: Colorado School of Mines, 2010; Arizona State University, 2011). Several programs integrate applied research initiatives with the entrepreneurial ventures. Research projects span from innovative technologies to appropriate business models, effective stakeholder management strategies and design tools. In an effort to guide researchers working in developing communities, Desai & Potter (2006) and Scheyven & Storey (2003) provide introductory guides to the numerous practical, ethical, and contextual issues of performing research in developing communities. Oakes (2002) and Gordon (2003) identify problems typically encountered by international researchers seeking IRB approval and ways to overcome them. Cargo & Mercer (2008) evaluate existing participatory research literature and provide recommendations. is paper builds upon these efforts by sharing insights into issues encountered in the IRB approval process and practical challenges encountered while conducting the studies in East Africa. e authors believe that the IRBs serve a very important function by protecting participants and helping researchers preserve the integrity of their research endeavors. At the same time, the IRBs are not fundamentally designed for developing country contexts and hence present unique challenges that researchers must navigate.

tHE institutional rEviEw Board Institutional Review Boards (IRBs) are “responsible to review and approve, require modifications in, or withhold approval of research involving human participants.” An IRB committee is composed of five or more individuals of diverse backgrounds. ough typically a part of a research organization such as a university, these bodies operate independently from their parent structure and in compliance with federal regulations in order to maintain legitimacy (Oakes, 2002). History of irBs e initial drive for human research protections arose out of the horrors of Nazi experimentation revealed at the Nuremberg trials following WWII. In the wake of the trials, the Nuremberg Code was draed to set guidelines for human research (Oakes, 2002). In 1964, the World Health Organization endorsed the use of review boards to protect human subjects from risk in the Declaration of Helsinki (Hamburger, 2004). Pressure for human subject protections in the US grew as the public became increasingly aware of unsafe and unethical research practices then in wide use, particularly with the exposure of the Tuskegee syphilis study. us, in the 1970s, the US government began to require research studies to be granted IRB approval in order to receive federal support (Hamburger, 2004). Since then, IRBs have proliferated and are now a mainstay at most research institutions (Oakes, 2002). Benefits of irBs First and most obviously, IRBs help ensure the safety of human research participants, a consideration which should be foremost in the mind of any researcher. Furthermore, IRBs help to standardize research methods and protocols for addressing ethical dilemmas. IRB approval lends credibility to research and helps teach students proper research methods. Despite numerous efforts on the part of a team of investigators, subject risks and liabilities

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can find their way into the research design unnoticed. In the case of international research, attention to cultural norms and local authority structures in experiment design is paramount and can be improperly treated due to the researcher’s unfamiliarity with the context. When faced with such diverse constraints, fundamental human participant rights such as voluntary informed consent can be compromised. IRBs exist as a check against such naturally occurring lapses in judgment. A simple but significant issue is that IRBs are responsible for appropriate conduct of research, and are not directly providing oversight for publication. e many current controversies surrounding practices in human subject research in the developing world point to the continued need for rigorous ethical evaluation of proposed projects. e debates over proper research participant compensation and the use of placebocontrols in clinical trials like those undertaken by US Centers for Disease Control and Prevention and National Institutes of Health sponsored trials of Zidovudine serve as prime examples (Shaffer, et al., 2006; Levine, 1998). By applying uniform regulations drawn largely from federal guidelines, the IRB serves to eliminate discrepancies in the application of research protections which, if unchecked, could ultimately harm human subjects (Oakes, 2002). e exact number of IRBs currently in existence is unclear; however, Oakes cites Amdur and Bankert as putting the figure at over 4,000 in the year 2002 (Amdur & Bankert, 2002; Oakes, 2002). e growing use of IRBs as a means of research approval and standardization lends increased credibility to IRB- approved research studies while casting doubt on those without it. A 2001 report by the National Bioethics Advisory Commission called for an end to government funding of any clinical research in the developing world that is not approved by an ethics committee or fails to conform to a number of Belmont Report inspired, IRB-like regulations (NBAC, 2001). At Penn State, any research requiring IRB approval, conducted without securing such approval, is not generally publishable. Such an act might jeopardize future use of the data and also lead to disciplinary sanctions against the researchers. ough there are some situations where the data might still be used, it is at the discretion of the IRB, and cannot be taken for granted. IRB approval is thus a critical step in the legitimization of any research effort. Additionally, by guiding students step by step through the design of a research study, the IRB process helps teach students the fundamental considerations involved in that process. As a result of the pre-planning required by the IRB process, studies are better designed, and for those being conducted internationally, more ready for implementation immediately upon arrival in the host country. Critiques of irB Despite the long and positive history of IRBs in guiding research and protecting human subjects, much of the literature surrounding them focuses on ways the regulatory efforts of these committees impede research, particularly in the social sciences. Part of this problem stems from the fact that the regulations upon which IRBs are based were written by biomedical researchers who consider only applications within their own field of research. is sort of regulation is considerably less applicable to social science research (Oakes, 2002). Some researchers fear that the labor-intensive IRB process could have a “chilling effect” on social science investigation by thwarting efforts at research, particularly the efforts of undergraduate and graduate students who find themselves under strict time constraints (Barzilai, 2007, p. 6). e IRB approval process can take months and in some instances cited by Barzilai (2007), years. is could be due to the nature of the study, or the responsiveness of


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the researchers and/or the IRB. As a result, students might shy away from research for which they feel they cannot gain timely approval. Attempts to circumvent the IRB either by altering research methods or ignoring it altogether can create further problems through less accurate, less contextually and ethically appropriate research (Barzilai, 2007). research in developing Communities ere is growing concern that research undertaken by industrialized country organizations and institutions in developing communities exploits participants. Researchers in both the US and developing countries have expressed concern that US IRBs are too procedurally-oriented and focus insufficiently on content. Many cite IRBs’ frequent insistence on individual’s written consent as an example. Researchers have also questioned whether US IRBs are sufficiently familiar with the cultural contexts in these communities to effectively guide research initiatives (Hyder, 2004) (Kass, Dawson, & Loyo-Berrios, 2003). Related works have discussed many of the difficulties that can arise while conducting research in developing communities. Anokwa et al. detail the most common challenges encountered by a group of nine North American researchers in developing communities. Chavan (2005) emphasizes the importance of contextually appropriate design and Russo & Boor (2003) provide insights into communicating through translation. Other commonly highlighted issues include: written vs. oral consent, levels of risk, use of audiotapes, recruitment of subjects, vulnerable populations, and de-identification and destruction of data.

navigating tHE irB proCEss For rEsEarCH in dEvEloping nations In many ways, the frustration with the IRB process stems from an incomplete understanding of it (Oakes, 2002). is section details key points in the IRB-approval process. irB structures and timeline e IRB process can be extremely time-consuming. For instance, IRB committees meet on a pre-determined schedule and review a number of studies each time. e frequency of meetings depends on the size and nature of the institution. As a result, reviews and modifications may take weeks or months, not days. is is particularly true in the spring semester when IRB committees receive large numbers of submissions for research to take place in the summer. It is best to begin the IRB process as early as possible to ensure timely approval. research approval at the local level As per federal regulations, the IRB application requires researchers to explain how they will gain local approval for the proposed research. An IRB will ask for documentation of this approval prior to the departure of the research team. is requirement can prove exceedingly difficult as many cultures rely largely on oral communication and face-to-face meetings than on written letters and email. ough some countries have their own IRBs, these are devoted to medical research and the timelines and procedures for social science research may, as a result, require several months or years. Many of these IRBs do not review social science protocols.

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Institutional IRB approval also requires documentation of research approval from any local IRB or ethics committees and mandates compliance with any locally-established research protocols. In the absence of any such local body, IRB will require letters of collaboration from local partners. Some institutions may require letters of local collaboration in addition to documented compliance with the requirements of local protocols. Our projects received IRB approval only aer collaboration letters from our local partner - the Children and Youth Empowerment Center (CYEC) were submitted. e CYEC obtained verbal approval from appropriate authorities in the Ministry of Public Health and Sanitation before providing the support letters to us. Conducting appropriate and ethical research requires going beyond IRB stipulations. Although we had already obtained verbal consent for the study through our partner, our first step in Kenya before conducting any research was to meet with local and provincial government officials. Details of the studies were discussed with several local, district and provincial chiefs. A letter of approval, draed by our team was edited and signed by these officials and then forwarded to all local entities. is was the actual protocol for local approval – which could be conducted only when we were actually on site and ready to conduct the study. letters of Collaboration Letters of collaboration are required to document the understanding and willing cooperation of research partners in the host country. is documentation is oen difficult to obtain since the required level of understanding and cooperation can be difficult to adequately convey through a letter. e letter must bear an original signature and that may prove problematic as well. Most US institutional IRBs do not oen realize that developing countries have unreliable courier and postal services. When working in rural, developing country communities, it may take a very long time to get a letter with an original (ink) signature. Oen, local authorities will expect to meet with researchers once they arrive in the country, rather than having to sign-off on a project months in advance. e IRB must also be assured that the local collaborator possesses adequate authority to consent to the proposed research and provide assistance to the researchers. A classic catch-22 situation happens when the IRB needs letters from local partners while the local partners are waiting on letters from IRB. In a situation like this, the IRB might be able to grant approval with stipulations that the necessary letters be turned in at a later date, but before commencing the research study. Providing detailed information about the larger picture of the study is likely to alleviate IRB’s concerns and increase the likelihood of approval. We obtained one letter of support from our local partner at the primary research site. We were unable to provide additional letters of support because, at the time of IRB application, we were unsure of the additional locations in which we might be working. Our team had previously conducted research studies in several other countries and we knew it is customary for the local partners to request us to dra the support letters and provide them in a ready-tosign format. Typically, the local partners do not seriously review the research protocol or offer suggestions; but merely conduct a perfunctory review, then sign and return the letters. location of research IRB requires that the location of proposed research be provided along with relevant contact information. Determining research locations oen requires additional coordination with local partners aer arrival in the host country. In these instances, providing an exact


27

location in advance can be impossible. We knew prior to departure that we would be working extensively at a specific site in Nyeri and we provided that information in our proposal. However, we knew that we would be holding clinics in additional locations to reach a larger and more diverse sampling of participants. Our application stated that we would be conducting research in two additional locations and was approved. Without one concrete address and local contacts, it is doubtful that the protocol would have been approved. e IRB is likely to approve studies where altering the exact location (within a larger defined area) does not affect the nature of the study and the participants, or does not lead to a substantial change in the demographic or the topic. Biomedical devices and research Depending on the kind of biomedical device incorporated into research, the IRB might require that a non-biased, non-affiliated expert write a letter certifying the device(s) as lowrisk. A key factor is whether the researchers are using FDA-approved devices in their intended way. In our case, an electrical engineer provided validation of the medical devices used as part of the telemedicine system. e IRB will also question whether or not a device requires FDA approval to be included in the study. We were initially required to gain FDA approval for our devices. is requirement was removed once we explained that we would be using FDA approved devices to support our own low-risk, proof-of-concept devices and that health information provided to participants would always be drawn from the FDA-approved commercial devices. data storage, de-identification, and disposal IRB requires that proposals describe the exact means of data storage, de-identification and disposal. Researchers are allowed to keep the data indefinitely, with or without identifier. However, the researchers must make their intent very clear and provide sound rationale. ese are seemingly small issues but procedures must be put in place to secure IRB approval. We detailed all of this information, including the building and room number of the computer at Penn State where the data would ultimately be stored. is is particularly challenging when large student teams need access to low-risk non-identifiable data. photos As part of the data disposal procedure, IRB requires that all photos taken of research participants be disposed off as well. However, photography is a standard expectation of international student ventures. ere were numerous instances in Kenya where students took pictures of participants outside the context of the research, either for personal reasons or because the participants themselves requested them. ese photos represent a priceless part of the student’s international experience. With the growing popularity of camera-phones, there is virtually no way to regulate student (and participant) photography and ensure that all pictures are destroyed. Participant permission for using photographs in publications must be sought separately than the IRB recruitment and consent processes. managing risk of protocol rejection If research projects contain multiple studies, we suggest dividing the activities across multiple IRB applications. By decoupling the sub-projects across multiple protocols, the risk posed by the rejection of a single research protocol is minimized. Rather than an entire project being disapproved, only one portion of it might be rejected. Since we were working

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with a relatively short (two month) timeline, we prepared separate IRB applications for the different portions of our projects depending on the level of risk involved. While many of these applications were approved early on, one was not approved until the day of our departure. Had that application not been approved, we would still have been able to continue with the other aspects of our studies. is would not have been the case had we submitted a single IRB application for our combined research initiatives. meet with irB staff prior to application An initial face-to-face meeting will help identify any possible issues with your protocol. Eliminating these issues before a protocol is submitted for review can save valuable time. Furthermore, face-to-face meetings provide researchers with an opportunity to allay the fears and concerns of IRB reviewers. A major source of confusion is the research proposal that is uploaded with the IRB protocol. It is common to have a proposal “spun” in various ways to seek funding from organizations with different objectives. In that case, the research protocol might not conform completely to the proposal and could lead to confusion and incorrect assumptions. Simple terminology and avoiding jargon help the IRB understand the intent and associated risks better. For instance, initially the IRB assumed that we planned to have sick patients participate in the telemedicine clinic. is would not have qualified it as a lowrisk study. e protocol would then have gone through a full review and required clarifications on patient treatment, access to medical professionals, etc. In fact, we intended to provide personal health information to healthy patients only. Once this was explained, and a protocol was designed to provide services for any sick individuals outside the research process, the protocol was approved. e IRB staff was extremely helpful in advising us on the course of action. e face-to-face meeting and explaining the potential benefits of the studies to the participants helped establish us as socially responsible researchers.

issuEs EnCountErEd wHilE ConduCting tHE studiEs in kEnYa recruitment and Consent Consent forms and recruitment scripts are two critical parts of the IRB protocol. For each portion of a study involving a participant, the individual has to be recruited and provided full information about the study. e participant must understand the information presented and agree to participate. Obtaining written consent is a general standard of IRBs, but in the Kenyan context it was not appropriate to request signed consent because it would not be viewed as normal or appropriate in East African culture (Gordon, 2003). Both Gordon and Oakes in their discussions of informed consent mention the Euro-centricity of the concept of written consent (Gordon, 2003; Oakes, 2002). In the East African context, the use of written consent would have generated a lot of trust issues. Written and signed documents are most oen associated with land titles and other legal documents, so research participation forms would have been treated with suspicion, especially considering that they would have been printed in English, the second or third language of those individuals recruited for the study. Because of these cultural differences, we used verbal consent rather than written consent. A letter from our local partner helped make the case for verbal consent to the IRB. e process was that aer someone went through the recruitment procedure, the investigator reiterated the terms of the study and asked “Do you agree to take part in this study? A “yes” constituted


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consent. is process was conducted in English, and when necessary, was facilitated by a translator to ensure full participant understanding. As per IRB requirements, the recruitment script had to be read verbatim. e approved recruitment script was written in very formal English, as is the norm for research conducted in the United States. However, the Kenyan research participants, even those who spoke English very well, oen did not fully understand the recruitment script but agreed to participate anyway. is problem became clear almost immediately as individuals arrived at the first stages of the clinical appraisal still unsure of exactly why they were there. If participants do not have a clear idea of the research being conducted and their role in it, then the principle of informed consent is violated and participants are being taken advantage of. To address this problem, aer reading the official script, the team began to paraphrase the recruitment script in simpler understandable English to explain the study to each participant individually. e participants then understood our goals and their role in our research. As a result, they began to ask questions and offer feedback even before they went through the Mashavu system itself. e simple verbal explanation significantly improved trust and communication and was absolutely necessary in order to adhere to the standard of voluntary informed consent. Challenge of interviewing individuals In some situations, it was particularly difficult to interview individuals because oen a crowd would immediately surround the researcher. As a result, questions posed to an individual were invariably answered by the group. Suggestions to sit down in a restaurant to be interviewed were not heeded. e participants, in one case, insisted that they lived together and were friends, and should therefore be interviewed together. Comfort with conducting medical research Questions of a personal nature that would be essential to ask in a real-world telemedicine system proved difficult and awkward for students to ask. e doctors we were working with needed this information, but the students asking those questions were uncomfortable doing so. We resolved this situation by having the doctors ask those questions if they felt them necessary following their examination of the participants’ health information. In a true trial of the system, the kiosk worker would have asked these questions, but due to the nature of our research study, this was not feasible. language Barrier We realized very quickly upon our arrival in Kenya that we would require intermediaries who spoke both English and the local language to conduct our research. Our belief prior to arrival, and one that was largely validated, was that a majority of the younger Kenyans spoke English. However, we did not consider that we would be hosting clinics primarily on weekdays, when most young people were at work or school. is meant that our primary demographic for these clinics shied from younger, English-speaking community members to older individuals from rural areas who spoke significantly less English. Youth affiliated with our local partners facilitated the interviews but a number of communication issues arose. At times, the patient would respond to a question with a long answer, sometimes speaking for over a minute, and the students would translate the response as “e patient said he liked it.” One might expect that in the face of this problem, translation would take place sentence by sentence, but this proved a difficult concept to explain and even more difficult to implement. Medical and technical terms were also a source

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of difficulty. Translators were at times unable to come up with an equivalent term for some symptoms during the medical history portion of the exam or had difficulty describing the exact nature of a biomedical device. Any data obtained through incomplete or inaccurate communication was not included in our final data set. Community recruiter translation issue To mobilize research participants we met with local community leaders, explained our project and asked that they help us recruit participants. ese community leaders were typically very excited about the project and helped to spread the word about it. However, the Mashavu message was now migrating from English into Swahili and other local languages through multiple intermediaries. As a result, we had numerous potential participants arrive with a somewhat inaccurate idea of why they were there. e word ‘clinic’ was oen used to describe our activities, both by us and by those spreading the word about Mashavu. However, ‘clinic’ also implied doctors and medicine to local residents. ough two US doctors (with permission to practice in Kenya) and a local medical professional were with us at all times, our purpose was not treatment. is fact was not well communicated to people prior to their arrival. We solved this problem by communicating to everyone upon their arrival the exact nature of the project, their potential role as participants and the potential benefits of the Mashavu telemedicine system. Clinic logistics Oen our community recruiters were so effective that more potential participants arrived at the telemedicine clinic than we had time or space to accommodate. Because this situation had occurred in previous years, we prepared in advance for this possibility. Each step of the clinic process, from where participants would line up to the timing of the post-clinic interviews, was planned and streamlined for efficiency. Even with careful preparation, circumstances required that our plans be continuously modified. For example, we had initially set up the two telemedicine booths with only a single person to collect and record medical information. is allowed only two participants to have their medical information collected and transmitted to a doctor at one time. In our first clinic we changed our approach and employed multiple operators so that each medical device was continually in use thus allowing us to see considerably more people. However, even with these measures in place, a situation arose at one clinic, where more people arrived than we could screen in a single day. We informed attendees, some whom had traveled a significant distance for medical advice, that we would not be able to see them. Ultimately, we decided to forgo any further research data collection and focus exclusively on collecting participant health information and transmitting it to the doctors who could then provide health recommendations. While we did not collect nearly as much information that day as we could have, we were able to connect every participant who arrived with a doctor. is approach also built more trust with the local partners by reinforcing that the social impact was more important to us than the research studies. involvement Criteria Completing an IRB protocol requires a detailed description of exactly who will participate in the proposed study. Children under the age of 18, currently incarcerated persons, sick people, or pregnant women are specially protected and require additional detailed explanations to justify their inclusion. e age of majority varies across cultures and countries and hence the age threshold for parental approval varies too. In many cultures it is customary


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for a community elder or person in authority (e.g. tribal chief or school headmaster) to give approval for working with minors in a school or community setting. We agreed not to include any of these protected groups in our studies. We realized that the stipulation that no participants should be under the age of 18 would create some issues because many of the elderly participants are also the primary caregivers for the children in their (extended) family. ese elderly participants would bring the children over with them and expect that they receive a consultation too. Declining the children participation altogether would have been considered impolite. To solve this problem, we wrote into our IRB proposal that we would set up a children’s clinic where they could participate in a minor activity and no information would be recorded. is simple, IRB-approved solution worked without any problems. research participation incentives Research incentives like material compensation and the opportunity to advance knowledge can be inherent or incidental to participation. One contentious form of incentive is financial compensation. No federal guidelines exist in regard to financial compensation for research participation and individual institutions have varying regulations. In most contexts, participants expect some form of compensation for participation. Local custom oen dictates that a beverage or a meal be shared as part of the (data collection) conversation. Many participants expect some sort of tangible benefit for their time and insights. Typically, we provided beverages as a part of the participation experience and we also provided all participants with a notecard detailing their health measurements. We did not provide direct financial compensation. Only two issues arose with research compensation over the course of the data-collection phase. Students from a local university that participated in the studies expected to receive some sort of letter or certificate documenting their participation. Another situation occurred with a student conducting interviews with street youth in Nairobi. e researcher would offer to share a soda with the youth while the interview was being conducted. Oen the interviewee would request alcohol instead, as the price was similar. In these instances the researcher explained that university regulations would not allow him to purchase the local brew. In no case did this prove to be a significant barrier to the interview, but it represents an important contingency not considered in the design and planning phases of the research.

largEr ConFliCts and CHallEngEs “Hit-and-run” research Research conducted in developing communities has increasingly been accused of being “hit-and-run,” meaning that researchers “parachute in, conduct research on community members, and leave without providing any information or assistance” (Cargo & Mercer, 2008, p. 326). Critics also contend that developing countries are oen chosen as the site of research because researchers are subject to decreased legal and financial liability, cheaper costs of conducting research, and less scrutiny in regards to safety and ethics (Mugerwa, Kaleebu, Mugyenyi, & Kotongole-Mbidde, 2002). In such instances, developing communities are not research partners, but are the victims of exploitation (Zimmet, 2000). Even when the research site is chosen because ultimately the research aim is to benefit that community, it is still important that the host community be engaged in the research process and benefit in the transfer of knowledge and experience (Cargo & Mercer, 2008). Additionally, community engagement will increase the likelihood that the host community will embrace and utilize research findings and applications (Cargo & Mercer, 2008).

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Our research initiatives in Kenya are based upon a four-year collaboration with our primary local partner and seven years of engagement in the country. Staff from the partnering organizations advised us in the development and implementation of the research projects while Kenyan youth assisted in the research projects, as well as in the entrepreneurial ventures. Community members who were engaged in the studies saw the potential short-term and long-term benefits and were happy to participate. e community members trusted our local partners which helped open doors for our team. e trusting environment and an understanding of the perceived benefits helped us connect with more participants and get more accurate and valid data from them. On the other hand, we have witnessed first-hand situations where participants get agitated because several researchers come knocking on their doors. e people do not know who the researchers are, how their communities would benefit, or if their responses might have negative consequences. Situations like these are fairly common in some of the well-known slums like Kibera in Nairobi. One of the research participants estimated that on any given day, at least fiy groups of researchers are conducting some sort of survey in the slum. Such studies have a negative effect on the local people’s interest and comfort level in participation. It also brings the validity of the data and ethical appropriateness of the research endeavor into question. e situation is further compounded when a substantial amount of money is paid to participants as compensation. How many of these research endeavors lead to any benefits for the people or result in useful publications? e strictures of the irB and those of a student research Budget Conforming strictly to IRB regulations on the budget of a student venture is virtually impossible. In spite of numerous grants and a substantial amount of self-funding, we found the goals of our research to be incompatible with the demands of the IRB. A perfect IRB application would have detailed exactly where all of our research would have taken place and exactly who would participate and would include letters of support from all local officials across all the research sites. Due to cultural constraints previously mentioned, this would have required having a team in Kenya to conduct face-to-face meetings with collaborators and securing their written support of the project prior to receiving IRB approval and scheduling the remainder of the team’s activities. Even then, officials are not likely to have signed support letters until the full team was in Kenya and a meeting had been held. Once we arrived in Kenya we did receive these letters of support and wholehearted collaboration and support at each of our research sites, but to provide this documentation prior to our departure would not have been feasible. e IRB asks if researchers speak the same language as participants. We responded yes, bearing in mind that we intended to communicate in English. However, English is not the first language of most Kenyans and this poses communication difficulties, especially when any jargon is involved. All documents provided to participants should have been ideally translated into Kiswahili and the three local languages of the regions we intended to visit. Finding fluent speakers of both English and each of these languages who would be willing to help is an impossible and expensive task. Collecting appropriate and valid data for the study and perfectly protecting participants at the same time are extremely difficult to achieve on a shoestring budget. e Collision of Circumstance and ‘appropriate research’ Striking a balance between acting appropriately in an international context, conducting a scientific research experiment, and advancing an entrepreneurial venture can be a very


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complicated task. Each aspect is equally important and needs to be performed with the same amount of integrity. An IRB protocol strictly outlines the proposed research method. However, in the developing world, chaos and entropy pervade any sort of research experiment. Conditions and circumstances influencing the research effort change constantly. Despite all attempts to adhere to the plan outlined in an IRB protocol, it is not always possible. Entrepreneurial ventures are chaotic by nature, requiring fast adaptation to changing circumstances and demands. Our venture strategy was recalibrated on a daily basis depending on the accomplishments of the day and partner dynamics. We frequently found ourselves under pressure to adapt the IRB protocol in order to gather relevant and useful data. However, IRB requires that any changes to the research plan must be approved by them - a time-consuming process. In the middle of a clinic, circumstances oen arose that required us to alter the procedure or risk neglecting the needs of clinic participants. e incredible flexibility required by entrepreneurial ventures and developing country research endeavors directly contradicts the stringent requirements of the traditional research methods and the IRB. For example, although we had many partners and connections in Kenya prior to our arrival, the process of making more local connections continued aer we were in Kenya. As a result, we had an opportunity to hold clinics in more locations than just the CYEC and the two other sites approved by IRB. is would have allowed us to field-test the telemedicine system further and to collect a greater number of responses from a more diverse sampling. From a research and business perspective this would have been a positive outcome, but it was not IRB-appropriate. Primarily due to our interpretation of IRB limitations, we were ultimately limited to three locations. However, aer return from Kenya, while deliberating with IRB staff, we realized that we could have held more clinics because we were not altering the study in any substantive manner. e IRB’s function is to protect all research stakeholders, which includes participants, researchers, the institution, etc. e IRBs have a considerable amount of wiggle room in evaluating and approving protocols. It is essential for researchers to lay out the big picture about the study and demonstrate a thorough understanding of the culture, ability to identify risky issues, the probability of risk and impact.

ConClusion is paper presented insights and lessons learned from integrated research and entrepreneurship endeavors in developing communities. Several larger themes emerge: the importance of contextual considerations in any research effort within a foreign culture, the importance of regulatory oversight, and the inherent contradictions and challenges of the IRB system. A complementary challenge is the lack of accessible educational materials that educate researchers on how to successfully navigate the IRB process rather than focus on a binary classification of what is allowed and disallowed. New educational initiatives, like the Scholarship and Research Integrity (SARI) program at Penn State are being designed to “offer graduate students comprehensive, multilevel training in the responsible conduct of research, in a way that is tailored to address the issues faced by individual disciplines.” An encouraging paradigm shi is the evolution from a ‘culture of compliance’ to a ‘culture of concern’. Several challenges remain, but the IRBs are getting friendlier and more approachable as they realize that being pro-active in working with researchers is the best way to create a win-win situation for all stakeholders.

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rEFErEnCEs (IRB), P. S. (2011). About the Institutional Review Board. University Park, PA: Penn State University. (NBAC), N. B. (2001). Ethical and Policy Issues in International Research: Clinical Trials in Developing Countries. Bethesda, MD: National Bioethics Advisory Commission. Dartmouth Humanitarian Engineering Projects. (2008). Retrieved September 17, 2010, from ayer School of Engineering at Dartmouth: http://www.dartmouthhelp.org/projects.html Humanitarian Engineering: Colorado School of Mines. (2010). Retrieved September 18, 2010, from Colorado School of Mines: http://humanitarian.mines.edu/ MIT: About D-Lab. (2010). Retrieved September 17, 2010, from D-Lab: Development through Dialogue, Design, and Dissemination: http://d-lab.mit.edu/about Amdur, R., & Bankert, E. (2002). Institutional Review Board: Management and Function. Boston: Jones and Bartlett. Anokwa, Y. e. (n.d.). Stories from the Field: Reflections on HCI4D Experiences. Arizona State University. (2011). Global Resolve. Retrieved 10 10, 2010, from ASU College of Technology and Innovation: http://globalresolve.asu.edu/ Barzilai, G. a. (2007). e Impact of Institutional Review Boards (IRBs) on Law and Society Researchers. Berlin: Report of the Membership and Professional Issues Committee to the Board of Trustees of the Law and Society Association. Bringle, R. G. (1996). Implementing Service Learning in Higher Edcuation. Journal of Higher Education. Cargo, M., & Mercer, S. L. (2008, January). e Value and Challenges of Participatory Research: Strengthening Its Practice. Annual Review of Public Health, 29, 325-350. Chavan, A. (2005). Another Culture, Another Method. HCI International. Desai, V., & Potter, H. (2006). Doing Development Research. ousand Oaks, CA: Sage Publications. Gordon, E. J. (2003). Trials and Tribulations of Navigating IRBs: Anthropological and Biomedical Perspectives of Risk. Anthropological Quarterly, Accessed online. Green, L. W. (2001, June). From Research to "Best Practices" in other Settings and Populations. American Journal of Health Behavior, 25(3), 165-178. Hamburger, P. (2004). e New Censorship: Institutional Review Boards. e Supreme Court Review, 271-354. Hyder, A. A. (2004). Ethical Review of Health Research: A Perspective from Developing Country Researchers. Journal of Medical Ethics, 68-72. Kass, N., Dawson, L., & Loyo-Berrios, N. I. (2003). Ethical Oversight of Research in Developing Countries. IRB: Ethics and Human Research, 1-10. Levine, C. (1998, November 6). Placebos and HIV Lessons Learned. e Hastings Report, pp. 43-48. Mugerwa, R., Kaleebu, P., Mugyenyi, P., & Kotongole-Mbidde, E. (2002, January 26). First Trial of the HIV-1 Vaccine in Africa: Ugandan Experience. British Medical Journal, 324(7331), 226-229. Oakes, J. M. (2002, October). Risks and Wrongs in Social Science Research: An Evaluator's Guide to the IRB. Evaluation Review, p. 443.


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Russo, P. a. (1993). How Fluent is your Interface:Designing for International Users. Proceedings of the INTERACT 93' and CHI 93' Conference on Human Factors and Computer Systems, (pp. 342-347). Scheyvens, R., & Storey, D. (2003). Development Fieldwork: A Practical Guide. ousand Oaks, CA: Sage Publications. Shaffer, D. N., Yebei, V. N., Ballidawa, J. B., Sidle, J. E., Greene, J. Y., Meslin, E. M., et al. (2006, January). Equitable Treatment for HIV/AIDS Clinical Trial Participants: A Focus Group Study of Patients, Clinician Researchers, and Administrators in Western Kenya. Journal of Medical Ethics, 55-60. Shah, A. (2010). Poverty Facts and Stats. Retrieved September 19, 2010, from Global Issues: http://www.globalissues.org/article/26/poverty-facts-and-stats#src11 Smithsonian. (n.d.). Design for the Other 90%. Retrieved September 19, 2010, from Cooper Hewitt: http://other90.cooperhewitt.org/ Victora, C. G., Habicht, J.P., & Bryce, J. (2004, March 1). Evidence-Based Public Health: Moving Beyond Randomized Trials. American Journal of Public Health, 94(3), 400-405. Zimmet, P. (2000). Globalization, Coca-colonization and the Chronic Disease Epidemic: Can the Doomsday Scenario be Averted?. Journal of Internal Medicine, 247, 301-310. acknowledgements: We would like to thank Dr. Audrey Maretzki (Emeritus Professor, Food Science), Jodi Mathieu (IRB Research Compliance Coordinator, Office of Research Protections) and Rosie Qin for their inputs and critiques that helped strengthen this manuscript and make it more accurate.

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37

The Entrepreneurial Nature of Salespeople: How They Justify Unethical Behaviors

Michael L. Mallin and Laura Serviere-Munoz

aBstraCt e purpose of this paper is to introduce a theoretical model in which salesperson ethical behavior is moderated by techniques of neutralization. Sales people are risk takers, pursue new ventures and thus deal with constant change. Such an entrepreneurial setting can make salespeople vulnerable to the use of neutralizations. e techniques of neutralization, are a set of rationalizations that people use to justify their illegal or unethical behavior. In addition to understanding the circumstances under which neutralization techniques are more likely to be employed, a series of propositions are developed. e general theory of marketing ethics is used as a general framework.

introduCtion Ethics is a relevant concept that has been widely discussed and researched among business disciplines (Valentine, 2009). Out of many of these disciplines, marketing has been especially vulnerable to disapproval and criticism because of the high propensity of unethical activities in some of its areas such as advertising, personal selling, pricing, marketing research, and

miCHaEl l. mallin is an Associate Professor of Marketing and Sales in the Edward H. Schmidt School of Professional Sales at e University of Toledo, 2801 W. Bancro Street, Toledo, OH 43606. Telephone: 419.530.4737 Email: [email protected] laura sErviErE-munoz is an Assistant Professor of Marketing in the Division of Urban and Professional Studies at the University of North Texas at Dallas, 7400 University Hills Drive, Dallas, TX 75241. Telephone: (972) 338-1809 Email: [email protected]

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international marketing (Vitell & Grove, 1987). In fact, in organizational settings, marketing is perceived to have a greater opportunity to move farther from ethical behavior, due to its numerous boundary spanning contacts, than other areas (Ferrell & Gresham, 1985). One marketing area in which ethics is vastly researched and valued is personal selling. As noted by Ingram, LaForge and Schwepker (2007), ethics in personal selling is crucial because salespeople typically operate with minimal supervision and direction and must manage their customer base in a very entrepreneurial fashion. Moreover, this entrepreneurial approach spills over to the environment in which salespeople operate; they become boundary spanners, risk takers, constantly pursue new ventures and typically prefer a flexible structure. e need to make daily decisions that impact their “bottom line” forces salespeople to face ethical challenges, many times resulting in unethical outcomes. In fact a recent study by Darrat, Amyx, and Bennet (2010) cites that an alarming 40% of sales reps studied admitted to acts of workplace indiscretion and even more troublesome is that 66% of these salespeople felt that their behaviors would result in no negative consequences. is might be one of the reasons why sales have long been associated with questionable activities (Hair, Anderson, Mehta, & Babin, 2009). An additional reason for the importance of ethics in sales activities resides in its ability to create new customers and sustain and enlarge relationships with current customers (Ingram, LaForge, & Schwepker, 2007), an issue that is especially critical for entrepreneurs as they try to pursue new ventures or extend the ones in existence. More importantly, personal selling spans across many business activities due to its crossboundary nature and has a significant impact for entrepreneurs and their activities. Entrepreneurs understand that on certain occasions, such as when pursuing new ventures or potential investors, they have to adopt a sales orientation to be able to convey the value of their efforts. Entrepreneurs and their employees also adopt a sales orientation when capitalizing on strengths of personal selling to adopt marketing strategies such as market penetration and market development when trying to increase demand and extend market share for their ventures. In a more specific way, entrepreneurs are involved in the day to day operations of their ventures and can be involved as coaches of their employees conducting the sales function. In the role of coach, an entrepreneur must help salespeople identify and correct selling deficiencies (Mallin & Mayo, 2006) as well as continue to encourage professional development. Despite the increased interest in sales ethics in business research (Hair, Anderson, Mehta, & Babin, 2009), virtually no known research has been conducted on justification techniques or attitudinally incongruent behavior in general (Holland, Meertens, & Van Vugt, 2002). A promising answer for justification of attitudinally incongruent behavior lies in neutralization theory (Sykes & Matza, 1957), which describes the mechanisms that facilitate behavior by “justifying” or “neutralizing” a person’s illegal or unethical actions. Neutralization theory consists of five techniques that are used to justify the behavior that conflicts with social or legal norms (Sykes & Matza, 1957). Neutralization theory has been applied in various contexts but little work has been done in marketing. For example, one of the few studies that addressed neutralizations in the field of consumer behavior has been Chatzidakis, Hibbert and Smith (2007) who applied the techniques to explain the attitude-behavior discrepancies that they found regarding consumers’ fair trade purchase behavior. In a different study, Strutton, Pelton, and Ferrel (1997) found that consumers used neutralization techniques to

Mallin and Serviere-Munoz

39

justify unethical behavior in retail settings. Overall, the inclusion of neutralization theory is a contribution that promises to help explain more appropriately how people justify incongruent or illegal behavior (Chatzidakis et al. 2007). In addition, efforts to identify variables that potentially moderate important relationships in the ethical decision-making relationships and models are scarce. As noted by O’Fallon and Butterfield (2005), when reviewing the ethical-decision making literature, there is an unexpected lack of emphasis on studying moderating relationships; especially in personal sales, in which paying attention to such moderators could largely advance our understanding of general ethical attitudes, the ethical reasoning process, and “ethical context-job attitudes” relationships (Valentine, 2009). us, Neutralization theory might prove to offer significant moderating variables in existing theoretical models of personal sales. e theory may account not only for the discrepancies that occur in attitude-behavior models, but could also provide an understanding of why, at times, intentions turn into behaviors. e purpose of this paper is to build a conceptual model using the general theory of marketing ethics as a framework to explain salespersons’ unethical behaviors. In addition, neutralization theory is proposed to play an a priori moderating role that leads to unethical behaviors. e model proposes, based on prior research from various disciplines, that neutralizations will moderate the ethical judgment-intention-behavior links and enables us to better understand the conditions in which salespeople justify their unethical acts. We also expect to contribute to entrepreneurship research by providing further insight on issues that affect the sales function among those pursuing attractive opportunities and bring attention to marketing issues that may have to be re-framed when set in an entrepreneurial environment.

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

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and address opportunities that have a direct benefit to the customers and organizations that they serve (Weitz, Castleberry, and Tanner 2006). Researchers have also concluded that critical advances in entrepreneurial research include a shi from the entrepreneurs’ characteristics to the consequences and results of their acts. Such advances provide a greater understanding of how entrepreneurs use knowledge, networks, and resources to build organizations; and a more inclusive and advanced categorization of environmental forces at several levels of analysis, such as population, community, and society (Aldrich & Martinez, 2001). In comparison, sales research has advanced to contrast a transactional selling versus a relationship selling approach (Saxe and Weitz 1982) and has offered frameworks based on improved knowledge and adaptive selling behavior to impact sales effectiveness (Weitz, Sujan, and Sujan 1986). It is also clear that entrepreneurs cannot succeed alone and among the fields that provide benefit, sales can have a profound interface with entrepreneurial activities. For example, small and medium sized enterprises oen approach sales and marketing in a different manner than their larger counterparts (Carson & Gilmore, 2000) leading to entrepreneur-driven activity. Such activities are seen as intersecting as entrepreneurs pursue relationships and network creation with other members of the marketing system (Carson & Gilmore, 2000; Hultman & Shaw 2003; Stokes, 2000). is is also supported by Morris, Miles and Deacon (2010) who augment the value of this interaction by pointing out that marketing is critical and effective in entrepreneurial organizations. All this can be summarized by illustrating that in the disciplines of sales, marketing, and entrepreneurship, the common focus is on discovering and exploiting opportunities of mutual benefit to both salesperson/entrepreneur and the customers that they serve. Given this background highlighting the entrepreneurship-sales interface and the importance of addressing customer opportunities, we turn our attention to how ethical decisions among salespeople are made. Ethical decision making among salespeople e ethical decision-making literature has experienced a substantial interest, and thus growth, from academicians who try to understand the field (Chatzikadis, Hibbert, & Smith, 2007) and its implications in a number of contexts. In their classic work, Hunt and Vitell (1986) introduced the general theory of marketing ethics in which ethical judgment is proposed to ultimately influence a person’s behavioral intentions. e theory proposes that if an individual has an ethical problem at hand, the individual will engage in a deontological evaluation, assess the perceived alternatives, and take action based on a teleological evaluation of perceived consequences. In addition to Hunt and Vitell’s (1986) theory, which has become widely accepted in managerial and organizational contexts, there are many other valuable frameworks. For example, Rest (1979) provided a 4-step moral judgment model consisting of: moral issue recognition, judgment making, choosing most salient moral concerns, and acting on those moral concerns. Trevino (1986) proposed a person-situation interactionist model that emphasized the importance of reasoning and organizational culture in the decision-making process. Ferrell and Gresham (1985) modeled a contingency framework in which individual and organizational factors, as well as the unethical opportunities act, alter, or affect an individual’s ethical decision-making. Within the same stream, Jones (1991) introduced a sequential model where behavior is ultimately influenced by the individual’s perceived intensity of the issue (for a review see O’fallon & Butterfield, 2005).


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Within the personal selling and sales management literature, ethical decision making has also received much attention. Ethics, which involves judgments based on right versus wrong or fair versus unfair (Hunt & Vitell, 1986), is uniquely significant to salespeople because as part of their job they face several ethical challenges which are sometime resolved in a questionable manner (Ingram, LaForge, & Schwepker, 2007). According to Roman and Ruiz (2005), ethical salesperson behavior should focus on the interests and well-being of the customer. Ethical salespeople should communicate in a truthful and accurate manner, offer products and services that will truly benefit the customer, treat and maintain customer information in a confidential manner, and promise only what can be delivered (Hansen & Riggle, 2009). If salespeople act in an ethical manner, they will be able to build and sustain strong customer relationships and their customer base will experience higher satisfaction, trust, and commitment levels with them (Roman & Ruiz, 2005). e techniques of neutralization Neutralization theory explains how individuals mute or eliminate the negative impact of their norm-violating behavior (Sykes & Matza, 1957) and has become one of the most known and cited theories within the deviant behavior literature (Chatzidakis, Hibbert, & Smith, 2007). e theory, which was originally introduced by Sykes and Matza, challenged the predominant school of thought about the idea of a delinquent sub-culture. is subculture was believed to be a “system of values” that represents an inversion of the values held by respectable, law abiding society. ey also pointed to the overwhelming evidence that a significant portion of delinquents experience guilt or shame and should not be discarded as a manipulative gesture towards the authority that apprehended them. Sykes and Matza (1957) further claimed that a large part of delinquent acts are based on justifications, which are oen unrecognized by others, that serve as a defense for the crime in the criminal’s mind. e criminal thinks that the act is valid even though the legal system or society does not share this view. Oen, such justifications are portrayed as rationalizations that occur aer the deviant behavior as protection from self-blame and the blame from society. Sykes and Matza strongly emphasized that these justifications may well occur before the deviant behavior is executed, and thus rationalizing the action.” Within the consumer behavior area, Strutton, Pelton, and Ferrell (1997) suggest that consumers use neutralizations before committing unethical acts. Once internalized, neutralizations alleviate guilt or selfblame (Sykes & Matza, 1957; Strutton et al. 1997). It is by learning these techniques that these individuals turn into delinquents (Sykes & Matza, 1957). ese neutralization techniques not only precede delinquent behavior but, based on the circumstances, make the behavior possible because the behavior is then perceived as acceptable, right, or fair (Sykes & Matza, 1957). Moreover, even though neutralizations do not necessarily involve delinquency, Matza (1964) acknowledged that under extenuating circumstances delinquency might take place. is view is shared by Agnew (1994) who concluded that there is a greater chance that neutralization will lead to delinquency among those who: deem that in some situations neutralizations are valid, embrace some commitment to established beliefs (i.e. censure of violence), come across opportunities for delinquency, and long to commit the actual offense. e neutralization techniques constitute a framework that identifies and explains how individuals justify or eliminate the consequences that their norm deviant behavior could have on them and on social relations (Vitell & Grove, 1987). e framework is based on five techniques which are: denial of responsibility, denial of injury, denial of victim, condemning the condemners, and appeal to higher loyalties. It is critical to point out that individuals may

42


employ more than one technique as a means to justify culpability for an act that is publicly unacceptable. ese values, also called subterranean values, are acquired via a process of socialization where individuals learn their usage through verbal symbols and socially-shared rationalizations (Vitell & Grove, 1987). In the sections to follow, each technique is further explained. denial of responsibility When turning to this neutralization technique, individuals reject any responsibility for their deviant actions by turning to negations of personal responsibility. For example, they might claim the act was an “accident” and that they did not mean it. is technique focuses on being able to deter the blame involved with violations of social norms and not on how valid the action might be. In addition, the individuals see themselves as “acted upon” instead of “acting” due to forces that are outside or beyond their control (Sykes & Matza, 1957). e individual thus sets the path for deviance from the normative system without a direct confrontation of the norms: “I couldn’t help myself, I was desperate” (Vitell & Grove, 1987, p.434). In sum, the link or association between the individual and the act is broken, leading to a denial of responsibility about deviant acts. denial of injury is technique centers on the harm derived from the delinquent act and questions whether anyone was injured by the behavior (Sykes & Matza, 1957). In an unclear way, the individual does not perceive that the behavior in question caused major or any damages at all. For example, individuals employing this technique might see vandalism as simply mischief and say “nobody was really hurt.” Contrary to denial of responsibility, where the link between individual and act is broken, denial of injury does establish a link between these two. However, the link between act and injury is the one broken or nonexistent. denial of victim Aer a deviant act, denial of victim occurs when the individual alleges that there is no victim. In contrast with denial of responsibility and denial of injury, the individual acknowledges responsibility for his or her actions and the injury or damage they caused (Sykes & Matza, 1957). However, any “moral indignation” is neutralized or justified by maintaining that there was no wrongful act or injury under the circumstances because the issue is a matter of punishment or rightful retaliation, not a matter of injury; where the victim deserved the injury: “they had it coming.” e individual becomes an avenger and the victim a wrong-doer. As noted by Vittel and Grove (1987), not only the existence of a victim is denied but the victim is perceived as a person that deserved to be hurt or injured. Condemning the Condemners Using this technique, the center of attention is shied away from the individual and the act to those who condemn the deviant actions and their motives (Sykes & Matza, 1957). e condemners are critiqued, and thus condemned, because they are hypocrites, crooks, or are simply motivated by spite or personal malice. Such a view functions as a deflection of the negative sanctions that go along with norm violation (Sykes & Matza, 1957). Furthermore, because the individual’s orientation has shied towards those in charge of norm enforcing, they eventually experience cynicism against them as well. e individual simply represses the wrongfulness of the deviant behavior by attacking others: “I was only doing what others do all the time” (Vitell & Grove, 1987, p.434).


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appeal to Higher loyalties Here, the individual justifies internal and external social controls by conceding preference to the demands of social groups to which the individual belongs (Sykes & Matza, 1957). A common misconception when addressing this technique is to assume that the individual rejects the norms and imperatives of the society at large. On the contrary, the delinquent might accept them but be faced with the dilemma of who are they loyal to. is dilemma is solved by turning to this technique; the individual fails to follow the law or societal norms to comply with the norms of the group to which the individual belong (Sykes & Matza, 1957). When appealing to higher loyalties, the individual denotes a higher loyalty to his or her group than to the society because this group matters more than the society at large. Conceptual Framework and propositions e theory’s impact is such that Sykes and Matza’s (1957) work is one of the most frequently cited articles within deviant behavior research and offers a medium for understanding how employees of all types employ arguments to justify and/or exonerate themselves from self-blame and social criticism when displaying unethical behavior (Vitell & Grove, 1987). According to Vittel and Grove, the understanding that the techniques bring to unethical behavior is one of the techniques’ key contributions. Furthermore, the authors developed a series of propositions regarding ethics in marketing and the techniques of neutralization. First, they proposed that there is a greater likelihood of engaging in unethical behavior when individuals employ one or more of the techniques as part of their decisionmaking process (and it is probable that the techniques were internalized). An additional proposition arises from the idea that the techniques are a function of unethical behavior. is proposition suggests that aer an unethical behavior, individuals might turn to one or more of the techniques as a way of explaining such behavior. It is important to note though that the usage of the techniques on a post-decision basis indicates that the individual still possesses sensitivity to the unethical part of the behavior (Vitell & Grove, 1987). In marketing and management, few business-to-business studies have been devoted to address the techniques and their role in unethical behavior. Most of the work here has been done in the business-to-consumer setting. For example, Strutton, Pelton, and Ferrel (1997) concluded that in retail settings consumers used neutralization techniques to justify unethical behavior. e results show that across generations, “thirteeners” (the thirteenth generation to know the American flag and constitution), turned with greater frequency to the techniques to justify their unethical behavior when compared to their parents. Moreover, the results showed that denial of victim and condemning the condemners were among the most popular techniques and that consumers neutralize any self-blame before committing unethical behaviors. In a more recent study, Chatzikadis, Hibbert, and Smith (2007) turned to the techniques to explain fair trade purchase behavior. e authors propose that the inconsistencies exhibited by the consumers regarding their attitudes and behavior towards fair trade can be explained by the techniques. Specifically, it is suggested that the techniques moderate the link between consumers’ attitudes, subjective norms, and perceived behavioral control on one side of the spectrum and the behavioral intentions on the other (Chatzikadis, Hibbert, & Smith, 2007). Given, this background, we proposed a conceptual framework of marketing ethics in which the role of neutralization techniques is explored. is framework describes the moderating role of the neutralization when a salesperson is acting on an ethical decision (see Figure 1). e following discussion describes this model.

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FigurE 1. proposEd FramEwork – gEnEral tHEorY oF markEting EtHiCs and nEutralization tHEorY

EtHiCal JudgmEnt

EtHiCal intEntion

EtHiCal BEHavior

nEutralizations modErating rolE

e Ethical Judgment — Ethical intention — Ethical Behavior links e General eory of Marketing Ethics (Hunt & Vitell, 1986) is one of the most accepted ethical theories in the marketing field. e theory suggests the possible elements of the decision-making process when an individual faces an ethical issue. Hunt and Vitell proposed that once an individual recognizes an issue as ethical, the individual will evaluate the behavior to form a judgment. e evaluation consists on deontological evaluations, to assess the perceived alternatives, and on teleological evaluations, to assess perceived consequences. In turn, ethical judgment will influence ethical intentions and ethical intention and situational constraints will determine behavior (Hunt & Vitell, 1986). e notion that ethical judgment influences ethical intention and this, in turn, influences ethical behavior has been widely supported throughout the literature. Dubinsky and Loken (1989) proposed that ethical decision making in the marketing environment is also a sequential process in which an individual makes a moral judgment and then establishes moral intent which leads to the moral behavior as the outcome. Rest (1986) proposed a model where ethical judgment, intention, and behavior links are included but argued that success in one step does not guarantee success in the next one. In addition, Rest (1986) pointed out that the model is easily generalized to organizational environments. Jones (1991) acknowledged this sequential process of judgment - intention - behavior in ethical decision making in organizations and extended it by suggesting that moral intensity, a construct that encompasses the situation’s moral imperative, influences every step or component of moral decision making. e entrepreneurial setting of personal selling has not been the exception in addressing the ethical judgment - intention - behavior model. Hunt and Vasquez-Parraga (1993) reported that managers turned to ethical judgments to discipline or reward a salesperson’s behavior. More recently, Valentine and Barnett (2007), McClaren (2000) and Ferrell,


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Johnston and Ferrell (2007) supported this model as well. However, Valentine and Barnett proposed that perceived organizational ethics will impact judgment and intention, and McClaren (2000) and Ferrell, Johnston, and Ferrell refer to the judgment intention link as the moral decision structure. us, the basic premise that this paper proposes for ethical decision making among salespeople is: P1: When faced with an ethical issue, a sales person will form a positive or negative ethical judgment P2: Salesperson positive ethical judgment will increase the likelihood of ethical intentions while negative ethical judgment will increase the likelihood of unethical intentions. P3: Salesperson ethical/unethical intentions will be positively related to ethical/unethical behavior. e moderating role of the techniques of neutralization Hunt and Vitell (1986) argued that individuals will experience guilt as a result of their intentions and behavior not matching their ethical judgments. However, there are times that individuals are able to soen or block this guilt by neutralizing any applicable norms and thus eliminate or reduce guilt. is is the building block in Sykes and Matza’s (1957) theory of neutralization: the theory emphasizes that deviant individuals are not that different from those who abide by the law or commit to conventional norms. Just like any other behavior, Sykes and Matza argued that unethical behavior is learned when immersed in social interactions and that individuals could also learn to neutralize their behavior. Neutralization theory explains how individuals, who are still committed to conventional norms, remove any negative impact or exonerate themselves from their inappropriate behavior by neutralizing their thoughts and behavior. Denial of responsibility, denial of injury, denial of victim, condemning the condemners, and appeal to higher loyalties are the five techniques of neutralization employed by the individuals committing the deviant behavior to justify their behavior (Sykes & Matza, 1957). Even though many areas have benefited from the study of the techniques of neutralization, the entrepreneurship, personal selling and sales management fields have largely ignored the potential impact that neutralizations could have on salespersons operating in these environments, especially when making an ethical decision. Because of the nature of their job, salespeople must balance their own interests with those of their buyers while being financially efficient. us, salespeople oen face a significant number of ethical dilemmas (Hansen & Riggle, 2009) and may use some of the techniques to justify their behavior. Neutralizations might also be especially appealing if most of their work is conducted in an entrepreneurial environment – where decision making involves risk, independence, and personal judgment. When originally proposed, the techniques of neutralization were strongly positioned as preceding deviant behavior (Sykes & Matza, 1957). More recent research, (e.g., Piquero, Tibbetts and Blankenship (2004), Strutton, Pelton and Ferrell (1997), and Vitell and Grove (1987) also supports the notion of neutralization preceding unethical behavior among both consumers and professionals. More specifically, the neutralization techniques have been argued to moderate the relationship between ethical judgment and ethical

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intention as well as between ethical intention and ethical behavior as the techniques of neutralization become keys to reinstate balance when individuals consider behaving in a way that is inconsistent with their convictions. For example, Chatzikadis et al. (2007) suggested that neutralization plays a moderating role in explaining why consumers do not buy products that are known to come from countries that do not practice fair trade policies. In sum, research suggests that situations entailing unethical acquisition and disposition behaviors were more likely to elicit or activate the use of neutralization techniques (Strutton, Pelton, & Ferrell, 1997). erefore, it is proposed that salespeople will turn to these neutralization techniques before considering and behaving in an illegal or unethical manner. e techniques serve to justify the deviant behavior as they tend to soen or eliminate any guilt or remorse that the salesperson experiences when acting on his or her ethical intentions. ese relationships can be summarized by the following proposition: P4: e techniques of neutralization will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior. specific applications of neutralization and propositions in the domain of sales As mentioned earlier, the role of neutralization techniques on salesperson ethical behavior has received very little attention within the sales and management literature. However, many studies conducted within the professional or white collar work environment support the role that neutralization plays prior to a person committing an unethical act. In this section, we draw upon previous research in the professional setting to propose scenarios where each of the five neutralization techniques are more likely to be employed in the sales domain. ese are illustrated in Table 1 and described in the section to follow. sales promotion Behaviors Sales promotion is one area which sales people might engage in behaviors where unethical acts may be rationalized through various neutralization techniques. e work of Piquero, Tibbets, and Blankenship (2005) demonstrates this. eir research evaluated the likelihood of individuals to engage in the promotion and sales of a hypothetical pharmaceutical drug that was about to be recalled. ey reported that neutralizations involving denial of responsibility, denial of injury, and appeal to higher loyalties were techniques selected by the respondents as a rationale to justify their behavior. Denial of responsibility and denial of injury were also linked to salesperson behaviors by Vitell and Grove (1987). eir study revealed that for salespeople who reported unethical promotion practices by competitors (e.g., “they are doing it too”), those salespeople felt “acted upon” or “forced to” misbehave just to be able to keep up with the competition. In these instances, the issue is no longer a matter of personal choice but the outcome of a non-negotiable condition leading to deny any responsibility. Denial of injury was exhibited by salespeople who tried to justify the use of excessive expenditures on sales promotion activities such as entertainment and travel for clients. eir claim that, “aer all, no one is hurt by this”, exemplifies the use of this neutralization technique (Vittel & Grove, 1987). e following proposition summarizes these effects:

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taBlE 1. appliCations oF nEutralization tECHniquEs in proFEssional salEs proFEssional salEs arEas & appliCations

nEutralization tECHniquE

sales promotion Behavior

Customer relationship Building & maintenance Behavior

Piquero, Tibbets & Blankenship 2005

Evans & Porche 2005; Gauthier 2001; Sykes & Matza 1957

sales organization Behavior Rosecrance 1988; Pershing 2003 Vittel & Grove 1987; Piquero,Tibbets & Blankership 2005; Hollinger 1991

Denial of responsibility

*

*

*

Denial of injury

*

*

*

Denial of victim

*

*

Condemning the condemners

*

Appeal to higher loyalties

*

*

*1 *2

notes: *1 Pershing reported that individuals who chose to report their peers’ misconduct appealed to higher loyalties. However, the study recognized the possibility that those who did not report peer misconduct might be appealing to higher loyalty as well. In this case, loyalty to their peer supersedes loyalty to the institution. *2 In addition to employing some of the techniques proposed by Sykes and Matza, Piquero, Tibbetts, and Blankenship reported that older or more experienced professionals were influenced by two additional justifications: the most important issue at stake is profit and anything is justified to make such profit.

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P5: When a salesperson is faced with unethical behavior involving sales promotion activities, the neutralization techniques of denial of responsibility, denial of injury, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior. Customer relationship Building and maintenance Behaviors Relationship selling has emerged as the key to building long-term partnerships between salespeople and their customers (Weitz, Castleberry, and Tanner 2006). For salespeople operating within an entrepreneurial environment this is especially important because the growth and sustainability of the small to medium enterprise depends on repeat business and word of mouth reputation. For these salespeople who have successfully built such relationships, unethical behavior toward their customers is likely to impinge on the trust that has been bestowed upon them. Inasmuch as little has been done to study how salespeople in an entrepreneurial setting rationalize unethical behavior toward their clients, we can turn to some of the research in other professional domains. For example, according to Evans and Porche (2005), professionals such as speech, occupational, and physical therapists who develop and maintain a direct and close relationship with their clients, turned to some neutralization techniques to justify some fraudulent practices. eir study identified that denial of responsibility and denial of injury were the techniques used to justify cutting therapy sessions short but charging the full rate or, charging individual session rates for group therapy sessions. In an earlier study, Gauthier (2001) identified that when veterinarians engaged in circumstances that could be considered unethical practice (e.g., providing substandard care to animals), they commonly reported using techniques such as denial of injury and denial of victim to justify their questionable actions. Salespeople are the “face” of their company and its offerings. As much as they are liked and trusted by their customers, sometimes the reputation of their offerings, company, and even profession stands in the way of relationship building and maintenance efforts. For example, an over-subscribed service offering, an understaffed customer service department, or a product built with defective components could turn relationship building efforts into an exercise of futility. us, to combat the negative perceptions that customers might have, salespeople may turn to neutralization techniques in justifying their unethical behavior. ere is some evidence of this in other professional domains where client relations are involved. rough interviews and fieldwork study, Rosecrance (1988) demonstrated that public defenders turned to neutralizations to cope with the notion that their services would always be inferior to those provided by private counsel. To cope with such a negative image, public defenders turned to all five neutralization techniques when representing their clients. Salespeople also build and maintain relationships with customers with whom they have no direct physical contact. Positions such as inside sales focus a salesperson’s efforts on managing a relationship via the telephone or internet (Weitz, Castleberry, and Tanner 2006). One aspect of neutralization research centers on situations where behavior is rationalized when a person denies the existence of a victim, especially when the victim is “physically absent, unknown, or a vague abstraction (Sykes & Matza, 1957, p. 668).” In denial of victim, the person accepts wrongdoing and takes responsibility for his or her actions. However, by a subtle alchemy, the individual positions himself as an avenger and


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whoever was originally a victim becomes a wrongdoer - a person who deserves the injury. e likelihood of turning to denial of victim is greatly augmented when the awareness or existence of the victim is weakened because, as just mentioned, such victim is physically absent or unknown. is diminished awareness as to who the victim is contributes to the person employing the denial of victim technique (Sykes & Matza, 1957). For salespeople, this diminished awareness of a possible victim might be important when dealing with new customers whose long-term value has not yet been established. is technique might also be used with competitors who might be seen as an “abstract concept” to the salesperson. Denial of victim could be especially prone to use towards new competitors, as the salesperson “does not really know them,” or when the salesperson is assigned to a new territory (“I have yet to meet the customer”). e above examples suggest that neutralization is used among professionals to justify behaviors while attempting to build and preserve the relationships with their customers (both directly and indirectly). Extending these finding into the sales domain, the following is proposed: P6: When a salesperson is faced with unethical behaviors involving building and maintaining customer relationships, the neutralization techniques of denial of responsibility, denial of injury, denial of victim, condemning the condemners, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior. sales organization Behaviors Salespeople engage in behaviors that impact the interactions with members of the organization -namely peers, superiors, administrators, and business owners. Each interaction involves behaviors where unethical practices are assessed and potentially carried out. For example, salespeople might turn to neutralization when faced with conflicting peer loyalty as to how they respond to the misconduct of others. As reported by Pershing (2003) in other domains, when confronted with questionable occupational conduct of their peers, U.S. naval academy members, employed denial of responsibility and appeal to higher loyalties to justify whether they reported their peers’ occupational misconducts. ose who turned to denial of responsibility pointed out that “time constraints” prevented them from filing misconduct reports. is time constraint is in line with Sykes & Matza’s argument that an individual denies responsibility because deviance is “due to forces outside the individual and beyond his control (1957, p.667). In this case, time constraints are the force beyond the individual’s control and thus, it is not their responsibility to report misconducts. Relative to sales, the decision as to whether a salesperson reports the occupational misconduct of their peers might be impacted by neutralization techniques used to try to soen or completely block any guilt for violating social norms about reporting unethical behavior witnessed of their peers. Another sales organizational factor is the age or career stage of the employee. e organizational behavior literature suggests that as professionals become more experienced and older, the intent to engage in unethical behavior increases. For example, Hollinger (1991) reported that older professionals had a greater likelihood to use neutralization

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techniques in corporate environments when justifying property the than their younger colleagues. Piquero, Tibbetts and Blankenship (2005) also supported this notion when examining corporate crime in the promotions/sales area. eir findings exposed that respondents over 35 or older are significantly more influenced to neutralize deviant behaviors by turning to denial of responsibility, denial of injury, and appeal to higher loyalties to justify further marketing of a hypothetical drug that was about to be recalled by the U.S. Food and Drug Administration. Appeal to higher loyalties was also linked to older executives by Vitell and Grove (1987). Retired executives relied on this technique because they felt greater loyalty to their corporation and corporate superiors than to the government. Vitell and Grove also suggested that salespeople might appeal to higher loyalties when trying to justify product misrepresentation in order to align with their firm’s goal to increase product sales. Finally, because salespeople incur travel, promotional, and customer hosting expenses, opportunities to misrepresent expense account transactions are prevalent. One example of this represents a situation in which a salesperson might rationalize unethical behavior in inflating his or her expense account. According to Vittel and Grove (1987), sales representatives might justify this behavior by relying on condemning the condemner. Specifically, salespeople might argue that the company engages in the same behavior by “overcharging” their customers. By claiming that the company “is just as guilty”, salespeople are able to protect their self-concept by redirecting the attention to others (Vittel and Grove 1987). Such behaviors may be more prevalent in small to medium organizations where fewer employees interact and the formal and informal interaction among employees can have an impact on the salesperson’s disposition to learn and exhibit neutralizations. e following proposition summarizes how sales people might use neutralization techniques when engaging in sales organization behaviors: P7: When a salesperson is faced with unethical sales organizational behavior, the neutralization techniques denial of responsibility, denial of injury, denial of victim, and appeal to higher loyalties will negatively moderate the relationship between a.) ethical judgment and ethical intention and b.) ethical intention and ethical behavior.

ConClusion Small to medium enterprises are a vital part of a nation’s economy. ey provide opportunities for business growth for both entrepreneur and the customers that they serve. is paper began by highlighting the importance that sales and marketing has on entrepreneurial activities by pointing out the interface and intersection of professional selling and entrepreneurship. By focusing on effective professional selling practice, entrepreneurs can develop mutually beneficial buyer-seller relationships based on a customer orientation. It is this that affects the players and the environment where business activities take place. In pursuit of knowledge within this domain, it is important to note that salesperson intention and behavior can be modified by many variables, some of which can lead to negative and unethical outcomes (Serviere 2010). In addition, the literature has recognized the importance of ethics in sales because of its role in acquiring new and maintaining existing customer relationships (Ingram, LaForge, & Schwepker 2007). Ethical salesperson behavior leads to increased buyer trust and commitment, and thus to an


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increased share-of-customer, buyer communications, and word of mouth (Ingram, LaForge, & Schwepker, 2007; Valentine, 2009). Due to this, understanding what motivates a salesperson to act ethically or unethically in an entrepreneurial setting is of great importance to research and practice. is research represents a first step toward this goal. e overall purpose was to present in a comprehensive, yet parsimonious manner, a conceptual framework that builds upon the general theory of marketing ethics to illustrate the moderating role of neutralization theory in explaining unethical salespersons behavior acting in an entrepreneurial environment. e applications to sales promotion, relationship building and maintenance, and sales organizational behaviors provide some practical perspectives as to how neutralization techniques may be used by salespeople to justify unethical behavior. For entrepreneurs acting as practicing sales managers, it is important to emphasize that the techniques are learned responses that tend to be socially reinforced to protect an individual from self-blame (Vitell & Grove, 1987). erefore, entrepreneurs must not turn a blind eye to salesperson behaviors. Occasionally monitoring a salesperson response to a situation involving judgment (e.g., a customer request for price concessions, reporting an expense for a business lunch, responding to a competitor claim, etc.) may be advised. Especially for newer sales reps, who may not yet fully understand the ethical landscape, managerial coaching and training on acceptable ethical practice is important. Managers should be on alert for employees using phrases like, “I did it because it was better for all concerned,” “I did it for myself,” “I didn’t mean it,” or “they asked for it.” is could be a signal that the employee is utilizing a neutralization technique to justify an unethical act. A logical follow up to this conceptual research would be an empirical study to test the framework. To do this, scales to measure a salesperson’s propensity to utilize each of the five neutralization techniques would be developed. A scenario based survey where typical entrepreneurial selling situations would be provided to a professional sample. Scenarios would describe situations where fictitious employees acted in an unethical manner. Subjects would be asked to rate the degree to which they viewed the behavior as ethical/unethical. To measure neutralizations, subjects would be presented with multiple statements (reflective of each neutralization techniques) and asked to rate their level of agreement/disagreement (e.g., “this salesperson’s actions were justified since it caused noone harm”, “this salesperson’s actions were justified because the customer had it coming”, etc.). e empirical data gathered via this method would allow for testing of the propositions presented in this paper.

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

aBstraCt While the notion that corporations’ obligations for environmental stewardship extend beyond adherence to specific regulations is now generally accepted, entrepreneurs, government officials, and scholars continue to struggle to find ways to establish genuine improvements in business environmental performance. However, successes do exist. We argue that endogenous change in business environmental performance—change not required by governmental regulation—derives from the ideology of institutional entrepreneurs as a mechanism for institutional change. We draw on diverse literature of institutional entrepreneurship, business environmental performance, and strategic groups to introduce the concept of an inter-industry ideological group. We discuss how such groups emerge and present a model to explain the process through which they improve firm environmental performance. We illustrate our model with examples from the case of 1% For the Planet (1% FTP) which we argue is an interindustry ideological group, founded by entrepreneur and Patagonia, Inc. founder Yvon Chouinard.

katHrYn atEn is an Assistant Professor of Management in the Graduate School of Business and Public Policy at the Naval Postgraduate School, 555 Dyer Road, Monterey, CA 93943. Telephone: 831.656.3238 Email: [email protected]. suzannE g. tillEman is an Assistant Professor of Management in the School of Business Administration at the University of Montana, 32 Campus Drive, Missoula, MT 59812. Telephone: 406.243.2915 Email: [email protected] JEnniFEr irwin is a doctoral candidate in the Lundquist College of Business at the University of Oregon, 1208 University of Oregon, Eugene, OR 97403. Telephone: 541.346.9068 Email: [email protected]

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

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We conclude by discussing how inter-industry ideological groups can influence the emergence and diffusion of new environmental norms and innovative practices through and across industries. Understanding the process of change enacted by inter-industry ideological groups provides knowledge to assist entrepreneurs and policy makers seeking to improve corporate social responsibility and environmental performance in particular. We highlight how entrepreneurs can change the institutional pressures on other firms through their own exceptional environmental performance. By becoming members in groups of firms with similar ideologies, entrepreneurs enhance their performance and the performance of other firms.

introduCtion Until recently, an axiomatic premise of the traditional North American business model was that businesses exist solely to maximize profit. In the face of increasing environmental concerns, members of the public interest, business, government, and academic communities have argued that businesses are responsible for more than generating profits and should respond to the needs of multiple stakeholders, including the communities in which the businesses operate (Freeman, 1984). From this perspective, businesses should be accountable for environmental sensitivity and the responsible use of resources, among other things. However, while the notion that businesses’ obligations for environmental stewardship extend beyond adherence to specific regulations is now generally accepted, entrepreneurs, government officials, and scholars continue to struggle to find ways to establish genuine improvements in business environmental performance. Successes do exist. A few well-known firms such as Patagonia, e Body Shop, and Ben and Jerry’s (Mirvis, 1994) have become public icons—business environmental superstars— known to the public through case studies and media profiles. However, while case studies and profiles in the popular and academic press document the specific actions taken by these individual entrepreneurs, we know much less about the roots of their environmental commitment; how they developed their environmental strategies; how their strategies have co-evolved with those of other business environmental superstars, and how, or if, their environmental strategies influenced less environmentally concerned firms. Current social and environmental dilemmas such as global warming, declining natural resource reserves, poverty in developing nations, and the worldwide drive for economic development indicate the extreme need for improved environmental business performance. Establishing genuine change that extends beyond a few unique firms will require the institutionalization of new norms, rules, and organizational practices through and across industries. Institutional change has been viewed as rare, slow, and largely driven by exogenous changes in policy (Scott, 2001). Such explanations provide limited hope for those seeking significant improvement in business environmental performance, as governments oen prove slow or reluctant to enact regulations. However, recent conceptions suggest that individuals and organizations acting as institutional entrepreneurs (Aldrich & Fiol, 1994; Powell & DiMaggio, 1991) are a mechanism for institutional change. We draw on these recent conceptions of institutional change to explore how the actions of a few exemplary entrepreneurial firms might generate improvements in environmental business performance. We argue that endogenous change in business environmental performance—change not required by governmental regulation—derives from the ideology

Aten, Tilleman and Irwin

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of institutional entrepreneurs. We draw on diverse literature to introduce the concept of an inter-industry ideological group. We discuss how such groups emerge and present a model to explain the process through which they improve firm environmental performance. We illustrate our model with examples from the case of 1% For the Planet (1% FTP) which we argue is an inter-industry ideological group, founded by entrepreneur and Patagonia, Inc. founder Yvon Chouinard. We conclude by discussing how inter-industry ideological groups can influence the emergence and diffusion of new environmental norms and innovative practices through and across industries. is paper is organized as follows. We begin by briefly reviewing the literature exploring the role of institutional entrepreneurs in influencing change and the role of firms in improving environmental performance. We then discuss ideologically driven environmental performance, introducing the concept of inter-industry ideological groups and presenting our model explaining how such groups influence firms’ environmental performance. We conclude by discussing the implications of our model, detailing the role of group member organizations, which act as institutional entrepreneurs (Aldrich & Fiol, 1994) to effect wider change and, suggesting areas for further research.

institutional EntrEprEnEurs and Firm EnvironmEntal pErFormanCE e acceptance of the notion that businesses’ obligations for environmental stewardship extend beyond adherence to specific regulations is driven by changes in underlying institutions—the social rules, norms and rituals—that govern and support North American business (Hoffman, 2001). Likewise, significant improvements in firm environmental performance require changes in institutionalized practices and criteria. However, the taken-for-granted nature of institutions suggests that they are very difficult and slow to change. e role of institutional Entrepreneurs in institutional Change e central argument of institutional theory is that institutions matter: organizations are influenced by an environment made up of taken-for-granted institutions and other organizations responding to the institutional environment and each other (Scott, 2001). e focus on the taken-for-granted aspect of institutions led to criticisms that institutional theory could explain only static, homogenous populations whereas observation illustrates that institutions change over time and are challenged and contested (Dacin, Goodstein, & Scott, 2002). e seemingly contradictory problem of how institutionalized norms and practices change has been the focus of increasing interest in entrepreneurship and organization studies. Arguing that to explain institutional change researchers must consider interested actors, DiMaggio (1988) introduced the concept of institutional entrepreneurship. A critical principle of institutional entrepreneurship is that institutional change may be attributable to the efforts of intentional actors (DiMaggio, 1988; Garud & Karnoe, 2003). ese actors may be people, groups of people, or organizations who participate in defining and advocating the new institution. e topic of institutional change has since emerged as a central focus for management researchers of organizations (Dacin et al., 2002). Subsequently, institutional entrepreneurship has been identified as mechanism of organizational and social change (Campbell, 2005; Davis & Marquis, 2005).

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Recent research has demonstrated that through their “perceptions, interpretations, and enactments of institutional logics…[actors] give meaning and life to institutions” (Dacin et al., 2002, p. 47). Acknowledging the requirements of collective action and the similarities between the creation of new institutions and social movements, researchers have called for the application of social movement theories and methods to the study of institutional change (Dowell, Swaminathan, & Wade, 2002; Swaminathan & Wade, 2001). ose promoting new institutions “Oen…overcome substantial obstacles through collective strategies that bear an uncanny resemblance to activities and strategies adopted by organizations that spearhead social movements” (Dowell et al., 2002, p. 286). Social movement scholars have noted that groups protesting around such non-class issues as the environment did not have long-standing collective interests based on an essential aspect of identity such as nationality or race, but rather had to construct a new collective identity (Polletta & Jasper, 2001). is has led to an increasing interest in the construction of collective identities and their role in these types of social movements. Identity construction in these movements involved collective agency, changed social norms, and created mobilizing networks. Similarly, institutional entrepreneurship involves collective agency as a transformation mechanism enacting change from micro to macro levels (Hedstrom & Swedberg, 1998). Scholars of identity based social movements note that these movement collectives are consciously self-reflexive (Laraña, Johnston, & Gusfield, 1994; Melucci, 1997). In these types of movements, identities are constructed as individuals intentionally coordinate their actions. is “collective agency” involves a conscious sense of the group as an agent, efforts to control and transform the social environment, and enactment in a moral space (Cerulo, 1997). Business Environmental performance Researchers of organizations and the natural environment have identified factors that influence environmental performance. ese include influences at the firm and industry levels (Etzion, 2007). is research has identified attributes associated with superior firm environmental performance, demonstrated the competitive advantages that accrue to such firms, and supported the need to understand the role of important stakeholders such as consumers and regulators. However, genuine, extensive improvements in environmental performance also require an understanding of the mechanism through which the underlying norms, rules, and innovative practices emerge and develop. Researchers have devoted considerable attention to identifying specific firm attributes that are associated with superior environmental performance. In a review of this literature, Etzion (2007) identifies the following key attributes: innovativeness, workforce perception, integration of multi-stakeholder perceptions, and knowledge and information flow. Etzion argues, “the unifying theme of these attributes is their complexity and inimitability, suggesting that improved environmental performance is made possible through possession of rare resources” (p. 640). An integrated and sincere focus on proactive environmental strategies leads to the development of inimitable, nontransferable, and sometimes valuable resources for the firm (Barney, 1991; Russo & Fouts, 1997). Drawing heavily on the resourced-based view (RBV) (Barney, 1991), this literature suggests that when firms perceive environmental issues as opportunities to improve competitiveness, their tendency to develop forward thinking


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environmental strategies is enhanced (Sharma, 2000). An integrated and sincere focus on proactive environmental strategies leads to the development of inimitable, nontransferable, and sometimes valuable resources (Barney, 1991; Russo & Fouts, 1997). Because the sincere commitment to the generation of strategies to improve environmental performance develops over a long time period, these strategies are difficult to imitate (McGee, 1998). While this literature shows that sincere attempts to improve environmental performance can increase firm competitiveness, questions important to those researching at the intersection of entrepreneurship and the natural environment and those seeking widespread acceptance of sustainable business objectives remain unanswered. While we know that the end result of a commitment to environmental performance may lead to increased competitiveness, observation indicates that this is rarely the initial motivation behind such strategies (Bansal, 2005). ere are businesses that successfully improve their environmental performance, but these entrepreneurs are not motivated to capture the green consumer or even able to demonstrate an ex ante profit potential, but because they are environmentally progressive and are seeking to change the way in which they do business (Mirvis, 1994; Prakash, 2001). Accumulated evidence shows that increased environmental performance leads to increased competitiveness but does not explain completely how improvements in environmental performance arise. A better understanding of how the innovative practices which lead to enhanced environmental performance emerge and are adopted will contribute to the body of research exploring organizations and the natural environment and provide knowledge to assist entrepreneurs and policy makers seeking to improve corporate social responsibility and environmental performance in particular. Given the far-reaching environmental impacts of certain industries, considerable attention has been devoted to research at the industry level of analysis. Not surprisingly, many have focused their attention on industries with greater environmental impact (Christmann, 2000; Hoffman, 1999; Hoffman, 2001; King & Lenox, 2000; Orsato, den Hond, & Clegg, 2002; Russo & Fouts, 1997; Sharma, 2000). Highly environmentally degrading industries, such as chemical and energy, are oen regulated. e environmental progress fostered by regulatory policies varies greatly across industries (Hunt, Auster, & Winter, 1990). Likewise despite isomorphic pressures, industry regulation results in varying degrees of environmental performance (Milstein, Hart, & York, 2002) as managers interpret requirements differently (Delmas & Toffel, 2004). us, regulation alone cannot be counted on to result in progressive environmental strategies. Similarly, truly innovative environmental performance does not result from stakeholder pressure or industry self-regulation. Managers and entrepreneurs selectively adopt beyondcompliance policies heterogeneously as a result of institutional and stakeholder pressures (Prakash, 2001). Stakeholders who seek environmental performance improvements are rarely driven by a desire for the same outcomes as businesses. ese constituencies evaluate practices and outcomes through different lenses, designated by their particular beliefs, and have competing agendas, which are oen resolved by compromise resulting in less than optimal improvement (Prasad & Elmes, 2005). Industry self-regulation has generated mixed results. Businesses oen join self-regulation groups to signal environmental concern rather than to make substantive changes (King & Lenox, 2000; Orsato et al., 2002). Such “greenwashing” is unlikely to lead to continuous improvements in environmental performance. Additionally, environmental laggards may

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use industry self-regulation groups, such as associations, to signal strategies rather than invest in them. Furthermore, the operational guidelines of self-regulatory groups are usually nonbinding (Christmann, 2004). While one much studied, notable exception, the chemical industry’s Responsible Care program, does police its members (Hoffman, 2001; King & Lenox, 2000), the overall effect of self-regulatory groups on environmental performance is at best unpredictable and varied. Additionally, industry self-regulation does not encourage the spread of innovative environmental practices beyond industry boundaries. Despite these challenges, positive change does occur. Positive change can result from both external forces and internal processes. As stated by Griffin, “ough external factors create incentives and expectations for firms, intrafirm dynamics are likely to influence how managers perceive, interpret, and translate these external pressures into actionable items.” (2000, p. 485). Prakash (2001) has examined how managerial interpretation of external pressures in conjunction with the mechanisms of power base and leadership base adoption processes lead to heterogeneous selection beyond compliance policies for corporate social responsibility within firms. Selective beyondcompliance policies are adopted because of managerial interpretation of external pressures. Rather than examining intrafirm responses to external pressures, our paper examines the mechanism of institutional entrepreneurship and how it changes external pressures to influence change within and across industries. Progressive organizations have changed the institutional pressures on other firms through their own exceptional environmental performance. Mirvis (1994) identified several businesses with superior environmental performance, including Ben & Jerry’s, the Body Shop, and Patagonia. e author conducted a case analysis to develop dimensions of environmentalism in progressive businesses. e study highlights the influences of entrepreneurs on firm environmental performance but does not explore how the innovative practices of these firms might diffuse through and across industries to generate widespread improvements. Mirvis emphasizes the value of studying how inter-organizational partnerships and networks influences change in environmental practices and attitudes (1994, p. 98). We know little of the mechanisms behind the emergence of such partnerships or how they influence the diffusion of new environmentally sensitive norms, rules and practices.

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


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In light of growing consumer concern with green products, entrepreneurs cannot help but be aware of the impact of their environmental behavior, or at least consumers' perceptions of their behavior. While for many entrepreneurs, this recognition may lead to attempts to meet the environmental demands of stakeholders, firms cannot achieve competitively important outcomes simply by interacting with stakeholder groups. Because the natural environment is a socially constructed idea, and so has no representative stakeholder able to speak authoritatively for its needs (Goldman & Schurman, 2000), stakeholder groups are not uniform in their requests, and in fact have widely varying expectations and interests. Individuals involved in environmentally focused businesses are oen motivated by ideology (Hoffman & Ventresca, 2002) and are likely to seek real performance improvements, irrespective of the demands of stakeholder groups. However, as business people in for profit organizations, they channel their ideological motivations through an economic lens. Entrepreneurs must consider their financial success when examining their environmental performance. ey cannot simply base their environmental performance on their ideals, but must also consider technical, competitive, and strategic outcomes (Howard-Grenville, 2002). us, firms must innovate to create new norms and practices that support traditional business outcomes as well as their ideologically driven goals. inter-industry ideological groups While institutional theorists have shown that mimetic pressures within organizational fields lead to isomorphism, observation shows that heterogeneity in strategy and performance exist. Seeking to account for intra-industry variation in both firm behaviors and performance, Hunt (1972) examined differential performance of firms in the American home appliance industry. Hunt proposed that the existence of strategic groups—groups of firms within an industry following the same or a similar strategy— explains the behavior and performance differences. We draw on this literature to suggest that differences in environmental performance, which distinguish environmental superstars from their within-industry competitors, arise when similarly interested firms from different industries form an inter-industry ideological group. We define inter-industry ideological groups as groups of firms from different industries united by a common ideology and desire to act on it. While we draw on concepts of the strategic group literature, we emphasize that we are conceptualizing a group of like-minded firms across industries. We argue that in the case of an inter-industry ideological group, a common ideology replaces industry membership to form the basis for a collective identity, behaviors, and strategies in a manner similar to that of industry strategic groups. Researchers have argued that strategic groups are based on managers’ categorizations of their competitors (Porac & omas, 1990; Porac, omas, Wilson, Paton, & Kanfer, 1995). Strategists from rival firms develop similar mental models of the competitive arena when they face similar technical and material problems and exchange information. Social exchange leads to a shared understanding of how to compete throughout a community of firms (Baum & Lant, 2003; Porac, omas, & Badenfuller, 1989). is shared understanding between members of the strategic group becomes an industry recipe, the group’s collective agreement on how to compete successfully within the

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industry ( James, 1997; Porac & omas, 1989). Recipes are industry level, supraindividual cognitive structures, which suggest business strategies and practices ( James, 1997) born of influential professionals united by shared beliefs. ese individuals form an “epistemic community” and their consensus is legitimized by their reputations. We argue that inter-industry ideological groups emerge and operate in a similar fashion, with ideology providing the initial attraction between group members. Because the firms are not competing directly with each other in an industry, competition takes the form of “friendly rivalry.” Firms with similar ideologies identify and categorize other like-minded firms. ose categorized as “like-us” on the focal issue become referents. Influential individuals from “rival” firms develop similar mental models of the ideological arena when they face similar technical and material problems and exchange information. As with a strategic group, social exchange leads to a shared understanding of how to achieve performance on the issue throughout a community of firms. An inter-industry ideological group of institutional entrepreneurs diffuses new norms and practices changing the institutional environment. 1% For the planet1 In order to illustrate this concept, we use examples from 1% FTP as an inter-industry ideological group and its founder, Yvon Chouinard, as an institutional entrepreneur. 1% FTP is a not-for-profit, inter-industry group founded by Yvon Chouinard. e organization seeks to improve the health of the environment and to encourage environmentally sustainable business practices. It grew from its founder’s experience in his for-profit company, Patagonia, Inc. and his desire to join with like-minded business people. Chouinard founded his first for-profit business, Chouinard Equipment, with Tom Frost in 1965. By 1970, the company was the largest U.S. supplier of climbing hardware and an environmental villain. Pitons, comprising 70% of the company’s business, did irreparable harm to climbing routes. In 1972, Chouinard made his first risky business decision in favor of environmental concerns. He stopped supplying pitons arguing instead in favor of non-damaging aluminum chocks. e decision was a success. e piton business dried up and chocks became the industry standard. In the early 1970’s when the number of clothing items, which were originally focused on climbers, grew, Chouinard founded Patagonia, Inc. to expand the clothing line. Early on, a group of Patagonia employees attending a city council meeting to help protect a local surf break heard a young biology student speak in support of protecting the Ventura River from proposed development. e company gave the student office space, a mailbox, and small donations and the development project was thwarted. In 1986, Patagonia made a commitment to donate 10% of profits, later changed to 10% of profits or 1% of sales, to grassroots environmental efforts such as the one that prevented the development that threatened the Ventura River. e company then began steps to reduce its own pollution, switching to recycled paper for the catalogs and developing a fleece made of recycled polyester. In addition, Chouinard founded two not-for-profit organizations to support environmental causes and advocate a more sustainable business model: 1% FTP—an alliance of diverse businesses “committed to leveraging their resources to create a healthier planet” (1% For the Planet, 2005)—and e Conservation Alliance—an organization of outdoor businesses that support grassroots citizen-action groups and their efforts to protect wild and natural areas. Like Patagonia, these organizations advocate a new business


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model as illustrated on the 1% FTP website: “1% FTP has been receiving a steady stream of inquiries from potential new business members …We hope this groundswell of action continues and results in a redefined way of doing business!” (1% For the Planet, 2005). rough these three organizations, Chouinard and the organizations he founded have acted as institutional entrepreneurs, actively seeking to mobilize other for-profit organizations to generate and share innovative practices to increase firms’ environmental performance. e mobilization efforts included the generation of a “sustainable business” identity supported by a common pro-environment ideology as illustrated by the following excerpts from the organizations’ web pages. Become a member of this socially and environmentally progressive group… affect real change…receive other benefits: e satisfaction of paving the way for more corporate responsibility in the business community and the recognition, support and patronage of conscientious consumers who value members' serious commitment to the environment (1% For the Planet, 2005) Membership in our own industry's conservation organization sends a strong message to consumers, competing interest groups and government decision makers about our industry's commitment to the jobs, and spiritual and recreational values contained within our nation's open spaces. Ultimately, the Alliance believes that more than any other group, this industry should be giving back to the landscapes on which its customers recreate, and the Conservation Alliance is the ultimate venue by which to do so. (e Conservation Alliance, 2005) a model of inter-industry ideological group development We propose that a mechanism for continuous improvement of firm environmental performance occurs when a deviation-amplifying process (Maruyama, 1963) unfolds across the network of similarly interested firms we have defined as an ideological interindustry group. Such cycles involve mutual casual relationships that amplify an insignificant or accidental initial deviation. is initial deviation builds, such that outcomes may diverge significantly from the initial condition. ese types of processes are ubiquitous: they are so-called viscous cycles when the results they generate are perceived as negative. Positive results from such processes include capital accumulation in industry, the evolution of living organisms, and rise of cultures (Maruyama, 1963). As explained by Maruyama (1963), the outcomes of such processes do not transpire as a result of either the initial conditions or deviation alone. Rather, they accumulate as a result of the interaction and feedback between the two. A deviation-amplifying process amplifies an initial deviation in a cycle whereby the influence exerted by one element of the process loops back to itself through other elements. us, an increase in one element of the process (A) leads to increases in another element (B), which in turn leads to an increase in the initial element (A). Importantly, the effects can accrue in the opposite direction as well. A decrease in an element (A) will lead to a decrease in element (B), which will in turn lead to a decrease in element (B). As depicted in Figure 1, we conceptualize this process as composed of elements – communication, benchmarking, innovation, and environmental performance – driven by a

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common ideology. e black arrows in the model depict the direction of influence and the +’s indicate that a change occurs in the same direction, but not necessarily positively. us, a + indicates that an increase in one element leads to an increase in the other and a decrease in the element would lead to a decrease in the other. So for example, as we will explain in detail below, an increase in communication generates an increase in benchmarking which generates an increase in innovation, which in turn generates an increase in performance, leading back to an increase in communication. Ideology forms a supporting context indicated by the background oval. Additionally, the ideology both supports and is strengthened by the other elements as indicated by the dashed grey arrows.

FigurE 1. idEologiCallY drivEn improvEd EnvironmEntal pErFormanCE

Ideology

+ Communication

+ Benchmarking

+ Innovation

Enviromental Performance

+

e loop formed by the arrows indicates the presence of mutual causal relationships. A mutual causal relationship exists when a change in the size of any of the elements influences the size of the others (Maruyuma, 1963). us, changes in each element are both cause and outcome. So, for example, an increase in firm environmental performance—our outcome of key interest—results from increases in the other elements and eventually causes further increases in firm environmental performance. Additionally, as depicted by the background gray circle, we argue that ideology forms a context and shared identity, which facilitates the creation of inter-industry ideological groups. e inter-industry ideological groups fuel institutional entrepreneurship changing institutional pressures on other firms. Ideology. Ideology forms a context facilitating an initial attraction between individuals and initiating development of inter-industry ideological groups. It provides a foundation for the development of a collective identity, “cognitive, moral and emotional connections with a broader community, category, practice or institution” (Polletta & Jasper, 2001, p. 284). Social recognition of a collective identity can change dominant normative expectations. Scholars of social movements have observed that in some movements participants seek recognition for new identities rather than political or economic


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concessions (Melucci, 1997). An identity is not imposed on these groups by political or legal systems, rather these groups, such as feminists and environmentalists, construct new identities. ey seek to change normative and cultural codes by gaining recognition for the new identity (Polletta & Jasper, 2001). By recognizing the existence of “environmentalists,” society acknowledges an ideology made up of a set of values and perceived problems and solutions. Whether or not one agrees with the values advocated by the newly identified collective, widespread recognition creates expected norms for that group. Specific behaviors and values are expected of environmentalists. Intra-industry ideological groups promote a set of expectations and values congruent with their ideology. For example, according to Chouinard, sustainable businesses are those that seek to reduce their impact on the environment, support environmental causes and civil democracy, and attempt to influence other companies (Chouinard, 2005). Membership in 1% FTP, Chouinard states, "…allows customers to distinguish between serious environmental commitment and empty rhetoric” (1% For the Planet, 2005). Ideology is also an element of our model. An increase in any one of the other elements will support a strengthening of ideology. For example, while Patagonia founder Yvon Chouinard had a long interest in environmental causes, the firm did not originally project a strong environmental ideology. e firm’s decision to provide office space, a mailbox, and small donation in support of an environmental cause was amplified when that initial innovation was successful, generating increased communication and visibility and encouraging similar actions. With each success, the pro-environment ideology was reinforced encouraging additional action. Communication. Innovators in an emerging network face a unique problem of seeking to form collective support for innovations and activities for which there may be no widely understood language (Hill & Levenhagen, 1995). Communication must occur about the new something, which does not yet exist. A shared ideology facilitates the creation of common terminology and mental models across the network. Once businesses have started interacting through their common interest in an ideology, and develop a common lens with which they approach this issue, greater communication develops over this network of interested businesses. It has been shown repeatedly that the internal flow of information improves firm environmental performance (Lenox & King, 2004; Sharma, Pablo, & Vredenburg, 1999). e same improvement is true for flow of information: as information flow improves, for example, as firms seek out and receive expert information from suppliers, environmental performance improves (Geffen & Rothenberg, 2000). Many studies have shown that networks assist organizational learning by establishing conduits for passing tacit knowledge, learning, and innovation (Hamel, 1991; Kogut, 1998; Powell & Brantley, 1992). In addition, valuable information is more likely to be effectively transferred if the source of the information is known to the recipient (Levitt & March, 1988). e development of inter-industry ideological groups will thus enhance communication and the transfer of valuable information applicable to the organizing ideology. Benchmarking. e common terminology supports the development of an information architecture, which supports benchmarking against one another’s environmental performance. Increased performance in environmental sustainability, like any other area of performance, is enhanced by interaction with other organizations pursuing similar goals, in

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this case, other progressively environmental businesses. Referent groups are used by organizations for benchmarking. (Ketchen, Snow, & Hoover, 2004) and it has been shown that imitation follows network ties (Ahuja, 2000). Referent groups within industries, as discussed in the strategic groups literature, provide no incentive in pushing firms to overcome the institutional pressures within their industry. However, inter-industry ideological groups are not harnessed to a single industry's institutional norms, instead creating referent groups between and beyond industry institutions. is allows firms to benchmark across industries, outside of the conformityinducing norms, and therefore to exceed industry standards in the area the ideological group addresses. Ideologically motivated organizations are thus able to benchmark against the best businesses in a given area, such as environmental sustainability, rather than the best in their industry. is inter-industry diffusion of practices results in greater environmental performance improvements. Inter-industry benchmarking allows firms to escape the mimetic pressures of their industries, generating innovative practices and implementing innovations developed in other industries leading to enhanced environmental performance. Exceptional environmental performance positions these firms as environmental leaders in their home industry, further reinforcing their commitment to a pro-environment ideology, and creating an impetus to make further improvements. Innovation. Because of their commitment to the ideology of environmental sustainability, inter-industry ideological group members will work to improve not only their individual environmental performance, but also that of all members of the group. Because the inter-industry ideological groups include members who are not in direct competition, they are particularly likely to share knowledge across organizational boundaries (Bouty, 2000). Competing for recognition and glory rather than resources, fosters improvements without limiting collaboration and information sharing. Many studies of biotechnology highlight innovation that occurs within the networks of organizations (i.e. Powell, Koput, & Smith-Doerr, 1996). Knowledge sharing is possible because the network connections are developed and enhanced through shared ideology, communication, and mutual success, allowing the group to share critical resources, such as competencies (Dyer & Singh, 1998). Increased innovation leads to improved environmental performance (Christmann, 2000; Sroufe, Curkovic, Montabon, & Melnyk, 2000). Improved Environmental Performance. When firms within the group achieve improved environmental performance, they are encouraged to communicate their successes and methods by their shared ideology and friendly competition. As discussed previously, the shared ideology supports an interest in improving the performance of all group members toward the end goal, in the case of this discussion, widespread business sustainability, and environmental protection. Friendly competition, the inter-industry ideological group corollary to strategic group rivalry, also encourages the communication of environmental performance improvements and methods among group members. is completes the cycle of deviation amplification through mutual causal relationships. An increase in any one of the elements leads to amplification of environmental performance and a continuation of the cycle and a re-dedication to the ideology of environmental sustainability.


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ConClusion We have argued that current literature does not explain the process through which a few widely known environmental superstars achieved performance successes. To address this gap, we have introduced the concept of an inter-industry ideological group and presented a model illustrating the mechanism for increasing firm environmental performance in a deviation amplifying cycle within such a group. We argue that endogenous change in business environmental performance—change not required by governmental regulation or existing industry norms—derives from the ideology of institutional entrepreneurs. We speculate that the improvements made by members of the inter-industry ideological group also influence the expectations and performance of their home industries suggesting how change might then diffuse within industries. Because they innovate outside the institutional limitation of their industry, group members become industry leaders in environmental performance. If successful, these higher standards can become new industry norms, leading other firms within the industry to conform, and spreading higher standards for environmental performance. We have illustrated our discussion with an example of one inter-industry ideological group. 1% For the Planet highlights the importance of ideology as an attractive force for the creation of an inter-industry ideological group. is is the beginning of our research to understand inter-industry influences on corporate social responsibility by firms. We intend in future studies to identify additional inter-industry ideological groups in order to test our model. Finding tractable data is challenging, but potential sources of empirical data could be comparative case studies or business communications. is paper contributes to the understanding of how industries can endogenously change and how practices can be adopted across industries. rough our model, we have shown that endogenous change occurs within industries because of outside networking and benchmarking driven by ideology. In the area of organizational theory, this model influences our understanding of institutional change and institutional entrepreneurship. In the area of entrepreneurship this model explains how individuals can shi the industrial landscape, dramatically affecting firm performance. Ultimately, the proposed model seeks to explain how the actions of a few exemplary entrepreneurs can generate endogenous improvements across multiple industries. note: 1. Patagonia Inc.’s history is excerpted om the organization’s web page.

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The Role of Creativity in Sales: Current Research and Future Directions Ellen Bolman Pullins, David Strutton and Iryna Pentina

aBstraCt e role that creativity may play in facilitating selling success or customer retention has received little attention in the sales or sales management literatures. Yet, given recent changes in the nature of the selling role, creativity itself may be increasingly important. e act of creation is – or, as reasoned below, absolutely should be – part of the professional salesperson’s job and selling arsenal. Based on the current sales and organizational creativity literatures, a classification of timing versus type of creativity is developed and used to derive eight research propositions. Each proposition is related to possible consequences associated with greater sales creativity.

EllEn Bolman pullins is Director of the Schimdt School of Professional Sales, Schmidt Research Professor of Sales & Sales Management and Professor of Marketing at the University of Toledo, 2801 West Bancro Street, MS 103, Toledo, Ohio 43606. Email: [email protected] david strutton is a Professor of Marketing and Director, New Product Development Scholars Program at the University of North Texas, P.O. Box 311396, Denton, TX 76203-1396. Email : [email protected] irYna pEntina is an Assistant Professor of Marketing at the University of Toledo 2801 West Bancro Street, MS 103, Toledo, Ohio 43606. Email: [email protected]

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e academic sales and sales management literatures are replete with models explaining what makes salespeople perform more effectively (e.g. Zoltners, Sinha and Lorimer 2008). Earlier studies focused on personality characteristics and appearance (Lamont and Lundstrom 1977), adaptive selling capabilities (Weitz, Sujan and Sujan 1986), and flexibility (Castleberry and Shepherd 1993). More recently, relationship development skills (Marshall, Goebel and Moncrief 2003) and the ability to function within a sales team (Deeter-Schmelz and Ramsey 1995) have been identified as key success factors. However, the role of a salesperson’s or a sales team’s creativity has been largely ignored (Wang and Netemeyer 2004). is is especially troubling since today’s world of selling has been radically reshaped by increased global competition, cutting-edge sales technologies, rapid empowerment of buyers, and fragmentation of markets (Moncrief and Marshall 2005). Such new approaches as relationship selling, value-added and consultative selling are critical to sales function-based competitive advantage in an increasingly commoditized business world, and require sufficient strategic planning that can benefit greatly if sales agents and teams exhibit more creative approaches at each step of the selling process (Piercy and Lane 2005). Taking this even one step further, business publications are beginning to recognize that collaborative salespeople have the real advantage: solving problems, creating solutions and co-creating with their customers (Ehmann, 2010). e role of creativity in enhancing business processes and functional outcomes has long been recognized. By 1943, Joseph Schumpeter was already writing that capitalism evolves primarily through “creative destruction” that produces, through mutations from within, innovative technologies and organizations. Organizational creativity has since been linked to outcomes such as organizational learning (Levinthal and March 1993), strategic differentiation and sustainable competitive advantage (Porter 1996), as well as improved new product performance (Im and Workman 2004), with these relationships becoming stronger in turbulent environments characterized by high uncertainty and competiveness (Ford, Sharman and Dean 2008). e evolution of sales from a marginal activity to a strategic value-creating function responsible for integrating internal departments and customer-facing channels for increased organizational productivity (Geiger and Guenzi 2009) and competitive differentiation (Piercy and Lane 2005) logically evokes the need for creativity research in the sales context. Although practitioner-oriented sales literature emphasizes the need for creative, problem-solving sales practices as markets evolve and technology advances (Wang and Netemeyer 2004), very little conceptual, empirical, or theoretical sales literature investigates the role of sales force creativity. To address this gap, the current paper attempts to explore the extant general creativity research in order to derive a series of testable research propositions that would aid us in better understanding creativity’s role in selling success today, and could provide new insights for the practicing managers and salespersons regarding the role of creativity in developing customer solutions and satisfaction, and in securing customer delight and profitable relationships (Zoltner, Sinha and Lonmer 2008). e remainder of this paper begins with an overview of the state of creativity research as it may relate to professional selling today. Following this, a framework is developed leading to testable research propositions that stem from the research gaps in current sales literature and may help marketing scholars develop theory in the area of sales creativity.

Pullins, Strutton and Pentina

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Creativity literature as it relates to sales and sales management Traditional creativity literature originated in the area of psychology and can be traced back to Galton’s (1869) work on hereditary genius profiling and Royce’s (1898) discussion of inventions. Later, Guilford’s (1950) calls for creativity research emphasized definitions of the concept and its antecedents. ese aspects were consequently addressed by five major research streams in management and business academic literatures. Creativity conceptualized as a collection of personality traits and behavioral elements focused on intuition, internal motivation, tolerance of ambiguity and risk, as well as innovative (as opposed to adaptive) problem-solving behaviors (e.g. Barron 1969; Kirton 1989). e view on creativity as cognitive processing centered on “outside the box”, divergent thinking and “lateral” associations (e.g., de Bono 1991). Researchers also considered both motivation (e.g., Ford et al. 2008), and the role of knowledge and expertise (e.g., Stern 1989) in fostering creativity. Finally, research focusing on organizational drivers of creativity considered social climate (e.g., Csikszentmihalyi 1988), and organizational culture and work environment (e.g., Amabile 1988; Mumford and Gustafson 1988) as factors promoting individual and team creativity (See Table 1 for examples of some of the major research findings in each stream). More recent work in the area of organizational creativity emphasizes its effects on social and organizational outcomes, including strategic and tactical competitive advantages (Ford et al. 2008), new product success (Bharadwaj and Menon 2000; Im and Workman 2004), and marketing communications effectiveness (Zinkhan and Watson 1996). Current creativity research also addresses cognitive processes underlying creativity at multiple (individual, group, and firm) organizational levels (e.g. Amabile 1996; Drazin, Glynn and Kazanjian 1999; Hargadon and Bechky 2006), as well as a manager’s role in promoting team creativity (Kurtzberg and Amabile 2001). Other studies attempt to capture creativity dimensions and to arrive at its more comprehensive definition. For example, DiLiello and Houghton (2008) propose to combine the opposing views on creativity as an intention and an outcome into a two-dimensional construct, with potential and practiced creativity representing different aspects of organizational resources that could boost innovation and productivity. Little work in the academic sales arena has specifically explored creativity among professional salespeople. Moncrief (1986) concluded preliminary evidence existed suggesting that creativity affects performance. Weilbaker (1990) explored the cognitive and perceptional selling abilities for missionary salespeople. Creativity was one of nine abilities identified as important by salespeople, sales managers, and their customers. He was particularly concerned with creativity as it relates to how they identify customer needs and innovate the ways they approach customers. In 1997, Atuahene-Gima noted that salespeople selling new products require the same high level of creativity as the product launch in the market place. He found that salespeople with an intuitive problem-solving style are more likely to adopt the new product and better support the selling effort associated with it (Atuahene-Gima 1997). Perhaps the most focused creativity research in sales has been conducted by Wang and Netemeyer (2004). ey proposed that creativity is essential to such tasks as finding new prospects, identifying the real needs of a customer,

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taBlE 1. ExamplEs oF somE maJor rEsEarCH Findings in various strEams pErsonalitY-BasEd CrEativitY rEsEarCH Amabile (1988); Barron and Harrington (1981); Galton (1869); Simonton (1975; 1986); Singh (1986); Woodman and Schoenfeldt (1989)

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

Findings  Specific sets of biographical variables are associated with creative achievement  Personality data interact with biographical data to predict creativity  Antecedent conditions influence personal and cognitive characteristics of individuals  Broad interests, attraction to complexity, high energy, independence of judgment, autonomy, intuition, selfconfidence of the individual affect creativity  Persistence, intellectual honesty, internal locus of control are important for creativity

Findings  Associative fluency, fluency of expression, figural fluency, ideation fluency, speech fluency, word fluency, originality are related to creativity  Associative thinking (leaps as opposed to following structured paths) helps finding innovative problem solutions  Ability to generate alternative solutions is a fundamental process underlying creative productivity  Flexibility and elaboration are essential to divergent production  Divergent thinking must combine with convergent thinking for a creative person  Training organizational members in creative thinking causes improved divergent thinking  Systematically employing brainstorming facilitates the creativity of new product proposals  Contextual ambiguity freed people to explore alternative causal relationships  Forces of causal reasoning that restrict attention may results either from individual or the social context that rigidly defines acceptable strategies, provides negative sanctions for failure, or guards against considering alternative explanations


motivational CrEativitY rEsEarCH Amabile (1979; 1988; 1990); Barron and Harrington (1981); Ford et al. (2008); Kanfer and Ackerman (1989); Kurtzberg and Amabile (2001); Mumford and Gustafson (1988); Oldham and Cumming (1996); Woodman et al. (1993)

rolE oF knowlEdgE and ExpErtisE Amabile (1988); Stein (1989)

organizationallEvEl CrEativitY outComEs Bharadwaj and Menon (2000); Im and Workman (2004)

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Findings

 Intrinsic motivation is a key element in creativity  Environmental settings that provide opportunities and absence of constraints foster creativity  Environmental settings that provide rewards foster creativity  Goals influence motivation through self-regulatory mechanisms  Creative performance may be undermined by expectation of evaluation  Culture, resources, technology, strategy, and rewards affect organizational creativity  Individuals whose dispositions make them more likely to be affected by a favorable work environment are more creative.  e creativity of all individuals is raised by a supportive environment.  Interpersonal interactions in teams, group diversity and group conflict can lead to positive (synergy) as well as negative (groupthink) effects  Creative strategic choices arise in response to managers’ perceptions of uncertainty and competition; creativity may improve the ultimate effectiveness of strategic choices by 5-10% Findings  Both domain-relevant skills (knowledge, technical skills and talent)and creativity-relevant skills (cognitive skills and personality traits) are important for creativity  ough previous experience can prevent from producing creative solutions, no creative behavior can be knowledgefree  Invention can be conceptualized as a new combination of previous experiences Findings

 The presence of both individual and organizational creativity mechanisms led to the highest level of innovation performance.  Meaningfulness dimension rather than the novelty dimension of creativity is of greater importance.

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and seeking tailored solutions to customer problems. eir findings supported the notion that customer sales depend on understanding problems and tailoring solutions. When salespeople integrate greater creativity into their sales activities, they may be more likely to provide prospects or customers with innovative, useful and thus more desirable solutions through which their problems can be solved and situations improved (Wang and Netemeyer 2004). Clearly, a problem-solving approach to selling has been accepted for sometime (e.g., Weitz 1998). Eliashberg, Lilien and Kim (1995) noted that since problem-solving increases the likelihood of sales encounters and long-term relationships, most studies have emphasized the value of using a problem-solving sales approach. As the psychological literature has demonstrated, successful problem-solving is strongly correlated with creative problem-solving (Amabile 1998). Now, couple the fact that little is known about creativity in traditional selling situations with the expanded role of selling today (Piercy and Lane 2005). More strategic thinking requires intensive problem-solving (Beatty 1998), and with more problem-solving comes more need for creativity. Today’s salesperson oen must coordinate many needs across multiple functions in both the buying and selling organization. She or he needs to be able to balance two separate sets of objectives and develop win-win alternative solutions so that both parties are satisfied. is salesperson then becomes an integrator of the two firms, not boundary spanning in the traditional sense (Piercy and Lane 2005), but serving as a conduit for a seamless system of problem-solving. e ability to identify information or problems and generate alternative solutions becomes very important, escalating the need for creativity. One other clearly relevant generalized change is arising within the sales profession. Market sensing requires that successful salespeople be capable of looking beyond their typical role and day to day operations, and understand what is happening in the external environment that is important to the selling firm, much like creative thinkers must si and sort multiple levels of information to “sense” out what is relevant to the problem at hand (De Bono 1993); to identify information and problems. Also, in the midst of integrating multiple functions, salespeople should be able to both sense relevant information, and develop multiple alternatives that meet a variety of differing criteria if they are to be successful. is requires high levels of creativity. Being creative entails “sensing” information and responsively generating multiple alternatives. Creativity also involves the ability to combine these sensing and generational activities successfully. Given the variety of activities that salespeople may engage in and the changing nature of the role, an initial distinction related to the timing of creativity needs to be made. A distinction is made between ‘real-time’ and ‘multi-stage’ creativity (Drazin, Glynn and Kazanjian 1999; Ford 1996). Real-time creativity eventuates - largely spontaneously - during the brief time frame in which salespeople operate in the actual presence of customers. By contrast, multi-stage creativity unfolds more deliberately. ere, sufficient time exists for more judicious generation, evaluation and selection of creative ideas and approaches through which any resulting solutions are presented to customers more creatively, consistent with the building and maintenance of customer relationships over time.

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A second distinction may also be relevant within the sales arena. Creative thinking can be classified into two distinct categories (Woodman et al. 1993). e first, divergent thinking, encompasses the intellectual predilection and applicable abilities of salespeople to create (i.e., originate) numerous inventive, fully-elaborated and diverse ideas. e second, convergent thinking encompasses the intellectual discipline and applicable abilities of salespeople to rationally evaluate, critique and identify those best ideas from any batch created during the divergent creative stage (Woodman et al. 1993). Divergent thinking appears essential to ensuring the novelty and appeal of creative sales solutions, as well as problem-solving. Yet as a necessarily complementary factor, convergent thinking may be every bit as essential as a means to ensure the appropriateness and practical suitability of any ideas selected for pursuit. Few sales professionals are likely to innately possess the intellectual, functional or temporal prerequisites necessary to engage naturally and optimally in divergent and convergent creativity. Yet arguably, most sales professionals could acquire the requisite creativity-inducing predilections and skill sets, if their leadership purposively managed or taught their subordinates in accordance with those facilitating factors (Epstein, Schmidt and Warfel 2008). When we consider that salespeople need both divergent and convergent thinking processes and that creativity needs to occur in both real time and multi-stage timing, we can consider how these two classifications interact. Combing the two concepts would give us two boxes (see Figure 1). Each of these combinations would result in unique positive outcomes in the selling relationship, which we explore below and present as research propositions.

Figure 1. outcomes of Creativity Classification

Creativity timing

Creativity type

real time

multi-stage

Convergent More selling time Greater differentiation

Increased customer satisfaction Increased account penetration

divergent Increased adaptability Better Solutions (improved benefit to customer) Longer relationships Stronger (more resistant) relationships

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Creativity, ideas and sales success: research propositions Based on the classification in figure 1, eight propositions were developed. Ultimately, each proposition might be examined empirically in follow-up research. Hopefully, these propositions can help establish a research agenda to direct future research in this area. ese propositions are structured such that, collectively, they should ensure that research conducted on creativity focuses on topics that should most benefit sales managers as they try to accommodate the changes facing today’s sales professionals. Salespeople should be motivated to create myriad opportunities - for customers, themselves and the firm they represent. Success in selling today requires the creation of new modes of thinking about customers, and their problems and core issues. e most successful salespeople may tend to create (or innovatively unearth) customer wants or needs where none previously existed (or was known to exist). More successful salespeople may tend to create new solutions or original variations on existing solutions, through convergent thinking. Oen, successful ones may create new messages or productive variations on existing messages, and deliver either through newly created approaches (Moncrief and Marshall 2005). Compared with less creative counterparts, creative professionals may confront evolving environmental challenges more readily and responsibly (Strutton 2008). Best case, creative salespeople should more willingly originate and take ownership of new – and potentially useful - sales ideas that yield solutions superior to the status quo. Even worst case, creative salespeople appear less likely to hold fast to debilitating tenets such as, ‘that’s not how we sell around here’, even when things are not going well. ey must be able to think creatively under the pressure of the face-to-face (real time) sales interaction. Salespeople are also supposed to create value, satisfaction and success for their customers and firms. Given that salespeople routinely encounter challenging yet only loosely structured tasks, many creative ways to satisfy customers exist (Wang and Netemeyer, 2004). In fact, most have yet to be created. Successful salespeople may tend to derive the most effective means of satisfying customers’ problems (De Bono, 1993), through real time, divergent thinking. So what should salespeople be creating? One practically significant answer is ideas (Amabile 1988). Wang and Netemeyer (2004, p. 806), in fact, describe salesperson creativity as “the amount of new ideas generated … by the salesperson in performing job activities”. Ideas are neither new products nor new solutions. Yet when properly nurtured and evolved, ideas might culminate in either, or both, desirable outcomes. e pursuit and execution of new ideas may facilitate selling success. e best ideas, those most capable of creating genuine differentiation-engendering value, naturally are rare. Original and useful ideas don’t exist - and thus cannot be emulated - until someone creates them. Any original sales idea’s value is always determined primarily by favorable or unfavorable perceptions that develop inside buyers’ minds. Logically, then, such ideationally-based sorts of perceived value cannot be possibly matched by competitors until aer initial sales efforts have been executed and relationships entered, strengthened or at least sustained as a future possibility (or prospect). When salespeople differentiate themselves or their offerings based on the practical (i.e., useful) value of new ideas they have created, the prospects of competitive bidding or effective competitor responses should be lessened.


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Proposition One: Salespeople who demonstrate more creative alternatives in real time settings will obtain higher levels of differentiation of their solution. Another singular advantage may accrue to salespeople who learn how to distinguish themselves based on their ideational creativity (Rasmusson 1999). In a man-bites-dog inversion of what one might expect, this advantage could emerge, oen to a salesperson’s eventual benefit, because customers can and oen will reject genuinely creative ideas rather easily! e rationale is this: when less creative individuals - call them ‘traditionalists’ - make presentations to customers they typically deliver many reasons why their product should be purchased. A case is presented, usually grounded in evidence supporting their product solutions’ superiority to competing solutions. e presumed buyer offers opposing arguments, which traditional salespeople attempt to counter. Unfortunately, in such sessions, buyers function as both judge and jury, and their word – especially, their no – is final. Case closed. And unfortunately, the best reasons to buy have already been presented. Sales opportunity, as well as an opportunity to call again, both lost – perhaps for a long time. Deriving a new case, a new rationale, for re-entering this particular judge’s ‘courtroom’ may prove more difficult for more traditional sales thinkers. But when more creative salespeople are selling based on the originality and potential usefulness of their ideas, even when those ideas are rejected, in theory there is always another reason and reasonable opportunity to see the customer again. at’s because creatively-oriented salespeople can derive new ideas more easily. And creativity-inured salespeople would understand those new ideas always need to be convertible into new and potentially useful solutions. As compared to less creative counterparts, then, creative salespeople may derive more attractive customer solutions that yield additional reasons and rationales to present to customers. us, even if their initial ideas are rejected, creative salespeople may be more likely to earn additional opportunities to meet and sell to customers again. Proposition Two: Salespeople who demonstrate more creative alternatives in real time settings will obtain more selling time with customers. Arguably, during customer presentations, creative salespeople should focus customer attention on the desirability of their original idea - rather than on reasons for buying the product. If properly derived and vetted, each creative idea should be perceived, rightfully and logically, as being unique to the targeted customer. Naturally, customers then should be more likely to talk about how the idea applies (or not) to their specific needs or problems. As prospects discuss their concerns, core issues and, ultimately core objectives, more creatively predisposed salespeople ought to productively reshape their original creative ideas (via convergent thinking) to address them, sometimes in real-time creative processes. ey should be more capable of achieving this outcome. Proposition ree: Salespeople that exhibit higher levels of creativity evaluation should be more adaptable in their selling presentations.

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In addition to being more adaptable, using convergent thinking (creative evaluation) in a real time setting should also result in better overall solutions with the customer. A major part of the selling process today is joint problem solving. Being able to work together to match solutions to real customer needs should improve the quality of the solution and provide additional customer benefits from decisions made. We should actually see better buying decisions on the customer’s part because of being engaged in this real time convergent process. Proposition Four: Salespeople that exhibit higher levels of creativity evaluation in the actual customer interaction, should help the customer obtain better solutions (more benefits). Novel, useful and viable economic solutions - an innovative genre derivable only from genuinely creative ideas - cannot be commoditized, at least in the short run. When relationships are created or strengthened based on ideation-based differentiation, it appears less likely that prices would need to be cut to sustain or grow customer share. So when divergent thinking is applied over time in a customer relationship, the prospect of retaining or expanding customer share is improved (Palmatier, Scheer and Jan-Benedict 2007). e ability of salespeople to cra distinguishing value by anticipating, identifying and understanding customers’ problems, opportunities or threats more creatively and more strategically through multi-stage processes, and then, based on their own original thinking, engendering and properly selecting unique solutions that address those issues may keep competitors a step behind. Customers will be more satisfied with the salesperson as consultant, and ultimately do more business with the salesperson. Proposition Five: Improved divergent thinking by salespeople over the course of the relationship with the customer will result in increased levels of customer satisfaction. Proposition Six: Improved divergent thinking by salespeople over the course of the relationship with the customer will result in increased levels of account penetration. Whatever their origins, ideas are potentially transformable into creative and highly desirable solutions for current or future customer problems. is is accomplished through strong convergent thinking capabilities. Oen, those customer problems were themselves discovered creatively, originating as sales ideas. e prospects for more easily sustainable, and thus longer-term, relationships with existing customers or prospects thus should expand. Proposition Seven: Over time, effective use of creative evaluation by salespeople increases the salesperson’s effectiveness at developing long term relationships with customers. Proposition Eight: Over time, effective use of creative evaluation by salespeople increases the salesperson’s effectiveness at developing stronger (more resistant, sustainable) relationships.


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

ConClusions In this paper, several propositions related to the consequences of sales creativity were developed. ese propositions can be examined empirically in various future practitioner and theoretical contexts.

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invitation to review manuscripts e review process is a critical step in publishing a quality journal. e Editor and Associate Editor of the Journal of Ethics and Entrepreneurship invite you to participate in the ongoing activities necessary to make JEE a reputable scholarly outlet. If you would like us to send you manuscripts to review, please complete the form below or email the information to: [email protected] Name ____________________________________________________________ Title _____________________________________________________________ School _____________________________________________________________ Address _____________________________________________________________ City, State & Zip ________________________________________________________ Office Phone Number ____________________________________________________ Email Address __________________________________________________________ List the areas of entrepreneurship and/or ethics for which would be interested in reviewing manuscripts. ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

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plEasE rEturn tHE Form to: Donald W. Caudill, Editor JOURNAL OF ETHICS AND ENTREPRENEURSHIP GARDNER-WEBB UNIVERSITY GODBOLD SCHOOL OF BUSINESS P. O. BOx 7208 BOILING SPRINGS, NC 28017

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subscription Form e Journal of Ethics and Entrepreneurship is $25.00 per issue. To receive the next issue, please complete the following information and send a check or money order in U.S. funds made out to Gardner-Webb University/JEE.

Name ____________________________________________________________ Title _____________________________________________________________ School _____________________________________________________________ Address _____________________________________________________________ City, State & Zip ________________________________________________________ Office Phone Number ____________________________________________________ Email Address __________________________________________________________

Please return the form with your check or money order to: Donald W. Caudill, Editor JOURNAL OF ETHICS AND ENTREPRENEURSHIP GARDNER-WEBB UNIVERSITY GODBOLD SCHOOL OF BUSINESS P. O. BOx 7208 BOILING SPRINGS, NC 28017 [email protected]

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a Brief History of gardner-webb university On December 2, 1905 the Boiling Springs High School was chartered as a result of an initiative sponsored by the Kings Mountain Baptist Association (Cleveland County) and the Sandy Run Baptist Association (Rutherford County). ree years later, the first campus structure, the Huggins-Curtis building, was completed. In 1928 in response to the changing educational needs of the area, the institution was transformed into the Boiling Springs Junior College. e Great Depression created many obstacles for the College, but its survival was secured by the sacrifices of many loyal supporters. One such instance occurred in 1932 when the school contracted with teachers to run the College on the condition that the teachers pay all expenses for food, books, supplies, heat, water, and lights and then accept for their own pay what was le from fees and gis. ere were at least two occasions in the 1930’s when trustees made motions to close the school. e proposals failed (once by a single vote) and the college survived. Shortly thereaer, North Carolina Governor, O. Max Gardner, began devoting his energy, time, and wealth to strengthening and guiding the college. On June 15, 1942 the trustees voted to change the name to Gardner-Webb Junior College in honor of Gardner and his wife Fay Webb-Gardner. During the following year, the institution embarked on a $300,000 financial campaign. At the conclusion of this initiative, the trustees announced that the school was debtfree. Enrollment stood at 1300 when Gardner-Webb was granted senior college status in 1969. In 1971, the first graduates of Gardner-Webb Senior College received their Bachelor degrees. During this same year, the Christian Service Organization was established to provide scholarships to students preparing for ministry. e institution became a pioneer in distance learning in 1978 with the establishment of the GOAL (Greater Opportunity for Adult Learners) Program. In 1980, the first Master Degree program was offered - a Master of Arts in Education with concentrations in early childhood, middle school, and physical education. In 1991, Gardner-Webb was recognized by the John Templeton Foundation as a character building school. e School of Divinity was established in 1992, with the initial group of students enrolling in Spring 1993. Two other significant events occurred during 1993 - the school changed its name to Gardner-Webb University and the Master of Business Administration program began in earnest. e University began offering its first doctoral program in 2001 - the first graduates with the Doctor of Ministry degrees received their diplomas at the May 2004 commencement ceremonies. A second doctoral degree program, the Ed.D. in Educational Leadership, was added in 2004. e Doctor of Nursing Practice was first offered in 2010.

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statement of values CHristian HEritagE Acknowledging One God – Creator and Sustainer of life, and Jesus Christ as Savior and Lord; committing to self-giving service displayed in Christ-like moral action that respects the dignity and value of every person. Baptist HEritagE Affirming historic Baptist values such as the freedom of individual conscience and the right of people to worship God as they choose, the authority of Scripture in matters of faith and practice, the priesthood of every believer, the autonomy of the local church, and the separation of church and state. aCadEmiC ExCEllEnCE Encouraging visible enthusiasm for knowledge, intellectual challenge, continuous learning, and scholarly endeavors; inviting pursuit of educational opportunities within and beyond the classroom for the joy of discovery; and inspiring accomplishment within one’s field of study. liBEral arts Offering broad-based exposure to the arts, humanities and sciences and to each field’s unique challenges, contributions, and life lessons; complementing the acquisition of career- related knowledge and skills with well-rounded knowledge of self, others, and society. tEamwork Working collaboratively to support and promote shared goals, assuming responsibility willingly, meeting commitments dependably, handling disagreement constructively, and persevering despite distraction and adversity. studEnt-CEntErEd FoCus Providing students an environment that fosters intellectual and spiritual growth; encourages physical fitness, service, social and cultural enrichment; strengthens and develops moral character; and respects the value and individuality of every student. CommunitY EngagEmEnt Assisting campus, local, national, and global communities through education, outreach, and research; fostering dialogue and action in support of human welfare and environmental stewardship. divErsitY Studying and celebrating our world’s rich mix of cultures, ideologies, and ethnicities; respecting and welcoming students without regard to ethnicity, gender, religious commitment, national origin, or disability.

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gardner-webb university at a glance GWU, a private Christian University, is located 50 miles west of Charlotte in the Piedmont area of Western North Carolina. Main campus of 200 acres is located in Boiling Springs, NC. EnrollmEnt: Over 4,000 students including the day program, graduate studies, and the GOAL program (Greater Opportunities for Adult Learners). 63% female, 37% male. Geographic distribution: 39 states, 24 foreign countries. FaCultY: 140 full-time, 79% with Ph.D. or equivalent. Faculty to student ratio is 1:13. CurriCulum: A total of 5 professional schools, 2 academic schools, and 11 academic departments offer nearly 60 undergraduate and graduate major fields of study. Approximately 33% of students major in business field, 30% in social sciences, and 17% in nursing. atHlEtiCs: NCAA Division I; member of the Big-South Conference. HistorY HigHligHts: Founded in 1905 as Boiling Springs High School; became Boiling Springs Junior College in 1928; renamed Gardner-Webb College in 1942 in honor of Governor O. Max Gardner and his wife Fay Webb Gardner; became a university in 1993; hosted 1996 U.S. Olympic Trials- Cycling; completed $34 million capital campaign in 1998; reclassification to NCAA Division I athletics in 2000; added first doctoral program (Doctor of Ministry) in 2001. Gardner-Webb celebrated 100 years of educational service in 2005. prEsidEnt: Dr.A. Frank Bonner ( July 1, 2005 - Present) gEograpHiC distriBution: 37 states and 21 foreign countries. did You know ? Gardner-Webb University has once again been ranked as one of the “Best Universities” in the South that offer “a full range of undergraduate and master’s programs” in the 2011 edition of “America’s Best Colleges” from U.S. News and World Report. Gardner-Webb was selected by the Carnegie Foundation for the Advancement of Teaching for its prestigious Community Engagement Classification, recognizing the University’s institutionalized commitment to service. GWU is one of only 311 institutions nationwide to have earned the distinction. Gardner-Webb was one of only 528 universities and colleges nationwide to be named to the President’s Higher Education Community Service Honor Roll (for the fourth consecutive year). Gardner-Webb was selected in 2011 by the White House for the President’s Interfaith and Community Service Campus Challenge. GWU is one of just over 300 schools to participate in this yearlong community service initiative. Gardner-Webb’s core curriculum ranks in the nation’s top two percent for quality and breadth, according to the 2011-2012 What Will ey Learn? study by the American Council of Trustees and Alumni (ACTA). Gardner-Webb was awarded the North American Mission Board’s (NAMB) Courts Redford Award for 2010, which recognizes the nation’s top 10 universities for mobilizing student missionaries through NAMB. e Big South Conference honored Gardner-Webb’s Carrie Long (women’s track and field) with the prestigious George A. Christenberry Award for Academic Excellence in 2011. Summer Hess, a 2006 honors graduate from Gardner-Webb (English major), was named a prestigious 2010-11 Fulbright Scholar. Hess is the first GWU graduate to receive this award. Gardner-Webb Women’s basketball won the Big South Conference Championship in 2011, earning the University’s first ever berth in the NCAA Division I Women’s Championship tournament.

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aBout tHE Editors oF tHE Journal oF EtHiCs & EntrEprEnEursHip dr . donald w. Caudill is a Professor of Marketing in the Broyhill School of Management in the Godbold School of Business at Gardner-Webb University in Boiling Springs, North Carolina. Previously, Dr. Caudill was a Professor of Business and Leadership and Chair of Marketing, Management and Leadership, and E-Business and Entrepreneurship at Bluefield College in Virginia and a Professor of Marketing and Director of the Appalachian Leadership and Entrepreneurial Center at Bluefield State College in West Virginia. He was also an Associate Professor of Marketing and Honors Professor at Belmont University in Nashville, Tennessee. Dr. Caudill served as an Assistant Professor of Marketing at Southern Arkansas University, the University of North Alabama and the University of Tennessee at Martin. He began his teaching career as an Instructor of Marketing at Virginia Polytechnic Institute and State University in 1981. Dr. Caudill was a member of the graduate faculty in the Jack C. Massey Graduate School of Business at Belmont University, and has taught classes via satellite (distance learning) for West Virginia Graduate College, evening, weekend, and online graduate courses for Averett University, the University of Tennessee at Knoxville and Mountain State University (WV). In addition to 30 years of teaching at the university level, Dr. Caudill has worked in selling, retail management, and marketing research. Further, he was a principal in a small advertising agency. A Virginia native, Dr. Caudill earned a B.S. degree in Business Administration from Berea College (Kentucky), a M.B.A. from Morehead State University (Kentucky), a M.S. in marketing from the University of Memphis (Tennessee), and a Ph.D. from Virginia Polytechnic Institute and State University. He is a member of Pinnacle, Phi Eta Sigma, Delta Mu Delta and Sigma Beta Delta academic honor societies and e Gamma Beta Phi Society and Alpha Kappa Psi. Dr. Caudill has had nearly 100 articles published in professional journals and trade publications. He has authored four seminar manuals and several business/leadership book manuscripts. Dr. Caudill’s research has been cited in business communications and selling textbooks and in numerous referred journals. He has been interviewed for several newspaper and magazine articles and on radio and television talk shows. Dr. Caudill has been a consultant for small and large businesses and a workshop leader and speaker at state, regional, and national conferences and conventions. Dr. Caudill has been on the editorial review boards of the Journal of Business and Economic Perspectives, Small Business Reports, Trade Show and Exhibit Manager, the Business Education Forum, the Journal of Managerial Issues (Ad Hoc Reviewer), and other journals. He is or has been a member of the United States Association for Small Business and

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Entrepreneurship (USASBE), the American Marketing Association, the Association of Consumer Research, the Academy of Marketing Science (a Fellow), and numerous other organizations. He is a frequent conference presenter, paper reviewer, discussant, session chair and panelist. Dr. Caudill is a former American Marketing Association Hugh G. Wales National Faculty Advisor of the Year, a life member of Pi Sigma Epsilon (National Fraternity in Marketing, Sales Management and Selling) and Sigma Pi (Social) Fraternity, and the winner of the Higginbotham Award for Outstanding Service. He has been named to Who’s Who in Advertising, Who’s Who in the South and Southwest, Who’s Who Among American Teachers, Who’s Who Among Emerging Leaders of the World, Who’s Who in American Education, Who’s Who Among Young Professionals, and twice selected as an Outstanding Young Man of America. Dr. Caudill has traveled throughout the United States and studied marketing in numerous foreign countries including Canada, e Bahamas, Aruba, Mexico, Belize, Honduras, Brazil, Argentina, Paraguay, France, Israel, Italy, Germany, Switzerland, Austria, England, Greece, Spain, Australia, Hong Kong and China. Dr. Caudill was a Visiting Advertising Professor to Fitzgerald and Company in Atlanta, GA and served an internship at Wisdom Media. He has been an advisor to Phi Beta Lambda and is a Sam Walton Fellow of Students in Free Enterprise (SIFE). His students have won numerous awards and honors.

JamEs E. littlEFiEld is Emeritus Professor of Marketing at Virginia Tech in Blacksburg, VA. Jim retired aer twenty-eight years at Virginia Tech and eighteen years at the University of North Carolina at Chapel Hill. He served as Department Head at each institution. He is the author or coauthor of eight books and numerous research articles in marketing and international marketing. Much of Jim’s career was spent abroad, having lived, researched, and taught in four countries and traveled in seventy countries. A major activity was developing and taking students on study abroad programs to Switzerland and other places in Europe, China, Vietnam, Cambodia, and other parts of Asia, and Chile. His industrial experience was with General Motors in Detroit, the B.F. Goodrich Company in Akron, and numerous consulting assignments in the U.S. and abroad.

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