SUSTAINABLE ENTREPRENEURSHIP AND A RADICAL RESOURCE-BASED VIEW:
AN EXPLORATORY STUDY EXAMINING CONSERVATION AGRICULTURE
FOR SMALL-SCALE FARMS IN LOW-INCOME COUNTRIES 1
Sustainable entrepreneurship is described as having an emphasis on social and ecological value creation that makes it distinct from conventional entrepreneurship’s emphasis on financial value capture. Data from exemplary sustainable organizations promoting Conservation Agriculture among small-scale farms in low-income countries lend support to the proposition that a Radical
Resource-Based View (RBV) provides a more appropriate theoretical framework for sustainable entrepreneurship than is provided by Conventional RBV. The data analysis also helps to distinguish between the four dimensions of RBV theory, namely whether resources are valuable, rare, inimitable and non-substitutable. Implications for sustainable entrepreneurship, RBV and management more generally, are discussed.
Conservation Agriculture, Radical Resource-Based View, sustainable entrepreneurship, smallscale farms, value capture vs value creation, VRIN
We live in a world facing increasing social and environmental problems. Perhaps the most pressing social concern is the growing disparity between rich and poor. Recent studies indicate that 70 percent of the world lives in countries with worsening economic inequality in the past 30 years, and today the world’s richest 85 people own as much wealth at the poorest half of the world combined (Fuentas-Nieva and Galasso, 2014). US President Obama has identified the rising level of economic inequality as “the defining challenge of our time” (Hiltzik, 2013).
Perhaps the most pressing environmental concern is climate change associated with greenhouse
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gas emission, with CO
levels now at 397 parts per million (ppm), much higher than the 350 ppm that are considered the upper bounds of sustainability and especially striking because CO
2 levels had not been greater than 300ppm in the 650,000 years prior to 1950 (NASA, 2014). Significant causes of climate change include emissions from automobiles (e.g., which accounts for 31 percent of CO
2 emissions in USA), cattle-rearing and the methane gas it produces (which generates more global warming greenhouse gases, in CO
2 equivalents, than transportation), and agricultural practices like tillage (which have resulted releasing into the atmosphere about 68 billion tons of carbon that had formerly been stored in the soil, Schwartz, 2014; tilling land has been estimated to releases one tonne of carbon per hectare per year; Joshi, 2011). These social and ecological issues are particularly threatening for the world’s poorest people, who cannot afford any change for the worse.
It should come as little surprise then that scholars are increasingly interested in sustainable entrepreneurship, that is, in studying organizations that address the pressing social and ecological concerns that face humankind. Indeed, this may be the key challenge facing business scholars of all stripes—ethics, marketing, accounting, finance, and so—to reinvent their disciplines to facilitate and encourage sustainable entrepreneurship.
This challenge is especially true because current business theory and practice has embedded within it moral-points-of-view and self-fulfilling prophecies that may have contributed to the social and ecological crises facing the world. For example, research shows that business students become increasingly materialistic and individualistic as they go through their programs of studies, focused on their own financial self-interests rather the overall well-being of humankind (e.g., Dyck et al, 2011; Ferraro et al, 2005; Ghoshal, 2005; Krishnan, 2003). This in turn has negative implications for ecological well-being (McCarty and Shrum, 2001) and social
well-being at the personal, corporate and societal levels (e.g., Kasser 2003; Giacalone and
Thompson, 2006; Rees, 2002).
This study draws on literature in sustainable entrepreneurship and Radical RBV to examine small-scale farms, a type of organization that is facing severe social and ecological issues. In particular, we will focus on sustainable entrepreneurship among the 500 million smallscale farms in the world’s low-income countries (Meyer, 2010), involving about 40 percent of the world’s population (Nagayets, 2005). These are among the neediest organizations in the world, given that the effects of climate change are expected to be particularly harsh for this segment of the population, and that already 70 percent of the world’s chronically malnourished people are small-scale farmers due in part to mainstream agricultural practices that are both too expensive and degrade the soil (Braul, 2011). Our study will focus on local sustainable entrepreneurship efforts involved in introducing Conservation Agriculture (CA) to small-scale farmers in lowincome countries. CA has been shown to double productivity for small-scale farmers, to improve their soil quality and their crops’ ability to withstand extreme weather patterns (e.g., Pretty et al,
The paper will proceed as follows. First, we will review the literature to present our understanding of sustainable entrepreneurship, underscoring how it is qualitatively different from conventional entrepreneurship. We will then draw on the literature related to RBV theory, and in particular we will respond to calls for the development of significantly modified RBV theory appropriate for sustainable entrepreneurship. This will lead to two hypotheses, the first suggesting that Radical RBV theory is more appropriate for studying sustainable entrepreneurship than is conventional RBV, and the second positing that the four categories of
RBV resources (valuable, rare, inimitable, nonsubstitutable) are relevant for sustainable entrepreneurship. Second, we will describe our research design and methods for examining
sustainable entrepreneurship among small-scale farmers in low-income countries. Third, we will provide an empirical examination of whether Radical RBV indeed is more relevant for sustainable entrepreneurship than Conventional RBV. Finally, we will discuss implications for sustainable entrepreneurship, RBV, and management theory and practice going forward.
There is some debate in the literature regarding the definition of sustainable entrepreneurship (e.g., Thompson et al, 2011; Weidinger et al, 2014). Our goal here is not to attempt to resolve that debate, but rather to present the definition that will be used in our study.
To start note that, like much of the literature, this study adopts a fairly broad understanding of entrepreneurship in general. Entrepreneurship is about identifying an opportunity to offer new or improved goods or services, and then planning and mobilizing organizational resources to seize that opportunity. Entrepreneurship often involves starting up a new organization, but it can also refer to setting up structures and systems within an existing organization in order to pursue a new opportunity (intrapreneurship).
There is some agreement that sustainable entrepreneurship is a combination of both (1) social entrepreneurship and (2) environmental entrepreneurship, each of which are differentiated from conventional entrepreneurship. Conventional entrepreneurship, which focuses on the economic dimension and seeks to maximize the financial return for the entrepreneurial enterprise
(“value capture”), remains the dominant approach in the entrepreneurship literature.
Research on social entrepreneurship, which adds a social dimension to the understanding of entrepreneurship, began to take off in the mid-1990s. Since then dozens of definitions have been developed (e.g., Bacq and Janssen, 2011) , but for present purposes it is sufficient to say that social entrepreneurship refers to entrepreneurial enterprises that have a focus on both financial
and social well-being. A well-known example is Greyston Bakery in New York, which hires former drug addicts and ex-convicts, trains them to become gainfully employed members of society (e.g., Neubert and Dyck, 2014). There is some debate regarding whether financial and social well-being are valued equally, or whether one is subservient to the other.
Environmental entrepreneurship adds a focus on treating the natural environment with respect, with a particular emphasis on “green” initiatives that reduce waste or transform existing waste into usable and saleable products. A well-known example is Terracycle, which started by selling—in recycled soda pop bottles—gardening compost composed of the poop of worms who had been fed organic garbage (e.g., leftover food from cafeterias) (Spitzeck, 2011).
Sustainable entrepreneurship encompasses both social and ecological goals. An early example of a sustainable entrepreneurship in the management literature describes a new vegetable farm, related to the larger Community Supported Agriculture (CSA) movement, was created in order to be “environmentally-friendly and provide a meaningful way for city and country people to connect” (Dyck, 1994, p. 47). In this example the sustainable entrepreneur was a small-scale farmer who sold to city people “shares” of his harvest of organically-grown vegetables. These vegetables were delivered on a weekly basis at neighborhood depots, where sharers got to know one another and their farmer. Sharers were also welcome to volunteer to work on “their” farm, which they often did, thereby further strengthening their relationship to their farmer and to the land.
There is some debate within the sustainable entrepreneurship literature regarding the relative emphasis placed on the economic dimension versus the social and ecological dimensions.
Some scholars are reluctant to relax the idea of profit-maximization, given its central role in the development of economics and entrepreneurship generally. Other scholars argue that the traditional emphasis on profit-maximization has contributed to many of the social and ecological
problems facing society today, and fear that the social and ecological dimensions of sustainable entrepreneurship may be co-opted by a fixation on profit-maximization. In the example of the
CSA farmer, it is clear that the economic dimension was important, but not as important as the social and ecological dimension. The emphasis is on economic viability , but not on profit maximization
: “CSAs are ecologically sound, socially just, and are demonstrating themselves to be economically viable” (Dyck, 1994, p. 56).
For our purposes, the distinction between “value creation” versus “value capture” from the field of strategy provides a helpful framework to address this tension (our discussion draws from and adapts Santos, 2012, who uses these concepts to develop theory related to social entrepreneurship). As used here, “value creation” captures the overall aggregate value— especially to people and to the planet—associated with any instance of sustainable entrepreneurship. For example, the social value created by the CSA described above comes from providing a field-to-table face-to-face link between sharers and farmer, thereby nurturing mutual trust and reducing misunderstanding between city and rural people. And the ecological value comes from use of agronomic practices that enrich the health of the soil, the air, and the food that people consume. The CSA also creates financial value, including a living wage for the farmer, income for suppliers of farm machinery and seeds, and an opportunity for sharers to purchase organic vegetables.
Whereas “value creation” is measured at the societal or system level, “value capture” occurs at the level of the focal entrepreneurial organization and describes its net financial gain
(profit is the traditional measure associated with value capture). Santos (2012, p. 338) notes that
“maximizing both value creation and value capture in the same organizational unit is difficult.”
Because of this tension, the result is two “ideal types” of entrepreneurial organizations: 1) conventional for-profit organizations who seek to maximize value capture while satisficing value
creation via staying within legal and societal norms, and 2) sustainable organizations seek to maximize (social and ecological) value creation while satisficing value capture to remain financially viable. The focus in our paper will be on this latter “ideal type” of sustainable entrepreneurship, which seeks to maximize socio-ecological value creation while satisficing value capture. Of course, in reality firms can be found all along a continuum between these two
“ideal type” end-points. Even so, this articulation of two ideal types is useful for the purpose of theory building, and for practitioners to understand where they lie along the continuum (and where they would like to be). Its primary emphasis on value creation is what distinguishes sustainable entrepreneurship from its conventional (commercial) cousin.
Sustainable Entrepreneurship and (Conventional) Resource Based View (RBV) Theory
Given the variety of definitions of the various kinds of entrepreneurship, it is should not come as a surprise that there is considerable debate in the literature as to whether sustainable (or social or ecological) entrepreneurship requires qualitatively different underlying theory than conventional entrepreneurship. We suggest that the argument calling for the development of alternative theory is strengthened considerably when suggesting that sustainable entrepreneurship is primarily about value creation rather than about value capture.
In this regard, our focus on Resource Based View (RBV) theory is of particular relevance.
Not only has RBV arguably become the dominant theory in strategy generally (Barney et al, 2001, p. 625), it is also a dominant theory when it comes to management scholarship that looks at social and ecological issues. For example, with regards to social entrepreneurship, RBV it is clearly linked with champions in the “Base of the Pyramid” (BoP) movement (e.g., Conner and Prahalad,
1996; Hart, 1995), which may be the most visible attempt within the management scholarship to help the world’s poor (e.g., Hart, 2007; Prahalad, 2010). And with regard to ecological entrepreneurship, there is a whole stream of research under the banner “Natural RBV” that has
been developed to help managers to address environmental issues, much of it is associated with the BoP movement (e.g., Hart and Dowell, 2011). Despite this impressive pedigree, we echo those who suggest that an approach to sustainable entrepreneurship like ours requires RBV theory to be significantly modified or augmented (e.g., Bell and Dyck, 2012; Hart and Dowell,
2011; Santos, 2012; Walske et al, 2011).
The vast majority of RBV research is designed to improve the ability of firms to capture value. In particular, RBV suggests that the key to achieving sustainable competitive advantage is to identify particular knowledge and physical “resources” (aka capacities) that, on their own or bundled together, have four characteristics – they are valuable, rare, inimitable, and nonsubstituable (known as VRIN). In the example of the CSA farm described above, a conventional
RBV perspective might encourage the entrepreneur who started the CSA farm to try to patent knowledge about CSA, or at least to establish competitive advantage by developing and keeping to himself VRIN knowledge required for operating a CSA farm, which might include agronomic practices, how much of each type of vegetable to plant, logistical insights regarding the timely harvest and transport of fresh vegetables, and software to monitor and deal with sharers.
The implications of RBV theory for conventional social entrepreneurship have been most fully-developed in the BoP literature. From an RBV perspective, entrepreneurs should recognize opportunities and develop their capacity to sell their goods and services to the 5 billion people at the BoP who, though relatively poor in individual buying power, are rich in their collective buying power. However critics argue that, because BoP theory is grounded in the “value capture” economic paradigm, the emphasis on “value creation” to serve the poorest people in the world will always take second place to the firm’s emphasis on their financial bottom-line (e.g.,
“pressures to generate profit from BoP projects within a short time-horizon will take the driving seat,” Arora and Romjin, 2012, p. 487). Indeed, the BoP approach is premised on the idea that the
best thing multinational corporations can do to help the poor is to include them in the formal financial economic structures of the global economy. As Prahalad puts it:
“we start with the assumption that everyone must have the right to the benefits of globalization. This implies that as individuals we have multiple roles—as consumers, producers, investors, and entrepreneurs. At a minimum, all must be treated with dignity and self-esteem—as micro consumers. … When the poor are converted into consumers, they get more than access to products and services. They acquire the dignity of attention and choices from the private sector that were previously reserved for the middle-class and rich.
” (Prahalad, 2010, pp. 21, 44-45; italics in original)
While the desire to treat poor people with dignity is certainly noble, it is far from clear that this is best accomplished by converting them into micro-consumers in today’s globalized economy. To suggest that treating someone as a consumer is equivalent to treating them with dignity may be consistent within a worldview where self-worth and self-esteem are defined by consumerism, but it certainly seems a far cry from an understanding where treating someone with dignity means treating them as a “thou” (e.g., a child of God) rather than as an “it” (e.g., a microconsumer) (Buber, 1958). Moreover, given that modern globalization has a track record of widening the gap between rich and poor—within organizations, within countries, and between countries (e.g., Rees, 2002)—it is unclear whether welcoming the poor into the globalized formal economy is really in their interest. Critiques of the BoP approach, often providing empirical evidence showing that BoP initiatives fail the poor, are becoming commonplace in the literature
(e.g., Arora and Romijn, 2012; Munir et al, 2010).
Some social entrepreneurship scholars provide an important variation of the role of value capture in RBV. In short, rather than have entrepreneurs use RBV to capture value for themselves, they suggest that RBV theory be used by social entrepreneurs to help the poor to capture value.
For example, Shivarajan and Srinivasan (2013) argue that the poor possess valuable resources like know-how, and that social entrepreneurs can help the poor to generate income by helping the poor to patent their knowledge, bring it to market, and/or collect royalties or licensing.
The implications of RBV theory for ecological entrepreneurship are most fully-developed in the Natural RBV literature. Already twenty years ago Hart (1995) recognized that the original formulation of RBV ignored the interaction between organizations and the natural environment, and thus offered a “Natural Resource-Based View” of the firm. Natural RBV focuses on three key organizational resources or strategic capabilities related to the ecological dimension: 1) resources that enable pollution prevention and the reduction of wasteful emissions, 2) capacities in product stewardship that enable a firm to take into account a product’s entire ecological value chain (from raw inputs to final resting place), and 3) capacities in sustainable development, which in Natural RBV encompasses both social and ecological concerns and have been especially evident in the BoP literature, and which enable firms to continue to provide goods and services into the future indefinitely (Hart and Dowell, 2011). Again, it is noteworthy that Natural NRBV theory, and much of the research it relates to, retains an emphasis on value capture:
“ it is likely that strategy and competitive advantage in the coming years will be rooted in capabilities that facilitate environmentally sustainable economic activity— a naturalresource-based view of the firm” (Hart, 1995, p. 991; emphasis added here).
“The question of whether or not it pays to be green was considered prior to the emergence of the NRBV [… However, the] NRBV perspective allowed for a more systematic examination of the relationship between environmental and financial performance by specifying the link between resources and capabilities and strategic outcomes.” (Hart and
Dowell, 2011, p. 1467; emphasis added here)
From a sustainable entrepreneurship perspective, this emphasis on “value capture” is a shortcoming of RBV theory, and may help to example why, in their recent review of the first 15 years of research in Natural RBV, Hart and Dowell explicitly invite scholars to engage in empirical research and to modify RBV theory regarding specifically the dimension of sustainable development and BoP:
“Despite corporate interest and a growing practitioner-oriented literature, however, there is a dearth of scholarly research on BoP. Indeed, there is a real opportunity for scholars to address this issue in a rigorous way in order to assess the degree to which our current
theories are sufficient in understanding the BoP phenomenon and to what degree this issue requires us to augment existing theories or even develop entirely new ones
Hart and Dowell, 2011, pp. 1471-72; emphasis added here )
The present study examines and tests just such a new and augmented theory.
Sustainable Entrepreneurship and Radical RBV
Even though much of the leading research in strategy (as well as in social and environmental entrepreneurship) draws on conventional RBV, this seems inappropriate for an understanding of sustainable entrepreneurship that places primary emphasis on value creation versus value capture. Fortunately, important theoretical work has been done toward developing alternative RBV theory that de-emphasizes value capture, but this has not undergone much empirical study.
For example, the arguments presented by Santos (2012, p. 346) suggest that sustainable entrepreneurs will focus on “sustainable solutions” rather than on “sustainable competitive advantage,” and they will embrace “value creation” without “value capture.” He goes on to counter conventional RBV assumptions when he argues that sustainable entrepreneurs seek “to make themselves dispensable,” in contrast to conventional entrepreneurs who “try to become indispensible.” Consistent with this, sustainable entrepreneurs are more likely to act in ways that are consistent with “the logic of empowerment” that enables especially the marginalized to benefit from “value creation,” rather than act according to “the logic of control” that characterizes conventional approaches who seek to capture value for themselves.
This view that sustainable entrepreneurship is associated with empowerment and becoming dispensable is also evident in Walske, Scarlata and Zacharakis (2011; their arguments about social entrepreneurship are extended here to sustainable entrepreneurship), who suggest that the impact of entrepreneurial “value creation” may be enhanced via inviting and enabling other (competing) organizations to participate in “value capture.”
“… RBV theory is typically cited as a way for firms to create a competitive advantage
[for itself] in the marketplace (Wernerfelt 1984, Barney 1991). However, if the aim of a
SE [social entrepreneur] is to address and solve social issues, and is not to garner the highest profitability, does securing a competitive advantage for SEs [social entrepreneurs] really apply?
Specifically, if the dependent variable for measuring a SE’s [social entrepreneur’s] success is not its revenue growth, nor its profitability, but is instead, its social impact, how does this change our interpretation and application of RBV theory? An example is a product that was created to alleviate the health effects of starvation, Plumy’nut, which is a food bar distributed by UNICEF to prevent severe malnutrition in impoverished regions.
The social impact of that product might be higher if it is actually imitated and produced by many firms across many ‘local’ geographic regions, thereby increasing its reach and social impact. … In fact, the social impact of a SE’s [social entrepreneur’s] product may be greater if it is copied by other firms. In effect, instead of scaling across many localities itself, a SE [social entrepreneur] can scale its social impact by encouraging other SEs
[social entrepreneurs] to mimic its efforts. As such, instead of resources being rare, inimitable, and nonsubstitutable, the greatest social impact might be achieved if they are valuable, yet common, transferrable and substitutable (i.e., VCTS).” (Walske et al, 2011, p. 11, emphasis added here)
These arguments for an augmented or significantly modified form of RBV are most fully developed in Bell and Dyck (2012), who contrast and compare what they call Radical RBV theory (based on virtue ethics) with Conventional RBV theory (based on consequential utilitarianism). They suggest that Radical RBV will be more appropriate for sustainable entrepreneurship, that is, for organizations where the firm’s profit-maximization (value capture) is less important than achieving value creation that balances multiple forms of well-being
(including financial, social, ecological, spiritual, physical) for multiple stakeholders (including owners, employees, customers, suppliers, competitors, neighbors, future generations). Table 1, which will guide the current study, provides a summary of key components of their framework, incorporating the VCTS language from Walske et al (2011) and the value creation vs value capture ideas from Santos (2012).
-- insert Table 1 about here --
Taken together, our discussion thus far points to at least two general propositions, which will be examined in the remainder of the paper:
Proposition #1: Radical RBV theory is more appropriate than Conventional RBV theory for the study of the key resources associated with sustainable entrepreneurship.
Proposition #2: More specifically, the Radical RBV sub-categories—regarding the value, rarity (common-ness), inimitability (transferability), and nonsubstitutability
(substitutability) of resources—are helpful for understanding the key resources associated with sustainable entrepreneurship.
RESEARCH DESIGN AND METHOD
As is appropriate for an exploratory study like ours, research sites were chosen where sustainable entrepreneurship would be most transparently observable (e.g., Eisenhardt, 1989).
This meant finding organizations that sought to improve social and ecological well-being, with an emphasis on value creation rather than value capture. Santos (2012) suggests selecting sites where entrepreneurs emphasize social and ecological problems that: i) have been neglected by others; ii) involve positive externalities (i.e., where there is opportunity to increase the social and ecological benefits); and iii) benefit a powerless segment of society. Our chosen sites are consistent with these criteria, as well as being of considerable practical importance.
Our research examines organizations that are promoting Conservation Agriculture (CA) practices among small-scale farmers in low-income countries. Such organizations have an important role to play in promoting global social and ecological well-being, as explained in the recent IAASTD (“International Assessment for Agricultural Science and Technology for
Development”) report commissioned by the World Bank and by the United Nations’ Food and
Agriculture Organization which sought to answer the question:
“How can we reduce hunger and poverty, improve rural livelihoods, and facilitate equitable, environmentally, socially and economically sustainable development through the generation, access to, and use of agricultural knowledge, science and technology”
(Stokstad, 2008, p. 1474).
In essence the IAASTD weighed the relative strengths and shortcomings of “industrial agriculture” versus “multifunctional agriculture” (Stokstad, 2008: 1474). “Industrial agriculture” includes proponents of the Green Revolution, industrialists and scientists who emphasize technologies like plant breeding, genetically-modified food, fertilizers, pesticides, often coupled with large-scale mechanization. Industrial agriculture would generally align with a conventional
BoP approach. In contrast, “multifunctional agriculture”—premised on the idea that farming is not just about maximizing the production of food, but that farmers also play other important functions in stewarding ecological resources and cultural heritage (Stokstad, 2008: 1475)— emphasizes sustainable farming practices like CA,
biodiversity, community development, and being stewards of the land. A major conclusion of the IAASTD was its recommendation to discourage “industrial agriculture” and encourage “multifunctional agriculture” research (Wood and Lenne, 2011, p.172; Stokstad, p. 2008). The report calls scholars to redirect research “to move away from processes that have profited primarily large-scale enterprises [and instead move] to processes that address the most basic needs of the world’s 900 million small farmers”
(Kiers et al, 2008, p. 320; McIntyre et al, 2009, pp. viii, 4, 5, 10; Rural Poverty Report, 2011 ).
CA has three basic principles:
1) minimize the mechanical disturbance of the soil (e.g., CA promotes zero-tillage directseeding or planting technique, which enhances the soil and may help to reduce the effect of global CO
emissions by 5 to 15 percent; Gomiero et al, 2008, p. 248);
2) provide permanent organic cover for the soil via using mulch or crop residues or cover cropping (e.g., CA enhances organic matter of soils via adding more roots, encourages helpful biological organisms, and improves water infiltration as it reduces water needs by
25 to 30 percent; Joshi, 2011); and
3) diversify and rotate the crops planted in the soil (e.g., after a season of growing corn, which leaches nitrogen from the soil, follow by having two growing seasons with a nitrogen-fixing legumous crops, such as beans).
Research on introducing CA on small-scale farms in low-income countries is clear on
several fronts. First, CA works. How well it work varies according to the local situation, but a recent review of research (Pretty et al, 2011) suggests that on average CA enables small-scale farmers to double the amount of food that they can grow on their land (though see Giller et al,
2009). Another recent study concludes that “… compared to conventional tillage based production systems, CA leads to higher net profitability, greater environmental sustainability and
– especially important in Africa – higher food security” ( Silici et al, 2011, p. 137).
Second, CA makes a difference in reducing poverty. “Cross-country comparisons show that GDP growth originating in agriculture is at least twice as effective in reducing poverty as
GDP growth originating outside agriculture” (de Schutter, 2011, p. 14).
For every 10 per cent increase in [agricultural] yields in Africa, it has been estimated that this leads to a 7 per cent reduction in poverty (more than the 5 per cent in Asia). Growth in manufacturing and service sectors has no such equivalent effect (World Bank, 2008;
Wiggins and Slater, 2010).” (
Pretty et al, 2011, p. 6)
Third, CA is affordable. This especially significant for financially poor farmers who cannot hope to pay for fertilizer or special equipment. Indeed, over time CA lowers the production costs (e.g., improved soil conditions result in reduced water usage). As one farmer put it, the genius of CA is that “Everybody can do it” (
Silici, et al, 2011, p. 143).
Fourth, CA is sustainable. The quality of the soil is improved, rather than degraded.
Carbon is put back into the soil from the atmosphere. Indeed, it has been estimated that carbon sequestration by CA could reduce by 40 percent the estimated annual global increases in CO
2 emissions (Joshi, 2011, p. 60). Providing farmers with carbon credits for sequestering the carbon from the atmosphere could provide further income for small-scale farms.
Fifth, and most importantly for the current study, managerial expertise is key to the widespread adoption and development of CA practices. It is a matter of getting small-scale farms to find out about CA, adapt it to their farm operations, and implement it. Improved managerial
expertise is especially important in matters like localizing CA principles, setting up communities of practice among small-scale farms, facilitating farmer-to-farmer extensions and organizations to exchange information, and developing supportive government policies and social institutions
(Meyer, 2010: 263). In short, t here is increasing consensus among experts in the field that getting that CA know-how implemented on small-scale farms is a strategic challenge of particular relevance for management scholars and practitioners (e.g., Degrande et al, 2012; de Schutter,
2010; Joshi, 2009, 2011; Lele and Trigo, 2010; Meyer, 2010; Pretty et al, 2011; Silici et al, 2011).
Implicitly, our study suggests that perhaps one reason why management scholars have seemed hand-cuffed to respond to these challenge is because they have been relying on conventional theories that prioritize “value capture”, rather than theory that seeks to enhance “value creation.”
A multi-step process was used to collect data related to organizations that are seeking to facilitate the implementation of CA practices on small-scale farms in low-income countries.
The data reported here are from two separate but related studies funded by the Canadian Foodgrains
Bank (CFGB), a charitable organization seeking to end hunger worldwide (see http://www.foodgrainsbank.ca/ ). Both studies were designed to collect data on best practices for facilitating CA among small-scale farms (Braul et al, 2011; Braul et al, 2010). In particular, the research examined the key organizational practices of community-based organizations that have exemplary track records in terms of facilitating CA among small-scale farms (this is consistent with the “call for indepth studies involving more [community-based] organisations to increase our understanding of what factors affect performance of organisations in disseminating agricultural innovations;” Degrande et al, 2012, p. 62).
The first study focused on six exemplary local non-government organizations (NGOs) in
Africa, and the second on five exemplary NGOs in Central America. These eleven organizations
comprise our sample of sustainable entrepreneurship. Each study involved site visits to these exemplary NGOs by a CFGB staff person and four staff representatives of North American member agencies that CFGB works with. The six NGOs chosen to be studied in Africa (five in
Mozambique, and one in Malawi) were based on recommendations by CFBG member agencies, and in most cases received CFGB funding. Of the world’s estimated 1.02 billion chronicallymalnourished people in 2009-10, an estimated 265 million lived in Sub-Saharan Africa (Pretty et al , 2011, p. 6). GDP per capita in Malawi is $145, and Mozambique is $330, though the life expectancy in Malawi is 48 years versus 43 in Mozambique. In Malawi 65 percent and in
Mozambique 69 percent of the population live in poverty (Ellis, 2005, p. 144; 1997 data).
The NGOs selected for the Central America study were recommended by a consultant who had been hired to visit five different countries in Central and South America and tasked with identifying exemplary organizations who work with small-scale farms in promoting CA. The sample of five local NGOs for this study was drawn from the Honduras, which was identified as hosting the most exemplary organizations in this area. None of the five local NGOs participating in the Honduras study received CFGB funding.
“Honduras is the second largest and most mountainous country in Central American with a population of about 8.1 million, about half of whom live in rural areas. About 65% of the total population lives below the poverty line, with 42.2% of these living in extreme poverty.
Poverty is particularly characteristic of rural areas, with an estimated 76% of the rural population living in poverty, and with 49% of the rural population in extreme poverty.
Honduras ranks fourth in the world in terms of having the largest income gap between the wealthiest 10% and the poorest 10% of its population. … While on many poverty indicators there has been significant progress in Honduras during the past 30 years (life expectancy, infant mortality, Human Development Index ranking, literacy), many sources report that chronic malnutrition/stunting rates in children have actually been rising, with a national average of 30% and in some rural areas reaching a chronic malnutrition rate greater than 50%. … It has been estimated that there is an average top-soil loss greater than
300 tons per hectare per year on typical hill-side farms in Honduras. Due to soil management practices, about 40% of the land area is considered ‘degraded’ due to erosion.
… As of 2001, 83% of Honduran farms were less than 5 hectares, with an average size of
1.4 hectares. The other 13% of farms average 209 hectares.” (Braul et al, 2011)
The site visits to each of the eleven local NGOs in the sample lasted one day. For each site the researchers asked questions about the successes and failures of the NGOs, lessons learned, key technological innovations, and outcomes for small-scale farms. The researchers took careful notes, and debriefed after each site visit to distill their findings. Each site visit included talking to leaders of the NGO as well as on-site visits to small-scale farms. A report was written for each local NGO site, and the final over-all reports for the two studies contained a list of 17 “general recommendations” that represented the key capacities required to facilitate CA on small-scale farms (ten key capacities were listed the Honduras report, and seven in the Malawi/Mozambique report). In total the two reports were about 17,000 words long (about 70 double-spaced pages).
It is important to note that none of the participants in the study were familiar with
Conventional RBV nor with Radical RBV, and that none of them knew that their data and findings would be analyzed using an RBV lens. That is, participants were “blind” to this purpose of their study. It is only after the data had been collected and final reports prepared that the lead author had access to them.
The analysis focused on using RBV to examine each of the 17 key organizational capacities presented in the two reports. In the language to RBV, the 17 findings represented the key “resources” or “capacities” (we use these terms interchangeably) that CFGB had identified for facilitating CA on small-scale farms in low-income countries. Each of these 17 was analyzed according to the four dimensions of RBT: value, rarity (common-ness), inimitability
(transferability), and nonsubstitutability (substitutability).
To address the first proposition we analyzed whether the value of the key capacities in the reports was more consistent with Conventional RBV or with Radical RBV. If a Conventional
RBV lens were more appropriate, we would have expected the reports to make frequent reference
to the competitive advantages, profits, and financial benefits that could be achieved. If a Radical lens were more appropriate, we would expect the reports to emphasize benefits for the overall and holistic well-being of larger community.
“Whereas Conventional RBT links the value of a resource to the financial performance of the firm, Radical RBT defines value in terms of the contribution of the resource to various forms wellbeing (including financial viability) for a variety of stakeholders. Radical RBT can be construed as focusing on value creation (for all stakeholders) rather than value appropriation (by the firm). In Conventional RBT, a resource is valuable precisely to the extent that the firm itself captures at least some of the economic rent created by the resource, and the rent the firm captures exceeds that realized from the next-best-use of the resource (the opportunity cost). Conversely, Radical RBT would recognize as valuable firm resources that may provide value to any of the firm’s stakeholders, not just its shareholders. Similarly, valuable resources do not necessarily produce only the best financial outcome for the firm.” (Bell and Dyck, 2012, p. 125; emphases in original)
To answer the second proposition, each of the 17 key capacities was analyzed to determine whether it placed primary emphasis on the resource’s rarity (i.e., resources that are held by no/few other current or potential competitors), inimitability (i.e., resources that are costly to develop or copy by other organizations) or its nonsubstitutability (i.e., resources that are not easily/affordably replaced by other bundles of resources/capabilities held by other current and potential competitors).
Proposition #1: Radical RBV theory is more appropriate than Conventional RBV theory for the study of the key resources associated with sustainable entrepreneurship.
Our analysis lends support to the first proposition. Virtually all of the 17 key organizational capacities identified in the reports were seen as valuable primarily because they created value for the holistic well-being of small-scale farms and their local community. This observation is confirmed by a couple of simple word counts. On the one hand, the documents contain few keywords associated Conventional RBV. The reports had:
zero mentions of the terms competitiveness/compete/competition;
one mention of finance/financial (provided by an agency to pay for a cement lid);
three mentions of the profit/s/able/ability (one mention of a non-profit organization, and two mentions that “The exclusion of herbicides and chemical fertilizer use was often cited as necessary to increase profit margins and reduce soil erosion”); and
six mentions of money (one referring to savings from having a family garden, three referring to the need for small-scale farmers to work off-the-farm, and two referring to aid from external agencies, one of which “used the ‘passing on the gift’ wherever possible so that external inputs could be passed on to others”).
On the other hand, consistent with hypothesis, the two reports make over 75 mentions of community/communities . While some of these references simply refer to a geographic location, the majority of mentions refer to enhancing social cohesion and overall well-being within the community, building community capacity, and generally strengthening the local community as a unit of analysis. This is finding entirely consistent with the assumptions underpinning sustainable entrepreneurship in terms of value creation (Santos, 2012), the VCTS framework (Walkesh et al,
2011), and Radical RBV (Bell and Dyck, 2012), but not expected in Conventional
RBV/entrepreneurship (where the unit of analysis is the firm that is engaged in value capture, not the community that benefits from value creation). To use resources to primarily and directly enhance the overall community is rather foreign to conventional theory, where the focus primarily on the financial well-being of the focal firm, and the benefits of value creation tend to be more indirect, via an invisible hand.
A general content analysis of the 17 key resources suggests that there is virtually no emphasis on achieving competitive advantage among farms or community members (one possible exception may be the mention of developing programs targeted to young people, which may serve to provide them a competitive advantage over other demographic groups). This is not
to suggest that small-scale farmers are not interested in increasing their farm income—they are interested and the reports describe the merits of improving doing so (e.g., with off-farm sales)— but there is never any hint that this is achieved by competing with neighboring farms. Far from it, the emphasis is on collaborating with neighbors and other communities to all may benefit from the value creation associated with CA.
More detailed analytical data are presented in Tables 2, 3, and 4, which will be presented in the discussion of the second proposition. In those Tables, each of the 17 key resources are analyzed in terms of their relative emphasis on social, ecological and/or economic well-being.
The results suggest that by far the greatest emphasis is on social well-being (which was the primary focus in 11 of the 17 resources, though also evident in the remaining 6), followed by ecological well-being (primary on 3 resources, evident in 1 other) and economic well-being
(primary on 2 resources, evident in 3 others). Two observations about the references to economic well-being are noteworthy. First, each one came from the category of “Non-substitutable” resources, and thus were part of larger bundles of resources that would be difficult or costly to replace (in contrast, both ecological and social resources were evident in each of the rare, inimitable, and non-substitutable categories). In other words, the economic emphasis was part of a larger, more holistic, understanding of valuable resources, never a focus unto itself. Second, each reference to economic well-being referred to enhancing the well-being of small-scale farmers and their communities, not to the well-being to the NGOs (i.e., the sustainable entrepreneurs) promoting the adoption and development of CA. Thus, consistent with Shivarajan and Srinivasan (2013), any emphasis on “value capture” is on behalf of the small-scale farmers, not for the NGO sustainable entrepreneurs.
In sum, the data lend strong support to the proposition that Radical RBV theory is more appropriate than Conventional RBV theory for the study of the key resources associated with sustainable entrepreneurship in this setting.
Proposition #2: The Radical RBV sub-categories—regarding the value, rarity (commonness), inimitability (transferability), and nonsubstitutability (substitutability) of resources— are helpful for understanding the key resources associated with sustainable entrepreneurship.
To examine the second proposition, we examined the 17 key resources identified in the two reports in terms of RBV’s four main organizational resource components, namely their
VRIN/VCTS. The first of these, value, may be the easiest to analyze. By design of how the data were collected, it can be said that each of the 17 key organizational capacities were perceived to be valuable, because that was the basis on which they were identified and included in the reports.
As described in the findings for the first proposition, these resources were seen to be valuable for reasons associated with Radical RBV (emphasis on community well-being, value creation) rather than Conventional RBV (no emphasis on competitive advantage, value capture). The second proposition focus one whether, in addition to be valuable, the resources were also rare, inimitable and/or nonsubstitutable.
As we shall see, while it is true that each of the (valuable) 17 resources has some evidence of being rare and inimitable and nonsubstitutable, more interesting is our finding that the 17 resources can be relatively easily divided into one of these three sub-groups where each grouping can be seen to have a relative emphasis on one of these three components. Six of the 17 key resources emphasized rarity, five emphasized inimitability, and six nonsubstitutability. First, the resources in the rarity sub-group all described well-established CA practices that are currently infrequently found on small-scale farms, and the capacity to make these practices more commonplace. Second, the resources in the inimitability grouping all describe new CA practices
that are going through the costly process of being developed, and the capacity to ensure that these can be copied and implemented by other small-scale farmers as appropriate. And third, the resources in the nonsubstitutability grouping describe the development of new resources required for the future that go beyond the local community, and the capacity to institutionalize this infrastructure to benefit all small-scale farmers. We will now consider each of these three groupings in more detail.
Rarity -- The capacity to get more small-scale farmers to implement well-established and valuable CA practices that are currently rarely used
Of the total of 17 key resources or organizational practices for improving the performance of small-scale farms, six place particular emphasis on the RBV idea of “rarity.” Each of the six refer to existing CA practices that have been proven to be effective in the field but which are relatively rare among small-scale farms, and the capacity for sustainable entrepreneurs to make these more common. In other words, this list identifies the capacities to implement and make more commonplace six core well-established CA-related practices. Contrary to Conventional
RBV, which would see rarity as an opportunity for hoarding CA practices in order to maximize financial self-interests (value capture), the key resources in this data set focus on sharing CA practices for the benefit of everyone (value creation). Table 2 lists each of the six key resources/capacities associated with rarity, followed by the wording and excerpts from the two reports they are drawn from.
--- insert Table 2 about here ---
Inimitability -- The capacity to make emerging (innovative, costly-to-develop) CA practices widely available to all small-scale farmers
Of the 17 key resources or organizational capacities for improving performance of smallscale farms, the five shown in Table 3 refer to development and diffusion of new (and not yet
proven) emerging practices that complement or enhance existing CA technologies. Such innovative practices may be costly to develop or copy by other organizations; sustainable entrepreneurs have the capacity to make these inimitable resources more transferable. For example, the CA-related practice of “planting stations”
is known to be effective in Africa; capacity is need to determine whether and how best to facilitate its transfer to small-scale farmers in Central America. The same is true for new (but not yet proven) practices related to diversified family gardens. These capacities are also related to facilitating farmer-led trials and nurturing a learning-orientation among small-scale farm communities. From a Conventional RBV perspective, because such resources and knowledge are costly to develop (and thus inimitable), they should be hoarded to gain competitive advantage. However, for Radical RBV the opposite is true – their costliness is precisely the reason that they should be disseminated broadly – it is important to facilitate the diffusion of (costly-to-develop) new knowledge that is being created in order to benefit as many small-scale farms as possible.
--- insert Table 3 about here ---
Nonsubstitutability – The capacity to develop CA-sustaining infrastructure (i.e., bundles of resources that would be difficult/costly to replace) to the benefit of small-scale farmers
The remaining six of the 17 total items refer to the capacity to develop or enhance the infrastructure of the larger community that enable CA-related practices to be sustained in the long-term (see Table 4). They involve valuable meta-resources that cannot be easily/affordably replaced by other bundles of resources; sustainable entrepreneur seeks to make these bundles available to all small-scale farmers. These capacities, which involve activities that extend beyond the level of small-scale farms and their immediate local community, include things like advocating for public policy changes on behalf of small-scale farmers, developing capacity for communities to monitor and evaluate systems related to their food security, and developing
programming targeted especially needy groups such as young people. As an example of the need for such larger infrastructure, consider the following:
“The lack of opportunity and desperation of Honduran youth is reflected by the estimated
1 million youth have immigrated to the USA (of a total population of 8.1 million), and the fact that of those who attempt to immigrate, an estimated 1% die in the process. As a response, two of the five organizations focused specifically on helping youth complete their education and become successful farmers. This demographic focus is generally not addressed in most food security programs, but merits the full attention and focus of food security programming” (Braul et al, 2011, p. 7).
Five of these 6 capacities are related to the economic dimension and focus small-scale farmers’ abilities to generate income from the larger marketplace and to be weaned off of external financial supports (which may be needed for start-up). These capacities have a holistic function, able to put together all the pieces of the larger puzzle to improve small-scale farming in lowincome countries. A hallmark of these resources is that they all involve the capacity to go beyond the individual small-scale farms and often beyond the local community, and to connect issues facing small-scale framers with public policy and the larger marketplace. The institutionalization of CA requires a holistic, integrated effort where the community takes ownership.
--- insert Table 4 about here ---
This is the first empirical study we are aware of that examines sustainable entrepreneurship from a Radical vs Conventional RBV perspective. Our findings suggest that
Radical RBV provides useful theory to guide further research and practice in the area of sustainable entrepreneurship. We hope that our exploratory study—which provides support for the two propositions we examined (and where some triangulation is evident, given the overlap between the findings of the two data sources examined here)—will encourage further research in other settings and using other methods, to further test and refine our understanding of sustainable
entrepreneurship. We will now discuss the implications of our study for sustainable enrepreneurship, RBV, and for management research generally.
Our study posited a definition of sustainable entrepreneurship that focused on “value creation” and that placed “value capture” in a subservient role. We then provided empirical data of eleven organizations that manifest that definition. This is noteworthy given the fixation on
“value capture” inherent in the larger literature and the self-fulfilling prophecies this engenders
(even within the BoP literature). It seems that value capture is such a powerful norm that few people would admit to being abnormal, seeking instead to ‘justify’ even their acts of altruism/value creation using instrumental language (Ferraro et al, 2005, p. 14).
Of course, it may be that the organizations in our sample are a very small minority in the world – after all, we did deliberately seek a setting where sustainable entrepreneurship would be most transparently observable. Alternatively, it may be that there may be far more such organizations than may be evident in the literature, but that scholars tend to fixate on businesses that emphasize value capture (“There are currently over 40,000 NGOs operating to develop sustained economic viability for developing countries,” Duke and Long, 2007, p. 1320).
In any case, it is noteworthy that the organizations examined here are working in a sector that encompasses at least one-third of humankind, and they address some of the most important social and ecological issues facing humanity. For these reasons, and others, we suggest that future research continue to examine sustainable entrepreneurship that focuses on value creation rather than value capture. Even if such organizations are an anomaly, they have important implications both in terms of practice and theory. This brings us to our second implication.
Richer understanding of RBV’s VRIN/VCTS
Our use of RBV theory as a lens to examine sustainable entrepreneurship serves not only
to provide empirical support for speculated differences between Conventional and Radical RBV
(proposition #1); it also provided a basis that may to point to richer and more nuanced understanding of the VRIN/VCTS framework at the core of RBT (proposition #2). In particular, our finding that the 17 key organizational resources associated with CA on small-scale farms in low-income countries could be readily divided into three groupings—based on their emphasis on rarity, inimitability and nonsubstitutability—was unexpected and provides a welcome opportunity to enrich the RBV paradigm generally, especially in light of the observation that it is rare for empirical studies to examine the separate VRIN characteristics at the conceptual level
(e.g., Newbert, 2007; Talaja, 2012).
Our findings may help to develop more fully the threefold typology of valuable organizational resources. First, our findings support speculating that “rarity” may be especially important for resources related to an organization’s fundamental core practices at the grassroots level (literally so in the current study). These are the core hands-on technologies that are evident in everyday actions in an organization. In our study it was about organizational practices that served to manage the nature and quality of the soil on small-scale farms, and food security at the farm level. In other settings it may be about the organization’s root technology/process/practice that serves to transform an input into an output.
Second, our findings support speculating that “inimitability” may be especially important for resources that are being newly-developed to improve performance. These resources are a level of abstraction higher than the hands-on “rare” resources. In our study these were initiatives or experiments to test and create “new” knowledge and new organizational practices. In other settings it may be about the developing new technologies/processes/practices that complement a firm’s core activities.
Third, our findings support speculating that “nonsubstitutability” may be especially important for resources that are holistic by their nature, and linked to larger institutions. These resources are at an even higher level of abstraction than “inimitable” resources. In our study these were part of a community’s socio-economic agro-ecosystems. In other settings these may be related to specific industry norms, organizational cultures, and national economic or trade policies.
Moreover, taken together our findings further suggest that these three valuable VRIN dimensions may be related temporally (RBV has been criticized for its lack of dynamism and for its lack of understanding the processes that undergird it, e.g., Kraaijenbrink et al, 2010). It may be that rare resources are the easiest to implement and manage in the short-term, nonsubstitutable resources take the longest to develop, and inimitable resources represent the outcomes of learning processes that enhance on-going long-term improvement and sustainability.
The implications of these findings for management and theory may be significant. In particular, managing these different types of resources requires different kinds of management skills and organizational systems and processes. These challenges are further compounded by the temporal interplay among the different types of resources as, for example, inimitable resources may over time become more familiar and more akin to rare resources. These observations about the differences among the VRIN components, and how they may change over time, are important topics for future research.
Our use of the Radical RBV framework to examine sustainable entrepreneurship among small-scale farms in low-income countries gives rise to a third proposition for future research:
Proposition #3: Sustainable entrepreneurship and “value creation” have a three-pronged process characterized by three basic and temporally linked capacities:
1) the capacity to diffuse core, basic practices that are known to create value;
2) the capacity to develop and diffuse emerging complementary practices that create value; and
3) the capacity to develop a larger infrastructure that sustains value creation (and makes the sustainable entrepreneur dispensable).
Management more generally: Time to reconsider the importance of “value capture”?
Rather than see sustainable entrepreneurship and Radical RBV as “niche” ideas that may have some merit in special situations, why not see them as the new “normal” for a world craving attention to social and ecological well-being? Can we envision a world where managers and organizations are more interested in “value creation” than in “value capture”?
Highly-regarded environmentalist David Suzuki notes that economic theory, and by extension most management theory, is essentially disconnected from the physical world. Our theories are based on abstract concepts like money and markets and competitiveness and profits—hallmarks of a paradigm fixated on “value capture”—that have little linkage to the natural world:
“I won’t go into a long critique, but currently nature and nature’s services – cleansing, filtering water, creating the atmosphere, taking carbon out of the air, putting oxygen back in, preventing erosion, pollinating flowering plants – perform dozens of services to keep the planet happening. But economists call this an ‘externality.’ What that means is “We don’t give a shit.” It’s not economic. Because they’re so impressed with humans, human productivity and human creativity is at the heart of this economic system. Well, you can’t have an economy if you don’t have nature and nature’s services, but economics ignores that. And that’s an unbelievably egregious error.” (quoted in Moffat, 2012)
While Suzuki may be overstating his case, it is true that the vast majority of management theorizing has little connection to the natural ecosystems wherein human existence is embedded
(e.g., Etzion, 2007; Kurucz et al, 2013). In this light, we find it noteworthy that grounding in the physical world is front and center in our current study. If this is important for the world’s most frequent organization, perhaps it is also important for other organizations.
For example, what would happen if management theory and practice were based on a carbon economy, rather than a financial economy? Indeed, the historical growth of the global financial economy is highly correlated with the amount of carbon humankind has been spewing
into the atmosphere (e.g., Wolf, 2007). This suggests that perhaps carbon is the true “energy” that is fueling our financial wealth (i.e., it is not our evermore clever business strategies). Our planet’s carbon energy is zero-sum; when it is released from the ground it goes into the atmosphere.
However, unlike earlier times, today we seldom think of the financial economy as zero-sum; instead we assume that we can “grow” the economy, with positive-sum multipliers where everyone can get richer. But what if the financial economy is merely a proxy for the carbon economy, and what if the global zero-sum carbon economy is at its breaking point (Hornborg,
Even if we believe that technological solutions will eventually save the planet from ecosystemic calamity (e.g., scientists will invent a method to re-claim the carbon from the atmosphere), there is still merit in developing management theories based on a carbon rather than a financial economy. From a carbon-based lens, small-scale farming and CA takes on a whole new meaning. Instead of being ignored because of their minimal effect on the formal financial economy, small-scale farms enter the spotlight as engines of carbon-wealth creation, able to annually sequester up to one tonne of carbon from the atmosphere per hectare. Along the same lines, management theories based on a carbon-based lens would provide counter-cultural criteria for deciding which industries are deemed to be wealth-creating, which policies are worth pursuing, which strategies to adopt and so on. For example, suddenly renewable energy sources would become much more interesting than fracking and building pipelines for the Alberta tar sands. Such theory would be much more directly connect the financial economy with its ecological foundation.
Extending on this provocative line of thought, rather than treat small-scale farms in lowincome countries as a unique setting where Radical RBV seems more appropriate than
Conventional RBV, what might happen if theories like Radical RBV were used as the default
lens through which to analyze goods and services producing organizations also in high-income countries? What if firms shared their VRIN/VCTS “best practices” with others, rather than hoard them? Would it result in market breakdowns, chaos, high prices and gouging the consumer? Or would it result in greater cooperation among stakeholders, greater concern for the natural environment, and decreased gaps between rich and poor? It would certainly give new meaning to the idea of “sustainable advantage.” Bell and Dyck (2012) provide examples of organizations in high-income countries whose behavior is consistent with sustenance economics (i.e., and which goes against Conventional RBV dictates) that create truly win-win-win scenarios. Similar examples and theory are evident in emerging research on topics like Benefit Corporations, the fourth sector, hybrid organizations, humanistic management, social entrepreneurship and so on
(e.g., André, 2012; Battiliana et al, 2012; Davis, 2013; Gaffney, 2012; Von Kimakowitz et al,
2011). Even though there are surely organizations where acting according to Radical RBV seems not to have been entirely positive (e.g., Aaron Feuerstein’s remarkable story with Malden Mills comes to mind), nevertheless more research is called for to determine whether sustainable entrepreneurship based on Radical RBV is workable and desirable beyond small-scale farms in low-income countries.
1. The IAASTD report took six years to complete, cost $12 million, and involved “800 stakeholders representing scientific and agriculture-related organizations around the world” working with “an advisory bureau of 55 people, comprised of representatives from governments, consumer groups, industry, and nongovernmental organizations” who chose the
400 authors to write the 2,500 pages of the report (Stokstad, 2008, p. 1475).
2. The focus in the present study is the multifunctional “Conservation Agriculture” approach that is widely-accepted as an important part of the solution (e.g., Grabowski, 2011; Milder et al,
. The IAASTD Report identifies CA as “one of the most important technological innovations in developing countries … It is a holistic agricultural system that incorporates crop rotations, use of cover crops, and maintenance of plant cover throughout the year, with positive economics, environmental and social impacts” (
Hurni and Osman-Elasha, 2009, p.
3. Note also that, in addition to the data reported here, in order to become familiar with the field, the lead author also travelled to several regions in the world to visit small-scale farms in lowincome countries where CA practices were being implemented. These visits also involved larger CA farms, and development projects that involved providing improved access to running potable water for small-scale farms. Project sites in South America (Bolivia, Paraguay,
Brazil) and Asia (China, DPRK) were visited. The lead author had visited agricultural projects in Africa at an earlier time. Taken together, this provided the lead author with some first-hand understanding of CA and small-scale farms in the far reaches of the world.
4. “Planting stations for perennial crops are made by digging holes up to one cubic meter [usually about 4 liters] and filled with varying amounts of soil rich in organic matter that often includes compost and manure” (Braul et al, 2011, p. 6).
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Table 1: Conventional versus Radical Resource-Based View (RBV) Theory*
Key underpinning assumptions
Resources (e.g., organizational capacities, knowledge, practices, ethics, physical and human traits)
Conventional RBV theory
Emphasis on value capture.
Based on consequentialist utilitarianism.
Organizational assets that allow firms to capture financial value for a firm and create sustainable competitive advantage.
Radical RBV Theory
Emphasis on value creation.
Based on virtue ethics.
Organizational assets that create
(financial or other) value for a firm and its stakeholders, and allow it to enhance overall well-being
(including contributing to social and ecological well-being).
A resource is valuable if it enables a firm to exploit opportunities to enhance its financial performance, and/or neutralize threats to its financial performance.
If a (valuable) resource is held by no/few other current or potential competitors, then it may increase the firm’s opportunity to enhance its profits.
If a (valuable) resource is costly to develop or copy by other firms, then it may increase the firm’s opportunity to enhance its profits.
If a (valuable) resource cannot be easily/affordably replaced by other (bundles of) resources, then it may increase the firm’s opportunity to protect its shareholders’ financial interests.
* Table adapted from Bell and Dyck (2012)
A resource is valuable if it enables an organization to exploit opportunities to enhance overall well-being, and/or neutralize threats to overall well-being.
If a (valuable) resource is held by no/few other current or potential competitors/collaborators, then it may increase an organization’s need to responsibly share the resource with others.
If a (valuable) resource is costly to develop or copy by others, then it may increase the organization’s obligation to teach others.
If a (valuable) resource cannot be easily/affordably replaced, then it may increase the organization’s responsibility use its capacity to set up bundles of resources that enable stakeholders’ overall well-being.
Table 2: Rare
Common Resources: The capacity of sustainable entrepreneurship to increase the adoption rate of valuable well-established CA practices that are infrequently used on small-scale farms
Resource #1: Capacity to improve soil fertility by making more commonplace specific rarelyused agronomic practices associated with CA. (ecological, social)
“Improving Soil Fertility [ecological] - Minimum and zero tillage, soil retention barriers, agro- forestry systems and green manure/cover crops (gm/cc) are [well-established] essential methods to improve soil fertility [ecological] and the food security [social] of smallholder farmers in
Honduras and other Central American countries where corn/bean based production systems dominate” (Braul et al, 2011, item #2, p. 1).
Resource #2: Capacity to conserve water and soils by making more commonplace specific rarelyused agronomic practices associated with CA. (ecological, social)
“Enhancing the programming capacity to develop and implement projects which conserve water and soils must receive greater attention”
[ecological] (Braul et al, 2010, item #3, p. 1; elaborated on p. 3:
“[In particular the] CFGB network needs to build capacity at all levels on prioritizing and promoting key innovations which address water and soil fertility issues which limit crop production. Partners and project participants identified conservation agriculture systems and the introduction of legumes (both as a main crop and intercrop) as key interventions which are having the greatest impact on achieving food security [social] . These innovations are also key climate change adaptation activities”
Resource #3: Capacity to introduce a few key well-established interventions at the farm level to make more commonplace specific rarely-used agronomic practices associated with CA. (social)
“To keep programs focused and manageable, food security projects should initially focus on only a few key [well-established] innovations that are shown to improve food security [social] at the household level” (Braul et al, 2010, item #5, p.1: elaborated on p. 3: Starting a program on a smaller achievable scale helps to establish a solid foundation. … Additional innovations should only be considered after the initial innovations are well established” ).
Resource #4. Capacity to introduce a few key well-established complementary [non-agricultural] interventions at the local community level in order to make more commonplace specific rarelyused agronomic practices associated with CA. (social)
“ Integrated food security programs play an important role in recognizing the diversity of factors affecting food security at the household level [social], but must also remain grounded in a few key [established] and complementary interventions” (Braul et al, 2010, item #6, p. 1; elaborated on pp. 3-4: “ An example would be linking the promotion of legumes in cropping systems and the use of legumes in diets through recipe sharing activities with program participants [social]
Resource #5. Capacity to utilize well-established knowledge within existing networks to make more commonplace specific rarely-used agronomic practices associated with CA. (social)
“ Networking - The rich and vast amount of [well-established] knowledge and practical experience around agro-ecological systems that is already present in Honduras and likely other
Latin American countries should be the source to model future food security programming in
[social] (Braul et al, 2011, item #9, p. 2).
Resource #6: Capacity to enhance food security by with rural programming that makes more commonplace specific rarely-used agronomic practices associated with CA. (social)
“ Programming in Central America–Food security programming by the CFGB network in
Central America should be promoted in rural areas where high food insecurity exists” (Braul et al, 2011, item #4, p. 1).
Table 3: Inimitable
Transferable: The capacity of sustainable entrepreneurship to make
emerging (innovative or costly-to-develop) CA practices widely available to small-scale farmers
Resource #7. Capacity to enhance food security by identifying, describing and disseminating information about new innovative and unique agronomic practices associated with CA. (social)
“The CFGB network needs to share the many unique and innovative technologies implemented by partners which are having a significant impact on enhancing food security”
(Braul et al. 2010, item #1, p. 1; elaborated on p. 3:
“Unfortunately, these technologies are not [yet] widely shared between partners and members. Identification, description and dissemination of these innovate farming practices to improve food security must therefore become a priority”
Resource #8: Capacity to perform research and disseminate findings regarding whether CArelated technologies that were developed (and found to be effective) in one geographic region are also helpful in another. (social, ecological)
“ Conservation Farming - Further investigation is required to determine how the [unproven-in-
Central America] conservation farming system characterized by planting stations and mulch by
CFGB partners in Africa may be applied in the Central American context”
(Braul et al, 2011, item #8, p. 2: elaborated on p. 8:
“The adoption of conservation farming (CF) by smallholder in southern Africa has resulted in significant improvements in food security [social] through the use of minimum tillage using planting stations, precision nutrient placement, rotations and mulching.
Given the success of the CF model, a careful analysis of the applicability of this technology to hillside agriculture currently practiced in Honduras and other Central American countries is necessary” ).
Resource #9: Capacity to perform research and disseminate findings regarding the effectiveness of not-yet-well-established CA-related practices like diversified family gardens. (social)
“ Diversified Family Garden - The CFGB network should investigate the food security impacts
[social] of the diversified family garden and incorporate the concept into food security projects”
(Braul et al, 2011, item #3, p. 1; elaborated on p. 6:
“The land immediately around the home of smallholder farmers is generally under-utilized for intensive food production. This area can become significantly more productive by establishing perennial plants such as cassava, papaya, pineapple, plantain, bananas, citrus, mango, and avocado in planting stations. Annual vegetables and root crops such as sweet potato, cabbage, lettuce, tomatoes, onions, and carrots can also be grown to diversify the diets … In the absence of supporting data, the CFGB network should investigate the link between the family garden concept and nutritional impact. Possible methods to improve the understanding and reporting around the impact of family gardens on nutrition include assisting partners in developing monitoring and evaluation systems to quantify these impacts or using evidence-based research data to draw supporting conclusions” ).
Resource #10: Capacity to promote the diffusion of innovative and emerging CA technologies via farmer-led trials, rather than via model farms. (social)
“Farmer-Led Trials – Innovative production technologies to improve food security
[social] are most effective when they are managed in farmer-led trials rather than on model farms” (Braul et al, 2011, item #10, p. 2).
Resource #11: Capacity to foster participation, ownership, and a learning-orientation in the larger local community in order to secure the long-term success of CA on small-scale farms. (social)
“Community participation and project ownership are key elements that improve the success and sustainability of projects and should be highlighted in proposal and reports”
(Braul et al, 2010, item #2, p. 1; elaborated on p.3: “In particular, the formation of farmer research teams to discuss and experiment with new innovations must be promoted within the CFGB network” [social]).
Table 4: Nonsubstitutable
Substitutable: The capacity of sustainable entrepreneurship to develop societal infrastructure (i.e., bundles of resources that would be difficult/costly to replace) to the benefit of all small-scale farmers
Resource #12. Capacity to support and learn from newly-developing small-scale-farm related initiatives related to public policy. (social, economic)
“The CFGB network needs to increase support to partners who are advocating for appropriate public policy changes that could ensure sustainable food security initiatives”
(Braul et al, 2010, item #4, p.1; elaborated on p. 3:
“The CFGB network needs to increase support to partners who are advocating for appropriate public policy changes that could ensure sustainable food security
[social] initiatives such as policies that improve access to land, strengthen agricultural input and output markets [economic], increased technical support to small scale farmers, good governance
[social] , etc. Sharing of experiences by members and partners around this topic is recommended to enhance the understanding of how to more effectively implement and measure the impact of these types of programs”
Resource #13: Capacity to design, implement and test new small-scale-farm related programming that address specific concerns related to young people, with a view to disseminating the lessons learned. (social, economic)
“ Assisting Youth to Become Successful Farmers – Designing and implementing agriculture development programs for youth to help them establish economically viable farming operations
[economic] is essential for sustainable rural development” [social] (Braul et al, 2011, item #6, p.
Resource #14: Capacity to design and implement new small-scale-farm related initiatives that address specific possibilities related to generating financial income, with a view to disseminating the lessons learned. (economic, social)
“ Income Generation – Food security programs should look beyond immediate subsistence food production systems by developing cash crops that diversify the production system and generate income [economic] in order to improve food security [social]. This focus will help make smallholder agriculture an attractive economic option for the future” [economic] (Braul et al,
2011, item #5; p.1; elaborated on p.11: “ While food security programming has often focused on the production of staples for family consumption, it was clear during the field visits by the delegation that cash crops are very relevant to farmer food security and the long-term sustainability of rural livelihoods. All of the projects visited had some component of income generation integrated into their projects, most notably through the production of crops almost exclusively for cash income, [economic] such as coffee, cashew, lumber, fruit, vegetable production, honey, processed vegetable products, dairy, and the sale of excess basic grains. Of particular relevance was the relationship between higher education, cash production, and the ability of youth to achieve the means to support a new family off the land as an option of choice.
[“A common impact, shared by farmers participating in these income generation projects, was eliminating the need to leave their community on an annual basis to seek work on coffee plantations or elsewhere to earn income to purchase food. Rather, they were able to achieve food security off the production from their farm operation.”] This is critical for a new generation of farmers to be created, instead of a continual flow of youth to urban areas and abroad, with the consequent social disintegration. [social] Similar programming should be considered for food security projects throughout the CFGB network” ).
Resource #15: Capacity to manage external inputs in a way that facilitates developing an infrastructure that can sustain CA over time. (economic, social)
“Input Incentives - To enhance project sustainability and increased community ownership
[social], external input incentives [economic] in food security projects should be minimized or removed”
(Braul et al, 2011, item #1, p.1; elaborated on p. 5: Within the CFGB network, the level of external inputs provided in food security projects is largely contextual [economic] . In situations where smallholder farmers without any assets are returning to regions they abandoned because of conflict, the use of external inputs (often seed and tools) is essential to begin rebuilding livelihoods. However, even in this situation, the importance of training that may involve improved agriculture practices and efficient use of local resources must be emphasized.
When food security projects are implemented in regions where farmers have some assets, building the capacity of farmers to use local resources and develop management skills must be emphasized [social] over the provision of external inputs. If external inputs are used, the beneficiaries should be responsible for some or all of the costs. Ownership is proportional to investment. In addition, there must be an exit plan developed already at the beginning of a project when inputs are provided to assure that the approach is sustainable”
Resource #16. Capacity to institutionalize change by fostering the holistic implementation of a wide variety of integrated CA practices. (ecological, economic, social)
“Agro-Ecological Production – To improve food security, projects should promote agroecological production systems that replace or reduce the use of fertilizers and herbicides and maintain long-term production through a holistic approach [ecological].
(Braul et al, 2011, item
#7. p. 2; elaborated on p. 7:
“All the organizations visited emphasized the use of agro-ecological systems of food production as the best approach to meet current household food consumption needs [social], produce food for surplus sales [economic] and assure long-term sustainable production levels [ecological].
Some of the key principles arising from the agro-ecological approach included protecting soils from erosion by maintaining a soil mulch cover at all times
(especially important on steep soils), enriching the biological activity and inherent nutrients in soils with the addition of organic matter and compost often through planting stations, increasing plant diversity in fields through companion cropping (more than one crop grown simultaneously), using gm/cc [green manure/cover-crops] to enhance soil fertility and protect soils during the dry season, establishing leguminous trees and managing forest regeneration
On average, smallholder farmers claimed that their yields approximately doubled using agro-ecological systems [economic, social]
Resource #17. Capacity to develop systems and train community members to assess and subsequently enhance the adequacy of food security. (social)
“Capacity building on developing strong monitoring and evaluation systems must be enhanced”
(Braul et al, 2010, item #7, p. 1; elaborated on p. 4:
“Building capacity in this area [i.e., monitoring and evaluating a community’s systems around food security] through workshops, mentoring and other training approaches is recommended to both improve the ability of partners to measure the impact of their food security program and simplify reporting [and thus facilitate future sustainable entrepreneurship]” ).