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Sustainability issues for start-up entrepreneurs *.

Article Excerpt
The concept of entrepreneurship covers many types of organisational and individual activities but it takes its most obvious form in the decision by an entrepreneur to start a new business. In recent years, researchers From different perspectives have focused more attention on the entrepreneurial activity involved in starting one's own business. Sociologists, psychologists and economists have all tried to give answers to questions such as: 'What conditions support business start-ups?'; 'Why do individuals decide to become entrepreneurs?'; 'What impacts do start-ups have on the economy?'. Environmental business management research has not yet concentrated on start-ups, although this early stage of a business enterprise's life might be a sensible starting point for environmental management. This paper is a report of an empirical study into start-up processes, designed to discover whether there are opportunities for implementing more sustainable business practices From the very beginning of new business ventures. Start-up entrepreneurs as well as start-up business advisers were interviewed in order to identify the points where environmental management could be incorporated into the start-up process. In the group of entrepreneurs interviewed, conventional as well as ecologically oriented entrepreneurs were represented. The different orientations made it possible to compare their respective approaches to the adoption of more sustainable business practices. It was found that starting a new business venture is a very complex process. Start-up entrepreneurs have to comply with a variety of external demands. Business advisers and banks as well as market conditions often interfere with the pursuit of ecological business practices. Information on how to start an ecologically oriented business venture is notably not provided by institutions that support start-ups. The comparison of ecologically oriented start-ups with conventional start-ups showed that the most crucial factor for environmental considerations in the start, up process is the entrepreneur him- or herself.

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Turning the focus to start-ups

IN CORPORATE PRACTICE, DIFFERENT LEVELS OF ECOLOGICAL AWARENESS AND activity can be seen. Most companies still practise a more or less defensive strategy. They comply with legal obligations and try not to attract special attention from local residents, environmental activists or the general public (Belz and Strannegard 1997). However, there are a few eco-pioneers (1) whose environmental performance is much better than that of the average company (Isaak 1998). They save energy and resources and, as a consequence, save substantial costs. Furthermore, these entrepreneurs look for opportunities in their respective markets to develop goods and services for environmentally aware customers. Their companies are on their way to sustainability. (2) However, although most of them are also successful in economic terms, other companies do not necessarily follow their example. The green enterprise is still an exotic enterprise.

Since the mid-1990s a new wave of the greening of industry has been occurring in Europe and the industrialised world. For example, standardised environmental management systems (EMSs)--mainly in the mould of the Eco-management and Audit Scheme (EMAS) of the European Union (EU) or ISO 14001 of the International Organisation for Standardisation (ISO)--have been developed and implemented within more than 40,000 companies worldwide. (3)

However, the positive environmental effects of EMSs are rather small (see e.g. Dyllick and Hamschmidt 2000; Morrow and Rondinelli 2002), and the normal state of organisational practice does not match the state of the art in organisational theory. EMSs are expert-based systems in which corporate environmental care is dictated in a top-down way. It is rare to find substantial changes in corporate culture arising from the adoption of EMSs. In practice, the implementation of more sustainable business measures into an existing organisational culture is often an arduous and lengthy process, resulting in conventional additional environmental conservation measures that do not reach beyond daily operating procedures (Freimann and Schwedes 2000; Freimann and Walther 2002).

The promotion of sustainability in start-up businesses seems to be a more promising approach, for a number of reasons. New businesses have yet to develop an organisational culture. As examples of green-green businesses founded with the clear objective of profitability through serving ecological and social aims show, there are opportunities for developing sustainable corporate cultures from the very beginning of a new venture (Anderson and Leal 1997). According to this argument, it should be easier to 'infect' founders of new businesses with the idea of sustainability than to rebuild the established corporate cultures of existing companies. Thus, the focus should not only be on the few ecopreneurs who convert their ideas of sustainable enterprises from the very first moment they think about building up their own businesses but also on start-ups by entrepreneurs just planning to create a conventional new venture who also need to become aware of the opportunities that more sustainable business practices have to offer. A widespread sustainability orientation in start-ups could speed up the overall process of sustainable restructuring of industry and commerce.

The basic hypothesis of our research project is that new business ventures are generally more open to new ideas, because they lack an already existing organisational culture; therefore, it should be easier to introduce sustainable thinking into new ventures than into established enterprises. In this paper we report on the results of an empirical study of start-up processes. The start-up processes of conventional and of sustainability-oriented start-ups are analysed in order to discover how they differ. It is also an aim of the analysis to identify the triggers that lead to the implementation of more sustainable business practices in the new 'green' business ventures. The results of the analysis will serve as a basis for the development of services designed to support start-ups in adopting sustainable business practices.

Research design and method

In order to discover starting points for...

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