Institutional Entrepreneurship and the Role of
Intrinsic and Extrinsic Motivations:
An Analysis of Environmental Startups in the Netherlands
Student:
J. (Jonathan) Dul
Student number:
10003517
Date:
June 19
th, 2017
Supervisor:
Dr. Y. (Yang) Song
Second supervisor: Dr. G.T. (Tsvi) Vinig
Master Thesis Business Administration – Entrepreneurship and Innovation
Amsterdam Business School, University of Amsterdam
Statement of originality
This document is written by student Jonathan Dul who declares to take full responsibility
for the contents of this document.
I declare that the text and the work presented in this document is original and that no
sources other than those mentioned in the text and its references have been used in
creating it.
The Faculty of Economics and Business is responsible solely for the supervision of
completion of the work, not for the contents.
Table of contents
INDEX OF TABLES AND FIGURES ... 4
ACKNOWLEDGEMENTS ... 5
ABSTRACT ... 6
1. INTRODUCTION ... 7
2. LITERATURE REVIEW ... 9
2.1.
I
NSTITUTIONAL ENTREPRENEURSHIP...9
2.1.1. Institutions ...9
2.1.2. Institutional entrepreneurship ... 10
2.1.3. Battilana et al.’s theoretical model of institutional entrepreneurship ... 11
2.2.
I
NSTITUTIONAL ENTREPRENEURSHIP AND ENVIRONMENTAL STARTUPS... 14
2.2.1. Institutional entrepreneurship and startups ... 14
2.2.2. Institutional entrepreneurship and sustainability ... 15
2.2.3. Institutional entrepreneurship among environmental startups ... 16
2.3.
C
ONCEPTUAL MODEL OF THE PROCESS OF INSTITUTIONAL ENTREPRENEURSHIP... 16
2.4.
I
NTRINSIC AND EXTRINSIC MOTIVATIONS... 17
3. METHODOLOGY ... 19
3.1.
C
ASE AND SAMPLE SELECTION... 20
3.2.
D
ATA COLLECTION... 21
3.3.
D
ATA ANALYSIS... 21
3.3.1. Directed content analysis ... 22
3.3.2. Cross-case analysis ... 22
3.3.3. Computer assisted qualitative data analysis ... 23
3.4.
O
PERATIONALIZATION... 23
3.4.1. Enabling conditions ... 23
3.4.2. Divergent change implementation ... 24
3.4.3. Intrinsic and extrinsic motivations ... 24
3.5.
V
ALIDITY AND RELIABILITY... 25
4. EMPIRICAL RESULTS ... 27
4.1.
C
ONCEPTUAL MODEL OF INSTITUTIONAL ENTREPRENEURSHIP... 27
4.1.1. Enabling conditions ... 27
4.1.2. Divergent change implementation ... 31
4.1.3. Outcomes of quantifying the coding analysis ... 34
4.1.4. Outcomes of the website analysis ... 34
4.2.
I
DEALIST AND PROFIT-
DRIVEN MOTIVATIONS... 35
4.2.1. Idealist motivations ... 35
4.2.2. Profit-driven motivations ... 36
4.2.3. Combination of idealist and profit-driven motivation ... 37
5. DISCUSSION ... 39
5.1.
F
INDINGS... 39
5.1.1. Enabling conditions ... 39
5.1.2. Divergent change implementation ... 42
5.1.3. The role of intrinsic and extrinsic motivations ... 44
5.1.4. Answering the research questions ... 47
5.2.
T
HEORETICAL CONTRIBUTIONS... 48
5.2.1. Contributions to institutional entrepreneurship literature ... 48
5.2.2. Contributions to environmental entrepreneurship literature ... 49
5.3.
P
RACTICAL CONTRIBUTIONS... 49
5.4.
L
IMITATIONS... 50
6. CONCLUSION ... 52
REFERENCES ... 54
APPENDICES ... 57
A
PPENDIXA.
I
NTERVIEW GUIDELINE:
QUESTIONS. ... 57
A
PPENDIXB.
I
NTERVIEW TRANSCRIPTS. ... 58
Transcript: African Clean Energy (ACE) ... 58
Transcript: De Vegetarische Slager ... 63
Transcript: Seamore ... 68
Transcript: Vandebron ... 74
Transcript: WeBuildHomes ... 79
Transcript: Yoni ... 81
Transcript: ZonnepanelenDelen ... 86
A
PPENDIXC.
L
IST OF ANALYZED WEBSITES. ... 92
Index of tables and figures
Figure 1. Battilana et al.’s model of the process of institutional entrepreneurship
12
Figure 2. Conceptual model of this thesis
17
Table 1. Linnanen’s typology of environmental entrepreneurs
18
Table 2. Overview of environmental startups included in the sample
19
Table 3. Coding scheme for field characteristics
23
Table 4. Coding scheme for actor characteristics
24
Table 5. Coding scheme for creating a vision
24
Table 6. Coding scheme for mobilizing allies
24
Table 7. Analytical table for field characteristics
29
Table 8. Analytical table for actor characteristics
30
Table 9. Analytical table for creating a vision
32
Table 10. Analytical table for mobilizing allies
33
Table 11. Quantity of codes across interviews
34
Table 12. Website analysis: total of all cases
35
Table 13. Analytical table for idealist motivations
36
Table 14. Analytical table for profit-driven motivations
37
Acknowledgements
“
Today, making money is very simple. But making sustainable money while being responsible to the
society and improving the world is very difficult.
” – Jack Ma (
⻢马云
)This thesis elaborates on the efforts of entrepreneurs who are trying to change the world for the
better. These people introduce innovative concepts, products, and ideas to change industries and
their related institutions. They strongly believe they can have a significant positive impact on this
planet and its people by having a profitable business case. During the course of writing this
thesis I have been able to meet many of these entrepreneurs, which has been very inspiring.
Personally, I truly believe that this is the right way towards sustainable development: making
money by having a positive impact.
I am very aware of the fact that I could not have written this thesis on my own. First of all, I
would like to show my greatest gratitude to the respondents of this research, without whom this
thesis would not have materialized. All of the founders of these inspiring companies made time
for me despite their tight schedules, which is something I highly appreciate. Secondly, I should
thank my family, friends, and girlfriend, who advised me on both the content and process of this
thesis. I am aware that the writing process sometimes affected my availability and my mood.
Thank you for coping with me. Also, I want to thank second reader Dr. Tsvi Vinig, for
understanding my personal preferences and providing me with the right direction. Lastly, I am
extremely grateful to my thesis supervisor Dr. Song Yang for her feedback and her willingness to
cooperate with me, despite the unusual process and timeframe of writing this thesis.
Abstract
The current world population’s behavior is threatening the future of our planet and a change in
the existing institutions is needed to ensure sustainable development. Institutional
entrepreneurship can change these harming patterns of established and prevalent behavior, rules,
and norms. Despite its importance, however, the most probable theoretical model of the process
of institutional entrepreneurship has never been confirmed in reality. Moreover, there is a lack of
research about the underlying motivational factors that influence institutional entrepreneurs.
This research therefore aims to answer the following two questions: (1) How does the model of the
process of institutional entrepreneurship reflect reality?, and (2) What is the role of intrinsic and extrinsic
motivations in institutional entrepreneurship? In order to answer these questions, environmental
startups are the perfect group of actors to analyze, because they represent a group of innovative
and disruptive actors that can be motivated intrinsically (idealism) or extrinsically (profit). The
research questions were answered through a qualitative approach that made use of content
analysis. Data was collected through website analyses and high-quality interviews among
founders of some of the best-known environmental startups in the Netherlands. The findings
show that it is very plausible that the conceptual model of the process of institutional
entrepreneurship reflects reality, as it was to a large extent visible among the environmental
startups. Moreover, intrinsic and extrinsic motivations seem to play a significant role in
institutional entrepreneurship and deserve further detailed exploration. This thesis provides a
starting point for further research on the intersection of institutional entrepreneurship, types of
motivations, and environmental entrepreneurship. Moreover, it encourages practitioners to take
the different concepts of the process of institutional entrepreneurship into account when trying
to implement divergent change.
1. Introduction
Environmental sustainability is an issue that is on top of most agendas. The world population’s
current behavior endangers our planet and is unsustainable in the long run. For many years, an
increasing number of academic articles have been written on the topic of sustainability, which
indicates the importance of the topic (Elsevier website, 2017). Change is needed on an
individual, political and business level in order to change the harming patterns of established and
prevalent behavior, rules, and norms. Luckily, environmental sustainability seems to be
becoming more and more institutionalized, with ‘green’ products being more popular, an
increasing number of governmental policies that reduce emissions, and people being aware of
the unacceptability of their polluting behavior. This implies that institutional change can play an
important role for the good of the environmental sustainability cause.
The power of institutions in changing processes is vast, because institutions shape
capacities and behavior of agents, and have the ability to change aspirations (Hodgson, 2006).
Institutions thus play a role for all actors in society. Through institutional entrepreneurship,
actors can also influence and shape institutions and thereby influence their own environments.
Businesses, government officials, entrepreneurs, public individuals and all types of other actors
can be the institutional entrepreneur that shapes institutions. Specifically in one widely cited
article published in the Academy of Management Annals (Battilana et al., 2009) the process of
institutional entrepreneurship is conceptualized. The article shows that certain enabling
conditions and implementation activities are part of this process of institutional change. That
model of institutional entrepreneurship is based on a rigorous literature review and can be seen
as the most probable display of the reality of institutional entrepreneurship. At the same time,
however, this model has never been confirmed in reality, which represents a gap in the academic
work on institutional entrepreneurship. The article of Battilana et al. (2009: 91) also indicates a
lack of research about the underlying psychological factors that influence institutional
entrepreneurship. By distinguishing between intrinsic and extrinsic motivations, this thesis aims
to shine some light on psychological factors that possibly play a role in institutional
entrepreneurship.
In order to analyze whether the model of institutional entrepreneurship can be
confirmed in practice, this thesis focuses on one particular type of institutional entrepreneur: the
environmental startup. Thanks to their innovative and disruptive character, environmental
startups are able to push for more environmental sustainability by shaping new sustainable
norms, rules and standards. Moreover, it is argued that some sustainable entrepreneurs are truly
sustainability-driven and are intrinsically motivated to change institutions for the sustainability
cause, whereas other sustainable entrepreneurs are focusing on the economic market
opportunities associated with sustainability (Hockerts & Wüstenhagen, 2010; Klein Woolthuis,
2010: 513). This means that some sustainable entrepreneurs are intrinsically motivated to change
institutions and make the world more sustainable, whereas others are extrinsically motivated and
focusing on economic profit. The group of environmental startups therefore presents a perfect
case to be studied to answer the two research questions of this thesis: 1. How does the model of the
process of institutional entrepreneurship reflect reality?, and 2. What is the role of intrinsic and extrinsic
motivations in institutional entrepreneurship?
Answering these two research questions has a twofold contribution to the literature. First
of all, the never tested theoretical model of Battilana et al. is applied to see whether or not it
reflects reality. Secondly, the role of intrinsic and extrinsic motivations in institutional
entrepreneurship is highlighted for the first time. By distinguishing between idealist and
profit-driven motivations this thesis also dives deeper into a little covered topic in academic literature:
idealism and/or profit as a driver for environmental entrepreneurs.
In order to answer these two research questions, a qualitative approach is chosen. The
sample of this research consists of seven leading environmental startups from the Netherlands.
The Dutch startup ecosystem is very accommodating to disruptive startups that are changing
institutions (European Digital Forum, 2016), which makes it a perfect case to test the model of
institutional entrepreneurship. If the earlier mentioned model is representative for reality, it
should be visible among environmental startups in the Netherlands, being eager and
accommodated to change institutions. Using interviews and website analysis, the thesis
concludes that the conceptual model of the process of institutional entrepreneurship is to a large
extent visible among environmental startups in the Netherlands. At the same time, the role of
intrinsic and extrinsic motivations among the different environmental startups is highlighted and
it is shown that they can play a significant role in institutional entrepreneurship. This provides a
first exploration on the role of these motivations in institutional entrepreneurship.
The following chapters show how the conclusions of this thesis were reached. The
second chapter provides a literature review of the relevant concepts of this thesis and presents
the proposed conceptual model. The third chapter elaborates on the methodology used to
deductively examine institutional entrepreneurship among environmental startups and to
examine the role of motivations. The fourth chapter presents the empirical results of this
research. The fifth chapter discusses the results and provides an analysis of institutional
entrepreneurship and the type of motivations among the environmental startups. The sixth and
last chapter draws up the conclusions of the study.
2. Literature review
This thesis focuses on how environmental startups in the Netherlands engage in institutional
entrepreneurship and emphasizes the role of intrinsic and extrinsic motivations. In this chapter,
the relevant literature regarding institutional entrepreneurship and environmental startups is
discussed. Also, the role of intrinsic and extrinsic motivations in this context is elaborated upon.
After that, the proposed conceptual model is presented which provides direction for the analysis
of environmental startups in the Netherlands.
2.1. Institutional entrepreneurship
Literature on institutional entrepreneurship looks how institutional entrepreneurs are able to
change institutions, even though there are always many actors who prefer to sustain the status
quo. Before discussing the term institutional entrepreneurship, it is important to briefly elaborate
on the concept of institutions.
2.1.1. Institutions
The term institution refers to social norms and behavior that are accepted within a group of
people, companies, organizations, industries, etc. In the literature many definitions are used, but
they are often closely interrelated. Institutions are seen as stable social structures, composed of
cultural-cognitive, normative and regulative elements. They operate at different levels, such as
the world system-, industry-, firm- and interpersonal level (Scott, 1995). Hodgson (2006: 18)
poses the following definition of institutions in his review of institution-focused literature:
‘systems of established and embedded social rules that structure social interactions’. Institutions
have an encompassing character when looking at the literature. Marriage is an example of an
institution, but diplomacy is an institution as well. Just some other random examples of
institutions are: a common managerial practice in firms; the financial system; traffic rules; and the
preservation of art in museums.
The importance of institutions is very high, since they are able to shape actors’ behavior.
Institutional theory argues that behavior, organization, and action of actors are determined by
the institutional structures in their environment (DiMaggio & Powell, 1983; Meyer & Rowan,
1977). The main argument in this structuralist view is that a high level of structurulization in a
certain field limits an actor’s agency (Hoffman & Ventresca, 2004). This would also explain
homogeneity in actors’ behavior within specific organizational fields when these fields are highly
structuralized (DiMaggio & Powell, 1983). However, a tension exists between the institutional
theorists’ emphasis on structure (= institutions) and agency (= actors’ behavior). From a rational
choice perspective, institutions are shaped because they are able to arrange individual and
collective interests (Holm, 1995: 399). This aligns with an agency perspective of institutionalism,
according to which actors are able to pursue their own interests and have an influence on their
social environment (Scott, 2001). Institutional entrepreneurship, which is the main concept in
this thesis, fits within both the structure and the agency perspective. On the one hand,
institutional entrepreneurship acknowledges the fact that actors are able to change institutions,
while on the other hand institutional change influences other actors who are shaped by these
institutions. Battilana et al. (2009: 73) acknowledge the challenge of institutional
entrepreneurship, which ‘travel[s] the difficult road that passes between a rational choice model
of agency on one side and structural determinism on the other’. The theoretical framework and
model proposed in their article is discussed later in this chapter and provides further direction
for this thesis.
2.1.2. Institutional entrepreneurship
The concept of institutional entrepreneurship can be explained when looking at the two words it
comprises: institutions and entrepreneurship. Studies on institutions traditionally focus on
continuity of institutions and the influence that institutions have on actors’ behavior. Research
on entrepreneurship, on the other hand, focuses more on change that can be instigated by
entrepreneurs. Institutional entrepreneurship puts these two forces (institutions and change)
together (Garud et al., 2007: 960). One of the most influential articles in the field of institutional
entrepreneurship states that ‘new institutions arise when organized actors with sufficient
resources see in them an opportunity to realize interests they value highly’ (DiMaggio, 1988: 14).
Next to creating new institutions, institutional entrepreneurship also refers to transformation of
existing institutions by actors who leverage their resources (Garud et al., 2007). Throughout the
years, DiMaggio’s (1988) definition has been generally accepted. Building on this definition,
Battilana, Leca, and Boxenbaum come up with a theoretical framework of the process of
institutional entrepreneurship in their widely cited article ‘How Actors Change Insitutions’
(2009). They also discuss certain definitional issues around institutional entrepreneurship and
argue that actors are only really engaging in institutional entrepreneurship when they (1) initiate
divergent changes, and (2) actively participate in the implementation of these changes (Battilana
et al., 2009: 68). Furthermore, they make the argument that it is possible that actors could
unintentionally be institutional entrepreneurs, by departing from existing institutions in the field
without any plan to change institutions. Also, change does not need to be successfully
implemented for an actor to be an institutional entrepreneur (2009: 70). Sometimes institutional
entrepreneurs fail to change institutions, but they still ought to be called institutional
entrepreneurs (2009: 70). Their last defining statement of institutional entrepreneurs is also very
relevant for this thesis about environmental startups: entrepreneurs (startups) can only be
regarded as institutional entrepreneurs when they generate new business models (2009: 71).
Throughout the institutional entrepreneurship literature five main strategies are found
that actors use in order to change or create new institutions. Zilber (2007) showed that actors (1)
created new symbols for the purpose of shaping and sharing ideas. In a study on a French
entrepreneur in the social responsible investment industry, it was shown that (2) constructing
new measures was another way to initiate institutional change, by quantifying a new corporate
social performance measurement to enhance its own legitimacy (Déjean et al., 2004). (3)
Theorizing is another strategy to initiate institutional change, by providing explanations why a
certain solution should be adopted (Greenwood et al., 2002). Another known strategy for
institutional change is to (4) build consensus in order to find allies and at the same time
diminishing the number of diverse standpoints (Wijen & Ansari, 2007). Lastly, institutional
change can be achieved by applying a strategy in order to (5) forge new collaborations, which can
help in realizing change through collective action (Dorado, 2013). Thompson, Herrmann and
Hekkert (2015) recognize all these strategies in their study of institutional change in the Dutch
biomass torrefaction industry. These strategies are very relevant, but not all-inclusive when
studying institutional change. Battilana et al.’s model (2009) takes a wider scope when explaining
institutional change. This model is thoroughly discussed in the coming paragraphs.
2.1.3. Battilana et al.’s theoretical model of institutional entrepreneurship
The model of Battilana et al. (2009: 87) is shown in figure 1. The following paragraphs discuss
the underlying processes of the model more thoroughly, as the figure does not reflect the
rigorous description that they provide in text of their article. However, these more detailed
concepts are important to explain here, since they are part of the conceptual model that guides
the analysis of this thesis.
Requirements for determining institutional entrepreneurship
As mentioned before in this thesis, an actor can be regarded as an institutional entrepreneur
when an actor initiates divergent changes and actively participates in the implementation of these
changes (Battilana et al., 2009: 69). Divergent change means that the entrepreneur does not align
with existing institutions and tries to break with them. Active participation in implementation
means that actors should be active in mobilizing resources to implement the institutional change.
Other things that need to be taken into account when determining whether someone is an
institutional entrepreneur are the following: it is not necessary that an actor intentionally is
changing institutions, because someone can unintentionally be an institutional entrepreneur;
actors that want to change institutions, but fail, are still institutional entrepreneurs; and startups
are only institutional entrepreneurs when they generate new business models (Battilana et al.,
2009: 70-71).
Figure 1. Battilana et al.’s model of the process of institutional entrepreneurship.
Enabling conditions for institutional entrepreneurship
According to the model, there are two types of conditions that enable actors to become
institutional entrepreneurs. These enabling conditions are (1) field-level conditions and (2)
actor-level conditions (Battilana et al., 2009: 74-75), and all conditions are not mutually exclusive. The
field-level conditions refer to characteristics in the field that can influence the likelihood of
actors in the field becoming institutional entrepreneurs. The first field characteristic that
influences the emergence of institutional entrepreneurship is the presence of a crisis. These
kinds of problems inspire actors to act and to change institutions in order to mitigate the crisis,
to move away from the crisis, or to ensure that the crisis can be dealt with. The second field
characteristic that plays a role is heterogeneity of the field. If there is a high variance in existing
institutional arrangements in a field, this might lead to internal institutional contradiction, which
in turn might result in actors not taking the existing institutional arrangements for granted. They
are therefore more likely to move away from these existing institutional arrangements and create
new ones. The third field characteristic that could enable institutional entrepreneurship is the
degree of institutionalization of a field. Emerging fields are known as lower institutionalized
fields and give way to institutional entrepreneurs, because there is still quite some uncertainty.
Mature fields, on the other hand, are more institutionalized and might therefore have less room
for institutional entrepreneurs to act on. However, some ambiguity on the role of mature fields
exists, since it is unclear but possible that mature fields can also enable institutional
entrepreneurship (Beckert, 1999).
As said, actor-level characteristics can also enable institutional entrepreneurship. Whereas
Battilana et al. (2009) emphasize the social position of actors, this thesis also distillates other
actor-level characteristics from their article. First of all, status might be playing a role in enabling
institutional entrepreneurship: actors’ perceived social position provides them with legitimacy to
initiate change. This way other stakeholders are willing to align themselves with the proposed
changes. However, sometimes lower-status organizations can initiate divergent change when they
are at the periphery of the field, depending on the degree of heterogeneity and
institutionalization. However, no clear statements about how these relations work are made in
the literature (Battilana et al., 2009: 76). Another actor-level characteristic that enables
institutional entrepreneurship is an actor’s multiple embeddedness in different fields.
Embeddedness in multiple fields enables actors to use the knowledge and skills from previous
experiences into another, thus changing or perhaps creating new institutions Lastly, Battilana et
al. acknowledge that other actor-level characteristics such as demographic or psychological
factors can also play a role in enabling institutional entrepreneurship. However, these factors are
not elaborated upon in the literature on institutional entrepreneurship. Therefore, later in this
thesis intrinsic and extrinsic motivations are introduced as potential psychological factors that
can play a role in institutional entrepreneurship, by focusing on the idealist and profit-driven
motivations of environmental entrepreneurs.
Implementation of institutional entrepreneurship
If the field- and actor-level conditions enable an actor to engage in institutional
entrepreneurship, there are two types of activities that an institutional entrepreneur applies in
order to implement institutional change. These two activities are not mutually exclusive: creating
a vision for divergent change, and mobilizing allies (Battilana et al., 2009: 78-85). The first
activity (creating a vision) is being done through three specific types of framing: (1) diagnostic
framing; (2) prognostic framing; and (3) motivational framing. Diagnostic framing helps the
institutional entrepreneur to articulate and expose the problems that are present within the
current institutional setting. Prognostic framing enables the institutional entrepreneur to frame
the proposed new institutions as superior over existing institutions, partially by theorizing the
new institutions in a way that align with the interests and values of (potential) stakeholders.
Motivational framing helps the institutional entrepreneur to provide stakeholders with
convincing reasons to support the new vision. For this type of framing it is necessary that
institutional entrepreneurs understand what stakeholders find important and to find a way to
present the arguments in a convincing way for the audience.
The other activity for implementing institutional change is mobilizing allies. Divergent
change always needs allies to be implemented, so mobilizing allies is important for institutional
entrepreneurs. There are two strategies to mobilize allies. First of all, institutional entrepreneurs
can use discourse in order to develop a new narrative that relates to the present institutional
logics and also refers to the values and interests of possible allies. Using narrative styles enables
entrepreneurs to have a new discourse that appeals to potential allies and helps in mobilizing
those allies. The second strategy to mobilize allies is through mobilization of resources.
Implementing change is always costly and the negative transaction costs that often arise during a
transitional period need to be compensated. Therefore, financial assets are an important resource
in order to mobilize allies who fear the costly transaction period. Another important resource to
mobilize allies is social position. Earlier, this was seen as an important asset in enabling divergent
change, but it can also be highly effective in promoting implementation of change. Having a high
status helps an organization drive the change of institutions in a field. Formal authority is the
third resource to mobilize allies, because it can help to legitimize institutional change. This can
be the institutional entrepreneur’s own formal authority, or formal authority of an ally. Lastly, an
actor’s informal network position can also be a useful resource. Social relations can provide links
to new and other groups, which in turn can be added to the list of potential allies that can be
mobilized.
2.2. Institutional entrepreneurship and environmental startups
The coming paragraphs review the relevant literature that connect environmental startups to
institutional entrepreneurship. Before discussing that specific topic, it is important to explore
research on institutional entrepreneurship’s relation to startups in general. Also, institutional
entrepreneurship in the environmental sustainability domain is elaborated upon.
2.2.1. Institutional entrepreneurship and startups
The role of startups in general in institutional entrepreneurship is interesting. On the one hand,
startups can be frustrated and discouraged by existing institutions that make it difficult to set up
a business. On the other hand, institutional entrepreneurship enables startups to shape an
institutional setting and to create structures in a way that helps their business (Bruton, Ahlstrom
& Li, 2010). Since entrepreneurs are often active in new and developing areas of business, they
can play a rather influential role in shaping institutions (DiMaggio, 1988; Lawrence, Hardy &
Phillips, 2002). However, not all entrepreneurs are necessarily institutional entrepreneurs, since
just starting a new company is not a crucial aspect of institutional entrepreneurship. Startups that
introduce new business models, aiming to set new standards, can be considered institutional
entrepreneurs (Battilana et al., 2009: 73). These ‘system-building entrepreneurs’ want to build
new structures to challenge the old ones. ‘Following entrepreneurs’, on the other hand, use the
existing systems to create a new business (Klein Wolthuis, 2010: 505). This thesis therefore only
focuses on system-building entrepreneurs, since following startups cannot be regarded as
institutional entrepreneurs.
Next to the fact that there is an interesting role for startups in institutional
entrepreneurship, there is another more pressing reason to study the relation between startups
and international entrepreneurship. In institutional entrepreneurship literature, the role of
startups is largely underexposed. Although there is a growing interest in how institutions
influence entrepreneurship, research about the influence of entrepreneurs on institutional change
is still limited (Battilana et al., 2009: 92; Dean & McMullen, 2007: 62). Several scholars argue for
more research on the topic of environmental entrepreneurship and institutional entrepreneurship
(Lenox & York, 2011; Pacheco et al., 2010). Although some research exists that analyses the
effect of institutions on environmental entrepreneurs, the relationship the other way around is
barely covered in the literature. This thesis is meeting the demand to cover that by exploring
how environmental startups engage in institutional entrepreneurship.
2.2.2. Institutional entrepreneurship and sustainability
For environmental sustainability, institutional entrepreneurship is very relevant. The importance
of institutions is very high in the domain of sustainability, possibly even more than for other
domains. This is due to the fact that values, norms, and rules for sustainable behavior are very
important in order to ensure an environmentally sustainable future. Moreover, environmental
degradation is a wicked problem, which is something that cannot be solved by traditional
processes (Klein Woolthuis et al., 2013: 92). Here lies an important role for institutional
entrepreneurship, which can break through traditional institutions and change institutions in
order to protect the environment in a better and more structural way. Some interesting work
exists on institutional entrepreneurship in the domain of environmental sustainability (Child, Lu
& Tsai, 2007; Dean & McMullen, 2007; Peters, Hofstetter & Hoffmann, 2011; Klein Woolthuis
et al., 2013; Thompson et al., 2015). Only one of these articles, however, focuses on how
environmental entrepreneurs engage in institutional entrepreneurship (Thompson et al., 2015).
This thesis is adding to that scarce amount of literature on environmental entrepreneurs and
institutional entrepreneurship.
Another interesting aspect about research on the intersection of institutional
entrepreneurship and environmental sustainability lies in the fact that no research focuses on the
role of ideological motivations in explaining the potential to change institutions towards more
sustainability. The distinction between ideological motivated institutional entrepreneurs and
opportunity-driven institutional entrepreneurs is made (Klein Woolthuis, 2010: 93), but the
influence of these motivations on how these actors engage in institutional entrepreneurship is
not covered. This thesis dives into that gap and explore how intrinsic and extrinsic motivations
play a role in how environmental startups engage in institutional entrepreneurship.
2.2.3. Institutional entrepreneurship among environmental startups
Environmental startups introduce environmentally friendly innovations into the market to
generate profit and help the environment at the same time. In order to be successful as an
environmental startup, it is important that market and institutions also are favorable towards
sustainable products becoming more competitive and legitimate (Shepherd and Patzelt, 2011).
Schaltegger and Wagner (2011) even define sustainable entrepreneurship as creating value
through environmentally or socially beneficial institutional innovations. This shows that
institutional change and environmental startups are interrelated. However, only one article exists
that studies how environmental startups engage in institutional entrepreneurship. According to
Thompson, Herrmann and Hekkert entrepreneurial startups are able to change institutions by
engaging in the five different institutional change strategies that were mentioned before in this
thesis: creating symbols, theorizing, constructing new measures, building consensus, and forging
new relations (Thompson et al., 2015: 612). Their research shows that this is the case for the
biomass torrefaction industry in the Netherlands. Still, it is unclear if the findings of this study
are generalizable to other sustainable initiatives in other industries. Moreover, the findings of
their research are not being mirrored to the theoretical model of institutional entrepreneurship as
presented by Battilana et al. (2009). Neither does the article of Thompson et al. (2015) take the
distinction between intrinsic (ideological) motivations and extrinsic (profit-driven) motivations
into account. These are issues that are dealt with in this thesis.
2.3. Conceptual model of the process of institutional entrepreneurship
The conceptual model that is used for the analysis of institutional entrepreneurship among
environmental startups is slightly more sophisticated than the figure presented by Battilana et al.
(2009: 87), as it includes some more detailed characteristics of institutional entrepreneurship as
distilled from their article. For example, in Battilana et al.’s model only ‘actor’s social position’ is
displayed, whereas they distinguish more actor characteristics in the text of their article. In this
thesis’ conceptual model it is therefore called ‘actor characteristics’ and includes all the concepts
that are mentioned before in this literature review. Next to that, among actor characteristics, the
article also includes type of motivations as a psychological factor that could enable institutional
entrepreneurship. This relates to the intrinsic (idealist) and extrinsic (profit-driven) motivations.
The conceptual model that guides the analysis of this thesis is shown in figure 2.
Figure 2. Conceptual model of this thesis.
2.4. Intrinsic and extrinsic motivations
According to literature of psychology, motivations are very important to explain why people do
the things they do (Ryan, 2000). Two types of motivations exist: intrinsic and extrinsic
motivations. Intrinsic motivations relate to someone doing something because it is inherently
interesting or enjoyable, whereas extrinsic motivation refers to people doing something because
it provides them with a specific outcome (Ryan, 2000: 55). For this thesis, it is interesting to look
at two types of motivations that are especially relevant for environmental entrepreneurs: idealist
motivations and profit-driven motivations. According to Reiss (2004), idealism is one of the
sixteen basic intrinsic motivations. This indicates that environmental entrepreneurs, who start a
company to change institutions because of their ideals, are at least intrinsically motivated when it
comes to this distinction. On the other hand, money or financial rewards are seen as an extrinsic
motivation (Brown, 2007). This indicates that, within this distinction, profit-driven
environmental startups are extrinsically motivated.
With regards to the distinction between ideological and profit-driven environmental
startups that engage in institutional entrepreneurship, only very few articles were found that
clearly take a position. Environmental entrepreneurs can capture economic value while reducing
environmental degradation at the same time. According to Dean and McMullen (2007: 62), ‘this
is achieved by institutional entrepreneurs who are self-interested profit-seeking actors who
establish or modify institutions to reduce transaction costs.’ They further argue that a
self-interested environmental entrepreneur can benefit society’s interests, by changing institutions for
the good of the environment. This view of environmental entrepreneurs as profit-driven
entrepreneurs does not align with Hockerts and Wüstenhagen (2010) who argue that sustainable
transformation starts with highly idealist entrepreneurs. They say that idealist startups play an
important role in the initiating phase of industry transformation towards more environmental
sustainability. This is in line with Pacheco et al. (2010), who argue that environmental
entrepreneurs create or change institutions in order to reduce environmental degradation, which
is an ideological motivation.
Linnanen (2002) distinguishes four types of environmental entrepreneurs, related to their
motivations. This typology is also used in the conceptual model of this thesis. He classifies
entrepreneurs according to two criteria: (1) desire to change the world; and (2) desire to make
money (Linnanen, 2002: 76). The four typologies that he recognizes are: (1) self-employer; (2)
non-profit business; (3) opportunist; and (4) successful idealist. Figure 2 shows these typologies
and their position on the two criteria.
Table 1. Linnanen’s typology of environmental entrepreneurs.
De
sir
e t
o c
ha
ng
e
th
e w
or
ld
Desire to make money
LOW
HIGH
HIGH
Non-profit business
Successful idealist
LOW
Self-employer
Opportunist
The distinction between intrinsic and extrinsic motivations completely lacks any attention in
institutional entrepreneurship literature. Considering the fact that DiMaggio (1988: 14) defined
institutional entrepreneurs as actors that ‘realize interests they value highly’, it is very plausible
that intrinsic motivations are apparent among institutional entrepreneurs. Unfortunately, neither
intrinsic (ideological) nor extrinsic (profit-driven) motivations and their role in institutional
entrepreneurship have been analyzed in any article before. This thesis sheds some light on the
influence of the type of motivations and how they affect institutional entrepreneurship. Within
the theoretical model of Battilana et al. (2009) and the conceptual model of this thesis, it
perfectly fits into the actor-level characteristics that enable institutional entrepreneurship.
3. Methodology
This chapter presents the research design used to examine the presence of the proposed
conceptual model and the role of intrinsic and extrinsic motivations is in institutional
entrepreneurship. First, environmental startups in the Netherlands are presented as the sample
used to answer the research questions. Interviews are the main source of data of this thesis,
supplemented by the environmental startups’ websites. Next, this chapter elaborates on the
analysis method: directed content analysis is used to deductively find out if the conceptual model
reflects reality across the different startups. Content analysis is also used to explore the presence
and role of intrinsic and extrinsic motivations. The conceptual model is regarded as plausible
when the different theoretical concepts are found to be present in the case of environmental
startups in the Netherlands. This chapter also discusses the operationalization of the conceptual
model by presenting the coding schemes. Moreover, it elaborates on how intrinsic and extrinsic
motivations are measured. After that, issues with regards to validity and reliability are considered.
Table 2. Overview of environmental startups included in the sample.
Company name Core business Contribution to the
environment Why an institutional entrepreneur? Interviewee
African Clean
Energy (ACE) Production and sales of energy efficient cookstoves.
Elimination of black carbon emissions; reduction in fuel use.
Aiming to change the way of cooking in developing countries. Ruben Walker Co-founder Commercial Director De Vegetarische
Slager (The Vegetarian
Butcher)
Production and sales of vegetarian meat products.
Reducing greenhouse gases that result from livestock farming.
Aiming to replace bio
industry. Jaap Korteweg Founder CEO
Seamore Sales of seaweed products for food consumption.
Reducing footprint of land-based food products by introducing seaweed.
Making a new source of food accessible to everyone.
Willem Sodderland Founder
Vandebron
(Fromthesource) Online marketplace for buying green energy straight from the source.
Increasing the use of renewable energy by making it transparent and accessible for everyone. Aiming to replace unsustainable energy sources in the Netherlands with renewable energy. Remco Wilcke Founder CEO
WeBuildHomes Offers an online portfolio packed with affordable architect designed houses.
All the houses are highly sustainable and have a minimum or positive effect on the environment.
Overturning the traditional development, design and building process by making architecture affordable.
Luke Bruins Co-founder CEO
Yoni Sales of tampons, pads and panty liners made of organic cotton.
Reducing impact on the environment: using organic cotton for the products and biologically degradable packaging.
Offering women a new choice when it comes to female care products.
Mariah Mansvelt-Beck Co-founder
ZonnepanelenDelen
(WeShareSolar) Crowdfunding platform for community solar projects.
Increasing the use of solar energy by enabling people to buy solar energy without owning a solar panel.
Offering people a new possibility to engage with solar energy.
Matthijs Olieman Co-founder
3.1. Case and sample selection
In order to test whether or not the conceptual model of institutional entrepreneurship reflects
reality among environmental startups and to discover the role of motivations, this thesis focuses
on the case of environmental startups in the Netherlands. According to the 2016 Startup Nation
Scoreboard, the Netherlands ranks first thanks to its enabling ecosystem for entrepreneurs
(European Digital Forum, 2016). This means that, if environmental startups want to change
things, it should be possible in an accommodating country as the Netherlands. In other words:
the process of institutional entrepreneurship should be clearly visible among startups in the
Netherlands, because there is space for innovative change and there is an environment that
supports this kind of change.
According to a research of the Dutch Rabobank, there are about 400 startups in the
Netherlands (Rabobank, 2016). Rabobank defines startups as companies with innovative and
disruptive business models. Out of these 400 startups, a small amount is likely to be an
environmental startup. The researcher estimates that 10 percent of these startups are active in
environmental sustainability, which would amount to 40 environmental startups in the
Netherlands. The sample of environmental startups in this research consists of seven of these
companies. These companies are all younger than 10 years, because they need to qualify as a
startup. Selection of these startups was based on the dependent variable of this research:
institutional entrepreneurship. All the selected startups qualify as institutional entrepreneurs,
because they are presenting innovative business cases aimed at changing institutions. Table 2
shows the sample and indicates why they can be called institutional entrepreneurs. Also, all the
startups can be considered environmental startups, since positive contribution to the
environment is part of their business case (see table 2). Another important selection criterion for
these startups is the industry they are active in. The final sample selection is based on difference
in industry they are active in, so that they complement each other in order to refine the existing
theory. The covered industries are: cookstoves, energy, female care products, meat, real estate,
seaweed, and solar panels. This aligns with Yin’s statement that cases must be chosen to
complement each other (Yin, 2013).
Even though this sample has a rather small n, it can still be considered a sufficient
number of startups to analyze the conceptual model considering that the population is also not
that large. More importantly, however, is that the quality of the data is very high and difficult to
access. The interviewed startups are household names in the Netherlands and represent an
upcoming group of successful environmental entrepreneurs who are really changing their
respective industries. Secondly, founders/CEOs of the startups were interviewed, which is
impressive since these are well-known Dutch companies with lots of media coverage and
publicity. A small n is justified considering the fact that boardroom interviewing is difficult, but
highly valuable (Baker et al., 2012: 8). In this context, the sample can be considered sufficient,
having seven founders/CEOs as respondents.
3.2. Data collection
Triangulation is used to collect sufficient and high-quality data in order to analyze institutional
entrepreneurship among environmental startups in the Netherlands. Firstly, founders/CEOs of
all environmental startups from the sample are involved in semi-structured interviewing.
Semi-structured interviews enable the interviewer to cover all topics of interest, while asking open
questions that allow the respondents to speak in their own words. The questions of these
interviews cover topics that reflect the conceptual model: company characteristics; industry
characteristics; company activities; story telling; and motivations. The interview guidelines and
leading questions are found in Appendix A. It was essential to speak with the founders of all
companies, since some actor characteristics such as multiple embeddedness and motivations are
related to the individual persons starting the company. All interviews were conducted in the
Dutch language, recorded and transcribed (see Appendix B for transcripts in Dutch). During one
interview (WeBuildHomes) the recording device failed, so the researcher used his notes to be
able to include this respondent in the analysis. The exemplary quotations that are used in this
thesis are translated from Dutch to English for the purpose of presenting the results. All quotes
used in this thesis were checked with all respondents. They confirmed that these quotes are true.
All respondents were also asked if they want the information to be confidential. They all agreed
there was no problem if their real names would be used.
The second data source of this thesis consists of texts from websites of the
environmental startups. These websites are a good reflection of the public standpoint of the
companies and provide sufficient information on many of the topics that are also covered in the
interviews. Texts from the websites are therefore used to confirm the findings of the interview
analysis. A list with the URLs of the websites is found in Appendix C.
Thirdly, an overall Internet search was performed using Google to find out how many
awards or prizes all the different companies had one. The complete list of prizes and awards per
company is found in Appendix D.
3.3. Data analysis
This thesis uses a qualitative and positivist approach in analyzing the collected data. Even though
the collected data is not statistically analyzed, the data is objectively examined and aims to
represent a reality in the world. This positivist perspective pairs well with the deductive approach
that the analysis takes by trying to examine whether or not the conceptual model is reflected in
reality among environmental startups in the Netherlands. In exploring the role of intrinsic and
extrinsic motivations in institutional entrepreneurship, this qualitative content analysis also highly
applicable.
3.3.1. Directed content analysis
Directed content analysis is used as the method of analysis in this thesis. Content analysis
enables researchers to analyze collected data in a systematic way by coding and categorizing the
data (Neuendorf, 2002). Using the directed approach enables the researcher to deductively apply
a content analysis, by analyzing the data from texts in order to validate a theoretical framework
(Potter & Levine-Donnerstein, 1999: 264). Theoretical predictions about the phenomena of
interest help to determine the initial codes that are used to understand the collected data (Hsieh
& Shannon, 2005: 1281). By using the conceptual model of this thesis and the earlier mentioned
typology of motivations for environmental entrepreneurs, the collected data is analyzed.
The available data of the interviews is analyzed in three ways. First, all transcripts are
coded and categorized and the qualitative results are presented. This includes interpretations by
the researcher of the weight and content of quotations. Next, for each interview all codes are
counted in order to see whether or not the qualitative interpretation of the results also aligns
with the quantity of used codes and categories. This is just a quantitative measure of the use of
concepts in the model and, due to the low n, does not include a statistical analysis. These scores
are then categorized as low, medium, or high and reflect that quantity of the codes. Thirdly, all
codes and categories that relate to the intrinsic and extrinsic motivations of the environmental
startups are analyzed separately to see how they relate to the other aspects of institutional
entrepreneurship. This enables the researcher to recognize if and how these motivations play a
role in institutional entrepreneurship.
The collected website data is also analyzed by coding and categorizing in order to see if
the message of the environmental startups’ websites align with the collected interview data. The
differences are further interpreted and explained if necessary.
3.3.2. Cross-case analysis
In order to find out whether or not the conceptual model is represented in the reality of
environmental startups in the Netherlands, a cross-case analysis is performed (Mathison, 2005).
Each environmental startup is thus seen as a case. This enables the researcher to examine if the
conceptual model of institutional entrepreneurship is present across different environmental
startups in the Netherlands. For all different concepts of the conceptual model a cross-case
analysis is performed in order to be able to analyze the presence of the process of institutional
entrepreneurship among the cases.
The same accounts for the analysis of intrinsic and extrinsic motivations. Similarities and
differences across cases are recognized, examined and interpreted to provide an interesting
analysis on the role of these two types of motivations in institutional entrepreneurship.
3.3.3. Computer assisted qualitative data analysis
The researcher used Atlas.ti, a Computer Assisted Qualitative Data Analysis (CAQDAS)
software program, which helped with categorizing, coding, and interpreting the collected data.
The coding schemes that resulted from that analysis are leading in this research and presented in
the next part when discussing the operationalization of the different concepts at stake.
3.4. Operationalization
All concepts of the conceptual model of institutional entrepreneurship are coded in a way that
they reflect the underlying theory. This enables the researcher to measure the concepts
consistently throughout all interviews and websites. Four coding schemes are used, reflecting the
four different themes in the model of institutional entrepreneurship: (1) field characteristics, (2)
actor characteristics, (3) creating a vision, and (4) mobilizing allies. The coding schemes are
found in table 3 to 6.
3.4.1. Enabling conditions
Table 3. Coding scheme for field characteristics
Category Codes Description
Crisis Political crisis Political instability and/or upheaval.
Economic crisis Economic instability or a call for change in the economic system as a whole, or just related to the company. Environmental crisis Environment is degrading and change is needed to
provide continuity for future generations.
Other crisis Other type of shocking or surprising development in an industry that ought to be stopped according to respondent.
Heterogeneity Many institutional arrangements High variance in existing institutional arrangements in the field.
Few institutional arrangements Low variance in existing institutional arrangements in the field.
Institutionalization Mature field Institutionalized and mature field, with solid institutions. Immature field Less institutionalized and emerging field with uncertainty
Table 4. Coding scheme for actor characteristics
Category Codes Description
Status Reputation for insiders and outsiders The person or company’s reputation for actors inside and outside the industry.
Acknowledgements Awards that acknowledge the company’s efforts. Multiple embeddedness Experience in different industries Activities of an actor outside the industry the actor is
currently active in. Type of motivations Idealist Desire to change the world.
Profit-driven Desire to make money.
3.4.2. Divergent change implementation
Table 5. Coding scheme for creating a vision
Category Codes Description
Diagnostic framing Exposing problems of current institutions The current institutions are lacking certain important aspects or are doing wrong.
Prognostic framing Company is superior to current institutions The company’s proposed change is better than the current institution’s practices.
Motivational framing Providing support for company The company has many benefits and the proposed change is shown to be better because of a certain reason.
Table 6. Coding scheme for mobilizing allies
Category Codes Description
Use of discourse New story compared to existing institutions The company frames its activities as new solutions that are currently not being used.
Mobilizing resources Use of material resources The company has access to money, which could help to mobilize allies.
Use of social position The company uses its social position to mobilize allies. Use of formal authority The company makes use of formal authority to mobilize
allies.
Use of network position The company uses its network to mobilize allies.
