Internationalization processes of Dutch and German social enterprises

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Internationalization Processes of

Dutch and German Social Enterprises

Name: Carolin Braun

Student Number: 11186577

Study Program: M. Sc. Business Administration – International Management

Date of Submission: March 24th, 2017

First Supervisor: Erik Dirksen MSc.

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Statement of Originality

This document is written by Carolin Braun 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.

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List of Abbreviations

BV - Limited Liability Company (in Dutch: Besloten Vennootschap met beperkte aansprakelijkheid)

CIE - Comparative International Entrepreneurship CSR - Corporate Social Responsibility

EMES - Emergence des Entreprises Sociales en Europe (Research Network)

EU - European Union

ESFN - European Social Franchising Network GDP - Gross Domestic Product

gGmbH - Non-profit Company with Limited Liability (in German: gemeinnützige Gesellschaft mit beschränkter Haftung)

GmbH - Company with Limited Liability (in German: Gesellschaft mit beschränkter Haftung)

ISE - International Social Entrepreneurship

KfW - A German Public Sector Financial Institution (in German: Kreditanstalt für Wiederaufbau)

MDG - Millenium Development Goals NGO - Non-Governmental Organization

List of Tables

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Abstract

This paper investigates the internationalization processes of Dutch and German social enterprises with an explorative, inductive approach using ten case studies which are based on interviews. Research in the context of social entrepreneurship often focuses on the still unresolved debate regarding a universal definition of the term. International social entrepreneurship research is even less developed, which is why this paper draws on theories from general international business and entrepreneurship research. The results were framed as six propositions, which suggest that the motive for internationalization depends on the type of issue tackled (social or environmental) and that the internationalization is a reactive process with serendipity playing a big role in the former case and an active process in the latter. Nonetheless, the internationalization process for both kinds of social ventures, specifically the market selection, is influenced by the networks of the social enterprises, especially for those that tackle social issues. Since the most widely used entry modes were franchising or other forms of licensing, the findings refute the Uppsala or stage model from international business theory. Since entrepreneurship theory emphasizes the role of networks, it might be more suitable to explain the internationalization of social enterprises. This is especially evident in relation to the success factors, of which the most important one relates to networks as well: finding the “right” people to work with, partly also in order to compensate for the lack of knowledge regarding the foreign local market.

Keywords: internationalization / social entrepreneurship / social enterprise / social franchise / international social business / networks / market selection / serendipity

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1. Introduction

About ten years ago, the Nobel Peace Prize was awarded to the Bangladeshi Muhammad Yunus, the founder of the Grameen Bank, which is famous for pioneering the microcredit concept (Nobel Media AB, 2014). Naturally, this awarding produced tremendous public interest in the idea of social entrepreneurship and Mr. Yunus has been referred to as one of the most famous social entrepreneurs ever since (Choi & Majumdar, 2014). Soon after, in 2011, the European Commission launched the Social Business Initiative, which aims to increase the visibility of social entrepreneurship, make it easier for this kind of enterprises to obtain funding and establish a better legal environment for them (European Commission, 2017). In the follow-up of that initiative, the European Commission stressed that the diffusion of best practices in EU countries needs to be investigated (European Commission, 2016). Furthermore, in 2015 the World Economic Forum called social entrepreneurship legitimately “a growing global movement” (Milligan & Schwab, 2015) and governments have started to provide funding for social entrepreneurial activities and encourage the formation of new initiatives by establishing new supportive organizational frameworks (Choi & Majumdar, 2014; Lambooy & Argyrou, 2014).

Parallel to the rising interest in social entrepreneurship from the business world and current politics, researchers of the academic world have been investigating the topic and published a growing number of articles about it (Rey-Martì, Ribeiro-Soriano & Palacios-Marqués, 2016) while the number of conferences on the topic has increased and new scientific journals devoted to the topic have been launched within the last decade (Choi & Majumdar, 2014). Bosma, Schott, Terjesen and Kew (2016) even identify an exponentially growing interest in social entrepreneurship by academics, policy-makers, and practitioners. However, there is still no single definition of the term “social entrepreneurship” upon which the majority of researchers would agree (Pless, 2012). Instead, a variety of definitions has emerged, especially during the last two decades. What is common to all of them is the notion of the business having a “social impact”, but besides that, the definitions show a wide range. Chapter 2 will further examine this lack of a uniform definition.

As this thesis investigates Dutch and German social enterprises, it understands them according to the definition of the EU, which will be explained in more detail in chapter 2. The definition emphasizes the importance of the social impact compared to making a profit. However, it also differentiates social enterprises from traditional NGOs, which normally rely

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2 on donations and do not generate own revenues (Zahra, Newey & Li, 2014; Zahra, Gedajlovic, Neubaum & Shulman, 2009).

The naturally inherent hybrid nature of social enterprises describes the tension between financial stability and the pursuit of the social mission (Dacin, Dacin & Matear, 2010; Zahra, Gedajlovic, Neubaum & Shulman, 2009) and comes along with unique management challenges. Additional complexity occurs when social enterprises internationalize. So far, this topic has not yet been investigated a lot. Marshall (2011) notes that social enterprises are confronted with various differences, for example, in language or culture and geographic and economic distances, when they internationalize – much as traditional enterprises when they cross borders. However, the management of international social enterprises can be assumed to be even more complicated, since social ventures are inherently confronted with complex environments. According to Chen, Saarenketo and Puumalainen (2016), international social entrepreneurship (ISE) is an emerging phenomenon that has not been studied a lot so far, although they recognize that an increasing number of social entrepreneurs achieve internationalization. The emphasis on the social impact should actually imply an inherent inclination towards internationalization, since many issues that social enterprises tackle are global in nature (Zahra, Rawhouser, Bhawe, Neubaum, & Hayton, 2008) – such as environmental issues or community development like in the case of the already mentioned Grameen Bank, which is active in more than 37 countries by now (Grameen Bank, 2017). Also, plans to internationalize could attract funding, which is typically a major income of social enterprises and therefore important. Still, most research on the processes, motives and success factors of internationalization is based on traditional, profit-oriented businesses (Zahra, Newey & Li, 2014), which is why the internationalization processes of social enterprises represent a research gap.

The aim of this master thesis is therefore to identify the underlying reasons for the internationalization of Dutch and German social enterprises, with sub-processes like market entry mode, success factors of the internationalization, and how the process is triggered as well as how the foreign markets are chosen. The findings hopefully have implications for future research as well as for practice and for actors of the institutional environment in The Netherlands, Germany, and on EU level. This thesis is therefore a reaction to the research questions proposed by Zahra, Newey and Li (2014) and the aforementioned call of the European Commission. It adopts an exploratory, qualitative research design, since the

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3 objective is to understand the internationalization processes of social enterprises and the research on this topic and on international social ventures in general is still in its early phase. Case studies are used in researching contemporary phenomena in real life contexts and can have several different sources of evidence. Among them are interviews and documents. Using multiple sources of evidence increases the validity of the study (Yin, 2013). The goal of case studies is usually to develop propositions that can be tested in further research (Langley, 1999). This master thesis therefore collected data through ten semi-structured interviews with different international social enterprises from Germany and The Netherlands. According to Eisenhardt (1989), a number between four and ten cases works well without adding too much complexity or too much data. Interviews are also especially suitable when the subject of interest happens infrequently and irregularly (Eisenhardt & Graebner, 2007). Additional data such as press releases were consulted to supplement the data from the interviews. Chapter 3 describes the research method more in detail. Subsequently, propositions were derived from the data collected.

It is hoped that this paper will contribute to the ongoing research of social entrepreneurship by exploring the patterns of their internationalization and thus help social entrepreneurs to increase their impact globally by learning from the insights of other companies in similar situations. It might also help governments and other institutions to design favorable policies for the support of international social entrepreneurship.

After covering the research on this topic and on general internationalization in the following chapters, the situation of social entrepreneurship in The Netherlands and Germany will be introduced in order to better understand the theoretical background of this paper. This is then followed by a description of the research method and a discussion of the findings, leading to several propositions based on the case studies. The thesis concludes with implications for research and practice and opportunities for further research.

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2. Literature Review: The Problem of Defining the Term Social

Entrepreneurship

It has already been mentioned in the introduction that there is no definition of social entrepreneurship upon which researchers would agree unanimously (Mair & Martí, 2006); a unifying conceptual framework has not yet emerged (Choi & Majumdar, 2014). Interestingly, the interviews showed that the social entrepreneurs themselves defined the term in various different ways, so apparently there is no consensus in practice either. While the community manager from Snappcar said that for social enterprises, “social impact and financial growth or stability […] are both equally important for the business”, the COO from Dialogue Social Enterprise GmbH stated: “We take social issues and tackle them with entrepreneurial means”. In a similarly unspecific manner, the brand ambassador from Dopper defined social entrepreneurship as “using your business as a source for good”. Probably the most accurate answer regarding the definition of social entrepreneurship was threfore given by the chairwoman of wellcome, who simply said that the term is “hard to grasp”.

A related complicating factor for social entrepreneurship research is the fact that there is no officially recognized legal form for social enterprises in the majority of countries, so even the number of social enterprises cannot be traced (Cheriakova, 2013). This also explains, at least to some extent, why quantitative empirical work in this domain is relatively scant (Bloom & Smith, 2010). Altogether, the lack of a singular definition makes the research on social entrepreneurship difficult. Dacin, Dacin and Matear (2010) list 37 definitions of social entrepreneurship and state that they believe there is no resolution for the debate, since a definitive set of characteristics that would apply to all kinds of social entrepreneurial activities across all contexts is unlikely. Likewise and quite recently, Choi and Majumdar (2014) even conclude that the term is still a contested concept and that a single accepted definition is almost impossible. Nevertheless, this should not and is not restraining the research on the topic. In order to explain the choice to base this thesis on the definition of the EU, the following part will look into the scientific discussion about the competing definitions of social entrepreneurship. It is important to recognize the contentious matter and to state explicitly the specific understanding of the term so that ultimately, social entrepreneurship can be established as coherent research field in which scientists are able to build on each other’s work (Choi & Majumdar, 2014).

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5 In their often cited article, Zahra, Gedajlovic, Neubaum and Shulman (2009) give an overview of twenty deﬁnitions and descriptions of social entrepreneurship from the research literature and different business schools. It is important to notice that for them, corporate social responsibility (CSR) is not part of social entrepreneurship. They note that many leading business schools refer to the so-called “double bottom line”, which means that social entrepreneurs often pursue both social and economic profits while many scholars characterize the term as placing social value over economic profit. They define social entrepreneurship as “the activities and processes undertaken to discover, deﬁne, and exploit opportunities in order to enhance social wealth by creating new ventures or managing existing organizations in an innovative manner” (Zahra et al., 2009:522). The same definition was used in a prominent paper by Zahra, Rawhouser, Bhawe, Neubaum and Hayton (2008), adding that social enterprises can be created by individuals or corporations. The latter is sometimes referred to as “social intrapreneurship” (Mair & Martí, 2006). However, for Chell, Nicolopoulou and Karataş-Özkan (2010), corporate social entrepreneurship is usually carried out in the form of CSR activities, which contradicts the definition of Zahra, Gedajlovic, Neubaum and Shulman (2009).

Mair and Martí (2006:37) give another prominent definition of social entrepreneurship that also adopts a broad view: “a process involving the innovative use and combination of resources to pursue opportunities to catalyze social change and/or address social needs.” By referring to a process, social entrepreneurship can be seen as the creation of new organizations, but also as the offering of products and services (Short, Moss & Lumpkin, 2009). Like the previous definition by Zahra et al. (2009), the social impact is mentioned as the objective of social entrepreneurship and the innovative nature is stressed. Mair and Martí proceed explaining that the economic value creation is a means to ensure financial stability, while the main focus is on the social value creation and this is also the distinguishing element between social entrepreneurship and other forms of entrepreneurship (Mair & Martí, 2006). Similarly, Dees (1998) describes social entrepreneurs as a special species, namely an entrepreneur with a social mission, which is also central and explicit, while wealth creation is not. For Dees, social entrepreneurship comprises non-profit ventures and social purpose businesses as well as hybrid organizations that mix non-profit and for-profit elements. Austin, Stevenson and Wei-Skillern (2006:2) even include the government into the possible realms of social entrepreneurship when they define it as an “innovative, social value creating activity that can occur within or across the nonproﬁt, business, or government sectors”. Certo

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6 and Miller (2008) agree by noticing that there is no single type of social entrepreneur and that social entrepreneurship can occur in existing or new organizations from both the for- and non-profit sector, but also through an individual social entrepreneur. They also regard the social mission as the central attribute, but add that the degree of its significance to the organization differs. These remarks are in line with Dacin, Dacin and Matear (2010). On the contrary, Seelos and Mair (2005:244) regard the social value creation as the primary objective of social enterprises. For them, the economic value creation is merely a side effect allowing for sustainability of the organization. Their definition seems to relate especially to social enterprises that work in developing countries: “[social entrepreneurship] creates new models for the provision of products and services that cater directly to the social needs underlying sustainable development goals such as the MDGs”. They continue explaining that social enterprises often take care of basic human needs such as providing food and medicines. Among the Dutch and German social enterprises investigated in the context of this thesis, there is only one social enterprise, namely Healthy Entrepreneurs from The Netherlands, which would fall into that category. Healthy Entrepreneurs is a franchise business that provides medicines and personal care and other health products to remote areas in developing countries (Healthy Entrepreneurs, 2017). Therefore, this thesis needs to be based on a different definition of social entrepreneurship.

Both of the definitions named above are a deviation from the initials of social entrepreneurship research, which was concentrated on the individual social entrepreneur and his personality, values, and visions (Bornstein, 2004; Terjesen, Hessels & Li, 2016). This emphasis on the individual social entrepreneur is also embodied by the US-based Ashoka organization, which promotes social entrepreneurship by identifying individual “changemakers” and including them in the Ashoka network as so-called Ashoka Fellows. Ashoka claims that this network is “the largest association of world-class social entrepreneurs” (Ashoka, 2016). Following Defourny and Nyssens (2012), this conception of social entrepreneurship belongs to one of the two US schools of thought, namely the school of innovation, in which Dees’ definition is considered as the best known (Defourny & Nyssens, 2012): “Social entrepreneurs play the role of change agents in the social sector by adopting a mission to create and sustain social value (not just private value), recognizing and relentlessly pursuing new opportunities to serve that mission, engaging in a process of continuous innovation, adaptation and learning, acting boldly without being limited by resources currently in hand, and exhibiting a heightened sense of accountability to the

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7 constituencies served and for the outcomes created” (Dees, 1998:4). This definition adds the dimension of risk-taking behavior and is very concentrated on the individual social entrepreneur.

The second US school of thought is called the “earned income school of thought” and refers to either non-profit organizations that become more commercial by supporting their mission through new sources of income, such as trading activities; or to a business model that is highly mission-driven and often provides services or goods to very poor customers in developing countries. The Grameen Bank of Muhammad Yunus is an example of the latter (Defourny & Nyssens, 2012). However, while trying to define social entrepreneurship, one has to consider that the conceptions of it are deeply rooted in social, political, economic and cultural contexts (Defourny & Nyssens, 2012). Also Mair and Martí (2006) state that social entrepreneurship needs to be examined taking into account the local environment and the social context, so for the research at hand it is essential to review the European context of social entrepreneurship.

In contrast to the US, the field of social entrepreneurship in Europe is primarily rooted in the third sector tradition, which refers to different kinds of non-profit private organizations and is sometimes also called social economy. It includes associations, cooperatives, and increasingly more foundations, among others (Defourny & Nyssens, 2012). Defourny and Nyssens (2010) explain that social entrepreneurship emerged in Europe at the end of the 1970s as a response to changes in the economic and political circumstances, which led the social enterprises to take over some of the tasks from public authorities. This also explains why in Europe, the cooperatives were important actors, while in the US foundations and private actors played a significant role in the beginnings of social entrepreneurship (Defourny & Nyssens, 2010; Defourny & Nyssens, 2012). The tradition is also reflected especially by the German social enterprises investigated in this thesis, for example wellcome gGmbH, which provides support to families with newborns or Projektfabrik, which offers training to the unemployed.

Regarding scientific research about social entrepreneurship, the field in Europe was mainly shaped by the EMES (Defourny & Nyssens, 2012), a research network formed in 1996 and sponsored by the European Union (EMES, 2017). Instead of a definition of the term, the EMES uses a list of economic and social indicators as an approach to social entrepreneurship. The following chapter will take a closer look at the country specific contexts of social entrepreneurship in Germany and The Netherlands. Although there are differences between

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8 the US and Europe regarding the conception of social entrepreneurship, what is common across almost all definitions is the objective of creating social value or impact rather than making a profit (Dacin, Dacin & Tracey, 2011; Certo & Miller, 2008; Dacin, Dacin & Matear, 2010). This is also reflected in several regulations and laws (Defourny & Nyssens, 2010). Another element that is often mentioned is the innovative manner in which the social enterprises operate, rather than replicating an existing practice (Austin, Stevenson & Wei-Skillern, 2006). Depending on the social issue addressed and the particular business model, social enterprises can operate as a non-profit or a for-profit organization (Mair & Martí, 2006).

Although the research question at hand is related to the internationalization, it is necessary to keep in mind that the social enterprises are rooted in the European context. Taking this and the points discussed above into account, a rather broad than narrow definition of social entrepreneurship is taken for this thesis, following the advice of Short, Moss and Lumpkin (2009) and Pless (2012). Therefore, and related to the EU’s Social Business Initiative mentioned in the introduction, the definition of social entrepreneurship for this research will be: “The key characteristic of social businesses is their primary social, environmental or community purpose, set up under a variety of legal forms, and the entrepreneurial and innovative way in which social entrepreneurs are striving for making a significant impact on society, economy or the environment” (European Commission, 2011). This definition does not restrict social enterprises to a specific legal form and allows for different kinds of social impact, including environmental impact. It also underlines the innovative manner and points out the significance of the social value created. The terms social enterprise, social business and social venture will be used interchangeably in this paper.

2.1. Social Entrepreneurship in The Netherlands and in Germany

While the previous chapter already mentioned differences in social entrepreneurship between Europe and the US, it is also necessary to go into more detail about the differences between social entrepreneurship in Germany and The Netherlands, since these two are the target countries of the present research. Both belong to the category of highly developed countries on the Human Development Index of 2015 (United Nations Development Programme, 2016), on position five (The Netherlands) and six (Germany), respectively. Also, both countries are part of the European Union, which gives their companies at least similar legal environments

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9 and internationalization opportunities that result from the common European market. However, cultural differences can be expected as well as different historical developments. The decision to select The Netherlands and Germany as the two target countries of this research was based on their overall similar economic contexts, but also on the accessibility of social enterprises in these countries and a very low language barrier between the researcher and the Dutch social entrepreneurs, which is an important aspect for the conduction of interviews.

Recently, more data on general aspects about social entrepreneurship around the world became available. In 2016, the Thomson Reuters Foundation conducted a survey in which they interviewed more than 800 experts from the field of social entrepreneurship in 45 countries. The aim of their research was to assess the favorability of each country towards the setting up of social businesses (Thomson Reuters Foundation, 2017a). The Netherlands and Germany score similarly in many areas such as government support, accessibility of grant funding and ease of selling to businesses and the public. However, there are also some differences. In Germany, the conditions to start and grow a social business are considered more favorable, as well as the ease to find appropriate staff. While in The Netherlands, the access to investment money is considered as good, in Germany, it is the access to non-financial support and vice versa (Thomson Reuters Foundation, 2017a & b). These impressions are however not reflected in the numbers of the GEM, the Global Entrepreneurship Monitor, which is a global network that publishes data about general entrepreneurship in most countries and has turned into a major source for research in this area (GEM, 2016). Their data is collected through large-scale interviews and their reports can be considered as the largest comparative study of entrepreneurship in the world. In 2016, they published a special report on social entrepreneurship in which they notice an exponential growth of the interest in social entrepreneurship by policy makers, researchers and practitioners over the last decade (Bosma, Schott, Terjesen & Kew, 2016). Based on the GEM’s broad definition of social entrepreneurship (“individuals who are starting or currently leading any kind of activity, organisation or initiative that has a particularly social, environmental or community objective”), they find a prevalence rate of nascent social entrepreneurial activity of 2,6% in The Netherlands and 0,8% in Germany. These numbers represent the share of social entrepreneurship activity in relation to all entrepreneurial activity in those countries. Furthermore, they find a prevalence rate of individuals in

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10 operational post start-up social entrepreneurial activity of 2,2% in The Netherlands and 1,5% in Germany (Bosma, Schott, Terjesen & Kew, 2016:5).

The already mentioned Ashoka organization, which has been founded more than 35 years ago in the USA and since then has accepted over 3.000 Ashoka Fellows from all over the world (Ashoka, 2016) is an example of a support organization. Each year, so-called Ashoka Fellows are selected to become members of this international network. Through this membership, the fellows gain access to funding opportunities and knowledge transfer with other social entrepreneurs. Also, they can benefit from services such as strategy or communication consultancy given to them by the corporate partners of Ashoka, and the German Chamber of Commerce refers to Ashoka as the leading global organization for social entrepreneurship (Mangels, 2016). Given its global importance and that it can be expected that an Ashoka membership facilitates the internationalization process of social enterprises, the Ashoka network member base was also investigated to find suitable Dutch and German social enterprises for this research. For The Netherlands, only seven Ashoka Fellows are listed, whereas there are 58 of them in Germany. It is not clear if this is due to supposedly better conditions for starting and growing a social enterprise in Germany, compared to The Netherlands as claimed by the Thomson Reuters Foundation (2017a). The following two subchapters will concentrate on the specific situation regarding social entrepreneurship in the Dutch and German context, since, for instance, a supportive tax and legal environment is one of the enabling factors for social entrepreneurship (Lambooy & Argyrou, 2014) and has therefore to be taken into account. Also, the characteristics of opportunities and the individuals discovering them are influenced by a country’s social context (Baker, Gedajlovic & Lubatkin, 2005). Declining welfare systems in developed countries and factors such as increased longevity and immigration are reflected in the social problems solved by social entrepreneurs and determine how social enterprises emerge (Cheriakova, 2013).

2.1.1 Social Entrepreneurship in the Dutch context

According to the typology of Esping-Andersen (1999), the welfare state regime of The Netherlands is a mixture of the social-democratic and the corporatist regime. The first one is characterized by redistributive effects and a dominance of the state in the provision of welfare services while the second one is characterized by a fairly active state in the provision of segmented welfare services in which private non-profit organizations such as trade unions

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11 and churches, also play an important role. As well as Germany, The Netherlands is a country in which social enterprises are not clearly differentiated from traditional third sector or public organizations, but innovation characterizes their products, services or production methods (Chell, Nicolopoulou & Karataş-Özkan, 2010).

In their national report on social entrepreneurship in The Netherlands, During, van der Jagt and de Sena (2014) say that it is a rather new business sector there, compared to the US, for example. Some developments like the economic crisis and the privatization of welfare have an encouraging influence. Presumably, the term social enterprise appeared in 1997 for the first time in the Dutch media, but was mainly related to CSR until the middle of the 2000s, when the focus shifted to the employment of the handicapped and the long-term unemployed. During et al. (2014) detect the lack of adequate business models as well as legislation and management development issues as the main problems for the advancement of social entrepreneurship in The Netherlands.

The country report about social entrepreneurship in The Netherlands from the European Commission finds that a legal definition or at least a generally accepted definition along with some sort of social enterprise label would improve the development of social enterprises (Van der Velden, Ruys & Houwen, 2014). A certification system could improve the brand value, credibility and the positioning of social enterprises and add transparency (Cheriakova, 2013). So far, there is no separate legal construction for social enterprises in The Netherlands (Social Enterprise NL, 2016b) and the Dutch Ministry of Economy said in November 2013 that it does not have any interest in a public support scheme for them (Van der Velden, Ruys & Houwen, 2014). All the social enterprises investigated in this paper have the legal form of a B.V. (besloten vennootschap), which is a private limited liability company. This is also the most widely used legal form of social enterprises in The Netherlands in general, besides the stichting, which is a foundation (Van der Velden et al., 2014). For instance, the social enterprise Healthy Entrepreneurs operates as a B.V. and has a foundation for its social impact. The report however points out that private limited liability companies follow the principle of maximizing profit instead of social value, while the foundations cannot have any kind of shareholder. The consultancy firm McKinsey notes that the legislation issue is that while charities can get tax exemption and giving to charities is tax-deductible, both are not true for social enterprises and this limits their available funding (Verloop, van Dijk, Carsouw & van der Molen, 2011). This explains that in a survey from 2013, only one third of the social entrepreneurs interviewed considered their legal form as adequate and the European

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12 Commission concludes that the legal issue is one of the constraints of social enterprises in The Netherlands (Van der Velden et al., 2014). Defourny and Nyssens believe that the recognition through public policies is a key channel for the expansion of social entrepreneurship in Europe (2010).

Several social enterprise networks exist in The Netherlands, and most of them have been established recently. For example, in 2012, the network Social Enterprise NL was founded and its certification can be seen as a private initiative of labelling. One of the criteria of this network is however that at least 50% of the income of the social enterprise comes from the market (Van der Velden, Ruys & Houwen, 2014), which is a more restrictive definition than the one from the European Union used here. The objective of Social Enterprise NL is to improve the Dutch eco system for social enterprises through better access to public markets and finance, and a specific legal form or at least an adapted form of the B.V. (Social Enterprise NL, 2016b). With its Social Entrepreneurship Initiative, the University of Utrecht wants to stimulate research and education about the topic since 2013 (Universiteit Utrecht, nd). Apparently, social entrepreneurship is gaining ground in The Netherlands especially in recent times.

The Dutch bank ABN AMRO considers the year 2016 very favorable for social entrepreneurship, with employment previously already rising by 36% between 2013 and 2015, and the turnover of social enterprises rising by 24% during the same time period. With these numbers, they achieved faster growth than mainstream small and medium enterprises. The bank also notices a growing number of investment funds for social entrepreneurship in The Netherlands. Additionally, the legal environment is changing in favor of social entrepreneurship. Since April 2016, a new Dutch law makes crowdfunding easier, which ABN AMRO considers an important source of funding for Dutch social enterprises. The bank underlines its planned contributions to the fostering of social entrepreneurship in The Netherlands and its partnership with the Social Enterprise NL (ABN AMRO, 2015).

Correspondingly, McKinsey detects a growth from an estimated number of 4.000 – 5.000 social enterprises to 5.000 – 6.000 between 2011 and 2016 (Verloop, van Dijk, Carsouw & van der Molen, 2011; Keizer, Stikkers, Heijmans, Carsouw & van Aanholt, 2016) and states that 0.3% of the total Dutch GDP in 2015 was generated by social enterprises. However, McKinsey’s definition of a social enterprise refers to organizations that obtain more than 50% of their revenues through commercial activities (Keizer et al., 2016) and they underline their independence and financial sustainability (Verloop et al., 2011). There might be up to

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13 10.000 social enterprises when taking those into account that are up to 50% dependent on subsidies (During, van der Jagt & de Sena, 2014). Increased media attention, as well as consumer trends like health and environmental awareness, supports the development of the Dutch social enterprise infrastructure (Keizer et al., 2016). Additionally, between 2014 and 2016, employment in this area grew by 24% (Social Enterprise NL, 2016a). Most Dutch social enterprises are active in the health and wellbeing sector, followed by energy and financial and business services (Keizer et al., 2016).

2.1.2 Social Entrepreneurship in the German context

Within the already mentioned typology of Esping-Andersen (1999), the welfare state regime of Germany is an example of the corporatist welfare state regime, which is characterized by a fairly active state in the provision of segmented welfare services in which private non-profit organizations, for example, trade unions and churches, also play an important role. As said before, it is mostly the innovative character that distinguishes German social enterprises from traditional third sector organizations, otherwise, a clear distinction can sometimes be difficult (Chell, Nicolopoulou & Karataş-Özkan, 2010). From the German social enterprises under investigation, wellcome and Generationsbrücke Deutschland are examples of social businesses that are closely linked to churches. Wellcome was created in the context of a churchy family education center and was still part of the church organization until it became too big and then independent (E. Pertzborn, interview, December 13, 2016). Generationsbrücke Deutschland is not a separate legal entity, but part of the non-commercial catholic foundation Marienheim Aachen-Brand and started as a social offer in their nursing home (H. Krumbach, interview, December 19, 2016). Esping-Andersen (1999) further classifies Germany as a country with a Bismarckian tradition, meaning that social services and social insurance are managed by intermediary bodies. This explains the significant presence of private non-profit organizations in the social services sector, which are mainly financed and regulated by public bodies (Defourny & Nyssens, 2010). The success of social enterprises depends to some extent on the strength of the other providers and the development state of the traditional third sector, as well as on the characteristics and the resources of the welfare state (Perrini, Vurro & Costanzo, 2010), assuming that the social enterprise is active in the social sector of course. In their report for the European Commission, Vincze, Birkhölzer, Kaepplinger, Gollan and Richter (2014) notice that the

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14 strong tradition of the third sector in Germany makes a clear differentiation even more difficult in the context of this country. The traditional German term “Sozialunternehmen” is often used as a translation for social entrepreneurship. However, Vincze et al. (2014) observe that the German term has a broader scope and that the actors from the rather new social entrepreneurship domain prefer to use the English word instead, also in order to underline their new approach. This new approach was also promoted by international organizations like Ashoka and the Schwab Foundation since the 1990s (Vincze et al., 2014). In fact, one of the German interviewees agreed that the German term has a different connotation than the English one and sounds rather outdated (M. Richter-Werling, interview, December 12, 2016). Some researchers and stakeholders even distinguish between the traditional and the new type of social enterprises in Germany, but features of the new type such as the business approach and innovativeness are also present in some traditional social enterprises and many of the new social business also rely on non-market revenues to a large extent, which makes this distinction ineffective (Vincze et al., 2014). Scheuerle, Glänzel, Knust and Then (2013) see a tendency to be more innovative within the traditional welfare organizations and Vincze et al. (2014) note that they also adopted performance-based management tools and even some cooperation have been established. Also one of the German social enterprises that form part of this research is now cooperating with an established welfare organization, the Caritas. In a joint pilot project, Generationsbrücke Deutschland wants to explore if its concept can be scaled nationwide (H. Krumbach, interview, December 19, 2016).

Historically, a social entrepreneurship tradition in Germany can be traced back at least until the 19th century (Scheuerle et al., 2013). Germany was actually leading the development of the social economy for a long time, and a strong group of social establishments operated by the church has always been part of it. The today so-called “Diakonie” is a welfare association that was established in 1848 by the Protestant Churches in Germany. The German “Caritas”, which is the welfare association of the Catholic Churches, was established in 1897. Together with other, similar organizations, they form welfare federations that today have reached a semi-public status and political influence on several levels (Vincze, Birkhölzer, Kaepplinger, Gollan & Richter, 2014).

Today, this social entrepreneurship tradition can still be seen in the field of the classic welfare state (Scheuerle, Glänzel, Knust & Then, 2013). However, the German welfare system might also suppress the potential for social innovations, which would explain the smaller number of social businesses in Germany compared to other Western countries like

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15 the UK or the US (Ryland, 2014). Scheuerle et al. (2013) estimate the number of social enterprises in the narrow sense in Germany at a lower four-figure range, however clarifying that this is based on a non-existent database. In the narrow sense, all three of the following criteria have to be met: Tackling of a social or environmental issue, innovation, and market-based income. For their definition in the broader sense, only the first criterion and one of the others has to be met. In this sense, they estimate the number of social businesses in Germany between 40.000 and 70.000. Most of them are mainly operating on a local basis. The German KfW Bank also laments the insufficient data situation due to the lack of a general definition and unclear differentiation criteria (Scheuerle & Bauer, 2013). Trends like the demographic development, changing energy policies, but also smaller public budgets for the social sector push the attention to social entrepreneurship. This is further boosted by the expansion of global social entrepreneurship networks like Ashoka or the Schwab Foundation (Scheuerle, Glänzel, Knust & Then, 2013). So far, there is no separate legal status for social enterprises in Germany, but any kind of limited company, foundation, cooperative or association can be awarded the “public benefit” status as long as they fulfill the legal requirements: an asset lock, no distribution of surplus and the aim of the organization must be in line with the legally defined public benefit purpose. There are no criteria for the governance. The advantage of this status is that the organizations do not have to pay taxes on their profits, but their accounting policy becomes inflexible in return (Vincze, Birkhölzer, Kaepplinger, Gollan & Richter, 2014). A public benefit organization is not allowed to make profits, while a company is not allowed to accept tax-exempt donations. The legal form of gGmbH (a public benefit company with limited liability in Germany, Austria, and Switzerland) allows the social enterprises both (Werdes, 2013). A problem of this status is however that all profits have to be reinvested into the company, so that the payment of returns on investment is forbidden. This can restrict the access to financing (Scheuerle, Glänzel, Knust & Then, 2013). The KfW counted around 9.000 gGmbH companies in Germany in 2013. Most of them generate the main part of their income on the public social services markets that have fixed service records (Scheuerle & Bauer, 2013). The KfW Bank sees a development of the social entrepreneurship infrastructure in Germany, including on a political level (Scheuerle et al., Glänzel, Knust & Then, 2013). In 2011, the bank presented a new funding instrument for the expansion of social enterprises together with the German Federal Ministry of Family Affairs, Senior Citizens, Women and Youth (Bundesministerium für Familie, Senioren, Frauen und Jugend, 2011). The current coalition agreement states that the government wants

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16 to support the work of the welfare organizations as well as social innovations from social entrepreneurs. The setting up of social businesses should be facilitated by an appropriate legal form without any unnecessary complexities (Bundesregierung, 2013).

With the ambition to become the central focal point of social entrepreneurship in the German-speaking world, the Social Entrepreneurship Akademie was founded in 2010 in Munich by the four universities of the city. It offers a qualification program, support to social entrepreneurship initiatives and forms a broad network. Another important German organization is the Social Impact Lab, based in several German cities. It offers physical space for social entrepreneurs as well as consultancy and coaching. The founder of this organization is himself an Ashoka Fellow (Mangels, 2016). According to the Social Impact Lab, a social enterprise is a business whose main aim is not making a profit, but solving social and/or ecological problems. The long-term intention is to permanently change society (Social Impact gGmbH, nd).

Interviews with German social entrepreneurs, conducted by the KfW Bank, found that the reconcilability of economic and social aims and the lack of financing opportunities are among the main issues of social entrepreneurs in Germany (Scheuerle & Bauer, 2013). Although the level of private funding is quite high, these funds are often conservatively managed, restricting the access for innovative social startups. Still, they represent an indispensable financing source and include family trusts, private foundations and corporate social responsibility funds (Vincze, Birkhölzer, Kaepplinger, Gollan & Richter, 2014). In sum, the situation of social entrepreneurship in Germany and in The Netherlands shows similar recent developments, but different historical paths and current legal environments. In both countries, social entrepreneurs are gaining in importance and the topic is getting increasing media attention.

2.2. International (Social) Entrepreneurship Research

Given the lack of a single definition of the term social entrepreneurship, it comes as no surprise that there is no generally accepted definition of international social entrepreneurship. On the other hand, many of the social problems that are tackled by social businesses are international by nature, such as environmental issues. In their review of comparative international entrepreneurship (CIE), Terjesen, Hessels and Li (2016) find that although the number of CIE research on internationalization has increased over the past five years, it is

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17 still very fragmented and in an infancy stage. The fact that there is no agreement on a definition and that the nature of entrepreneurship itself is very heterogeneous across countries leads to theoretical challenges and makes cross-national research difficult. Chen, Saarenketo and Puumalainen (2016) notice that international entrepreneurship research initially concentrated on the international new venture phenomenon, but has now gone beyond that and focuses on any cross-border opportunity pursued, independent of the company’s size and age. They further observe the emergence of enterprises that achieve both internationalization and social value creation, which they define as international social entrepreneurship, adding that this phenomenon is largely unexplored and relevant empirical evidence is still missing in the current literature (Chen, Saarenketo & Puumalainen, 2016). Yang and Wu (2015:32) define international social entrepreneurship as “the process of creatively discovering and exploiting social entrepreneurial opportunities overseas with the application of business expertise and market-based skills, with innovation social goods and services, either with or without proﬁt orientation, but with the pivotal objective of creating societal value rather than shareholder wealth in the overseas territories where the enterprise functions”. This definition again mentions the innovative character of social entrepreneurship and the objective of creating social value rather than making a profit and draws on the work of Tukamushaba, Orobia and George (2011) and Marshall (2011). Tukamushaba et al. (2011) investigate the motives for the internationalization of social enterprises in the context of Uganda and formulate a conceptual framework that explains the creation of a new international social venture by the individual’s perceptions and socio-psychographics. Their study is therefore in the tradition of the beginnings of general social entrepreneurship research, when it was mainly focused on the social entrepreneur’s values and personality, like mentioned earlier in chapter 2. They identify three motives for the internationalization of social enterprises: foreign market failure for the social good, survival of the company when the domestic market is shrinking and synergy effects. However, it has to be recognized that their research focuses only on social goods. By contrast, the majority of social businesses investigated in the context of this thesis offer social services.

Marshall (2011) observes a growing number of international for-profit social entrepreneurs and concentrates his research on social businesses with commercial exchange across national borders, specifically on companies that receive money from the recipient country and with a social mission in the source country. This refers primarily to fair trade companies and similar businesses and thus constitutes a very restrictive definition. Nonetheless, Marshall mentions

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18 an aspect that is also important for other international social businesses, namely the need to understand the cultural, social and economic system of the target country in which the social entrepreneur wants to create an impact. In order to access this knowledge and to create an effective strategy, social entrepreneurs might consider collaborations with non-profit, public or private organizations, which is why Marshall assumes that networks will play an important role for the internationalization of social enterprises. Likewise, Zahra, Rawhouser, Bhawe, Neubaum and Hayton (2008) even claim that intermediary organizations that connect social entrepreneurs worldwide (for instance, Ashoka and the Schwab Foundation) accelerate the internationalization of social enterprises. Defourny and Nyssens (2010) also stress the importance of embeddedness in the local contexts; otherwise, social businesses will just be replications with no long-lasting success. Consequently, Mair and Martí (2006) raise the question if the transfer of a social product or service and the scaling of a social initiative across borders are even possible. Thus, one of the interview questions asks for the country-specificity of the social issue tackled and another one for changes on the business model or the concept due to the internationalization and the subsequent weighting between standardization and adaption. Regarding this issue, Yang and Wu (2015) suggest that – given the typically strained financial situation, which does not allow for big marketing campaigns – social enterprises should target potential new markets that have similar cultural backgrounds or product preferences to the current one, so that costs for adaption are low.

Zahra, Newey and Li look at the relationship between social and international entrepreneurship and argue that extending the international entrepreneurship research field by social entrepreneurship can help to rethink its focus, assumptions and boundaries. So far, the focus was on developed countries and profit-making companies. They further state that international social ventures, either founded by existing companies or individual entrepreneurs, play a rapidly growing role and define these ventures as “pursuing social concerns on a global scale” (2014:139) with an entrepreneurial orientation to financial, environmental and social opportunities. For them, the difference to non-profit organizations is the greater share of earned income instead of contributed income (Zahra, Newey & Li, 2014). This is a quite general definition, but shows parallels to the definitions of social entrepreneurship discussed in chapter 2. Some of their proposed further research questions are reflected in this thesis, for example: How do social ventures internationalize? What is their pattern of internationalization and is it different depending on the social issue? What are

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19 the push factors for internationalization? What about cross-national collaborations? How are the international opportunities conceptualized and evaluated?

For Chen (2012), an international social venture is simply a social venture that involves cross-border operations, without any further specification. This can be a social enterprise that is funded by sponsors from developed countries and benefits people in developing countries. It can also refer to a global social business that serves a need which exists in several countries. Chen laments the research gap in this area and claims that it would help potential international social entrepreneurs who want to create such a business. Other researchers mainly resort to general concepts that have been developed in the context of internationalization processes of traditional companies. For example, Dees, Anderson and Wei-Skillern (2004) formulate three different strategies for the spreading of social innovations on a continuum with decreasing flexibility, with an increasing degree of control and often also greater resource requirements. The easiest one is dissemination, which means actively providing information to others and sharing the knowledge about social innovations (Berelowitz, Chopra, Coussa, Paren, Towner, Wetherill & Huggett, 2015). It is very simple and requires little resources, but offers little control in return. Yet, Bloom and Chatterji (2009) assume that social entrepreneurs are not concerned with property rights issues, but follow an open-source approach instead. This would however imply that the only reason for scaling is the bigger impact, which seems questionable. Therefore, the interviewees were asked about the reasons and motives for the internationalization of their social ventures. The second strategy formulated by Dees et al. (2004) is affiliation, a formal and ongoing relationship that can range from loose partnerships to tight franchise networks and is based on an agreement that includes certain guidelines on how to replicate the social innovation (Berelowitz et al., 2015). The highest control is provided by branching, which is the creation of a local site by the organization. Some call it wholly owned replication (Berelowitz et al., 2015). It is useful if there is a strong organizational knowledge and specific practices (Dees, Anderson & Wei-Skillern, 2004). Bloom and Chatterji (2009) note that the research on scaling of social enterprises has mainly focused on internal processes and issues such as leadership, financing and social impact measurements and the creation of relationships with external partners has only recently entered the scientific discourse. Scaling does not necessarily equal internationalization however; it can simply refer to reaching more people (scale wide) or improving the impact (scale deep) nationally. Also Yang and Wu (2015) resort to three general aspects of internationalization in their research about international

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20 social enterprises, namely the operation mode, the selection of the first foreign target market and the target countries for a consecutive international expansion. All of these aspects were reflected in the interview questions. Since researchers seem to mainly draw from general internationalization research when studying this subject in the context of social entrepreneurship, the next chapter will present some theoretical aspects from this realm.

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2.3. Internationalization Processes

The internationalization process of the firm is a sub-field of international business and it has been studied since the 1970s. A lot of subsequent research has been based on the early Uppsala Model by Johanson and Vahlne from 1977 (Forsgren, 2016; Welch & Paavilainen‐ Mäntymäki, 2014), which states that companies enter new markets with increasingly greater psychic distance and increasingly greater commitment. According to this model, internationalization is thus seen as a gradual and linear process (Keupp & Gassmann, 2009) and has therefore an incremental, path-dependent character (Johanson & Vahlne, 1977). Psychic distance refers to differences in factors such as culture, language, political system and trade practices, but also geographic proximity. It is supposed that experiential managerial learning drives the internationalization and that companies start by indirect exporting to similar markets and subsequently increase their risk and commitment, finally leading to equity investments (Coviello & Munro, 1997). The justification of this model is that a market with small psychic distance requires only little adjustments of the operations and products or services (Hadley & Wilson, 2003). This aspect might be relevant for social enterprises, which are usually constrained by the resources available to them, although historically, the research on internationalization processes has mainly focused on large, manufacturing companies (Coviello & Munro, 1997).

Next to the “incremental stages” internationalization approach from mainstream international business (Keupp & Gassmann, 2009), there is a second stream in the extant literature that suggests that the internationalization process is influenced by the relationships of a firm and thus involves a company’s network (Coviello & Munro, 1997). Zain and Ng define a network as “the relationship between a firm’s management team and employees with customers, suppliers, competitors, government, distributors, bankers, families, friends, or any other party that enables it to internationalize its business activities” (2006:184). Some even claim that networks are the primary driver of internationalization (Hitt, Ireland, Camp & Sexton, 2001). Keupp and Gassmann (2009) contrast the ordered approach of international business theory with entrepreneurship theory and point out that the latter emphasizes the often chaotic and dynamic nature of internationalization, underlining the role of skills, experience and social networks. It is therefore the relationships that are considered the key drivers of internationalization in the network-based approach (Cerrato, Crosato & Depperu, 2015). The network approach to internationalization can be regarded as a reaction to the concerns and criticisms of the preceding stage theories like the Uppsala Model. Although this model

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22 received widespread support, several empirical studies have challenged its assumptions and underlined the uniqueness and specificity of each company’s internationalization patterns and questioned its applicability to service-intensive industries and in times of globalization in general. Also, research has shown that smaller companies often use licensing and joint ventures as their initial foreign market entry mode, which is contradictory to the Uppsala model (Bell, 1995). The network approach to internationalization has been especially highlighted in the context of small companies, since they can exploit their networks to mitigate limitations due to their small size or limited knowledge and international experience. Networks can thus extend a firm’s opportunities and resources (Cerrato, Crosato & Depperu, 2015). By now, the importance of networks as supporting the internationalization process has been reported and studied exhaustively by international business and entrepreneurship researchers, illustrating that small firms can in fact make use of their networks to overcome resource limitations (Ciravegna, Lopez & Kundu, 2014). Regarding the number of employees, all the social businesses in the context of this paper can be regarded as small firms, which is why the network approach represents a viable theoretical framework. Ciravegna et al. (2014) further found that companies that used networks exported their goods and services earlier than those that did not use or have such networks. It is reported that networks are used to get information and to compensate for the lack of reputation in the foreign market. There are also contrasting views within the network approach, for instance, some scholars believe that the networking is an active entrepreneurial process, while others have the opinion that this unfolds in a rather passive way, for example when the opportunity to enter a new export market arises due to the reference of a current customer or partner. Some scientists even claim that certain paths might have been determined by serendipity instead of strategic planning. For instance, a casual encounter might affect the internationalization process (Brewer, 2001). Also Crick and Spence (2005) point out the role of serendipitous encounters for the internationalization process. In their case study of small high tech companies from the UK, they found that internationalization can happen via planned or unplanned strategies and that exploiting networks resulted to be more important than psychic “closeness”. Austin, Stevenson and Wei-Skillern (2006) add that networking is a powerful growth strategy for social entrepreneurs and that they should strengthen their relationship management skills since they naturally rely on resources outside their direct control, including donors, partners and volunteers. However, unlike the previously mentioned authors, they stress the importance of strategic thinking in the context of growth opportunities

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23 for social entrepreneurs and call for a disciplined approach to it. On this account the interviewees of the research at hand were asked about their approach to internationalization and the degree of strategic planning behind it. Regarding the influence of networks, Crick and Spence (2005) suggest that policy-makers as well as managers should recognize their importance and support their formation by facilitating contacts between domestic and foreign business people. Dacin, Dacin and Tracey (2011) propose to examine how social entrepreneurs profit from the networks that emerge through organizations such as Ashoka, the Schwab Foundation or the Skoll Foundation, asking how social entrepreneurs leverage the networks that result from their meetings, conferences and other events. Zain and Ng (2006) studied the internationalization processes of small enterprises and the impact of networks on it and found that network relationships played an important in the companies’ initial decision to internationalize and for marketing-related activities. Other researchers have documented the network’s influence on foreign market selection and mode of entry (Bell, 1995; Coviello & Munro, 1997), both of which are considered key strategic decisions in the internationalization process (Hadley & Wilson, 2003). Another key strategic decision is the time to internationalization (Dimitratos, Johnson, Plakoyiannaki & Young, 2016).

Investigating the internationalization processes of social enterprises is important for several reasons. Naturally, the social impact increases through the dissemination. A successful internationalization also shows that the concept is convincing, which can attract further investments and new donors. It is therefore not only the social entrepreneurs themselves who are interested to learn about the success factors, but also the public and private agencies and donors that support and fund them (Bloom & Smith, 2010). Bloom and Smith (2010) even argue that it might be the most important variable in the field of social entrepreneurship. A better understanding of international social entrepreneurship is also useful for international organizations and governments, since it could help them to set conducive frameworks and favorable policies (Munoz, 2010). Certainly, understanding the internationalization processes of social enterprises will also have theoretical significance for the research fields of international business, entrepreneurship and social entrepreneurship in particular. The master thesis at hand therefore tries to answer the following research question, liberally based on Zahra et al. (2008) and Zahra et al. (2014):

Why and how do Dutch and German social enterprises internationalize and

what factors influence that process?

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24 With the cases coming from different countries and different fields of activity, as can be seen in table 1, the external validity of the study increases (Belz & Binder, 2015). Additionally, by comparing two countries, the risk of obtaining nation-specific results decreases and the generalizability of the findings rises. Also, it helps to recognize best practices if the findings come from different national environments (Terjesen, Hessels & Li, 2016).

The part of the research question about the manner (“how”) refers to the aforementioned key strategic decisions in the internationalization process: time to internationalization, the foreign market selection and the entry mode decision.

3. Data & Research Method

This master thesis adopts an exploratory research design, since the objective is to understand the internationalization patterns and strategies of social enterprises. As the insights into the research literature in chapter 2 have already shown, the research on this topic and on international social business in general is still in its initial stages. According to Short, Moss and Lumpkin (2009), qualitative methods are typical and especially suitable in the early stages of a research field, which is basically the case in social entrepreneurship research, as noted for example by Puumalainen, Sjögrén, Syrjä and Barraket (2015). Short, Moss and Lumpkin (2009) call for further qualitative research and case studies. Therefore, a qualitative research design is the reasonable choice of method. The aim of this approach is to generate propositions rather than testing hypotheses, because the topic is not yet well-understood. Data were collected through semi-structured interviews, which adds some flexibility and ensures that additional questions can be included, if necessary, and that the topic order can be varied (Saunders & Lewis, 2012). Interviews can provide in-depth insights that would not be possible to obtain through archival data only. The sample is a self-selection sampling, because possible interview partners are contacted and subsequently those who identify themselves as willing to be interviewed take part in the research (Saunders & Lewis, 2012). In order to be eligible for the research, the organizations had to meet the following three criteria: 1. They were founded in The Netherlands or in Germany; 2. They qualify as a social enterprise according to the definition explained in chapter 2; and 3. They are active in at least one foreign country. Additionally, data provided by press releases and public documents by and concerning the ventures being investigated were consulted to supplement the data from the interviews. These additional data represent archival data, which allow a triangulation with

Internationalization processes of Dutch and German social enterprises