By The faculty of NSE
At the NTNU School of Entrepreneurship, we have a saying that ‘we are cowboys riding on the edge of the unknown’. While the origin of the quote or saying is a bit disputed, its meaning still stand strong among the students and faculty. For this third presentation of theses, we will focus on some of the lonesome riders, those who challenge the edge of uncertainty, but who manage to expand our map and understanding rather than staying put in the ‘Valley of Death’. These theses are thus single-authored, but they all also revolve around sustainable activities or focus, and their authors’ work reflects excellent writing, long hours, and creative solutions and approaches.
Once again, we hope you get inspired and enjoy the reading! If you want to read more about our students’ prior theses, you can find January and February’s six theses here and here.
– The faculty of NSE
In 2018, NSE celebrates its fifteenth anniversary and as a part of the celebration, the faculty has gathered fifteen theses from prior NSE students, and intend to present three of these theses through the first semester of 2018. The theses presented will be a variety of academic prodigies, timely written investigations and theses not necessarily meaningful to the majority of the world, but with topics of profound importance to NSE’s students. Some will carry limited empirical foundation, nevertheless with impressive results. Others have a data collection that would cause professors to become envy, but where the students still handled the data in an impressive manner. Moreover, all of the above show the impressive span in the students’ theses.
In this series of presentations, we intend to provide you with an overview of what NSE students focus on, what outcomes the Master’s theses could give, and what the students themselves think of their theses – some of which written more than a decade ago! You will therefore find abstracts and interviews with the authors of the presented theses. If some of the works are of interest to you, the majority of the theses are available at the Norwegian University of Science and Technology’s library. If they are not available, we assume the authors would be happy to share some of their knowledge.
Sustainable Business Models – A Need For New And Sustainable Business Models
By Nina Heir
The seventh thesis in this series was written in 2016 by Nina, and it focus on different business models’ influence on the sustainable development of our society. While the focus on sustainability has developed a bit during the latter years, there is still a long way to go, as Nina reminds us:
– The leading business models did not, and still do not, have a sustainable perspective. With a passion and huge interest in this field, it was natural to choose a thesis aiming to dig deeper into how businesses can change their business models to make a positive contribution to a more sustainable future.
Nina took the UN sustainability goals as her starting point, and further focused on the parties contributing a lot to humanity’s development: different innovative businesses. Although we today find sustainability in the centre of a lot of our activity, there is still limited understanding of the connection between business models and future-vision focused businesses. Not to say business model in its own. Nina remembers the little research focus in the field, and how this influenced her choices and approach in her work:
– The field of ‘Sustainable Business Models’ was barely addressed as a field of research. Therefore, it was hard to find enough material and valid documents with consensus. Writing this thesis was on the one hand mapping out the field of research; what had been done and not been done, and on the other hand mapping out the ‘status quo’ in the field of business, she tells us. Her strategy therefore consisted of both investigating the theory and empirical evidence in an iterative process.
– Starting from both ends at the same time resulted in this thesis building a potential bridge between theory and action, addressing the lack of focus and understanding of how devastating and serious the global situation can become if we do not turn it around and create lasting, positive changes, Nina adds.
The work on environmental issues was, and still is, important to Nina. However, as the environment is more in focus now than before, Nina thinks her work would be even more important now than ever.
– It is addressing the lack of focus and understanding of how devastating and serious the global situation can become if we do not turn it around and create lasting, positive changes, she tells us. Hence, if we all ignore the consequences from our activities, the future might look a bit depressing. However, as we now have more and more focus on the environment, the situation was a bit different when Nina wrote her thesis, as she explains:
– The gradual shift towards a more sustainable mind-set and action-oriented businesses had just started. This made it difficult to find well-documented research, and finding good case companies that had actually implemented solutions and started to change their business model, Nina says. However, the topic for a potential new thesis would still be in the same field, as she explains:
– I would without a doubt have chosen to write about something within the same field; the sphere of sustainability and the challenges addressed by the UN’s Sustainable Development Goals.
Abstract
Business plays a key role for the sustainable development of the society. However, business models of today do not have a sustainable perspective, indicating that they do not balance the three dimensions of sustainability; the social, environmental and economical dimension. A change at the business model level is therefore required for sustainable business models to become the new business models of tomorrow.
The purpose of this study is to increase the knowledge of how companies can contribute to a sustainable development through the creation of value related to the three dimensions of sustainability. Furthermore, it is a wish that this study shall increase the knowledge of which sustainable elements the selected case companies are working with, and to which parts of the business model these elements can be related to. This study also seeks to uncover the relationship between the company’s strategic plans for sustainability and the actual integration of sustainable elements. Two research questions are proposed to answer to the purpose of the study.
Examples of sustainable elements are waste management, change from fossil fuels to renewable sources of energy, recycling and reuse, to secure safe working conditions, reduce harmful emission and use of eco-friendly materials.
A literature review was conducted by Ronæss and Heir (2016) presenting a theoretical fundament which has been integrated as a part of the conceptual background for this master s thesis. The theoretical fundament consists of theory related to the fields of business models, business model innovation and sustainable business models. It is revealed to be little consistency regarding a common definition both for business models, business model innovation and for the relatively new area of research; sustainable business models. This implies a lack of theory, and uncovers a demand for more research related to these fields. The framework the business model canvas (BMC) is introduced in the conceptual background, and is further used as a framework for the analysis in this study.
The purpose of this thesis is fulfilled through a multiple case study approach, where information from case studies of six selected companies is used to acquire in-depth knowledge for the analysis. The empirical findings are analysed in relation to the research questions, before the result of the analysis is discussed to which degree they answers to the research questions and the overall purpose of this study. The last part of the discussion relates the analysis to the challenges presented in the introduction.
Six goods-producing companies are investigated through the case studies, one of which also provides services related to waste management in the Norwegian industry. The Norwegian companies Plasto, Hexagon Ragasco and Wonderland are included in this master s thesis, all of which are part of the research project SISVI at NTNU. Additionally, the Norwegian companies Elkem, Norsk Gjenvinning and the Swedish company IKEA are included.
The analysis shows that the integrated sustainable elements in the companies business models can mainly be related to three parts of the business model. It is also uncovered that integration of sustainable elements at the business model level can be challenging to measure. Through the analysis it is revealed that the relation between what the companies wants to do and what they are actually doing are related in a varying degree. Plans at the strategic level without being rooted in a plan of action do not prove to contribute to actual integration of sustainable elements. What has become clear is that the companies’ commitment and focus on sustainability contributes to influence the industry, politicians and the society, and might contribute to increased facilitation, more incentive programs and more regulations concerning sustainable development.
This leads to a discussion of the various integrated elements, and whether one can say something about the extent of integration and the importance of which parts of the business model the elements are related to. In addition, is the relationship between the companies’ plans and actual integration of sustainability discussed, including the forces influencing how the company works with sustainable development. It is also discussed whether the integration of sustainable elements into a company’s business model proves to contribute to sustainable development in the society, if the company balances the three dimensions of sustainability. The discussion touches upon if the integration of sustainability can have a positive synergistic effect on the companies’ financial performance. A greater degree of integration is probably associated with an increased performance in the long run.
This study sets out to shed light on the importance of the fact that the research area of sustainable business models should be explored further in the future. In addition, the author encourage that further research should look into the order of which the sustainable elements are integrated in, the integrated extent of each element, and if the integration of sustainability can have a positive impact on the company s financial performance. In this way, the research might contribute to the development of new and sustainable business models that can be used in practice, addressing the three dimensions of sustainability.
Corporate Social Responsibility as a Driver for Innovation and Growth in Small and Medium-sized Enterprises: A Quantitative and Qualitative Study of High-Growth Small and Medium-sized Enterprises
By Line Backer-Grøndahl
The second thesis in March is one with a self-explanatory title, but also with an important focus as the previous. Line, who graduated in 2012, focused on corporate social responsibility, but moved the focus from big corporations to SMEs – a research focus that to a little extend was explored at the time, and in a field that still holds many unanswered questions.
– In the literature study, I found that little research had been done on CSR or sustainability in small and medium-sized enterprises, and that most research in this topic looked at large, multinational companies, Line tells us, before she elaborates about her choice of focus:
– During my studies, I became more and more interested in whether, and how, we can make money on solving environmental and social problems.
Thus, the choice of topic was easy for Line, and with the help from supervisors and researchers at both NTNU and BI focusing on gazelle start-ups, the study grew to an interesting project with a lot of data. The thesis further explores a mix of methods, and applies quantitative and qualitative methods to answer the research questions.
However, writing such a thesis alone is something Line remembers as challenging.
– It was a structured process where I worked all weekdays 8-4, but still experienced a hectic final phase. The process involved a lot of independent work as I wrote the thesis alone, with good help from excellent supervisors, Line tells us. This last point is something Line also finds as one of the most important learnings from her work:
– To write the thesis on my own felt like a big responsibility and achievement, but if I were to write the thesis again today, I would write it together with a good discussion partner.
Regarding the findings from her thesis, it reveals that the growth in SMEs did not necessarily depend on innovation or CSR, but that there are other reasons influencing these businesses. The results reveal a correlation between CSR and innovation, but that this alone was not enough to create a viable business. As Line explains:
– The thesis concluded that an engaged leader was the most important factor for CSR and innovation in a company. However, the study did not find that either CSR or innovation leads to growth. Many of the companies that grew rapidly and are viewed as successful were not necessarily very innovative.
Thus, businesses like construction companies and similar influenced the results, where their activity often were low on innovations. However, these results only introduced new questions, and Line tells us that she would pursuit a similar subject if she was writing another theses.
– The research subject would be related to sustainability and innovation. After five years of work experience as a consultant for companies, I think the interviews would be more relevant and practical.
Line also think that the world has changed a lot when it comes to the focus on sustainability, and she ends our interview looking both back and forward in terms of opportunities:
– It would be interesting to investigate if the same study would give different results today. In the last five years, the interest and focus on sustainability, and in particular climate change, has increased dramatically.
Abstract
BACKGROUND Corporate social responsibility (CSR) is a topic of current interest due to a growing focus on sustainability and a changing role of business, where business is increasingly seen as playing an important part in solving environmental and social problems (Blowfield & Murray, 2011). This has given rise to the debate on what’s in it for business, the business case for CSR (Carroll & Shabana, 2010). Up till this date, researchers have not been able to show consistent, positive findings of the influence of CSR on financial measures (McWilliams & Siegel, 2001; Orlitzky, Schmidt, & Rynes, 2003). In addition, the business case can be highly dependent on industry and company size; large, branded manufacturers typically have more to gain on CSR than smaller service companies. Through looking at innovation benefits of CSR, it is presumed to find a business case for CSR less dependent on industry and company size (Preuss, 2011). Several studies promote CSR as an important driver for innovation (Nidumolu, Prahalad, & Rangaswami, 2009; Porter & Kramer, 2011). But most of these studies focus on larger companies, despite the fact that small and medium-sized enterprises (SMEs) play an essential role in sustainable development and Europe’s economic value creation (Morsing & Perrini, 2009). The few, existing studies on CSR as a driver for innovation in SMEs focus on describing practices, and there is a need for more research on how CSR can drive innovation and growth (Bos-Brouwers, 2010; MacGregor & Fontrodona, 2010; Mendibil, Hernandez, Espinach, Garriga, & Macgregor, 2007).
GOAL AND SCOPE The goal of the thesis is to gain insight into how CSR can drive innovation and contribute to growth in SMEs. It aims to develop the theory on CSR-driven innovation by placing it in the context of SMEs, and by this making a contribution to the debate on the business case for CSR in SMEs. The focus is on the relationship between CSR, innovation and growth on a company level. Influences of industry, different SME sizes and growth are not within the scope of this study.
RESEARCH QUESTIONS The main research question of the thesis is “How can CSR drive innovation and growth in SMEs?” To answer this question, the following sub questions are investigated. 1. How can CSR drive innovation in SMEs? 2. How is CSR-driven innovation related to growth in SMEs? METHOD This study uses both quantitative and qualitative method. It utilizes the results from a quantitative survey among 343 Norwegian high-growth SMEs, and conducts a multiple case study of six sampled survey respondents. High-growth SMEs are companies that fulfill certain criteria related to positive results and growth. The case companies were selected as “polar types” with different CSR and innovation focus, and from different industries.
RESULTS AND CONCLUSIONS The results indicated a correlation between CSR and innovation, but not causality. It appeared to be the values and commitment of leader/owner and employees that were the main drivers for both CSR and innovation. Neither CSR nor innovation was found to have any effect on growth. The thesis proposes a model for how CSR can drive innovation and growth in SMEs, which shows the importance of integrating normative and business case drivers. A proactive CSR strategy with CSR activities integrated into the company and its value creation, showed to have the largest influence on innovation and growth. Also, innovation influenced CSR through collaborations. For the resulting CSR innovations to contribute positively to SME growth, they should be successful innovations aligned with the SMEs’ core business. The results of this study are useful both for researchers and practitioners. It further develops the theory on CSR innovation by placing it in the context of SMEs. In addition, it provides a starting point of the integration of the normative and the business case for CSR in SMEs. Further research should focus on testing the model in different industries, SME sizes and countries. The results of this study can be an encouragement for SME leaders/owners and employees to engage and take a more proactive approach to CSR.
Contextual Market Research Challenges for Startups
By Jonas Helland
Jonas, who graduated in 2017, wrote the last thesis we present in March. In this well-written work, he investigates his own start-up, in which he had been working for some time. The start-up focused on environmental friendly products for the consumer market. With interest and work tasks in marketing and marketing strategy, Jonas tells us it was easy to choose topic for the thesis.
– As our CMO had extensive commercial experience with market research, I thought it might be interesting to take an academic approach to how one can apply commercial market research techniques to a start-up with limited resources, he recalls, before he adds:
– When researching the academic field of market research, it became clear that there was an extensive gap in the field of start-ups conducting market research, as most theories concerned large businesses with extensive resources to spend.
Hence, also Jonas’ work focus on gaining new insights about smaller firms, and moves the focus from big corporations to SMEs. However, filling gaps in the literature is not an easy job, and it might not be easier when the research case also is your own workplace. To balance research and business focus is a demanding task, especially when extraordinary activities occur:
– The process became longer than expected. After I conducted the literature review and starting the data collection, I had to take a five months break from the research from March 2017 until August 2017, as we were heading into an intense Kickstarter campaign for a new product. However, looking back in hindsight, this might have been a good thing, as I got new perspectives from seeing how the results of our market research directly affected the Kickstarter campaign and the product development, Jonas tells us.
Jonas also recalls that the fall until December, when he handed in his work, was hard, as he had to work full time in the start-up while writing his thesis, but that a ‘good rhythm’ helps a lot in the work. Regarding the findings in his work, Jonas identified some important aspects when reading the field’s literature and investigating his own start-up. He especially finds the difference between small resource-scarce start-ups and big corporations an important and ignored difference in field, and an important finding in his work:
– The extent of which the whole market research field has more or less ignored the prospects of start-ups, and consequently, how ‘normal’ academic theories on market research and to a large extent marketing in general don’t apply to start-ups. An academic field like market research should not limit itself to a precondition that companies have extensive resources.
When we ask Jonas what he would have focused on in a new thesis today, he tells us that he found many interesting results in his initial work that could be foundations for future work. Especially to dig deeper into how concepts in market research could be applied to start-ups in different context, and as such expand the research from a single case study would be interesting, he tells us:
– I have identified many areas that need more research. As of such, I would have liked the chance to explore concepts and theories with a longer and broader list of case companies. Subsequently, I think it would be beneficial to conduct quantitative research to test the theoretical propositions.
He also adds that if he would write another thesis, he learned a lot from the process that would be beneficial in a second process, which would have made the work clearer from the beginning. As he explains us in the end of our talk:
– At first, when conducting the literature review, I didn’t come up with anything original, and despite reading tons of articles, I didn’t feel I obtained a clear perspective on what was needed and what I should research. It was only when re-starting the research in August that a kind of clarity emerged. Now, I gave myself much more time to actually think deeper, by only spending the morning hours each day to write. As I now see it, I would choose being deeply concentrated for four hours over being decently concentrated for 12 long hours when writing any day.
Executive Summary
Even though the field of market research (MR) has evolved in sophistication, scope and importance over the years, previous research has mostly focused on large, resource-abundant corporate organizations and has ignored startups. Consequently, startups are assessed in the context of existing models based on large firm practices, something that fails to consider the resource constraints and capability limits of small, entrepreneurial firms. Current research within the field of entrepreneurship has identified that the applicability of current MR theories to a startups’ decision making is limited, and that the MR literature fails to relate to the unique context of the entrepreneur. This contextual gap in the MR field is unfortunate, as the greatest risk for startups in order to survive and grow lies not in the development of new products, but in the development of customers and markets.
This study starts by reviewing MR literature, in order to define the contextual MR challenges for startups and define propositions for how to deal with these challenges. Based on an abductive approach of combining theoretical findings and empirical data, the author presents a detailed, actionable and coherent framework for startups to use when conducting MR. This framework addresses specific challenges that startups are likely to encounter when conducting MR, and suggests appropriate strategies for handling these challenges.
The identified challenges in the framework are related to both the research design, data collection and sampling stage of the design phase and of the execution phase of the MR process. Here, the use of simple, inexpensive methods, small sample sizes and the need to use nonprobability sampling are identified as the main MR challenges for startups in the design phase. Subsequently, asking the right questions, the lack of continuous work and how everything takes longer are critical challenges that needs to be handled in the execution phase. To deal with these challenges, the author presents the following four strategies for a startup context: Be pragmatic in research design, combine methods, harness online resources and harness relationships.
The initial framework is illustrated through a single-case longitudinal study, which explores the nuances and details of a startup conducting MR, and describes MR challenges and strategies indepth. The selected case is the MR conducted by the American startup One Earth Designs between November 2016 and March 2017. The goal of this MR was to inform the marketing and product development of a new, incremental product innovation for the American outdoor market, namely a portable solar cooker. Due to the author’s role as Marketing Officer in the startup throughout the study, data was collected through participant-observation, interviews and documentation. Throughout the analysis, the author identifies how the approach used by One Earth Designs is distinctly different to the large-firm processes described in the MR literature, even though the methods and techniques in themselves are similar. The case study is presented through a comprehensive and detailed analysis.
The author contributes to theory by suggesting a new pragmatic approach to MR for startups, in which combining methods, being systematic and making choices are key principles. This pragmatic approach provides an important step in filling the contextual gap identified in the MR literature, by recognizing the unique context in which startups that are developing new incremental product conduct their MR. Furthermore, by identifying appropriate strategies for handling the lack of statistical power and resource constraints, the suggested approach will help increase the relevancy and applicability of current MR literature to startups.
Further research should focus on four topics identified in this study. First, the distinction between challenges arising for startups in quantitative and qualitative research needs to be clarified. Secondly, the impact of startups’ non-MR-related daily responsibilities on the MR work needs to be investigated. Thirdly, to what extent MR experience or expertise is present in startups and how this impacts the ability to ask the right questions in MR needs more research. Fourthly, further research should consider how online resources best can be harnessed by startups as a key strategy in obtaining high-quality MR data. In addition, more quantitative research is needed to test both the elements present in the theoretical framework, and the relationships between these elements. Finally, substantial work is needed to develop the pragmatic approach to MR, which makes MR more applicable and less resource intensive for startups.
