Adapting To Grand Environmental Challenges Through Collective Entrepreneurship

Academy of Management Perspectives
ADAPTING TO GRAND ENVIRONMENTAL CHALLENGES

THROUGH COLLECTIVE ENTREPRENEURSHIP
Journal: Academy of Management Perspectives
Manuscript ID AMP-2017-0056.R3
Document Type: Symposium
Stakeholders < Upper Echelons/ Corporate Governance < Business Policy

and Strategy < Topic Areas, Organizations and the Natural Environment
Keywords:
< Topic Areas, Institutional theory < Theoretical Perspectives,
Entrepreneurship (General) < Entrepreneurship < Topic Areas
Page 1 of 53 Academy of Management Perspectives
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3 ADAPTING TO GRAND ENVIRONMENTAL CHALLENGES THROUGH
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6 COLLECTIVE ENTREPRENEURSHIP
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10 Jonathan P. Doh
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Villanova University
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15 Villanova, PA 19085 USA
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17 jonathan.doh@villanova.edu
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22 Peter Tashman
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24 University of Massachusetts Lowell
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26 Lowell, MA 01854 USA
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29 Peter_Tashman@uml.edu
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33 Mirko Benischke
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Erasmus University Rotterdam
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38 Rotterdam 3042 NA, The Netherlands
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40 benischke@rsm.nl
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Academy of Management Perspectives Page 2 of 53
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3 ADAPTING TO GRAND ENVIRONMENTAL CHALLENGES THROUGH
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6 COLLECTIVE ENTREPRENEURSHIP
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8 ABSTRACT
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10 Businesses are increasingly participating in cross-sectoral partnerships to reduce their
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environmental impacts on society. At the same time, some are pursuing more entrepreneurial
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15 ventures to stimulate environmental innovations. Environmental issues, however, are evolving
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17 into grand challenges that could create massive disruptions to organizational and societal systems
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that transcend the interests or influence of individual firms. As such, successful adaptation to
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22 these challenges will require innovative solutions that leverage the resources and capabilities of
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24 all relevant actors. Drawing from research on cross-sectoral partnerships and environmental
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26 entrepreneurship, we propose collective environmental entrepreneurship (CEE) as a strategy to
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29 facilitate adaptation to changing global ecosystems. We explain how cross-sectoral partnerships
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31 can overcome some of the constraints facing individual sectors in developing innovative
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33 adaptations to grand environmental challenges by pursuing CEE. Further, we show how these
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initiatives can institute governance arrangements that help individual sectors reconcile their
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38 diverging interests. We then apply these insights to three cases where governments, private
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40 interests, and nonprofits have collaborated to adapt to the physical impacts of climate change
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through innovative partnerships and draw implications for how this construct could be applied to
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45 other global challenges facing society.
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49 Key words: sustainability, collective entrepreneurship, climate change, cross sector partnerships
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3 INTRODUCTION
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6 In 1953, a devastating flood struck the low-lying communities of the Netherlands, Belgium,
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8 England, and Scotland. More than 2,500 people perished, mostly in the Netherlands. This flood,
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10 and others in the ensuing decades, prompted public and private actors to consider alternatives to
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conventional approaches to controlling water. These included lowering or removing dikes;
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15 convincing farmers to donate land for river spillways during flood events to protect downstream
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17 residents; and innovations such as the “Zandmotor” (Sand Engine), a 24-million-ton pile of sand
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that uses nature as the “engine” to distribute that sand into a flood barrier and protective beach
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22 (Kimmelman, 2017). More recently, the Nature Conservancy partnered with public and private
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24 actors to develop 400 water funds around the world for downstream water users to jointly invest
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26 in upstream land conservation and restoration as a means to address potential fresh water
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29 shortages (Abell, 2017). One of these efforts, the Upper Tana-Nairobi Water Fund, now serves
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31 farmers, businesses, and more than 9 million Kenyans. These two illustrations underscore how
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33 grand environmental challenges threaten private and public interests and how cross-sectoral
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partnerships can stimulate innovative adaptive responses to these challenges.
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38 In a provocative commentary in the Academy of Management Journal, George and
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40 colleagues wrote: “The world is besieged by challenges…whether it is war in Syria, migrant
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crises in Asia and Europe, climate change-induced natural disasters, poverty, water scarcity, or
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45 famine, global challenges remain stubbornly persistent despite technological, economic, and
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47 social progress” (2016, p. 1880). Their message is also reflected in broader calls for scholars to
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49 produce more relevant research for pressing societal grand challenges (Buckley, Doh, &
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52 Benischke, 2017; Gates Foundation, 2017; Ghoshal, 2005). While these challenges reflect
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54 complex and intractable problems, they also invite “ambitious but achievable objectives that
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3 harness science, technology, and innovation to solve important national or global problems”
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6 (U.S. Office of Science and Technology Policy, 2014).
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8 Perhaps no other grand challenge is as urgent as the confluence of environmental crises
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10 facing humanity (Markman, Russo, Lumpkin, Jennings, & Mair, 2016; Whiteman, Walker, &
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Perego, 2013). The earth is now on the boundary of an epochal shift from the Holocene Era,
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15 which for millennia provided a stable habitat for human systems, to the Anthropocene Era, which
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17 brings an uncertain future with potentially massive discontinuities (Hoffman & Jennings, 2015,
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Rockström et al., 2009; Winn, Kirchgeorg, Griffiths, Linnenleucke, & Guenther, 2011). The shift
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22 is already generating troubling effects, including rising sea levels, drought and extreme weather,
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24 soil degradation, and collapsing food systems. Large areas may become uninhabitable, leading to
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26 millions of environmental refugees (UNFCCC, 2007). Such effects have enormous implications
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29 for organizations, including disruption of their biophysical foundations and value chains
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31 (Santangelo, 2018; Tashman, Winn, & Rivera, 2015).
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33 In this paper, we explore a novel arrangement for addressing grand environmental
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challenges, namely collective environmental entrepreneurship. We derive the concept from two
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38 organizational initiatives and research traditions central to solving complex societal issues:
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40 environmental entrepreneurship and cross-sectoral partnerships. Environmental entrepreneurship
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refers to “the process of discovering, evaluating, and exploiting economic opportunities that are
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45 present in environmentally relevant market failures” (Dean & McMullen, 2007, p. 58). Cross-
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47 sectoral partnerships are alliances among private, public, and/or NGOs that tackle common
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49 interests where different sectors may lack capacity to achieve their interests alone (Pearce &
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52 Doh, 2005). We argue that cross-sectoral partnerships that focus on environmental
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54 entrepreneurship are well suited for generating solutions to grand environmental challenges
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3 because private sector innovation and public institutional support are both essential to such
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6 efforts. To this end, we define collective environmental entrepreneurship as the process through
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8 which business, government, and NGOs work as partners to leverage and combine their sector-
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10 specific competencies to discover, develop, and scale innovative adaptive responses to
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environmental challenges.
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15 In the remainder of the paper, we first describe the grand environmental challenges
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17 confronting organizations and society. We then review how the private, public, and nonprofit
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sectors have independently sought to adapt to these challenges, with limited success. We turn our
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22 attention to collective environmental entrepreneurship (CEE) as a form of cross-sectoral
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24 partnership well suited for realizing adaptive responses to grand environmental challenges. Then,
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26 we discuss how CEE requires integrating the interests and conflicting expectations among
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29 private, public, and nonprofit actors and how conflicts among partners can be addressed
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31 (Googins & Rochlin, 2000; Selsky & Parker, 2005). Finally, we propose several CEE partnership
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33 governance mechanisms to reconcile potentially conflicting goals and expectations, and facilitate
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collaborative adaptive responses to grand environmental challenges.
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38 GRAND ENVIRONMENTAL CHALLENGES FOR ORGANIZATIONS AND SOCIETY
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40 Regardless of their causes, grand environmental challenges are generating a variety of cascading,
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cross-scale, negative effects around the globe such as climate change, ocean warming and
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45 acidification, new disease vectors, and losses of tundra, artic ice, marine and terrestrial
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47 biodiversity, and arable land (Harvell et al., 2002; McCarthy, Haigh, Hirshi, Grist, & Smeed,
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49 2015). While such effects result from planetary-scale processes, they have severe local
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52 consequences including drought, flooding, freshwater shortages, abnormal extreme weather,
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54 diseased forests, and collapses in marine and terrestrial food-producing ecosystems. These
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3 consequences affect both private and public interests directly and undermine key ecological
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6 systems that support them (Winn et al., 2011). Some of these effects lead to vicious cycles; for
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8 example, climate change leads to loss of tundra, which in turn leads to methane release in the
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10 atmosphere that further exacerbates climate change (Pachauri et al., 2014).
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In an influential article in Nature, Rockström and colleagues (2009) encapsulate these
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15 challenges in the form of nine critical earth systems that have been or are close to being
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17 surpassed: “climate change; rate of biodiversity loss (terrestrial and marine); interference with
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the nitrogen and phosphorus cycle; stratospheric ozone depletion; ocean acidification; global
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22 fresh water use; change in land use; chemical pollution; and atmospheric aerosol loading”
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24 (Whiteman et al., 2013, p. 313). Under business-as-usual (Wright & Nyberg, 2017), these
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26 systems will continue a trajectory beyond their boundaries, leading to more severe and frequent
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29 ecological and societal consequences. Arguably, the most pressing task facing humanity is
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31 developing societal resilience to these challenges to “absorb a spectrum of shocks or
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33 perturbations and to sustain and develop its fundamental function, structure, identity, and
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feedbacks as a result of recover or reorganization in a new context” (Chapin III, Kofinas, &
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38 Folke, 2009, p. 350).
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40 Unfortunately, the spatial and temporal uncertainty associated with these challenges
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complicates policy responses (Pachauri et al., 2014). Grand environmental challenges often
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45 transcend property rights and geopolitical boundaries, and involve impacts in geospatial areas
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47 and timeframes that are far removed from the underlying causes (Winn et al., 2011). Therefore,
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49 resilience-building efforts require holistic adaptation or “adjustment in natural or human
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3 systems” (IPCC, 2007, 18.1.2).1 This suggests that adaptation efforts may require innovation to
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6 pool risks associated with tackling grand environmental challenges. We therefore contend that
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8 the private sector has a critical role to play in adaptive responses to these challenges because it
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10 offers capital, managerial know-how, and innovation capabilities critical to such efforts (Reid et
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al., 2010; Winn et al., 2011). Still, there is little evidence of widespread coordinated action by
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15 public and private actors (Tompkins & Eakin, 2012). With this in mind, we turn to a brief
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17 discussion of the role of private, public, and nonprofit sectors in addressing grand environmental
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challenges, concluding that their contributions are necessary but insufficient when undertaken
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22 independently.
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24 PRIVATE, PUBLIC, AND NONPROFIT ADAPTATION TO GRAND
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26 ENVIRONMENTAL CHALLENGES
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29 The scope and intensity of grand environmental challenges require responses from all relevant
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31 sectors. Yet each sector faces challenges in realizing the potential of its contribution. In this
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33 section we summarize efforts by these sectors to implement adaption strategies and specify some
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of the limitations to single-sector response. In so doing, we review extant management research
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38 on actions taken to adapt to grand environmental challenges, summarized in Table 1.
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Private Sector Adaptation Efforts
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45 Research has recognized how entrepreneurial activity helps address pressing environmental
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49 1 It is important to acknowledge that grand environmental challenges–in particular climate change–can also create opportunities. For example,
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51 warmer temperatures may open up opportunities in the agricultural sector to farm land that has not been suitable for such use before. However,
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given that the private sector will most likely have strong incentives to take advantage of positive impacts of climate change, market failure is less
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54 likely to be an issue in these type of adaptation efforts. Thus, our discussion is most relevant to adaptation that involves systematic responses that
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are designed to moderate harm ensuing from the negative ecological and societal consequences associated with climate change.
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3 issues by driving innovation for ecologically responsible products and services (e.g., Cohen &
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6 Winn, 2007; Dean & McMullen, 2007; Larson, 2000; Meek, Pacheco, & York, 2010; York &
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8 Venkataraman, 2010). Self-interested entrepreneurs can seize opportunities that result from the
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10 environmental impact of firms’ activities (Dean & McMullen, 2007) and societal pressures for
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sustainable business practices to address various types of market failures or “environmental and
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15 social disruptions” (Hall, Daneke, & Lenox, 2010, p. 441; see also Anderson & Huggins, 2008).
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17 Cohen and Winn (2007) illustrate how four types of market imperfections—inefficient firms,
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externalities, flawed pricing mechanisms, and information asymmetries—provide entrepreneurial
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22 opportunities.
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24 While entrepreneurial ventures are typically profit-oriented, entrepreneurship can also
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26 resolve externalities to create value to society as a whole (Meek et al., 2010; York &
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29 Venkataraman, 2010). Environmental entrepreneurship has been hailed as a potential market-
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31 based solution for adaptation to environmental challenges. As Howard-Grenville, Buckle,
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33 Hoskins, and George explain, such adaptation is needed to “address the challenges faced by the
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world’s vulnerable societies while seeking environmentally favorable solutions for the provision
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38 of clean water, clean energy, communications, and mobility infrastructure” (2014, p. 620). In this
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40 regard, Lenox and York propose that environmental entrepreneurs “simultaneously foster
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economic and ecological benefits for society regardless if they themselves contributed to
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45 environmental degradation” (2011, p. 71). However, they acknowledge that few environmental
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47 entrepreneurs have broader collective goals; indeed, many “have no other objective than to make
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49 money and they may be able to do so without changing underlying institutions” (Lenox & York,
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52 2011, p. 73). As such, many individual entrepreneurs are still constrained by the profit motive,
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54 which directs them to focus on developing environmentally responsible products and services
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3 that send clear signals to potential consumers without necessarily addressing broader initiatives
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6 that generate positive externalities (Cohen & Winn, 2007; Lenox & York, 2011). Given that
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8 adaptation to grand environmental challenges requires investments into public goods across
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10 geospatially dispersed areas and jurisdictions, such investment would not be readily appropriable
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by individual entrepreneurs (Howard-Grenville et al., 2014).
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15 Relatedly, management research has observed that the private sector tends to consider
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17 bio- or geophysical threats only to the extent they interfere with day-to-day operations (Wright &
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Nyberg, 2017), with little or no consideration to the broader effects on all communities that
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22 inhabit those areas (Linnenluecke, Griffiths, & Winn, 2013). This view drives many private
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24 organizations to focus narrowly on protecting their assets from such effects in the short-term
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26 (Winn et al., 2011). Such action, however, may be short-sighted, because it overlooks
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29 organizations’ interdependence on resilient societal systems. Indeed, if grand environmental
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31 challenges destabilize the societal networks in which organizations are embedded, firms might
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33 also become damaged because of their interdependence with them. For example, agricultural
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firms are not only directly vulnerable to water shortages, collapsing nitrogen cycles, and
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38 biodiversity losses, but also indirectly through their effects on labor, supply and distribution
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40 chains, financing, and government policies (Belliveau, Smit, & Bradshaw, 2006).
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Research has also shown how some private sector efforts to adapt to these challenges
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45 may actually make society more vulnerable to them. In these cases, firms reduce their
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47 vulnerability to environmental pressures by exploiting public ecosystems, which reduces the
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49 resilience of those ecosystems (Tashman, 2011). For example, ski resorts have used water in
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52 snowmaking facilities as a substitute for scarce natural snowfall resulting from climate change,
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54 thereby magnifying the impact of scarce winter precipitation on freshwater supplies (Scott &
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3 McBoyle, 2007); farms respond to increasingly unpredictable annual precipitation levels by
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6 overexploiting scarce ground water (Wall & Smit, 2005); and forestry companies have
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8 intensified harvesting rates in response to poor forest health to ensure the maximum allowable
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10 yield, even though such activity further degrades biodiversity and nitrogen and phosphorus
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cycles (Spittlehouse & Stewart, 2003). Such practices may help firms in the short run; however,
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15 they may have negative long-term consequences by slowly destabilizing the ecological systems
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17 that support firms or their stakeholders. In sum, research on firm adaptation to these challenges
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suggests that they pursue short-term measures to protect affected resources, overlook broader
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22 measures that address the spatial and temporal scale of environmental challenges facing them,
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24 and even exacerbate the larger problem. Still, they have critical resources for planning and
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26 implementing societal adaptation, including managerial know-how, capital, strategic alliancing
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29 capabilities, and innovativeness.
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31 While most evidence suggests that the private sector focuses on adaptation efforts that
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33 protect their own interests, some firms are trying to deploy adaptation practices that focus on
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broader socio-ecological systems. For example, Danone is in the early stages of transforming its
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38 supply chain to rely on dairy farms that use regenerative agricultural techniques (practices that
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40 increase biodiversity, soil enrichment, and watershed restoration). Such efforts help enhance
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farms’ resilience to impacts from climate change by improving soil’s nitrogen fixing, water
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45 storage, and infiltration capacities (Greenpeace, 2008), while strengthening ecosystems’ abilities
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47 to provide common pool resources at the same time. To this end, Danone recently committed $6
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49 million to research on advancements in regenerative farming and the development of a
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52 certification standard for such practices called Regenerative Organic Certification
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54 (BusinessWire, 2018). These efforts involve partnerships with governments and NGOs to resolve
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3 some of the disincentives Danone might otherwise face in making such an investment.
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6 Public Sector Adaptation Efforts
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8 Research on public sector adaptation also reveals shortcomings. In theory, the public sector
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10 focuses on providing a broad range of benefits that enable societal adaptation to grand
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environmental challenges, including investing in infrastructure, providing social programs for
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15 vulnerable populations, and developing publicly available planning resources such as
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17 environmental data and modeling (Tompkins & Eakin, 2012). However, such efforts are poorly
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coordinated, reactive, ad-hoc, and managed at multiple levels of governance, complicating
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22 planning and implementation (Brooks & Adger, 2005). For example, “local municipalities in
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24 Norway believe that large-scale flood defense schemes have undermined their capacity to
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26 develop more robust and locally attuned adaptive responses” (Urwin & Jordan, 2008, p. 181).
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29 Given government finances, the challenges described above, and the role of the private
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31 sector in land and ownership of other assets, the public sector may have no choice but to work
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33 with the private sector to facilitate adaption to grand environmental challenges. First, public
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sector agents tasked with responding to grand environmental challenges often lack agency over
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38 key ecosystems (Tompkins & Eakin, 2012) because those are controlled by private individuals
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40 and organizations. Further, private actors likely have divergent interests from public and civil
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sector actors. For example, flood control policies near coastal areas often rely on water capture
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45 and storage on rural lands, which can conflict with objectives of local farmers whose interests lie
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47 in maximizing food production (Posthumus, Hewett, Morris, & Quinn, 2008). These diverging
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49 interests make it difficult for public sector agents to convince organizations that control key
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52 ecosystems to help their adaptive planning efforts (Tompkins & Eakins, 2012). In addition, the
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54 nature of public governance rarely leads to true innovations. While public sector agencies can
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3 support research and development through funding and create favorable policies to incentivize
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6 private sector innovation, the mission of the public sector does not include commercializing new
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8 technologies and business models that may be required for adaptation to environmental
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10 challenges.
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Nonprofit Sector Adaptation Efforts
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15 In the nonprofit sector, NGOs act to both complement and influence policies to protect the public
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17 from the bio- and geophysical effects of grand environmental challenges. NGO efforts frequently
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target the community-level to help local stakeholders assess their vulnerability to these effects,
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22 catalog their capabilities for adapting to them, and devise community-level adaptation plans (van
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24 Aalst, Cannon, & Burton, 2008). Some NGOs advocate for community interests in broader
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26 governance arenas where such policies are developed and implemented (Thomas & Twyman,
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29 2005). Frequently, they advocate for natural-resource dependent communities in the developing
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31 world who are particularly vulnerable to bio- and geophysical disruptions because they lack
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33 capital and political voice (Adger, Kelly, Winkels, Huy, & Locke, 2002). NGOs can help such
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communities gain representation in policy-making processes and access government programs
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38 that help society cope with environmental impacts. These organizations, however, often lack
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40 policy-making agency and capital to finance efforts needed to champion systematic adaptive
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responses to grand environmental challenges (Bouwer & Aerts, 2006). Taken together, NGOs
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45 can help communities make sense of their physical exposure to grand environmental challenges,
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47 organize and deploy resources to cope with it, gain influence in policy processes, and access
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49 government programs; however, they lack the capabilities to develop innovative solutions
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52 needed to confront the magnitude and severity of the impacts these challenges pose in the future.
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54 In sum, we have argued that environmental entrepreneurship is a possible mechanism for
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3 facilitating societal adaptation to grand environmental challenges. However, we have also
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6 identified conflicts over the type and scale of environmental entrepreneurship to facilitate it.
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8 Finally, we have noted the constraints facing independent efforts of the private, public, and civil
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10 society sectors innovating effective adaptive responses to these challenges. .
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COLLECTIVE ENVIRONMENTAL ENTREPRENEURSHIP AND ADAPTATION TO
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15 GRAND ENVIRONMENTAL CHALLENGES
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17 Because private sector environmental entrepreneurship and corresponding efforts in the public
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and nongovernmental sectors appear to be insufficient for effective adaptation to grand
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22 environmental challenges, we propose collective environmental entrepreneurship (CEE) as an
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24 alternative. CEE relies on cross-sectoral partnerships to leverage resource complementarities or
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26 recombination to develop novel, innovative approaches to these technological and institutional
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29 challenges (Rangan, Samii, & Van Wassenhove, 2006). In general, cross-sectoral partnerships
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31 give actors from different sectors vehicles for resolving common challenges by recombining
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33 resources as well as leveraging differential cost advantages between public and private sectors
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(Rangan et al., 2006). Such hybrid organizational forms can also become a platform to pursue
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38 multiple shared goals across sectors (Markman et al., 2016), particularly for intractable social
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40 and environmental issues that are affecting each sector in unique ways (Powell, Hamann, Bitzer,
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& Baker, 2018).
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45 Private, Public, and Nonprofit Sector Contributions to CEE
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47 The private sector contributes financial resources, market intelligence, expertise on adoption of
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49 new practices, innovative ideas and the ability to pilot them in a controlled setting (Teegen, Doh,
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52 & Vachani, 2004), and ironically, some legitimacy to NGOs and governments. Some NGOs are
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54 perceived as peripheral and ineffective, and affiliations with respected corporations may mitigate
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3 some of these perceptions (Teegen et al., 2004; York, 2013). The private sector can also move
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6 projects faster than governments, which can have slow, bureaucratic processes; partnering with
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8 corporations may relax or remove some of these constraints.
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10 Governments provide the institutional framework, authority, and public legitimacy by
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virtue of their role as (mostly) elected administrators and dense relational ties throughout society.
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15 Regulatory authority allows them to design incentives that promote rapid scaling of solutions to
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17 grand environmental challenges. For example, mandates, tax incentives, and other regulations
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have been instrumental in the growth and swift diffusion of renewable energy; that growth has,
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22 in turn, led to rapid innovation and dramatically increased scale economies, all made possible by
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24 the regulatory push (Weigelt & Shittu, 2016).
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26 Governments and NGOs bring scientific and technical expertise, often resulting from
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29 experience in managing large-scale conservation initiatives for geographically vast ecosystems
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31 (Doh, London, & Kilibarda, 2012). This expertise has been applied, for example, in partnerships
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33 between Coca-Cola and World Wildlife Fund around climate adaptation and water use (Yaziji &
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Doh, 2009). NGOs also possess reputational and social capital that can confer credibility and
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38 legitimacy to their business partners among broader groups of stakeholders (Edelman, 2017).
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40 The potential halo effects of working with NGOs helps public and private actors earn legitimacy
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from civil society as they pursue the goals of the partnership (Marano & Tashman, 2012).
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45 The Dynamics of Cross-Sectoral Partnerships and CEE
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47 Since cross-sectoral partnerships are vehicles for enabling actors from different sectors to
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49 combine complementary resources to resolve externalities that affect each of them, we argue that
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52 they may be appropriate mechanisms for incentivizing the scale of environmental
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54 entrepreneurship needed for societal adaptation to grand environmental challenges. Still, in
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3 practice, few cross-sectoral environmental partnerships have demonstrated a capacity for driving
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6 societal adaptation to grand environmental challenges. They tend to be narrowly focused,
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8 superficial, and unable to engage core activities of the participants. While some resemble broader
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10 strategic alliances in which partners engage in joint planning and resource pooling (Austin,
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2000b; Rondinelli & London, 2003), most focus on developing specific sustainability practices
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15 with limited impact on societal resilience to grand environmental challenges (Whiteman et al.,
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17 2013). CEE alliances, on the other hand, move beyond these efforts by leveraging partners’
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sector-specific competencies in risk-taking activities to discover, develop, and scale possible
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22 solutions to these challenges. In this way, CEE resembles “transformational” partnerships
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24 (Austin & Seitanidi, 2012a, p. 737) that reflect “a more aspirational stage that achieves
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26 significant social change” by engaging partners in “joint problem solving, decision making,
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29 management, learning, and creating conjoined benefits.”
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31 We do not suggest CEE as a panacea for building societal resilience to global ecological
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33 change. Grand environmental challenges such as climate change are complex issues, and they
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likely have no solutions without difficult trade-offs (Markman et al., 2016; Winn et al., 2011).
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38 Further, most adaptation efforts will requires cultural, institutional, and technological advances
39
40 that are currently only in the ideation stage of thought leaders in each sector (Howard-Grenville
41
42
et al., 2014; Hoffman & Jennings, 2015). Still, CEE represents a novel collaborative arrangement
43
44
45 that focuses specifically on bringing to bear critical resources that each sector possesses for
46
47 progress in moderating harm generated by grand environmental challenges. Given the
48
49 uncertainty associated with long-term changes in ecology, CEE efforts should be experimental
50
51
52 and co-evolutionary, adopt a long innovation horizon, and lead to critical learning opportunities.
53
54 Figure 1 provides an illustration of the process for how CEE partnerships may grow, develop,
55
56
57
58
59 15
60
1
2
3 and evolve over time.
4
5
6 --- INSERT FIGURE 1 ABOUT HERE ---
7
8 Governance of Collective Environmental Entrepreneurship: Resolving Goal Conflicts
9
10 While cross-sectoral partnerships enable sectors to integrate resources to address common
11
12
13
challenges, organizations from different sectors have different cultures and missions, serve
14
15 different stakeholder groups with conflicting expectations and interests, and therefore have
16
17 conflicting goals, which limits partnership effectiveness (Googins & Rochlin, 2000; Powell et
18
19
al., 2018; Pisani, Kourula, Kolk, & Meijer, 2017; Rondinelli & London, 2003; Selsky & Parker,
20
21
22 2005; Shapiro, Hobdari, & Oh, 2018; Wong, Wei, Yang, & Tjosvold, 2017; Yaziji & Doh,
23
24 2009). Conflicting goals often stem from socioeconomic inequality among partners that breeds
25
26 distrust and disagreement about the distribution of economic responsibility for shared goals
27
28
29 (Powell et al., 2018). In turn, such conflicts can impede partners’ ability to forge consensus on
30
31 distributing partnership benefits or mitigating opportunism (Kivleniece & Quelin, 2012), leading
32
33 to potentially incompatible activities (Tjosvold, 1998).2
34
35
36
Goal conflicts between private and public or nonprofit partners can be classified into
37
38 three general types: focus, scale, and time horizon (Googins & Rochlin, 2000; Selsky & Parker,
39
40 2005). Focus conflict refers to the basic objectives and emphasis that partners bring to the
41
42
collaborative initiative. Private actors are naturally focused on their economic and commercial
43
44
45 interests, whether they involve direct financial benefits or enhancement of goodwill, reputation,
46
47 or legitimacy with their stakeholders. Public and nonprofit actors aim to solve social and
48
49 environmental problems, particularly for socioeconomically disadvantaged stakeholders (London
50
51
52 & Rondinelli, 2003; Powell et al., 2018). In partnerships that address grand environmental
53
54
55
56 2 Goal conflict is defined as “incompatible activities,” not simply “opposing interests” (Tjosvold, 1998: 286).
57
58
59 16
60
1
2
3 challenges, focus conflict often involves private sector interests in using public environmental
4
5
6 goods to build organizational resilience, even if it adversely affects natural systems, and public
7
8 and nonprofit interests in stabilizing ecosystems to enhance broader socioecological resilience.
9
10 Scale conflict involves the breadth of the cross-sectoral initiative. Private actors are
11
12
13
interested in initiatives that address impacts on their operational activities, while public and
14
15 nonprofit actors are typically committed to helping all stakeholders that are affected by the social
16
17 or environmental issue (Selsky & Parker, 2005). In partnerships addressing grand environmental
18
19
challenges, scale conflict manifests itself in geospatial terms (Tompkin & Eakin, 2012). In
20
21
22 particular, private actors tend to be concerned with vulnerable areas and ecosystems that have
23
24 direct economic implications for them, while public and nonprofits actors are interested in the
25
26 broader geospatial area that is vulnerable to environmental change (Doh, London, & Kilibarda,
27
28
29 2012). Finally, time-horizon conflicts occur because of the shorter planning horizons of private
30
31 actors involving responses to marketplace dynamics, and the longer planning horizons of public
32
33 and nonprofit actors based on the lifecycle of the social or environmental issue (Roberts,
34
35
36
Lawson, & Nicholls, 2006). For grand environmental challenges, this conflict involves private
37
38 interests in developing responses to biophysical effects on their resources and public and
39
40 nonprofit interests in addressing the much larger and longer term effects of planetary-scale
41
42
environmental changes (Adger et al., 2009; Rockström et al., 2009).
43
44
45 While goal conflicts can undermine the effectiveness of cross-sectoral partnerships,
46
47 collective governance mechanisms can mitigate them when established in early stages of the
48
49 partnership (Le Ber & Branzei, 2010a, 2010b; Googins & Rochlin, 2000). To this end, partners
50
51
52 should define their “adaptive responsibilities and co-design mechanisms” (Le Ber & Branzei,
53
54 2010a, p. 142), particularly those that facilitate ongoing dialogue to institutionalize trust and
55
56
57
58
59 17
60
1
2
3 discourage partner disaffection (Powell et al., 2018). Austin and Seitanidi (2012b, p. 937) have
4
5
6 identified many of these governance mechanisms, including “setting objectives and structural
7
8 specifications (Andreasen, 1996; Arya & Salk, 2006; Austin, 2000b; Bryson et al., 2006;
9
10 Glasbergen, 2007; Googins & Rochlin, 2000; Halal, 2001); formulating rules and regulations
11
12
13
(Das & Teng, 1998; Gray, 1989); drafting a memorandum of understanding (Seitanidi & Crane,
14
15 2009); establishing leadership positions (Austin, 2000a; Waddock, 1986); deciding
16
17 organizational structures (Berger et al., 2004; McCann, 1983); and agreeing on the partnership
18
19
management (Austin & Reavis, 2002; Seitanidi & Crane, 2009).”
20
21
22 --- INSERT TABLE 2 ABOUT HERE ---
23
24 Since CEE partnerships are tasked with innovating solutions to grand environmental
25
26 challenges, we argue that additional integrative governance mechanisms may be needed for goal
27
28
29 conflicts in these partnerships. Kivleniece and Quelin explain that integrative mechanisms
30
31 promote “complementarity and relative resource as well as governance advantages of public and
32
33 private organizations to address market externalities and allow a synergistic combination of
34
35
36
public and private resources” (2012, p. 281). Below, we outline three integrative mechanisms
37
38 that directly target the focus, scale, and time-horizon conflicts that can occur in CEE
39
40 partnerships. Figure 2 illustrates our model showing how such mechanisms can promote better
41
42
CEE partnership outcomes. Table 2 illustrates how they go beyond mechanisms that are
43
44
45 recommended in less integrative cross-sectoral environmental partnerships.
46
47 --- INSERT FIGURE 2 ABOUT HERE ---
48
49 Ecosystem valuation to address focus conflict. Actors from different sectors often have
50
51
52 fundamentally different objectives for cross-sectoral partnerships, which leads to focus conflict.
53
54 In CEE projects, private organizations tend to focus on measures that reduce organizational
55
56
57
58
59 18
60
1
2
3 vulnerability to physical changes to the environment (Galbreath, 2009; Scott & McBoyle, 2007),
4
5
6 exploit alternative sources of natural resources that are threatened by those physical changes
7
8 (Wall & Smit, 2005), or enhance organizational resilience to the physical impacts of changing
9
10 ecological conditions (Linnenluecke, Griffiths, & Winn, 2012). In contrast, governments
11
12
13
emphasize broader benefits to society and positive externalities to the system as a whole. This
14
15 mismatch is consistent with the general literature on cross-sectoral collaboration, which has
16
17 identified differing scope preferences of public versus private sectors (Kivleniece & Quelin,
18
19
2012). A key implication is that the isolated efforts of actors from each sector can have negative
20
21
22 impacts on the others, particularly with regard to the use of ecological systems that mediate the
23
24 physical impacts of environmental challenges (e.g., Tashman & Rivera, 2016; Posthumus et al.,
25
26 2008). Such ecological systems are frequently not valued properly in the marketplace, which
27
28
29 sends ambiguous signals to private and public interests about their optimal use.
30
31 To explain how partnerships can help mitigate focus conflict, we draw on the work of
32
33 ecological economics, which studies how the unrecognized economic value of ecology for
34
35
36
society-at-large can be quantified and incorporated into governance solutions that slow the
37
38 resulting degradation of ecological systems (Costanza & Daly, 1992). Ecosystem valuation uses
39
40 economic principles to “put a price” on natural systems and resources that otherwise have no
41
42
market value. Ecosystem valuation mechanisms can help address focus goal conflict in two
43
44
45 ways. First, they help incentivize private organizations to consider the monetary value of
46
47 ecology, which could discourage organizations from exploiting natural resources when adapting
48
49 to environmental challenges and potentially exacerbating those challenges. Second, they help
50
51
52 public and nonprofit actors to take private interests into account when mandating or advocating
53
54 for public policies for adapting to complex environmental problems. NGOs with expertise in
55
56
57
58
59 19
60
1
2
3 ecological processes and their value to civil society can provide technical assistance to private
4
5
6 and public interests in designing the policy and finance instruments that comprise valuation
7
8 mechanisms (Gómez-Baggethun et al., 2010). With such mechanisms in place, private sector
9
10 goals can realign towards more sustainable responses that rely less on exploiting ecosystems for
11
12
13
short-term efforts to protect business interests. At the same time, these mechanisms allow public
14
15 and nonprofit actors to address economic goals of the private sector, which should help motivate
16
17 its commitment to CEE.
18
19
To illustrate, the partnership between the Bogota Water and Sewage Company (EEAB)
20
21
22 and Conservation International's Integrated National Adaptation Project (INAP) works to
23
24 improve Colombia's understanding and assessment of effects, vulnerability, and adaptation to
25
26 climate change by piloting measures and policy options to address climate impacts. INAP takes
27
28
29 an ecosystem-based approach to adaptation by creating mechanisms for explicitly valuing
30
31 biodiversity and ecosystem services and sharing results with all partners. The ecosystem-based
32
33 approach eschews short-term financial gains to EEAB by limiting its consumption of water in
34
35
36
support of broader ecosystems, and creates a longer-term monetary incentive to protect
37
38 ecosystems’ capacity for water provision when nonfinancial ecosystem services and biodiversity
39
40 are sustained, using conventional financial valuation analysis (Chapin III et al., 2009).
41
42
The INAP also contains other critical elements of CEE: communicating weather and
43
44
45 climate forecasts to decision makers; designing and implementing an adaptation program that
46
47 supports Colombian Caribbean insular areas; and responding to increased exposure to tropical
48
49 vector-borne diseases induced by climate change. However, the centerpiece of the program is its
50
51
52 mechanism for valuing and supporting ecosystem services. For example, in the Rio Blanco
53
54 Watershed, EEAB has leveraged this mechanism to participate in over 200 vegetation restoration
55
56
57
58
59 20
60
1
2
3 processes. While these efforts do not ensure EEAB’s short-term access to water, they help
4
5
6 restore the watershed and its capacity to cycle water over the long-term. Further, the land use
7
8 plans of several local municipalities were updated to include adaptation measures such as land
9
10 restoration and sustainable farming practices that help ensure the availability of water in the
11
12
13
long-term (e.g., tree fences, crop diversification, soil and water conservation practices, and
14
15 wildfire protection). In light of these considerations, we propose that:
16
17 Proposition 1: Ecosystem valuation mechanisms help mitigate focus conflicts and
18
19
enhance the effectiveness of CEE in adapting to grand environmental challenges by
20
21
22 incentivizing (a) private organizations to invest in environmental resilience when they
23
24 perceive no immediate financial gains to doing so, and (b) public and nonprofit actors to
25
26 take private interests into account when mandating or advocating environmental policies.
27
28
29
30
31 Polycentric governance to address scale conflict. Scale conflict is a critical issue in CEE
32
33 efforts because actors from different sectors tend to plan around different geographic scales.
34
35
36
Governments and NGOs prioritize environmental policies and initiatives in geographic areas
37
38 under their jurisdiction. Corporations, on the other hand, are more interested in solutions that
39
40 address the physical context of their value chains: their own property, plant, and equipment, and
41
42
those of their value-stream partners (Sussman & Freed, 2008). To illustrate, while government
43
44
45 agencies may seek solutions to protect broader populations from greater risk of water shortages,
46
47 businesses are interested in protecting direct access to water resources for production or other
48
49 use. Although these two goals are not mutually exclusive, their geographic scales likely contain
50
51
52 significant non-overlapping areas (Adger et al., 2009). Scale conflict is therefore problematic for
53
54 CEE because different approaches to the scale of the problem can inhibit identification and
55
56
57
58
59 21
60
1
2
3 selection of the most promising ideas for adaptation. Even if an initial idea is developed,
4
5
6 subsequent experimentation, refinement, and preliminary adoption may not come to fruition
7
8 when partners have different scale orientations (Shah & Tripsas, 2007).
9
10 We propose that polycentric governance mechanisms (e.g., Ostrom, 1999) within CEE
11
12
13
partnerships can mitigate such scale goal conflicts. Polycentric governance refers to “the
14
15 organization of small, medium, and large-scale democratic units that each exercise independence
16
17 to make or enforce rules within a scope of authority for a specified geographical area” (Chapin
18
19
III et al., 2009, p. 349). Polycentric governance mechanisms involve establishing vertical
20
21
22 institutional linkages between actors and organizations that have agency at different geopolitical
23
24 levels of analysis: for example, the municipal, state, national, or multilateral levels. Such
25
26 linkages help coordinate communication, establish decision-making norms and authority, and
27
28
29 enable exchanges of information and resources (Ostrom, 1999). They also help establish
30
31 accountability across levels of governance and mitigate the potential for authorities at different
32
33 levels to work across purposes. This is accomplished, in part, through information sharing of
34
35
36
how local solutions may be scalable to more global problems. Examples of polycentric
37
38 governance include the EU’s principle of subsidiarity—in which those levels of government
39
40 closest to a problem are given primary authority for addressing it—and municipal governance in
41
42
the United States, in which towns, cities, and counties often have collective jurisdiction over
43
44
45 services.
46
47 With respect to the collective entrepreneurship partnerships, authorities and NGOs
48
49 operating at different scales—in consultation with salient private interests—may need to
50
51
52 communicate and exchange knowledge to determine the geospatial scale of the entrepreneurial
53
54 effort (a city vulnerable to rising sea levels, a region vulnerable to drought, etc.). In particular,
55
56
57
58
59 22
60
1
2
3 this should facilitate a process whereby the partners first develop solutions to micro problems,
4
5
6 and then adapt the solution to the macro scale. This step-wise approach should help facilitate
7
8 goal realignment across partners by building trust in the first stage, and stronger commitments to
9
10 finding solutions in the second (Harper, 2008).
11
12
13
As an example, Adaptation for Smallholders to Climate Change (AdapCC) is a private-
14
15 public partnership between Cafedirect and GIZ in Latin America and in East Africa. AdapCC
16
17 supports coffee and tea farmers in developing strategies to cope with the risks and impacts of
18
19
climate change. Poor agricultural smallholders in rural areas are highly vulnerable to climate
20
21
22 change’s effects on arable land, water availability, and increasing pest attacks because they lack
23
24 capital for adaptation and institutional and technical support. In response, AdapCC is working
25
26 with the United Nations to incentivize coffee farmers in Sierra Piura, Peru, to adopt more
27
28
29 sustainable agricultural practices that will make them more resilient to climate change over the
30
31 long-term. The partnership promotes practices such as rotating crops and planting shade trees
32
33 that reduce vulnerability to ecological change and sequester carbon. It then links farmers
34
35
36
involved with the partnership to carbon credits through the multilateral CarbonFix Standard
37
38 program, which provides financing for the projects. Cooperation and information sharing at
39
40 multiple levels (polycentric governance) ensures that innovations at the local level percolate to
41
42
regional, national, or multilateral ones, and that local interests are reflected at all levels.
43
44
45 Proposition 2: Polycentric governance mechanisms mitigate scale conflicts and enhance
46
47 the effectiveness of CEE in adapting to grand environmental challenges by (a) ensuring
48
49 accountability across scales of governance and (b) reducing the potential for authorities
50
51
52 at different levels to work at cross purposes.
53
54
55
56
57
58
59 23
60
1
2
3 Contractual risk sharing to address time-horizon conflict. Time-horizon conflict may be
4
5
6 inherent in CEE efforts, because the private, public, and nonprofit sectors can have different
7
8 levels of urgency for priorities in addressing grand environmental challenges (Adger et al.,
9
10 2009). As illustrated earlier, businesses may favor near-term solutions that protect their core
11
12
13
businesses, which can exploit natural systems and exacerbate their long-term ecological
14
15 vulnerability (Clement & Rivera, 2017; Tashman & Rivera, 2016). Although central
16
17 governments may also seek solutions that can immediately alleviate the adverse physical effects
18
19
of grand environmental challenges, there is a greater tendency to consider the trade-offs between
20
21
22 economic benefits today and the environmental and societal costs imposed on future generations
23
24 (Adger et al., 2009). Resolving conflict between short- and long-term perspectives is vital to the
25
26 emergence of entrepreneurial activity within the cross-sector collaboration, since temporal
27
28
29 perspective shapes how partners make sense of the risks associated with these challenges. Cross-
30
31 sectoral partnerships with diverging temporal views of the co-managed risks may develop
32
33 incoherent strategies based on different timeframes for action (Slawinski & Bansal, 2012). We
34
35
36
propose that risk-pooling financial devices can help mitigate time-horizon conflicts. Such
37
38 devices involve long-term contracts between cross-sectoral partners that provide certainty around
39
40 risk-sharing a priori (Bloomfield, 2006) to help ensure that both the risk and rewards are shared
41
42
more equally between the partners. By implication, they should incentivize partners to make
43
44
45 stronger commitments to CEE efforts.
46
47 Oxfam America, Swiss Re, and other partners, for example, have developed an
48
49 integrative holistic risk-management framework to enable environmental entrepreneurial
50
51
52 solutions for poor farmers in the drought-prone northern state of Tigray in Ethiopia through the
53
54 Horn of Africa Risk Transfer for Adaptation (HARITA) project. This project aims to strengthen
55
56
57
58
59 24
60
1
2
3 food and income security for partners that are vulnerable to drought conditions and poor soil
4
5
6 quality by establishing community resilience projects (risk reduction), insurance (risk transfer),
7
8 microcredit ("prudent" risk taking), and savings (risk reserves). Existing approaches to providing
9
10 drought insurance have not been effective due to high administrative costs and the inability of
11
12
13
cash-poor smallholders to afford premiums. Instead, HARITA relies on an "insurance-for-work"
14
15 program to complement the government's "food-and-cash-for-work" Productive Safety Net
16
17 Program, which serves 8 million chronically food-insecure households in Ethiopia. The
18
19
Ethiopian National Meteorological Agency also played a strong role in supporting weather data
20
21
22 collection and analysis for the weather index insurance.
23
24 The resulting innovation allows cash-poor farmers the option to work for their insurance
25
26 premiums by engaging in community-identified irrigation improvements and soil management
27
28
29 projects. In the event of a seasonal drought, insurance payouts are triggered automatically when
30
31 rainfall drops below a predetermined threshold. The insurance helps farmers adopt a longer-term
32
33 time horizon by providing incentives to avoid short-term overexploitation of arable land and
34
35
36
scarce sources of fresh water during droughts, as well as helping them afford seeds and other
37
38 inputs for the following season. HARITA also partners with local microfinance institutions to
39
40 help farmers bundle insurance with credit and savings. The program then monitors farmer efforts
41
42
through community-driven Participatory Capacity and Vulnerability Assessments. HARITA's
43
44
45 success has convinced Oxfam America and the World Food Programme to develop the R4 Rural
46
47 Resilience Initiative, which is a strategic collaboration to expand the HARITA model in Ethiopia
48
49 and to other countries. Swiss Re is providing financial support and technical expertise as the
50
51
52 partnership's exclusive insurance sector sponsor, and acts as the reinsurer for the project. In light
53
54 of these considerations, we offer the following proposition:
55
56
57
58
59 25
60
1
2
3 Proposition 3: Risk-sharing contractual mechanisms mitigate time-horizon conflicts and
4
5
6 enhance the effectiveness of CEE in adapting to grand environmental challenges by (a)
7
8 resolving conflicting views about the temporal trade-offs of different solutions and (b)
9
10 creating incentives for partners to commit information and resources to projects that
11
12
13
address the same or similar temporal scale.
14
15
16
17 DISCUSSION AND FUTURE RESEARCH
18
19
There is significant evidence from a range of scientific disciplines that grand environmental
20
21
22 challenges will create massive discontinuities for many habitable regions (Rockström et al.,
23
24 2009). As we approach fault line thresholds within which present-day society can be sustained,
25
26 attention must be drawn to initiatives seeking to reduce or alleviate the adverse effects of these
27
28
29 challenges. Addressing such problems, however, is an inherently complex task given their
30
31 systemic and geographically dispersed nature and the competing interests driving these efforts.
32
33 Without coordinated efforts to build societal resilience, their effects will become increasingly
34
35
36
acute and private and public interests will find themselves competing for increasingly scarce
37
38 ecosystems and natural resources. As such, the interests of these groups are inextricably
39
40 interwoven. By extension, the private sector cannot address its vulnerability to complex
41
42
environmental challenges indefinitely without taking broader societal issues into consideration
43
44
45 (Markman et al., 2016), while the public and civil society actors need the private sector support
46
47 to create sustainable long-term solutions. CEE is one vehicle through which the different sectors
48
49 can combine resources and know-how to find adaptive approaches to these challenges.
50
51
52 To advance research on this topic, we identify and conceptualize CEE as the integration
53
54 of the innovative efforts of environmental entrepreneurs and the collaborative efforts of cross-
55
56
57
58
59 26
60
1
2
3 sectoral partnerships. While prior research on environmental entrepreneurship has observed how
4
5
6 such entrepreneurs can seize opportunities caused by market failures to innovate environmentally
7
8 responsible products and services, little work has focused on how they can address the demand
9
10 for adapting to grand environmental challenges. We explain how CEE partnerships can do so by
11
12
13
resolving collective action problems that seem to be spurning individual environmental
14
15 entrepreneurs from taking such action. We also explain the inherent goal conflicts in these
16
17 partnerships, and the design of governance mechanisms that can mitigate them. By explicating
18
19
how the ecological and geospatial characteristics of these challenges influence the types of goal
20
21
22 conflicts that arise, we are able to propose specific approaches to resolving them (ecosystem
23
24 service valuation, polycentric governance, and contractual risk sharing), thereby adding to recent
25
26 work drawing on the governance challenges in hybrid organizations pursuing multiple goals
27
28
29 (Markman et al., 2016).
30
31 Collective Entrepreneurship and Other Grand Challenges
32
33 We focus on grand environmental challenges because they create unique problems that are
34
35
36
globally systemic. Thus, the nature and solutions to grand environmental challenges involve
37
38 interconnected ecological issues that transcend geospatial boundaries of governance and property
39
40 rights. Other grand challenges, such as poverty reduction, are inherently socioeconomic or
41
42
sociopolitical and therefore warrant a somewhat different conceptual development. Yet our
43
44
45 approach may provide some insights for research on these challenges.
46
47 Ansari, Munir, and Gregg (2012) discuss how the interplay between community action,
48
49 government intervention, and the private sector can contribute to poverty alleviation, whereas
50
51
52 localized initiatives such as government-sponsored poverty alleviation programs often degrade
53
54 into “charity.” However, goal conflict is also a key barrier to successful cross-sector
55
56
57
58
59 27
60
1
2
3 collaboration when addressing these socioeconomic or sociopolitical challenges (Rein & Stott,
4
5
6 2009). We proposes that these partnerships may have a greater impact when complementary
7
8 resources of each sector are leveraged through the vehicle of collective entrepreneurship to
9
10 resolve externalities affecting each partner and to realize the comparative advantages that public
11
12
13
and private organizations possess. While these barriers may differ in other types of grand
14
15 challenges, our framework may still offer insights that can be adapted to them.
16
17 Still, as grand environmental challenges are comprehensive and all-encompassing
18
19
challenges that touch and influence nearly every global social and ecological issue (Howard-
20
21
22 Grenville et al., 2014), we believe they have profound, singular, and distinctive implications
23
24 beyond those explicitly discussed above. For example, poverty, water scarcity, malnutrition, or
25
26 migration are often direct consequences of collapsing ecosystems due to climate change’s effects
27
28
29 of increasing drought and extreme weather, soil degradation, and collapsing food production
30
31 systems (e.g., Black, Bennett, Thomas, & Beddington, 2011; Reuveny, 2007). As such,
32
33 collective entrepreneurship designed to help systems adapt to grand environmental challenges
34
35
36
may have an impact that cascades down to other grand challenges. For example, socioeconomic
37
38 or sociopolitical grand challenges can sometimes be driven by stressed ecosystems that force
39
40 competition for scarce resources and result in geopolitical conflict (Podesta & Ogden, 2008).
41
42
CEE could help mitigate the role that a stressed ecology plays in creating those grand challenges.
43
44
45 In sum, while we believe that grand environmental challenges are unique in that they
46
47 typically transcend the geospatial boundaries of governance and property rights, there is no
48
49 reason that the basic insights emanating from our framework cannot be adapted to study
50
51
52 socioeconomic or sociopolitical challenges. Nonetheless, we also recommend novel theorizing in
53
54 future research that considers the interconnectedness among grand challenges and how broader
55
56
57
58
59 28
60
1
2
3 collective entrepreneurial activities can be leveraged to identify and solve these linkages.
4
5
6 Limitations and Future Research
7
8 Given the competing interests of private- and public-sector parties, we have focused on
9
10 describing both the source of goal conflicts and potential remedies. As such, our discussion is
11
12
13
limited in scope and geared primarily to stimulating a broader discussion about the role of CEE
14
15 as a driver of sustainable innovation. Naturally, we envision additional areas for future research.
16
17 For example, research on other forms of collaboration shows that trust is critical to effective
18
19
alliances and partnerships (Gulati, 1995; Zaheer, McEvily, & Perrone, 1998). Future research
20
21
22 may explore factors facilitating a trust-building dialogue among cross-sectoral partners and how
23
24 it could eventually result in meaningful collective environmental entrepreneurial activity.
25
26 Moreover, there are also opportunities for research that focuses on the micro-foundations
27
28
29 of CEE in cross-sectoral partnerships. In addition to identifying the micro-processes of resource
30
31 and capability accumulation and coordination (Zahra & Wright, 2011), there is also the broader
32
33 question regarding the “right” kind of people being represented in the partnership to maximize
34
35
36
the potential for collective entrepreneurship. While the majority of research focuses on the
37
38 individual as the focal point of entrepreneurial activity—meaning that individuals create or
39
40 discover and subsequently develop solutions to exploit these opportunities—such discoveries can
41
42
also be grounded in organizational processes (Teece, 2007). Such processes may be particularly
43
44
45 important when studying CEE because wealth is co-created across sectors in these initiatives.
46
47 While Teece, Pisano, and Shuen (1997) focus on organizational structure when identifying
48
49 organizational processes that can facilitate entrepreneurial activity, the question of how
50
51
52 individual and shared cognition leads to collective action remains largely unanswered. Cross-
53
54 sectoral partnerships offer a particularly rich context to study this question, given that those
55
56
57
58
59 29
60
1
2
3 represented in the partnership will differ in the way they see the world depending on whether
4
5
6 they come from a private- or public-sector background (Lyons, Duxbury, & Higgins 2006).
7
8 In addition, we believe that the current framework can be a platform for extending
9
10 research on organizational learning. Scholars have developed a rich literature on how
11
12
13
organizational learning occurs through structured internal processes, decisions that balance
14
15 explorative and exploitive adaptation, and learning networks of communities of practices (Brown
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17 & Duguid, 1991; March, 1991). Some work has focused on learning that occurs through cross-
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19
sectoral partnerships by “borrowing from organizations in other sectors” (Selsky & Parker, 2005,
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21
22 p. 853). Still, little is known about the nature of collective learning in cross-sectoral partnerships
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24 and communities of practice that seek to reconcile goal conflicts between private and public
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26 sectors with short- and long-term benefits. Further, while scholars have begun to study the
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29 effects of polycentric governance on organizational behavior and institutional development
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31 (Ostrom, 2010), little is known about how the learning process unfolds in polycentric fields.
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33 Finally, while scholars have studied how some alliances are focused on risk sharing and others
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36
on shared learning (Lane & Lubatkin, 1998), our model suggests that risk-sharing partnerships
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38 may be an antecedent of collective learning across sectors. Thus, future research might examine
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40 linkages between risk-sharing mechanisms and learning processes that unfold in partnerships.
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42
Last, at a broader level, we believe that management scholars should have a stronger
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45 voice in discussions about the role of the private sector in providing collective goods. If the
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47 private and civil sectors assume greater roles in tackling grand challenges, governments may
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49 begin abdicating their responsibility to these issues. The question of the benefits of private
50
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52 involvement in public sector tasks is not one of efficiency only (Porter & Lee, 2013), but also of
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54 the relative role of different sectors, and whether provisioning of the collective goods should
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59 30
60
1
2
3 depend on the goodwill of the private sector.
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5
6 Conclusion
7
8 In this study, we have adopted a multidisciplinary approach to gain a better understanding of
9
10 how research on solving grand environmental challenges can advance management theories. In
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13
doing so we have: (a) provided an overview of the research on managing grand environmental
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15 challenges and described how cross-sectoral partnerships can become the source of collective
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17 environmental entrepreneurial activities; (b) elucidated the role of goal conflict as the critical
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19
barrier to meaningful collective entrepreneurial activity in these cross-sectoral partnerships; and
20
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22 (c) identified governance mechanisms that can enable cross-partnerships to overcome goal
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24 conflict. This in turn offers management scholars a platform to study the role of collective
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26 environmental entrepreneurship and collective efforts more broadly as society continues to face
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28
29 enormous challenges that span different geographies, nationalities, and sectors.
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1
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3 TABLE 1
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5
6 Insights from Management Research on Grand Environmental Challenges
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8 Sector Focus Problems Examples Citation
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10 Private Protecting core Such efforts have a Ski resorts use of Linnenluecke et
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12
13 businesses & value narrow geospatial water in snow- al., 2013;
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15 chains; focus that does not making; farms Spittlehouse &
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17 transforming match the scale of using irrigation to Stewart, 2003;
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19
20
business models to the challenge; combat shortages Scott &
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22 be less vulnerable; solutions that rely in rainfall; forestry McBoyle, 2007;
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24 salvaging value on increased use of firms accelerating Tashman &
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26
from damaged natural resources harvest schedules Rivera, 2016;
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29 ecological further undermine of diseased timber Wall & Smit
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31 resources ecosystems 2005
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33 Public Ensure that public Slow, incremental, Large-scale flood Brooks & Adger,
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36 goods are not bureaucratic; lack defense schemes 2005;
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38 interrupted; of coordination have undermined Posthumus,
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40 environmental among levels of Norway Hewett, Morris,
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43 regulations; government; lack municipalities’ & Quinn, 2008;
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45 investments into of innovation and capacity to Tompkins &
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47 national security, ability to embrace develop more Eakin, 2012;
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49
infrastructure, novel ideas from robust and locally Urwin & Jordan,
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51
52 social programs for private sector; lack attuned adaptive 2008:
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54 vulnerable of consideration of responses, and
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59 47
60
1
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3 populations, and private sector undermined local
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5
6 publicly available interests farm production
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8 planning resources
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10 such as climate
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13 data and modeling
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15 Nonprofit Environmental Lack policy- Use influence to Adger, Kelly,
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17 policy advocacy; making ability; shape Winkels, Huy, &
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19
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providing aid and lack capital to environmental Locke, 2002;
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22 expertise to finance and policy; educate Bouwer & Aerts,
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24 communities that implement communities about 2006; Thomas &
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26
are affected by programs on their building resilience Twyman, 2005;
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29 ecological own; lack to environmental van Aalst,
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31 disruptions managerial know- challenges; Cannon, &
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33 how advocate for Burton, 2008
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36 fairness in
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38 distribution of
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40 public programs
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59 48
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3 TABLE 2
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5 Governance mechanisms in cross-sectoral partnership for environmental issues
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7 Governance mechanisms in partnerships Purpose (how it resolves goal conflict) Citation
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9 for environmental issues described in the
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11literature
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13 1. Setting objectives and structural Creates overall purpose and sets boundaries, Andreasen, 1996; Arya & Salk, 2006;
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15 specifications for partnership limits, and extent of partnership scope Austin, 2000b; Bryson et al., 2006;
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17
Glasbergen, 2007; Googins &
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Rochlin, 2000; Halal, 2001
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2. Formulating rules and regulations for Specifies operating procedures and mechanisms Das & Teng, 1998; Gray, 1989
22
23
partnership for conflict resolution
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3. Drafting a memorandum of Codifies scope and relevant roles and Seitanidi & Crane, 2009
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understanding for partnership responsibilities; details mechanism for conflict
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32 resolution
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34
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36 4. Establishing partnership leadership Identifies responsible parties for building Austin, 2000a; Waddock, 1986
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38 positions relational capital and trust and developing
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40 conflict resolution mechanisms
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44 5. Deciding on specific organizational Ensures that partners control structures that Berger et al., 2004; McCann, 1983
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46 structures allow them to add and integrate value, and that
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48 substructures are coordinated properly
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59 49
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1
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3 6. Agreeing on the partnership Ensures that partners have agency over their Austin & Reavis, 2002; Seitanidi &
4
5 management sectors—specific competencies and appropriate Crane, 2009
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7 emphasis is given to each of them
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9 Governance mechanisms for CEE Purpose (how it resolves goal conflict)
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11partnerships proposed in this article
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13
1. Ecosystem-valuation mechanisms Aligns focus conflict on how ecosystem services should be used by placing a value on
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specific elements of nature in order to determine cost/benefit of conserving them
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2. Polycentric governance mechanisms Provides for explicit mechanism for allowing some autonomous decision making at
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lower governance levels but establishes mechanism for coordination across levels
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26 3. Risk-sharing mechanisms Explicitly specifies and distributes risks across CEE partners of provision public
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28 adaptation benefits to grand environmental challenges.
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59 50
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1
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3 FIGURE 1
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Process of Collective Environmental Entrepreneurship
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Pool resources and Pilot adaptation
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12 generate adaptation responses
13 responses
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21 Pool knowledge on Select
22 private and public Learn from failures
23 of ada
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risks
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31 Private, public, and
32 Establish partnership
33 governance nonprofit partnership
34 mechanisms formation
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1
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3 FIGURE 2
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Collective Environmental Entrepreneurship, Governance Mechanisms, and Adaptation to
6 Grand Environmental Challenges
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9
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12 Ecosystem valuation Polycentric governance Risk-sharing contractual
13 mechanisms to resolve mechanisms to resolve mechanisms to resolve
14 focus conflicts scale conflicts + time-horizon conflicts
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17
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19 + + +
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21 Collective Adap
22 environmental en
23 entrepreneurship
24 +
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1
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3 Jonathan P Doh is Associate Dean of Research, Rammrath Chair in International Business and
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5
Co-Faculty Director of the Center for Global Leadership at Villanova University. He has
6 published numerous articles and books on topics including international business, corporate
7 responsibility and sustainability. His PhD is from George Washington University.
8
9 Pete Tashman is an Assistant Professor of Management at the University of Massachusetts
10 Lowell. He holds a PhD in Strategic Management from the George Washington University
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School of Business. His research interests include managing institutional complexity, resource
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13
dependence, and ecological uncertainty.
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15 Mirko H. Benischke is an Assistant Professor of Global Strategy at the Rotterdam School of
16 Management, Erasmus University (The Netherlands). He earned his Ph.D. from the University of
17 Auckland (New Zealand). His research lies at the intersection of international business, strategic
18 management, and corporate governance.
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Adapting To Grand Environmental Challenges Through Collective Entrepreneurship

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