Entrepreneurial orientations and their impact on trade-off decisions in sustainability

Our paper investigates the microfoundations of sustainable entrepreneurship and aims to shed light on trade-offs made in decisions about social, ecological and economic sustainability. Balancing the three dimensions of sustainability (social, ecological and economic) inherently requires choices in which one dimension or another has less optimal outcomes. There is not much known about the rationale that sustainable entrepreneurs use for making such trade-offs. Thus, we ask how does entrepreneurial orientation affect decisions and trade-offs on sustainability impact?

Our study is an exploratory, qualitative study of 24 sustainable entrepreneurs. We collected data about entrepreneurial orientation and sustainability trade-offs and held in-depth interviews with a subsample of six firms. We conducted a cluster analysis based on four entrepreneurial orientations (innovativeness, proactiveness, riskiness and futurity) and three sustainability trade-off dimensions (environmental, social and economic). From the findings, we derivea typology of three types of sustainable entrepreneurs: green-conflicted, humanitarian-oriented and holistically-oriented. We uncover salient characteristics and aspects of entrepreneurial orientation in relation to trade-off decisions. We find that the entrepreneurs accept slower economic growth or lower performance in order to maintain the integrity of their social and ecological principles and values.