Sustainability as a driver for innovation towards a model of corporate social entrepreneurship at Odebrecht in Brazil

rgio Franc o Heiko Spitzeck, Claudio Boechat and Se a Lea

Heiko Spitzeck and Claudio Boechat are cleo de Professors at Nu Sustentabilidade, o Dom Cabral, Sa o Fundac a Paulo, Brazil. rgio Franc o is Se a Lea o based at Odebrecht, Sa Paulo, Brazil.

Abstract Purpose The purpose of this paper is to present a model of corporate social entrepreneurship. The case of Odebrecht demonstrates how companies are using societys sustainability challenges to innovate, in particular by adopting a corporate social entrepreneurship approach that allows the company to differentiate from competitors and create shared value. Design/methodology/approach This research applies a comparative case study design in combination with a review of the literature in order to present a model of corporate social entrepreneurship. Findings The case study of two major projects within the Odebrecht group allows us to design a model of corporate social entrepreneurship explaining how the company transforms external triggers such as socio-environmental risks into sustainability innovations, creating competitive advantages. Research limitations/implications The two case studies provide some evidence of how companies blend sustainability and innovation within corporate social entrepreneurship strategies. More research is needed in order to rene the patterns and components of the corporate social entrepreneurship model. Practical implications Integrating sustainability into the innovation process allows Odebrecht to differentiate itself from competitors and have meaningful engagement with stakeholders. This helps the company to grow, especially in developing economy markets, which face similar sustainability challenges as Latin America. Originality/value The combination of corporate entrepreneurship models and these case studies of sustainability innovation helps to create a model of corporate social entrepreneurship explaining how companies can transform external sustainability challenges into shared value creation. Keywords Sustainable innovation, Corporate social entrepreneurship, Shared value, Social intrapreneurship Paper type Case study

Introduction
In 2010 The World Business Council for Sustainable Development published the Vision 2050 report (World Business Council for Sustainable Development, 2010) which lays out a pathway leading to a global population of some 9 billion people living well, within the resource limits of the planet by 2050[1]. Like the Rio 20 conference and the European Unions 2020 Horizon, the report calls for inclusive forms of growth creating employment and education, internalising externalities, valuing ecosystem services, as well as avoiding carbon emissions. These initiatives as well as many others demonstrate global societys struggle to achieve sustainable development to ensure that future generations have the same access to essential resources and services as we have today (World Commission on Environment and Development, 1987). This societal demand has met with a new consciousness in the corporate world that realises that satisfying societys sustainability needs not only helps to avoid risks, but may also create opportunities, for as Porter and Kramer (2011) termed it shared value creation. Companies at the higher end of corporate sustainability maturity have started to adopt their

DOI 10.1108/CG-06-2013-0080

VOL. 13 NO. 5 2013, pp. 613-625, Q Emerald Group Publishing Limited, ISSN 1472-0701

CORPORATE GOVERNANCE

PAGE 613

strategies, proactively including societys concerns (Zadek, 2004; Maon et al., 2010). Due to their large-scale impacts, multinational enterprises possess the potential to increase innovation, spur wealth creation, transfer technology, raise productivity, meet basic needs, enhance living standards, and improve the quality of life for millions of people around the world (Nelson, 2006, p. 2). However, this ambition to innovate based on societys sustainability challenges is currently not reected in existing models of corporate entrepreneurship (Kuratko et al., 1990; Hornsby et al., 1993; Stopford and Baden-Fuller, 1994; Antoncic and Hisrich, 2003; Anderson et al., 2004; Kuratko and Goldsby, 2004). Research on corporate entrepreneurship basically focusses on entrepreneurial responses to market forces, such as increased competition (Kuratko et al., 2004), and currently fails to integrate non-market aspects such as sustainability challenges. This paper addresses this gap by proposing a model of corporate social entrepreneurship based on a literature review and the insights of two case studies within one organization. The argument of this paper is presented as follows: rst, we present a short literature review demonstrating that neither research on sustainability nor research on corporate entrepreneurship is currently able to explain how companies can use corporate entrepreneurship to support sustainable innovations. Second, the research methodology is presented, which explains two case studies of projects executed by Odebrecht, a Brazilian business conglomerate. The projects contain diverse sustainability innovations, which simultaneously create value for the company and for society (Porter and Kramer, 2011). Contrasting insights from the literature and the cases then allow us to present a model of corporate social entrepreneurship. In conclusion, implications for theory and practice are presented.

Literature review
In trying to integrate sustainability challenges into business strategies, companies seem to move through stages of maturity, usually starting from a more reactive approach, evolving to a risk management approach, and nally to exploiting business opportunities and causing positive transformations in society (Zadek, 2004; Mirvis and Googins, 2006; Maon et al., 2009; Spitzeck, 2009). Due to their generic categorisations, sustainability maturity models have been unable to describe exactly what companies do in terms of innovation and sustainability once they reach higher stages of maturity. Additionally, many models have been designed by departing from a corporate reputation crisis in order to explain how companies learn to integrate sustainability into their operations (Zadek, 2004; Spitzeck, 2009). This stream of research has yet to offer explanations to questions such as:
B B

How do companies without a reputation crisis learn to integrate sustainability? What kind of internal environment do companies create once they treat sustainability within their business strategy? How do mature companies use sustainability to innovate and create competitive advantages?

Some initial ideas are given in Porter and Kramers (2011) seminal paper about creating shared value. However, many questions remain: what does a favourable internal environment for creating shared value strategies look like and who implements sustainability innovations? Research on corporate entrepreneurship has explored how companies adapt to changing market conditions through new business venturing, innovation processes and self-renewal (Kuratko et al., 1990; Hornsby et al., 1993; Stopford and Baden-Fuller, 1994; Antoncic and Hisrich, 2003; Anderson et al., 2004; Kuratko and Goldsby, 2004; Christensen, 2005; Mantere, 2005; Antoncic, 2007). This line of research has particularly explored the characteristics of a favourable internal environment for innovation and entrepreneurship such as proactive organizational culture, encouraging HR practices, top management support, resource availability, exible organizational structures as well as an innovation strategy. There are also models that connect the favourable internal environment to external innovation triggers such as, for example, increased competition (Kuratko et al., 2004). The

PAGE 614 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

triggers explored in this line of literature have not yet integrated with wider social and environmental concerns and are currently limited to a market perspective by analysing technological change, industry growth, competitive rivalry, and market dynamism (Hornsby et al., 1993; Antoncic and Hisrich, 2003; Ireland et al., 2009). This paper aims to create synergies between both lines of research by presenting a model of corporate social entrepreneurship. This model explains how external non-market triggers give an impulse for innovations that create value for the rm as well as for society.

Research method
In order to explore the connection between external non-market triggers, innovations and a system of corporate social entrepreneurship we present in-depth case studies (Eisenhardt, 1989; Yin, 2003) of two major projects of the Odebrecht group. The objective is to explain how the company transforms sustainability issues into innovations that create value for society while at the same time creating a competitive advantage for Odebrechts business. The case is analysed by combining various research methods such as semi-structured interviews with intrapreneurs and managers (Miles and Huberman, 2005), participant observation (Glaser and Strauss, 1967) as well as document analysis (both internal and external) to triangulate data and verify the results presented (Jick, 1979). The analysis of two different cases helps to demonstrate that results are in fact based on a corporate social entrepreneurship strategy and not just incidental.

Case background
This case background describes important organizational antecedents (Kuratko et al., 1990, 2001; Christensen, 2005; Ireland et al., 2009) which are essential for a favourable organizational environment regarding corporate entrepreneurship. Odebrecht is a diversied Brazilian business holding company headquartered in Salvador de Bahia (Brazil) that is active in construction, engineering, infrastructure, real estate development, biofuels, oil and gas, environmental engineering and petrochemicals, employing 87,000 people, and reporting revenues of $US23.34bn in 2009. Fifty-four per cent of its revenue was generated in Brazil, 24 per cent in other Latin-American countries, 10 per cent in Africa and the remainder in North America, the Middle East and Europe (Odebrecht, 2010, p. 15). The companys mission is to generate increased wealth for Clients, Shareholders, Members and Communities, aiming to Survive, Grow and Perpetuate[2]. A core part of Odebrechts sustainability approach is institutionalised in the so-called Tecnologia Empresarial Odebrecht (TEO). This policy, originally formulated by the companys founder (Odebrecht, 1983), describes the companys values and principles, which govern the achievement of results, client satisfaction and sustainability in all operations[3]. It values human beings strengths, particularly willingness to serve others, the ability and desire to progress, and the drive to surpass previous results. As Odebrecht is a very entrepreneurial organization, a rules and compliance approach would limit the creativity and engagement of the rms leaders, which have contributed to the creation of the highly diversied business portfolio. Therefore Odebrecht opted for a principle-based approach, based on trust in people and their development through work. Due to its values and vision, Odebrecht does not see itself as a construction rm, but as a service provider to government and society wherever the rm is present, as well as an inductor of local development. This desire is present within the companys long-term strategy for 2020 as well as in the discourse of senior leaders such as Marcelo Bahia Odebrecht, President and CEO (Odebrecht, 2010, p. 11):
. . . Linked to the Growth projected for 2020 are two basic commitments: to social development [. . .] and to environmental protection [. . .] By 2020 we will be bigger, but we will still be ourselves: knowledgeable people who can make things happen and create businesses that induce sustainable development wherever we are present.

The projects described below demonstrate how Odebrecht intends to bring life to this vision.

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 615

Case 1: The hydroelectric power plant Santo Antonio in Porto Velho

Brazils energy demand was expected to rise by 7.4 per cent in 2010, putting increasing pressure on the existing energy infrastructure (Blount, 2010). Brazil has one of the cleanest electric energy grids worldwide, which is 44.1 per cent powered by renewables (Empresa tica, 2012). Until the early 1990s, most electricity generated in Brazil De Pesquisa Energe was supported by state-owned companies. The majority of the large hydropower plants were built by private construction companies under contracts with public energy utilities. Delays in construction schedules due to budgetary constraints frequently led to cost overruns in such public energy projects. Since environmental regulations were initiated in the 1980s[4], but only consolidated in Brazil in the early 1990s, most large power plants were built under conditions where the present strict regulations were not in place. Environmental and social costs were high under these practices, especially where large reservoirs were involved. Deterioration in water quality and the spread of disease (malaria and others) occurred in several projects in the Amazon region (Lyons, 2010). The environmental and social impacts of energy plant construction led the Brazilian government to halt construction, especially in environmentally sensitive regions such as the Amazon biome. However, infrastructure today is a major challenge to Brazils growth trajectory, and the country has set targets to build 24 dams in the Amazon in this decade business worth about $US100bn (Lyons, 2010). Critics argue that Brazil should do more to protect the Amazon biome, which is home to an unparalleled biodiversity and key in the ght against climate change. An actual case of critique is the 11,200 MW Belo Monte dam (Barrionuevo, 2010a). The project is worth $US11bn and requires the hiring of approximately 20,000 workers, mostly men. The impacts of migration to this region will have great impact on social investments and programs in the region. Risks of increasing prostitution and crime rates are among the major concerns of the local population (Schexnayder, 2010). The construction affects the Amazons Xingu River in the Northern state of Para and will ood 440 square kilometres (Barrionuevo, 2010b). The project has been delayed by over a year due to environmental concerns, and its approval has been argued to be among the causes for Environment Minister Marina Silva resigning from ofce in 2009 (Blount, 2010). Against this background Odebrecht Energy manages the project of the 3,150 MW Santo nia, Brazil right in the heart of the Antonio hydropower plant on the Madeira River in Rondo Amazon biome. Odebrecht is involved in all stages of the project from feasibility studies all the way through planning, construction, and via the company Santo Antonio Energia SA it will also participate in the plants operations and energy sales (Odebrecht, 2010, p. 32). The construction itself has a budget of $US8bn (Lyons, 2010). The construction consortium led by Odebrecht has spent $US600m on a sustainable development strategy for the region (Lyons, 2010) and had commissioned environmental impact assessments[5] three years before the opening of the public bidding process. Odebrecht Energia has projected the total amount of greenhouse gas emissions that will be generated during the construction of the Santo Antonio plant. This survey identied the main sources of emissions, making it possible to develop reduction strategies (Odebrecht, 2010, p. 32). Odebrecht not only mitigated impacts but took local sustainability challenges to drive innovation. One of the main innovations in terms of environmental protection was the adoption of special low head turbines. Traditional hydroelectric plants require the formation of reservoirs to provide the necessary water heads in order to power large-scale generators. Odebrecht commissioned the study of a run-of-the-river project involving a higher number of low head turbines, which in turn implied a smaller reservoir and consequently less ooding of areas. This strategy also allowed the company to bring forward energy production from one part of the dam by one year. On the social side, in 2005 Porto Velho had 350,000 inhabitants, 40,000 of whom were unemployed (Barrionuevo, 2010c). In 2008 Odebrecht set up a programme called ACREDITAR (Portuguese for belief or certify) to train local residents to provide the labour pool necessary for the construction of the plant. The programme has trained more than 36,000 people for jobs such as bricklayers, welders, carpenters and electricians to name just a few. With total investments (2008-2011) of approximately $US18m Odebrecht developed all didactic material for two modules the basic and the specic technical

PAGE 616 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

modules[6]. The basic module consists of 32 hours of training on health, safety at work, environment, quality, planning, group work and occupational psychology, mainly based on TEO. The technical module consists of anything from 32 to 200 hours of training for a specic job on site. After the course, graduates have priority for recruitment and 24,708 graduates had been recruited by May 2011. Most of these workers have increased their income. One case is Arlincen Batista Gomes, a 30-year-old mother who earned $US110 per month as a cleaner and now works as a carpenter with a monthly salary of $US750 (Lyons, 2010). Critical for the success of the programme was partnering with the Ministry of Social Development, local state government, the city administration, local schools and universities. ACREDITAR has been expanded to other 20 projects in six different states in Brazil and also to projects in Angola, Colombia, Panama, Venezuela and Peru. Due to its impact President Lula has visited the project several times, thus highlighting the importance of local development at the Santo Antonio site[7]. Benets of the programme included a reduction in the number of qualied people being brought to the region from outside, thus putting less stress on the existing infrastructure (hospitals, schools, roads, etc.) (Lins de Alencar et al., 2009).

nica Sur Case 2: Interocea

In Peru, Odebrecht has a 70 per cent share in the CONIRSA consortium for the construction apari with San Juan de Mancona, Matarani and other cities of a 700 km road connecting In (Machado Filho et al., 2008). CONIRSA will hold a 25-year licence for operation and maintenance of the road. The project began in 2005 and the value of the contract adds up to $US1bn. Right from the beginning the project was conceived as an opportunity for social inclusion and environmental protection. Before construction began Odebrecht ran a diagnostic of social and environmental indicators, and discovered that 70 per cent of the population lived in rural areas, and 91.4 per cent of those lived in poverty; nearly 50 per cent of children suffered from malnutrition and 25 per cent were illiterate; and 35 per cent of the population were without access to energy, clean drinking water and sanitation. The mapping of communities and their interests in being connected to the highway as well as avoiding environmentally sensitive areas facilitated the planning of the road. In 2007 the consortium started to invest in local development for the communities affected by this work and developed initiatives that aimed to improve health and education as well as to develop sustainable forms of tourism that would enable the communities to benet from the new highway. Total investment was expected to be $US12.5m over a ve-year period, with $US3m coming from Odebrecht and the rest from other partners. These funds nanced projects in responsible tourism and handicrafts, eco-businesses such as sales of local fruits, conservation of biodiversity and strengthening of local governance structures. Responsible tourism centres have been created in Tinque and Ausangate; these include trekking routes, camp sites and accommodation facilities[8]. In the eco-business section one project focussed on training 120 families of guinea pig farmers, increasing their production ten-fold and increasing prices by 300 per cent[9]. More than 230 handicraft producers have been trained in order to improve management and protability (Machado Filho et al., 2008). As a result of initial progress, Odebrecht was able to attract co-funding from various banks and development institutions. The implementation and funding depended on the support of local citizens groups, handicraft associations, NGOs such as Conservation International, Instituto Machu Picchu n Sin Fronteras, banks such as Corporacio n Andina del Fomento, Fondo de las and Accio ricas and the Inter-American Development Bank, government institutions such as the Ame Ministry of Tourism and the Regional Government of Cusco, as well as industry associations n Peruana de Turismo de Aventura y Ecoturismo as well as other such as the Asociacio partners. Estimates from the Peruvian government overseeing the construction calculated that the highway had generated approximately $US3bn in benets for the country by 2011 due to the creation of 10,000 direct and 30,000 indirect jobs as well as the economic development of the region now connected to the road network of Peru and Brazil[10].

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 617

Results and cross-case comparison

The literature on corporate entrepreneurship and intrapreneurship (Hornsby et al., 1993; Antoncic and Hisrich, 2003) has described two main antecedents of innovations: 1. the external environment in which the rm operates; and 2. the internal organizational environment, which either hinders or fosters innovation. These models frequently refer to external triggers for innovation, innovations responding to these triggers, as well as organizational outcomes (Hornsby et al., 2002; Antoncic and Hisrich, 2003; Kuratko et al., 2004; Ireland et al., 2009). In the following cross-case comparison (see Table I) we make reference to these important factors of corporate entrepreneurship, but also add elements of the case studies such as external collaboration as well as societal outcomes. The comparison of the two cases demonstrates that while individual characteristics such as sustainability challenges and societal impacts may differ, there are clearly identiable common elements, such as:
B B B B

an innovation response to a non-market external trigger; the use of external collaboration in the design and implementation of the innovation; nancial as well as intangible organizational outcomes; and reduced negative impacts as well as positive outcomes for the local communities involved.

Table I Cross-case comparison

nio Santo Anto External (non-market) triggers Migration of construction workers leading to: increasing crime rates stress on existing infrastructure prostitution The ooding of vast areas of land, leading to: deforestation loss of biodiversity relocation of local population breeding ground for mosquitoes with impacts on health (e.g. malaria) ACREDITAR programme training local population and reducing the need for worker migration Low head turbines reducing the area to be ooded Ministry of Social Development Local and state governments Schools Universities nica Sur Interocea The planned highway runs through areas characterised by: sensitive ecological areas poverty malnutrition inefcient business administration

Innovation

Planning of the route as well as training of the people along the highway for agricultural and handicraft production and sustainable tourism

External collaborations

Ministry of Tourism Local and state governments Citizen groups Industry and handicraft associations NGOs such as Conservation International Inter-American Development Bank Increased income from highway concession Co-funding of local development initiatives by partners

Organisational outcomes

Avoiding delays and in this case achieving production one year ahead of schedule Building relationships with the government which is the main client (visit by President Lula) Avoiding reputational risks and negative media from protests Training of 36,000 people Recruitment of 24,708 people Increasing income Lower environmental impact Lower need for worker migration and thus reduced social impacts

Societal outcomes

Employment generated for 10,000-30,000 people Education and training of local population (management of handicrafts, agricultural business) Local economy increased by ca. $US3bn

PAGE 618 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

Towards a framework for corporate social entrepreneurship

The existing models of corporate entrepreneurship in combination with the insights of the case studies described above now allow us to design a model of corporate social entrepreneurship. Corporate social entrepreneurship has been dened as a process of extending a rms domain of competence [. . .] through innovative leveraging of resources, both within and outside its direct control, aimed at the simultaneous creation of economic and social value(Austin, 2006, p. 170) and the model shown in Figure 1 illustrates how corporations can transform external non-market triggers into innovations, thus creating economic and social value. We detail each of the components of this model of corporate social entrepreneurship below using existing theory as well as references to the ndings of the case studies. External triggers Existing research summarises external triggers for innovation, such as dynamism, technological change, industry growth, competitive rivalry, product-market fragmentation and demand for new products (Hornsby et al., 1993; Zahra, 1993; Antoncic and Hisrich, 2003; Ireland et al., 2009). These triggers are all clearly present in the case study, but at the same time are focussed on existing market conditions, ignoring non-market aspects such as Figure 1 A model of corporate social entrepreneurship

Organizational Antecedents
Sustainability Vision Top Management Support Communication Openness Time & Resource Availability Rewards & Controls Organizational Values Work Discretion and Autonomy

Organizational Outcomes
Financial
Profitability Growth Competitive capabilities Strategic repositioning

External Triggers
Market Factors
Competition Technological Change Industry Growth Product-Market Fragmentation Demand for new products Social & Environmental Risks Opportunities for Creating Shared Value

Intangible Value
Reputation Risk reduction Access to Government Long-term legacy

Non-market Factors

Social Intrapreneurs

Societal Outcomes Collaborations

Authority Competencies Credibility Co-funding Reduced Negative Impacts Positive Impacts

Note: Additions to traditional models of corporate entrepreneurship are marked in bold and italic

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 619

Shared Value Creation

social and environmental issues. The cases above demonstrate rst, the importance of considering social and environmental risks as potential triggers for innovation. In constructing hydropower plants and highways there are social risks such as resettling and economic dislocation of the affected population, among other potential social negative impacts. Additionally, there are environmental risks such as loss of habitat, reduced biodiversity and impacts on sh populations. Some issues are inter-linked, such as extensive ooding, which creates more breeding grounds for mosquitoes, transmitting malaria and other diseases. These externalities have traditionally not been considered in corporate decision-making and innovation processes as their impacts were felt mainly by the general public. Secondly, there is the potential of using social as well as environmental characteristics in order to create shared value (Porter and Kramer, 2011). The socio-environmental diagnostic in Peru allowed Odebrecht to better plan construction activities along the route of the highway, promoting increased support activities for the local population. Envisaging future uses of the highway, Odebrecht proposed fostering responsible economic activities such as improvements in tourism facilities, which in turn could bring further usage of the road. Local unemployment at the Santo Antonio site created a fertile ground for the educational initiatives of the company, which allowed a reduction in the number of workers hired elsewhere and thus the costs of relocating, travel expenses and the extent to which the local infrastructure was put under strain.

Organisational antecedents Among the organizational characteristics that inuence corporate entrepreneurship are communication openness, reward and control mechanisms (Kuratko et al., 1990, 2001; Christensen, 2005; Ireland et al., 2009), environmental scanning intensity, time availability (Hornsby et al., 1993), top management support (Kuratko et al., 1990; Hornsby et al., 2002) and organizational values (Antoncic and Hisrich, 2003). The Odebrecht case nds traces of all these aspects, but adds one essential component: the inclusion of sustainability in the companys vision and action plans of senior executives. This vision has been formulated based on humanistic values already established in Tecnologia Empresarial Odebrecht. Such values have been found to be important for inspiring organizational members to innovate (Antoncic and Hisrich, 2003), as well as to increase the motivation to partner for external stakeholders (Juniper and Moore, 2002; Lozano, 2005; von Kimakowitz et al., 2010).

External collaborations Organisational boundaries have been discussed extensively in the context of corporate entrepreneurship (Hornsby et al., 1993, 2002; Kuratko et al., 2005). However, the empirical analysis has been limited to questions of cross-departmental or cross-functional collaboration within the organization to overcome a silo culture (Hornsby et al., 2002). The Odebrecht case demonstrates the importance of collaborating with external stakeholders in order to create shared value. This is in line with research on collective impact (Isaacs, 1993; Kania and Kramer, 2011) as well as social entrepreneurship (Austin et al., 2006). Contributions from social entrepreneurship state that the organization may actually have greater social impact by working in collaboration with complementary organizations or even former or potential competitors (Austin et al., 2006, p. 18). Collaborations in the Odebrecht cases have been used in order to gain authority, add competences, increase credibility, and to leverage funds. Partnering with the local government and citizen groups gave the initiatives the necessary authority and governance structure in order to implement projects. Partnering with training institutions was essential for educating the local population in order to benet from the projects either as employees, suppliers or as entrepreneurs. Collaborating with diverse groups also increased credibility as it demonstrated a joint and organized effort, which did not depend on a single actor. Finally, partnering with international and local development organizations and banks helped to leverage funds dedicated to these projects as some institutions co-nanced the local development activities.

PAGE 620 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

Social intrapreneurs The emergence of sustainability innovations depends on individuals working within the organization being capable of recognizing and responding to external triggers, building alliances with external stakeholders and aligning these activities with corporate strategy. These individuals have recently been named social intrapreneurs (Sustainability, 2008; Brenneke and Spitzeck, 2010; Grayson et al., 2011; Halme et al., 2012), who are described as people within a large corporation who take direct initiative for innovations which address social and environmental challenges protably (Grayson et al., 2011, p. 3). In both cases of the Santo Antonio dam and the Peru highway the Odebrecht team included several members acting as social intrapreneurs. Of course, these social intrapreneurs do not work alone, but they are the articulators of the shared value strategy on the local as well as organizational level. Social intrapreneurs form a cross-functional project team; they engage with local stakeholders, they convince development organizations to partner and align their activities with corporate strategy, and they report on nancial, social and environmental results of their projects in short, they bring the creation of a shared value strategy to life within the operations of the company by implementing sustainability innovations. The following quote from one of the intrapreneurs demonstrates the importance of articulating a network of internal and external stakeholders in order to create shared value in the long run:
A leader is more than a good administrator of resources for all stakeholders, including investors. A leader aims for more than making money and includes concerns about values and ethics, and long-term impacts of the business on society. A leader must ensure a continuous platform of dialogue as a basis to seek mutual benets for his business and society that go beyond the scope of his contract.

Outcomes Previous papers on corporate entrepreneurship have described outcomes in terms of organizational and individual outcomes (Morris et al., 2011). Research on shared value (Porter and Kramer, 2011), however, suggests that the results should be described in terms of organizational and societal outcomes. On the organizational side, primary outcomes have been performance criteria such as growth and protability (Antoncic and Hisrich, 2003) or competitive capabilities and strategic repositioning (Ireland et al., 2009). In line with the literature, the above case reports some clear, tangible, nancial outcomes such as increased protability by concessions, such as more economic activity in the local communities meaning more trafc on the highway. By addressing social and environmental issues the company was also able to attract co-funding for local development projects and had access to cheaper forms of nancing provided by banks operating under the Equator Principles agreement or the social and environmental policies of the World Bank. By reducing risks regarding opposition to the nio dam, Odebrecht was able to bring forward operations on part of the dam by Santo Anto one year, thus anticipating the generation of revenue. By training the local population, the company was able to reduce costs in comparison to the more expensive approach of bringing more than 10,000 workers into a remote location. In addition to the nancial benets, Odebrecht was able to create intangible value such as a better reputation, reduction of risks and government support for the training programme, while leaving a positive legacy in the community. On the societal side there are two major differences between the Odebrecht approach and other similar projects. First, the projects aim to reduce negative impacts, which stem from the nature of projects such as constructing a dam, for example ooding, strain on existing infrastructure, increased crime rates, etc. The reduction of negative impacts always refers to innovations compared to the business-as-usual scenario in which social and/or environmental impacts are more severe. Second, the approach aims to create positive impacts, such as educating and training local stakeholders and animating local economic activities. The cases demonstrate how the voluntary inclusion of social and environmental externalities brings benets to the community and company alike. This is how the company aims to create shared value in line with the denition proposed by Porter and Kramer (2011, p. 66):

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 621

The concept of shared value can be dened as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.

Conclusion
The aim of this paper was to demonstrate how companies respond to external sustainability challenges by following a corporate social entrepreneurship approach that allows the company to create shared value. The Odebrecht cases demonstrate that external triggers include non-market socio-environmental risks and opportunities. Social intrapreneurs recognize these external triggers and come up with sustainability innovations. These innovations are made possible by an enabling internal environment as well as by adding competencies, resources and the reputation of external partners. Innovations from social intrapreneurs are successful on two grounds: commercial success for the company and success in resolving sustainability issues in the communities in which the company operates. Only if the business and society benet from the sustainability innovations can we speak of the creation of shared value. Contribution to theory This paper contributes to the intersection of sustainability and corporate entrepreneurship theory. It enriches existing models of corporate entrepreneurship and presents a model of corporate social entrepreneurship. This model of corporate social entrepreneurship differs from previous models in so far as it recognizes non-market triggers for innovation such as socio-environmental risks and opportunities. It also stresses the importance of a sustainability vision, which inspires social intrapreneurs to innovate and motivates external stakeholders to collaborate. Finally, the model does not only consider organizational outcomes, but also includes outcomes generated for society. The ndings are limited by the adopted research approach of a comparative case study within a single organization. This research design is not sufcient for creating a new theory and therefore, the model of corporate social entrepreneurship needs to be considered as a rst suggestion, which requires further testing and renement. However, the case does serve to demonstrate the limitation of current models of corporate entrepreneurship (Popper, 1959), which are at present unable to integrate sustainability considerations. The cases suggest investigating the values, competencies and behaviours of social intrapreneurs as an avenue for further research. This would help educational institutions as well as human resource professionals to design development activities which in the end help individuals as well as organizations to harness the benets of a shared value approach. Practical implications This paper demonstrates the usefulness of a corporate social entrepreneurship approach for companies, which are seeking ways to transform external sustainability challenges into innovation. One of the essential components is a sustainability vision, which formulates a desirable image of the future for the company as well as for external stakeholders. This sustainability vision has two effects. On the one hand it motivates external stakeholders to partner in projects, which aim to achieve this goal in which they are intrinsically interested. On the other hand it inspires employees and intrapreneurs to come up with innovations that connect the sustainability challenges, the companys vision and the interests of external stakeholders in order to create value for the community, and simultaneously for the company. Of central importance in this model is the social intrapreneur. These individuals understand business as well as the external context and are able to identify the sweet spot in which interests overlap and collaborative projects can be born. As Felipe Cruz, Director of Sustainability and CSR, states: The best CSR project is the one focused on the convergence of interests of the regional actors and the business itself.

Notes
1. Taken from WBCSDs website, available at: www.wbcsd.org/pages/edocument/edocumentdetails. aspx?id 219&nosearchcontextkey true (accessed 18 March 2012).

PAGE 622 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

2. See www.odebrecht.com.br/en/odebrecht-organizations/2020-vision (accessed 4 November 2010). 3. See www.odebrecht.com.br/en/odebrecht-organizations/teo-business-culture and odebrechtonline.com.br/materias/01701-01800/1760/ (both accessed 4 November 2010). www.

4. See, for example, Brazils National Environmental Policy enacted in 1981, available at: www.planalto. gov.br/ccivil_03/leis/l6938.htm (in Portuguese; accessed 22 May 2013). 5. See www.odebrechtonline.com.br/materias/01701-01800/1753/ (accessed 4 November 2010). 6. See Lins de Alencar et al. (2009). 7. See, for example, www.mds.gov.br/noticias/em-rondonia-presidente-lula-e-ministro-patrusananias-visitam-o-projeto-acreditar (accessed 27 October 2010). 8. For these and more examples see www.isur.org.pe/proyectos (accessed 5 March 2013). 9. See www.isur.org.pe/proyectos/formacion-y-fortalecimiento-de-redes-de-productores-de-cuyesen-el-distrito-de-ccatcca-provincia-de-quispicanchi (accessed 5 March 2013). 10. See http://bic.caudilweb.com/es/Article.12432.aspx (accessed 5 March 2013).

References
Anderson, N., De Drew, C.K.W. and Nijstad, B.A. (2004), The routinization of innovation research: a constructively critical review of the state-of-the-science, Journal of Organizational Behavior, Vol. 25 No. 2, pp. 147-173. Antoncic, B. (2007), Intrapreneurship: a comparative structural equation modeling study, Industrial Management & Data, Vol. 107 No. 3, pp. 309-325. Antoncic, B. and Hisrich, R. (2003), Clarifying the intrapreneurship concept, Journal of Small Business and Enterprise Development, Vol. 10 No. 1, pp. 7-24. Austin, J., Stevenson, H. and Wei-Skillern, J. (2006), Social and commercial entrepreneurship: same, different, or both?, Entrepreneurship Theory & Practice, Vol. 30 No. 1, pp. 1-22. Austin, J.E. (2006), Social entrepreneurship: its for corporations, too, in Nicholls, A, (Ed.), Social Entrepreneurship: New Models of Sustainable Social Change, Oxford University Press, Oxford, pp. 169-180. Barrionuevo, A. (2010a), Bypassing resistance, Brazil prepares to build a dam, New York Times, 16 August. Barrionuevo, A. (2010b), Diaspora-in-waiting in Amazon; indigenous groups refuse to go quietly as new dam forces them to relocate, International Herald Tribune, 17 August. Barrionuevo, A. (2010c), Educational gaps limit Brazils reach, New York Times, 5 September. Blount, J. (2010), Brazil expects power demand to rise 7,4% and is ramping up hydro and thermal projects, Global Power Report, LexisNexis, Dayton, OH. Brenneke, M. and Spitzeck, H. (2010), Social intrapreneurs bottom-up social innovation, International Review of Entrepreneurship, Vol. 8 No. 2. Christensen, K.S. (2005), Enabling intrapreneurship: the case of a knowledge-intensive industrial company, European Journal of Innovation Management, Vol. 8 No. 3, pp. 305-322. Eisenhardt, K.M. (1989), Building theories from case study research, Academy of Management Review, Vol. 14 No. 4, pp. 532-550. tica (2012), Balanc tico Nacional 2012 Ano base 2011: Empresa De Pesquisa Energe o Energe tica, Rio de Janeiro. Resultados Preliminares, Empresa de Pesquisa Energe Glaser, B.G. and Strauss, A.L. (1967), The Discovery of Grounded Theory: Strategies for Qualitative Research, Aldine Publishing, Chicago, IL. Grayson, D., McLaren, M. and Spitzeck, H. (2011), Social intrapreneurs: an extra force for sustainability innovation, Doughty Centre for Corporate Responsibility, Craneld University, Craneld, available at: www.som.craneld.ac.uk/som/dinamic-content/media/knowledgeinterchange/criticalguides/ 20110223b/Guide.pdf

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 623

Halme, M., Lindeman, S. and Linna, P. (2012), Innovation for inclusive business: intrapreneurial bricolage in multinational corporations, Journal of Management Studies, Vol. 49 No. 4, pp. 743-784. Hornsby, J.S., Kuratko, D.F. and Zahra, S.A. (2002), Middle managers perception of the internal enviroment for corporate entrepreneurship: assessing a management scale, Journal of Business Venturing, Vol. 17 No. 3, pp. 253-273. Hornsby, J.S., Naffziger, D.W., Kuratko, D.F. and Montagno, R.V. (1993), An interactive model of the corporate entrepreneurship process, Entrepreneurship Theory & Practice, Vol. 17, pp. 29-37. Ireland, R.D., Covin, J.G. and Kuratko, D.F. (2009), Conceptualizing corporate entrepreneurship strategy, Entrepreneurship Theory and Practice, Vol. 33 No. 1, pp. 19-46. Isaacs, W. (1993), Dialogue, collective thinking, and organizational learning, Oranizational Dynamics, Vol. 22 No. 2, pp. 24-39. Jick, T.D. (1979), Mixing qualitative and quantitative methods: triangulation in action, Administrative Science Quarterly, Vol. 24 No. 4, pp. 602-611. Juniper, C. and Moore, M. (2002), Synergies and best practices of corporate partnerships for sustainability, Corporate Environmental Strategy, Vol. 9 No. 3, pp. 267-276. Kania, J. and Kramer, M.R. (2011), Collective impact, Stanford Social Innovation Review, Vol. 60, Winter, pp. 36-41. Kuratko, D.F. and Goldsby, M.G. (2004), Corporate entrepreneurs or rogue middle managers? A framework for ethical corporate entrepreneurship, Journal of Business Ethics, Vol. 55 No. 1, pp. 13-30. Kuratko, D.F., Hornsby, J.S. and Goldsby, M.G. (2004), Sustaining corporate entrepreneurship: modelling perceived implementation and outcome comparisons at organizational and individual levels, International Journal of Entrepreneurship and Innovation, Vol. 5 No. 2, pp. 77-89. Kuratko, D.F., Ireland, R.D. and Hornsby, J.S. (2001), Improving rm performance through entrepreneurial actions: Arcordias corporate entrepreneurship strategy, Academy of Management Executive, Vol. 15 No. 4, pp. 60-71. Kuratko, D.F., Montagno, R.B. and Hornsby, J.S. (1990), Developing an intrapreneurial assessment instrument for an effective corporate entrepreneurial environment, Strategic Management Journal, Vol. 11 No. 5, pp. 28-49. Kuratko, D.F., Ireland, R.D., Covin, J.G. and Hornsby, J.S. (2005), A model of middle-level managers entrepreneurial behavior, Entrepreneurship Theory & Practice, Vol. 29 No. 6, pp. 699-716. Lins de Alencar, C., Vinhas Teles, F.E., Costenaro, F. and Ojima Costa, S. (2009), ACREDITAR o Prossional Continuada, Odebrecht Premio Destaque, Salvador. Programa de Qualicac a Lozano, J. (2005), Towards the relational corporation: from managing stakeholder relationships to building stakeholder relationships (waiting for Copernicus), Corporate Governance, Vol. 5 No. 2, pp. 60-77. Lyons, J. (2010), Brazil engineers a critic-proof dam, Wall Street Journal, 6 October. Machado Filho, D., Carneiro Da Cruz, L.F., Barrio De Mendoza, E., Silva Rocha, G. and Canseco, M.T. nica Sur: Integrando Conservacio n y Desarollo, Odebrecht Premio (2008), Iniciativa Interocea Destaque, Salvador. Mantere, S. (2005), Strategic practices as enablers and disablers of championing activity, Strategic Organization, Vol. 3 No. 2, pp. 157-184. Maon, F., Lindgreen, A. and Swaen, V. (2009), Designing and implementing corporate social responsibility: an integrative framework grounded in theory and practice, Journal of Business Ethics, Vol. 87 No. 1, pp. 71-89. Maon, F., Lindgreen, A. and Swaen, V. (2010), Organizational stages and cultural phases: a critical review and a consolidative model of corporate social responsibility development, International Journal of Management Reviews, Vol. 12 No. 1, pp. 20-38. Miles, M.B. and Huberman, A.M. (2005), Qualitative Data Analysis: An Expanded Sourcebook, Sage Publications, Thousand Oaks, CA. Mirvis, P.H. and Googins, B. (2006), Stages of corporate citizenship, California Management Review, Vol. 48 No. 2, pp. 104-126.

PAGE 624 CORPORATE GOVERNANCE VOL. 13 NO. 5 2013

Morris, M.H., Kuratko, D.F. and Covin, J.G. (2011), Corporate Entrepreneurship and Innovation: Entrepreneurial Development within Organizations, South-Western Cengage Learning, Mason, OH. Nelson, J. (2006), Leveraging the development impact of business in the ght against global poverty, Working Paper No. 22, Corporate Social Responsibility Initiative, John F. Kennedy School of Government, Harvard University, Cambridge, MA. Odebrecht (2010), Annual Report 2010-2020, Odebrecht, Salvador. Odebrecht, N. (1983), Survival, Growth and Perpetuity, Odebrecht, Salvador. Popper, K.R. (1959), The Logic of Scientic Discovery, Harper & Row, New York, NY. Porter, M. and Kramer, M.R. (2011), The big idea: creating shared value, Harvard Business Review, Vol. 89 Nos 1/2, pp. 62-77. Schexnayder, C.J. (2010), Brazil approves 11,200-MW Monte dam, Engineering News-Record, 3 May. Spitzeck, H. (2009), Organizational moral learning: what, if anything, do corporations learn from NGO critique?, Journal of Business Ethics, Vol. 88 No. 1, pp. 157-173. Stopford, J.M. and Baden-Fuller, C.W.F. (1994), Creating corporate entrepreneurship, Strategic Management Journal, Vol. 15 No. 10, pp. 521-536. Sustainability (2008), The Social Intrapreneur A Field Guide for Corporate Changemakers, Sustainability, London. von Kimakowitz, E., Pirson, M., Spitzeck, H., Dierksmeier, C. and Amann, W. (Eds) (2010), Humanistic Management in Practice, Palgrave Macmillan, New York, NY. World Business Council for Sustainable Development (2010), Vision 2050, World Business Council for Sustainable Development, Geneva. World Commission on Environment and Development (1987), Our Common Future, Oxford University Press, Oxford. Yin, R.K. (2003), Case Study Research: Design and Methods, Sage Publications, Thousand Oaks, CA. Zadek, S. (2004), The path to corporate responsibility, Harvard Business Review, Vol. 82 No. 12, pp. 125-132. Zahra, S.A. (1993), Environment, corporate entrepreneurship and nancial performance: a taxonomic approach, Journal of Business Venturing, Vol. 8 No. 4, pp. 319-340.

About the authors

o Heiko Spitzeck is Professor and Head of the Sustainability Research Centre at Fundac a Dom Cabral in Brazil. From 2008-2010 he was a Lecturer at Craneld Universitys Doughty Centre for Corporate Responsibility in the UK. Between 2004 and 2006 he served as Director for oikos International, a student-driven NGO for sustainable management and economics. He was educated in Germany, Spain and Switzerland and received his PhD from the University of St Gallen (Switzerland). Heiko Spitzeck is the corresponding author and can be contacted at heiko@fdc.org.br udio Boechat has been a Teacher, Researcher and Project Manager at the Sustainability Cla o Dom Cabral (FDC), Brazil, since 2002. His current professional Research Centre, Fundac a activities include knowledge development in the eld of responsible and sustainable business management. He is the Brazilian representative of the Globally Responsible Leaders Initiative, sponsored by the UN Global Compact and the European Foundation for Management Development, and is a member of the UN Global Compact Task Force for Principles for Responsible Management Education. He holds a degree in Electrical Engineering from the Federal University of Minas Gerais, Brazil, and is Specialist in o Dom Cabral. Economic Engineering at the Fundac a o is Director for Sustainability at Odebrecht. Previously he was Sergio Director for Sergio Lea Environmental Affairs at Odebrecht Engineering and Construction. He holds a degree in Civil and Sanitary Engineering from the Universidade Federal de Minas Gerais (Brazil) and a PhD in Civil Environmental Engineering from the University of California at Berkeley. To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints

VOL. 13 NO. 5 2013 CORPORATE GOVERNANCE PAGE 625