Purpose: This article uses a dynamic approach to analyzing the role of resource dependence on the BM trajectory of a non-profit organization. Non-profit organizations are particularly dependent on access to external resources and advanced partnerships to create, deliver and capture value. Because they have little or no control on these external resources, this dependence may influence the business model orchestration and its evolution over time. Design/methodology/approach: Based on an in-depth case study of a major French e-sport association, the qualitative methodology relies on 15 semi-structured interviews and a large amount of secondary data covering a period of 12 years (2011-2023). Findings: This article identify various types and intensities of the sources of dependence that shape the BM trajectory. It specifies this influence on the mechanisms of value creation, proposition, and capture and describes the dynamics of reinforcement or reduction of dependence, according to the strategic actions deployed. Practical implications: The article encourages non-profit organizations to consider addiction as a positive phenomenon, in order to structure their value logic and acquire a short-term reputation. In the medium term, dependence needs to be controlled and rebalanced as the BM continues to grow. Originality/value: The originality lies in the use of resource dependency theory to analyze the BM trajectory. Knowing that the BM is theoretically grounded in the resource-based view, this this view of dependence contributes to better understand the internal and external factors influencing a BM's evolution process.
Purpose: This paper investigates the adoption of non-financial reporting (NFR) standards and the double materiality (DM) principle, and their possible implications on external performance measures, namely ESG ratings. By doing so, it positions reporting practices as mechanisms that affect disclosure quality and the transparency and accountability of firms’ business models. Design/Methodology/Approach: Longitudinal analysis over three years (2020–2022) was conducted using the 366 European listed companies' annual reports. Descriptive statistics and ordinary least squares regressions were employed to analyze the association between reporting practices, DM adoption, and ESG ratings from several rating agencies. Findings: The results show that the adoption of non-financial reporting frameworks is associated with higher ESG ratings among European firms. However, the early adoption of double materiality does not yet have a significant impact on ESG performance at this stage. Research implications: The study contributes to the business model literature by demonstrating how reporting practices and regulatory development build external representations of firms' value creation, delivery, and capture. It highlights the role of disclosure frameworks and double materiality as institutional forces with the capacity to transform business models to meet stakeholder and regulatory pressures. Originality/Value: This study is one of the first longitudinal tests that empirically analyze the impact of non-financial reporting frameworks and DM on ESG ratings, and which sheds new light on how they impact evaluation of sustainable business model.
Purpose: This study aims to operationalise the analysis of textual patterns in ESG reports from the perspective of double materiality, enabling the distinction between value and impact statements across environmental, social, and governance initiatives. This aligns with the transformative nature of ESG reporting, which promotes more sustainable business models by integrating environmental and social impacts into core value creation, facilitating the management of risks and opportunities linked to the interests of various stakeholders. Design/Methodology/Approach: The paper develops guidelines for exploratory content analysis to examine ESG reports through a structured codebook approach, focusing on topic prevalence, tone, and integration levels. It combines signalling, stakeholder, legitimacy, institutional, and attribution theories as complementary elements. Findings: The research establishes a methodological framework for analysing double materiality in ESG reports facilitating the recognition, systematisation, and analysis of textual choices in ESG reporting. Practical implications: The developed codebook provides a structured approach to analyse and compose ESG reports, helping organisations balance standardisation requirements with reporting flexibility while ensuring transparent, decision-useful information for stakeholders. This benefits both academics and practitioners. Originality/Value: This paper presents a novel methodological approach to analyse ESG reports through the lens of double materiality, bridging theoretical understanding with practical application. This supports the use of ESG reporting as a tool for transformation towards more sustainable business models.
Purpose: Machine manufacturers can enhance their revenues by providing outcome-based contracts (OBCs) that focus on delivering the outcome associated with machine performance. Although OBCs are gaining traction, structured taxonomies of decision criteria to guide their design remain underdeveloped. Methodology: This study conducts a systematic literature review of academically reported industrial cases to develop a taxonomy of decision criteria for designing OBCs. Findings: The proposed taxonomy identifies 20 decision criteria that significantly influence lifecycle profits and risk management in OBCs. These criteria mainly relate to ownership responsibilities, and the payment model. The study also outlines its theoretical and practical contributions. Originality: The paper systematizes existing academically reported industrial cases and clarifies OBC-specific business model decision criteria from the perspective of machine manufacturers. It thus future OBC researchers to describe and analyze OBCs with greater depth and precision. Practical implications: The taxonomy provides a practical tool for managers of machine manufacturers to design OBCs more effectively.
In this conceptual paper, we discuss four future scenarios of the financial industry, illustrating a potential industry configuration. We take a legitimacy-based perspective on future business models, highlighting interdependencies between legitimacy, regulation policy, and industry structure. We conjecture that the Neo Bank scenario is the most probable in the future of Fintech.
Purpose: Overconsumption and overproduction in the fashion industry have detrimental impacts on the environment and society. A radical transition of the industry is required to eliminate the impact generated by years of exploiting the Earth’s finite resources while ignoring planetary boundaries. A degrowth transition entails an equitable downscaling of production and consumption in the Global North to increase human well-being and enhance environmental conditions. This article aims to generate an empirical understanding of conceptualizing degrowth in business models, with an emphasis on how value is created in the examined companies and to bridge the gap between two research fields: degrowth and business model innovation for strong sustainability. Design/Methodology/Approach: Our qualitative study investigates how 12 selected companies in the Dutch fashion industry conceptualize degrowth in their business models to create value. Findings: Our results reveal that profit distribution is de-emphasized and that prioritizing social, ecological, and economic value while promoting growth in size and revenue allows these companies to outperform unsustainable competition. Consequently, we found that the examined companies create degrowth value through quality growth. Value maintaining is achieved by reducing resource use and output within production, combined with designing for durability, repairability, and longevity in clothing. The examined companies also share value by collaborating in the exchange of physical resources, knowledge, and skills to facilitate a sustainability transition in the industry. In terms of value unlocking, the companies operationalize degrowth while operating as sustainability influencers and demonstrating transparency regarding the sustainability of their operations and products. Originality/Value: Our study contributes to a practical understanding of sustainable business models that support degrowth-oriented value creation in for-profit fashion companies. Conceptually, the findings highlight key degrowth principles employed by these businesses—such as leveraging sustainability influencers, maintaining transparency about the sustainability of operations and products, assuming responsibility for post-consumer product management, and ensuring fair value distribution. These principles are then linked to value functions that drive sustainable value creation. Finally, this study enriches the existing literature by offering empirical insights into how degrowth principles are implemented at the organizational level.
Purpose: Business models aiming to extend product lifecycles are recognized as a market opportunity in retailing. While many retailers are evaluating their ambition to participate in the secondary market, prior C2C literature is showing only scarce attention to exploring it from the business perspective. The purpose of this explorative study is to identify and analyze business model value-creating activities in the context of C2C ecommerce. Design/methodology/approach: This multiple case study focuses on firms that instead of having pre-existence in traditional markets were established in the online environment from the offset. Each of the 18 case examples serve multisided C2C ecommerce markets (i.e., unstructured consumer markets), enabling supply and demand of used goods. The data includes descriptions of 362 identified actions systematically performed by the firms analyzed through qualitative research methods (formal content analysis, categorization, and comparison). Findings: The findings are presented inductively to help understand the current design of C2C ecommerce BMs, and also to generate a broader view of how traditional retailing can be challenged in the future. The findings identify the content of activity systems used in various business model types in secondary markets and compare the impacts of the choices between activity system structure, actors roles and burden of governance allocation. Originality/value: This study is among the first attempts to adopt a business perspective to previously consumer centric C2C ecommerce research. By doing this, the paper builds on the foundation of activity systems, lowering the level of abstraction in existing conceptual business model literature and providing tools to compare linear- and/or network-based business models. Furthermore, the findings provide new insights for firms that pursue, participate or refuse to enter the online-based secondary market.
Purpose: This paper aims to apply a systems thinking perspective, specifically the system leverage point framework, to enhance the understanding for the effectiveness of sustainable business models in achieving systems change towards sustainability. Design/Methodology/Approach: Conceptual paper, using an integrative research approach. Findings: The conceptual analysis shows that the sustainable business model archetypes largely target shallow system leverage points, which are unlikely to achieve wide-ranging systems change. Therefore, a research agenda is developed around the deep leverage points for system change, to guide future research efforts in developing truly sustainable business models. Practical Implications: The findings offer insights for both managers and policymakers on the effectiveness of different types of sustainable business models and how they can be improved to drive broader systems change. Research Implications: The research agenda put forward focuses on the systemic root-causes of unsustainability and can guide scholarly efforts toward adopting a broader systems perspective on sustainable business model development as a potential solution. Originality/Value: This paper provides insights into the ability of sustainable business models to generate sustainability outcomes through systems change, serving as a stepping stone for more effective sustainable business model development efforts.
Purpose: The purpose of this paper is to explore how the operational capabilities for pay-per-outcome business model are deployed in the context of indoor environment. In the past decade, product–service systems have attracted interest from various industries as firms seek new ways to create competitive advantage. The transition towards more advanced services in product–service systems require novel operational capabilities. However, the operational capabilities that have a significant impact on the successful implementation of pay-per-outcome business models have not been studied comprehensively hitherto. Design/Methodology/Approach: To address this gap, we deployed a single case study design involving four firms as embedded units of analysis. The goal of the firms was to provide a range of integrated technologies and equipment designed to monitor, control, and enhance indoor environment by utilizing collaborative pay-per-outcome business models. Findings: The findings indicated that different key design decisions impact ordinary capabilities. The decision to transfer ownership while retaining operational responsibility creates a hybrid model where control over the performance remains with the firms, but financial and legal ownership lies with the customer. Due to these key decisions, three novel operational capabilities were needed: ‘contracting capabilities towards third parties’, ‘capability to train the usage of pay-per-outcome business models’ and ‘remote support capability’. Originality/Value: This research contributes to business model literature by empirically identifying the operational capabilities required to implement collaborative
Purpose: This study aims to introduce a methodology dedicated to developing business models for industrial product service systems (IPSS) in mechanical engineering. It identifies shortcomings in generic methods and emphasizes the importance of a systematic approach. Design/Methodology/Approach: Grounded in a thorough literature review, a careful selection of eleven scientific papers has been identified and explored in a two-step literature review and analysis process. To develop an adjusted reference methodology, we used a multi-phase development model for structural guidance. The emphasis is on a step-by-step and iteratively validated approach to overcome the particular challenges of IPSS in mechanical engineering. Findings: The comprehensive review of literature revealed a gap in research concerning IPSS business model development within mechanical engineering, as none of the reviewed studies fully met all predefined requirements. Additionally, the absence of focus on small and medium-sized enterprises (SMEs) in the literature suggests an important area for further investigation. These findings underscore the need for a more systematic methodology to address this deficiency. Despite these limitations, valuable insights were extracted through careful content analysis, organized into distinct phases, resulting in the development of a systematic reference model. Practical Implications: Project managers and organizations can view this reference model as a strategic roadmap, providing step-by-step guidance for the effective development of IPSS business models in engineering companies. Originality/Value: We contribute a systematic reference methodology for the development of collaborative IPSS business models in mechanical engineering, addressing industry-specific needs and paving the way for future research on incorporating company-specific factors into the business model development process.
Purpose: Many startups face the complex anticipation of offering value sustainably over the long term yet must test market engagement to evaluate an economically viable business model in the near term. This study aims to capture the usefulness of a business model innovation method (Flourishing Startup Method) aligned with sustainability-as-flourishing thinking as perceived by entrepreneurs during the early stages of enterprise development. Design/Methodology/Approach: Through action research, the utility of the approach was evaluated through multiple applications across two events with a total of 64 entrepreneurs taking place 2017-2018. Findings: The research revealed insights related to the reaction to the Flourishing Startup Method and its facilitation including the intention to use beyond the events, their perceived learning utility, as well as the overall perceived utility in terms of usefulness and ease of use. The study also showed that to fully leverage the Flourishing Startup Method, entrepreneurs must have time and facilitated opportunities to develop a minimum level of proficiency in a set of entrepreneurial competencies that support business model for sustainability-as-flourishing. Originality/Value: This research contributes to understanding the process of business model innovation towards novel and impactful business models aligned with sustainability-as-flourishing and offers one of few empirical investigations on a business model innovation method aligned with sustainability-as-flourishing to identify its utility and fit with the needs and expectations during the early stages of startup development.
Purpose: Despite the vast array of literature on integrated reporting, there is scant empirical evidence on the value relevance of the specific content elements of integrated reports. This paper investigates whether a specific content element of integrated reports, namely, business model disclosure quality influences the share price of South African listed companies. Business model disclosure was selected because it is integral to all stakeholders in understanding companies’ value creation processes to make informed decisions. Design/Methodology/Approach: The value relevance was tested using the Ohlson (1995) Model through the application of panel data. A new proxy was used for the “other information” variable in the Ohlson (1995) Model for business model disclosure. Two scenarios were evaluated: one sample included profit-making and loss-making companies (350 observations) and another sample of profit-making companies (260 observations) for five years from 2016 to 2020. Findings: The results for both scenarios indicated that the quality of business model disclosure had no effect on the share price of South African listed companies. Originality/Value: The paper makes four contributions to the existing literature. Firstly, analysing the value relevance of one specific component of integrated reports, namely, business model disclosure. Secondly, using a new a proxy for business model disclosure to incorporate into the Ohlson (1995) Model. Thirdly, the paper provides empirical evidence on the value relevance of one of the critical elements of integrated reports of companies that have a mandatory requirement to publish integrated reports. Fourthly, two samples were analyzed: one sample of profit-making and loss-making companies and another sample of profit-making companies.
Purpose: This study evaluates the success metrics of post-merger and acquisition (M&A) activities in the German biopharmaceutical industry, focusing on small- and medium-sized enterprises (SMEs). It examines how metrics such as economies of scale, economies of scope, market share, clinical success rate, and efficient allocation of personnel and resources affect post-M&A revenue. Design/Methodology: The study uses partial least squares structural equation modeling (PLS-SEM) to analyze data from a survey of 384 biopharmaceutical SMEs in Germany. The survey targeted senior management involved in M&A processes, with the analysis assessing the reliability, convergent validity, and discriminant validity of the success metrics, and the statistical significance of the structural path coefficients. Findings: The results indicate that efficient allocation of personnel and resources, as well as clinical success rate, significantly impact post-M&A revenue. In contrast, economies of scale, economies of scope, and market share do not significantly affect revenue. The study also emphasizes that while M&A activities can lead to operational efficiencies and cost savings through synergies, these benefits alone do not ensure revenue growth without effective resource management and innovation. Internal efficiencies and clinical outcomes are more critical than market expansion strategies. Originality/Value: The study introduces a novel methodology for evaluating different success metrics in post-M&A performance within the biopharmaceutical industry using PLS-SEM. The combination of success metrics and their impact on post-M&A revenue is identified as a relatively unique research contribution.
In this interview-based article, Professor Christian Nielsen summons two of the latest decades’ biggest management thinkers, the two inventors of the Business Model Canvas, Alex Osterwalder and Yves Pigneur, for a conversation about the current challenges for companies in doing business model innovation. According to Alex and Yves, companies face two major challenges. First, companies have inadequate governance structures for allowing innovators to do decent work, and second, the old guard knows jack shit about innovation. Unfortunately, it is precisely the old guard sitting with the management reigns at this time. Our conversation identifies three enablers to help overcome these challenges. First, the enabler is about ensuring leadership commitment and allocating management time to innovation. The second enabler is the ability to kill ideas. This is important, because every company needs to focus its innovation efforts, besides ensuring that budgets and resources are channeled in the most fruitful directions. The third enabler is building an innovation culture that coexists with an exploitation culture and where innovators can thrive. In successful companies, innovators are not pirates; they are highly esteemed contributors to corporate success. Finally, we get a sneak peek at their current work focus.
This interview comprises the opening part of a doctoral defense in which Christian Nielsen acted as Sari Perätalo’s opponent. The defense took place on November 24, 2023, at Oulu Business School, Finland, and the topic was “In search of a business model approach for smart cities.” After the discussion conveyed in this paper, the doctoral defense focused on specific research outcomes, methodologies, and theories and illustrated that the PhD candidate indeed was extremely knowledgeable about the subject and should be awarded the degree of a PhD.
Purpose: The purpose of this article is to develop a sustainable business model (SBM) concept for local crowdfunding of climate measures in agriculture. Many climate measures entail significant capital costs preventing farmers from their adoption, and existing finance schemes have experienced limited success. Crowdfunding can be a novel financing tool for farmers to implement climate measures in agriculture. Design/Methodology/Approach: We apply the adapted SBM canvas framework and argue that the framework presents a suitable tool for identifying and validating business models for a local crowdfunding program. Findings: By applying the adapted SBM canvas tool and through an extensive mixed method approach, the study identifies 6 relevant design principles for SBM development and relates them to different dimensions in the SBM canvas. Practical Implications: The study develops a proven business model concept that can be implemented by practitioners and farmers to facilitate the adoption of climate change mitigation measures, overall contributing to the transition to a low emission society. Originality/Value: This study demonstrates the existing limitations of the adapted SBM canvas and suggests how it can be improved by integrating external structural constraints that can be a barrier to business model development. Moreover, we contribute to the SBM literature by being the first to connect Design Science with crowdfunding and the adapted SBM canvas.
Purpose: Functioning of business models that follow the philosophy of circular economy is a growing research theme but discussion about the potential and the limitations of such business models remains unstructured. We provide a focused perspective on the meaning of complementarity between the elements of business models. Approach: Cluster analysis techniques allow us to explicate correlations between the business model elements, which in turn enables us to demonstrate how complementarity between these elements can strengthen the creation of both societal and customer value. Findings: By analyzing 92 companies, we point out why complementarity between the value creation, value proposition, and value capture elements is an important phenomenon. We also show how complementarity can be utilized in the development of circular business models. Social and practical implications: Our findings are promising because numerous societal and customer value propositions seem to be compatible with diverse business model elements. This means that circular features can be attached to various types of businesses. Based on our analysis, we propose that business model complementarity should be thoroughly considered in future efforts to develop more ambitious circular business models.
Purpose: Increasing public awareness of social and environmental problems has led to critique of firms, rais- ing questions about their efforts in addressing sustainability. Due to their unique position in the supply chain, retailers have enormous potential to influence sustainable progress through their business models. However, many global retailers have fallen into various sustainability-related scandals. Therefore, the purpose of this study is to identify activities that retailers are undertaking to address sustainability. Design/Methodology/Approach: Recent reports indicate that Nordic retailers have established themselves as sustainability pioneers. Consequently, this exploratory research is based on an empirical multiple case study, fo- cusing on eight retailers from Denmark, Finland, Norway, and Sweden. This study draws from sustainability re- ports and employs directed content analysis to identify retailers’ activities. Findings: The study identified 44 retailing activities used to address sustainability and revealed that only six (out of 45) sustainable business model design patterns are commonly used by pioneer retailers. The findings illustrate both the common and emerging patterns in retail, and further highlight the areas that are lacking in retail business model design. Originality/Value: By exploring how a megatrend is addressed by commercial actors, this research connects retail business model and sustainable business model literature, proposes a new role for retailers as change agents, and suggests five propositions that can guide traditional retailers on their sustainability journeys.
