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Business Models for Sustainability: Origins, Present Research, and Future Avenues
Abstract
While a consensus appears to have evolved among many sustainability researchers and practitioners that sustainable development at the societal level is not very likely without the sustainable development of organizations, the business model as a key initiating component of corporate sustainability has only recently moved into the focus of sustainability management research. Apparently, the usual approaches to sustainable development of philanthropy, corporate social responsibility, and technological process and product innovation are insufficient to create the necessary radical transformation of organizations, industries, and societies toward genuine, substantive sustainable development. More in-depth research is needed on whether both modified and completely new business models can help develop integrative and competitive solutions by either radically reducing negative and/or creating positive external effects for the natural environment and society.
... Recent studies suggest that this is due to their lack of a business model that makes them attractive to mainstream customers and economically viable for the firms that sell them (Bohnsack et al., 2014). Mainstreaming business models for sustainability (BMfS) in mature industries is therefore imperative for sustainable transitions to take place (Schaltegger et al., 2016). By mainstreaming, we refer to the emergence of new types of BMfS which become generally accepted and widely adopted in an industry, both by incumbents and new entrants. ...
... Mainstreaming BMfS is challenging because they are more demanding than traditional business models in terms of the value they seek to create and the stakeholders they aim to benefit (Lüdeke-Freund & Dembek, 2017). That is, BMfS require a fundamental rethinking of the value proposition, comprising economic, social, and environmental value, and an extended network of stakeholders involved in value creation, delivery, and capture (Schaltegger et al., 2016). However, mass markets do not reward social and environmental value in the same way they reward economic value. ...
... Second, it prevents the adoption of BMfS. As BMfS challenge the mainstream perception of value and unsustainable business practices, adoption would require radical changes in consumer preferences, production systems, and revenue models (Schaltegger et al., 2016). Our article sheds light on how entrepreneurs garner support for the mainstreaming of BMfS in mature industries despite such constraints. ...
Addressing global sustainability challenges requires a mainstreaming of business models for sustainability (BMfS) in mature industries. However, the presence of an already dominant mainstream business model in an industry tends to hold back BMfS. This article investigates how new types of BMfS can become generally accepted and widely adopted in an industry. It presents a qualitative study of the mainstreaming of BMfS in the Dutch electricity industry. The findings show that this process depends on entrepreneurs’ capacity to (1) incorporate alternative institutional logics into the design of BMfS to achieve optimal distinctiveness and (2) to directly alter the dominant institutional logic of the industry to make it more conducive to BMfS. Furthermore, successful BMfS act as anomalies that indirectly alter the industry’s dominant institutional logic. Anomalies support a self-reinforcing loop that accelerates the mainstreaming process. We integrate these findings into a dynamic model of the mainstreaming of BMfS.
... Schaltegger et al. [38] also proposed sustainability-oriented business models, which should be imbued with structural and cultural attributes such as: (i) the development of team/community spirit; (ii) increasing/enhancing worker confidence and loyalty; (iii) commitment to sustainability evaluation; (iv) disclosure to stakeholders. An organization's mission and objectives should have to be considered, without forgetting the performance evaluation approach, the need to include all stakeholders, and the way nature must be addressed. ...
... An organization's mission and objectives should have to be considered, without forgetting the performance evaluation approach, the need to include all stakeholders, and the way nature must be addressed. Sustainability management must have an interdisciplinary character, integrating social, economic, and environmental aspects (TBL) to transform the organization and contribute to SD (economy and society) [38]. ...
... Progress on bringing about a sustainable future for people and the planet is patchy, and the majority of companies involved in the Compact, are not doing enough to help bring about the UN's 2030 Agenda for Sustainable Development [41]. The three designations are often considered to be a catch-all designation of corporations integrating sustainability within their overall corporate strategy, with the degree of such application varying by industry, domicile, and firm size [38]. ...
The concept of sustainable development (SD) was introduced in the “Our Common Future” report, launched in 1987, which influenced the emergence of many studies related to the role played by organizations as actors supporting SD. SD is a consolidated concept; however, since 1987, many political, social, and natural events have occurred on our planet, which have impacted companies’ behaviors. However, the diversity of research from different fields has provoked, among the academic community, a lack of clarity surrounding “sustainability” (S), “corporate sustainability” (CS) and “corporate social responsibility” (CSR) concepts. This lack of clarity can also be identified in companies, which have referred to “sustainability” only in the environmental field. Recently, increased discussions related to corporate sustainability metrics have shed light on the ESG criteria (environmental, social, and governance), increasing misperceptions associated with the concept. Ambiguous definitions and constructs may prevent managers from identifying sustainability goals for their companies. Therefore, literature reviews as a research method are more relevant than ever. Thus, in this work, we aim to answer the following question: How should we integrate different perspectives on corporate sustainability, in order to broaden the understanding of the concept? In this study, we conducted a focused bibliographic review and revisited the papers that most influenced the construction of the concepts. The information in this paper is helpful to improve the understanding of CS; to provide specific insights into the studies that have investigated this field; to help managers and entrepreneurs who are improving CS actions in their companies; and to support academia by putting together a large amount of information about this theme in one paper.
... While few conceptual frameworks have been proposed in recent literature to enhance the cooperative capacity of stakeholders [13,15,18], there are increasing calls for more studies that examine comprehensive, multi-level models, that focus on individual, organizational and societal levels to address sustainability challenges and that are able to arrive at the mechanisms for maximizing efficiencies amongst these collaborative groups [2,[4][5][6]. In a recent paper, Freudenreich et al. propose that the dynamic and reciprocal nature of value-creation processes amongst multiple stakeholders, including the "stakeholder relationships and motivations", are nonexistent in both traditional and sustainability-focused business-model literature [12] (p. ...
... Three categories of competencies are predominantly highlighted in the literature, these being interpersonal, strategic, and systems' thinking competencies [11,[24][25][26]. Osagie et al. [27] provide empirical evidence that key competencies that help drive corporate social responsibility (CSR) implementation in a business context include: (1) anticipating CSR challenges, (2) understanding CSR-relevant systems and subsystems (systems' thinking), (3) understanding CSR-relevant standards, and 4) CSR management competencies. ...
... In our study, we draw on the definition by Shaltegger et al., who describe a business model for sustainability as one that "helps in describing, analyzing, managing, and communicating: (i) a company's sustainable value proposition to its customers and all other stakeholders; (ii) how it creates and delivers this value; and (iii) how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries" [2] (p. 6). Building on calls for more research on how traditional business models can be used to advance sustainability research (for example, [15]), we draw on the stakeholder theory [7][8][9] to inform our study's key research questions. ...
Sustainability leadership aims at balancing short-term economic goals with long-term sustainable development goals by considering the interests of all stakeholders instead of just shareholders and focusing on a triple bottom line: people, planet, and profit. The existing research on sustainability leadership has mainly focused on the role of individual competencies without considering other meso and macro level factors that can impact the enactment of sustainable leadership. The studies that have considered these micro, meso, and macro levels have conceptualized these levels as stratified and discrete, assuming a hierarchical relationship between them. Such a conceptualization constitutes an impediment to the dynamic communication and engagement that is necessary to the achievement of sustainability goals. Drawing on stakeholder theory, this study investigates the key factors impacting the practice of sustainability leadership in a contextually relevant manner. More specially, we propose a multi-level, multi-stakeholder framework for sustainability leadership that is data driven and supported by evidence. This framework is meant to portray a holistic model that is dynamic and reciprocal in the manner in which micro, meso and macro factors impact each other. Qualitative research methods and purposive sampling were used for four stages of data collection, from 39 individuals with diverse profiles across the sustainable-engineering sector. The data collected were analyzed thematically, and the findings formed the basis of the dynamic inclusive business model for sustainability proposed in this paper, which challenges the traditional hierarchical business models. The data-driven, multi-level, multi-stakeholder framework proposed in this work extends the literature by providing insights on the key factors that impact the practice of sustainability leadership in the context of SMEs, operating in an emerging market. This framework demonstrates that the effective practice of sustainability leadership by SMEs is influenced by the interplay of factors at micro, meso and macro levels, as represented by individuals, organizations/firms, and governments.
... Sustainability-oriented BM changes can be realised via a business model innovation process for sustainability (BMIpfS) that stimulates a systematic and holistic mindset of the involved actors (Stubbs & Cocklin, 2008;. The BMIpfS requires businesses to make strategic decisions related to market, customers, and value propositions to optimise social and environmental value creation (Bocken et al., 2014;Schaltegger et al., 2016). As a result, the BMIpfS can facilitate agricultural businesses' understanding of business activities and enable a greater sense of control of land-use changes, make them more likely to maintain these changes over time, and encourage comparable changes in the future (Fielding et al., 2008). ...
... The aim of the BMIpfS is to design BMs that support sustainable development that produces positive (or reduces negative) environmental effects on society and that also produces long-term prosperity for businesses and their stakeholders (Geissdoerfer et al., 2018). The BMIpfS requires that businesses take a long-term perspective on their business strategies and goals (Schaltegger et al., 2016), meaning that changes due to the process will be noticeable for all stakeholders throughout the value chain. ...
... This approach, which is suitable for expanding current understanding of the complex phenomenon of sustainability-oriented business changes (e.g. Lüdeke-Freund & Dembek, 2017;Schaltegger et al., 2016), leads to empirical findings based on deep interactions with respondents. According to Bocken and Bogaert (2016) and Geissdoerfer et al. (2018), the approach is particularly suitable for researchers who wish to increase the knowledge and usefulness of the BMIpfS when business sustainability is in focus. ...
The agricultural sector has a critical role in creating social and environmental value of natural resources in addition to its traditional role of creating economic value by supplying food to the ever-increasing world population. In fulfilling this dual role, the agricultural sector often faces competing pressures: to operate financially profitable businesses and to create, maintain, and benefit from ecosystem services (ES) in their operations. This paper analyses these pressures in an examination of drivers and barriers to the initiation of the business model innovation process for sustainability (BMIpfS) as perceived by ten agricultural business managers who operate farms in southern Sweden. The paper explores the interplay between managerial cognition and business decisions as revealed in semi-structured interviews. The new ES in focus connect to radical land-use change, paludiculture, as used in the rewetting of farmland intended to reduce the greenhouse gas emissions that drained peat soil causes. The paper contributes to the literature by identifying drivers and barriers that moderates the initiation of the BMIpfS. Although the managers acknowledge the importance of long-term, sustainable social, and environmental value creation, they have grave doubts about the profitability of activities associated with the preservation of peat soils and connected ES. These managers would benefit from taking a more proactive, long-term approach to business model changes for sustainability and from acquiring more knowledge about market demand for sustainability-oriented ES. Successful facilitation and implementation of knowledge transfer and government subsidies that support ES could improve the turning of profits based on sustainable value creation.
... The distribution and packaging of this reactor and their impact on the environment present substantial challenges for Supply Chain Management (SCM) especially due to the sensitive nature of components. This is an area not sufficiently researched [17,24]. In the current decade, a linear thinking on supply chains drives companies' economic growth [17,18]. ...
... The use of these environmental energy devices can help reduce greenhouse gas emissions [40], but due to a lack of clear policy, deficient understanding of the use of environmental energy to guarantee sustainability goals, and essential sustainable tools, the use of hydrogen as alternative energy for the Mexican transportation remains a great commitment and unsolved dilemma (Mexican Instituto Polit ecnico Nacional (IPN)). For example, sustainable tools largely refer to the capability to identify links between sustainability and functional technologies [24], but safety measures and distribution processes (for developing the use of the energy devices) must be grounded in quality standards, policies, and knowledge to ensure their scale uses. Research from the Higher School of Chemical Engineering and Extractive Industries (ESIQIE) and the Higher School of Mechanical and Electrical Engineering Unidad Azcapotzalco (ESIME U-A) confirmed that the processes of design and manufacture have great impacts on the development of electrodes in oxyhydrogen reactors with excellent results in terms of economic performance, and yet, studies in SCM have to acknowledge their packaging and distribution processes, in terms of environmental performance. ...
... The supply chain management e a sustainable system Supply Chain Management (SCM) is growing in importance and can contribute to sustainable growth for society as a whole [17]. Growing pollution and ecological catastrophes have motivated researchers, policy makers, industry experts, and supply chain managers to increase focus on reducing the logistics footprint on the society, environment, and economic growth [17,24]. To better understand the relationships inherent among logistics suppliers, researchers suggest a holistic perspective that consciously integrates logistics processes (e.g., avoiding bio risk, synthetic risks, ecological risks) with the environmental impact (e.g., avoiding pollution risks and CO 2 emissions risks) [46,48]. ...
This study sheds light on the Hydrogen technology in transportation for reaching the
sustainability goals of societies, illustrated by the case of Mexico. In terms of the affected
supply chains, the study explores how the packaging and distribution of a fuel-saving tool
that allows the adoption of hydrogen as complementary energy for maritime trans-
portation to improve economic and environmental performance in Mexico. This exploratory study performs interviews, observations, simulations, and tests involving producers, suppliers, and users at 26 ports in Mexico. The study shows that environmental and economic performance are related to key processes in Supply Chain Management (SCM) in which packaging and distribution are critical for achieving logistics and transportation sustainability goals. Reusable packaging and the distribution of a fuel-saving tool can help decrease costs -, of transport, and downstream/upstream processes in SCM while at the same time increasing the environmental performance.
... The change toward a sustainable business model is expected from the press, politics, and society and promoted by various rankings [26][27][28][29]. Therefore, pharmaceutical development of the future should operate according to the sustainable development goals (Figure 1, [6]). ...
... The idea of a sustainable business model was discussed from different perspectives as a continuous adaption to the market, innovative business models, environmental sustainability, or overall sustainability, including diversity in talent acquisition [27][28][29]108]. In 2009, an article in the Harvard Business Review was published claiming that there is no other way than sustainable business development in which they are focusing on environmental sustainability [28]. ...
The fourth industrial revolution in 2011 aimed to transform the traditional manufacturing processes. As part of this revolution, disruptive innovations in drug development and data science approaches have the potential to optimize CMC (chemistry, manufacture, and control). The real-time simulation of processes using “digital twins” can maximize efficiency while improving sustainability. As part of this review, we investigate how the World Health Organization’s 17 sustainability goals can apply toward next-generation drug development. We analyze the state-of-the-art laboratory leadership, inclusive personnel recruiting, the latest therapy approaches, and intelligent process automation. We also outline how modern data science techniques and machine tools for CMC help to shorten drug development time, reduce failure rates, and minimize resource usage. Finally, we systematically analyze and compare existing approaches to our experiences with the high-throughput laboratory KIWI-biolab at the TU Berlin. We describe a sustainable business model that accelerates scientific innovations and supports global action toward a sustainable future.
... It differs from regular entrepreneurship by its social, economic, and environmental dimensions [32] or the economic, psychological, social, and ecological consequences [7]. Sustainable entrepreneurs introduce innovative business models and develop revolutionary technologies through the concept of "creative destruction" [33,34]. It draws attention to four market imperfections: flawed pricing mechanisms, information asymmetries, inefficient firms, and externalities leading to unsustainable business and environmental degradation [7]. ...
... Before the release of the UN's sustainable development goals in 2017, Eurostat's "Environmental Goods and Services Sector" classification for environmental protection activities (CEPA) or resource management activities (CReMA) mainly described the focus of sustainable entrepreneurship [9]. However, after the announcement of the UN SDGs, the scope has shifted to address them through innovation [12,33]. ...
Sustainable entrepreneurship is venturing to shift business practices towards environmental and social sustainability. It gained popularity worldwide, particularly in the US, due to promoting regulations for some sustainability areas, the high availability of impact investment, and the large-scale entrepreneurial ecosystem of the country. However, the literature does not explain what sustainable entrepreneurs undertake in business. This paper investigates (1) what the coverage of sustainable entrepreneurship is, (2) how this coverage has changed in the last 20 years, and (3) which sustainable development goals (SDGs) sustainable entrepreneurs serve. For these questions, the study analyses keyword co-occurrences of companies (n = 2004) from 72 countries and regions listed on the CrunchBase database with sustainability identification. The study shows differences in coverage and changes between the US and the other countries in the last 20 years. The study maps sustainable entrepreneurs to the SDGs they primarily serve, analysing their descriptions and websites. It identifies the distribution of sustainable entrepreneurs over SDGs, locating more popular and less popular SDGs. The paper invites several research streams on sustainable entrepreneurship and suggests policies to promote SDGs among sustainable entrepreneurs.
... One of the first definitions of SBM was provided by Schaltegger et al. (2016) who stated that: "a business model for sustainability helps describing, analyzing, managing, and communicating (i) a company's sustainable value proposition to its customers, and all other stakeholders, (ii) how it creates and delivers this value, (iii) and how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries". [50] (p. 6) Since then, several definitions have been provided in many studies [51][52][53][54][55][56]. The topic has been analyzed from different points of view: according to activities, processes, constituent elements, the concept of value, and the construction of frameworks or practical tools [55]. ...
... The first element of the BM value creation and delivery macro area concerns customers. We have observed the impact of services on health and wellness, support, and satisfied needs [50]. ...
In the last decade, individual awareness of the impacts generated by the activities of businesses has increased more than ever. Consumers, employees and investors have begun to criticize business behaviors that negatively affect either society or the environment. Given this context, and relying on the literature relating to hybrid organizations and sustainable business models, our research aims to investigate how dual logic affects the business model of benefit corporations in the Italian film production industry. To capture the complexity of this type of firm, we adopted a qualitative research method, the case study approach. The case selected was ARE FILMS srl, a creative film production company. It has been a benefit corporation since it was founded. The study suggests that the capacity of hybrid businesses to achieve a hybrid mission is intrinsically embedded in their business model. A young film production benefit corporation is more likely to adopt a semi-integrated business model that does not create an external perception of dual corporate identity and does not affect economic sustainability. Moreover, the sustainable value proposition emerges even without the formal application of accepted protocols. Furthermore, we realized that the size of the firm affects business modelling. Finally, this research underlines the fact that benefit corporations do not require external pressure to implement sustainable practices.
... Thus, sustainable entrepreneurship is characterized as an approach to address environmental and societal challenges by implementing a successful business and endorsing "sustainable development through entrepreneurial corporate activities" (Schaltegger & Wagner, 2011, p. 224). Because of their innovative capacities, sustainable entrepreneurs represent a key transformative force for the sustainable economy, shaping markets and society through sustainability-oriented business models (Schaltegger et al., 2016;Schaltegger & Wagner, 2011). (Freudenreich et al., 2019). ...
To shed light on how incumbent firms implement sustainable corporate entrepreneurship (SCE) processes, this study investigates how organizations connect sustainability and venture departments. Based on qualitative interviews with 14 experts from 12 multinational corporations headquartered in Germany, we identified five maturity levels of SCE with increasing cross‐functional collaboration: Non‐Existent, Occasional, Expert, Collaboration, and Strategic Collaboration. Using secondary interview data from seven multinational companies headquartered outside Germany, we find initial support for these collaboration types in an international context. Results indicate that a company's general approach to innovation is associated with its SCE maturity level: companies with dedicated entrepreneurship units are more likely to have a higher level of SCE focus. Furthermore, the likelihood of working on radical innovations for sustainability seems to increase as soon as venture experts collaborate with sustainability managers, which, in turn, increases the chances of initiating sustainability transitions.
... Therefore, niches allow businesses to refine their sustainability solutions before introducing them into mainstream markets (Geels, 2004;Hörisch, 2015Hörisch, , 2018. Once such solutions are introduced into mainstream markets, they have the potential to foster a sustainability transition (Hörisch, 2018;Schaltegger et al., 2016). While the sustainability transitions literature recognizes the importance of niches as protective spaces, it mostly discusses niche actorship in markets in which governments or corporations are customers (Bakker et al., 2015;Cramer, 2020;Loorbach & Wijsman, 2013). ...
Social entrepreneurs and activists can contribute to sustainability transitions by influencing consumer culture. This can provide a protective space to shelter new sustainability solutions from market pressures until they are ready to scale to the mass market. We study how social entrepreneurs and activists within a sustainable market niche attempt to influence consumer culture. Using grounded theory, we analyse interviews with 26 activists and social entrepreneurs in the market for alternatives to animal products in the Netherlands. We find a synergy where social entrepreneurs' strategies pull consumers into sustainable consumption while activists' strategies focus push consumers out of unsustainable consumption. These strategies contain four tactics: connecting to, showing contrast with and broadening consumers' connection to values associated with sustainable consumerism and a radical innovation tactic. We show how strategies for consumer culture change interact on the niche level of sustainability transitions to create a protective space for sustainability solutions.
... To this aim, an important and relevant issue arises: to accelerate the entrepreneurial process, educated young people are more interested in learning about the intentions and underlying motives of prospective entrepreneurs. Moreover, the youths' intentions are at the center of recognizing opportunities, and critical to understand and envisage entrepreneurial prospects; the intention to have or build a business or adapt an existing one in line with SDGs (Figge et al., 2002;Schaltegger et al., 2016). To realize scientific debates on how environmental values influence sustainable entrepreneurship (Weidinger, 2014) and which need to be based on environmental values, i.e., eco-friendly and green values (Cervelló-Royo et al., 2020). ...
This Research Topic consists of 15 articles on various aspects and methodologies of active
and sustainable Science, Technology, Engineering, and Mathematics (STEM) education toward educational psychology domain research contributed to by 49 authors. At the time of writing the Research Topic, the articles published have been checked online more than 24,000 times and received abundant citations in the scientific literature.
The topic theme, “STEM education,” is an umbrella term for the approaches and methods from different research disciplines and areas, targeted at the improvement of Sustainable Development Goals (SDGs) and the cognitive, affective, behavioral, and multidimensional domain in both academic, professional, and industrial personnel who are involved in this field with their everyday work. Here, the various educational psychology domains are getting increased attention in relation to STEM and SDGs. In the same context, it is still challenging and inspiring because this educational psychology domain needs to reflect the current renewable and sustainable situations that are required to follow and achieve the SDGs in STEM education. With various active approaches and methods becoming available, all these ideas and thoughts in the educational psychology domain could be integrated into the area of STEM toward the SDGs that can diagnose and analyze various peoples’ cognitive, affective, behavioral, and multidimensional patterns as well as their peculiarities.
... To this aim, an important and relevant issue arises: to accelerate the entrepreneurial process, educated young people are more interested in learning about the intentions and underlying motives of prospective entrepreneurs. Moreover, the youths' intentions are at the center of recognizing opportunities, and critical to understand and envisage entrepreneurial prospects; the intention to have or build a business or adapt an existing one in line with SDGs (Figge et al., 2002;Schaltegger et al., 2016). To realize scientific debates on how environmental values influence sustainable entrepreneurship (Weidinger, 2014) and which need to be based on environmental values, i.e., eco-friendly and green values (Cervelló-Royo et al., 2020). ...
... Particularly in sustainability contexts, markets are linked to considerable uncertainties which need proper time and resources for exploring new business models for commercializing the new technologies (Hansen et al. 2009;Schaltegger et al. 2016). Fifth, a top-down integration approach (Breuer and Lüdeke-Freund 2017b, 60f), as represented by our case of a top management-initiated diversification, could be complemented by elements of a bottom-up approach in order to better engage employees in the new innovation paradigm. ...
Sustainability is a key societal challenge and has become an opportunity for innovation. While start-ups are prone to enter such new territories, established companies are more hesitant to leave current trajectories and embrace uncertainty linked to sustainability-oriented exploration. We present a case of a conventional high-tech firm of an owner-manager whose strong values of universalism led him to initialize a sustainability-oriented diversification by exploring renewable energy technologies. Our longitudinal study uncovers how changes in ambidextrous organizational design and represented managerial values ultimately resulted in failed exploration. Our contribution is threefold: First, we link individual-level managerial values of universalism with organizational-level phenomena of sustainability-oriented exploration and diversification. Second, we contribute to bridging hitherto mostly separate bodies of literature on sustainability-oriented innovation and ambidexterity to better understand how conventional firms can deploy their technological capabilities for sustainability. Third, we conceptualize the "separation drift" as fading organizational separation resulting in exploration failure.
... To this aim, an important and relevant issue arises: to accelerate the entrepreneurial process, educated young people are more interested in learning about the intentions and underlying motives of prospective entrepreneurs. Moreover, the youths' intentions are at the center of recognizing opportunities, and critical to understand and envisage entrepreneurial prospects; the intention to have or build a business or adapt an existing one in line with SDGs (Figge et al., 2002;Schaltegger et al., 2016). To realize scientific debates on how environmental values influence sustainable entrepreneurship (Weidinger, 2014) and which need to be based on environmental values, i.e., eco-friendly and green values (Cervelló-Royo et al., 2020). ...
... This trend largely relates to the growth of circular economy (CE), an economic system in which novel business models re-envision the "end-of-life" concept by reducing, reusing, recycling, and recovering the materials used in product production and use (Kirchherr et al., 2017). While CE entails both incremental and radical innovation, past research has argued that stopping the depletion of natural resources and reducing current levels of CO 2 emissions cannot be achieved by incremental changes alone (Schaltegger et al., 2016). This concern highlights the need for radical measures by many actors in society. ...
Circular economy (CE) is gaining interest among industrial firms in light of sustainability concerns, and several incumbent firms are integrating it into their strategy. In this study, we scrutinize learnings from three large established industrial firms with a clear CE agenda and that are front-runners in CE strategy deployment. We analyze exploitation and exploration approaches to CE and problematize how these approaches relate to radical innovation, which we argue is critical for achieving CE. Semi-structured interviews (n = 30) were used to collect data. We found several issues referring to (1) challenges and approaches to normative management, (2) how the innovation ecosystem is engaged, (3) how goals and metrics relate to CE, and (4) resources and coordination regarding the CE initiative. Overall, current exploitative approaches are favored over explorative, mirroring an undesired imbalance between the two. We suggest several ways to counteract this. For example, (1) addressing existing norms so that they align with the ambitions in CE, (2) actively managing collaboration in the innovation ecosystem, including radically new setups of different actors, and (3) that managers need to carefully consider when and how to use goals and measurements in a circular strategy deployment, to foster both radical and incremental innovation.
... The internet facilitates two-way communication, transforming customers' positions from passive consumers to active co-creators [50]. Consequently, firms continuously use data gained from customers and other stakeholders to innovate their business models to meet expectations and demands. ...
These days, issues such as environmental degradation, the wealth gap, and unequal access to opportunities and resources are increasing. These concerns have increased the need for sustainable entrepreneurship, defined as sustainable business practices. Entrepreneurship is central in transitioning towards a more sustainable future, whereas aligning the social, economic, and ecological objectives and ecological entrepreneurs plays a role. This scoping literature review analyzes the field of sustainable entrepreneurship and the extent of the holistic integration in the global business arena, therefore filling a gap in the existing literature. It aims to analyze the depth of existing pieces of literature on sustainable entrepreneurship, its definitions, and its applications in business practices. The analysis relies upon a literature search on the SCOPUS database around the keywords ‘Sustainability’ and ‘Sustainable Entrepreneurship’. The scientific software VOSviewer is used to better illustrate the linkage of major categories and correspondent trends, related with both business growth and maintenance of ecological systems. It concludes that the desired levels of sustainability require collaborations between all stakeholders, while the transition towards service-oriented business models has contributed to the growth of sustainable entrepreneurship. Nevertheless, existing institutional structures favor current unsustainable businesses and systems over the newer sustainable ones, demanding ecopreneurs to initiate institutional changes.
... In the case of mobility for example, BMs that focus on delivering functionality rather than ownership require a new value proposition that refocuses on services rather than ownership, new arrangements for customers to pay for service use, and new types of networks to connect different users of shared physical resources (Bocken et al., 2014). While some authors have focused on changes in one or two BM components (Huijben et al., 2016), there is a growing understanding that changes across all three BM components, termed 'complex' BMI by Foss and Saebi (2017), are required to support sustainable innovation by addressing the core challenges new technologies pose to existing ways of doing business (Anderson and Kupp, 2008;Bidmon and Knab, 2018;Bocken et al., 2014;Sanchez and Ricart, 2010;Schaltegger et al., 2016). ...
Business model innovation (BMI) is often complementary to technological innovation and offers novel and sustainable value creation opportunities. Enabling BMI through policy is difficult, however, and not yet well understood in practice or theory. We build on the quickly evolving literature on policy mixes to develop a theoretical model which explains how policy strategies and instruments shape the conditions for BMI. We derive the model inductively by studying the emergence of an off-grid renewable energy BMI in sub-Saharan Africa which proposes to actively create sustainable development in rural areas as opposed to merely increase energy access, drawing from 61 interviews with companies and industry experts as well as policy documents across six African countries. Our model has three core theoretical implications. First, focusing on policy strategies, policy instruments and their respective interactions, we uncover a set of mechanisms that explain how policy mix elements combine to create conducive conditions for BMI. Second, we shed light on the role of multiple objectives and goals within a policy mix for fostering BMI, which, if balanced appropriately, can create a productive tension between support and constraints. Third, we suggest the distinction between sector-specific and society-wide policy mixes as an analytical tool to study these tensions in policy mix research.
... environmental value(Gregori et al., 2019;Lüdeke-Freund, 2020;Schaltegger et al., 2016). Wefurther consider business models as composed of and enacted by heterogeneous actors (Demil & Lecocq, 2015; Doganova & Eyquem-Renault, 2009), including central actors such as the entrepreneur, diverse stakeholders, and technology. ...
Sustainability and digitalization are two central discourses in entrepreneurship research, but only recently have they been discussed jointly. Scholars call for an integration of the previously disconnected research stream to investigate the transformative potential of digitalization to advance sustainable development. However, little effort has been devoted to such an integration leading to a fragmented field of research with a lack of consolidated knowledge. This article conducts a systematic review of the literature to unravel the state-of-the-art of digital sustainable entrepreneurship. We derive common themes of current work and discuss them in the light of promising theoretical perspectives to contribute to the integration of sustainability and digitalization in entrepreneurship research and offer promising avenues for future research.
... Additionally, Kindermann et al. [12] suggest that companies can overcome strategic challenges associated with the pervasiveness of digital technologies by adopting and maintaining a digital orientation. The business model perspective in the context of sustainability emphasizes the logic of creating value for the organization and its effects and potentially requires new forms of governance, such as cooperatives, public-private partnerships and social business, thereby helping to move beyond narrow horizons [35]. At the same time, the non-financial aspect of the company's sustainability is focused on long-term success and quality aspects of the business. ...
Despite the growing importance of digital transformation, empirical research on the drivers of digital transformation is still lacking, creating a knowledge gap. The purpose of this study is to explore the effect of digital orientation and digital capability on digital transformation, as well as the mediating effect of digital transformation on revenues and business models of SMEs during the COVID-19 pandemic. This paper examines a new conceptual framework designed on resource-based theory perspectives by using survey data of 246 SMEs in Latvia. To achieve the research purpose, this study used a mediation analysis to examine the direct effect of digital orientation and digital capability on digital transformation, as well as to explore the mediating effect of digital transformation
on SME outcomes. Our results reveal that both digital orientation and digital capability have direct positive effects on digital transformation. We also found that digital transformation has a positive mediating effect from digital orientation on revenue and business model, as well as from digital capability on revenue. These findings could be useful for policymakers, managers and practitioners to clarify how digital orientation and digital capability intermediated through digital transformation affect the outcomes of SMEs.
... First, one must consider the customer area, carefully observing the impact of products or services on health and wellness, support and satisfied needs (Schaltegger, Hansen, & L€ udeke-Freund, 2016). Customers are interested in corporate sustainability. ...
Purpose-Sustainable business model innovation (SBMI) is a change in the way a firm operates in order to create positive impacts or to reduce negative consequences for the environment and the society. The aim of this paper is to explain what pathways a firm can take when it implements a sustainable business innovation process in line with Sustainable Development Goals (SDGs). Design/methodology/approach-The article starts with the analysis of the existing literature about BMI and SBMI in order to extrapolate the main elements of these topics. Findings-Thanks to the combined information from academic and nonacademic sources, the study proposes a new framework. It is divided into three sectors: value proposition, value capture delivery and value capture according to the main studies about the business model. Research limitations/implications-Regarding theoretical implications, this study contributes to developing a theory of both BMI and sustainable innovation. Indeed it helps in the understanding of the dynamic vision about how the business model changes in order to incorporate triple sustainability. Practical implications-From a practical view, the paper can serve as a guideline for corporate reorganization. Originality/value-The new framework differs from some recent academic efforts first of all for its theoretical characteristics: BMI construct and not business model concept is the core of the framework. The business model represents the subject of innovation, not its vehicle. Another unique aspect that can be derived from the approach adopted is that it links theoretical with practical sources.
... Given the direct impact of economic effect on tourist activities is significant, most researchers directly view economic factors as the main driving force for the sustainable development of film-induced tourism, owing to the direct influence of economic effects on tourists' tourism activities (Horbach et al., 2013;Hojnik and Ruzzier, 2016). As been defined by researchers, sustainable economic development involves the exploration and innovation of business models, creating market opportunities, the processes of resolving unsustainable environmental and social problems (Schaltegger et al., 2016). When film-induced culture is continuously produced into cultural tourism products, the commercial interests of tourism sales promote the industrialization and gradually form a complete industrial chain-cultural tourism industry. ...
The tourism economy has become a new driving force for economic growth, and film-induced tourism in particular has been widely proven to promote economic and cultural development. Few studies focus on analyzing the inherent characteristics of the economic and cultural effects of film-induced tourism, and the research on the dynamic mechanism of the sustainable development of film-induced tourism is relatively limited. Therefore, from the perspective of the integration of culture and industry, the research explores the dynamic mechanism of sustainable development between film-induced culture and film-induced industry through a questionnaire survey of 1,054 tourism management personnel, combined with quantitative empirical methods. The conclusion shows that the degree of integration of culture and tourism is an important mediating role that affects the dynamic mechanism of sustainable development of film-induced tourism, and the development of film-induced tourism depends on the integration of culture and industry. Constructing a diversified industrial integration model according to local conditions and determining the development path of resource, technology, market, product integration, and administrative management can become the general trend of the future development of film-induced tourism.
... Second, scholars have increasingly demonstrated how conceptions of value encoded in measures of profit are socially constructed and relational (Graeber 2001;Retsikas and Marsden 2018). For this reason, reframing profit as an objective that can be attained through the adoption of more sustainable (or what are increasingly described as "circular") practices still fails to offer an explicit critique of the "value-creation logic" (Schaltegger et al. 2016) that underlies these conventional understandings of what profit is or how it might be attained (Jackson 2009). Finally, scholars have increasingly called attention to possibilities for "living well" that do not hinge on profit or economic growth, examining diverse expressions of communitarian and grassroots approaches to sustainable livelihoods (Kothari 2014;Kothari et al. 2014), or speculating how a downshift to not-for-profit business models could facilitate postgrowth transitions (Hinton 2020). ...
This article highlights the emergence of intentional communities known as ecovillages (ecoaldeas) in Mexico, exploring how humans seek to design sustainable futures in part by re-making rural livelihoods. Ecovillages are inherently speculative ventures, or as Burke and Arjona (2013) note, laboratories for alternative political ecologies, inviting—and indeed, necessitating—the reimagination of human lives with greater consideration for the natural world. In this sense, such communities might be understood as “exilic spaces” (O’Hearn and Grubačić 2016), in that they seek to build autonomous and self-sustaining agricultural, social, and economic systems while also reflecting a stance of resistance to neoliberal capitalist structures. At the same time, communities may also remain dependent on connections to broader regional or global markets in diverse and interconnected ways. Understanding ecovillages as diverse and emergent “worldings” (de la Cadena and Blaser 2018), I ask how these experimental social ventures reckon with their connections to the very systems they are positioned against. To trace out how communities negotiate this fragile space, this article is concerned with how ecovillagers spend their time at work—particularly when it comes to managing relationships with and between more-than-human beings. Drawing on participant observation with ecovillagers and more-than-human others they work with, I explore how the concept of “rentabilidad” (profitability) is differently constructed. To this end, I highlight ethnographic examples where rentabilidad is purposefully reconceptualized with more-than-human lives in mind; such a shift, I suggest, hinges on ecovillagers’ individualized relations with the beings they (imagine themselves) to care for.
... It has since evolved as an important concept, attracting wide public attention from the business environment and gradually increasing scholarly focus within BMfS literature (Menghwar and Daood, 2021). Schaltegger et al. (2015) proposed that BMfS describe, analyze, manage, and communicate a firm's value proposition to its stakeholders and how that value is created, delivered and retained, while maintaining or increasing natural, social, and economic capital beyond the firm's organizational boundaries. This definition reinforces the argument that CSV can stimulate BMfS. ...
Interest on the creation of sustainable value has recently increased as a response to global issues caused by traditional business-as-usual logic. Indeed, corporations pursuing profits and competitive advantage at the expense of social and environmental resources has become a source of pressing concern and institutionalized unsustainability needs to be reversed. To create sustainable value, a paradigm shift is required in who benefits from value creation: beyond customers, suppliers, and business partners, value should be created for an expanded range of stakeholders including governmental and non-governmental entities, local communities, and future generations. This study refers to unique value creation derived from business modeling for sustainability and the stakeholder theory perspective as a theoretical lens for understanding how sustainable shared value is created in the context of carbon capture and utilization. Using an exploratory, in-depth single case study of a microalgae cultivation project, the study gathers empirical evidence to show how engaging stakeholders around a common purpose can serve as a path to open new business opportunities for sustainable shared value. This study challenges the Friedman's assertion of shareholder profits and shows evidence of the power of creating shared value if a company adopts a purpose beyond profits. Through empirical findings on how embedding a sustainable purpose at the core can lead to business opportunities that provide shared value for multiple stakeholders, it outlines how a company can obtain value propositions that cater to economic, environmental, and societal balance in the drive to move toward a more sustainable society. This study thus contributes to the growing body of empirical literature on creating shared value and business models for sustainability. The findings are also relevant for various industry practitioners, presenting insights on sustainable value creation and business modeling for an industry plagued by high emissions and stakeholder pressure to do good.
... One of the greatest and most widely acknowledged challenges today for organizations is to operate a sustainable business model (Schaltegger, Hansen, & Lüdeke-Freund, 2016). In an organizational context, the (long-term) performance of an organization is signaled to the market, for example, by specific corporate social responsibility (CSR) activities (Zerbini, 2017). ...
This study takes a fresh look at the credibility of corporate communication in family firms, as compared to corporate communication in non-family firms, in voluntary sustainability reporting. In his pioneering work Hsueh (2018) discovered that family firms suffer from a credibility disadvantage in terms of their sustainability reporting efforts, from the point of view of external stakeholders. This is called the ‘credibility gap’. This finding however is in stark contrast to the superior trust attribution of external stakeholders towards family firms in the general family firm literature. Our replication study shows that indeed, family firms do not suffer from a credibility gap compared to their non-family firm counterparts. In fact, in our experimental extension we can show that family firms, when perceived as such, are considered to be benevolent, which in turn increases the credibility of their sustainability reporting from an external perspective. Thus, contrary to the original study by Hsueh (2018), we suggest that family firms have a credibility advantage over non-family firms when it comes to their sustainability reporting. Furthermore, our results suggest that this credibility advantage remains, even when tested with specific stakeholder roles (customers, job-seekers), and that it ultimately influences their interactions with the firm positively.
... More generally, companies interested in including the combination of economic, environmental and social aspects in their business can be said to be making a transition to a sustainable business model. Lüdeke-Freund et al. and Schaltegger et al. define the sustainable business model as "A business model for sustainability helps describing, analyzing, managing, and communicating (i) a company's sustainable value proposition to its customers, and all other stakeholders, (ii) how it creates and delivers this value, (iii) and how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries", [58,59] (p. 6). Adopting a sustainable business model requires innovation. ...
Today, innovation and sustainability in their broadest sense, which includes people (social dimension), the planet (environmental dimension) and profits (economic dimension), are increasingly intertwined. Integrating the sustainability dimension into the innovation of products, services, processes, technologies, business and organizational models requires an effort on the part of the company as it demands a different set of knowledge and skills than those needed to innovate in a traditional way. As a result, companies, in order to integrate the dimension of sustainability in their innovation processes, have felt the need to exploit knowledge, skills and technologies external to the organization itself, promoting what is called the process of open innovation. Since this field of field is only recently being explored, we conducted a literature review through bibliometric analysis on a sample of 93 scientific articles published between 2011 and today, April 2022. To achieve the purpose of this review, both quantitative (co-occurrence analysis) and qualitative analysis have been conducted. Four different research themes have been identified: sustainable open innovation and innovation performance, the role of technological capability for sustainable open innovation, business model perspective and sustainable open innovation and university collaboration. As far as future research is concerned, a mainline has been identified concerning the study of sustainable open innovation in the agri-food industry.
Recent developments, such as climate change, demographic change and resource scarcity, have forced companies to turn towards more sustainable resources, processes and products. Thus, their business models should be developed in a way that meets social, ecological and economic challenges. A vital part of this development process is the evaluation of business models against the background of sustainability targets during different phases of this process. This paper addresses the, thus far, largely neglected sustainability-related strategic evaluation in the earlier phases of business model development. Based on a sustainability-related canvas approach and concepts from strategic management theory, it suggests a method for sustainability-related strategic evaluation of business models as well as business model ideas and options. Therefore, a procedure for evaluation is presented and five main criteria are developed that should be taken into account: eligibility to create stakeholder’s benefit, market attractiveness, heterogeneity/singularity, permanence and eligibility to generate sustainability-oriented value.
Capítulo 2 del libro de próxima publicación "Para saltar con Red", en el que se describe la metodología AVIN (Análisis y Validación de Ideas de Negocio), enfocada a la elaboración de un modelo de negocio sostenible con apoyo de una aplicación informática que implementa la metodología. Este capítulo se centra en una definición operativa de modelo de negocio sostenible.
Although digital technology offers many sustainable business model opportunities, they are not always exploited. We argue that the framing of technology is still rarely considered a cognitive antecedent of business models for sustainability, despite that it offers insightful explanations, connecting technology's sustainability potential to its business model implementations. We conduct a qualitative multicase study of virtual power plants, adopted by seven incumbent companies in the German energy sector, and explore how they frame innovative digital technology, as well as how it affects their value propositions and the energy transition. Our research reveals several value proposition differences between two company groups. The first generates a single‐focused technological frame, concentrating on economic value. The second constructs a twofold digital and sustainable technological frame, resulting in additional socioenvironmental value components. Overall, companies that create a twofold frame operate as renewable energy enablers or system supporters and contribute to the energy transition.
This review article attempts to analyse the social issues that impact the performance of natural treatment systems (NTSs). An NTS is a decentralised wastewater treatment system found to be appropriate in developing countries due to its affordability and lower technicity. However, if socio-economic and institutional issues of community are ignored then NTSs may turn out to be unsuitable for developing countries. The article also takes a critical view on the extant literature which ignores the social cost of NTSs. The social cost of NTSs may be high as a decentralised system requires the engagement of various governmental agencies, research institutes and the community. The cost of engagement may make NTSs a socio-economically unattractive proposition. The article discusses the variables to be considered for the social cost-benefit analysis. It also discusses the implications of social cost-benefit analysis for appreciating the incentives and net benefits for collective actions at the community level. Social cost-benefit analysis can help overcome the initial difficulty of high financial cost and usher sustainability.
The global wine industry has recognized the benefits of embracing a more sustainable approach to be more competitive and resilient. However, evaluation of complex winegrowing systems and assessment of their sustainability performance remains a difficult task. In this paper, we use the Douro wine region in Portugal as a case study to test different benchmarking approaches to assess sustainability performance. Our findings revealed a greater sustainability of social and environmental components of the Douro vineyard farms, but the economic pillar shows weaknesses. We may assume that the Douro region demands a strategy to improve its economic stability, resilience, and adaptability to face future challenges (more adverse climate conditions, labor shortage, and increased costs). This work also emphasizes the need of the wine sector to increase and improve research on sustainability issues and evaluation frameworks to assess it, having always present the context where the winegrowing system operates.
Using a multi case‐study analysis, we shed light on the strategies, practices, and tensions of fund managers acting as impact investors. Results show that while some fund managers experience tension between the social and financial aspects of specific, although relevant, components of the business model, other fund managers experience challenges throughout the business model. The governance component emerges as the most relevant issue and this may help explain why impact washing is a key topic in the impact investing discussion. Relevant implications for practitioners and policy makers are also discussed.
Purpose
The purpose of this research is to examine the evolution of entrepreneurship, explain the reasons for why it is not contributing significantly to the global sustainability challenge and propose a new approach and business model to better enable it to do so.
Design/methodology/approach
The research adopts a grounded theory–style approach based on case study production and analysis using secondary data and, where appropriate, personal observation.
Findings
The paper concludes that entrepreneurship has failed to address the sustainability challenge because of its emphasis on “making as much money as possible” and its failure to appreciate that the planet is a system. It concludes that for any solution to be successful it must be based on systems thinking and should integrate or harmonise the traditional, separately applied approaches to entrepreneurship in order to produce a business model with a Triple Bottom Line, whereby Profit, Planet and People are in Harmony.
Research limitations/implications
While the proposed model is based on a real-life case, it needs to be tested in different politico-economic contexts and industry sectors. It has the potential, though, to impact very considerably the traditional thinking on entrepreneurship and its application.
Practical implications
The proposed new approach will have significant implications for entrepreneurship education and training, including the adoption of a stakeholder rather than shareholder approach to management.
Social implications
Sustainability is arguably the most urgent and critical problem facing contemporary society. The proposed model provides a potential solution to that problem, particularly at the local community level.
Originality/value
The research proposes a new approach to entrepreneurship that breaks with the Friedman (1970) mantra that the purpose of business is to “make as much money as possible”.
The objective of this work is to classify the innovation and sustainability of tourist destinations in Sinaloa through the ordered weighted average operator (OWA). The application of this method allows to order the recreation sites according to the relative importance of each criterion. The results indicate the city of Culiacán as the recreation place with the best levels in its evaluation, while the municipality of Cosalá turned out to be the lowest valued establishment. This information is useful for policy makers because they will be able to allocate their resources based on their areas of opportunity. Finally, the document demonstrates the application of the OWA operator to measure innovation and sustainability of tourist attractions in Sinaloa, Mexico.
Despite the urgency of decarbonising, the shipping sector has demonstrated a slow‐paced response to climate change challenges. Some frontrunner firms are engaged in sustainability‐oriented innovation processes. However, there is limited knowledge of how such processes emerge and contribute to societal sustainability transitions and what the role of technology is in companies' (re)orientation towards sustainable business models. This study contributes to filling these gaps through a comparative case study of the ongoing innovation process within an incumbent and a newcomer firm developing wind‐powered energy solutions for deep‐sea transportation. The study's findings bear implications for theory and practice. This paper's combination of a dynamic capabilities approach and a multi‐level perspective from sustainability transitions research is a conceptual novelty, enabling an understanding of the activities involved in the (re)orientation process towards sustainable business from a company's perspective, as well as broader societal and sustainability needs.
This book provides recent research on soft computing and fuzzy methodologies in innovation management and sustainability. The uncertainty in the business world is increasing. Significant changes are generated unexpectedly, so using fuzzy logic and soft computing methods allows us to create flexible scenarios adaptable to new realities. Within the book, we will find different applications of fuzzy methodologies that can apply to various topics such as sustainability, innovation, tourism, costs, exports, systems administration, among others.
The book's main contribution is the applicability of the various methodologies to specific cases, which allows generating a relationship between theory and practice. In addition, it has some bibliometric studies on various topics that give us a visualization of what has happened and where multiple topics are headed.
This book is recommended mainly for students who wish to know how the various fuzzy and soft computing tools can be taken to real situations, allowing a better understanding of these and generating new visions of future applicability.
Following the tradition of using opposing concepts as a basis for organisational analysis, this article advances a theory‐based understanding of incumbent firms in sustainability transitions. Building on seminal transition studies, we propose innovating/defending and collaborating/competing as two useful spectra to describe organisational behaviours in transitions. Presenting the automotive industry as an explanatory case, we show results from a systematic literature review that reveal motives for diverging behaviours. Combining the spectra into a 2 × 2 matrix, we then introduce four conceptualisations to explain the observed motives and behaviours. The conceptualisations are associated with different streams of organisation theory: dynamic capabilities and the resource‐based view, resource‐dependence theory, neo‐institutional theory and theories on organisational learning and path dependence. Referring to organisational ambidexterity, value configurations and political arenas, we conclude that transitions research can reach a more multifaceted understanding by challenging the prevailing notion of the firm as a coherent actor.
The concept of circular business models, defined as firm activities to create and capture value in a circular manner by, for example, extending or continuously reusing product materials, has received increasing attention in management research. The emerging literature, however, lacks theoretical underpinning and empirical findings are not cumulative. Therefore, this article analyzes existing and related research in much detail and presents a comprehensive research model on antecedents, moderators, and outcomes of circular business models. The theories and related research streams considered for the research framework include Institutional Theory, Managerial Cognition, Dynamic Capabilities, Corporate Social Responsibility, Business Model Innovation, and Ecosystems. Gaps within and across the respective research streams concerning circular business models are revealed, and relevant avenues for future research are suggested.
Introduction:
The uncertainty derived from the availability of natural resources require transformations in strategic management to adopt sustainable production practices without affecting competitive advantage.
Objective:
This research aims to analyze the behavior and evolution of trends in publications on strategic management for the adoption of sustainable production practices. The
Materials and methods:
used was Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) and a bibliometric study for 442 publications retrieved from the Scopus database. Indicators of quantity (Pareto's Law, Lotka's Law and Solla Price Law), quality (Impact, h-index), and structure (Co-occurrence and cluster) were analyzed. The
Results
identified as research trends: environmental innovation; circular economy; Green Supply Chain Management; and bio-economic cost models.
Conclusion:
Finally, eight clusters emerged: (1) Management and models of sustainability to face climate change; (2) Natural resources conservation; (3) Methodologies, models and strategies of sustainable production; (4) Circular economy and waste management in sustainable production; (5) Energy sources management in productive processes; (6) Education and water management; (7) Risks and uncertainty management; and (8) Public policies for sustainable production.
Purpose
The purpose of this study is to identify groups of manufacturing firms having different combinations of strategic orientation (market and technology orientations) and compare the viable groups for differences in their sustainable innovation (SI) performance.
Design/methodology/approach
A sample of 373 Italian manufacturing firms is clustered (using non-hierarchical cluster analysis) based on their combinations of market orientation (MO) and technology orientation (TO). Subsequently, the one-way between-groups analysis of variance (ANOVA) with post-hoc tests is conducted to detect how the resulting groups differ in their SI performance.
Findings
The synergistic co-alignment of TO with both dimensions of MO (i.e. responsive and proactive) can help firms enhance their performance regarding SI. Amongst the groups of manufacturing firms identified in the context of this research, ‘future-oriented entrepreneurs’ appear to represent the strongest combination of MO with TO, leading them to achieve higher levels of SI performance.
Research limitations/implications
This study, by referring to a survey-based empirical study of manufacturing firms in Italy, extends the literature by arguing that higher levels of balanced TO–MO results in greater SI performance. To confirm and extend the results of this work, future research should assess the examined combinations of orientations in other contexts, and with respect to other performance variables (e.g. sustainable entrepreneurship).
Practical implications
By recognizing the real value of foresight practices, manufacturing firms should be equipped with organizational capabilities that enable them to systematically predict potential discontinuities, explore the future and simultaneously maximize their innovation and technology capacity. The findings of this research provide insights to managers on how to invest in resources linked to different configurations of MO and TO so that they can lead to the improvement of sustainability-oriented innovation performance.
Originality/value
This work represents a first attempt to explore the viable combinations of MO (including responsive and proactive dimensions) with TO in the manufacturing context, and to investigate how these combinations contribute to different levels of SI performance.
Equity crowdfunding is a form of capital market concerning the online offering of private company securities to a group of people for investment. Over the years, it has emerged as a valid financing alternative for sustainability‐oriented startups to conventional sources of funding to support their establishment and growth. This research explores the role that the elements of sustainable business models (SBM), which creates, delivers, and captures value for all its stakeholders without depleting the natural, economic, and social resources it relies on, can play as success discriminants of equity crowdfunding campaigns. A configuration approach was selected, and Fuzzy Set Qualitative Comparative Analysis (fsQCA) was used to investigate the causal configurations of 33 crowdfunding campaigns posted on the six most popular Italian equity crowdfunding platforms from 2014 to 2020. The analysis revealed that the SBM elements, and combinations of them, can positively affect the outcome of a campaign. Results also show that negative outcomes may be primarily due to campaign‐related features, such as high minimum investment requirements and high funding target.
Product-Service Systems (PSS) are offered to deliver superior value propositions to customers while achieving better results for business organizations. To achieve these benefits, PSS business models should be designed to cover improvements in sustainability's economic, environmental, and social dimensions. Nevertheless, these sustainable aspects regarding PSS business model are dispersed in the literature and generally not considered when developing a PSS. In this sense, this study is a conceptual literature review aiming to synthesize PSS and business model publications from a sustainable value perspective. The review was developed in three stages to cover a diversity of publications on PSS and business model. Based on the literature content analysis, this paper deals with PSS value architecture components: value proposition, creation, delivery, capture, and value network. A set of opportunities to enhance sustainable production and consumption were pointed out with regard to the PSS business model's value architecture components and sub-components. Creating sustainable value propositions could be improved by maximizing utilization of resources and skills, employing effective operations, and aligning the product-service system solution with the triple concern people-planet-profit. The developed framework aims at contributing to both the development of theory on PSS and servitized business models. In addition, the framework also contributes to enhance PSS business models focusing on sustainable and responsible practices.
Impact investments have the dual goals of generating profit and environmental and/or social impact from the same project or enterprise. This article examines recent impact investments in biodiversity conservation—specifically, debt finance in the form of conventional bonds and impact bonds. The proceeds of these bonds finance projects aiming to enhance forest management, sustainable agriculture, endangered species protection, ecosystem service provision, and nature‐based solutions to climate change such as REDD+. The article scrutinises whether these dual goals are achievable by evaluating the financial risks and impact risks within each bond's theory of change. Risks stem from projects with vague cashflow forecasts, project sites with low or ambiguous threat statuses, and simplified impact metrics that may measure activities or outputs—rather than impact. Risk mitigation strategies involve using baselines and counterfactuals to establish additionality, and guarantors to protect investors if revenues are insufficient. Implications for biodiversity management and for‐profit conservation are discussed.
From the 1970s, a number of tools, initiatives, and approaches (TIAs) have been developed to foster and implement sustainability. These have evolved from purely “end-of-pipe” solutions (which are usually costly and inefficient) towards whole-system approaches, by changing products, processes, services, and systems, so that waste is minimised and resources used more efficiently and effectively, in almost closed loops. Twenty-four TIAs have been widely used and researched. These can be divided according to their focus on (1) operations and production (circular economy (CE), design for the environment (DfE), eco-efficiency, Factor X, green chemistry, industrial ecology, and life cycle assessment); (2) management and strategy (corporate citizenship (CC), corporate social responsibility (CSR), (more) sustainable business models (SBMs), sustainable/socially responsible investment (SRI), the natural step (TNS), and the triple bottom line (TBL)); (3) supply chain (eco-labelling, sustainable marketing (SM), sustainable livelihoods (SL), and sustainable supply chains (SSC)); and (4) assessment and reporting (environmental and social accounting (ESA), environmental management systems (EMS), integrated management systems (IMS), and sustainability reporting (SR)). The majority of the TIAs have focused on the economic and environmental dimensions and on technocentric and managerial ploys. The TIAs have been limited in addressing all the system elements of organisations, since they have neither been selected nor used explicitly to address the governance, organisational systems, service provision, or change management system elements. Each TIA has advantages with respect to the sustainability dimensions and contribution to an organisation’s system elements, but it also has limitations in its scope and reach. Relying on one initiative can result in a limited and narrow contribution to sustainability and curtail overall coverage of the company’s system, while using too many tools wastes resources and energy due to duplication in tasks. None of the TIAs, on its own, covers the full organisation system, or the four dimensions of sustainability (economic, environmental, social, and time). Therefore, a combination of TIAs is needed, which capitalises on synergies and address the sustainability dimensions and the organisation’s system elements.
The central aim of this study was to create a vector typology of corporate development models in the context of sustainability. The methodological basis for its achievement was represented by a systematic review of the literature describing the origins of sustainability models and the identification of the most prioritized SDGs in business and society. As the central methodological tools to determine a competitive sustainability model, classification analysis and grounded theory method were used. The research revealed that the stakeholder-centered model is the best solution to perform competitive corporate management in the context of sustainability. Stakeholder-centered model can be expanded by including social and ethical parameters, as well as giving consideration to innovations.
Whether and how “sustainable business models” effectively support sustainable development is not just a matter of design, but also of the measurability and manageability of business model effects. While the interrelations between organisations’ sustainability performance and their business models is discussed in an increasing number of academic and practice publications, appropriate management approaches for the deliberate assessment and management of business models and their expected contributions to a sustainable development of the natural environment and human society are currently not available. Therefore, this chapter discusses this research gap and proposes a conceptual framework for sustainability-oriented business model assessments.
While business model innovation has been widely accepted as an innovation category on its own, its problem-solving potential is still unexplored. We argue that business model innovation can be applied beyond single firms, i.e. on the value network level, to find systemic solutions to " wicked " problems. A framework and method for sustainable business model innovation for value networks are proposed: the former building on the concept of normative management, the latter on a " mainstream " business modelling tool. This method was applied and evaluated in a workshop series on regional energy networks in Germany. We review the literature on sustainable business models, provide the theoretical background of normative innovation management, describe the workshops, and reflect on the lessons learned from theory and practice. We conclude that the best starting point for systemic sustainability innovations lies beyond single firms within networks built on shared goals and normative values.
Pressures on business to operate sustainably are increasing. This requires companies to adopt a systemic approach that seeks to integrate consideration of the three dimensions of sustainability – social, environmental, and economic – in a manner that generates shared value creation for all stakeholders including the environment and society. This is referred to as sustainable business thinking. The business model concept offers a framework for system-level innovation for sustainability and provides the conceptual linkage with the activities of the firm such as design, production, supply chains, partnerships, and distribution channels. A value mapping tool has been presented in the literature to assist in sustainable business model innovation. This study explores the use of value mapping for broader sustainable business thinking, by reflection on its use in workshop settings. A range of new applications is identified which is expected to be of interest to business practitioners, policy makers, and academic researchers.
Social entrepreneurship research often relies on presenting narratives of organisations that integrate various actors, actions, contextual elements and outcomes without a clear perspective on why these elements were selected and what can be learned from them. This paper provides a transparent and systematic process of modelling organisations and proposes a validity triangle that adequately integrates analytical, theoretical and ontological dimensions. An illustrative case study demonstrates the choices involved in a valid modelling process. It also illustrates the steps involved in building a generative model of a social enterprise that accounts for the mechanisms that explain how the focal organisation achieves multiple strategic objectives.
Grameen bank, founded in 1976, has both pioneered the development of micro-finance, and created nearly 30 businesses designed to alleviate poverty. The article traces the gradual development of Grameen’s expertise in formulating social business models, which require new value propositions, value constellations and profit equations, and as such, resembles business model innovation. The article presents five lessons learned from this experience: three are similar to those of conventional business model innovation: challenging conventional thinking, finding complementary partners and undertaking continuous experimentation; two are specific to social business models: recruiting social profit-oriented shareholders, and specifying social profit objectives clearly and early. We suggest these new business models - where stakeholders replace shareholders as the focus of value maximization - could empower capitalism to address overwhelming global concerns.
Eco-innovations, eco-efficiency and corporate social responsibility practices define much of the current industrial sustainability agenda. While important, they are insufficient in themselves to deliver the holistic changes necessary to achieve long-term social and environmental sustainability. How can we encourage corporate innovation that significantly changes the way companies operate to ensure greater sustainability?
Sustainable business models (SBM) incorporate a triple bottom line approach and consider a wide range of stakeholder interests, including environment and society. They are important in driving and implementing corporate innovation for sustainability, can help embed sustainability into business purpose and processes, and serve as a key driver of competitive advantage.
Many innovative approaches may contribute to delivering sustainability through business models, but have not been collated under a unifying theme of business model innovation. The literature and business practice review has identified a wide range of examples of mechanisms and solutions that can contribute to business model innovation for sustainability. The examples were collated and analysed to identify defining patterns and attributes that might facilitate categorisation.
Sustainable business model archetypes are introduced to describe groupings of mechanisms and solutions that may contribute to building up the business model for sustainability. The aim of these archetypes is to develop a common language that can be used to accelerate the development of sustainable business models in research and practice. The archetypes are: Maximise material and energy efficiency; Create value from ‘waste’; Substitute with renewables and natural processes; Deliver functionality rather than ownership; Adopt a stewardship role; Encourage sufficiency; Re-purpose the business for society/environment; and Develop scale-up solutions.
The aim of this paper is to advance research on sustainable innovation by adopting a business model perspective. Through a confrontation of the literature on both topics we find that research on sustainable innovation has tended to neglect the way in which firms need to combine a value proposition, the organization of the upstream and downstream value chain, and a financial model, in order to bring sustainability innovations to the market. Therefore, we review the current literature on business models in the contexts of technological, organizational, and social sustainability innovations. As the current literature does not offer a general conceptual definition of sustainable business models, we propose examples of normative 'boundary conditions' that business models should meet in order to support sustainable innovations. Finally, we sketch the outline of a research agenda by formulating a number of guiding questions.
A considerable body of literature deals with the creation of economic value while increasing corporate environmental and social performance. Some publications even focus on the business case for sustainability which aims at increasing corporate economic value through environmental or social measures. The existence of a business case for sustainability is, however, mostly seen as an ad hoc measure, a supplement to the core business, or simply a coincidence. As a contrast, this paper argues that business model innovations may be required to support a systematic, ongoing creation of business cases for sustainability. A framework for business model innovation is proposed as a means to strategically create business cases on a regular basis as an inherent, deeply integrated element of business activities.
According to one perspective, organizations will only be sustainable if the dominant neoclassical model of the firm is transformed, rather than supplemented, by social and environmental priorities. This article seeks to develop a "sustainability business model" (SBM)-a model where sustainability concepts shape the driving force of the firm and its decision making. The SBM is drawn from two case studies of organizations considered to be leaders in operationalizing sustainability and is informed by the ecological modernization perspective of sustainability. The analysis reveals that organizations adopting a SBM must develop internal structural and cultural capabilities to achieve firm-level sustainability and collaborate with key stakeholders to achieve sustainability for the system that an organization is part of.
This paper proposes a model of how incumbents and new entrants engage in sustainable entrepreneurship. We suggest that in the early stages of an industry's sustainability transformation, new entrants (‘Emerging Davids’) are more likely than incumbents to pursue sustainability-related opportunities. Incumbents react to the activities of new entrants by engaging in corporate sustainable entrepreneurship activities. While these ‘Greening Goliaths’ are often less ambitious in their environmental and social goals, they may have a broader reach due to their established market presence. This paper analyses the interplay between ‘Greening Goliaths’ and ‘Emerging Davids’ and theorizes about how it is their compounded impact that promotes the sustainable transformation of industries.
This paper aims to clarifyi the concept of business models, its usages, and its roles in the Information Systems domain. A review of the literature shows a broad diversity of understandings, usages, and places in the firm. The paper identifies the terminology or ontology used to describe a business model, and compares this terminology with previous work. Then the general usages, roles and potential of the concept are outlined. Finally, the connection between the business model concept and Information Systems is described in the form of eight propositions to be analyzed in future work.
The article is intended as a contribution to the ongoing conceptual development of corporate sustainability. At the business level sustainability is often equated with eco-efficiency. However, such a reduction misses several important criteria that firms have to satisfy if they want to become truly sustainable. This article discusses how the concept of sustainable development has evolved over the past three decades and particularly how it can be applied to the business level. It then goes on to describe the three types of capital relevant within the concept of corporate sustainability: economic, natural and social capital. From this basis we shall then develop the six criteria managers aiming for corporate sustainability will have to satisfy: eco-efficiency, socio-efficiency, eco-effectiveness, socio-effectiveness, sufficiency and ecological equity. The article ends with a brief outlook towards future research.
Part I - Introduction.- The Emergence of Green Business Models.- Purpose of this Work and Research Approach.- Part II - Theoretical Foundation of Green Business Model Transformations.- Environmental Sustainability in Business.- The Business Model Concept as a Unit of Analysis for Management Science.- Towards a Taxonomy of Green Business Models.- Organisations, Change, and Innovation.- Part III - Towards a Practical Management Approach.- A Survey on Green Business Model Transformations.- Managerial Implications of Survey Results.- Managing Green Business Model Transformations - A Framework for Management Practice.- Part IV - Conclusion and Outlook.- Conclusion and Outlook.
This present book offers a unique view on innovativeness and competitiveness that improve when organizations establish alliances with partners who have strong capabilities and broad social capital, allowing them to create value and growth as well as technological knowledge and legitimacy through new knowledge resources. Additionally, the value of digital technology, at both personal and industrial levels, leads to new opportunities that emerge for creating experiences, processes, and organizational forms that fundamentally reshape organizations. For example, organizational intelligence systems have become versatile to accumulate internal information and environmental changes, utilizing the insights that emerge by the transformation of data with the knowledge of the strategic value. Moreover, this book aims to show that organizational resilience is linked to organizational competitiveness and robustness via organizational intelligence and knowledge, information and data analytics for organizational intelligence competences and capabilities.
The relevance of business models for corporate performance in general and corporate sustainability in particular has been widely acknowledged in the literature while sustainable entrepreneurship research has started to explore contributions to the sustainability transformation of markets and society. Particularities of the business models of sustainable niche market pioneers have been identified in earlier research, but little is known about the dynamic role of business models for sustainable entrepreneurship processes aiming at upscaling ecologically and socially beneficial niche models or sustainability upgrading of conventional mass market players. Informed by evolutionary economics, we develop a theoretical framework to analyze co-evolutionary business model development for sustainable niche pioneers and conventional mass market players aiming at the sustainability transformation of markets. Core evolutionary processes of business model variation, selection and retention, and evolutionary pathways are identified to support structured analyses of the dynamics between business model innovation and sustainability transformation of markets.
The concept of business models has reached global impact, both for company's competitive success and in management science. Its application by authors from diverse areas has led to a previously very heterogeneous comprehension of the concept. Yet, by means of investigating its origin and theoretical development, we state a recently converging business model view. Further, based on analyzing business model definitions, perspectives and components in the literature, we newly define the concept and portray its essential components in an integrated framework. Finally, the compilation of the current state of business model research yields the article's main findings. In this regard, via database search we quantitatively identify 681 peer-reviewed articles. Further, we qualitatively analyze them according to individual research areas that we adopt from an appropriate heuristic frame of reference. In this way, we identify four essential research foci: innovation, change & evolution, performance & controlling and design. In triangulation with assessing future research perspectives through a survey of twenty-one international experts, they also consider the areas of innovation, change & evolution, and design to be significant for the future development of the business model research field.
This paper explores the relationship between micro-economic business models, economic structure, and locally sustainable prosperity. In this respect, the paper takes as a premise the contention that sustainable mobility requires a sustainable industry to create the vehicles and business models to deliver that mobility. The interactions between locality and scale are explored within the context of the anti-globalisation discourse. Thereafter, the paper provides a brief outline of some business models from the automotive industry where alternatives to the monolithic and centralised structure of the mainstream industry have been proposed.
Sustainability challenges are complex. So are the challenges that business firms encounter in their corresponding quest for corporate sustainability. Given this complexity, there is a need for new approaches to corporate sustainability management research. We discuss transdisciplinarity as such a novel approach in three steps. After showing that specialization is the primary conventional response to increasing complexity, we first briefly compare how inter-, multi-, and trans-disciplinarity reintegrate decentral, specialized knowledge. The second step describes how the emerging sustainability science has recently advanced the transdisciplinary methodology. Based on the two dimensions of interdisciplinarity and academia-practice collaboration, we thirdly, generate a framework for mapping existing research approaches in terms of their transdisciplinary qualities. We use this framework to identify room for novel methodologies in sustainability management research.
Management studies on corporate sustainability practices have grown considerably. The field now has significant knowledge of sustainability issues that are firm and industry focused. However, complex ecological problems are increasing, not decreasing. In this paper, we argue that it is time for corporate sustainability scholars to reconsider the ecological and systemic foundations for sustainability, and to integrate our work more closely with the natural sciences. To address this, our paper introduces a new development in the natural sciences – the delineation of nine ‘Planetary Boundaries’ which govern life as we know it – including a call for more systemic research that measures the impact of companies on boundary processes that are at, or possibly beyond, three threshold points – climate change, the global nitrogen cycle (N), and rate of biodiversity loss – and closing in on others. We also discuss practical implications of the Planetary Boundaries framework for corporate sustainability, including governance and institutional challenges.
This paper explores the role of the business model in capturing value from early stage technology. A successful business model creates a heuristic logic that connects technical potential with the realization of economic value. The business model unlocks latent value from a technology, but its logic constrains the subsequent search for new, alternative models for other technologies later on-an implicit cognitive dimension overlooked in most discourse on the topic. We explore the intellectual roots of the concept, offer a working definition and show how the Xerox Corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day. We then show the long shadow that this model cast upon Xerox's later management of selected spin-off companies from Xerox PARC. Xerox evaluated the technical potential of these spin-offs through its own business model, while those spin-offs that became successful did so through evolving business models that came to differ substantially from that of Xerox. The search and learning for an effective business model in failed ventures, by contrast, were quite limited.
The ambiguity around model-based science is witnessed by the proliferation of meanings of the term business model. We argue that a clearer specification of the analytical, theoretical and ontological validity of models is an opportunity to learn about and understand complex organizational phenomena more systematically. We apply this to research on social entrepreneurship and pro-poor business models that has been criticized as being atheoretical and conceptually ambiguous. Business models are presented as narratives that integrate various actors, actions, stories, and outcomes without a clear perspective of why these elements were selected and what we can learn from them. This paper outlines an explicit modeling process as an investigative tool that enables transparent and systematic theorizing of business models. Using an illustrative case study, we develop a generative model that accounts for the social mechanisms that explain how business models achieve multiple strategic objectives and multiple dimensions of economic and social value creation.
The purpose of this paper is to propose a framework to position sustainable entrepreneurship in relation to sustainability innovation. The framework builds on a typology of sustainable entrepreneurship, develops it by including social and institutional entrepreneurship, i.e. the application of the entrepreneurial approach towards meeting societal goals and towards changing market contexts, and relates it to sustainability innovation. The framework provides a reference for managers to introduce sustainability innovation and to pursue sustainable entrepreneurship. Methodologically, the paper develops an approach of qualitative measurement of sustainable entrepreneurship and how to assess the position of a company in a classification matrix. The degree of environmental or social responsibility orientation in the company is assessed on the basis of environmental and social goals and policies, the organization of environmental and social management in the company and the communication of environmental and social issues. The market impact of the company is measured on the basis of market share, sales growth and reactions of competitors. The paper finds conditions under which sustainable entrepreneurship and sustainability innovation emerge spontaneously. The research has implications for theory and practitioners in that it clarifies which firms are most likely under specific conditions to make moves towards sustainability innovation. The paper makes a contribution in showing that extant research needs to be expanded with regard to motivations for innovation and that earlier models of sustainable entrepreneurship need to be refined. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management's hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory.
We explore different business ventures in low-income markets in order to understand the factors influencing business model innovation in this context. Grounded in the rich data obtained from multiple case study analyses and in the received theory in strategy in low-income markets and business models, we identified a set of contingency factors that permitted us to distinguish between isolated and interactive business models. Isolated business models widen its entrance into new markets by leveraging firm's current resources and capabilities for taking advantage of existing opportunities. Interactive business models require a firm to combine, integrate and leverage both internal resources with ecosystem's capabilities to create new business opportunities. Finally, we discuss the main implications on value creation from these business models.
Corporations increasingly subscribe to the principles of corporate sustainability, which is generally described as the integration of economic, environmental and social dimensions. Concerning innovation management, this emphasises the role of sustainability-oriented innovations (SOI). SOI is considered a tool both to address sustainability issues and to tap into new customer segments and markets. Yet SOI are very risky: both their market success and non-economic sustainability are uncertain. This paper presents a generic model termed the "Sustainability Innovation Cube" (SIC) for structuring innovations' sustainability effects in order to better inform corporate decision-makers about how to minimize the directional risk of SOI. The model includes the three dimensions: target, life cycle and innovation type. A qualitative expert study reveals the opportunities and challenges related to the developed model. Finally, practical implications are derived, limitations are discussed and a brief outlook is given.
"Business model" was one of the great buzz-words of the Internet boom. A company didn't need a strategy, a special competence, or even any customers--all it needed was a Web-based business model that promised wild profits in some distant, ill-defined future. Many people--investors, entrepreneurs, and executives alike--fell for the fantasy and got burned. And as the inevitable counterreaction played out, the concept of the business model fell out of fashion nearly as quickly as the .com appendage itself. That's a shame. As Joan Magretta explains, a good business model remains essential to every successful organization, whether it's a new venture or an established player. To help managers apply the concept successfully, she defines what a business model is and how it complements a smart competitive strategy. Business models are, at heart, stories that explain how enterprises work. Like a good story, a robust business model contains precisely delineated characters, plausible motivations, and a plot that turns on an insight about value. It answers certain questions: Who is the customer? How do we make money? What underlying economic logic explains how we can deliver value to customers at an appropriate cost? Every viable organization is built on a sound business model, but a business model isn't a strategy, even though many people use the terms interchangeably. Business models describe, as a system, how the pieces of a business fit together. But they don't factor in one critical dimension of performance: competition. That's the job of strategy. Illustrated with examples from companies like American Express, EuroDisney, WalMart, and Dell Computer, this article clarifies the concepts of business models and strategy, which are fundamental to every company's performance.
This paper explores the role of the business model in capturing value from early stage technology. A successful business model creates a heuristic logic that connects technical potential with the realization of economic value. The business model unlocks latent value from a technology, but its logic constrains the subsequent search for new, alternative models for other technologies later on--an implicit cognitive dimension overlooked in most discourse on the topic. We explore the intellectual roots of the concept, offer a working definition and show how the Xerox Corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day. We then show the long shadow that this model cast upon Xerox's later management of selected spin-off companies from Xerox PARC. Xerox evaluated the technical potential of these spin-offs through its own business model, while those spin-offs that became successful did so through evolving business models that came to differ substantially from that of Xerox. The search and learning for an effective business model in failed ventures, by contrast, were quite limited. Copyright 2002, Oxford University Press.
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