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Sustainable Business Model and Supply Chain Conceptions – Towards an Integrated Perspective

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Abstract

Supply chains and business models are of general importance for any company. Due to these concepts’ overarching and interlinking nature, they are of particular importance for companies engaging in sustainable entrepreneurship and sustainability management. These companies look over the rim of their organizations’ boundaries—motivating research and practice dealing with sustainable supply chains (SSCs) and sustainable business models (SBMs). SSCs and SBMs come from different origins and use, but are highly interrelated, both in theory and practice, one building in part on the other often without recognition by scholars and practitioners in both fields. Therefore, this chapter compares the main characteristics of SSCs and SBMs as discussed in current academic literature and investigates the conceptual similarities, differences and areas where both can complement each other. Sustainability-oriented extensions of supply chain and business model concepts are meant to bring together multiple stakeholders, their needs and perceptions of value, going beyond suppliers and customers and including local communities (e.g. in the case of social business models) or post-consumer actors (e.g. in the case of closed-loop supply chains). Because of their shared potential to foster multi-stakeholder perspectives on value creation, particular analogies between supply chains and business models can be discerned. A framework is introduced comparing both concepts, highlighting their complementary and distinguishing characteristics. The resulting integrated perspective on value creating activities provides more clarity for those engaging in conceptual and practical SSC and SBM design and management.

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... setting fair wages and reasonable working hours with appropriate overtime payments, eliminating gender discrimination and harassments, improve working conditions, ensuring worker rights and reducing health and safety risks) can be difficult to measure because of its subjective and qualitative nature (Pullman et al., 2009). In addition, social sustainability may require investment without a guarantee of financial return on investment (Lüdeke-Freund et al., 2016). ...
... This is because, social benefits are considered less tangible with subjective and qualitative indicators, and social sustainability is often contained within relationships rather than processes (Dempsey et al., 2011). Additionally, social sustainability outcomes may require investment without a guaranteed return on investment (Lüdeke-Freund et al., (2016). Even the implementation of social initiatives can increase indirect costs in the short term ( Wu and Pagell, 2011). ...
... These reviewed literatures bring many conceptual and empirical contributions to the theory and practices of the overall SSCM field. Table 4.5 Social sustainability related subjects and reviews of literature in SSCM field Social sustainability related subjects Literature reviews within SSCM Definition and concept of social sustainability Elkington (1997), Dyllick and Hockerts (2002), Giddings et al. (2002), Grinde and Khare (2008), Seuring and Müller (2008), Carter and Rogers (2008), Carter and Easton (2011), Pagell and Wu (2009), Pullman et al. (2009), Pullman and Dillard (2010), Cetinkaya (2011), Ashby et al. (2012), Dillard et al. (2012), Seuring and Gold (2013), Touboulic and Ejodame (2016), Touboulic and Walker (2015), Missimer et al. (2016), Lüdeke- Freund et al. (2016), Varsei (2016) Social issues: child labour in the sweat shops, poor working conditions, low wages and long working hours, workers' rights and health and safety risks The literature review was conducted in two phases. The first phase was dedicated to the overall field of SSCM (see chapter 2 section 2.1) and involved using a preliminary set of keywords: sustainable supply chain management, social sustainability, sustainable sourcing, socially sustainable sourcing, sustainability performance (see table 4.5). ...
... The institutional vulnerability of the region tends to be heightened by the presence of corruption and informal markets, the latter of which Vassolo et al. (2011) considered to be a cornerstone of Latin American economies, as these informal business activities sustain the economy and society. In their five-step model of SCS, Lüdeke-Freund et al. (2016) acknowledged that being aware of the institutions in which SCs are embedded (i.e. industry, socio-economic context, traditions and customs, culture, language, laws and regulations, stakeholders, values, beliefs and norms) is the first step toward developing In the same vein, Silvestre (2015) used institutional analysis to discuss the structure of a specific sector in Brazil. ...
... For instance, when sustainability in Amazonia is only possible in terms of the working conditions and the current dynamic of the workforce in the region (Paper 6), it influences the traditions and customs (Lüdeke-Freund et al., 2016); that is, it creates impacts affecting the sustainability of SCs. ...
... Specificities could be highlighted, as argued by Lüdeke-Freund et al. (2016), by combining research and practice on SCS and business models. This approach is relevant to considering the socio-economic and institutional environment where companies and other stakeholders are embedded in order to create value not only for wealthy ...
Purpose: The majority of the supply chain sustainability (SCS) literature is based on research perspectives and findings from studies conducted in developed countries. The aim here is to analyse the current Latin American publications on SCS (2007–2016) to explore whether another perspective exists. Design/methodology/approach: As part of a structured literature review, 123 peer-reviewed articles published in four Latin American databases were scanned. This literature review was combined with a qualitative content analysis using an inductive and deductive approach to move away from top-down approaches and to illuminate the Latin American perspective on SCS. Findings: The analysis of the scientific literature demonstrates that the traditional three pillars of sustainability are not enough to understand the specificities of the region. This review shows that cultural and institutional dimensions enhance the understanding of SCS locally. In addition, three major triggers for SCS in Latin American economies were found: 1) green supply chain management practices, 2) local development and 3) stakeholder engagement. Research limitations/implications: A deeper understanding of the Latin American perspective can support scholars worldwide in developing the field of SCS in relevant directions and in comprehending the specificities of their own countries by infusing cultural and institutional elements into their conceptualisations of SCS. Originality/value: This paper provides an unexplored perspective on SCS because it analyses Latin American publications; it presents a mapping of current SCS issues and research gaps that offers insights to guide future research in the field.
... Consequently, the management of an SBM needs to exceed the organization-centric value creation perspective of the focal firm and include the inter-organizational perspective of the supply chain (Gold et al., 2010). According to Lüdeke-Freund et al. (2016), however, the complementarities between the two concepts -SBM and SSCMhave so far only been addressed sparsely in the literature while scholars from either field refer to the each other in a general manner, only (e.g., Boons & Lüdeke-Freund, 2013;Lozano, 2018;Pagell & Wu, 2009). Although agreement exists that an SBM needs to consider all stakeholders involved (Freudenreich et al., 2020), the implicit focus of the literature on direct stakeholder relationships implies that indirect relationships to more distant stakeholders are less relevant for SBMs. ...
... (e.g.,Lüdeke-Freund et al., 2016) do not explicitly consider indirect supply chain stakeholders of a focal firm and, therefore, have limited utility for the analysis of sustainable business models. Thus, a differentiated framework for the description and analysis of SBMs that also considers indirect supply chain stakeholders and polyadic value creation relationships (e.g.,Dyer & Singh, 1998) is needed. ...
... Advancing the comparison of SBMs and SSCM byLüdeke-Freund et al. (2016),Table 1provides a comparison and overview of the possible complementarities. Both concepts take social and ecological impacts into account and assume responsibility toward stakeholders (e.g.,Seuring & Müller, 2008b;Stubbs & Cocklin, 2008). ...
Article
Full-text available
Extant literature on sustainable business models highlights that value creation stems from resources exchanged in relationships between a focal firm and its stakeholders. In this context, the literature has, so far, focused on direct relationships. However, despite the acknowledged relevance of sustainability issues in supply chains, this relational view of the focal company and its direct stakeholders has not been extended toward value creation for and with indirect stakeholders, such as stake-holders of suppliers. Addressing this gap, this conceptual article integrates a relational view of sustainable supply chain management into the management of sustainable business models. It extends the scope of sustainable business models from relationships between the focal firm and its direct stakeholders to indirect relationships with stakeholders of suppliers. A framework is developed that supports analysis and management of value-creating relationships between the focal firm, suppliers, and stake-holders of suppliers. By extending the conceptualization of sustainable business models to consider relationship chains beyond direct relationships, this article proposes that a focal firm has to actively manage interactions both with suppliers and with suppliers' stakeholders. K E Y W O R D S business model, corporate sustainability, integrated framework, multi-tier supply chain, relational view, stakeholders, sustainable supply chain management, value creation
... As pointed out by Storbacka et al. (2012), Lüdeke-Freund et al. (2016, studying value creation from a network perspective could provide a better understanding of what it means and for whom value is created. SCs are one type of networks that is gaining attention to create sustainable value (e.g., Naomi et al., 2018), since SC are a network of firms and each of these firms have their own business models (Trkman et al., 2015). ...
... In the SBM field, researcher also worked towards the understudied link between SCV and SSCM (Lüdeke-Freund et al., 2016) to address both firms' direct and indirect suppliers and highlight that suppliers contribute to value creation (Norris et al., 2021). However, Norris et al. (2021) take a focal company perspective and do not address the role of procurement in creating sustainable value. ...
Article
Sustainable value creation is a term that is widely used in sustainable business model literature, and it is gaining importance in other management fields. While there is still confusion on the meaning of this concept, researchers encourage studies that take a network perspective to generate new knowledge and a better understanding of it. In this paper, we address this call by taking a supply chain perspective, which is a type of network, and by focusing on one specific supply chain activity: procurement. Through a single case study of a French multinational, we investigate who creates sustainable value and for whom, taking a stakeholder theory lens. The case study is based on an inductive and qualitative-driven mixed-methods approach, involving interviews of key procurement and sustainability employees, ethnographic observation, and content analysis to provide new knowledge in both the sustainable business model and sustainable supply chain management fields. The findings provide empirical data that show, in the case of the firm studied, that the procurement function has a key role to play to create sustainable value for multiple stakeholders within and outside the firm. Sustainable procurement creates sustainable value for the firm, suppliers, clients, investors, municipalities, schools, NGOs, and associations. This value relates to economic, social, environmental and ethical dimensions. To our knowledge, this is the first study that clearly underlines the role of sustainable procurement to create sustainable value, which is relevant to guide researchers in digging further the importance of the procurement function and the supply chain lens in the sustainable business model field. The findings also highlight the need for top management and supporting functions such as finance to build capacity among the procurement department to develop sustainable procurement practices as, with a long-term perspective, it improves the sustainability performance of the firm and its supply chain partners. Overall, this study invites firms to integrate buyers and procurement managers at the core of their strategy to facilitate the operationalisation of their sustainable development goals.
... Companies and their networks are therefore central actors within transitioning modes of operation and value creation logic to include CE concepts within strategies for innovation, stakeholder and network engagement (Geissdoerfer et al. 2017;Porter and Kramer 2011;Valkokari and Rana 2017). This requires setting clear strategic commitments to a sustainable vision delivered by leadership able to re-think relationship management strategies and change business practices that account for the wider system dynamics (Klassen and Vereecke 2012;Lüdeke-Freund et al. 2016;Romero and Molina 2012;Waller et al. 2015). ...
... This chapter focuses upon collaboration between partners voluntarily and jointly constructing activities to develop new processes or products (Barratt 2004;Luzzini et al. 2015;Soosay et al. 2008). Collaboration, moreover, is a key theme within sustainable supply chain literature, whereby Lüdeke-Freund et al. (2016) have clearly presented the conceptual similarities and connections with SBMs. Sustainability increases the boundary of responsibility for environmental and social impacts beyond the focal company (Blome et al. 2014;Pagell and Shevchenko 2014;Seuring and Müller 2008;Vachon and Klassen 2008). ...
Chapter
This chapter presents emerging work on mapping collaborative activities related to Circular Business Model (CBM) implementation. Findings pertain to the importance of collaboration presenting specific types demonstrated while pursuing CBMs. Future research areas are highlighted to explore potential impacts of collaboration upon CBMs.
... The creation of shared or sustainable value often involves innovation of the business model, and where a business model does not change, for instance, as with CSR, there is the possibility of missed value creation opportunities, for the supply chain leading organisations and wider society . Business engagement with sustainability has also broadened from looking internally, for instance at efficiency improvements, to include sustainability impacts occurring outside the traditional boundaries of organisations, including in the supply chain (Kovács, 2008;Lüdeke-Freund et al., 2016). ...
... The above review illustrates that common objectives exist between organisational engagement with climate change and SSCM, such as stakeholder engagement and the management of reputational and brand factors (see Table ) ( Lüdeke-Freund, 2009;Lüdeke-Freund et al., 2016;Schaltegger and Wagner, 2011). A range of activities for managing climate mitigation objectives are also evidence. ...
Chapter
The supply chains of large organisations contain a high proportion of the total greenhouse gas (GHG) emissions associated with products and services. This has implications for climate mitigation and the sustainability strategies of 'focal' firms that lead and control supply chains. This research explores the objectives and activities involved in managing supply chain GHG emissions, and how these impact underlying business models and sustainable value creation opportunities. An exploratory qualitative approach is undertaken, involving interviews with 31 expert informants, through two phases. Of interviewees, 20 are from focal organisations in the public or private sectors. This data is coded to identify specific supply chain GHG emission management activities and separately, the objectives they fulfil. Matrices are used to link activities with the different supply chain GHG emission management objectives. The results show that the most direct way to achieve supply chain GHG emission reductions is through design changes. It is also found that current strategies often miss sustainable value-creating opportunities. Sustainable business model archetypes such as 'maximising efficiency', 'creating value from waste', and 'industrial symbiosis' may be consistent with supply chain GHG emission management. This paper deepens understanding of the supply chain as an area of action for organisational climate change strategy, providing new granularity to existing models. A tentative contribution is made in relationship between supply chain management and business models, where the paper shows how which sustainable business model archetypes may be applicable to supply chain GHG emission management.
... Here, Bocken et al. (2014) distinguish nine different sustainable business model archetypes, particularly fostering maximization of material and energy efficiency, creation of value from waste, substitution with renewable and natural processes, delivery of functionality rather than ownership, adoption of a stewardship role, encouraging sufficiency, repurposing for society and environment, as well as the development of solutions that are easily scalable. However, Lüdeke-Freund et al. (2016) see research in the field of sustainable business models still rather limited, in particular with regard to empirical analyses. Moreover, industry and branch specific sustainable businesses need to be analyzed to access business model elements and archetypes supporting the management of voluntary social and environmental activities in certain environments. ...
... SocietyThe importance of incorporating a stakeholder approach is increasingly understood in sustainable SCs and sustainable business models(Seuring and Müller 2008;Lüdeke-Freund et al. 2016). For instance, the stakeholder approach requires that a company engages suppliers in its sustainable supply chain management tackling social issues(Boons and Lüdeke-Freund 2013;Seuring and Müller 2008). ...
Chapter
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Green Logistics is no longer just a temporary fashion, but a topic that has been discussed by experts for many years. What is new is, on the one hand, the increased social and political awareness and, on the other hand, the transfer of green core statements to entrepreneurial problems. Not least the economic crisis that began at the end of 2008 reinforced the change in attitude towards a more sustainable economy. As a result of the crisis, the cost situation but also the competitive environment has intensified for companies, which are now also concentrating on areas such as waste disposal logistics, which had previously not been taken into account. Concrete climate protection strategies, for example, to prevent CO2 emissions, are therefore being actively pursued by industrial companies, particularly by companies with high transport volumes. For the transport industry as such, which is strongly affected by rising fuel prices, more efficient transports mean not only a reduction of CO2 emissions, but also cost savings in economic terms. Accordingly, the basic methods and principles of Green Logistics and their relationship to Logistics Social Responsibility and Sustainable Supply Chain Management are outlined in this chapter. The advanced part of the chapter describes detailed instruments for Green Logistics strategies and coordination as well as provides a technical overview regarding latest green transportation developments, including a case study regarding green waste disposal logistics. The final state of the art part of this chapter discusses Green Logistics strategies as integral part of sustainable business models, including a further case study and further reading advice.
... Here, Bocken et al. (2014) distinguish between eight different sustainable business model archetypes, particularly promoting maximization of material and energy efficiency, creation of value from waste, substitution with renewable and natural processes, delivery of functionality rather than ownership, adoption of a stewardship role, encouraging sufficiency, repurposing products and services for society and environment, as well as the development of scale-up solutions. However, Lüdeke-Freund et al. (2016) see research in the field of sustainable business models as still rather limited, in particular with regard to empirical analyses. Moreover, industry-and branch-specific sustainable businesses need to be analyzed to access business model elements and archetypes that support the management of voluntary social and environmental activities in certain environments. ...
... This perspective is relevant as sustainable innovations may require changed terms of competition and collaboration among the actors engaged in the supply chain (Boons and Lüdeke-Freund 2013). In this line, the importance of incorporating a stakeholder approach is increasingly understood in sustainable supply chains and sustainable business models (Seuring and Müller 2008;Lüdeke-Freund et al. 2016). For instance, the stakeholder approach requires that a company engages suppliers in its sustainable supply chain management to tackle environmental and social issues (Boons and Lüdeke-Freund 2013;Seuring and Müller 2008). ...
Chapter
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In food supply chains, products and services are continuously expanded and adapted according to changing customer demands. As concerns for environmental and social issues within societies grow, sustainable business practices in supply chains are coming to the fore. Altogether customers’ growing demand for local food has led to an increased importance of local food production and distribution networks. In this context, the present study analyzes sustainability-related practices in two local food production and distribution networks in Germany and Austria applying a multiple-case study approach to understand how business models can facilitate sustainable practices within the food industry. By comparing the selected cases, insights were derived with regard to sustainable business model elements in local food networks, in particular promoting logistics and financial coordination in the supply chain. Thus, the article builds on academic literature by identifying and describing key elements of sustainable business models in local food networks. At the same time, it can be argued that sustainable business models have to be accepted by consumers such that sustainability advantage aspects need to be stressed through external communication. Managerial implications with regard to transferability and scaling of regional food businesses are provided accordingly.
... Broadening this systems' scope further, Neumeyer and Santos [15] position business models as part of the whole entrepreneurial ecosystem, particularly dependent on the stakeholder's social network. In addition, Lüdeke-Freund et al. [16] see research in the field of sustainable business models as still limited, particularly with regard to empirical analyses. ...
Article
Full-text available
Societal, economic and ecological prosperity will be highly affected in the next decades due to socio-demographic developments and climate change. The design of more sustainable logistics business types can address such challenges to build more resilient supply chains. Therefore, the discussion with regard to transformational potentials of logistics businesses provides valuable information to shape business strategies according to future sustainability requirements. Within the framework of this paper, a mixed-methods approach has been applied to explore and analyze drivers and barriers for sustainability transformations of logistics service providers (LSPs) and to evaluate related business strategies with optimization and simulation methods in a concrete regional context. So far, LSPs' main obstacles are competitive pressure, focal firm orientation, and dependence on other supply chain members, while supply chain collaboration and integration, as well as the integration of sharing economy solutions and new digital technologies, have been identified as promising for sustainability transitions. Accordingly, this paper suggests a roadmap for the logistics sector while defining retention strategies such as growth, replication, mimicry, and mergence to meet future societal and environmental requirements. By doing so, this study contributes to theory by constructing the Lead Sustainability Service Provider (6PL) business model (arche)type and its role in societal transitions.
... This is included in the barriers for managing the SC in an integrated model, namely the increasing complexity of coordination, the lack of communication between partners, the potentially higher cost of management and managers' lack of capability [86]. However, the stakeholder approach is increasingly understood in sustainable supply chains and sustainable business models [87], developing mutual commitment and trust, moving relationships from cooperation to collaboration. ...
Article
Full-text available
Green agri-food supply chains are increasingly attracting research interest, owing to their potential capacity for resilience against recent crises (e.g., financial, COVID-19) as well as end-consumers' concerns on sustainability issues. In this context, this paper aims to explore the relationship between green supply chain management practices and three different performance aspects, namely, supply chain, green (environmental) and business performance, and controlling for environmental dynamism. Field research was conducted through a structured questionnaire contacted to 134 executives of firms in the agri-food sector in Greece. The results reveal that information sharing, logistics networking and transportation are the most powerful factors that impact sustainable, business and supply chain performance. In addition, green packaging is related to financial and social performance aspects. Interestingly, green warehousing and logistics emissions failed to establish any relationship with performance outcomes. The conclusions and recommendations drawn in the present study are expected to provide meaningful guidance for the supply chain decision-making process, as logistics managers are becoming increasingly aware of exploiting all available resources, knowhow and competitive advantages for attaining sustainable performance.
... We take an institutional theory perspective and compare six case studies of FBs and six case studies of NFBs to explore the role of familiness in operationalizing sustainability goals along the SCs. Institutional theory allows us to analyze firms' behavior in a specific context related to coercive, normative, or mimetic forces (DiMaggio and Powell, 1983), which are relevant to understanding complex topics such as SMSC (Lüdeke-Freund et al., 2016;Silvestre, 2015;Hall and Matos, 2010). Furthermore, as institutions are known to determine what decisions and behaviors are legitimate for society, they reduce uncertainties (Henisz and Delios, 2001;Haunschild and Miner, 1997;Giachetti and Torrisi, 2018). ...
... Over the past few years, sustainable business model innovation (SBMI) has gained attention as a necessary means to contribute to sustainable development and the circular economy [1][2][3][4]. To reach this sustainability potential, multiple studies have found that this requires a collaborative process which innovates the business model of the initiating company [5][6][7] and aligns the business models of multiple stakeholders [8][9][10]. However, such a multi-stakeholder collaborative process is extremely difficult in practice as stakeholders often have different priorities, value logics and business models that pose significant challenges in finding mutual value opportunities and overcoming barriers for alignment [9,11]. ...
Article
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Sustainable business model innovation cannot reach its full sustainability potential if it neglects the importance of multi-stakeholder alignment. Several studies emphasize the need for multi-stakeholder collaboration to enable sustainable business model innovation, but few studies offer guidance to companies for engaging in such a collaborative process. Based on the concept of boundary work, this study presents a tested process tool that helps companies engage with multiple stakeholders to innovate sustainable business models. The tool was developed in three iterative phases, including testing and evaluation with 74 participants in six sustainable business model innovation cases. The final process tool consists of five steps to facilitate multi-stakeholder alignment for sustainable business model innovation: (1) defining a collective ambition, (2) mapping and negotiating the changing organizational boundaries, (3) exploring opportunities and tensions for aligning stakeholders, (4) defining first interventions and (5) developing a collaboration pitch. We found that the tool enables discussions and negotiations on sensitive topics, such as power reconfigurations and mutual responsibilities to help stakeholders align. For companies, the boundary tool enriches sustainable business model innovation by offering guidance in the process of redesigning their multi-stakeholder system, assessing their own organizational boundaries, exploring, negotiating and prioritizing strategic actions based on organizational boundary changes and kick-starting new partnerships.
... Here, Bocken et al. (2014) distinguish between nine different sustainable business model archetypes, particularly promoting maximization of material and energy efficiency, creation of value from waste, substitution with renewable and natural processes, delivery of functionality rather than ownership, adoption of a stewardship role, encouraging sufficiency, repurposing products and services for society and environment, as well as the development of scale up solutions. However, Lüdeke-Freund et al. (2016) see research in the field of sustainable business models as still rather limited, in particular with regard to empirical analyses. Moreover, industry and branch specific sustainable businesses need to be analyzed to access business model elements and archetypes which support the management of voluntary social and environmental activities in certain environments. ...
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NaWiKo Synthese Papier der Projekte RegioTransKMU und ILoNa (bei de Projekte wurden mit den Mitteln des Bundesministeriums für Bildung und Forschung unter den Förderkennzeichen 01UT1406B und 01UT1403A gefördert)
... Second, given the limited attention that supply chains have received in the context of the CE (Aminoff and Kettunen, 2016;Lieder and Rashid, 2016), we propose five preliminary propositions as a framework which supports CSCs and yield insights into the CE and SCM. Sustainable business models and SCM are closely connected in the sense that the configuration of supply chains can affect the development of a sustainable business model, and vice versa (Lüdeke-Freund et al., 2016). ...
Article
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Circular modes of production, known as the circular economy, are welcomed in political and business circles to overcome the shortcomings of traditional linear operating models. Academic literature on the circular economy is nascent however and little attention is given to supply chain management implications, regardless of the relevance of supply chain innovation towards a more resource efficient and circular economy. Based on a review of the literature, this article presents preliminary propositions concerning implications for the development of what we term 'circular supply chains', defined here as the embodiment of circular economy principles within supply chain management. Our propositions are based on the following arguments: a) a shift from product ownership to leasing and access in supply chain relationships; b) the relevance of structural flexibility and start-ups in regional/local loops; c) open and closed material loops in technical and biological cycles; d) closer collaboration within and beyond immediate industry boundaries; and e) public and private procurement in the service industry as a lever for the scaling up of circular business models. We discuss what these circular economy principles mean in terms of supply chain challenges and conclude with limitations and future research agenda.
... On the one hand, there is a great opportunity to bridge between different literature streams to come to a more holistic overview of what has been done and found in previous research, while at the same time facing the danger of comparing pears and apples. In these regards, it is very helpful that work is being published (e.g. for a comparison of sustainable business models versus sustainable supply chain conceptions see Luedeke-Freund et al. 2016) that helps disentangle such terms, so that the basis for such interdisciplinary projects can be set up clearly right from the start. Another suggestion is the careful delimitation of units and levels of analysis, as SSCM research often centers on the organizational level, while social entrepreneurship literature can be about the level of the business (organizational) or entrepreneur (individual). ...
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Integrating triple bottom line (TBL; economic, social and environmental) sustainability into supply chains is a major challenge. Progress has been made to address the economic and environmental dimensions in supply chain management research however, the social dimension is still underrepresented. This chapter reflects on research that looked at the literature on hybrid business models and social entrepreneurship in order to bridge these streams of literature to literature on sustainable supply chain management. Following the literature analysis, case-based research that related specifically to social businesses in catastrophe-ridden Haiti were performed. The insights provided by the entrepreneurs of these businesses showed organizations that target TBL objectives from their inception, the specific social capabilities employed to obtain the desired TBL objectives and the specific supply chain structures that were needed to execute and achieve the TBL goals. The purpose of this chapter is to reflect on that research as it relates to the social businesses, consider the primary results of that research and discuss how those results might guide further research in the field of sustainable supply chain management.
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Purpose The purpose of this paper is to assess the impact of smallholder supply chains on sustainable sourcing to answer the question how food and agribusiness multinationals can best include smallholders in their sourcing strategies and take social responsibility for large-scale sustainable and more equitable supply. A sustainable smallholder sourcing model with a list of critical success factors (CSFs) has been applied on two best-practise cases. In this model, business and corporate social responsibility perspectives are integrated. Design/methodology/approach The primary data of the value chain analyses of the two smallholder supply chains of a food and agribusiness multinational have been applied. Both cases were of a join research program commissioned by the multinational and a non-governmental organization using the same methods and research tools. Similarities, differences and interference between the cases have been determined and assessed in order to confirm, fine tune or adjust the CSFs. Findings Both cases could be conceptualized through the smallholder sourcing model. Most CSFs could be found in both cases, but differences were also found, which led to fine tuning of some CSFs: building of a partnership and effective producers organization, providing farm financing and the use of cross-functional teams in smallholder supplier development programs. It was also concluded that the smallholder sourcing model is applicable in different geographical areas. Research limitations/implications The findings of this study are based on just two cases. More best-practise cases are recommended in order to confirm or to adjust the developed sourcing model and the CSFs. Originality/value This paper/research fills the need in sustainable supply chain management literature to study supply chains that comply with the triple bottom line concept, rather than supply chains that are just more “green.”
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Das vorliegende essential enthält eine Reihe von Tools, welche sich im Rahmen des dreijährigen, BMBF-geförderten Projekts „Innovative Logistik für Nachhaltige Lebensstile (ILoNa)“ als besonders hilfreich für die praktische Umsetzung einer Nachhaltigkeitsstrategie von Logistikunternehmen herausgestellt haben. Eine Besonderheit liegt dabei in der konsequenten Umsetzung der Konsumentenperspektive: So wird die Interaktion mit den Endkunden – seien es Käufer im Supermarkt oder Online-Käufer – als erfolgsrelevanter Faktor in die Nachhaltigkeitsstrategie miteinbezogen und es wird Unternehmen der Logistikbranche aufgezeigt, wie sie ihre zentrale Rolle als verbindendes Element von Wertschöpfungsstufen und Akteuren verantwortlich wahrnehmen können.
Article
The circular economy requires companies to rethink their supply chains and business models. Several frameworks found in the academic and practitioner literature propose circular economy business models (CEBMs) to redefine how companies create value while adhering to circular economy principles. A review of these frameworks shows that some models are frequently discussed, some are framework-specific, and some use a different wording to refer to similar CEBMs, pointing to the need to consolidate the current state of the art. We conduct a morphological analysis of 26 current CEBMs from the literature, which includes defining their major business model dimensions and identifying the specific characteristics of these dimensions. Based on this analysis, we identify a broad range of business model design options and propose six major CEBM patterns with the potential to support the closing of resource flows: repair and maintenance, reuse and redistribution, refurbishment and remanufacturing, recycling, cascading and repurposing, and organic feedstock business model patterns. We also discuss different design strategies to support the development of these CEBMs.
Chapter
Das Thema unternehmerische Nachhaltigkeit hat seine akademische Nische verlassen und ist zu einem prominenten Bestandteil der unternehmerischen Praxis geworden. Während es zum guten Ton gehört, sich als wettbewerbsfähig und zugleich ökologisch und sozial verantwortungsvoll zu positionieren, haben sich einige Pioniere auf den Weg gemacht, dieses Thema auf der Ebene von Geschäftsmodellen anzugehen. Der vorliegende Beitrag befasst sich mit den Zusammenhängen zwischen den Herausforderungen der unternehmerischen Nachhaltigkeit und der Entwicklung entsprechender Geschäftsmodelle. Der Beitrag verknüpft das Geschäftsmodell mit dem „Business Case for Sustainability“ und der übergeordneten Nachhaltigkeitsstrategie. Des Weiteren werden Geschäftsmodelle als Plattform zur Durchsetzung von Nachhaltigkeitsinnovationen diskutiert und abschließend wird ein Blick auf das derzeit verfügbare umsetzungsnahe Wissen geworfen. Insgesamt werden wesentliche Eckpunkte für einen Geschäftsmodellprozess vorgeschlagen, der die Phasen Analyse, Innovation und Umsetzung umfasst. Anstelle eines „How to?“ Leitfadens lassen sich gegenwärtig jedoch vor allem konzeptionelle Überlegungen in diesen Prozess einordnen. Hierauf können Forscher und Praktiker aufbauen, um ihren Interessen entsprechend die nächsten Entwicklungsschritte in Richtung eines konsistenten nachhaltigkeitsorientierten Geschäftsmodellmanagements zu gehen.
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Business is increasingly employing sustainability practices, aiming to improve environmental and social responsibility while maintaining and improving profitability. For many organizations, profit-oriented business models are a major constraint impeding progress in sustainability. A formally defined ontology, a model definition, for profit-oriented business models has been employed globally for several years. However, no equivalent ontology is available in research or practice that enables the description of strongly sustainable business models, as validated by ecological economics and derived from natural, social, and system sciences. We present a framework of strongly sustainable business model propositions and principles as findings from a transdisciplinary review of the literature. A comparative analysis was performed between the framework and the Osterwalder profit-oriented ontology for business models. We introduce an ontology that enables the description of successful strongly sustainable business models that resolves weaknesses and includes functionally necessary relationships.
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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.
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Business models have received much attention in recent years due to their importance in the fundamental logic of every company. This paper is based on a qualitative, empirical research study conducted in cooperation with 10 Austrian companies in 2014 and it aims to investigate business models for sustainability in order to better understand how they operate and what the drivers for developing these business models are. This is a cross-industry sample covering companies showing notable sustainability activities. In fact, half of the companies were founded with the intention of complying with sustainability principles. The results show that business models incorporating aspects of sustainability do not differ substantially from traditional business models. However, they do require specific adaptations and extensions. Furthermore, the findings highlight the significance of company leaders in organizing change processes so as to encompass sustainable business practices. The findings reveal that business models undergo constant change, and that sustainability plays a central role, both internally and externally. The results gained allow for a deeper understanding of the motivational aspects and drivers needed in developing business models for sustainability, and serve as a solid basis for further research in this field.
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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.
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The bottom of the pyramid (BOP) in the global distribution of income has been promoted as a significant opportunity for companies to grow profitably. Under the BOP approach, poor people are identified as potential customers who can be served if companies learn to fundamentally rethink their existing strategies and business models. This involves acquiring and building new resources and capabilities and forging a multitude of local partnerships. However, current BOP literature remains relatively silent about how to actually implement such a step into the unknown. We use two BOP cases to illustrate a strategic framework that reduces managerial complexity. In our view, existing capabilities and existing local BOP models can be leveraged to build new markets that include the poor and generate sufficient financial returns for companies to justify investments.
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Purpose – Although business models that deliver sustainability are increasingly popular in the literature, few tools that assist in sustainable business modelling have been identified. This paper investigates how businesses might create balanced social, environmental and economic value through integrating sustainability more fully into the core of their business. A value mapping tool is developed to help firms create value propositions better suited for sustainability. Design/methodology/approach – In addition to a literature review, six sustainable companies were interviewed to understand their approaches to business modelling, using a case study approach. Building on the literature and practice, a tool was developed which was pilot tested through use in a workshop. The resulting improved tool and process was subsequently refined through use in 13 workshops.
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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.
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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.
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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.
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Purpose – There is an ongoing and controversial debate about the current state of maturity of supply chain management (SCM) as research discipline and its future development. Openness to theory of other fields is on the one hand welcome and on the other hand denounced as arbitrariness hampering the progression of SCM. This paper aims to contribute to this debate outlining one promising framework that structures the field and provides guidance for its evolution. Design/methodology/approach – This paper conceives SCM as a Lakatosian research program from a philosophy of knowledge perspective that allows for continuously developing the knowledge base of SCM. After outlining the peculiarities of knowledge development according to Lakatos, the hard core of the program is delimitated from its protective belt by means of various analytical criteria referring to the meta, discipline, and practice level. The distinction framework is illustratively applied to four SCM research articles. Findings – Developing SCM as a Lakatosian research program entails two main challenges: consensus regarding the irrefutable hard core and theoretic and methodological openness regarding its protective belt. Research limitations/implications – Meeting these challenges requires distinguishing between hard core and protective belt. Thus, the Lakatosian viewpoint facilitates both the integration of knowledge from a diversified range of research designs into the body of SCM knowledge and safeguards its stability and its identity as research program. Originality/value – This paper is a rare attempt of grounding SCM in a coherent conceptualization of scientific knowledge development.
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This commentary reviews the position articulated in an article published in 2004 that the business model prevalent in the automotive industry was inadequate to meeting the challenge of sustainability, and reviews the key developments since then. The most noticeable developments the commentary traces are the growth in academic interest in business models, a more responsive government policy particularly in respect of new technologies, and the practical application of the concepts and ideas mooted in the original paper, notably with respect to electric vehicles.
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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.
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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.
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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.
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Purpose: This paper attempts to seek answers to four questions. Two of these questions have been borrowed (but adapted) from the work of Defee et al.: RQ1. To what extent is theory used in purchasing and supply chain management (P&SCM) research? RQ2. What are the prevalent theories to be found in P&SCM research? Following on from these questions an additional question is posed: RQ3. Are theory-based papers more highly cited than papers with no theoretical foundation? Finally, drawing on the work of Harland et al., the authors have added a fourth question: RQ4. To what extent does P&SCM meet the tests of coherence, breadth and depth, and quality necessary to make it a scientific discipline? Design/methodology/approach: A systematic literature review was conducted in accordance with the model outlined by Tranfield et al. for three journals within the field of "purchasing and supply chain management". In total 1,113 articles were reviewed. In addition a citation analysis was completed covering 806 articles in total. Findings: The headline features from the results suggest that nearly a decade-and-a-half on from its development, the field still lacks coherence. There is the absence of theory in much of the work and although theory-based articles achieved on average a higher number of citations than non-theoretical papers, there is no obvious contender as an emergent paradigm for the discipline. Furthermore, it is evident that P&SCM does not meet Fabian's test necessary to make it a scientific discipline and is still some way from being a normal science. Research limitations/implications: This study would have benefited from the analysis of further journals, however the analysis of 1,113 articles from three leading journals in the field of P&SCM was deemed sufficient in scope. In addition, a further significant line of enquiry to follow is the rigour vs relevance debate. Practical implications: This article is of interest to both an academic and practitioner audience as it highlights the use theories in P&SCM. Furthermore, this article raises a number of important questions. Should research in this area draw more heavily on theory and if so which theories are appropriate? Social implications: The broader social implications relate to the discussion of how a scientific discipline develops and builds on the work of Fabian and Amundson. Originality/value: The data set for this study is significant and builds on a number of previous literature reviews. This review is both greater in scope than previous reviews and is broader in its subject focus. In addition, the citation analysis (not previously conducted in any of the reviews) and statistical test highlights that theory-based articles are more highly cited than non-theoretically based papers. This could indicate that researchers are attempting to build on one another's work. © Emerald Group Publishing Limited.
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Conducting business operations at the Base of the Pyramid (BoP) have necessitated the need for multinational corporations (MNCs) to involve poor communities in production processes including management of critical supply chains. However, current research on the interface between supply chain management and BoP business operation is lacking. In analyzing three cases of BoP projects in the food industry this study addresses the question of how sustainable supply chain management (SSCM) applied to BoP projects can help MNCs to achieve their sustainability goals. Findings indicate that applying SSCM to BoP projects can complement economic, social, and environmental dimensions of sustainability. In particular, the BoP projects analyzed show viable paths for integrating the social domain of sustainability with general SSCM theory and practice. From the perspective of international business research, the findings help to link sustainability activities to MNC operations at the BoP. Accordingly, further research is needed to advance integration of these two research streams.
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Sustainability innovations are characterized by a systemic nature and require that multiple organizations act in an orchestrated fashion. To jointly identify opportunities and plan sustainability innovations, new methods and approaches are needed. In this article we describe a case study where 8 firms have collaborated to envision and create new business models in the energy industry. After describing this collaborative business modelling (CBM) approach, we discuss its strengths and limitations and compare it to two alternative methods of strategy and innovation planning: scenario technique and roadmapping. We find that CBM creates a powerful platform for (1) jointly identifying economic and societal value, (2) defining value creation/value capture systems, and (3) planning of complex and uncertain future markets.
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British Petroleum (BP) was among the first major oil companies to commercialise solar power technologies and was also one of the largest fully integrated photovoltaics companies. Following the oil crises of the 1970s and as part of its diversification strategy, BP built up its subsidiary BP Solar, which later became a central element in BP's corporate social responsibility and sustainability activities. But in 2011, BP Solar was shut down. However, before this the company did indeed have a 'solar business case' and this paper shows how this business case was realised and how BP tried to keep it going. Sources used were BP's annual reports from 1998 to 2011, which were studied by means of software-supported text analysis. For the reconstruction of the strategic drivers and business model innovations behind BP's solar business, a framework from sustainability management research was employed. It was found that an accommodative solar strategy was applied by the company and implemented through two business model innovation paths, the optimisation of module manufacturing combined with completely new distribution models.
Thesis
This cumulative dissertation deals with the relationships between business models, sustainability innovations, and the business case for sustainability. Its main purpose is to define theoretical and conceptual interrelations between these concepts. According theoretical foundations are developed and combined with empirical studies on the solar photovoltaic industry. This industry is particularly suitable for this kind of research because of its increasing maturity paired with public policy and market dynamics that lead to a variety of business model challenges. The overarching research question is: How can business models support the commercialisation of sustainability innovations and thus contribute to business cases for sustainability? Theoretical and conceptual foundations are developed from a systematic literature review on the role of business models for technological, organisational, and social sustainability innovations. Further, business model innovation is linked to sustainability strategies and the business case for sustainability. These foundations are applied in an in-depth case study on BP Solar. Moreover, because supportive public policies and the availability of financial capital are important preconditions for commercial success with solar innovations, the dissertation contains a comparative public policy study as well as a conjoint experiment to explore debt capital investors’ preferences for different photovoltaic business models. The main contribution of this work is the “Business Models for Sustainability Innovation” (BMfSI) framework. It is based on the idea that business models are artificial and social constructs that fulfil different functions based on social interaction and their deliberate construction. The framework emphasises the mediating function, i.e. the iterative alignment of business model elements with company-internal and external factors as well as with the characteristics of environmentally and socially beneficial innovations.
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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.
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Although the term 'business model' is widely used in the business world, the academic research on this issue is sparse. This paper tries to close that gap by developing a typology of different business models along three dimensions: value chain constellation, market power of innovators versus owners of complementary assets and total revenue potential. This typology consists of four different types of business model (Integrated, Layer Player, Market Maker and Orchestrator) and is built on the resource based view as a conceptual foundation. Moreover, this paper discusses how business models may change over time, due to a varying competitive landscape.
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Although research on supply chain management has made many valuable contributions, there is a dearth of empirical evidence and theoretical reflection on the characteristics of supply chains that operate mainly in developing and emerging economies. The aim of this paper is to help to fill this gap by exploring how supply chain sustainability can be implemented and managed in these settings. An in-depth case study of the upstream oil and gas industry supply chain in Brazil was used to develop propositions about supply chains that operate in developing settings. Drawing from institutional theory, evolutionary theory, complexity theory, and from the organizational learning, innovation, and strategy literatures, this paper offers four key findings and contributions to the supply chain literature. First, it shows that becoming a sustainable supply chain is not a destination, but a journey, where trajectory and time matter. Given the evolutionary nature of supply chain sustainability trajectories, this paper highlights that supply chains learn and evolve just as organizations do. Second, this research indicates that, although globalization is a trend, natural resource-based supply chains are often more geographically bounded and susceptible to local social demands than other supply chains. Third, this paper extends the supply chain literature by arguing that supply chains face additional barriers to sustainability in developing and emerging economies, which contribute to a higher degree of complexity and uncertainty due to the existence of highly turbulent business environments and institutional voids. These factors in turn hinder supply chain learning and innovation, and reduce the slope of supply chains sustainability trajectories. Finally, this research contributes to the literature by claiming that, due to the highly complex and uncertain business environments, in these settings focal companies play an even more important role in managing the escalating ambiguity, stimulating supply chain learning, and promoting innovation towards supply chains enhanced sustainability performance.
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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.
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The electric power sector stands at the beginning of a fundamental transformation process towards a more sustainable production based on renewable energies. Consequently, electric utilities as incumbent actors face a massive challenge to find new ways of creating, delivering, and capturing value from renewable energy technologies. This study investigates utilities' business models for renewable energies by analyzing two generic business models based on a series of in-depth interviews with German utility managers. It is found that utilities have developed viable business models for large-scale utility-side renewable energy generation. At the same time, utilities lack adequate business models to commercialize small-scale customer-side renewable energy technologies. By combining the business model concept with innovation and organization theory practical recommendations for utility mangers and policy makers are derived.
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Studies on Product–Service Systems (PSS) are emerging as a growing body of literature driven by the desire to combine economic prosperity and sustainable resource management. However, knowledge about how companies can adopt and implement PSS has remained limited. In this study, a systematic literature review is conducted related to understanding implementation of PSS business models and five sets of tactical practices. Based on an in-depth analysis of 67 articles, it was found that PSS is increasing rapidly as a research field, which is spread across a variety of disciplines and research domains. More specifically, research findings were accumulated from the field to present a framework supporting the implementation of well-established categories of PSS business models, that is, product-oriented, use-oriented, and result-oriented business models. Each business model category is linked to five operational-level tactics that ensure the model can be implemented successfully and subsequently generates value. These tactical sets include 1) contracts, 2) marketing, 3) networks, 4) product and service design, and 5) sustainability operational practices. This study concludes by proposing suggestions for future research.
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Purpose – The purpose of this paper is to argue that mainstream economic theory leads to a diminishment of human happiness and well-being. Alternatively, Buddhist wisdom, applied to economic decision making, offers the opportunity for a well-lived life of purpose and meaning. Design/methodology/approach – The paper begins with an examination of the foundational elements of Buddhism and economics, then contrasts the paths (or models) constructed from these bases and the associated implications for happiness and well-being. Findings – The assumptions of Buddhism and economics regarding incessant wants, method of analytical inquiry, assignation of primary agency, and promotion of individual freedom, all bear striking similarities. Yet, despite these commonalities, the paths they undertake could not be more different. Specifically, their views and beliefs regarding consumption, work, and self-interest lead to radically different implications for how to live a well-lived life and how to organize economic society. Research limitations/implications – Business leaders should develop alternative business models that incorporate a broader range of values and ideals than those associated with traditional economic modeling. Explicit inclusion of a firm's social responsibilities can be implemented via social accounting procedures and its mission statement. Responding to consumer demand for goods that are produced fairly, humanely, and sustainably will allow firms to do well by doing good. Originality/value – Significant and detrimental consequences arise from the adherence to the mainstream economic model. Buddhist wisdom, on the other hand, provides a path that offers an alternative vision of economic society, one that would likely lead to greater human fulfillment.
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The purpose of this paper is to identify and analyze the published definitions of green supply chain management (GSCM) and sustainable supply chain management (SSCM). A total of 22 definitions for GSCM and 12 definitions for SSCM were identified. In order to analyze the identified definitions, two different sets of key characteristics for business sustainability (i.e., economic, environmental, social, stakeholder, volunteer, resilience, and long-term focuses) and SCM (i.e., flow, coordination, stakeholder, relationship, value, efficiency, and performance focuses) were proposed. The identified definitions were analyzed against each other and the two sets of proposed key characteristics. The analysis shows that definitions for GSCM were generally more narrowly focused than those for SSCM and had an emphasis on the characteristics of environmental, flow, and coordination focuses. Though some definitions of SSCM show considerable overlap with definitions of GSCM, it is argued that SSCM is essentially an extension of GSCM. Several identified definitions addressed at least half of the proposed key business sustainability and SCM characteristics. However, no complete definition of GSCM or SSCM was identified. To address this issue, a new definition for SSCM is proposed.
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The paper aims to generate systematically business model innovations in the field of electric mobility. It introduces a new framework, in which a business model denotes a value-focused concept with five value dimensions: value proposition, value communication, value creation, value delivery and value capture. The framework enables the classification of business model patterns, identified in the literature, according to five categories. The combination of patterns from different dimensions can lead to the systematic generation of business model innovations. But the number of business models that can result from pattern combinations can be overwhelming. Subsequently, the paper only evaluates the extent to which business model patterns that are not necessarily observed in the automotive sector can be useful for the field of electric mobility, and how they can be adapted to fit into the new context. We find that the transferability strongly depends on the actor's role in the system, if it is a manufacturer, supplier or service provider. More importantly, our analysis shows that some models such as product-to-service (e.g., car sharing service), already implemented in the automotive industry, will continue to be successful in the future because of their potential of increasing customer acceptance and technology diffusion. Many other business models-so far used in other sectors, but not in the automotive industry-may integrate the field of electric mobility. Razor and blades, own the undesirable concept, and leverage new influencers are all promising business models, if they can be fitted adequately to the new context induced by the new technology.
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Reputational risks because of child labor allegations drove Syngenta to forge for-profit and not-for-profit sector alliances with the Fair Labor Association, which was directed toward raising social standards in its Indian hybrid vegetable seed supply chain. This case study, informed by expert interviews and complementary document analysis, gives an account of various sustainable supply chain management (SCM) practices implemented by Syngenta and its partners in this pilot project. By being located in one specific industry and world region, this study contributes a piece of evidence to the neglected issue of how to include the social dimension of sustainability into SCM.
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Billions of dollars worldwide are pumped into the search for clean technology and renewable energy. So far, however, most investment has been in companies that are using conventional business models to fit new technologies into existing systems. A far better approach, say Johnson and Suskewicz, is to create whole new systems. The authors propose a framework for thinking about clean tech that consists of four interdependent components: an enabling technology, an innovative business model, a careful market-adoption strategy, and a favorable government policy. Two recent experiments show how this framework can be applied: Better Place, founded by the software executive Shai Agassi, has a network of battery-recharging and -switching stations to support its electric cars and a business model based on selling electricity (miles) rather than vehicles. It has a foothold market in Israel, where gas-powered cars are taxed far higher than electric ones. Masdar City, now under construction in Abu Dhabi, will be a carbon-neutral incubator of clean technologies, supported by the investment, manufacturing, strategy, and academic units of a government initiative. The city is itself a foothold market and will benefit from government subsidies, "free zone" status, and favorable regulations. Both enterprises provide hope for supplanting the oil-based economy. Reprint R0911D
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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.
Conference Paper
This paper explores the role of business models for socio-technical transitions, i.e. large-scale changes in the way societal functions are fulfilled. In a first conceptual attempt it integrates research on business models and research on transitions. Using the multi-level perspective on socio-technical transitions we show that business models can impact transitions in their roles as (1) devices to commercialize technological innovation, (2) a dominant business model logic that is part of the current socio-technical regime and (3) niche innovation competing with this dominant business model logic. Our findings theoretically underpin why non-technological innovation, such as business model innovation, has a higher leverage on achieving radical societal shifts than technological innovation. Exploring the role of business models for transitions is of relevance to researchers and practitioners trying to understand the dynamics behind transitions, such as the ones required for a shift towards more sustainable consumption and production.
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Management is on the verge of a major breakthrough in understanding how industrial company success depends on the interactions between the flows of information, materi-als, money, manpower, and capital equipment. The way these five flow systems interlock to amplify one another and to cause change and fluctuation will form the basis for antici-pating the effects of decisions, policies, organizational forms, and investment choices." (For-rester 1958, p. 37) Forrester introduced a theory of distribution management that recognized the integrated nature of organizational relationships. Because organizations are so intertwined, he argued that system dynam-ics can influence the performance of functions such as research, engineering, sales, and promotion.
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Rising global food prices have driven 44 million additional people into extreme poverty—and malnutrition—in developing countries since June 2010. Partners in Food Solutions (PFS), a nonprofit social enterprise affiliated with General Mills, is proposed as the conduit for food industry managers, engineers, and scientists to initially advise small- and medium-sized African mills and food processors—and later other developing countries—on improving supply chain management by addressing manufacturing problems, developing products, improving packaging, extending product shelf, and finding new product markets. In this article, the “creative capitalism” model of sustainability and social and environmental responsibility is applied to the food manufacturing industry's efforts supporting PFS. Furthermore, the evolution of the sustainable business model developed by PFS is thoroughly described, explained, and analyzed as a generic model of social enterprise to be “scaled up” by the global food manufacturing industry. A summary of salient points conclude the article.
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In 2009, Greenpeace launched an aggressive campaign against Nestlé, accusing the organization of driving rainforest deforestation through its palm oil suppliers. The objective was to damage the brand image of Nestlé and, thereby, force the organization to make its supply chain more sustainable. Prominent cases such as these have led to the prevailing view that sustainable supply chain management (SSCM) is primarily reactive and propelled by external pressures. This research, in contrast, assumes that SSCM can contribute positively to the reputation of an organization as a “good citizen” and, thereby, counter the impression that external stakeholder pressure is the only driver of SSCM. The study draws on Resource Dependence Theory in analyzing the three competing models of the potential stakeholder, SSCM and the corporate sustainability performance relationship. A dataset of 1,621 organizations allows the statistical comparison of these three models. Findings suggest that stakeholder pressure and SSCM both contribute to an organization’s sustainability performance. Thus, supply chain managers will perceive benefits from SSCM other than merely the reduction of risk from reputational damage through stakeholder activism.
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Although theoretically the importance of sustainable business models has become widely accepted in the literature, little is known about how managers deal with practical issues such as differences in stakeholder interests. In this paper, we focus on the question: What strategies can help decision-makers to better connect with stakeholders and overcome the challenges of conflicting interests when considering sustainability in their business models? Our research draws on two case studies in the Brazilian energy sector: the national oil company Petrobras and its attempts to develop biodiesel, and the national electrical utility Eletrobras and its attempts to provide electricity to impoverished communities. This paper is based on original qualitative data derived frominterviews with 138 key informants conducted between 2003 and 2010 with supply chain members and other stakeholders, as well as secondary sources. We draw from a number of literature streams to develop our paper. One stream relates to sustainable supply chain and the recognition of the relationship among economic, environmental and social values rather than only focusing on economic and/or environmental aspects. Another stream suggests that BOP (Bottom of the Pyramid) settings present potential ideal opportunities to connect business with sustainability. Finally, we use stakeholder theory to analyze how sustainable values can drive the operationalization of sustainable business models. We suggest that a combination of approaches promoting the participation of a diverse number of local stakeholders, encouraging both learning and capability building and shifting stakeholder values from single to multiple objectives are critical to overcome the challenges of stakeholders conflicting interests.
Article
We review the literature on sustainable supply chains during the last decade; 2000–2010. We analyze the literature from different perspectives. We then provide frameworks for sustainable supply chain management and performance measures. We also provide a case study to illustrate the experience of a utility supply chain in setting performance indicators.
Article
There is a broad understanding that intergenerational equity is a necessary, if not sufficient, condition for sustainability. Likewise, there is a growing consensus that sustainability science requires stakeholder engagement to be successful. These two ideas demand some meaningful way of engaging the future as a stakeholder if sustainability is to be operationalized. Rawls' theory of justice provides a model for how this might be accomplished, yet there are both conceptual and practical problems with a Rawlsian approach. We propose using retrospective assessment as a means of learning how to approach future stakeholder engagement in sustainability.
Article
It is often overlooked that British Petroleum (BP) was among the commercial solar energy pioneers and one of the largest fully integrated photovoltaics companies. Following the 1970s oil crises, BP built its subsidiary BP Solar. But in 2011, in the wake of changing policy regimes, falling module prices and fierce competition, BP Solar was closed. However, before these developments occurred the company had a “solar business case.” This paper shows how this business case was realised and how BP tried to maintain it. BP’s annual reporting from 1998 to 2011 was studied by means of software-supported text analysis. A framework from sustainability management research structured the re-construction of the strategic drivers and business model innovations behind BP’s solar business. It is found that an accommodative strategy was applied and realised through two business model innovation paths, i.e. the optimisation of module manufacturing combined with completely new distribution models.
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