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Value creation and appropriation in economic, social, and environmental domains: Recognizing and resolving the institutionalized asymmetries
Abstract
Value creation and appropriation are much-studied processes in business and management fields. However, both academia and business practice have traditionally focused on how value is created and appropriated in the economic context and by economic actors. This overemphasis on economic logic has created institutionalized asymmetries in managing the relationship between business, society and ecological environment. In this paper, we broaden the value creation and appropriation analysis along two dimensions: (1) the type of economic goods used to create value (private and club goods, public goods and common goods) and (2) value creation and appropriation domains (economic, social, and environmental). Building on this framework, we argue that there are several institutionalized asymmetries in the relationship between the goods used to create value and the domains in which the value is eventually appropriated. We point out the system-level tendency of value over-appropriation in the economic domain over the two other domains as well as value over-appropriation in the social domain over the environmental domain. We also discuss how existing organizational practices, such as corporate social responsibility, shared value creation, and sustainable business models, have attempted to overcome them, and reflect on the main critiques to these approaches. Finally, we identify potential business-based solutions to the institutionalized asymmetries and provide implications to research and practice.
... An anchor practice can be defined as one that becomes more influential in guiding action compared to some other practices in a certain situation (Swidler, 2001); it is "the fundamental principle of orientation in practice" (Equi Pierazzini et al., 2021, p. 1262. Indeed, there are certain issues, aspects or viewpoints that seem stronger when compared to other values in most decision-making situations-for example, it can be money, ecologic sustainability or social aspects (Saukkonen et al., 2018;Campanale et al., 2021;Kuperstein Blasco et al., 2021;Ritala et al., 2021). The theoretical concept of anchor practices, derived from the general understanding of human behaviour (by Swidler, 2001), has recently been introduced to studies on management accounting and control that aim to understand how management control systems influence action (Ahrens, 2018;Carlsson-Wall et al., 2020). ...
... The case study revealed that anchor practices might be a valid theory for explaining the value dynamics that guide action in the public sector (Ritala et al., 2021;Campanale et al., 2021). In our examination of the dynamics of different values in healthcare, it was noted that these values caused conflicts in decision-making and daily working practices. ...
... Similarly, implementing a shift towards sustainability easily leads to difficult decisions and balancing different values (Saukkonen et al., 2018;Kuperstein Blasco et al., 2021). Hence, different forms of economic, ecologic and social sustainability (Ritala et al., 2021) offer enormous potential for further enquiries about balancing different control and measurement anchors as well (Campanale et al., 2021;Beusch et al., 2022). For instance, circular economy pilots could be an interesting area to examine (anchoring) practices that guide decision-making and the quest for profitable operations. ...
With the demand for elderly care increasing in many countries, digital technologies offer the potential for organising such care while also increasing value for money. However, public administrators need tools to make sense of their own complex environment and the possible impacts of new technologies. The current paper examines this issue by applying horizontal performance measurement, where practitioners can give financial value to issues that span across many functions and thus avoid sub-optimisation. We use an interventionist case study to illustrate a situation in which a Nordic city attempted to calculate the financial impact of introducing new digital technologies into elderly care. As our contribution to the literature on horizontal performance measurement, we show how economic (financial) and wellbeing anchors influence horizontal performance measurement in a healthcare digitalisation project. We also contribute to the development of our method theory, i.e., anchor practices, by providing evidence of the usage of multiple simultaneous anchors and make a methodological contribution by showing that interventionist researchers can support operationalising anchor practices.
... Sustainable business models draw on economic, environmental, and social aspects of sustainability in defining an organisation's purpose and performance measures; consider the needs of all stakeholders rather than giving priority to owner and shareholder expectations; treat 'nature' as a stakeholder and promote environmental stewardship; and take a system, as well as a firm-level perspective on the way business is done (Stubbs & Cocklin, 2008). Sustainable business models have been positioned by academia, business, and policy as a key enabler for addressing systemic societal and environmental issues in a business context and tackling institutionalised unsustainability (Bocken & Short, 2021;Ritala et al., 2021). ...
... While sustainable business models are seen as an important way to address systemic societal and environmental issues in a business context and tackling institutionalised unsustainability, there are still severe institutionalised unsustainable business models in virtually all global sectors (Ritala et al., 2021). Institutions can be characterised according to the regulative (laws and regulations), cognitive (knowledge and skills), and normative context (norms, values, beliefs, assumptions)contexts which only shift gradually (Scott, 2013;Zvolska et al., 2019). ...
... Yet, critics have questioned whether the field of sustainable business models is an emerging field or passing buzz-term because of the sudden popularity of the field and overuse of the term in research and practice (Lüdeke-Freund & Dembek, 2017). However, it is evident that dominant unsustainable business models need to be transformed towards more sustainable and circular business models (Ritala et al., 2021). Notably, the IPCC (2022) calls for the transformation towards a circular economy with significantly transformed sustainable and circular business models to accelerate the business transition and cut carbon emissions by half by 2030. ...
Human activity is increasingly impacting the environment negatively on all scales. There is an urgent need to transform human activity towards sustainable development. Business has a key role to play in this sustainability transition through technological, product/service and process innovations, and innovative business models. Business models can enable new technologies and vice versa and are therefore important in the sustainability transition. A business model for sustainability, or synonymously, sustainable business model, takes a holistic view on how business is done in relation to its stakeholders, including the society and the natural environment. They incorporate economic, environmental, and social aspects in an organisation’s purpose and performance measures; consider the needs of all stakeholders rather than giving priority to owner and shareholder expectations; treat ‘nature’ as a stakeholder; and take a system, as well as a firm-level perspective on the way business is done. The research field of sustainable business models emerged from fields such as service business models, green and social business models, and concepts such as the sharing and circular economy. Academics have argued that the most service-oriented business models can achieve a ‘factor 10’ environmental impact improvement, if designed the right way.
Researchers have developed various conceptualisations, typologies, tools and methods and reviews on sustainable business models. However, sustainable business models are not yet mainstream. Important research areas include: (1) tools, methods, and experimentation, (2) the assessment of sustainability impact and rebounds for different stakeholders, (3) sufficiency and degrowth, and (4) the twin revolution of the sustainability and digital transition. First, a plethora of tools and approaches are available for inspiration and sustainable business model design. Second, in the field of assessment, methods have been based on life cycle thinking considering the supply chain, how a product is (re)used, and eventually disposed of. In the field of sufficiency, authors have recognised the importance of moderating consumption through innovative business models to reduce the total need for products, reducing the impact on the environment. Finally, researchers have started to investigate the important interplay between sustainability and digitalisation. Because of the potential to achieve a ‘factor 10’ environmental impact improvement, sustainable business models are an important source of inspiration for further work. This includes the upscaling of sustainable business models in established business and in new ventures. Understanding how to design better business models, and pre-empting their usage in practice, are essential to achieve the desired positive impact. In the field of sufficiency, the macro-impacts of individual and business behaviour would need to be better understood. In the area of digital innovation, the environmental, societal and economic value need scrutinization.
Researchers and practitioners can leverage the popularity of this field by addressing these important areas to support the development and roll-out of sustainable business models with significantly improved economic, environmental, and societal impact.
... Initially, placed emphasis on how the focal firm can create and capture value from open innovation through business models; now increased interest in how value is created, distributed, and captured across multiple firms (see e.g., Bogers et al., 2017;Chesbrough et al., 2018;Chesbrough, 2020) Has continuously put emphasis on value creation and value capture mechanisms, and on how value is distributed among multiple participants (see e.g., Ritala et al., 2013;Ritala et al., 2021) Process view Open innovation viewed as a process is not uncommon (see e.g., Gassmann and Enkel, 2004), but is often treated as changes in "beings" rather than patterns of emergence -of "becoming" A few longitudinal and process-oriented studies exist (see e.g., Chiaroni et al., 2010Chiaroni et al., , 2011Di Minin et al., 2010), but this is still a rather neglected area in open innovation ...
... For BioVentureHub, the value creation focus dominated in both the buildup and expansion phases, whereas the emphasis on explicit value capture mainly emerged in the integration phase. This finding is in line with Adner and Kapoor's (2010) argument that value creation often precedes value capture in ecosystem development, which may be even more important in asymmetric power relations in which large corporations can otherwise over-appropriate value from the smaller ecosystem actors (Ritala et al., 2021). From a process perspective, however, our study also highlights that open innovation initiatives may, for various reasons, change their value mechanisms over time. ...
... The study thus proposes a need for alignment but also describes this alignment process as emergent and in constant development. Furthermore, the process model advances the scholarly debate on value creation and value capture in the fields of open innovation (Chesbrough et al., 2018) and innovation ecosystems (Ritala et al., 2013;Ritala et al., 2021) by highlighting that such initiatives may shift the value focus over time. Simultaneously, the collaboration-oriented guiding principles developed by BioVentureHub did not change, but were rather seen as meriting protection, especially when AstraZeneca increased its value capture orientation. ...
This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes. This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.
... Reflecting the evidence that changes are needed in business modelsthe ways firms do businessto unlock 'the full potential of companies to solve ecological, social and economic problems' (Lüdeke-Freund et al., 2018: 145), great attention has recently been devoted in the practitioner and academic literatures to business models for sustainability (Beltramello et al., 2013;Geissdoerfer et al., 2018;Lüdeke-Freund et al., 2018a;Ritala et al., 2021). Sustainable Business Models (SBMs) are innovative architectures for the creation, delivery and capture of value, which place environmental and social goals at the core of the business and orient firms' activities (Stubbs, 2019). ...
... Several classifications have been provided to describe the variety of SBMs (Bocken et al., 2014;Lüdeke-Freund et al., 2018a;Ritala et al, 2018Ritala et al, , 2021, to provide inspiring examples for managers, and to help consolidate the academic literature. Such classifications of SBM typesalso called 'archetypes' 1provide a detailed description of different possible configurations of firms' activities for value creation. ...
... With the aim of helping researchers and practitioners to better grasp the phenomenon and provide examples of the broad range of SBM opportunities, efforts have been made to identify and compare types of SBM that firms might implement -'generic strategies' that can represent an inspiration for managers and a basis for theory testing and development (Bocken et al., 2014;Lüdeke-Freund et al., 2018a;Reinhardt et al., 2020). Each of those typesalso called archetypesentails a peculiar orientation and set of activities that enable firms to create shared environmental, social and economic value (Ritala et al, 2018(Ritala et al, , 2021. ...
The literature on Sustainable Business Models (SBMs) has burgeoned, identifying different archetypes to capture the variety of business models applied. Little is known, however, regarding to what extent such SBMs are effectively driving sustainable performance. This paper addresses this gap by exploring how SBMs relate to sustainability performance, considering both overall sustainable performance and the balance across the three dimensions – environmental, social, and economic (integrated performance). Based on original survey data on B Corps located in Italy, Spain and the United Kingdom, our findings suggest that the implementation of most SBMs results in the prioritization of one sustainability dimension over the others, especially when it comes to economically-oriented SBMs. Furthermore, our study suggests that none of the SBM archetypes considered is associated with a balanced sustainable performance, that is, none of them are inherently better able to overcome tensions across the Triple Bottom Line.
... Sustainable business models have been positioned as a key enabler for addressing systemic societal and environmental issues in a business context (Stubbs & Cocklin, 2008), and tackling institutionalised unsustainability (Bocken & Geradts, 2020;Ritala et al., 2021). In 2014, a typology of sustainable business model archetypes was developed (Bocken et al., 2014) to bring what were then disparate strands of the literature together to provide a unified understanding of what types of business model might facilitate or deliver more sustainable outcomes for the environment and society, while still delivering economic sustainability. ...
... Overall, it is disappointing to observe that the sustainable business model archetypes (Bocken et al., 2014) and later examples (e.g., Lüdeke-Freund et al., 2019;Ritala et al., 2018) are still not in widespread use, and even when applied do not seem to be delivering the needed level of transformation (Tukker, 2015). Ritala et. (2021) observe, unsustainability is embedded, or "institutionalised" within many of the world's conventional business models and our economic systems. Breaking down these institutionalised models is key to successful transformation to a more sustainable system. Cramer (2020) and Jaeger-Erben (2021) observe that successful business model innova ...
... Another 'overarching sector', that plays a fundamental role in driving unsustainable levels of production and consumption is the advertising and media sector, which only recently started to challenge its foundations. It was found that UBMs are still deeply embedded throughout the industrial system and all of today's major industries are still built on at least partially unsustainable business models, echoing recent work by Ritala et al. (2021). The UBM archetypes indicate potential dominant business models to deinstitutionalise more generally, and at a sectoral level. ...
Academic and business interest in sustainable business models (SBMs) as a potential solution to pressing global sustainability issues has grown significantly over the past decade. Yet, to date sectoral progress on business model innovation has been insufficient to address much of the social and environmental harm caused by, or facilitated by industry, and progress against the UN Sustainable Development Goals (SDGs) has been disappointing. This study investigates the following research question: What are the dominant “unsustainable business model” types per sector that institutionalise social and environmental harm, and hold back progress on the SDGs, and what are the potential sustainable business model responses? This paper first investigates the dominant unsustainable business model types and potential sustainable business model solutions per key sector. Based on this analysis, a comprehensive overview of nine dominant unsustainable business model (UBM) archetypes and potential sustainable business responses are developed. The UBM archetypes are: 1) Environmental resource exploitation and waste; 2) Human resource exploitation and waste; 3) Economic exploitation; 4) Unhealthy or unsustainable offering; 5) Quantity over quality and value; 6) Addictive consumption pattern; 7) Complex opaque global value chain; 8) Short-term shareholder – not stakeholder value and 9) Financing and supporting unsustainable practices. Furthermore, a hierarchy of sustainable business model responses is introduced, showing the need for business to develop multiple initiatives, and a recognition that the focus for SBM innovation should be to some extent sector specific. Finally, directions for future research to transform dominant unsustainable business models are provided.
... There is no generally accepted definition of the social dimension of sustainability [43]. However, socially sustainable development refers to assurances for present and future generations and enhancement of the capabilities of well-being and fairness [5,43,49]. Moreover, the social networks motivated customers to accept new hybrid technological vehicles [32]. ...
... Also, the directional distance function (DDF) is widely used for environmental applications, i.e., environmental performance. So, we used the latest version DDF refers to the generalized directional distance function (GDDF) [45,49]. The main reason for selecting generalized directional distance function (GDDF) was that [40] the inefficiency value obtained from the directional distance function DDF is not a proper measure as it does not always remain within the interval of zero to one. ...
This study measures the sustainable performance of ten car manufacturers operating in the U.S. We took into account three dimensions of sustainability: (a) economic, (b) environmental, and (c) social. Our methodology drew on the generalized directional distance function data envelopment analysis in conjunction with the multi-parametric method for bias correction of efficiency estimators. The combination of the two methods reduced the bias of efficiency estimators, which was sourced from the dimensionality of the production set and the sample size. Our analysis revealed that Chrysler-Fiat, GM, and Ford have the worst sustainable performance among firms under review over the years 2014-2018.
... This paper borrows from Ritala et al. (2021)'s two dimensions of value creation and appropriation, the first of which relates to the type of goods used to create value (private goods, club goods, public goods, and common goods) and the second to the domain of the value creation (economic, social, and environmental). This paper adds a longitudinal element to this framework to understand how these tensions develop. ...
... These tensions are often treated as "either-or" problems, rather than searching for "both-and" solutions, an approach that yields worse results for sustainable businesses (Van Bommel, 2018). This prioritization of economic value relates to institutional asymmetries between economic and environmental value (Ritala et al., 2021). Based on this case, the author proposes that economic and environmental tensions remain latent in earliest phases for sustainable startups. ...
... Economic and social-ecological domains have been popularly discussed to value sustainability-oriented innovation along the "triple bottom line" that aims to simultaneously improve profits, people, and the planet (Ahmed and Sundaram, 2012;Ritala et al., 2021). The economic domain is motivated by the financial returns that such innovations generate (Rauter et al., 2019;Wagner, 2010). ...
... In contrast, the social-ecological domains encompass human activities and the natural environment, including sustainability values related to e.g. social equity, healthcare, education, human rights, natural resources, and carbon emission (Dyck and Silvestre, 2018;Ritala et al., 2021). When social-ecological values are taken into account in FEI, this motivates firms to increasingly capture and exploit ideas focusing on sustainability values, reducing negative social-ecological externalities or enhancing positive social-ecological externalities (Dyck and Silvestre, 2018). ...
Decision biases reinforce firms’ tendency to develop innovations based on narrow economic motivations. Consequently, sustainability-oriented ideas explicitly targeting social and environmental issues are easily discarded in idea selection when trade-offs between economic and sustainability values are faced. Given the so far limited knowledge about how sustainability-oriented ideas are developed and selected in organizations today, this research aims to explore how managerial biases affect selection of sustainability-oriented ideas in internal crowdsourcing. It does so through an empirical study drawing on data collected from a Swedish multinational company using internal crowdsourcing for different types of innovation ideas. The empirical study explicitly identifies sustainability-oriented ideas based on machine learning and captures managerial biases for ideas based on sentiment analysis. Regression analyses reveal that managerial biases potentially affect the selection of sustainability-oriented ideas through the mediating role of managerial attention in idea development. Furthermore, this mediating relationship is moderated by search pattern in terms of directed search. The study contributes to the literature on both innovation and sustainability, shedding new light on the effects of managerial bias, managerial attention, and innovation search for decision making and provides managerial implications enabling a fruitful adoption of sustainability-oriented innovation ideas.
... If the economic domain includes the analysis of activities, of the different economic actors, based on the market, such as the production, distribution or trade, and consumption of goods Interlinking institutions and services (Ritala et al., 2021). The social domain encompasses human activities related to social sustainability, including elements, such as social equity, social justice, health, education, culture, community development, social capital, human rights, workers' rights, peacekeeping, social responsibility and community resilience. ...
... public administration, governments, citizens). However, the social domain is primarily based on the growth of public goods (Ritala et al., 2021). ...
Purpose-This study holds the objective of evaluating the impact of formal (e.g. ease of doing business score, start-up procedures to register a business, property rights) and informal (e.g. school life expectancy, collaboration between companies and human capital) institutions on the economic performance of countries in conjunction with the mediating effect of entrepreneurial activities and social performance.
Design/methodology/approach-The authors collected quantitative, secondary data from a range of different sources, specifically the World Bank (WB), Global Entrepreneurship Monitor (GEM), World Economic Forum (WEF), Freedom House (FH) and Doing Business (DB) for the years between 2016 and 2018. The authors deployed a quantitative approach based on estimating structural equation models according to the Partial Least Squares (PLS) method.
Findings-The authors find that institutions, whether formal or informal, impact positively on economic and social performance with entrepreneurial activities positively mediating the relationship between informal institutions and economic performance and social performance.
Practical implications-The study research holds key implications for strengthening institutional theory. The authors find that our empirical results draw attention to the impact that institutions and their functioning can have on economic performance. Through this alert, the authors aim for researchers, politicians and other diverse decision-makers involved in public policies to prioritise not only the good working of institutions but also fostering entrepreneurship, in order to boost the resulting economic performance.
Originality/value-The study research contributes to the literature by testing the model that links institutions, entrepreneurial activity and economic performance. The authors also help policymakers to become aware of the importance that the quality of institutions has on entrepreneurial activity, and, consequently on economic performance.
Keywords-Institutional theory, Entrepreneurship, Economic performance, Formal institution, Informal institution
... Business model innovation is recognized as a driver for transition towards sustainability (Stubbs & Cocklin, 2008;Lüdeke-Freund, 2010;Bocken & Geradts, 2020;Ritala et al., 2021) improving sustainability compared to technology innovation alone (Girotra & Netessine, 2013), but practitioners tend to be mainly focused on products and processes innovation rather than to business model. Academic literature pays great attention to SBMs (Lüdeke-Freund, 2010;Boons & Lüdeke-Freund, 2013;Charles et al., 2017;Evans et al., 2017) offering SBMs archetypes (Bocken et al., 2014;Ritala et al., 2018;Pieroni et al., 2019;Bocken & Short, 2021) but neglecting, with a few exceptions (Bocken & Short, 2021), the reasons why, even when applied, innovation in BMs does not deliver the needed level of transformation (Tukker, 2015). ...
... Academic literature pays great attention to SBMs (Lüdeke-Freund, 2010;Boons & Lüdeke-Freund, 2013;Charles et al., 2017;Evans et al., 2017) offering SBMs archetypes (Bocken et al., 2014;Ritala et al., 2018;Pieroni et al., 2019;Bocken & Short, 2021) but neglecting, with a few exceptions (Bocken & Short, 2021), the reasons why, even when applied, innovation in BMs does not deliver the needed level of transformation (Tukker, 2015). This is because a sort of institutionalized unsustainability of business models (Ritala et al., 2021) which needs to be identified in its root causes. ...
COVID-19 pandemic crisis threatened the stability of economy and the survival of many firms, but it has been also the chance to challenge the current economic development path and to rethink firms’ business models according to a more sustainable approach. Academic literature states that business model (BM) innovation is a driver for the transition to sustainability. Sustainable business models (SBMs) incorporate sustainability vision in the main components of business model, which are value proposition, value creation and value capturing. Nevertheless, the usual approach to business models, based on a positive concept of value, can underestimate some areas of potential opportunities to catch. For this reason, in this paper we suggest to adopt a novelty approach that emphasizes the negative concept of value (value uncaptured) to identify unexploited value opportunities. This approach can help firms innovating their BMs towards SBMs.
... Ecopreneurial activities create economic and environmental value. Environmental value creation is understood as the result of activities that supply or conserve natural assets (Ritala et al. 2021), thus contributing to the preservation of biodiversity, with changes in agricultural land use and pollution and climate control, among other results that impact the quality of life for society, but mainly for the environment (Gregori et al. 2021). ...
... More recently, Dyck and Silvestre (2018) propose that environmental value creation, under the Resource Based View theory, contemplates a more holistic value creation that balances a comprehensive set of forms of well-being (financial, social, ecological, spiritual, and physical) to all stakeholders (owners, employees, customers, suppliers, competitors, future generations, etc.). For Ritala et al. (2021) environmental value creation can occur directly and indirectly, involving the generation of new value for the natural environment. The authors cite the example of regenerative agriculture initiatives. ...
Ecopreneurs emerged as a specific class of entrepreneurs that demonstrate skills to connect business activities with the natural environment. However, while literature has come a long way in addressing drivers and motivations behind value creation in ‘traditional’ entrepreneurs, a conspicuous gap remains when it comes to the generation of environmental value in the ecopreneurial cohort. In this article we assess these relationships by focusing on the impact of ecopreneurial perspectives on environmental value creation, considering the effects of empathy, moral obligation, ecopreneurial self-efficacy, perceived social support, and environmental engagement of ecopreneurs. The sample consisted of 130 ecopreneurs participating in the Atlantic Forest Connection Project in southeastern Brazil, home to one of the most important ecoregions in the world. Analytical procedures involved Partial Least Squares Structural Equation Modeling (PLS-SEM) and fuzzy-set Qualitative Comparative Analysis (fsQCA). According to the PLS-SEM results, antecedents with a positive effect comprehend ecopreneurial self-efficacy, perceived social support, and environmental engagement. Complementarily, the fsQCA analysis indicates that three different configurations are sufficient for a high level of value creation, where empathy and perceived social support function as pivotal elements across paths. These findings contribute to formulating initiatives that aim at fostering sustainable transitions in entrepreneurial ecosystems. The research also contributes with analytical insights to the Sustainable Development Goals (SDGs).
... Our methodology is not based on a systematic review, but we followed a narrative literature review method (i.e. "a narrative review synthesizes evidence familiar to an author on a given topic or theme") to explore the concept of value in eco-design, as describe in (Sovacool et al., 2018) and adopted in a recent paper on value by Ritala et al. (2021). The objective is to contribute to a better knowledge on this topic, in line with previous research on value appropriation (Ritala et al., 2021) or sustainable value (Lüdeke-Freund et al., 2020). ...
... "a narrative review synthesizes evidence familiar to an author on a given topic or theme") to explore the concept of value in eco-design, as describe in (Sovacool et al., 2018) and adopted in a recent paper on value by Ritala et al. (2021). The objective is to contribute to a better knowledge on this topic, in line with previous research on value appropriation (Ritala et al., 2021) or sustainable value (Lüdeke-Freund et al., 2020). To do so, we has developed a resolutely interdisciplinary approach (cf. ...
Since the end of the 20th century, the engineering field, like many other sectors, has been faced with society's new preoccupations. Eco-design strives to reduce the harmful effect of industrial production and mass consumption on the environment. It makes use of tools and methods which, besides being built on technical and scientific foundations, borrow a vocabulary from economics and management science (“cost-benefits”, “needs”, “stakeholders”, etc.) and puts a fundamental category -“value”-, back on the agenda.
This research endeavors to show how these foundational concepts “contaminate” the tools colonized by an economical imaginary. Researchers' and scientists' attempts to modify or overturn the existing order come up against a blind spot: the definition of value in the engineering field and, more specifically in sustainable development, finds its theoretical origins in the political economics of the 18th century, more precisely in the neo-classical economy of the 19th century.
Through a narrative review methodology, we first argue that eco-design have not broken away from the ideology of orthodox economics, where riches are reduced to a simple monetary expression, and the social and environmental consequences are evaluated in terms of cost/benefits in the light of a rational instrumentality. Then, to illustrate these propositions, we base our arguments on the analysis of three tools used to develop ideas of sustainable development/innovation: Life Cycle Assessment; the Value Mapping tool, and the Triple Layered Business Model Canvas.
... Sustainable business models help zoom in on a spectrum of innovative activities that enable firms to propose, create and deliver, and capture sustainable value [15,[40][41][42]. ...
... Our analysis highlights how firm activities contribute in sustainability transitions by starting with changes in firm's practices, going through internal and external organizational structures, and reaching industry and societal changes in systems in a timescale from short-to long-term respectively. This contribution increases the understanding of how a diverse set of activities related to a firm business model support transitions from a governance perspective [21,42]. ...
Business models direct a firm’s activity to move in coherence with the objectives of the business. Current literature suggests business models can act as vital forces to facilitate sustainability transitions and highlights the urgent research call to understand the role of business model innovations in stimulating sustainability transitions. This paper addresses this research need by investigating how firms create business model innovations for system-level transformation towards sustainability. Through a systematic literature review and deductive content analysis methodology, we identify and categorize different combinations of innovative activities in a firm’s business model. Furthermore, two cases are illustrated to demonstrate the proposed conceptual model. The proposed conceptualization bridges a significant gap in the theme of sustainability and business and presents a defensible and researchable problem for transitions literature. Specifically, we find (1) shared vision and strategic dialogues among firms in different sectors as essential to develop value propositions and leverage business opportunities for sustainability in the long run; (2) companies ensure sustainable value creation and value delivery in the medium term through creation of an interdependent network of the green supply chain and collaboration with stakeholders; (3) in the short term, companies adopt sustainable practices, controlling daily operations, conducting awareness campaigns and experimenting with collaborations to deliver values based on sustainable practices.
... Sustainable business models help zoom in on a spectrum of innovative activities that enable firms to propose, create and deliver, and capture sustainable value [15,[40][41][42]. ...
... Our analysis highlights how firm activities contribute in sustainability transitions by starting with changes in firm's practices, going through internal and external organizational structures, and reaching industry and societal changes in systems in a timescale from short-to long-term respectively. This contribution increases the understanding of how a diverse set of activities related to a firm business model support transitions from a governance perspective [21,42]. ...
This paper explores firm level perspectives for sustainability transitions by analysing the activity system of a firm from the transition management lens. While sustainable business model studies provide useful inputs for firms’ sustainability actions, their role in contributing to sustainability transitions over decadal time scales remains largely unexplored. By identifying the content, structure and governance activity system of a firm we conceptualize their role in sustainability transition. Our conceptual framework suggests that specific activities from the value mechanisms of sustainable business models can change unsustainable dominant practices in organizations (short-term); internal and external operational structures (medium-term), and logics at the industry/sector and consumption levels (long-term). The paper details the above through a framework. The paper also contributes to theory by integrating the concepts of activity system approach and sustainable business model with transition management. Further, we understand how firm business model support transitions from a governance perspective. We provide recommendations for future research to further develop knowledge and help practitioners and policy makers in this urgent matter. Keywords: Sustainable business models; activity-system approach; sustainability transition, transition management"
... Among value-related transgressions, social and environmental unsustainability is common and has the most tangible implications for life on Earth; the researched cases of value-related transgressions involved employee mistreatment and workplace discrimination, corporate fraud, sweatshop factories and child labour, environmental harm and animal abuse, and controversial marketing practices and unethical production (e.g., Ouyang, Yao and Hu, 2020;Xu, Bolton and Winterich, 2021). Unsustainability is "institutionalized" in many of the global conventional business structures and economic systems (Ritala, Albareda and Bocken, 2021). Breaking down these institutionalized patterns and acknowledging that nature and humanity are inextricably linked to each other may be the key to a successful transition to a more sustainable economy, ensuring a future for nature and humans. ...
... Among value-related transgressions, social and environmental unsustainability is common and has the most tangible implications for life on Earth; the researched cases of value-related transgressions involved employee mistreatment and workplace discrimination, corporate fraud, sweatshop factories and child labour, environmental harm and animal abuse, and controversial marketing practices and unethical production (e.g., Ouyang, Yao and Hu, 2020;Xu, Bolton and Winterich, 2021). Unsustainability is "institutionalized" in many of the global conventional business structures and economic systems (Ritala, Albareda and Bocken, 2021). Breaking down these institutionalized patterns and acknowledging that nature and humanity are inextricably linked to each other may be the key to a successful transition to a more sustainable economy, ensuring a future for nature and humans. ...
... Building on this latter research trajectory, I argue that digital platforms provide a technological and organizational architecture enabling ecosystems that incentivize both economic and prosocial participation, thus offering the potential for major scalability and impact. Indeed, given that network effects driven by economic incentives are the main impetus for growth in platform markets (Cennamo, 2021;Kretschmer et al., 2022), the resulting impact can be considerable when economic logic aligns with the creation of social and environmental value (Porter & Kramer, 2011;Ritala et al., 2021). With this potential in mind, the present study focuses on platform ecosystems with a purpose that aligns with resolving a particular grand challenge and that orchestrate the platform participants' for-profit and prosocial motivations and incentives in a scalable manner. ...
The persistence of grand societal and environmental challenges demands attention from innovation management scholars and practitioners to find effective resolutions. Grand challenges are complex, uncertain, and evaluative and cannot be resolved by individual actors or organizations. Therefore, conventional forms of organizing do not suffice in the face of wicked problems like climate change or global inequality, which require continuous and varied attention and inputs. In this catalyst article, I argue that platform ecosystems—communities and groups of actors in different markets orchestrated through a digital platform and driven by combinations of economic and prosocial incentives—are an organizing form that can help effectively scale solutions for grand societal and environmental problems. This potential is based on three organizational elements of platform ecosystems: (1) coordination structures for orchestrating complementary inputs, (2) instigation and maintenance of collective action, and (3) generativity potential. I illustrate these arguments with practical examples of two platforms with the potential to resolve specific grand challenges: Patient Innovation, which orchestrates a community of innovators seeking to help treatment of chronic and rare diseases, and Excess Materials Exchange, which provides matching solutions to address the challenges associated with industrial material waste. The article concludes with an agenda for future research and practice on platform ecosystems and grand challenges.
... A number of empirical studies have explored startup and incumbent settings to analyze the development of SBMs and the processes whereby sustainability goals are achieved through such models (e.g., Bocken and Geradts 2020;Hockerts and Wüstenhagen 2010;Schaltegger et al. 2016b). While established firms undergo challenging transition paths in changing their conventional profit-oriented and "unsustainable business models" into sustainability-oriented business models (e.g., Roome and Louche 2016;Ritala et al. 2021;Schaltegger et al. 2016a), startups pursue sustainability-related opportunities as market gaps and design of novel SBMs from scratch to reinvent conventional value streams (Henry et al. 2020;Parrish 2010;Rok and Kulik 2020). ...
Sustainability research has increasingly emphasized the importance of value networks in the design and development of sustainable business models (SBM). This is because SBMs must incorporate economic, environmental and social goals to achieve their desired impacts, hence designing such models requires firms to develop an understanding of value creation from the perspective of all key stakeholders in their networks in order to co-create economic, social and ecological value. To advance our understanding of how value network activities shape SBM development, we conducted a longitudinal case study of RECUP, a born sustainable startup with a circular economy business model that has developed and worked with a broad value network to achieve a major reduction in waste from linear consumption. We identify three sets of value network activities that supported the continuous development of the firm’s value proposition and contributed to mutual value creation among stakeholders from business, politics and society: B2B-partnering, political agenda-setting and mobilizing end-consumers. Our contributions to research on SBM innovation and design include demonstrating how value network activities initially emerge through experimentation and consolidate over time through iterative learning processes. Such learning and adaption through dynamic value network activities is especially important, we argue, when value-creating factors are not sufficiently known in advance by startups and/or their stakeholders.
... The issue of sustainability echoes as a challenge for companies, whereas old managerial cultures, sustained by more traditional companies, will have to adapt to the directives of more sustainable development. From the most traditional to the most remote companies, these will all have to align themselves with the ESG not as a normative standard, but as an ethical, rational, and socio-environmental precept that promotes a culture for a more conscious capitalism (Ritala et al. 2021). ...
The Sustainable Development Goals (SDG), advocated by the UN, have been enhanced in business organizations under the spotlight of the financial sector, which guides the selection of investors in companies committed to ESG (Environmental, Social and Governance) goals. People are reassessing their individual choices, which affect business practices. This has leveraged sustainability and placed more sustainable commitments on the CEOs’ agenda and the corporations’ strategic planning. Movements such as Conscious Capitalism and Humanized Companies have grown while the style of companies’ business management becomes evident. Thus, the activity of humanized companies should be reviewed against the indicators of the sustainable development goals. Companies that place customers’ focus at the core of their business, must develop their staff’s awareness to act connected to a network for a greater purpose. Thus, within these dynamics, this survey aimed at reviewing the ESG and SDG guidelines in connection with sustainable and responsible activities carried out by the Irani paper and packaging company (one of the four largest paper mills in Brazil). Thus, the result of ESG business practices and the standards exhibited by Irani shows that there are people who are more aware, satisfied and who contribute better to the business, and the planet. Therefore, it is noteworthy that a conscientious company voluntarily contributes to the sustainable development of the surrounding communities. They favor people, the environment and the economy. Corporate social responsibility begins from within, the ego and further expresses and shares its values and develops its environment, the eco.
... While technical innovation is essential to create cleaner technologies and to ensure circular processes and practices, business model innovation is needed in order to fundamentally rethink the way business is done (Bocken et al. 2014). In this regard, sustainable and circular business models aim for a holistic approach that bridges economic, social and environmental value creation (Stubbs and Cocklin 2008;Ritala, Albareda, and Bocken 2021) and, when designed as such, can have a significant positive impact on circularity (Tukker 2004;2015). Importantly, circular business model innovation can extend its impact far beyond individual businesses. ...
Circular business models help businesses to create and capture value in ways that are in line with circular economy strategies, while at the same time making feasible business cases. Identifying circular business cases is not simple, however, and calls for major innovation efforts in different aspects of the firm's business model. In this chapter, we identify and demonstrate three lenses to circular business model innovation. First, we explicate how firms innovate circular value propositions, i.e., customer-facing promises of value creation that draw from circularity principles. Second, we focus on the firm-level business models, i.e., on how firms innovate their value creation, delivery, capture schemes to operationalize circular strategies. Third, we adopt the ecosystem lens, by examining how firms can involve a variety of complementary actors, governed via coordination mechanisms such as contractual frameworks, digital platforms, and around a shared value proposition. The three lenses are complementary and constitute an overarching view of circular business model innovation. We use examples to show how these lenses help companies implement the circular strategies of narrowing, slowing, closing and regenerating the loop. We also suggest directions for future research in this area.
... Non-human Stakeholders and Stakeholder Proximity. Including nonhuman stakeholders and the environment in strategic organizational management has been discussed so far, mainly in Business and Economics literature (Phillips & Reichart, 2000;Orts & Strudler, 2002;Driscoll & Starik, 2004;Steurer et al., 2005;Colvin et al., 2020;Ritala et al., 2021;Tallberg et al., 2022;Kortetmäki et al., 2022;among others). In our framework of SVC, self-organizing capacity is a vital aspect of the social dimension (Missimer et al., 2017a). ...
Stakeholder-orientation is critical to fostering sustainable urban development through synergic collaborations among urban stakeholders. However, although Stakeholder Value Creation (SVC) has been widely explored in sustainable organizations, little attention has been given to SVC in Urban Sustainability. Thus, this research explored the conceptual connections between SVC and Urban Sustainability using a new methodological protocol based on a Sequential Mixed Method Research design. The main findings revealed that the social, economic, and institutional dimensions of Urban Sustainability are fully integrated into the SVC framework; however, better integration of the Environmental Dimension is needed. Therefore, this dyadic phenomenon can currently be classified as unsustainable or weak sustainability. Additionally, the critical characteristics of SVC with Urban Sustainability are: stakeholder engagement; stakeholder cooperation; ethics of capitalism; satisfaction of stakeholders' needs by self-organization and learning capacities, diversity, trust, common meaning, and consensus; sustainable economic development; innovation ecosystems; sharing economy; circular economy; technical resources; social capital; smart sustainable cities; and energy efficiency. Finally, we proposed a framework for Sustainable SVC in Cities, in which SVC is a means for achieving Urban Sustainability and better integrating the environmental dimension. Environmental issues, environmental management, social entrepreneurship, non-human stakeholders, and stakeholder proximity are promising perspectives in the framework.
... Most prior research has focused on companies practicing either CSR in general or within a single CSR domain (e.g., Auger et al., 2008;Mohr and Webb, 2005). But such approaches belie the reality, as noted by growing literature, that CSR can exist in diverse domains (Öberseder et al., 2013;Li et al., 2021;Ritala et al., 2021;Xie et al., 2019) (for an overview, see Table 1). A few studies link CSR domains with consumer responses in efforts to understand their differentiated effects (Baskentli et al., 2019;Contini et al., 2020;Li et al., 2021;Shankar and Yadav, 2021), but they leave three key theoretical issues unanswered. ...
Companies engage in corporate social responsibility (CSR) in various domains. As the current research establishes, consumers respond to these various domains in distinct ways, depending on the congruence of each domain with the consumer's predominant or focal morality. Two experimental studies involving 1207 consumers—obtained from a single-country sample in Study 1 and a cross-national sample in Study 2—reveal that exposing autonomy-oriented consumers to ethics-based CSR, or purity-oriented consumers to environment-based CSR, leads to more favorable pro-company responses (i.e., attitudes toward the company) and pro-society responses (i.e., intentions to donate money and volunteer for the cause). However, the hypothesized congruence mechanism does not hold when community-oriented consumers are exposed to community-based CSR. These findings suggest that congruence between the CSR domain addressed by the company and the focal morality embraced by consumers can predict consumer responses to CSR. Furthermore, the findings provide practitioners with insights into how to communicate their CSR activities to different consumer targets, in ways that enhance both business returns and societal impacts.
... While experimenting and deciding upon scaling up, companies need to make difficult decisions on what capabilities to keep, develop, or source via others in the short and long term, despite the uncertainty. This work could be enriched by bridging studies from former research, e. g., on how companies successfully exploit new opportunities and challenge their existing business models (McGrath, 2010) with theories prevalent in sustainability, such as those on embedding heterogenous logics in business models, combining commercial and societal logics (Ritala et al., 2021;Laasch, 2018). ...
Consumer-facing corporations have started setting ambitious circular economy goals. However, it is unclear what innovators in corporations do to help meet these targets. The literature on circular business model innovation (CBMI) has focused on business-to-business contexts, efficiency, and recycling, but lacks insight into the innovation activities within consumer-facing corporations to pursue higher strategies in the waste hierarchy such as repair and reuse. Because of the size and potential impact of such organizations, it is important to better understand these activities. The aim of this study is to investigate the essential activities innovators in consumer-facing corporations carry out as part of CBMI. We use a dynamic capabilities lens to review the literature on innovation activities according to the CBMI stages of visioning, sensing, seizing and transforming. The following research question is investigated: What practices and tools help corporations build dynamic capabilities during the CBMI process? We conduct in-depth interviews with key informants dealing with CBMI in three corporations (H&M, IKEA, and Philips), and use thematic analysis to analyze and map the data to the four stages. We thereby add a range of CBMI innovation activities to the current literature and provide additional guidance for practitioners in large corporations.
... Driven by the need to halt ecological destruction while enhancing access to products and services, the reorganization of value creation between business and society is at the center of debate. Rather than a focus on economic value, businesses are increasingly challenged to co-create economic, environmental and social forms of value with a wide variety of stakeholders, such as cross-sectoral businesses, public institutions and non-governmental organizations (Freeman, 2017;Ritala et al., 2021). A proliferate area of research to enable such value co-creation deals with circular business model innovation (CBMI). ...
This PhD thesis investigates the role of businesses in addressing grand societal challenges such as climate change, environmental degradation and social inequality. Businesses can address such challenges through innovating new, sustainable business models, but in practice, their contribution has been extremely modest regarding the challenges at hand. To provide a sharper view on the potential of sustainable business models, this thesis explores the processes that businesses and their stakeholders go through in pursuit of sustainable business model innovation (SBMI). Through empirical and theoretical research, this thesis shows that SBMI requires the crossing, redesign and re-alignment of multiple types of organizational boundaries between the business and its multiple stakeholders that affect the desirability, feasibility and sustainability of the innovation. Such a process of stakeholder engagement and alignment can be better understood through boundary work, which involves a journey of exploring, negotiating, disrupting and realigning organizational boundaries based on multiple value creation, and requires brokering to re-align critical boundary dissonances in multi-stakeholder networks. This thesis develops a framework and actionable tool to illustrate how boundary work helps researchers to understand complex stakeholder interactions in SBMI, how businesses can engage in the first steps of collaborative SBMI, and how intermediaries can better support businesses in their boundary work for SBMI.
... Taking social responsibility can make enterprises gain a competitive advantage and promote innovation and global economic growth, and create value from the perspective of entrepreneurial psychology (Ritala et al., 2021). CSR is related to the characteristics of corporate ownership, country, and cultural background. ...
The research intends to improve the optimization of social media’s nature of corporate social responsibility (CSR) and standardize the influence mechanism of social media. First, the research analyzes the concepts of social media, CSR, and corporate reputation from the perspective of entrepreneurial psychology and expounds on the influencing factors of CSR scores from a macro perspective. Second, the mechanism of social media’s role in CSR is briefly discussed. On this basis, it is found that the most intuitive manifestation of social media platforms affecting the communication of CSR is the impact on the score of CSR. Three hypotheses are proposed, namely, (1) social media platforms, such as “WeChat,” have a greater impact on the communication of CSR; (2) social media is positively correlated with the increase in CSR scores; and (3) user reading and liking are positively correlated with the increase in CSR scores. Finally, 78 listed companies related to the mobile communication industry are selected as samples for the questionnaire survey and statistical analysis, and the hypothesis is demonstrated. The results demonstrate that the hypothesis that the social media platform “WeChat” has an impact on the communication of CSR is valid, and the hypothesis that the open state of “social media” is positively correlated with the increase in CSR scores is not valid. It is assumed that the number of user readings and likes is positively correlated with the increase in CSR score, which is valid under a limited sample. It is concluded that the WeChat platform has the best effect on the communication of CSR and can provide the impetus for the improvement of corporate reputation. The opening of “social media” is not directly related to the improvement of CSR scores. The correct operation of “social media” will have an impact on the communication of CSR. The correlation between the number of users reading and liking on “social media” and the increase in CSR score is not significant, as only the number of “likes” on social media related to shareholders is significantly associated with an increase in CSR score. The linear regression coefficient between the number of likes and the increase in CSR score is less than 0.05. There is a positive correlation between user reads, likes, and increases in CSR scores. This research helps enterprises to effectively fulfill their social responsibilities and improve the efficiency of CSR. This makes up for the lack of social media’s influence mechanism on the nature of CSR. It innovatively explores the impact of social media on CSR from the perspective of entrepreneurial psychology and provides some ideas for entrepreneurs and enterprises to create CSR and CSR value.
... Practically, the concept creates a cycle in which the return of responsibility for resource management is in the form of economic management results in the form of profits being given back to the environment (planet) and human life (people) in a balanced way (Farias, Farias, Krysa, & Harmon, 2020). Balance here means that the three dimensions must receive the same weight (Ritala, Albareda, & Bocken, 2021). ...
Consumers who buy their products through e-commerce are beginning to pay attention to a company's corporate social responsibility (CSR) status. Due to technological advancements, information became more transparent. Based on this phenomenon, research is required to determine the extent to which word-of-mouth consumers collaborate to increase value in order to achieve sustainability. In this study, the achievements are examined from the perspective of co-creation on the word of mouth aspect, with dimensions of three main factors, namely, social, economic, and environmental. The hypothesis of this study was tested using structural equation modeling (SEM), which includes an assessment of the segments of the related pathways. A total of 297 Indonesians who have completed at least 20 transactions in e-commerce, expressed concern about three important aspects of sustainability: people, profit, and the planet. This finding demonstrates the importance of co-creation of word-of-mouth value in achieving sustainability. Further research into the moderating effects of more detailed aspects of the supporting ecosystem could be conducted in the future.
... Value creation is a complex research field that can be analyzed on multiple levels of analysis and theoretical disciplines [56][57][58][59][60]. ...
Agricultural land demand tends to be in weak condition vis-à-vis settlement development, transport infrastructure and industry expansion. At the same time, the awareness and demand of consumers for regional food is constantly rising, in particular in urban regions. The resulting challenge is that high demand for regional food is concentrated at places where land for food production tends to be particularly under pressure. Against this background, our article reflects on the extent to which regional food supply chains support the status of agricultural demand in the competition for land. The main aim of our paper is to understand the role of proximity between the different stages of value creation, including cultivation, production (manual or industrial) and trade (retail, direct marketing). Our empirical study on the example of three products in Bavaria (Germany) shows that short distances within food value chains support the agricultural condition in land use dynamics (beer, sweet cherry, asparagus). The analyses are based on official and internal statistics as well as expert interviewing. This mixed-methods approach results in value-creation mappings and provides spatial differentiation of the economic process. Proximity between at least two stages of value creation plays an important role to explain the economic trends and land use dynamic. These findings are rooted in arguments of efficiency, tacit knowledge, networks, as well as product reputation. However, the role of proximity does not automatically play a role but has to be stabilized by strategic measures such as product innovation and marketing measures.
This conceptual paper aims to develop an approach that integrates the circular economy paradigm (4-R) with the new pathway proposed by McKinsey & Company for the post-Covid-19 renaissance (5-R) to reimagine the post-pandemic context as a new normal scenario. From an ecosystem perspective, the authors highlight the interconnections between this approach and the widely adopted theories in circular economy studies – the Stakeholder Theory and the Resource-Based View Theory – to provide a resilient model for decision-makers. In this context, the paper spotlight on how digital technologies can represent the enabling factor for implementing the newly proposed approach. In particular, the authors suggest that this approach could be applied within the agri-food sector, characterised by complex supply chains, to cope with future challenges and become more resilient in the new normal scenario. Our contribution is crystallised into a series of research propositions on the intersection between circular economy and digital technology in the data-driven decision-making literature.
The continuous search for sustainable practices in the tourism sector paves the way for alternative approaches to social entrepreneurship perspectives. Despite growing research interests in social entrepreneurship, the impact remains fragmented and this has led to calls for a details explanation of the process of social entrepreneurship in tourism sectors. The purpose of this chapter is to address this gap in the social entrepreneurship context by conceptualizing eco-tourism as a strategy to host communities and conserve the environment. By critically explaining the relationship between social entrepreneurship and tourism studies, this paper situates social entrepreneurship tourism within and for local community development. Drawing upon previous literature and case study research, this chapter explores the significance of eco-tourism for the process of social entrepreneurship. The key role is how this chapter explaining all entrepreneurship in these discussions led to the understanding of the issue, its definition, and its development. This chapter contributes to the emerging literature on social entrepreneurship and tourism to enhance the eco-tourism ecosystem as they focus on developing community-based social enterprises.KeywordsTourismSocial entrepreneurshipCommunity developmentCommunity-based
Digitization and cross-border entrepreneurship are driving research in business model innovation. The chapter describes a process to convert research findings into business model development insights by adopting a translational research approach. Entrepreneurs and top management teams can use the insights to map out how they will manage and assess, frame, create, communicate, deliver, capture, protect, and sustain economic and social value. A corpus of 465 paragraphs was assembled by extracting textual paragraphs from relevant research articles providing actionable insights for companies interested in designing or innovating their business models. The research approach employs topic modeling to structure the insights from a systematic literature review and associates the emerging topics with the eight elemental functions of an existing system-level business model framework. The resulting business model framework is theoretically driven but provides actionable insights for scholars and practitioners.
The circular economy has attracted the interest of business leaders, policy makers and academics alike for its potential to contribute to a more resilient, prosperous and resource‐efficient economy. The transition towards a circular economy requires new business models that challenge the linear logic of value creation that is still endemic across most industries. In turn, the transition from linear to circular business models involves the rethinking of strategic decision‐making processes and the development of new organisational capabilities. This paper addresses these important strategic implications of the emergence and implementation of circular business models. Coupling business models with open strategy and dynamic capabilities, we develop a “three‐pronged” strategy framework that advances the emerging field of circular business model research. Our contribution is crystallised into a series of propositions and future research questions for scholars working at the intersection of the circular economy and the strategy literature.
Digital platform technology enables circular business models that facilitate the reduction, reuse, and recycling of resources and materials across large ecosystems of platform actors. However, little is currently known about the inner workings of such platforms and how they are organized. Framing these platforms as meta-organizations, this study examines the orchestration mechanisms deployed by platform owners to facilitate economic value creation with a circular business model among a large group of actors. Building on an inductive analysis of 10 European platform organizations, this study identifies five meta-organizational orchestration mechanisms and develops an empirically grounded model that explains how the focal firm orchestrates value creation with a platform-based circular business model. This study advances the existing knowledge on orchestration mechanisms in platform-based meta-organizations in a circular economy context and highlights novel implications for theory and practice.
The impact of business model innovation (BMI) on business ecosystems, society, and planet is of growing theoretical and practical importance for strategic management. Increasing sustainability pressures warrant a better understanding of the impact of companies’ BMI through a more comprehensive analysis of innovation and its consequences. We discuss four foci of innovation (BMI, sustainable BMI, ecosystem innovation, and sustainable ecosystem innovation) to broaden the conceptualization of innovation and its economic, societal, and natural environmental impacts. We call for scholarship examining the impact of BMI to advance knowledge through research on value destruction and the dynamics of BMI over time.
Municipalities are increasingly adopting green public procurement practices in construction projects; one example is the specification of preferred building materials in public procurement tenders. Before tendering documents, different stakeholders and their ambitions influence the framing of material requirements. In this paper we explore factors initiating wood material selection in five public procurement cases, where the initiation phase of the procurement resulted in wood material use requirements specified in the public procurement tenders. Based on the cases, we constructed potential paths leading to building material requirements to be set in the tender documents. We also identified triggers initiating construction projects and offer a discussion of the role of different determinants related to building material use. These identified paths, triggers, and determinants unveiled the dynamics behind building material requirements in public procurement tenders and more specifically, the actions and underlying values for doing so.
In recent years, business ethics and economic scholars have been paying greater attention to the development of commons organizing. The latter refers to the processes by which communities of people work in common in the pursuit of the common good. In turn, this promotes commons organizational designs based on collective forms of common goods production, distribution, management and ownership. In this paper, we build on two main literature streams: (1) the ethical approach based on the theory of the common good of the firm in virtue ethics and (2) the economic approach based on the theory of institutions for collective action developed by Ostrom’s research on common-pool resources to avert the tragedy of the commons. The latter expands to include the novel concepts of new commons, “commoning” and polycentric governance. Drawing on the analysis of what is new in these forms of organizing, we propose a comprehensive model, highlighting the integration of two sets of organizing principles—common good and collective action – and five problem-solving processes to explain the main dimensions of commons organizing. We contribute to business ethics literature by exploring the convergence between the ethical and economic approaches in the development of a commons organizing view.
This study investigates how the circular economy and business models are related in the current business and management literature. Based on bibliometric analytical procedures, 253 articles were retrieved from the Scopus, Web of Science, and ScienceDirect scientific databases. The articles were analyzed according to network analysis principles, and key terms were mapped into a network. We used VOSviewer to build the network, explore the most-researched terms and their relationships, and identify less-explored terms and research gaps. We furthermore conducted a qualitative review of selected publications to provide an illustration of quantitative results and delve deeper into the research topics. The main findings revealed the networks of current topics as they appear in the publications such as business models, the circular economy, circular business models, value, supply chain, transition, resource, waste, and reuse, and their most prevalent relationships. The results also highlighted several emerging topics such as those connected with managerial, supply-side, demand-side, networking, performance, and contextual considerations of circular business models.
This article aims to uncover the processes of developing sustainable business models in innovation ecosystems. Innovation ecosystems with sustainability goals often consist of cross-sector partners and need to manage three tensions: the tension of value creation versus value capture, the tension of mutual value versus individual value, and the tension of gaining value versus losing value. The fact that these tensions affect all actors differently makes the process of developing a sustainable business model challenging. Based on a study of four sustainably innovative cross-sector collaborations, we propose that innovation ecosystems that develop a sustainable business model engage in a process of valuing value in which they search for a result that satisfies all actors. We find two different patterns of valuing value: collective orchestration and continuous search. We describe these patterns and the conditions that give rise to them. The identification of the two patterns opens up a research agenda that can shed further light on the conditions that need to be in place in order for an innovation ecosystem to develop effective sustainable business models. For practice, our findings show how cross-sector actors in innovation ecosystems may collaborate when developing a business model around emerging sustainability-oriented innovations.
Business models are developed and managed to create value. While most business model frameworks envision value creation as a uni-directional flow between the focal business and its customers, this article presents a broader view based on a stringent application of stakeholder theory. It provides a stakeholder value creation framework derived from key characteristics of stakeholder theory. This article highlights mutual stakeholder relationships in which stakeholders are both recipients and (co-) creators of value in joint value creation processes. Key findings include that the concept and analysis of value creation through business models need to be expanded with regard to (i) different types of value created with and for different stakeholders and (ii) the resulting value portfolio, i.e., the different kinds of value exchanged between the company and its stakeholders. This paper details the application of the stakeholder value creation framework and its theoretical propositions for the case of business models for sustainability. The framework aims to support theoretical and empirical analyses of value creation as well as the management and transformation of business models in line with corporate sustainability ambitions and stakeholder expectations. Overall, this paper proposes a shift in perspective from business models as devices of sheer value creation to business models as devices that organize and facilitate stakeholder relationships and corresponding value exchanges.
In line with the Sustainable Development Goals of the UN 2030 Agenda, the circular bioeconomy concept is gaining greater political momentum and research interest. A circular bioeconomy implies a more efficient resource management of bio-based renewable resources by integrating circular economy principles into the bioeconomy. These ideas have been well received at industry level since they are deemed to foster cost reductions, innovation and competitiveness. While recent scientific literature has dwelt on sustainability-related circular business models, empirical research on company-level implementation is only just emerging. Our study contributes to addressing this research lacuna by seeking answers to two questions: 1. How do small and medium-sized enterprises (SMEs) propose, create and deliver, and capture value through circular bioeconomy business models?; and 2. What are the business challenges and opportunities related to the operationalization of such business models? To this end, we employed content analysis on interview data gathered from managers in Finnish SME companies from the field of packaging, textiles, composite materials, cosmetics and pharmaceutical products. We outlined the main business model archetypes, and identified the key characteristics that enable value capture and delivery for various stakeholders. The contribution of this study is duly two-fold. From the perspective of a theoretical contribution, we expand and refine the conceptualization of sustainable circular bioeconomy and related business models. In addition, based on our findings, we provide insights and recommendations for researchers and policy-makers to advance the sustainability transition to a circular bioeconomy in the context of the forest-based industry, and for the management of SMEs to reflect on company viability and growth.
A series of weaknesses in creativity, research design, and quality of writing continue to handicap energy social science. Many studies ask uninteresting research questions, make only marginal contributions, and lack innovative methods or application to theory. Many studies also have no explicit research design, lack rigor, or suffer from mangled structure and poor quality of writing. To help remedy these shortcomings, this Review offers suggestions for how to construct research questions; thoughtfully engage with concepts; state objectives; and appropriately select research methods. Then, the Review offers suggestions for enhancing theoretical, methodological, and empirical novelty. In terms of rigor, codes of practice are presented across seven method categories: experiments, literature reviews, data collection, data analysis, quantitative energy modeling, qualitative analysis, and case studies. We also recommend that researchers beware of hierarchies of evidence utilized in some disciplines, and that researchers place more emphasis on balance and appropriateness in research design. In terms of style, we offer tips regarding macro and microstructure and analysis, as well as coherent writing. Our hope is that this Review will inspire more interesting, robust, multi-method, comparative, interdisciplinary and impactful research that will accelerate the contribution that energy social science can make to both theory and practice.
Public-private collaborations, or hybrid organizational forms, are often difficult to organize because of disparate goals, incentives, and management practices. Some of this misalignment is addressed structurally or contractually, but not the management processes and practices. In this study, we examine how the coordination of these social and work relationships, or relational coordination, affects task performance and the creation of social value. We employ a dyad perspective on two long-term relationships that are part of a wider ecosystem. We illustrate the social value creation process, identifying mutual knowledge and goal alignment, as necessary to create relational coordination. We find that the degree of professional embeddedness moderates the link between coordination and task performance, and explore the role that organizational and ecosystem experiences play. We develop a model of how relational coordination influences social value creation in hybrids. The findings have implications for social value creation, hybrid collaborations, and organizational design.
The transition within business from a linear to a circular economy brings with it a range of practical challenges for companies. The following question is addressed: What are the product design and business model strategies for companies that want to move to a circular economy model? This paper develops a framework of strategies to guide designers and business strategists in the move from a linear to a circular economy. Building on Stahel, the terminology of slowing, closing, and narrowing resource loops is introduced. A list of product design strategies, business model strategies, and examples for key decision-makers in businesses is introduced, to facilitate the move to a circular economy. This framework also opens up a future research agenda for the circular economy.
In this Introduction to the Special Topic Forum on Management Theory and Social Welfare, we first provide an overview of the motivation behind the special issue. We then highlight the contributions of the six articles that make up this forum and identify some common themes. We also suggest some reasons why social welfare issues are so difficult to addressin the context of management theory. In addition, we evaluate means of assessing social welfare and urge scholars not to make (or imply) unwarranted "wealth creation" claims.
Meta-governance is Earth system governance for dealing with the global commons. This article develops a whole network approach to meta-governance to explore the potential for collective action for sustainable development by a loosely coupled network of networks. Networked corporate social responsibility (CSR) governance has emerged around corporate sustainability and responsibility in the first years of the 21st century. Growing agreements and interactions among CSR initiatives suggest the development, structure, and governance of networked CSR governance as a network that can analytically be viewed as a whole and as a platform for learning about systemic change. Using the evolution of CSR initiatives from about 1990 to 2014, the authors differentiate four developmental stages: independent and fragmented multistakeholder networks as CSR governance, collaborative CSR governance, networked CSR governance, and integrated networked CSR governance. The authors then present a framework to analyze networked CSR governance as a whole network experimenting with meta-governance.
Boycotts are among the most frequent forms of consumer expression against unethical or egregious acts by firms. Most current research explains consumers’ decisions to participate in a boycott using a universal cost–benefit model that mixes instrumental and expressive motives. To date, no conceptual framework accounts for the distinct behavioral motives for boycotting though. This article focuses on motivational heterogeneity among consumers. By distinguishing two stable behavioral models—a self-regarding type and a strongly reciprocal type—we introduce the notion of strong reciprocity to the boycott literature. We argue that the presence of strongly reciprocal consumers can enhance boycott success. First, in interactions with the target firm, strongly reciprocal consumers perceive higher levels of egregiousness and are more willing to engage in boycotting behavior, even in unfavorable strategic conditions, which provides a stable basis for boycotting. Second, in interactions with self-regarding consumers, strongly reciprocal consumers are willing to sanction those others, according to whether they participate in the boycott, which increases overall participation in and the likelihood of success of a consumer boycott. These findings have implications for further research, as well as for firms, nongovernmental organizations, and boycotters.
Are we well dressed?
Our clothes are getting cheaper, they follow fashion
more rapidly and we’re buying more and more
of them. At the same time, we hear more about
poor working conditions in clothing factories, the
greenhouse effect is becoming more threatening and
the UK is facing a crisis in disposing of its waste. What
should we do?
This report aims to help answer that question, by
looking at what might happen if the way that our
clothes are made and used were to be changed. What
would happen if we used different fibres, or different
farming practices? What would be the consequence of
washing our clothes in a different way, or keeping our
carpets for longer? What would happen if more of our
clothes were disposed of through clothes banks?
In the UK we are already awash with information on
these questions – so why read this report? Firstly, the
report is intended to be neutral – it does not have
an agenda, or seek to promote a particular change
or approach. Secondly, it attempts to take a very
broad view of the sector – encompassing the views of
business, government and campaigners and trying to
reflect the widest definitions of ‘sustainability’. Thirdly,
it attempts to identify the potential for significant and
lasting change by looking at what might happen if a
whole industrial sector were to experience a change.
The report is intended to be valuable to a wide
range of interested groups. It is written for people in
business – who have to balance their personal ethics
and the concerns of their consumers with the need for
their business to prosper. It is written for consumers
who have a limited budget but are concerned about
the impact of their shopping choices. It is written for
campaigners and those in education, government and
the media – to try to provide as balanced evidence as
possible about the present and future impacts of the
clothing and textiles sector.
Five person-years of work leading to this report were
funded by the Landfill Tax Credit scheme, through the
Biffaward scheme administered by the Royal Society of
Wildlife Trusts and with 10% funding from Marks and
Spencer. On the way to writing the report, we have
received help from hundreds of people working in the
sector and have attempted to acknowledge many of
them inside the back cover. We would particularly like
to acknowledge the contributions of Marisa de Brito,
who worked with us for the first half of the project,
Jon Cullen who designed the graphics, sourced the
photographs and edited and laid out the document,
and our steering committee of Mike Barry from Marks
and Spencer, Peter Jones from Biffa and David Aeron-
Thomas from Forum for the Future.
Business model innovation is an important lever for change to tackle pressing sustainability issues. In this paper, ‘sufficiency’ is proposed as a driver of business model innovation for sustainability. Sufficiency-driven business models seek to moderate overall resource consumption by curbing demand through education and consumer engagement, making products that last longer and avoiding built-in obsolescence, focusing on satisfying ‘needs’ rather than promoting ‘wants’ and fast-fashion, conscious sales and marketing techniques, new revenue models, or innovative technology solutions. This paper uses a case study approach to investigate how companies might use sufficiency as a driver for innovation and asserts that there can be a good business case for sufficiency. Business models of exemplar cases are analysed and insights are gained that will contribute to future research, policy makers and businesses interested in exploring sufficiency.
Firms play a crucial role in furthering social welfare through their ability to foster stakeholders' contributions to joint value creation-value creation that involves a public good dilemma arising from high task and outcome interdependence-leading to what economists have labeled the "team production problem." We build on relational models theory to examine how individual stakeholders' contributions to joint value creation are shaped by stakeholders' mental representations of their relationships with the other participants in value creation, and how these mental representations are affected by the perceived behavior of the firm. Stakeholder theorists typically contrast a broadly defined "relational" approach to stakeholder management with a "transactional" approach based on the price mechanism- and argue that the former is more likely than the latter to contribute to social welfare. Our theory supports this prediction for joint value creation but also implies that the dichotomy on which it is based is too coarse grained; there are three distinct ways to trigger higher contributions to joint value creation than through a transactional approach. Our theory also helps explain the tendency for firms and their stakeholders to converge on transactional relationships, despite their relative inefficiency in the context of joint value creation.
To address global sustainability challenges, major investments are required in sustainable businesses that deliver triple bottom line results. Although interest in sustainable businesses is on the rise, these businesses are not yet widespread. Venture capital investment has a key role to play in the development of sustainable start-ups. The research area of ‘sustainable’ venture capital is still emerging. More research is required to understand how venture capital can support the development of sustainable businesses. This paper provides insight into how venture capitalists can contribute to sustainable business success, by investigating their role, motivations, investment theses, and barriers and enablers to success of sustainable ventures. The following question is investigated: How can sustainable venture capitalists contribute to the success of sustainable start-ups? Interviews were conducted with an expert sample of leading sustainable venture capitalists and other key stakeholders in sustainable entrepreneurship. It was found that next to financial support, venture capitalists provide triple bottom line business advice and network support. Key success factors include business model innovation, collaborations and a strong business case, whereas failure factors include a lack of suitable investors, a strong incumbent industry and a short-term investor mind-set. Sustainable start-ups should focus on triple bottom line business model innovation, find opportunity in new technology and funding platforms and develop multiple business cases to create success beyond the ‘green customer base’. Sustainable venture capitalists can help prove the success of sustainable business formats, mitigate financial risk through co-investments and exercise patience by balancing financial with social and environmental returns.
An effective integrative review can provide important insight into the current state of research on a topic and can recommend future research directions. This article discusses different types of reviews and outlines an approach to writing an integrative review. It includes guidance regarding challenges encountered when composing integrative reviews, such as fair representation of different perspectives and synthesizing that knowledge to yield new insights. An integrative review is of unique value among other types of knowledge-synthesis vehicles, such as narrative or systematic reviews and meta-analyses. Because each has distinctive but important approaches to synthesizing empirical knowledge, our protocol for writing integrative reviews is designed to complement these other knowledge-synthesis vehicles to best advance organization science.
Social enterprises aim to create both social and financial value, requiring the creation of business models that allow both objectives to be pursued simultaneously. However, the tensions between these objectives can make this a challenging task in terms of issues such as mission drift and commercial failure. Our multiple case study of seven social enterprises operating in Finland examines business model innovation in social enterprises from an activity system perspective to identify different patterns of activity through which social and financial goals are developed, discarded, and reconfigured. We find that the process involves variety of hybrid logics, with both sequential and parallel combinations of social and financial value, as well as gradual and discontinuous progressions. The findings also provide evidence of how social and financial goals guide the strategic framing of the business model in social enterprises by setting mutually constraining boundary conditions, restricting or guiding opportunities for business model innovation.
The concept of circular economy is increasingly receiving attention in different domains, including strategic management, operations management, and technology management. It requires companies to design their business model (i.e., the value network, the relationships with the supply chain partners, and the value propositions towards customers) around a new concept of sustainable development that reduces consumption of natural resources and preserves the environment. However, extant research falls short in terms of explaining how companies design their business model according to the circular economy principles. Starting from this premise, the present paper provides a systematic review of the literature on the design of business models in the context of circular economy, aiming to offer an overview of the state of research and outline a promising research agenda.
Ecosystems have recently emerged as a visible stream in organization and management research. The ecosystem concept promises a broader, systems view of organizational and technological phenomena beyond traditional firm, value chain or network boundaries. However, adopting an ecosystem approach presents a range of methodological challenges for researchers, including how to set boundaries for the ecosystems, as well as how to examine their structure and relationships, as well as to explain the inherent dynamics and co-evolution. Based upon on a complex adaptive systems lens, this study proposes a theoretically grounded but pragmatic approach to address these challenges. The proposed methodological framework facilitates exploration of the conceptual, structural and temporal dimensions of ecosystem research design. An illustrative example is also included to showcase the framework's applicability.
Since the inception of Sustainable Development Goals (SDGs), the Next 11 (N11) countries are facing difficulties in attaining the SDG objectives, as maintaining the environmental quality has been a challenge for them. In this study, we have revisited the technology policies of these countries, and in doing so, we have tried to address the problem of environmental degradation, while addressing the issues of sustained economic growth, clean and affordable energy, and quality education. In this pursuit, we have designed two indices for environmental degradation and technological advancement, and then analyzed the association between them following the Environmental Kuznets Curve (EKC) hypothesis. The empirical analysis has been done by IPAT framework, and by using bootstrapped quantile regression and rolling window heterogeneous panel casualty tests, over a period of 1990–2017. Following the results obtained from the analysis, we have tried to address the objectives of SDG 13, SDG 4, SDG 8, SDG 9, SDG 7, and SDG 10.
There is an increasing interest in the role of actors in the pursuit of sustainability transitions. In this paper, we adopt a life course perspective to explore active sustainability actors. To this end, we interviewed 16 professionals across private, public, and third sectors in Finland. The paper's main implication is in introducing a life course perspective to the study of active sustainability actors. Second, we propose a grounded model of active actors' sustainability engagement. The model details sustainability agency formation and maintenance dynamics. Going forward, our findings are a call for further research on sustainability agency, be it in its engagement, via life courses, or via the study of different actor types.
Since many years, companies are trying to cope with impressive technological growth rates, severe environmental issues and even more restrictive national and international directives. However, innovative Business Models (BMs) and industrial strategies adequate to this new context are still either under development or implementation. To this aim, the article proposes a systematic literature review on existing Circular Business Models (CBMs) and their classification methods, by selecting the most promising ones. A total amount of 283 articles related with CBMs has been assessed into detail, by identifying: 5 archetypes, 9 classification methods, 5 adoption-oriented challenges, 4 decision-support tools and 3 additional research areas. Key findings demonstrate that: i) Product-Service Systems (PSSs)-oriented and Reuse, Remanufacturing and Recycling (3R)-based CBMs are the most common archetypes, ii) Business Model Canvas is the most diffused classification framework, iii) sustainability and company-based challenges are the most discussed by the experts and iv) sustainability check-oriented is the most common type of decision-support tools. These (and others) results could support both companies, researchers and governments in updating the current knowledge on CBMs and make them adoptable for practitioners from different industrial contexts.
In times of climate change, biodiversity loss, or growing natural resource scarcity, the circular business model (CBM) concept is increasingly attractive, promoting the reorganization of current value creation architectures and supply chains toward a sustainable system of production and consumption. Driven by a vision of continued economic expansion and growth on a planet with finite natural resources, CBMs are endorsed by political institutions, multinational corporations, business consultancies, and academia. Some argue that CBM configurations contribute to a more holistic and radical change in the existing business logics than approaches that achieve incremental resource efficiency improvements. However, how “holistic” and “radical” are CBMs theoretically constituted in academia if we consider the deep structural and paradigmatic shifts in societies necessary to deal with the challenges associated with the Anthropocene? Prior studies do not examine the inherent normative settings and the operational change approaches beneath CBM concepts. To reconstruct the theoretical foundations of CBMs critically, the
recent CBM body of academic literature is systematically reviewed according to (1) the legitimacy of CBMs (why should it be done) (2) the modes of value creation and offerings (what should be done), and
(3) the core principles of CBM integration into daily business (how should it be done). From this synthesis, the predominant notion of sustainability behind the CBM concept can be revealed. This study
argues contemporary scientifically constructed CBMs need to be reconsidered if they are intended to contribute to a profound economic transition toward sustainability. Hence, the paper shows how principles from more “holistic”, “radical”, and pluralistic economic approaches can widen CBMs and how future research can help to diversify the concept.
Despite the growing number of studies on eco-innovation, the measurement of the specific financial resources applied to the eco-innovation process by firms and its internal management have not been thoroughly elucidated to date. Therefore, the main objectives of this study is to define, classify, and measure different dimensions of financial resources applied to eco-innovation by firms and to analyse the influence of business' technological and environmental management capabilities in the efficient allocation of these resources to undertake investments in eco-innovation. Resource amounts and their quality, availability and public nature are measured using a novel approach that addresses the study of their different aspects as a whole. A partial least square structural equation model (PLS-SEM) on a sample of Spanish companies shows that different dimensions of financial resources influence the eco-innovative investment and the internal management of eco-innovation.
The purpose of this chapter is to outline the development of the idea of "stakeholder management" as it has come to be applied in strategic management. We begin by developing a brief history of the concept. We then suggest that traditionally the stakeholder approach to strategic management has several related characteristics that serve as distinguishing features. We review recent work on stakeholder theory and suggest how stakeholder management has affected the practice of management. We end by suggesting further research questions.
THE CAPITALIST SYSTEM is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community.
The circular economy (CE) can be a driver for sustainability and CE can be promoted and supported by the creation of new and innovative business models, which embed CE principles into their value propositions throughout the value chains. This study focuses on the environmental value propositions of the CE business models. The term environmental value proposition refers here to an absolute value being a promise of environmental improvement, which a company provides to the environment by its impacts throughout the whole value chain. The aim of this study is to outline a framework for evaluating the environmental value propositions of CE business models. The framework consists of an environmental value propositions table (EVPT) and a step-by-step approach towards an evaluation process. The framework was tested in three CE business model cases. The outlined framework enables a better understanding of circular economy principles, combining them with the environmental value proposition. With the framework, companies can plan and design new CE business models or they can verify intended environmental benefits and analyse their contribution to sustainability. The biggest challenges, when applying the framework, were related to the estimation of environmental benefits gained from the environmental value propositions at the system level. In the future, intensive scientific work should concentrate on developing environmental assessment methods specifically for companies developing new CE business models.
This book was originally published by Macmillan in 1936. It was voted the top Academic Book that Shaped Modern Britain by Academic Book Week (UK) in 2017, and in 2011 was placed on Time Magazine's top 100 non-fiction books written in English since 1923. Reissued with a fresh Introduction by the Nobel-prize winner Paul Krugman and a new Afterword by Keynes’ biographer Robert Skidelsky, this important work is made available to a new generation.
The General Theory of Employment, Interest and Money transformed economics and changed the face of modern macroeconomics. Keynes’ argument is based on the idea that the level of employment is not determined by the price of labour, but by the spending of money. It gave way to an entirely new approach where employment, inflation and the market economy are concerned.
Highly provocative at its time of publication, this book and Keynes’ theories continue to remain the subject of much support and praise, criticism and debate. Economists at any stage in their career will enjoy revisiting this treatise and observing the relevance of Keynes’ work in today’s contemporary climate.
In this study, we examine the diversity of sustainable business models adopted by the largest global corporations — those listed in the S&P 500 index — over the period 2005–2014. We examine press release communications during this period, which represent public data about business-relevant events. We expect that examining this communication can reveal longitudinal patterns in the adoption of sustainable business activities and models. Empirically, we utilize academic and practitioner expert panels to build a set of keywords across nine sustainable business model archetypes and utilize automated content analysis to examine the breadth and nature of a firm's sustainable business activities and practices. We find evidence of the increasing prominence of different types of sustainable business models over time. In particular, the results show that large capitalized firms have mostly adopted the environmentally-oriented archetypes, and to much lesser extent the societal and organizational ones.
Improving product durability and reparability can save natural resources and money for consumers but may not always be in the best interest of all manufacturers. With the emergence of the circular economy as an important policy objective in the European Union (EU), there is renewed interest in policies to promote durability and address planned obsolescence. Different legislative approaches are currently used to provide incentives for design for durability and reparability at the EU and Member State levels. The EU has started to regulate durability through the Ecodesign Directive, whereas Member States have made use of other legal approaches such as longer consumer warranties, the criminalization of planned obsolescence and measures to incentivize the availability of spare parts. In this contribution, we review some of the legislation in place and discuss benefits and disadvantages of different legal approaches.
Most of the world's poor live in developing markets and face unmet needs in core areas such as education, health, energy, sanitation and financial services. This offers businesses a vast opportunity for growth as these economies emerge from low-income to middle-income status. Social businesses in particular address a social need while generating profits typically reinvested into the business itself, but there is limited understanding of the ways through which social businesses achieve scale. This paper investigates how social businesses can scale up. First, we define scaling up as “increasing the number of customers or members of a business as well as expanding its offer and maximising its revenues until it reaches millions of people.” Second, using three in-depth case studies of social businesses that successfully scaled up according to these definitions, BRAC, Aravind and Amul, we identify scaling up strategies for social businesses. We identified market penetration, market development, product development and diversification as key strategies at different stages of business maturity. We find that there are two ways of increasing income generated that are linked to these four strategies: increasing revenue per stream and diversifying revenue streams. Our findings give insight to companies aiming to pursue social businesses and adds to the sparse literature on scaling up social businesses. A fruitful future research avenue would be to investigate the best sequence for applying these scaling strategies across companies and sectors over time.
Drawing on the eco-innovation and resource-based view, this research attempts to contribute to the eco-innovation-performance debate by examining the effects of eco-innovation on business performance. In particular, we propose that the eco-innovation–performance relationship is contingent on environmental orientation and resources commitment. The analysis of 83 green-oriented SMEs in New Zealand suggests that eco-innovation has a positive effect on business performance. More interestingly, the findings show although environmental orientation does not directly influence business performance, it enhances the positive effect of eco-innovation on business performance. The results further suggest that green-oriented firms will reap more performance benefit of eco-innovation when they commit more organizational resources.
Most of the world's poor live in developing markets and face unmet needs in core areas such as education, health, energy, sanitation and financial services. This offers businesses a vast opportunity for growth as these economies emerge from low-income to middle-income status. Social businesses in particular address a social need while generating profits typically reinvested into the business itself, but there is limited understanding of the ways through which social businesses achieve scale. This paper investigates how social businesses can scale up. First, we define scaling up as “increasing the number of customers or members of a business as well as expanding its offer and maximising its revenues until it reaches millions of people.” Second, using three in-depth case studies of social businesses that successfully scaled up according to these definitions, BRAC, Aravind and Amul, we identify scaling up strategies for social businesses. We identified market penetration, market development, product development and diversification as key strategies at different stages of business maturity. We find that there are two ways of increasing income generated that are linked to these four strategies: increasing revenue per stream and diversifying revenue streams. Our findings give insight to companies aiming to pursue social businesses and adds to the sparse literature on scaling up social businesses. A fruitful future research avenue would be to investigate the best sequence for applying these scaling strategies across companies and sectors over time.
Although much has been written about value in coopetition initiatives, the dynamics of value creation and appropriation remain poorly articulated. This paper explores the types of value and the dynamics of value creation and appropriation when competitors cooperate.The research provides some suggestions towards semantic clarity and introduces new dimensions to the existing value creation and appropriation literature. We also present the Coopetition Value Matrix (CVM), an expanded typology that aids in the understanding of value dynamics in coopetition. Constructing the CVM required the incorporation of stakeholder theory and the concept of socio-environmental value, two aspects that are under-explored in coopetition research.We applied the CVM to a case of environmental coopetition in the South African wine industry, which provided us with empirical illustrations of the dynamic interaction of different types of value.
The transition within business from a linear to a circular economy brings with it a range of practical challenges for companies. The following question is addressed: What are the product design and business model strategies for companies that want to move to a circular economy model? This paper develops a framework of strategies to guide designers and business strategists in the move from a linear to a circular economy. Building on Stahel, the terminology of slowing, closing, and narrowing resource loops is introduced. A list of product design strategies, business model strategies, and examples for key decision-makers in businesses is introduced, to facilitate the move to a circular economy. This framework also opens up a future research agenda for the circular economy.
This paper explores a discrepancy between what the literature says about sustainability and how sustainability is actually practiced. Our analysis reveals that we are in a transition era in which firms incrementally offset—rather than eliminate—their negative impacts on the environment and society. We also argue that external stakeholders have yet to create the conditions that would compel firms to become truly sustainable. We further find that a firm's response to external pressure to become truly sustainable greatly depends on its capabilities. For large firms, the decision to become truly sustainable is driven by their ability to manage external stakeholders' expectations, with the most innovative of large firms remaining unsustainable even in the long term. In contrast, small innovative firms guide their decision-making based on their internal readiness to change and therefore will be the first to reach true sustainability. Finally, and regardless of size, firms that lack an innovation capability are unlikely to become truly sustainable; they will struggle to survive the transition era. This article is protected by copyright. All rights reserved.
This paper provides a theory of private politics in which an activist seeks to change the production practices of a firm for the purpose of redistribution to those whose interests it supports. The source of the activists's influence is the possibility of support for its cause by the public. The paper also addresses the issue of corporate social responsibility by distinguishing among corporate redistribution as motivated by profit maximization, altruism, and threats by the activist. Private politics and corporate social responsibility not only have a direct effect on the costs of the firm, but also have a strategic effect by altering the competitive positions of firms in an industry. From an integrated-strategy perspective the paper investigates the strategic implications of private politics and corporate social responsibility for the strategies of rival firms when one or both are targets of an activist campaign. Implications for empirical analysis are derived from the theory.
In recent years we have seen the first signs of a paradigm shift in environmental public policy. While traditional policy has predominantly targeted industrial production, newer approaches offer a more systemic perspective, where the role of consumption is put at the centre. However, this change is not yet well reflected in actual policy making. An evaluation of existing policy instruments for sustainable consumption and production demonstrates that the majority of policy instruments in EU aim to improve the ecoefficiency of production processes and products, and hence only indirectly address consumption. The aggregate environmental impacts of industrialised economies appear to be on the rise, and this trend will hardly be reversed unless more efforts are put into changing the patterns and levels of consumption. There are however several barriers towards such developments. These include lack of systemic perspective in current policy developments, the reigning paradigm of economic growth, the non-integrative nature of policy tools, and lack of effective instruments for addressing consumption patterns and levels. Unless these problems are addressed, it will be extremely difficult to initiate system level changes in society and stimulate institutional and behavioural changes towards sustainable consumption. This chapter discusses the complexity of the consumption challenge and policies to achieve more sustainable consumption patterns, and provides some reasons for why the progress has been slow. The main argument is that sustainable consumption is a complex issue that requires the development of policy packages consisting of policy tools that affect various stakeholders and comprise various types of instruments: regulatory, economic and information-based. A relevant issue concerns the role of governmental intervention: moving towards more sustainable systems of consumption and production may require a shift from governing to governance, where the role of governments change away from controlling functions towards more participation and collaboration.
Providing a much-needed critique of Corporate Social Responsibility (Csr) practice and scholarship, this book seeks to redress Csr advocacy, from a political and critical perspective. A strident approach backed up by extensive use of case studies presents the argument that most Csr-related activity aims to gain legitimacy from consumers and employees, and therefore furthers the exploitative and colonizing agenda of the corporation. By examining Csr in the context of the political economy of late capitalism, the book puts the emphasis back on the fact that most large corporations are fundamentally driven by profit maximization, making Csr initiatives merely another means to this end. Rather than undermining or challenging unsustainable corporate practices Csr is exposed as an ideological practice that actually upholds the prominence of such practices.
Despite much progress, scholarship on organizations and strategic management remains unduly reliant on economic models such as the industrial organization (IO) market structure-based analysis. The focus of such models is on price-output determination by firms and the economy-wide efficient allocation of scarce resources, under conditions of full knowledge and certainty. This limits their usefulness for students of organizations who have wider concerns and also focus on organizations, as opposed to just markets. In this article, we aim to provide a framework for analysing the most fundamental, even existential, issue of organization studies and strategic management scholarship. This is whether and how the pursuit of value capture from economic agents who perceive that they possess appropriable value creating advantages, capabilities and action potential, can motivate the emergence of organizations and their strategies and actions intended to capture socially co-created value in conditions of real life. To do so, we explore (the co-evolution of) value capture and creation and their relationship to organizational sustainable advantage (SA). We delve into the nature, determinants and relationship between organizational value capture and creation and explore causal pathways, trade-offs and co-evolution, as well as vehicles through which SA can be effected in an evolving and uncertain environment. We also discuss implications for managerial practice, limitations and future research opportunities.
Much social theory takes for granted the core conceit of modern culture, that modern actors - individuals, organizations, nation states - are autochthonous and natural entities, no longer really embedded in culture. Accordingly, while there is much abstract metatheory about "actors" and their "agency," there is arguably little theory about the topic. This article offers direct arguments about how the modern (European, now global) cultural system constructs the modern actor as an authorized agent for various interests via an ongoing relocation into society of agency originally located in transcendental authority or in natural forces environing the social system. We see this authorized agentic capability as an essential feature of what modern theory and culture call an "actor," and one that, when analyzed, helps greatly in explaining a number of otherwise anomalous or little analyzed features of modern individuals, organizations, and states. These features include their isomorphism and standardization, their internal decoupling, their extraordinarily complex structuration, and their capacity for prolific collective action.
In this article I provide a critical perspective on governing the global corporation. While the papers in the 2009 special issue of
Business Ethics Quarterly
explore the political role of corporations I argue that they lack a sophisticated analysis of power across institutional and actor networks. The argument that corporate engagement with deliberative democracy can enhance the legitimacy of corporations does not take into account the effects of institutional, material and discursive forms of power that determine legitimacy criteria. As a result corporate versions of citizenship mediate versions of social responsibility and morality, which are reflected in the institutional and political economic norms that are produced by this power/knowledge. In order to overcome the limits of corporate social responsibility there is a need to develop more democratic forms of global governance of corporations. A radical revisioning of democratic governance would also need to overcome the limits posed by sovereignty and would require new forms of multi-actor and multi-level translocal governance arrangements in an attempt to create forms of power that are more compatible with the principles of economic democracy.