Activities and Value: Framework for Sustainable Business Models

Abstract

Traditional perspective on business models focused on how an enterprise delivers value to customers has become insufficient and outdated in light of increasing pressures and expectation on companies to create social and environmental value while building their economic success. This study addresses this problem by combining the activity system perspective on business models, with the stakeholder-based perspective on value and with insights from broader research on value, to develop a combined activity/value framework. The framework identifies activities performed, determines their structure, identifies related stakeholders, identifies different types of value created (or destroyed), and the value sources and capture mechanisms for the involved stakeholders. It enables the linking of particular activities to their diverse value outcomes for stakeholders. The framework is especially relevant for assessing how business models of social enterprises, and other hybrid organizations create different types of value for multiple stakeholders. We demonstrate the use of this framework with the case of Kopernik, an Indonesia-based social enterprise providing technology to low-income, remote communities.