Adopting a New Business Model and Firm Performance: Evidence from the Advertising Industry

Abstract

This paper analyzes the role of organizational capabilities in the success of a new business model. In particular, it is argued that when a firm engages in the process of adopting a new business model, existing capabilities are activated and new capabilities are developed that lead to improving company performance. In this regard, the moderating role of managerial and creative capabilities on the assumed positive relationship between a new business model and company performance is analyzed. Furthermore, it is argued that a firm’s business group affiliation can influence its capabilities and hence play a role related to value creation from a new business model. The proposed framework is analyzed using data from the advertising industry. The study contributes to the literature of business models by shedding light on the role of organizational capabilities and business group affiliation.