Business Model Innovation as Lever of Organizational Sustainability

Abstract

The concept of business models and consequently business model innovation has its foundation in corporate practice, strategic management, and industrial economics. However, business models are not a strategy but constitute the core and driver of a strategy as well as the key for decoding, understanding, and effectively communicating a strategy both within an organization as well as across its business ecosystem. As with Business Model, the Business Model Innovation literature is not well developed. This paper focuses on the effects that can be achieved through business model innovation, in particular organizational sustainability. In this regard, the paper focuses on the organizational design and governance and the role different stakeholders, predominantly customers and partners play in the innovation process towards organizational sustainability. Finally, the ways by which organizational performance is influenced by different business models are also explored, aiming to shed light on this theoretical gap. The results provide insights to manufacturers in developing countries, overcoming their dependence on commoditized products and OEM manufacturing while maintaining a sustainable ecosystem. Finally, implications for theory, policy, and practice are outlined along with the suggestions for future research.