Developing Dynamic Capabilities for Business Model Innovation in Start-ups: The Role of the Board

Abstract

Corporate governance research suggests that Boards of Directors can play a key driving role in promoting entrepreneurship and innovation. This role is especially crucial in start-ups or entrepreneurial firms that need to constantly renew their know-how and adapt their business model in order to find their place in the competitive environment. This research addresses how the Board behaves to nurture and drive business model innovation in a start-up. Basing on a dynamic capability perspective, this study investigates how, within a Board, Directors can adopt modes of interaction and dialogue that foster the renewal and development of know-how to innovate the business model. It also examines how such modes of interaction and dialogue can facilitate collaboration with partners in its ecosystem to transform the resources needed to innovate the business model and its implementation. It also focuses how Boards need to reconfigure their role when performing their tasks. The research is carried out by a single case study approach and investigates a young start-up company involved in the design of high tech innovative medical devices. Emerging findings show how a new combinative capability is generated by dynamically shaping the ecosystem and managing relationships with the actors involved.