Strategic Leadership and Business Model Innovation: Integrating Micro and Macro Perspectives

Abstract

Business Model Innovation (BMI) is a real phenomenon, which is very important to understand, yet poorly understood. Despite the importance of strategic leadership to BMI, there is very little attention to it in the literature. Using the theory of dynamic capabilities as an underlying framework, we develop a theoretical, multi-level relationship between strategic leadership, TMT strategic agility and employee flexibility, which are critical organizational competencies necessary for orchestrating BMI. We conceive of firm-level strategic agility as a combination of TMT strategic agility, comprised of collective commitment and strategic sensitivity at the TMT level, and employee flexibility, comprised of skills flexibility and behavioral flexibility at the employee level. We contribute to the literature by addressing the important phenomenon of BMI and by bridging the micro-macro divide. We highlight our contributions, discuss limitations of our theoretical model, and conclude the paper with both academic and practical implications followed by future research directions.