Enabled Business Models Research Articles

Employee Ownership and Firm Digital Transformation

AbstractThe development of digital technologies has triggered the digital transformation of organizations, enabling business model innovation. With the rise of a human‐centred view of digitalization, previous studies have been devoted to exploring how leadership drives digitalization, overlooking the role of employees as a key stakeholder. Motivated by this gap, based on agency theory, we investigate how employee ownership affects digital transformation in firms. Further, we identify vital contingencies based on heterogeneity in human resource management under the ability–motivation–opportunity framework. Analysing data on Chinese listed firms from 2015 to 2021, we find that the adoption of employee ownership promotes firms’ digital transformation, and that this positive effect is moderated by R&D personnel (ability), female CEO (motivation) and state ownership (opportunity). Our findings reveal the role of employees in the digital transformation process, which deepens our understanding of the literature on employee ownership and business model innovation.

How do you enable business model innovation to thrive in your organisation?

How do you enable business model innovation to thrive in your organisation?

Digitally enabled business models for a circular plastic economy in Africa

In recognition of the need for an economic logic that complements and reinforces the ecological imperative for the circular plastic economy, this paper explores the importance and impact of digitally enabled circular plastic business models across retailing and distribution systems. The paper draws from 16 focus group discussions, complemented by 17 semi-structured interviews of frontline organisations incorporating digital innovations in their businesses to enable the management of plastic waste in Africa. The study finds that, across African countries, the transition to a circular plastic economy has been hampered by the limited uptake of circular products by consumers. In order to accelerate the transition, innovative business models are required to invigorate the ecosystem and simplify the logistics of retailing and distribution systems. The paper proposes a new conceptual framework that explicates the impact of digital innovations in the processes of value creation and value capture across a whole spectrum of circular economy reverse logistics activities: recycling, redistribution, and remanufacture. The study also highlights two important social and policy implications of digitally-enabled circular business models: Firstly, the creation of new employment opportunities through the empowerment of a new labour force for the circular plastic economy; secondly, the heightened opportunity to enact an innovative sharing economy in typically resource-constrained contexts in which otherwise idle products and resources are more efficiently used in a process of collaborative consumption.

How Does Digital Infrastructure Affect Manufacturing SMEs Business Model Innovation? An Empirical Study in Guangdong Province

ABSTRACT Based on the resource orchestration theory (ROT), this research explores the significant role of digital infrastructure in enabling business model governance innovation (BMGI) within manufacturing small and medium-sized enterprises (SMEs). Using a sample of 237 cases from Guangdong Province, China, linear regression analysis demonstrated that digital infrastructure could significantly facilitate such innovation. Additionally, both design and use recombination acted as mediators, with design recombination yielding a substantially stronger positive impact on BMGI. This study also highlighted the contrasting impact between discrete and process manufacturing, showing that discrete manufacturing derives more substantial benefits from digital infrastructure. The findings of this research provide valuable theoretical insights into the digital transformation and value creation of SMEs in the manufacturing sector.

How Digital Technologies Enable Business Model Innovation in the Energy Sector: An Empirical Study of Italian Energy Service Companies

The evolution of digital technologies has been expanding the business opportunities that firms can tap by leveraging such technologies. Business model innovation triggered by digital technologies allows firms to extend the scope of products and services they offer and create new markets. This trend is particularly relevant in the energy sector. However, little is known about how actually energy firms’ business models evolve because of the adoption of digital technologies. Therefore, this article aims at shedding light on the business model innovation process enabled by digital technologies in the energy sector. To this aim, eight Italian energy service companies that innovated their business model by adopting digital technologies are analyzed. The empirical analysis allows to spot an archetypal business models innovation process enabled by digital technologies in the energy sector. The study contributes to the literature on business model and business model innovation by highlighting how digital technologies may promote the evolution of business models and by spotting an archetypal business models innovation process that can be implemented accordingly. It also contributes to the emerging literature on digital transformation, by showing how digital technologies can be exploited by energy firms to improve their value creation, delivery, and appropriation mechanisms.

Business IT Alignment - Status Quo on a Survey Amongst Top It Managers in German Speaking Countries: A Replication Study

This research-in-progress paper describes how Companies and especially IT Organizations manage the Business-IT-Alignment between the Management including its Top Management Team and the Chief Information Officer (CIO). This is necessary as near to all companies are part of aworld where volatility, uncertainty, complexity, and ambiguity (VUCA) drive the constant adaption of Business strategy, business models, and Technology to stay either ahead of the competition or at least be able to compete head to head with the other market players. The CIO whose Role more and more is described as an executive one, rather than an operative one, needs to drive this process actively. The Scope of this research are bigger companies in the German-speaking DACH (Germany, Austria, and Switzerland) region from all industries. Excluded from the survey were state agencies. As the survey was purposely only offered in German language, a referral to other countries has been prevented. Purpose: To give interested practitioners and researchers an overview over the status quo. Additionally the outcome will be used to design research models for further analysis. Methodology: Based on data acquired in an online survey in the German-speaking DACH region, methods of descriptive statistics have been used to visualize the nature of the results. The results of this research are based on 168 individuals which held the position of a top IT manager. Results and conclusions: This paper gives a structured overview of key figures regarding IT Organization’s setup, CIO’s strategic work, and Business-IT-Alignment. The data suggest that IT organizations today are on the same level as other operational business processes and that CIOs are fully accepted as part of the top management team. This results in the fact that business IT alignment leads to the situation that most companies report that the IT architecture supports the business strategy very well. Yet, the participants report that their involvement in the development of the company strategy is average, which might cause issues in the future as new digitally enabled business models are more and more needed in a VUCA environment.

DIGITAL TECHNOLOGY BASED BUSINESS MODEL DESIGN ANALYSIS

This research investigates how digital technology aid in the development of new business models in the creative industries. A holistic business model framework was built through a thorough literature study, which was then utilized to assess empirical evidence from the creative industries. According to the findings, digital technology have permitted widespread changes in company structures, and several noteworthy patterns have emerged. However, the redesigned business models are frequently not 'new' in the sense of being unprecedented. Business model innovation primarily manifests itself in the use of digital technology to enable the deployment of a broader choice of business models than was previously available to a corporation. The increasing adoption of numerous business models as a portfolio inside one corporation is a key rising trend. This occurs in enterprises of all sizes when a single firm employs numerous business models to service distinct market groups, offer different products, or engage in multi-sided markets, or employs changing business models over time. A recursive learning process refines and extends the holistic business model framework, which can serve as a cognitive instrument for comprehending business models as well as a planning tool for business model improvements. The study advances our understanding of business model theory and how digital technologies enable business model innovation in the creative industries. Three new study topics for the future are emphasized.

Minimum cost spectrum allocation with QoS guarantees in multi-interface multi-hop dynamic spectrum access networks

Spectrum Sensing as a Service (SSaS) is emerging as the enabling business model for efficient spectrum sharing in many recent applications. In such model, sensing infrastructure provides dynamic spectrum access networks, also known as cognitive radio networks, with information about availability or unavailability of given spectrum bands. In return for such information, the service provider imposes money costs on the users of the dynamic spectrum access network or its operator. In this paper, we address the problem of spectrum allocation along a route in multi-interface dynamic spectrum access networks under the SSaS model. The objective is to allocate spectrum channels to interfaces of nodes along the route so that the total sensing cost imposed by SSaS provider is minimized and the quality of links meet a predetermined QoS requirement, specifically a data rate requirement. The problem is formulated as an Integer Linear Program (ILP) to obtain the optimal solution. Given the intractable complexity of ILPs, a sub-optimal algorithm is proposed. The accuracy of the proposed algorithm is validated via extensive experimentation.

Exploring the Boundaries of Success: A Literature Review and Research Agenda on Resource, Complementary, and Ecological Boundaries in Digital Platform Business Model Innovation

Digital platform business model innovation is a rapidly evolving field, yet the literature on resource, complementary, and ecological boundaries remains limited, leaving a significant gap in our understanding of the factors that shape the success of these platforms. This paper explores the mechanisms by which digital platforms enable business model innovation, a topic of significant theoretical and practical importance that has yet to be fully examined. Through a review of the existing literature and an examination of the connotations of digital platforms, the design of platform boundaries, and the deployment of boundary resources, the study finds that (1) the uncertainty of complementors and complementary products drives business model innovation in digital platforms; (2) the design of resource, complementary, and ecological system boundaries is crucial to digital platform business models and manages complementor and complementary product uncertainty while promoting value co-creation; and (3) boundary resources establish, manage, and sustain cross-border relationships that impact value creation and capture. Based on these findings, four research propositions are proposed to guide future research on digital platform business model innovation and provide insights for effectively innovating business models and influencing value creation and capture.

Business models for digital sustainability: Framework, microfoundations of value capture, and empirical evidence from 130 smart city services

The emerging research stream on digital sustainability examines how digital technologies enable the creation of environmental and social value. The need to finance the creation of such value calls for a business model perspective that combines value creation and value capture. To extend the digital sustainability literature in this regard, we adopt a microfoundations perspective and argue that the configuration of value creation influences the decision of users to pay for a value proposition or not, which in turn affects organizational value capture. Applying a crisp-set qualitative comparative analysis to 130 smart city initiatives in Switzerland, we develop a three-dimensional framework of business models for digital sustainability. The framework comprises 12 theoretically possible business model types, representing distinct business model configurations. We contribute to the digital sustainability and the microfoundations literatures by analyzing, explaining, and classifying the diversity of digitally enabled business models in the context of smart cities.

Get Ready for Quantum Age: The Implications of Quantum Technologies for Business Model Innovation

Quantum technologies (QT) are nearing a phase of commercialization where technology adoption and business model design are becoming a major topic among practitioners and policymakers. This paper explores the potential impact of QT in transforming the way firms create and capture value. We identify the key properties of quantum mechanics and explain their potential in enabling new applications around computation, communication, and sensing. We propose that the application of QT has the potential to enable business model innovation by generating new market demand through novel customer value propositions, changing the structure of transaction costs, and enabling unique capabilities. This study aims to highlight the theoretical challenges and opportunities for management scholars and help organizations prepare for the quantum-enabled economy by analyzing the impact of QT on business models.

The economic case against licensing negotiation groups in the Internet of Things

Abstract Competition policy generally prohibits coordination among buyers or sellers, especially coordination on price, price-related inputs, and output. In licensing markets for standard-essential patents (SEPs), it has been periodically proposed that this rule should be relaxed to permit licensing negotiation groups (LNGs), which is expected to reduce transaction costs and the purportedly ‘excessive’ royalties paid to licensors. Based on the economic structure and historical performance of wireless technology markets, this policy intervention is likely to degrade, rather than enhance, competitive conditions in the wireless, automotive, and other markets encompassed by the ‘Internet of Things’. In the short term, LNGs would most likely result in a redistributive (not an efficiency) effect that shifts value from innovators to implementers in the technology supply chain without necessarily passing on cost-savings to consumers. In the medium to longer term, LNGs are liable to impose efficiency losses by endangering the viability of licensing-based monetization models that have funded research and development, promoted dissemination of technology inputs, facilitated entry in device production, and enabled business models across multiple industries. While LNGs may reduce the transaction costs of SEP licensing, the historical record shows that pooling structures can achieve the same objective at a substantially lower risk of competitive harm.

Management Control and Business Model Innovation in the Context of a Circular Economy in the Dutch Construction Industry

This study explores how different forms of management control support and enable business model innovation in the context of the principles of the circular economy. Following a qualitative research approach, empirical data is collected from construction companies and governmental organizations in the Netherlands. Building on Simons’ four levers of control. This paper illustrates how to balance the intended and emergent strategies via the organization’s management control system. According to Simons, the four levers encompass the beliefs systems, the interactive control systems, the diagnostic control systems, and the boundary controls. The empirical findings uncover the beliefs systems and the interactive control systems to be the most relevant levers that enable and drive business model innovation striving for the effective use of materials. Rather than measuring the output with predefined performance indicators, business model innovation in this context is better served by diagnostic controls which evaluate how innovative business models contribute to the organization’s mission.

The ROAD to continuous business model innovation: A longitudinal study unveiling patterns of cognitive sensing dynamic capabilities

The dynamic capabilities of sensing, seizing and transforming enable business model innovation. The emerging literature on the cognitive antecedents of business model innovation identifies several sensing capabilities that could facilitate the design of a new business model. However, little attention has been paid to the configuration of different patterns of sensing capabilities as enablers of business model innovations over time. This longitudinal case study uses a cognitive perspective to explore such sensing dynamic capabilities across three generations of business owners of a butcher's shop that has engaged in four business model innovations over 80 years. The innovations allowed the firm to grow, whereas most of its competitors faced severe crises or even failed because they decided to retain the same business model. Our cognitive perspective allows us to unveil different patterns of four sensing capabilities (i.e. Responding, Overturning, Anticipating and Dribbling) that allowed us to describe the ‘ROAD’ the business owners travelled to initiate their business model innovation processes. This ROAD to business model innovation and the detailed patterns underlying the four capabilities may help other small business owners develop viable business models and overcome the challenges of business model innovations.

How AI capabilities enable business model innovation: Scaling AI through co-evolutionary processes and feedback loops

Artificial intelligence (AI) is predicted to radically transform the ways manufacturing firms create, deliver, and capture value. However, many manufacturers struggle to successfully assimilate AI capabilities into their business models and operations at scale. In this paper, we explore how manufacturing firms can develop AI capabilities and innovate their business models to scale AI in digital servitization. We present empirical insights from a case study of six leading manufacturers engaged in AI. The findings reveal three sets of critical AI capabilities: data pipeline, algorithm development, and AI democratization. To scale these capabilities, firms need to innovate their business models by focusing on agile customer co-creation, data-driven delivery operations, and scalable ecosystem integration. We combine these insights into a co-evolutionary framework for scaling AI through business model innovation underscoring the mechanisms and feedback loops. We offer insights into how manufacturers can scale AI, with important implications for management.

AI-enabled business-model innovation and transformation in industrial ecosystems: A framework, model and outline for further research

Manufacturing incumbents find it difficult to integrate AI in their traditional business models. This paper draws on the research question: How does manufacturing incumbents use AI for enabling business model innovation in industrial ecosystems? We use qualitative method in order to study four large global manufacturing incumbents that are transforming their business models with AI. We performed more than 30 semi-structured in-depth interviews with strategic key personnel in order to understand how they have succeeded with implementing AI and transforming business models. Our main contribution establishes the need for AI business-model innovation to be aligned with ecosystem innovation. Specifically, in short-term incumbents may use ecosystem reconfiguration strategy, whereas long-term strategies relate to ecosystem revitalization, and resilience. Thus, we contribute by connecting organizational microelements with ecosystem macro dimensions and provide an evolutionary model envisioning how incumbents attempt to promote strategic transitions in their firms and ecosystems.

Exploring Innovative Marketing Opportunities for Halal Entrepreneurs in Hospitality and Tourism Industry

Innovation is essential for long-term competitiveness of firms. The lack of innovation can reduce the competitiveness of firms in the hospitality and tourism industry. Therefore, Halal entrepreneurs in the Halal travel market must prepare for a future led by innovation and technology and to build scalable, digitally enabled business models. There are many innovative opportunities that can be translated into Halal tourism product/services for Muslim and non-Muslim travellers. Some aspects of Halal travel may also satisfy the demands of the non-Muslim market. The paper discusses seven innovative opportunities that could be exploited by Halal entrepreneurs in the hospitality and tourism market. The findings are useful for entrepreneurs to develop Halal products and services for Muslim and non-Muslim travellers.

Digital technologies catalyzing business model innovation for circular economy—Multiple case study

Digital technologies have been increasingly argued to enable circular economy business models. However, the extant research is based on conceptual and review studies, leading to a lack of understanding of how digital technologies enable individual firms in real-life settings to improve their resource flows and value creation and capture and thereby enable business model innovation to emerge. In this study, we conducted a multiple case study with interviews and document data from four Northern Europe-based forerunner firms with circular economy business models enabled by digital technologies, providing two key contributions to the extant literature. First, we generate an empirical evidence -based synthesis of improvements of resource flows and value creation and capture in firms’ businesses across industries, highlighting the critical role of knowledge generation. Second, we develop a model of four key types of business model innovation for circular economy catalyzed by digital technologies, varying on incremental and radical improvement to both the resource flows and value creation and capture, providing theoretical insights to both business model innovation and digital technologies in circular economy. For managers, we suggest suitable digital technologies for the key types, highlighting the importance of radical business model innovation catalyzed by data integration and analysis technologies.

Enabling Conditions for Consumer-Centric Business Models in the United Kingdom Energy Market

To achieve ambitious United Kingdom decarbonization targets, consumers will need to engage with energy services more so than they have done to date. This engagement could be active or delegated, where in the latter consumers pass responsibility for engagement to a third party in return for ceding some control over decisions. To date, insight into the barriers to consumer adoption of future business models has been limited. To address this gap this study explored benefits, risks and enabling conditions using two extreme consumer-centric business models, third Party Control and Shared Economy. The approach yielded information from stakeholders on what would have to be true for one of the business models to dominate the market. The results show substantial agreement across the expert groups on five key issues that will need to be addressed in the near-term to enable energy business model innovation in the United Kingdom market. These are: 1) Create space to enable business model innovation; 2) Ensure smart devices and data are interoperable and secure; 3) Improve the service standards of energy businesses; 4) Ensure business models work for consumers in all situations; and 5) Implement targeted carbon regulation.

Strategizing for Dynamic consistency in Digital Innovation: The Role of Intellectual Property

IP strategy has moved from a primary focus on value capture to increasingly also consider aspects of value creation, not the least in digital innovation. Digital innovation has created a plethora of business models and enabled business models to change, sometimes rapidly, over time. All of this has complicated the general advice that the IP strategy should be integrated with the business model. In this research, we seek to better understand how digital technology-based startups use IP strategy to support their business models under uncertainty, and especially when business models are likely to change. We study seven digital technology-based startups through 35 semi-structured interviews with elite informants. In addition to IP strategizing for value creation and value capture we find that decision-makers strive to build and maintain dynamic consistency of their IP strategies, meaning that the strategies should be compatible with, and balance between, the firms’ current components of value creation and value capture, while simultaneously being compatible with future changes in the business models. The capability to achieve an IP strategy that is dynamically consistent is a dynamic capability of significant importance for innovative firms facing an uncertain future where business model change is likely to happen. We find several principles used by decision-makers to enable dynamic consistency.