Designing your future business model: An activity system perspective

Building on the received literature, we conceptualize a firm's business model as a system of interdependent activities that transcends the focal firm and spans its boundaries. The activity system enables the firm to create value in concert with its partners but also to appropriate a share of the value created. Anchored on theoretical and empirical research, we suggest two sets of parameters that activity systems designers need to consider: design elements - content, structure and governance - that describe the architecture of an activity system; and design themes - novelty, lock-in, complementarities and efficiency - that describe the sources of the activity system's value creation.Business model; activity system; design;

Business model innovation: Creating value in times of change

We highlight business model innovation as a way for general managers and entrepreneurs to create and appropriate value, especially in times of economic change. Business model innovation, which involves designing a modified or new activity system, relies on recombining the existing resources of a firm and its partners, and it does not require significant investments in R&D. We offer managers and researchers a conceptual primer on business model innovation emphasizing the importance of system-level thinking.Business model; innovation; activity system; design; value creation;

The business model: Theoretical roots, recent developments, and future research

The paper provides a broad and multifaceted review of the received literature on business models, in which we attempt to explore the origin of the construct and to examine the business model concept through multiple disciplinary and subject-matter lenses. The review reveals that scholars do not agree on what a business model is, and that the literature is developing largely in silos, according to the phenomena of interest to the respective researchers. However, we also found some emerging common ground among students of business models. Specifically, i) the business model is emerging as a new unit of analysis; ii) business models emphasize a system-level, holistic approach towards explaining how firms do business; iii) organizational activities play an important role in the various conceptualizations of business models that have been proposed, and iv) business models seek not only to explain the ways in which value is captured but also how it is created. These emerging themes could serve as important catalysts towards a more unified study of business models.Business model; strategy; technology management; innovation; literature review;

How are U.S. Family Firms Controlled?

In large U.S. corporations, founding families are the only blockholders whose control rights on average exceed their cash-flow rights. We analyze how they achieve this wedge, and at what cost. Indirect ownership through trusts, foundations, limited partnerships, and other corporations is prevalent but rarely creates a wedge (a pyramid). The primary sources of the wedge are dual-class stock, disproportionate board representation, and voting agreements. Each control-enhancing mechanism has a different impact on value. Our findings suggest that the potential agency conflict between large shareholders and public shareholders in the United States is as relevant as elsewhere in the world

Learning about Failure: Bankruptcy, Firm Age, and the Resource-Based View

Systematic differences in the determinants of firm failure between firms that fail early in their life and those that fail after having successfully negotiated the early liabilities of newness and adolescence are identified. Analysis of data from 339 Canadian corporate bankruptcies suggests that failure among younger firms may be attributable to deficiencies in managerial knowledge and financial management abilities. Failure among older firms, on the other hand, may be attributable to an inability to adapt to environmental change

Business Model Innovation: Toward a Process Perspective

Business model innovation matters to managers, entrepreneurs, and academic researchers because it represents an often underutilized source of value and, as such, could translate into sustainable performance advantage. Yet, despite the importance of the topic and the increasing attention it has received from researchers, relatively little is known about the process of business model innovation. To address this gap, this chapter draws on the design literature to derive a generalizable and normative model of the business model innovation process. This contribution links creativity at the individual and firm levels with innovation at the business model level of analysis and thus acknowledges explicitlt the multilevel nature of innovation

How Do Family Ownership, Control and Management Affect Firm Value?

Using proxy data on all Fortune-500 firms during 1994–2000, we find that family ownership creates value only when the founder serves as CEO of the family firm or as Chairman with a hired CEO. Dual share classes, pyramids, and voting agreements reduce the founder\u27s premium. When descendants serve as CEOs, firm value is destroyed. Our findings suggest that the classic owner-manager conflict in nonfamily firms is more costly than the conflict between family and nonfamily shareholders in founder-CEO firms. However, the conflict between family and nonfamily shareholders in descendant-CEO firms is more costly than the owner-manager conflict in nonfamily firms

Business Model Design and the Performance of Entrepreneurial Firms

We focus on the design of an organization’s set of boundary-spanning transactions—business model design—and ask how business model design affects the performance of entrepreneurial firms. By extending and integrating theoretical perspectives that inform the study of boundary-spanning organization design, we propose hypotheses about the impact of efficiency-centered and novelty-centered business model design on the performance of entrepreneurial firms. To test these hypotheses, we developed and analyzed a unique data set of 190 entrepreneurial firms that were publicly listed on U.S. and European stock exchanges. The empirical results show that novelty-centered business model design matters to the performance of entrepreneurial firms. Our analysis also shows that this positive relationship is remarkably stable across time, even under varying environmental regimes. Additionally, we find indications of potential diseconomies of scope in design; that is, entrepreneurs’ attempts to incorporate both efficiency- and novelty-centered design elements into their business models may be counterproductive