Business model innovation by international social purpose organizations: The role of dynamic capabilities

Abstract

This paper examines the role played by dynamic capabilities and business model innovation in international social purpose organizations (ISPOs) 1 operating across developing and developed countries. Utilizing a qualitative multiple case study methodology, we identify a set of dynamic capabilities deployed and leveraged by these organizations for business model innovation in order to achieve their dual mission of social and economic value creation. The findings highlight unique micro-foundational capabilities of the founders that are vitally important to perceive social challenges as opportunities for ISPOs to sense socially and economically intertwined prospects. We discuss the specific organizational-level capabilities-at both the production and selling sites-that are developed and utilized by ISPOs to seize opportunities by combining competing social and economic logics. In relation to transformation, ISPOs develop ecosystem-wide production-and market-related capabilities-in both developing and developed countries-that enable them to scale-up their dual mission business model through co-creation.

Editorial and research agenda: JBR special issue on business model innovation in social purpose organizations

“…The BMI responses of SPOs to antecedents identified above are varied, and span all business model components. Articles in this special issue examine value proposition BMI that includes developing new products and services ( De Silva et al, this issue , Fehrer and Wieland, this issue , Gasparin et al, this issue ), developing new marketing relationships ( De Silva et al, 2020 ), and drawing on the resources of others to enhance value propositions ( Kullak et al, 2020 ). Papers of this special issue investigate value creation BMI that includes new production processes ( De Silva et al, 2020 ), and working with suppliers, partners, networks, and ecosystems ( Best et al, this issue , De Silva et al, this issue , Fehrer and Wieland, this issue , Gasparin et al, this issue , Klein et al, this issue , McDonald et al, this issue , Siebold, this issue ).…”

“…Articles in this special issue examine value proposition BMI that includes developing new products and services ( De Silva et al, this issue , Fehrer and Wieland, this issue , Gasparin et al, this issue ), developing new marketing relationships ( De Silva et al, 2020 ), and drawing on the resources of others to enhance value propositions ( Kullak et al, 2020 ). Papers of this special issue investigate value creation BMI that includes new production processes ( De Silva et al, 2020 ), and working with suppliers, partners, networks, and ecosystems ( Best et al, this issue , De Silva et al, this issue , Fehrer and Wieland, this issue , Gasparin et al, this issue , Klein et al, this issue , McDonald et al, this issue , Siebold, this issue ). Value capture BMI detailed in the special issue includes that seeking to boost existing or develop new revenue streams ( Alshawaaf and Lee, this issue , Best et al, this issue , De Silva et al, this issue ), while architecture BMI is captured by Alshawaaf and Lee (2020) , who examine how digitizing their business models revitalized the Tate Modern in the UK and the Pompidou Centre in France.…”

“…Papers of this special issue investigate value creation BMI that includes new production processes ( De Silva et al, 2020 ), and working with suppliers, partners, networks, and ecosystems ( Best et al, this issue , De Silva et al, this issue , Fehrer and Wieland, this issue , Gasparin et al, this issue , Klein et al, this issue , McDonald et al, this issue , Siebold, this issue ). Value capture BMI detailed in the special issue includes that seeking to boost existing or develop new revenue streams ( Alshawaaf and Lee, this issue , Best et al, this issue , De Silva et al, this issue ), while architecture BMI is captured by Alshawaaf and Lee (2020) , who examine how digitizing their business models revitalized the Tate Modern in the UK and the Pompidou Centre in France. As is evident in the articles cited above, many cover multiple components, and Fehrer and Wieland (2020) underscore this with the all-encompassing argument, that rather than only describing value creation, delivery and capture, business models can also guide and capture dynamic and systemic co-creation of value among a wide range of actors.…”

“…The first of the strong substance-related themes in this special issue is a focus on how BMI promotes SPOs’ work with other actors to facilitate their dual social-economic goals. While working with others can present challenges and complexities, as Best et al (this issue) find in their study of UK-based SPOs providing services to people with disabilities, many articles find that SPOs seek to work, or are working, within broader systems to advance themselves by building networks ( Kullak et al, this issue , McDonald et al, this issue ), co-creating business models with stakeholders ( Gasparin et al, 2020 ), and working with like-minded partners ( De Silva et al, this issue , Klein et al, this issue ) and mutually-supportive stakeholders ( Siebold, 2020 ). Collaboration is also a popular focus of BMI aiming to balance tensions ( Fehrer and Wieland, this issue , Klein et al, this issue ) and serve the mission ( Kullak et al, 2020 ).…”

“…Dynamic capabilities can include developing new skills ( Ahmed et al, 2020 ), and continually adapting capabilities to work with stakeholders to design, create and deliver solutions ( Best et al, this issue ). Along these lines, De Silva et al (2020) studies how founders of international SPOs working with poor and disadvantaged communities build dynamic capabilities to ensure improvements will continue into the future, including sensing and seizing opportunities to transform relationships with key players, processes, routines, networks and structures. A further article addressing the role of capabilities is that by Weerawardena et al (2020) , in which the authors develop a model whereby SPOs undertaking BMI are theorized to develop market-focused learning capabilities, network learning capabilities, and internally-focused learning capabilities, that will generate new knowledge to pursue BMI and create both social and economic value.…”