Untangling business model outcomes, impacts and value

Abstract

Value is a key concept in the business model literature. Yet business models are not only about value and how it is created. They are also key to understanding how organisations create outcomes for stakeholders and impact the natural environment and society. So far, however, business model studies have paid little attention to the conceptual differences and particularities of outcomes, impacts and value. This prevailing vagueness is critical. Lacking an understanding of how organisations create outcomes and impacts while aiming to create value with and for their stakeholders can harm both communities and the organisations involved, despite their best intentions.Hence, this article clarifies the differences between business model outcomes, impacts and value and offers an activity system theory-based framework to map and analyse business models. Using the example of TOMS, this article shows how changes in a business model's activity system influence the outcomes, impacts and value it creates. Finally, we argue that a stakeholder perspective is necessary but insufficient to understand the system-level impacts of business models and that it needs to be complemented with a systems theory lens.

Sustainability impact assessment of new ventures: An emerging field of research

“…This follows the idea of logic models (descriptions of cause-effect relations and how changes are triggered by certain activities or interventions) and a multicausal understanding of impact (Fichter et al, 2021, p. 25 ff.). Building upon this, impact is understood as system-level change (Bagnoli and Megali, 2011), that addresses meso-level (e.g., industry standards) and macro-level phenomena (e.g., climate change) beyond organizational boundaries (Johnson and Schaltegger, 2020;Schaltegger et al, 2022a) and beyond value creation for (single) stakeholders (Dembek et al, 2022). 'System' refers to more complex aspects of the natural environment (e.g., natural habitats), parts of society (e.g., social groups) or the economy (e.g., markets), and to their interplay and the joint systems they create (e.g., industrial systems of production and consumption).…”

“…Change, on the level of systems, unfolds in the medium or long-term (Bagnoli and Megali, 2011). Hence, in its positive version, 'sustainability impact' refers to longer-term changes in social, technical, or natural systems that bring us closer to sustainable development (Dembek et al, 2022;Dijkstra-Silva et al, 2022;Schaltegger et al, 2022b).…”

“…The literature furthermore distinguishes between the scale of sustainability effects, including global, longer-term sustainability impacts on the one hand and rather local, short-term effects on the other hand. Further key distinctions are made between outputs (countable results such as sustainable products), outcomes (qualitative improvements for stakeholders), and impact (medium-to long-term system-level effects and changes) (Fichter et al, 2021), which cover the scope of effects that emerge from organizational activities (Dembek et al, 2022).…”

“…Assessments often tend to focus on outputs (e.g., products or number of social projects) and outcomes (e.g., the value created for stakeholders by sustainable products) (cf. Bagnoli and Megali, 2011;Dembek et al, 2022;Dembek and York, 2019;Wagner et al, 2021) as they can be linked rather directly to corporate and entrepreneurship activities and are often easy to measure quantitatively. Output and outcome, however, are precedents to impacts, the final, inherent goals that characterize what sustainable development is actually intended to achieve.…”

“…1. Key terms denoting companies' sustainability effects: output, outcome, and impact (based on Fichter et al, 2021;McLaughlin and Jordan, 1999;and Dembek et al, 2022).…”