Christoph Zott

The Business Model: Recent Developments and Future Research

This article provides a broad and multifaceted review of the received literature on business models in which the authors examine the business model concept through multiple 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 of the respective researchers. However, the authors also found emerging common themes among scholars of business models. Specifically, (1) the business model is emerging as a new unit of analysis; (2) business models emphasize a system-level, holistic approach to explaining how firms “do business”; (3) firm activities play an important role in the various conceptualizations of business models that have been proposed; and (4) business models seek to explain how value is created, not just how it is captured. These emerging themes could serve as catalysts for a more unified study of business models.

Business Model Design and the Performance of Entrepreneurial Firms

We focus on the design of an organizations 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.

How Entrepreneurs Use Symbolic Management to Acquire Resources

Results of a two-year inductive field study of British ventures show that entrepreneurs are more likely to acquire resources for new ventures if they perform symbolic actions—actions in which the actor displays or tries to draw other peoples attention to the meaning of an object or action that goes beyond the objects or actions intrinsic content or functional use. We identify four symbolic action categories that facilitate resource acquisition: conveying the entrepreneurs personal credibility, professional organizing, organizational achievement, and the quality of stakeholder relationships. Our data show that entrepreneurs who perform a variety of symbolic actions from these categories skillfully and frequently obtain more resources than those who do not. Our data also suggest three factors—structural similarity, intrinsic quality, and uncertainty—that moderate the relationship between symbolic management and resource acquisition. We theorize how the various symbolic action categories shape different forms of legitimacy that help entrepreneurs acquire resources.

Strategies for value creation in e-commerce:: best practice in Europe

This paper investigates strategies for value creation of e-commerce companies. Our main assumption is that e-commerce fundamentally affects the way business is conducted across many industries. To support this insight, we discuss the unique characteristics of virtual markets brought on by the Internet. Based on a survey of 30 European e-commerce companies, we then identify two main strategies for value creation in e-commerce -- the efficiency that e-commerce business models exhibit, and the degree to which they create stickiness. To illustrate these two strategies, we give examples of European companies that can be considered best practice companies.

The Business Model: A Theoretically Anchored Robust Construct for Strategic Analysis

Anchored in our research on business models, we delineate in this article a future research agenda. We establish that the theoretical and empirical advancements in business model research provide solid conceptual and empirical foundations on which scholars can build in order to explore a range of important, yet unanswered research questions. We draw inspiration on the direction of the business model research agenda by briefly reviewing several distinct bodies of literature adjacent to the business model literature including new organizational forms, ecosystems, activity systems, and value chain. In doing so, we also distinguish the business model concept from seemingly similar concepts that have been proposed by researchers.

Designing Your Future Business Model: An Activity System Perspective

Building on the received literature, we conceptualize a firms 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 systems value creation.

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.

When Adaptation Fails

A rationale based on adaptive learning is used to explain inefficient bargaining under private information. A dynamic bargaining model using genetic algorithms is developed in which independent but interacting negotiators coevolve their offers. A computer simulation analysis is conducted that compares bargaining outcomes under complete and incomplete information. Results show that inefficient bargaining (i.e., delays and failures to agree) may be due to problems in the agents adaptive processes that arise because of incomplete information and that adaptive failures may occur even under complete information. Adaptive learning is identified as both a mechanism for resolving conflict and a potential source of conflict.

Affective Sensegiving, Trust-Building, and Resource Mobilization in Start-Up Organizations

Based on a four-year field study of six new ventures, we investigate whether and how founders of new firms engaged in affective sensegiving with diverse stakeholders; namely investors, board members, customers and employees. Affective sensegiving refers to founders integrating affect in their verbal statements and actions to influence stakeholders understanding of aspects of their young firms (including themselves). We found a subset of affective sensegiving actions - called emotional assuring - that seeks to generate stakeholders understanding of the young firms or their leaders as displaying: 1) socially valued entrepreneurial characteristics; 2) personal caring, and 3) transparent or inclusive organizing. We show how stakeholders interpret these founders sensegiving actions and suggest that they are likely to mobilize resources when they feel emotionally assured because they perceive trustworthiness. Our study enriches the sensegiving literature - which has mainly focused on cognition - by identifying a range of sensegiving actions that include affect and build trust. It also extends the trust literature by specifying managerial actions that build, sometimes simultaneously, cognitive as well as affective trust in the challenging context of creating new firms. Lastly, it contributes to the entrepreneurship literature by unpacking the social construction of start-up organizations through founders use of affective sensegiving actions.

Emotional Assuring, Trust Building, and Resource Mobilization in Start-Up Organizations

Based on a five-year field study of six new ventures, we investigate whether and how organization foun-ders use affective influence, a form of emotion management, with diverse stakeholders, namely investors, board members, customers, and employees. We found wide differences in founders propensity to use affective influence actions and that not all affective influence actions were effective in mobilizing re-sources for the new firm. We identified a particular form of beneficial affective influence we call emo-tional assuring, which refers to affective influence actions that seek to build three different dimensions of trust in regard to the new firm: (1) the firms integrity, (2) the founders competence as an entrepreneur, and (3) the founders benevolent character. Although firms that practiced little emotional assuring could mobilize adequate resources as well as firms that did it in munificent environments, the latter gained an upper hand and were more resilient under tough economic conditions. We also identified the moderating conditions and limitations of emotional assuring.