The impact of organizational culture on a firm's capability to innovate the business model

Abstract

Recent literature on business model innovation tries to identify operational changes occurring within the business model components. We suggest that a significant part of the business model cannot be understood without an investigation of the underlying logic of the firm. Drawing on organizational culture literature, this study explores the idea that parts of the capabilities that enable business model innovation are determined by the firm's underlying cultural values. In this study, we utilize existing literature on organizational culture to analyze the underlying organizational values of the two main business model design themes (novelty and efficiency) and link these to the firm's capabilities that foster business model innovation. By empirically analyzing a sample of 305 companies in the engineering industry, we find that novelty-oriented cultural values foster capabilities (strategic sensitivity, collective commitment and resource fluidity) in favor of business model innovation, while efficiency-oriented cultural values do not show positive effects. We further find that strategic sensitivity and resource fluidity significantly enhance the propensity to business model innovation.

How Can Blockchain Technology Disrupt the Existing Business Models?

“…Empirical research has confirmed that two of these, strategic sensitivity and resource fluidity, indeed increase the propensity for business model innovation (Hock et al, 2015).…”

“…Overall, the literature indicates endogenous and exogenous sources of business model innovation. As for endogenous sources of business model innovation, they are related to the learning capabilities of the organisation (Sosna, Trevinyo-Rodríguez, & Velamuri, 2010), its strategic agility (Doz & Kosonen, 2010) and its organisational culture (Hock, Clauss, & Schulz, 2015). Sosna et al (2010) describe the case of Naturhouse to argue that business model innovation is an outcome of organisational learning processes, where trial and error are indispensable parts of business model innovation.…”

“…As mentioned above, according to a recent study by Hock et al (2015) based on a sample of over 300 companies, strategic sensitivity and resource fluidity increase the propensity to innovate business models. The same study indicates that they are positively affected by novelty-oriented cultural values, such as innovativeness and flexibility, openness of internal communication and inter-functional communication but not by efficiency-oriented cultural values such as quality, success and speed.…”

Efficiency-centered, innovation-enabling business models of high tech SMEs: Evidence from Hong Kong

“…selling a product to providing solutions) (Laudien & Daxböck, 2016), which results in the alteration of routines, competences, technology and resources at the same time (Andries, Debackere, & van Looy, 2013). Radically novel business model may require internal transformational change in organizational culture (Hock, Clauss, & Schulz, 2015) to support new dominant logic and business model.…”

University business models in disequilibrium – engaging industry and end users within university technology transfer processes

“…Within business model innovation research, knowledge exchange with stakeholders is deemed crucial in relation to future business model development (Zott et al, ; Miller et al, ) However, organisational culture is said to underpin the capabilities needed for business model change (Matzler et al, ; Hock et al, ). Indeed, Wirtz et al (, p. 14) identifies the need to acknowledge ‘contextual differences between different business models as we are incapable to explain why certain models will function in particular environments and the others are not’ illustrating the influence organisational factors may have on business models development.…”