Business Model Innovation as Antecedent of Sustainable Enterprise Excellence and Resilience

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Business Model Innovation as Antecedent of SustainableEnterprise Excellence and Resilience

Elias G. Carayannis & Evangelos Grigoroudis &Stavros Sindakis & Christian Walter

Received: 5 June 2014 /Accepted: 8 June 2014 /Published online: 20 July 2014# Springer Science+Business Media New York 2014

Abstract Organizations are open systems operating under conditions of substantialturbulence, risk (known unknowns), and uncertainty (unknown unknowns) and seekingto balance stability and coherence with flexibility and change in pursuit of higher levelsof efficacy and routine excellence. In addition, organizations exist, survive, and prosperon the basis of a sound value proposition and functional business model that helpsunlock, capture, and redistribute in an efficacious manner the value added by theorganization in question. Despite the increasing amount of literature on Business ModelInnovation (BMI), a sound theoretical foundation is still missing, which is also true forthe concept of Business Model (BM) itself. However, many scholars argue that a BMcan provide a concise framework that explains how firms create and capture value, andclarify how enterprises monetize their innovations. This paper focuses on the effectsthat can be achieved through BMI, in particular organizational sustainability, resilience,and excellence. The main aim of the paper is to address how organization sustainabilityand resilience can be achieved with BMI and study the role of different factors in thisprocess. In addition, the present case shows how BMI can be used to overcomecommoditization challenges partly by moving from a BM focused on the trade ofgoods to a BM focused on the trade of tasks. The results show how manufacturers in

J Knowl Econ (2014) 5:440–463DOI 10.1007/s13132-014-0206-7

E. G. Carayannis (*)George Washington University, Washington, DC, USAe-mail: [email protected]

E. GrigoroudisTechnical University of Crete, Chania, Greecee-mail: [email protected]

S. Sindakis : C. WalterBangkok University, Bangkok, Thailand

S. Sindakise-mail: [email protected]

C. Waltere-mail: [email protected]

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developing countries can overcome their dependence on commoditized products andOEM manufacturing, while maintaining a sustainable ecosystem.

Keywords Businessmodel innovation . Value proposition . Sustainable enterpriseexcellence

Introduction

Organizations are open systems operating under conditions of substantial turbulence,risk (known unknowns), and uncertainty (unknown unknowns) and seeking to balancestability and coherence with flexibility and change in pursuit of higher levels of efficacyand routine excellence. In addition, organizations exist, survive, and prosper on thebasis of a sound value proposition and functional business model that helps unlock,capture, and redistribute in an efficacious manner the value added by the organizationin question.

Reinmoeller and Van Baardwijk (2005) identified four primary enterprise innovationstrategies: knowledge management, exploration, cooperation, and entrepreneurship.Briefly, knowledge management is reusing of tacit and explicit enterprise knowledge,exploration refers to experimentation for the purpose of finding meaningful recombi-nations of enterprise knowledge, cooperation refers to assessing and reusing comple-mentary knowledge of supply chain and other enterprise ecosystem partners, andentrepreneurship may be characterized as experimentation aimed and identification ofnew meaning in the enterprise landscape.

Business Model Innovation (BMI) is a concept based on the premise that firms caninnovate leveraging their internal capabilities and resources (Amit and Zott 2010) andtherefore relates to several of the aforementioned enterprise innovation strategies. It hasbeen argued that the innovation of a business model can be a response to environmentalchanges, since an organizations business models might be victim to a shelf life, due totechnological advancements (Chesbrough 2010).

Despite the increasing amount of literature on BMI, a sound theoretical foundation isstill missing, which is also true for the concept of business models itself (Schneider andSpieth 2013). Like the BMI literature, the Business Model (BM) existing literature isnot very well structured, but despite Porter’s (2000) early doubt in the BM concept,many scholars argue that a business model can provide a concise framework thatexplains how firms create and capture value, and clarify how enterprises monetizetheir innovations (De Reuver et al. 2013). One of the strengths of BMs is that itprovides a narrative that lays out the activities and structure of the business, which canimprove execution (Magretta 2002).

Indeed, the reason for becoming and then being a sustainable, profitable, andscalable entity for a new firm (and for that matter for a nonprofit but value-addingand value-maximizing new organization) is centered around the value proposition andBM concepts and especially in a knowledge-based and knowledge-driven context(Carayannis 2008; Carayannis et al. 2011, 2012, 2013a). Therefore, developing agrounded theory of an organic typology and adaptive taxonomy of BMs with thecapacity to evolve into more effective and efficient mechanisms of value creation, aswell as value unlocking, capturing, and leveraging, may indeed be a core element of the

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current and emerging state of the art in related organization science, theory, policy, andpractice matters. This could be especially the case concerning cocreation, coopetition,coevolution, and cospecialization competences driven by higher order learning pro-cesses (Carayannis 2008; Carayannis and Provance 2008; Carayannis and Campbell2009, 2010, 2012; Carayannis et al. 2013a). This has particular significance in theemerging and increasingly influential open innovation ecosystems approach to thestudy of the nature and dynamics of competitive strategy in knowledge-driven envi-ronments. Indeed, we consider targeted open innovation to be the coreoperationalization context of the emerging grounded theory, typology, and taxonomyof BMI and within this context the case of smart specialization strategies as an enablerof sustainable differentiation via focusing on financially, socially as well as environ-mentally sustainable technology and market niches (Carayannis et al. 2013b). Velamuriet al. (2013) note that BMI is particularly interesting for enterprises facing commod-itization, such as manufacturing firms. This is because of increasing cost-pressure,difficulties in differentiation, and threats of easy substitution. This is mainly true fororganizations in developed countries, but it is also a reality that is faced by manufac-turers in developing countries. When developing countries move towards the level ofdeveloped countries, labor cost and labor expectations increase and their competitiveadvantage is vanishing.

The main aim of the paper is to demonstrate how organization sustainability andresilience can be achieved with BMI. The role and importance of several factors in theprocess is also studied (e.g., the importance and influence of organization design on thedevelopment of innovation). The present case study shows also how BMI can be usedto overcome commoditization challenges partly by moving from a BM focused on thetrade of goods to a BM focused on the trade of tasks (Carayannis et al. 2011). Inaddition, the results provide insights to manufacturers in developing countries inovercoming their dependence on commoditized products and OEM manufacturingwhile maintaining a sustainable ecosystem. It should be emphasized that the presentstudy may contribute to the current research examining the role of the main BMIcompetences (i.e., resources, dynamic capabilities, and corporate entrepreneurship) todevelop such competitive advantages and explore new business opportunities so thatfirms may achieve sustainable enterprise excellence.

The following sections will briefly discuss the existing literature on BMs and BMI,before the different elements of the BM are set into the context of organizationalsustainability and resilience, which will set the stage for the empirical analysis.Subsequently, the paper will outline the research approach taken before the cases willbe described in detail and findings will be evaluated, as well as comprehensivelydiscussed. Finally, implications for theory, policy and practice, and future research willbe outlined.

Background

Business Model and Value Proposition

The concept of BMs and consequently BMI has its foundation in corporate practice,strategic management, and industrial economics (Aspara et al. 2009). It received

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increasing attention during the late 1990s and early 2000s (see among others Applegate2000; Petrovic et al. 2001) due to the emergence of internet-based businesses (Spectoret al. 2009). Despite the concept of BMs being first mentioned in 1947 (Spector et al.2009), there is no academic definition that has been agreed upon (Mäkinen andSeppänen 2007; Goethals 2009; Schneider and Spieth 2013) and this is therefore alsotrue for BMI (Schneider and Spieth 2013). Partially, the reason can be found in that theterm “business model” appeared in the popular press, due to developments in theentrepreneurship theory and practice (George and Bock 2011). Zott et al. (2011)understand BMs as a new holistic, systemic way of analyzing organizations bridgingtraditional units of analysis, by describing what organizations do and how they do it. ABM is then an activity-centered, structural description of a firm’s relations with all itsinternal and external stakeholders and has its roots in strategic management thinking(Zott and Amit 2008; Zott et al. 2011).

Thus, BMs are not a strategy but constitute the core and driver of a strategy, as wellas the key for decoding, understanding and effectively communicating a strategy bothwithin an organization as well as across its business ecosystem. Zott and Amit (2008)showed that a product market strategy and a BM are indeed different concepts and thattheir combination affects a firm’s market value. However, Casadesus-Masanell andRicart (2010) argue that the strategy and the BM overlap. It enables external observersto understand a firm’s strategy by looking at its BM, as the BM reflects the realizedstrategy of an organization. Shafer et al. (2005) found 12 different definitions inbetween 1998 and 2002, encompassing 42 different BM components. The definitionsfit into four themes: strategic choices, creating value, capturing value, and valuenetworks. They conclude that a BM is reflecting the strategic choices and theiroperating implications, which helps to communicate, analyze, test, and validate thecause-effect relationships that derive from the strategic choices made (Shafer et al.2005). Similarly, Zott et al. (2011) list ten general level definitions for BMs and suggestthat existing literature has mainly addressed BMs under the view of a new analyticalapproach, as a holistic perspective on how enterprises do business, stressingorganizational activities, and emphasizing value creation.

George and Bock (2011) established six themes on which BM seem to reflect upon:(1) organizational design, (2) resource-based view of the firm, (3) narrative and sensemaking, (4) the nature of innovation, (5) the nature of opportunity, and (6) transactivestructures. However, their research shows that practitioners relate a BM predominantlyto performance, survival, and opportunity exploitation. The BM therefore reflects thearchitecture of an organization to accomplish a specific purpose, usually value creation.In summary, BMs focus at least on value creation and value capturing aspects ofbusinesses (Zott et al. 2011). In a sense, this plethora of views and variants of BMs mayindeed reflect that emergent stage of the theory and hence BMI perspectives.

While systemic frameworks and definitions of BMs are useful, they also tend to begeneric, as their abstraction level is higher, since they do not deal directly with activitiesand business patterns (Abdelkafi et al. 2013). A less abstract way of defining BMsevolved around value-based BMs. Osterwalder and Pigneur (2010) develop the BMCanvas around the value proposition and defined a BM as “a rational of how anorganization creates, delivers and captures value” (Osterwalder and Pigneur 2010,p. 14). Their BM Canvas is constructed around value propositions. Johnson (2010)defines the BM as a “representation of how a business creates delivers value, both for

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the customer and the company.” His BM includes four interconnected key elements,customer value proposition, profit formula, and the closely linked key resources andprocesses, which altogether grow the rules, norms, and success metrics of a business.Abdelkafi et al. (2013, p. 12) follow a similar approach by defining the BM as adescription of “how a company communicates, creates, delivers, and captures value outof a value proposition.” Their framework (Fig. 1) captures how each aspect is carriedout in the organization.

Value proposition in the center is defined by Osterwalder and Pigneur (2010, p. 22)as “the bundle of products and services that create value for a specific customersegment.” The surrounding aspects explain how value is created, captured, delivered,and communicated from this proposition. A value proposition is by definition onlyrelevant for a specific or several specific customer segments, wherefore it has to becommunicated appropriately, which includes selecting useful channels and the rightcontent. Value creation addresses the question with whom and how processes arecarried out and resources are transformed. Value delivery addresses who the valueproposition is addressed to and how it will be delivered to them. Finally, value capturefocuses on how revenue is generated and how costs are kept under control (Abdelkafiet al. 2013). Indeed, we consider the value proposition to be the enabling foundation forthe conceptualization and implementation of a business model or models as it encap-sulates the unique, hard to expropriate and/or emulate as well as superior value-addingin a financially, socially, and environmentally sustainable manner leading to sustainableentrepreneurship and robust competitiveness regimes (Carayannis et al. 2000;Carayannis and Provance 2008; Carayannis et al. 2011; Carayannis and Campbell2009; Carayannis et al. 2013b; Carayannis and Wang 2012)

The research adopts the definition and framework of Abdelkafi et al. (2013) as itallows to discuss different pattern in a less abstract nevertheless comprehensive way. Itenables to examine a business more closely and explore activities carried out in thecontext, eventually easing the operationalization of BM research. It also allows

Value Communication

ValueDelivery

ValueCreation

ValueCapture

Value Proposition

With whomKey partnerships

HowKey resources and process

HowDistribution channels

WhomCustomer segments and relationships

WhatStory for communication value

HowChannels for communicating value

HowRevenuestream

HowCost structure

Fig. 1 Business model framework (source: Abdelkafi et al. 2013, p. 12)

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exploring the different business patterns in the selected cases and allows comparison ofthe BMI approaches.

Business Model Innovation

Schneider and Spieth (2013) recently summarized the current state of BMI research thatfocuses on three core perspectives:

a. The theoretical foundations of the resource-based view of the firm (Barney 1991),b. The dynamic capabilities view of the firm (Teece et al. 1997), andc. The strategic entrepreneurship view (Hitt et al. 2001; Kuratko and Audretsch

2009).

The resource-based view argues that an organization’s competitive advantage isbased on their different, unique, and nonsubstitutable resources (Barney 1991).

Dynamic capabilities in the context of the resource-based view means an activeintegration, or in BM terms, reconfiguration of the capabilities and organizationalprocesses, in order to gain a competitive advantage from them (Teece et al. 1997).This in fact reassembles the view of Spector et al. (2009) who defined BMI as “areconfiguration of activities in the existing business model of a firm that is new tothe product/service market in which the firm competes” (p. 14) and who call BMIa way of lean innovation, since resources and other capabilities are alreadyinherent in the organization, and investment can often be kept at a minimum.Similarly, Lindgardt et al. (2009) state that BMI can be embedded in the existingcore business, which allows to capitalize on existing capabilities, or integrated intoa new firm, as suggested by Christensen (1997) when dealing with disruptiveinnovations.

The third incorporated perspective is strategic entrepreneurship, which combinesinternal situation and external opportunity perspectives. Schneider and Spieth (2013)developed a BM research framework based on the distinction of BM development andBMI, where the latter is a response to changing sources of value creation, while theearlier is a continuous change. Consequently, BMI is dominantly rooted in strategicentrepreneurship, while BM development is rooted in the concepts of resource-basedview and dynamic capabilities perspective. A BM is a constantly adjusting anddynamic system based on internal and external changes, that might be either incremen-tal or radical (Bucherer et al. 2012). As a result, it will not be possible to predict theinnovation of a BM by just looking at an organization’s existing BM. The BM onlyreflects the status quo and not the strategic choices organizations might make(Casadesus-Masanell and Ricart 2010).

Similarly Aspara et al. (2009) argue that BMI can be regarded as a strategic choiceof a business or as a continuous strategic orientation. It is seen as valuable in instableeconomic situations, where businesses often face the need to completely reinventthemselves (Lindgardt et al. 2009), whereas BMs seem to be more stable during timesof success, as the “path ahead” seems to be obvious (Schneider and Spieth 2013). Costreduction and flexibility are among the most compelling reasons for organizations toengage in business model innovation, as BMI allows specialization and seizing emerg-ing opportunities quickly (Pohle and Chapman 2006).

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It has been argued that making the strategic choice to completely change or alter anexisting BM will show significant sustainable business performance improvements(Lindgardt et al. 2009). Despite the BMI praise, Aspara et al. (2009) found that BMIalone will not likely result in greater business performance; however, in combinationwith a second strategic focus, namely, replication of effort as covered in the quotedstudy, it will yield better performance. This finding reinforces our views as wellfocusing on the importance of higher order learning to achieve higher levels oforganizational sustainability and excellence discussed earlier.

Organizational Design and Sustainability

Business Model Innovation, Organizational Design, and Governance

Osterwalder (2004) notes that the BM is situated within a triangle of Business Strategy,Information and Communication Technologies (ICT), and Business Organization, thelatter including organizational structure, departments, units, processes, and workflow.He notes that changes within the BM will effectively change how the organization isdesigned. Accordingly, Carayananis and Provance (2008) have argued that innovationemerges from posture, the organizations position within a business ecosystem, propen-sity, as a reflection of processes routines, and capabilities including the organizationalculture and performance (3P), which are not only financial but also products, patents,and environmental impacts. Organizational design for innovation is in then the effectivealignments of the organization to the firm’s BM in order create an optimal environmentfor the 3Ps. Similarly, Zott and Amit (2010) have argued that the BM represents anactivity system of a firm and that its design around content (what), structure (how), andgovernance (who) should address one/or several themes around novelty of content,structure and governance, lock-in of stakeholders, complementarities of activities, andefficiency to reduce transaction cost.

This poses the question where BMI originates within an organization, and what kindof leadership style is needed to drive BMI. Established firms, in particular, face thebarrier of responsibility in regard to BMI. In large organizations, several stakeholderscould potentially be responsible for innovating the BM, but top management is oftenassigning the responsibility to mid-level management, which often lacks the requisitecompetence, experience, expertise and authority to properly shape, drive and leverageBMI, and that eventually results in a leadership gap and even failure (Chesbrough2007; Spector et al. 2009), a reason why smaller firms might be more successful, asthey face less constraints, can adapt quicker, and have a less extensive organizationalstructure (Aspara et al. 2009) along the themes of organizational resilience, robustness,and sustainability earlier discussed. Accordingly, De Waal (2007) has argued thatorganizational design in high performance organizations should stimulate cross-functional and cross-organizational collaboration, simplify the organization byreducing barriers around units, foster knowledge sharing, and be able to continuouslyalign the business with the ever changing internal and external environment. Thesechanges, however, can only be mandated by the top management. BMI, particularlysuch that could lead to market disruption, needs organizational redesign which mightexplain why established firms tend to be more successful at sustaining innovations,

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while being less successful in BMI per se, while firms new to a market are more likelyto succeed in BMI. In this regard, Spector et al. (2009) consider relational linkagesbetween internal and external (partners, supplier, customers, etc.) units and transac-tional linkages of activities of these give units and their governing mechanisms as vitalto be addressed in the organizational design. Governance, in particular, addresses theproblem of power distribution, control, and hierarchy.

It might be these governance issues that predominantly hinder BMI as the conflict-ing interests between the configuration of existing business assets and potentially newways of doing business contradict the dominant logic a firm follows. Often BMI makesseveral capabilities and partners obsolete, which conversely means that new skills andknowledge are required organization-wide thus triggering defensive routines and otherorganizational inertia and resistance to change and learning symptoms (Argyris 1985;Argyris and Schôn 1987) It potentially changes the scope of the corporation, impactsother departments, and risk exposure (Spector et al. 2009).

Organizational Sustainability, Intelligence, and Resilience Towards Excellence

Several studies have reported that the main goal of firms is to create wealth and profitsfor shareholders, putting social and environmental “aspects” as secondary under themain business goal (e.g., Stormer 2003). Other studies mention that corporations haveto undertake initiatives and operate in such way that will address social and ecologicaldegradation, developing new BMs that would lead them to become integrated entitiesthat operate beyond the economic profit, creating social and environmental value (e.g.,Doppelt 2003; Dunphy et al. 2003). Nidumolu et al. (2009) argue that sustainabledevelopment is the only way available for enterprises’ growth, decreasing productioncosts and generating additional revenues from novel offerings or business expansion.Their empirical study found that (p. 2) “sustainability is a mother lode of organizationaland technological innovations that yield both bottom line and top-line returns.” Al-though this path is not easy—with those firms facing the challenges of the five stages ofchange (Nidumolu et al. 2009, p. 5): viewing compliance as opportunity; making valuechains sustainable; designing sustainable products and services; developing new BMs,and creating next-practice platforms—they present this strategy as the competency forbusinesses to develop future’s competitive advantage, which is also emphasized asdifferent management standards such as ISO 14001 address sustainability issues (Halland Wagner 2012). Considering the role of different stakeholders, particularly partners,clients, and customer, in achieving organizational sustainability is fruitful as theorganizations can position themselves as sustainable leaders. Sorescu et al. (2011),for example, name sustainable sourcing and business practices as means of locking incustomers, as part of a customer engagement strategy to increase loyalty and positiveassociations with the brand.

Likewise, Stubbs and Cocklin (2008) suggest that the current BM must be trans-formed, incorporating social and environmental priorities for organizations to becomesustainable. Scholars have raised the issue of integration of economic, social, andenvironmental aspects in business operation (e.g., Elkington 1998; Savitz 2006). Forexample, Carayannis and Campbell (2010) underlined the importance of ecology inbusiness operations in developing an interdisciplinary and trans-disciplinary frameworkof analysis for sustainable development. Based on the Triple (university-industry-

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government relations) and Quadruple (university-industry-government-civil societyrelations) Helices (Carayannis and Campbell 2009), they introduced the broader andmore comprehensive concept of Quintuple Helix (Carayannis et al. 2012) which framesknowledge and innovation in the context of the natural environment, and can beinterpreted as an approach in line with sustainable development and social ecology.While the Triple Helix recognizes the importance of higher education for innovationand the Quadruple Helix incorporates the principles of and requires a coevolution withthe knowledge society and the knowledge democracy for knowledge creation andinnovation, the Quintuple Helix is ecologically sensitive as it emphasizes on thesocioecological transition of society and economy (Carayannis et al. 2012). QuintupleHelix is the system that sets a common ground between ecology, knowledge, andinnovation, creating the synergies between economy, society, and democracy. Conse-quently, organizations should operate within those frameworks and adopt such BMsaiming also to provide solutions to societal and environmental challenges (apart fromseeking economic profit), as “such global problems are too complex to be solved solelyby political actors” (Hansen et al. 2009, p. 684). Additionally, sustainable developmentprovides the framework for innovation and business expansion, through new regula-tions that push for innovation and new ideas that lead to business growth. Putting allthese together, we see that sustainability innovations maintain and increase the overallcapital stock (social, economic, and environmental) of a firm (Hansen et al. 2009), withethics and culture (people) being the cornerstones of this framework.

In this context, it is often perceived that globalization serves as both a catalyst ofaccelerated development as well as an agent of chaotic disruption resulting in socio-economic and political dislocations. In light of this, a key idea may be that heteroge-neity could be understood as a mind-set and a practice where complexity and diversityare leveraged strategically in a manner that promotes sustainable entrepreneurship.

We define sustainable entrepreneurship as:

the creation of viable, profitable and scalable firms that engender the formation ofself-replicating and mutually enhancing innovation networks and knowledgeclusters leading towards what we call robust competitiveness. (Carayannis 2009).

We define robust competitiveness as:

a state of economic being and becoming that avails systematic and defensible“unfair advantages” to the entities that are part of the economy and is built onmutually complementary and reinforcing low-, medium and high technology,public and private sector entities (government agencies, private firms, universi-ties, and nongovernmental organizations). (Carayannis 2009).

Although there is a relationship between organizational resilience and organizationalrobustness, they are neither identical nor are they necessarily fully compatible: that is, aset of strategies and actions that maximize resiliency may not be identical—and in factmay be inimical—to a set of strategies and actions maximizing robustness. As such, acritical organization design consideration is the emergence of an enterprise form thatoptimizes the coexistence, cooperation, and coordination of resilience and robustness.Whenever there are differences in the sets of strategies and actions maximizing

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resiliency and robustness, the organization should exercise care to elaborate and makeinformed choices among the trade-offs between resiliency and robustness that ultimate-ly constrain any choice of strategies, actions, and organization design including and inparticular that of BMI choice and evolution (Aspara et al. 2009; Carayannis andProvance 2008).

Just as organization design is important to resilience and robustness, so is innovationa documented resilience enabler. Innovation and organization design are also critical toSustainable Enterprise Excellence (SEE) (Edgeman and Eskildsen 2012) where:

Sustainable Enterprise Excellence balances the complementary and competinginterests of key stakeholder segments, including society and the natural environ-ment and increases the likelihood of superior and sustainable competitive posi-tioning and hence long-term enterprise success that is defined by high-levelorganizational resilience and robustness and by continuously relevant and re-sponsible governance, strategy and actions that produce superior results.

This is accomplished through organizational design and function that emphasizeinnovation, enterprise intelligence & analytics, operational, supply chain,customer-related, human capital, financial, marketplace, societal, and environ-mental performance. Sustainable Enterprise Excellence integrates ethical, effi-cient and effective (E3) enterprise governance with 3E (equity, ecology, econo-my) Triple Top Line strategy throughout enterprise culture and activities toproduce Triple Bottom Line 3P (people, planet, profit) results that are simulta-neously pragmatic and innovative and that provide foresight suggestive of nextbest practices and sources of competitive advantage.

Figure 2 aims to illustrate the linkage between those concepts, placing BMI andorganizational sustainability at the heart of business organizational performance. Itshows that innovation and organization design along with enterprise excellence formand enhance a firm’s organizational intelligence leading to robust competitiveness andsustainable entrepreneurship. The latter also advances organizational resilience leadingto innovations, enriching the capabilities of excellence of the organization. This isconsistent with Levinthal and Rerup (2006), who argue that, among other processes,the commitment to resilience is likely to lead to an active awareness in organizations(such as “the mindfulness concept” by Langer 1989), which is regarded as an opennessto new information and a disposition to assess context from different angles. See also inconnection to that the concepts developed by Carayannis (2008; Carayannis et al.2011), namely strategic knowledge serendipity and arbitrage (coined as SKARSE™)which denote the likelihood to come across valuable information (knowledge seren-dipity) and the capacity to understand it and leverage it (knowledge arbitrage) in atimely and effective manner.

Within this framework, this study aims to explore the ways and means by whichsustainability is created, focusing on a lighting manufacturing organization in Thailand(see the research design below). We should emphasize that the aforementioned modeldoes not provide an analytical quantitative structure with an explicit set of quantitativevariables and cause-and-effect relations, but rather a qualitative conceptual framework,linking BMI and SEE related concepts.

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Hall and Wagner (2012) analyzed the impact of how integrating sustainabilityaspects into the BM of manufacturing firms can help create competitive advantages.They argue that integrating sustainable metrics and measures can be the foundation forcompetitive advantage as it allows reducing inadequacies usually caused by deviatingfrom objectives as well as diverging objectives (such as financial vs. social vs.environmental). They propose that BMs based on cross-functional problem solvingperform economically and ecologically better than those using a modular approach.However, cross-functional coordination leads to a less tight integration with regulatorybodies in the case of process innovation.

Based on the argument of Schaltegger et al. (2012) that the degree of BMI impactscorporate sustainability strategies, and therefore the overall performance and compet-itiveness of the organization, the authors also plan to conceptualize and empiricallycorroborate the assumption that BMI is the driver of sustainable growth in the caseorganization.

Empirical Research

Empirical Research Design

Since current research on BMI and organizational sustainability is still in the emergentphase, an exploratory qualitative research approach was chosen based on case studyresearch (Eisenhardt 1989; Yin 2009). A qualitative, case study-based approach allowsunveiling and building theory when the phenomenon studied is not clear or little isknown. It considers complex patterns and context specific factors as well as causalrelationships. The authors conducted an exploratory case study. The data was studied inan iterative way allowing for creation of new relationships that explore possibleexplanation for the studied phenomenon.

Since the study required information on the conception, implementation, and evo-lution of the BM, our objective was to interview the most senior executives. Companydata was collected through interviews, historical financial data, and documents relevantin the BMI process. Interview with eight senior executives, including the CEO andManaging Director, were conducted. The interviews were open-end, semi-structuredinterviews. The interviews were conducted in English language with a Thai translator

Innovation & Organization Design

Enterprise Excellence

Sustainable Entrepreneurship

Robust Competitiveness

Business Model Innovation /Organizational Sustainability

Organizational Resilience

Organizational Intelligence

Fig. 2 Theoretical framework: BMI and organizational sustainability for enterprise excellence and resilience(adapted from Carayannis et al. 2013a)

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present to clarify concepts and questions if remarks arose. We also collected pastfinancial data, product and general company information as well as documents relevantto the BMI process. Publicly available data, web presence, and media coverage wereconsidered where it added additional information. Where data was only available inThai language, translations were conducted and checked for validity and reliability by asecond translator.

The interviews lasted between 20 and 60 min and were held on-site. All interviewswere taped and transcribed before the data analysis. We first clarified the concepts ofBMI and organizational sustainability to the interviewees to ensure the concepts wereaddressed correctly. In the second step, the open-end questions were asked regardingthe mentioned topics. The open-end questions were developed by the authors andfocused on when, why, and how the new practices were developed and implemented aswell as the practical changes these implementations had on the organization, in terms ofnew offerings, the leveraging of existing and new knowledge and improvement oftechnologies that would enable market leadership, or improve organizational sustain-ability in any way. At the end of the interview, we allowed for comments to give theinterviewees the opportunity to add information they deemed useful for the study.

Based on the above, and taking into account the presented theoretical framework onorganizational design and sustainability, the main research objectives are as follows:

& Demonstrate how organization sustainability and resilience can be achieved withBMI.

& Study the importance and influence of organization design on the development ofinnovation

& Justify, in practically way, the importance of the three core perspectives of BMI(i.e., resource, dynamic capabilities, and strategic entrepreneurship)

& Verify that a continuous strategic orientation to innovation and flexibility—twocore components of sustainability and resilience—is characterized by pro-activeness

& Show that cross-organizational and cross-functional collaborations are factors ofsuccess and facilitate the implementation of BMI.

In addition, the present case justifies that innovation, flexibility, and ambidexterityare necessary for successful BMI development, acting as enablers of enterprise excel-lence. As already noted, companies that manage to reconfigure their capabilities andorganizational processes are able to innovate and therefore, compete and survive in theglobal competitive landscape. Finally, one of the research objectives is to show howBMI can be used to overcome commoditization challenges partly by moving from aBM focused on the trade of goods to a BM focused on the trade of tasks.

Empirical Case-in-Point: Lee KichareonSeang Co. Ltd.

Lee KichareonSeang Co. Ltd. (LKS) was founded 44 years ago and is Thailand’slargest lighting manufacturer, and is owned by Lee KichareonSeang Co. Ltd. consistsof six companies all focusing on different parts of the lighting manufacturing, packag-ing, and sales. The particular interest of this research is on LeKise Lighting (LKL),which was established in 2009. LKS started as an OEM manufacturer 44 years ago and

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has since then technologically collaborated with Hitachi Japan to produce variouslighting solutions. LKS is the first and one of the largest providers of T5 and later T8tube lighting in Thailand and is now the first Thai organization to introduce LEDlighting to the country. Among their clients are companies like Toshiba, Panasonic, andPhilips.

In 2009, the company established its own branding under LKL and started sellinglighting products under its own brand in Thailand and to various countries acrossSoutheast Asia. In the same year, LKL started to invest in research and development toimprove existing products and meet customer expectations. In 2010, LKL expanded itsbusiness by creating a service solution around lighting, called 1-Stop Lighting Service.This full service solution, encompassing products customized for clients, installation,and extensive customer relationship services was designed to differentiate LKS fromcompetitors and further increase independence from OEM manufacturing. In 2011,LKS became the first manufacturer to start developing and selling LED lighting inThailand. The evolution of the BM is summarized in Table 1. LKL was forced toinnovate its BM due to changing market conditions. LED lights are slowly replacingfluorescent lights in Thailand and around the world, which results in major problemsfor lighting manufacturers. While fluorescent lighting is based on specific lightingtechnologies, LED lighting is using electronic circuits, which can in theory be producedby every provider of electronic appliances. This expands the competition in the lightingindustry considerably. Not only is LED lighting much more energy efficient, the LEDlights lifetime is much longer as well. With increasing lifetime and increasing adoptionsales are likely to decline in the long run, wherefore new revenue sources have to beexplored.

OEM manufacturing has been the backbone of LKS for 44 years. However, OEMmanufacturers face the problem of increasing labor, raw material and energy cost, aswell as price pressures from their clients. The managing director pointed out that this isone of the main reasons for LKS to establish LKL. The company had positioned itselfas an OEM manufacturer delivering reliable quality of products at competitive price tocustomers. LKL had adopted the manufacturing process, technology, and qualitycontrol from Japan. However, one manager pointed out that the LKS is in fact not ableto compete on price anymore, due to the Chinese competition. He pointed out that inOEM manufacturing, LKS is only able to compete on quality.

We sell our products in a good price and the quality is beyond the price they paid.That means customer will think that our product is worth paying for. Forexample, a lamp has its life time at 22,000 h which customer can use for 4 yearsand they only pay about 30–50 Baht for it.

The LKL brand is manufactured by LKS, which modifies the production to fit theLKL brand. As an OEM manufacturer, LKS delivers products to the USA, Middle-East, Northern Africa, and Southeast Asia including Thailand. Under this brand, LKLsales products to international customers across Asia and through retailers like TescoLotus to end users.

LKL has not only established a LeKise brand but has introduced new services,called 1-Stop Lighting Services. Originally, LeKise would only deliver products tolarge construction projects. In case of quality issues, the clients would contact LeKise

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and the company would send a team to fix the issues. The new service offer changedthis process completely. Through the 1-Stop Lighting Service, LeKise provides clientswith an integration customized products, customized lighting design, installation ser-vices, called power serve, and customer relationship management, and customer socialresponsibility programs, which includes an energy-saving consulting service.

This changes the value proposition of LeKise entirely. In the interviews, it wasrepeatedly pointed out that the value proposition is communicated as a lighting solutionrather than a lighting service. The lighting solutions are the main differentiator from itscompetition for LeKise.

Before LeKise had the 1 Stop Service they separated the market into consumermarket and project market. Before they tried to develop the one-stop-service they

Table 1 Changes in the LKS business model

Before establishing LeKiselighting

With LeKise lighting

Value proposition Lighting products Lighting products and services

Value communication—storyfor communicating value

High-quality lightingproducts

Customized high-quality lighting solutionsthat save energy and decrease cost fororganizational and environmental benefits

Value communication—channelsfor communicating value

▪ Social responsibilityprojects

▪ On- and Offline media(TV/Websites)

▪ Customer Relationship Management▪ Social responsibility projects▪ On- and Offline media (TV/Websites)

Value creation—key partnerships ▪ Hitachi▪ Raw material suppliers▪ Mainly internal LKS

Group partners▪ OEM partners

▪ Raw material suppliers▪ Mainly internal LKS Group partners▪ Lighting designers▪ Contractors▪ OEM partners

Value creation—key resourcesand processes

▪ Raw materials▪ Sales team▪ Manufacturing

process

▪ Raw materials▪ Human resources▪ Manufacturing process▪ Lighting design▪ Customer Relationship Management▪ Power serve

Value capture—cost structure Manufacturing ▪ Manufacturing▪ Customer Relationship Management▪ Social responsibility▪ R&D

Value capture—revenue streams ▪ Wholesale▪ OEM Products▪ Export

▪ Wholesale▪ Projects▪ Government Projects▪ Export▪ OEM

Value delivery—customersegments and relationships

▪ Wholesale▪ OEM clients

▪ Wholesalers▪ Modern trade▪ Government▪ OEM

Value delivery—distributionchannels

Direct sales to wholesalecustomers

Direct sales to wholesale and retailcustomers

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were thinking about how to customize the project segment of the market. We feltthat LeKise is not just selling the product. The project market is the solution. It’snot just the product and service sales but also the solution to customers.

Right now we are already in the top 2 of the lighting companies in Thailand…forLeKise lighting our goal has changed, for example solutions. We try to comparewith the local solution providers; we are still trying to find out who is the leadingThai organization in the solution market. The question is, if it can be LeKise.

LeKise was the first full solution provider in Thailand. While one could expect theprovision of customized solutions would be the main distinction between LKL and itscompetitors, the customer relationship management and customer social responsibilityactivities are giving LKL another edge, as competitors in Thailand do not operate suchdepartments. The message that is conveyed through marketing efforts is that LKLproducts can save energy and preserve the environment. Upon introduction of theservice, off- and online marketing campaigns that target particularly cost minimizationtopics in joint effort with the Electricity Generating Authority of Thailand, while thefocus is now changing to point-of-sales marketing and social responsibility, particularlyreforestation, campaigns. The point-of-sales marketing allows demonstrating the prod-ucts, but on-site tests for potential solution clients are available as well.

LeKise was the first full solution provider in Thailand. While one could expect theprovision of customized solutions would be the main distinction between LKL and itscompetitors, the customer relationship management and customer social responsibilityactivities are giving LKL another edge, as competitors in Thailand do not operate suchdepartments. The message that is conveyed through marketing efforts is that LKLproducts can save energy and preserve the environment.

The implementation of solutions has altered LKL key processes significantly. Whilethe key processes were solely based on ISO standards and Key Performance Indicators(KPIs) originally, they are now including customer relationship and corporate socialresponsibility processes. The integrated approach does require IT solutions that canhandle the management of different departments, also collaboration between depart-ments are much more integrated, and resource allocation has been becoming a majordifficulty.

After we introduced the 1-Stop Service, processes and resources have changeddramatically. For 1-stop-services we have to divide resources into four parts. Weneed to combine four different teams in order to be able to do one stop service.Creating the product, designing, both have to design and create products thatmeet customer requirements and satisfy them. The service team needs to knowdifferent types of installations, which installation system is best for each location.The CRM team has to follow up with customers and maintain a good relation-ship. Before the 1-Stop-Service had only the production and sales team, but afterwe need to have four teams.

There is an IT structure to control the resources and respond to customerrequirements. The CRM system can and is used to collect the customer data.All these systems are linked together, so it’s quite easy to monitor.

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About 10 % of the LeKise’s revenue is now invested into R&D, which focusesmainly on improving current products. Investment in R&D became necessary as thelighting industry is moving towards LED lighting. R&D is also working closely withthe lighting design departments and sourcing and quality department as differentconditions and designs require a variety of different materials. In particular, the R&Ddepartment is looking into opportunities to develop more environmental friendlyproducts, with longer lifetime and based on modules that can be reused for otherproducts in order to be able to reduce cost and decrease production lines. LeKise’sproduction also complies with several ISO standards such as ISO 9001, ISO 14001, andISO 170025.

Partnership management and collaborations have become significant for LKL. Interms of supply chain, LeKise “resides in the middle and relies heavily on up- anddownstream partners.” Suppliers are considered close business partners and are inte-grated in the R&D process, which is also possible as many suppliers are part by LKS,or belong to family members that own LKS. Upstream partners are designers, consul-tants and contractors, who have to bid for LKL project offers. However, the integrationof partners goes deeper. LeKise is actively approaching customers to share theirexperience and needs and has implemented a customer knowledge management pro-cess, which is used to improve existing products and services based on customerfeedback. LeKise is also partnering with the Thai government on lighting projects toreduce the government’s ecological footprint, more importantly on a partner level,LeKise is part of the committee that creates production and environmental standardsmanufacturers have to follow. Furthermore, LeKise has been and is currently involvedin special government programs that helped to drive adoption of more ecologicalfriendly lighting products. The government has worked with LKL on providing interestfree loans to project clients if they adopt the latest technology. The loan is paid back tothe government on a monthly basis according to the monthly savings the customershave through adopting the new technologies, increasing not only LeKises customerbase but also reducing Thailand’s ecological footprint.

The provision of services has also affected human resource practices. Before theintroduction of services and brands, the education level of new employees was notsignificant for the majority of employees. Employees in manufacturing can choose toget paid on a daily basis and are free to leave the company from 1 day to the other, as it“only takes few hours” to master working at most of the machines. Since establishinginternational sales and 1-Stop Services, about 80 % of new hires have a bachelordegree. “The employees need higher skills and a better educational background.” Aspart of its HR efforts, LeKise is offering a mini MBA and other training programs to itsmanagement employees. Obviously, this affects the cost structure significantly. Wherepreviously raw materials and manufacturing were major expenses, human resources isnow an increasing cost factor.

While the cost structure was at first very simple, only reflecting raw material andmanufacturing, administration, and shipping, it has become very complex. Business toBusiness (B2B) and Business to Government (B2G) projects are now considered as oneof the major revenue streams but calculating their price remains a challenge, as everyproject is completely customized. The sales team has now to estimate cost that willarise during the projects propose the project price and estimate to the top managementbefore it can offer the project estimate to the customer. A major part of the cost are now

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human resources, research and development, and warehousing of spare parts, which areneeded to act on warrantee cases immediately. However, while the 1-Stop Servicesincrease the complexity of the cost structure, it also increases revenue. The volume ofB2B and currently B2G project sales increases yearly by about 50 % and make up asignificant amount of revenue for LeKise (see Fig. 3).

In order to be able to deliver new services, LKL had to restructure itself significantly.While originally only focusing on sales and manufacturing, it has had to change to acompany that provides services. Not only had the organizational structure to change butthe mind-sets of employees. In itself LKL as part of LKS was set up to enable the groupto deliver new products and services to the lighting market. When LKL had to adapt tothe market situation due to the increasing adoption of LED lighting and their introduc-tion of the 1-stop service, LKL had to change again.

We are the organization that is really good at adapting or changing. We are veryflexible. All employees can easily adapt to change. When the LED technologycame in the existing organization structure and unit was not enough to drive thewhole organizational changes necessary. So we set up a new unit.

Part of the restructuring was reducing the amount of functions performing the sametasks and having the same accountabilities across the organization, this allowedestablishing the new structure to foster sustainable growth and competition along theway. LKL also established the overseas subsidiaries to create more efficient supplychain activities at competitive costs and operations allowing staying close to marketand rendering services faster. LKL also implemented product-marketing teams dedi-cated to manage the Product-Life-Cycle of major product groups as well as executing amulti-generation product development plan for the upcoming 3 years which allowsLKL to stay ahead of the competition. These teams are supplemented by Chinese-basedsourcing teams that help accessing new technologies at low cost.

Fig. 3 Net profit Lee KichareonSeang Co. Ltd. 2009–2012

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LeKise describes itself as a very flexible and adapting organization, with anemphasis on quality management and innovation. The firm is designed to meetcustomer requirements and it is possible to change process depending on customerneeds. However, change is mainly driven by the CEO himself. In all conductedinterviews, the managers pointed out that the vision and strategy are provided by thetop management and disseminated through meetings, emails, and bulletins to thedifferent management levels and departments.

Our CEO looks into long-term success of the organization. He teaches allemployees that we always have to be one step ahead of others.

One manager noted that the approach works very well for LeKise because the CEOand Managing Director are both actively involved in the day-to-day operations of thefirm. This is in accordance with several managers noting that the organization in itself isvery conservative. The CEO and top management develops a 3- to 5-year strategy forLKL, which is then translated into KPIs by the head of departments. Value creation isenhanced by measuring organizational results against the KPIs, and meetings are calledfor to be able to quickly react to market changes if the KPIs are not met. Part of theKPIs is also to reduce cost and awareness programs, and competitions are run toincrease mindfulness about cost saving issues. However, despite being described asconservative and following a managerial “top-down” approach, employees are encour-aged to share their ideas, make suggestions to improve practices and minimize cost, aswell as suggest projects LKL should embark on. In fact, the CEO described everysingle employee as crucial for the fulfillment of the organizational strategy.

Conclusions

Empirical Findings Discussion and Future Research

Based on one empirical case study (LKS), some preliminary findings can be derived asan emerging set of indicators that may be reinforcing some of our theoretical tenetsoutlined above. It comes forward, for example, that LKS takes the advantage of currentresources and knowledge in order to develop and establish its own brand (LKL), aimingto fill the gap in the local market and compete with larger firms that still collaborateswith under the OEM framework. This is consistent with the views of Barney (1991),Teece et al. (1997) and Spector et al (2009), which emphasize that companies thatmanage to reconfigure their capabilities and organizational processes are able toinnovate and therefore, compete and survive in the global competitive landscape.Likewise, this case company verifies the arguments of Lindgardt et al. (2009),Christensen (1997), and Schneider and Spieth (2013), who used the term strategicentrepreneurship to describe corporate entrepreneurial initiatives as tools for BMI(e.g., when organizations utilize current competencies and resources to develop newunits or new ventures). Therefore, we see that LKS links, proves and practically enrichesthe three core perspectives of BMI given by Schneider and Spieth (2013) (see above).

This study also corroborates the views of Carayannis et al. (2000), Pohle andChapman (2006), Carayannis (2008), and Aspara et al. (2009) that this continuous

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strategic orientation to innovation and flexibility—two core components of sustainabil-ity and resilience—is characterized by pro-activeness as it allows firms to appreciatefuture risks and take the necessary actions to obviate competitors; check on globaltechnological advancements (in this case by adopting, adapting and developing inno-vations for the local market); respond to environmental changes (by designing lightingproducts that save energy); and meet customers’ needs (by developing high-qualitycustomized lighting solutions). LKS seems to be a good example of a company in SEAsia that adopts BMI, readapting its structure, developing and establishing a newbusiness, and adjusting the balance of production—investing more on producingLKL products and less on OEM—responding in that way to the challenges of thepresent time. This study also underlines the ambidexterity that is required for successfulBMI, leading companies to create opportunities for growth, and so, prevent decay.

Here comes the ability of the company not to develop its strategy and count onlyon the benefits of the short-term goals, but also consider long-term planning as thetunnel to success and sustainability. In other words, “the ability of an organization tofocus on both the short and the long term is one of the key critical enterprise successfactors and this balance can be achieved by relying and leveraging technologicallearning processes at multiple levels within the organization” (Carayannis 1998, p.699). This highlights the importance of higher order technological learning (HOTL)capabilities that produce enhanced and innovative organizational routines that, in turn,lead to enterprise excellence (Carayannis et al. 2013a). LKS and its BMI exampleillustrate the importance and influence of organization design on the development ofinnovation and reinforces Osterwalder’s notion that the BM is positioned at the centerof the Business Strategy, ICT, and Business Organization triangle. This is shownclearly in Table 1, where the key partnerships, resources and processes as well as thecost structure have been modified according to the new BM development frameworkof the company. Similarly, we see that posture, propensity, and performance(Carayannis and Provance 2008) have also been revised and updated, setting up theframework for the company to be competitive (changing its position within thebusiness ecosystem—from an OEM to own brand and product developer—adaptingand adopting routines and culture for innovation development; and improving theperformance and environmental impact).

This study also enhances De Waal’s (2007) argument about cross-functional andcross-organizational collaborations. Table 1 shows the differences from before to afterthe establishment of LKL. In the new context, we see that the key partnerships havebeen enriched and developed mainly with partners that influence the production ofhigh-quality customized outcomes (suppliers, lighting designers, and lead customers);provide solutions for cost reduction (suppliers and contractors); and optimal productdistribution (wholesale and retail distribution). Therefore, we can assume that success-ful BMI requires an integration of the stakeholders into the design, production, anddistribution process, following the same rules and aiming to achieve the same results interms of values (quality) and performance (quantity).

To sum up, we see that organizational sustainability, intelligence and resiliencerequire the application of BMI competences that incorporate resources, dynamiccapabilities, and corporate entrepreneurship to develop such competitive advantagesand explore new business opportunities so that firms may achieve SEE. Moreover, theemphasis on innovation, flexibility, and ambidexterity (O’Reilly and Tushman 2004) is

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a prerequisite for successful BMI development in addition to HOTL and organizationdesign for innovation that act as enablers of enterprise excellence. Finally, we argue thatcross-organizational and cross-functional collaborations are factors of success andfacilitate the implementation of BMI.

Clearly, this is work in progress in terms of the collection of empirical data and weexpect to have additional empirical validation in the near future. On the matter of themove from trade in goods to trade in tasks we see confirmation on this based on thefollowing quote below.

In order to be able to deliver new services LeKise Lighting had to restructureitself significantly. While originally only focusing on sales and manufacturing ithas had to change to a company that provides services. Not only had theorganizational structure to change but the mind-sets of employees. In itselfLKL as part of Lee Kitchareonsaeng was set up to enable the group to delivernew products and services to the lighting market.

In addition, we see in the following quote an affirmation of the LKS’s capacity toengage in BMI and reinvent itself in the process possibly not only sustaining but alsoenhancing its value proposition:

When LeKise Lighting had to adapt to the market situation due to the increasingadoption of LED lighting and their introduction of the 1-stop-service LKL had tochange again.

We are the organization that is really good at adapting or changing. We are veryflexible. All employees can easily adapt to change. When the LED technologycame in the existing organization structure and unit was not enough to drive thewhole organizational changes necessary. So we set up a new unit.

Of course, one should take such pronouncements with a grain of salt to be furthercorroborated via the use of financial results which seems to be reinforced in Fig. 3. Inaddition, sustainability, resilience and robustness are demonstrated in the manner thatLKS seems to have been adapting as well as reallocating resources to provide a strongfoundation for future performance and competitiveness based on quality-centric andless cost-centric differentiation:

LeKise describes itself as a very flexible and adapting organization. The firm isdesigned to meet customer requirements and it is possible to change processdepending on customer needs. However, change is mainly driven by the CEOhimself, as already emphasized in the previous section.

Moreover, it is interesting to note that this adaptive flexibility is combined with arather overall conservative culture for LKS per the quotation below. This apparentcontradiction seems to be effectively managed and even leveraged for enhancing resultsvia the organic, top-down and bottom-up as well as mid-level out approach at LKS—that may be reflective of the Quadruple Innovation Helix concept at the micro level (seereferences in text above).

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Particularly interesting is the change in marketing efforts. LKL used to promoteproducts as cost saving rather than energy efficient and social responsible. One couldargue that this is indeed implicit in the message of cost saving, however LKL didchange the scope of its marketing efforts completely by setting up a corporate socialresponsibility and customer relationship management unit. This emphasizes is nowon advertising sustainable products and services through mainly corporate socialresponsibility activities. It is noteworthy that Thailand was victim to an extensiveflood in 2011. Previous research (Henderson 2007) has shown that such incidents canhave an effect on the interest of organizations in acting more social and environ-mental friendly. It is however unlikely that, given the economic demands,implementing corporate social responsible practices is just a philanthropic endeavor.Organizations always need to consider the triple bottom line of social, environmentaland economic returns in creating value, even in terms of corporate social responsi-bility. While the aftermath of the flood, that victim several of LKS’s competitors,might have triggered corporate social responsibility initiatives, LKS’ products andservices can easily be aligned to CSR practices, after all LED technologies allows fordecreasing energy consumption. This allows LKS to apply corporate social respon-sibility practices not only in times of need, out of philanthropy, but also to increasethe triple bottom line results in a sustainable manner. It is a practice that can be usedto reach organizational growth by achieving environmental friendly and societalbeneficial goals at the same time.

While every firm can, in theory, implement corporate social responsibility schemes,the case of LKS is different as CSR and CRM are both results of a large organizationalrestructuring as part of an innovation in the BM. All in all, the LKS case study seems tobe the first in a series of empirical validation steps that has already provided someinteresting and encouraging insights into whether, when, how and why organizationalsustainability, resilience, and excellence can be best served by BMI.

Limitations and Implications for Future Research

LKS serves as an example case of BMI serving organizational sustainability, resilience,and excellence. However, LKS is only one case, and while the data is rich and valuable,its limitations have to be acknowledged. As such, the study cannot claim generaliz-ability or causality. Organizational reality is not only determined by the firm’s actionsbut also by its competitors and environmental causes, and the data is not sufficientenough to make such claims. The study can also not claim to offer a representativepicture, as we note above that the LKS case is a unique case that overcomes the OEMmanufacturing trap by innovating its BM and aligning it to financial, environmental,and societal goals. To clarify if BMI can serve organizational sustainability, resilience,and excellence, comparative case studies across multiple organizations in differentsetting would determine if BMI can consistently be a drive for such goals andquantitative research would allow unraveling patterns that are conducive to BMI beinga driver for organizational sustainability.

The LKS case provides initial insights into how BMI can serve organizationalsustainability, resilience, and excellence; however, future research is needed to developcomprehensive insights. First, the study can be extended to a series of comparative casestudies that could provide insights in potential patterns and processes that would allow

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us to conduct further research in this area by qualitative and quantitative means. That is,the case studies could be complemented and extended via surveys and semi-structuredinterviews. Second, extending the study cross-sectorally, that is beyond manufacturingfirms to organizations operating in the service sector would allow us to get insights intowhen, whether, and how organizations with a potentially smaller ecologic footprintcould align their BM with sustainable goals. Third, the role of the value chain networkhas not been discussed in the present study. It would certainly be of value to explorehow first- and higher order customers, suppliers, complementors, and competitorsactually drive or inhibit firms in aligning their BM with ecological, societal, andfinancial goals. Finally, the proposed conceptual model may provide a general frame-work for future quantitative cause-and-effect analyses in this field.

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