Special Issue Theme Background
Transforming economies such as the BRIC countries – Ex-Soviet Republics, or Eastern European countries – share national aspirations of becoming innovation economies. These aspirations have stimulated a push for entrepreneurship and experimentation with new ways of doing things. This has created a fascinating context for research on business model innovation, relating to the way incumbent firms adapt their business models or come up with entirely new models. Similarly, new business models may be originated by start-up companies that often are challenging and leapfrogging the ‘tired’ old business models or simply invent new ones. However, research that specifically explores indigenous business model innovation in the context of these transforming economies is still in its early stages. The MOR special issue on ‘ Business Model Innovation in Transforming Economies ’ aims to address this gap by soliciting research uncovering successful new business models that is indigenous to these economies, as they transition to becoming innovation economies themselves and contribute to strategy and management theory development.
A business model is a holistic concept that ‘explains’ how firms create and capture value, (e.g., Volberda, Van Den Bosch, & Heij, Reference Volberda, Van den Bosch and Heij2017). Business model innovation emerging in such transforming economies provides opportunities for new organizations to challenge incumbent firms who often find it hard to respond to new ways of doing business. Despite growing interest in research on business models over the past decade (cf. Foss & Saebi, Reference Foss and Saebi2017; Zott, Amit, & Massa, Reference Zott, Amit and Massa2011), research on business model innovation by firms in transforming economies is only beginning to attract growing interest.
This MOR special issue seeks to attract research on indigenous business model innovation especially in the transforming economies of Russia, Ex-Soviet Republics, and Eastern Europe. While research already recognizes that the characteristics of transforming economies require firms to use different business models to those found in established economies, much remains to expand the range and deepen understanding of new indigenous business model applications and demonstrate new ways in which startups and incumbent organizations cope with the universal limitations of bounded rationality, and how and why the new business models are successful in the context of these transforming economies (i.e., history, institutional configurations, cultural philosophical roots, and specific aspects such as the role of trust.).
Another important area for research is the development process for new business models in transforming economies. Of course firm-level factors such as leadership, extreme philosophical beliefs, (e.g., Haier is the Sea, Reference Zhang2016; Lewin et al., Reference Lewin, Välikangas and Chen2017) and organizational culture (e.g., Morris, Schindehutte, & Allen, Reference Morris, Schindehutte and Allen2005) can and do account for business model innovation. However, a much more nuanced understanding is needed of various influences at different levels of analysis, and the possible interplay between them. As transforming economies climb up the added value chain the institutional and technological contexts are transitioning and it is especially important to elucidate the co-evolution firms’ business models innovation and national competitiveness. For instance, the growth and maturity of the Internet and advances in virtual software applications such as Block Chain applications (Lansit & Lakani, Reference Lansist and Lakani2017) have given rise to new business models, new apps based services, and new ways of organizing work. Apps such as Alipay, created by Alibaba in China, has revolutionized online retailing and all types of transactions that are stymied by the absence of trust between parties to a transaction. Similarly cloud applications and the Gig economy are changing how companies organize work and where it is executed and by whom (e.g., Kaganer, Carmel, Hirschheim, & Olsen, Reference Kaganer, Carmel, Hirschheim and Olsen2013; Malone, Laubacher, & Scot Morton, Reference Malone, Laubacher and Scot Morton2003).
More work is also needed to determine how business model innovation affects the competitiveness of firms from transforming economies (e.g., the emergence of Huawei as the global leader in telecommunication networks and the decline of incumbents such as Lucent and Erickson). Similarly, it is important to develop much more nuanced understanding of how the relationship between a new business model and the rapid change in transforming economies allows firms to implement and leverage new ways of doing business. Also, as these firms increasingly venture outside their national borders (Ramamurti, Reference Ramamurti2012), there is an urgent need to develop deeper insights of the socio-political and economic context and why and how the business models allow them to compete with multinationals from established markets that are often better resourced and have more international experience (Luo & Child, Reference Luo and Child2015).
Examples of Research Topics
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• What new types of business models are emerging in transforming economies and why might different business model innovations emerge in different transforming economies?
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• What drives business model innovation in these economies – and what types of environmental change (for example, absence of trust and legal adjudication) are particularly important in triggering this?
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• Are there differences in business model innovation between different types of firms (e.g., new startups versus established firms) and what drives these differences?
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• What can incumbents learn from the business model innovation of new entrants, and vice versa, and how can they do this?
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• How do the business models of multinationals from transforming economies differ from those of their counterparts in developed economies?
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• What business model innovations help multinationals from transforming economies to become internationally competitive?
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• Do multinationals from transforming economies change their business models to become more competitive internationally, or do they employ established models from their existing markets?
The questions above are only indicative of the themes that may emerge, and we welcome studies addressing related topics that advance understanding of the business model innovation of firms in transforming economies. We encourage the submission of qualitative, quantitative, and theoretical studies at all levels of analysis.
Questions about the special issue may be directed to the guest editor, Henk Volberda ([email protected]). Papers should be submitted electronically through MOR’s Scholar One Manuscripts site at http://mc.manuscriptcentral.com/mor and identified as submissions for the ‘Business Model Innovation in Transforming Economies’ special issue. All submissions should follow the ‘MOR Author Guidelines’, available online at https://www.cambridge.org/core/journals/management-and-organization-review/information/instructions-contributors
