Business model design–performance relationship under external and internal contingencies: Evidence from SMEs in an emerging economy

Pati, Rakesh Kumar; Nandakumar, Mankavil Kovil Veettil; Ghobadian, Abby; Ireland, R. Duane; O'Regan, Nicholas

Abstract

© 2018 Elsevier Ltd We examined Business Model (BM) designs – performance relationship and the moderating effects of firm age and external environment on this relationship. Furthermore, we investigated the impact of simultaneously operating dual BM designs (i.e. novelty and efficiency) on firm performance and contingent effect of firm age on this relationship. Based on data from 241 Indian SMEs, our findings highlighted that BM novelty was of greater benefit to younger SMEs compared to mature SMEs, while BM efficiency was of greater benefit to more mature SMEs. The environmental dynamism positively moderated the relationship between BM novelty and performance but it negatively moderated the relationship between BM efficiency and performance. We also found that BM efficiency is more beneficial in a low, rather than a high, munificent environment but we found environmental munificence did not moderate the BM novelty and SME performance relationship. Finally, we found simultaneous deployment of BM novelty and BM efficiency resulted in an enhancement of performance among mature SMEs compared to younger SMEs. Our study not only adds to the limited literature on BMs in SMEs but also helps practicing managers and entrepreneurs to make informed choices about their BMs.

• Journal Article Type: Article
• Acceptance Date: Jan 9, 2018
• Online Publication Date: Jan 9, 2018
• Publication Date: Oct 1, 2018
• Deposit Date: Jan 11, 2018
• Publicly Available Date: Jan 10, 2020
• Journal: Long Range Planning
• Print ISSN: 0024-6301
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 51
• Issue: 5
• Pages: 750-769
• DOI: https://doi.org/10.1016/j.lrp.2018.01.001
• Keywords: business model, performance, environmental dynamism, environmental munificence, firm age, SMEs, emerging economy
• Public URL: https://uwe-repository.worktribe.com/output/859527
• Publisher URL: https://doi.org/10.1016/j.lrp.2018.01.001
• Additional Information: Additional Information : This is the author's accepted manuscript. The final published version is available here: https://doi.org/10.1016/j.lrp.2018.01.001.
• Contract Date: Jan 11, 2018