The breadth of business model reconfiguration and firm performance

Panos Desyllas, Ammon Salter, Oliver Alexy

Research output: Contribution to journalArticlepeer-review

15 Citations (SciVal)

Abstract

Looking at business models as systems of interdependent elements, we study how the breadth of an incumbent firm’s business model reconfiguration influences its performance. Drawing on the metaphor of firms searching on a performance landscape, we argue that the relationship between business model reconfiguration breadth and performance should form an inverted U-shape. While firms can gain from increasing business model reconfiguration breadth, these benefits need to be traded-off against the increasing complexity of its associated changes. We further predict that this inverted U-shape will flip for highly performing firms while being amplified for firms heavily active in innovation. Using data from an original survey of knowledge-intensive business services firms, we find that, on average, business model reconfiguration has little effect on performance. However, U-shaped effects clearly emerge when accounting for the effects of past performance and innovative activity. Our findings contribute to a better understanding of the conditional nature of the advantages stemming from business model reconfiguration.

Original languageEnglish
Pages (from-to)231-269
Number of pages39
JournalStrategic Organization
Volume20
Issue number2
Early online date17 Sept 2020
DOIs
Publication statusPublished - 1 May 2022

Bibliographical note

Funding Information:
The article has benefited from the feedback provided by the editor and three anonymous referees. The authors gratefully acknowledge comments on earlier versions of the paper by the referees and audience at the Strategic Management Society and the Academy of Management annual conferences and workshops at Bath, TUM, Cambridge and Manchester. They also thank Charles Baden-Fuller, Tomi Laamanen, Bruce Tether, and Edmund Thompson for suggestions and Ian Miles, Marcela Miozzo, and Hsing-fen Lee for their contribution to developing and carrying out the survey. The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Desyllas acknowledges support from the Economic and Social Research Council (ESRC; No. RES-062-23-3250).

Funding Information:
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Desyllas acknowledges support from the Economic and Social Research Council (ESRC; No. RES-062-23-3250).

Publisher Copyright:
© The Author(s) 2020.

Keywords

  • business model reconfiguration
  • firm performance
  • knowledge-intensive business services

ASJC Scopus subject areas

  • Business and International Management
  • Education
  • Industrial relations
  • Strategy and Management

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