The Determinant And Consequences Of Business Model Innovation:Toward The View Of Managerial Decision

In recent years, business model innovation has caught the attention of both scholars and practitioners. Due to the difficulties in the measurement as well as the limitations of research perspectives of business model innovation, there are numerous valuable research problems remains to be well explained. Current research mainly focuses on the components of business model and its relationships with firms’ strategies and actions, but neglects the important influence of firms’decision-makers-the top management team- who play a very important role in the resource allocation during business model innovation. At the same time, most studies on business model innovation are based on case studies rather than quantitative studies based on large samples. This study addresses these gaps by investigating the Chinese Internet-based companies first, and constructs a framework of the influential factors that lead to the success of business model innovation. Furthermore, this study introduces strategic schema and top management team diversity as the antecedent factors for business model innovation, as well as the threshold variables for its functional mechanism form the perspective of decision-making. The three sub studies empirically support the formation and functional mechanism of business model innovation, the evidence from which are as follows.Combining qualitative with quantitative methods, Sub Study I discusses the factors which lead to the success of business model innovation in Internet-based firms under the context of emerging economies. Momo technologies,360, Letv.com and Qunar.com are chosen as case companies for a multiple case study. At the same time, 23 Internet-based firms listed in the US are taken as samples for a quantitative study. The empirical analysis shows that, the localization context of emerging economies has important influence on firms’ business model innovation performance. Specifically, on one hand, when the level of market diversity and market segmentation gets higher, the efficiency performance of firms’ business model innovation would be lower; the higher level the market competition, the higher the firms’business model innovation efficiency. When introducing in TMT diversity as a moderator, higher TMT diversity would intensify the negative relationship between market segmentation and business model innovation efficiency; while the positive relationship between market competition and business model innovation efficiency also be stronger. On the other hand, as the level market segmentation is high, the growth performance achieved by business model innovation becomes lower. With TMT diversity as a context, when the diversity level of TMT tenure is higher, the negative relationship between market segmentation and growth performance would be stronger.Sub Study II investigates how strategic schema influences business model innovation, as well as the moderating effect of industry dynamics. The samples are 2726 firms listed in Chinese small and medium sized enterprise board from the year 2004 to 2014. The empirical evidence shows s significant negative effect exists between the complexity of strategic schema and efficiency-centered business model innovation. When industrial dynamics gets higher, the above-mentioned negative effect has been weakened.Sub study Ⅲ discusses how business model innovation influences firms’ performance as well as the threshold effect of TMT diversity. The data is collected from 906 firms listed in Chinese small and medium sized enterprise board from the year 2009 to 2011 (balanced panel data). The empirical evidence shows that TMT functional diversity plays as the threshold variable in the relationship between novelty-centered business model innovation and firms’performance, while TMT tenure diversity plays the threshold role between efficiency-centered business model innovation and firms’performance. Specifically, when the diversity of TMT function surpasses a certain level, novelty-centered business model innovation has significant positive effect on firms’performance, otherwise no significant effect; when the diversity of TMT tenure is in a certain range (between two threshold value), efficiency-centered business model innovation would positively influence firms’ performance.This dissertation contributes to the previous research in the field of business model innovation from several aspects:(1) The innovation on research perspective.Current research mainly relates business model innovation with technological innovation or strategies. The scholars consider business model innovation as facilitating the commercialization of firms’technologies or lubricating the implementation of firms’strategies. However, business model innovation is not only the important assistive tool for technological innovation and strategy, which would lead to prejudiced opinions on business model innovation. In fact, business model innovation is an important decision made by firms, who need to comprehensively consider multiple information including technologies, customers, and markets. In this process, decision-makers are crucial in accepting and processing information, as well as have important effects on the formation and functional mechanism of business model innovation. Therefore, this research analyzes the functioning mechanism of business model innovation from the perspective of decision-making, which considers the influence of business opportunities comprehensively, as well as contributes in filling the theoretical gap in the relationship between business model innovation and decision-makers.(2) The expansion of business model innovation boundary.Previous studies on business model innovation explain its formation and functional mechanism from the view of resource, transaction cost and value network, etc. However, these studies only focus on the resource allocation and application in business model innovation, rather than considering the decision-makers behind the resource, namely, the effect of the top management team. According to managerial cognition theory as well as the echelon theory, business model innovation is an important decision-making task; the cognition construct of TMT may generate decision influence on business model innovation. By introducing managerial cognition theory in business model innovation research, this research largely expands the research boundary of business model innovation so as to increase its explanatory power to reality.(3)The innovation on measurement.This research is the first to establish the measurement method for business model innovation with objective indicators. Questionnaire is adopted by many previous studies to assess business model innovation. However, the effectiveness of the questionnaire remains to be testified within more industries and contexts. Business model innovation is not only a subject construct of mental activity. Instead, using objective indicators to measure business model innovation is very important on the theoretical level. The measurement method of this research could help following scholars to expand business model innovation research to more industries, at the same time, enable more quantitative research in the field of business model innovation.