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

Rakesh Kumar Pati, M. K. Nandakumar*, Abby Ghobadian, R. Duane Ireland, Nicholas O'Regan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)750-769
Number of pages20
JournalLong Range Planning
Volume51
Issue number5
Early online date9 Jan 2018
DOIs
Publication statusPublished - 1 Oct 2018

Keywords

  • Business model
  • Emerging economy
  • Environmental dynamism
  • Environmental munificence
  • Firm age
  • Performance
  • SMEs

Fingerprint Dive into the research topics of 'Business model design–performance relationship under external and internal contingencies: Evidence from SMEs in an emerging economy'. Together they form a unique fingerprint.

Cite this