Popular though poorly-defined, the business model construct has generated a
fragmented and non-accretive research literature. Despite prominence in the practice
community for scholarly research has yet to converge on construct boundaries or establish a
research framework in organizational theory. This study develops an integrative approach to
business models and identifies business model formation and change processes.
Prior studies address business models within the strategy discourse of competitive
positioning. The failure to disentangle business models and strategy has limited theoretical
and practical research. A quasi-systematic review of the academic literature combined with a
discourse analysis of the business model in practice yields an empirical assessment of
business model language. Managers use business models to address opportunities rather
than position the firm for competitive advantage. This anchors an integrative definition for the
business model as the design of organizational structures to enact an opportunity.
Building on this framework, an analysis of structured interviews with 556 large firm
CEOs establishes the links between organizational structures and strategic flexibility.
Working within a capabilities and structural framework, the study extends research on
strategic flexibility firms engaged in business model innovation in a global, cross-industry
context. Creative culture enables strategic flexibility while partner dependence inhibits it. In
addition, firms that focus managerial attention without giving up non-core activities achieve
flexible outcomes.
Finally, a case-based study of innovative entrepreneurial firms unpacks
characteristics of business model formation and change processes. In contrast to theories of
outward-facing strategic fit with environment, entrepreneurial firms undergo an internallydriven
process towards business model coherence. The case studies reveal a self-evolving
narrative process operating at multiple levels within the firm. The application of a narrative
framework facilitates a novel sense-making approach to theories of change at
entrepreneurial firms.