Complementing the conceptual toolbox for sustainable transition – defining the business logic concept.

• Researchers and practitioners frequently rely on models and analytical concepts in order to understand the world around them. Two concepts from the field of business strategy research, the industry value chain and the business model, are at the center of attention in relation to the transition towards sustainable business practices (cf. Markard et al. 2012; Boons et al. 2013). The industry value chain, i.e. supply chain, has for example been presented as a tool that is useful when developing inter-firm collaboration that may support a more equal distribution of costs and value among actors involved in the production process (Vurro et al. 2009). The business model has been declared as playing a key role in the commercialization process, taking sustainable technology from concept to market and facilitating the technological transformation towards a more sustainable society (Bocken et al. 2014). Both concepts portray important aspects of business management and it is fairly common to see them being used together in discussions about innovation and change. The concepts also have implications in relation to each other. For example, in a competitive market setting each firm is supposed to have a business model to generate value (Teece 2010). This implies that each firm active in an industry value chain must have a business model. Consequently, these two concepts are powerful analytical tools that both frame the object of study (i.e. the firm and the value chain) and influence perceptions of other analytical concepts. Much of business related research conducted on sustainability deals with the question of organizational change and particularly obstacles to such change (Benn et al. 2014). Both the value chain and the business model facilitate change towards sustainability, but since their analytical focus is on the business or a particular value chain, they often fail to address the general logic behind the way business is conducted in a particular sector or industry. Key factors in relation to managerial decision making such as industry structure, policy setting and management traditions are missing. Currently there is no commonly accepted analytical concept that could provide an anchor point for comparison, covering such a broad span of factors. We believe that such a concept would increase the usefulness of the other two by identifying business-specific reasons for why transition does happen or not. In this paper we propose that the concept of ‘business logic’ may fill this role. We suggest that ‘business logic’ can be used to describe what characterizes the general understanding of an industry on issues such as production technology, value creation, regulation and stakeholder relationships. The ‘business logic’ may be conceptualized as a description of a number of factors and conditions, providing a starting point for understanding an established business and its conditions for change. One important difference between the ‘business logic’ and the other two concepts is its focus on structural circumstances that define the conditions for their content and evolution. Hence, the ‘business logic’ can be seen as a description of critical success factors that a business model or value chain should manage successfully. The business logic establishes the contours within which a manager may expect business models and value chains to function. Consequently, as the business logic changes so does the space within which business models and value chains evolve. The business logic concept thus represents a general logic for change in relation to both concepts. The paper aims to explore analytical weaknesses with the value chain and business model concepts in relation to sustainable transition and present the ‘business logic’ concept as a facilitating tool when working with this issue. The paper is based on a literature review coupled with selected representative cases that support key arguments presented in the paper.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Nyckelord

Business model

value chain

transition management

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