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

Pati, R. K., Nandakumar, M. K., Ghobadian, A., Ireland, R. D. and O'Regan, N. (2018) Business model design–performance relationship under external and internal contingencies: evidence from SMEs in an emerging economy. Long Range Planning, 51 (5). pp. 750-769. ISSN 0024-6301 doi: 10.1016/j.lrp.2018.01.001

Abstract/Summary

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.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/75893
Item Type	Article
Refereed	Yes
Divisions	Henley Business School > Leadership, Organisations and Behaviour
Publisher	Elsevier
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