How do firms understand their business model; destruction and creation of meaning through the business model

Professor Per Vagn Freytag, University of Southern Denmark

22nd Feb 2013  02:30 pm - Room 214/215, H69 - Economics and Business Building

The aim of this conceptual paper is to impart an understanding of how actors create meanings about the firm's business model through interaction processes. In particular we are interested in understanding how business models are shaped through interaction processes (Tikkanen et al. 2005). Actors hold different understandings or beliefs of the business model and give them different meanings (Wieck 1995; Welch & Wilkinson, 2002). These schemas or meanings are essential in the structuring process of the resources and activities which are available. Business models are the manifestations of the meaning creating processes which takes place and evolve over time. Business models make action meaningful and direct intentions yet also limit the repertoire of possible actions. However firms do change their repertoire over time. What is it that drives change in the meaning or understanding of the business model?

Interaction takes places at different levels: within the firm, in dyads and networks. These different levels effect the understanding of the business model and how it works and as actors hold different obligations and take care of different tasks this may imply different understandings of the model. Therefore interaction processes takes place and schemas can collide on a firm and on a network level. Little is known about how these processes takes place and how new mental business models emerges. In this paper based on a comprehensive litterateur review and a case study, different business model understandings are highlighted and a conceptual framework is developed.