The role of dynamic capabilities in building innovative business models. An empirical evidence from Italy.

D’Amore Gabriella^1,*,+, Francesco Caccavale¹, Maria Testa¹,
Luigi Lepore¹

¹University of Naples Parthenope, Department of Law

*[email protected]

⁺Associate Professor in Business Administration

Extended abstract

Background

In the last decades, companies have received many institutional and social pressures to transition towards environmental sustainability. As a result of the 2030 Agenda, which has clearly mapped out the global path towards sustainability with its 17 SDGs and 169 targets, followed by the more precise commitment of the COP26, in the fight against climate change, reinforced by the EU approval of the Fitfor55 package of measures, aimed at reducing carbon emissions by 55% by 2030, firms have gained awareness of the need to rethink their business models to contribute to sustainability challenge. The introduction of ecological innovations into their products, processes and structures, can also represent an opportunity for companies to achieve a competitive advantage and improve financial performances. However, the transition from a traditional business model to an innovative and sustainable business model is not limited to this, but requires the development of human capabilities able to manage innovation by integrating new knowledge and skills within the organizational structure (Scuotto et al. 2022). As previous studies assessed (Alvino et al., 2020; Di Vaio et al., 2020), this process can be strongly supported by the use of new technologies which facilitate the dissemination of knowledge and innovation among the stakeholders (Freudenreich et al., 2020, Ayuso et al. 2011). Despite the numerous studies developed in this research field (Scuotto et al., 2022; Dangelico et al. 2017; Inigo et al., 2017), the ways in which human capabilities are developed among employees, how to encourage the diffusion of innovation and the active participation of all the personnel (from the leaders to management and employees) in new, innovative and sustainable ways of doing business, still remains to be explored.

Purpose

This research aims to understand how institutional and social pressures related to environmental concerns impact on business models and the role of dynamic capabilities into transform traditional business models in innovative and sustainable business models.

Methodology

In order to achieve this aim, after an in-depth mapping of the academic debate on the role of technology and dynamic capabilities into foster sustainability and knowledge management, the research focuses on the analysis of an Italian shipping company: Mec.Ship S.r.l.. This firm innovated completely its business model, with the support of digital technology, to answer to the new ecological requirements imposed by external stakeholders to its clients, mainly represented by cruise companies.

Findings

Using the lenses of CSR framework, stakeholder theory and diffusion of innovation (DOI) theory, this study evidences the role of digital technology into transform a traditional business model in an innovative business model. This required the development and dissemination of innovative skills and knowledge from leaders to employees. There were two main factors that pushed Mec.Ship s.r.l. to this radical changes: the search of a competitive advantage and the need to bypass the technical and economic difficulties experienced with the previous model (such as high specialization of the technicians, to speed up the construction/creation of new systems and to reduce the construction costs of the systems on board the ship). It follows the improvement of financial performances and the reduction of environmental impact of shipping value chain.

Implications

Our case study contributes to academic literature, showing the role of dynamic capabilities in the diffusion of innovation within business boundaries and the role of new technologies into accelerate the ecological transitions. This research provides interesting insights also for firms operating in the shipping industry, illustrating through a business model canvass the path towards innovation and sustainability followed by Mec.Ship s.r.l.

Keywords 

dynamic capabilities; innovation; business model; sustainability

References 

Alvino, F., Di Vaio, A., Hassan, R. & Palladino, R. (2020) Intellectual capital and sustainable development: A systematic literature review. Journal of Intellectual Capital. 22(1), 76-94.

Ayuso, S., Rodríguez, M. Á., García‐Castro, R. & Ariño, M. Á. (2011) Does stakeholder engagement promote sustainable innovation orientation? Industrial Management & Data Systems. 111(9), 1399-1417.

Aagaard, A., Lüdeke-Freund, F. & Wells, P. (2021) Business Models for Sustainability Transitions. Springer International Publishing.

Baumgartner, R. J. & Rauter, R. (2017) Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production. 140, 81-92.

Bidmon, C. M. & Knab, S. F. (2018). The three roles of business models in societal transitions: New linkages between business model and transition research. Journal of Cleaner Production. 178, 903-916.

Dentchev, N., Rauter, R., Jóhannsdóttir, L., Snihur, Y., Rosano, M., Baumgartner, R., ... & Jonker, J. (2018). Embracing the variety of sustainable business models: A prolific field of research and a future research agenda. Journal of Cleaner Production. 194, 695-703.

Di Vaio, A., Palladino, R., Hassan, R. & Alvino, F. (2020) Human resources disclosure in the EU Directive 2014/95/EU perspective: A systematic literature review. Journal of Cleaner Production. 257, 120509

Di Vaio, A., Hassan, R., D'Amore, G. & Strologo, A. D. (2022) Digital technologies for sustainable waste management on-board ships: an analysis of best practices from the cruise industry. IEEE Transactions on Engineering Management. Available from: Digital Technologies for Sustainable Waste Management On-Board Ships: An Analysis of Best Practices From the Cruise Industry | IEEE Journals & Magazine | IEEE Xplore [Accessed 13 February 2023]

Freudenreich, B., Lüdeke-Freund, F. & Schaltegger, S. (2020) A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166(1), 3-18.

Haaker, T., Bouwman, H., Janssen, W. & de Reuver, M. (2017) Business model stress testing: A practical approach to test the robustness of a business model. Futures, 89, 14-25.

Hernández-Chea, R., Jain, A., Bocken, N. M. & Gurtoo, A. (2021) The business model in sustainability transitions: A conceptualization. Sustainability, 13(11), 5763.

Jonker, J. & Faber, N. (2019) Business models for multiple value creation: Exploring strategic changes in organisations enabling to address societal challenges. In: Aagaard, A. (eds.) Sustainable business models: innovation, implementation and success, Palgrave Studies in Sustainable Business, pp. 151-179.

Loorbach, D. & Wijsman, K. (2013). Business transition management: exploring a new role for business in sustainability transitions. Journal of Cleaner Production, 45, 20-28.

Schaltegger, S., Hansen, E. G. & Lüdeke-Freund, F. (2016). Business models for sustainability: Origins, present research, and future avenues. Organization & Environment, 29(1), 3-10.

Schneider, S. (2019) The impacts of digital technologies on innovating for sustainability. In: Bocken, N., Ritala., P., Albareda L. & Verburg R. (eds.) Innovation for Sustainability: Business Transformations Towards a Better World, Palgrave Studies in Sustainable Business, pp. 415-433.

Scuotto, V., Nespoli, C., Palladino, R. & Safraou, I. (2022) Building dynamic capabilities for international marketing knowledge management. International Marketing Review, 39(3), 586-601.