Managing Value Creation Paradoxes in Social Business: The Role of the Digital Platform Business Model
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Abstract
Objective: this paper examines how business model design influences value creation paradoxes in social businesses, with a focus on DPBMs (digital platform-based models). Methods: case studies in the Brazilian education and employability sector are analyzed using the activity system perspective of business model design. Results: the findings show that DPBM-based social businesses exhibit a mix of traditional business model value drivers (complementarity, lock-in, and novelty) and social business value drivers (impact complementarity, shared values, and integration novelty). DPBMs can help social organizations address the learning paradox and improve activity efficiency for business scalability. However, challenges in implementing DPBMs, such as user group selection, revenue models, and platform access regulation, can amplify performance and learning paradoxes. Conclusions: the study provides empirical evidence supporting specific drivers of social business value while highlighting a coexistence with traditional business model drivers. DPBM can aid scalability but presents challenges impacting performance and learning paradoxes. Insights for managers include the significance of business model design and the need to consider social and traditional value drivers in DPBM decisions.
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Moura, V. F. de, Souza, C. A. de, & Scornavacca, E. (2024). Managing Value Creation Paradoxes in Social Business: The Role of the Digital Platform Business Model. Brazilian Administration Review, 21(4), e230147. https://doi.org/10.1590/1807-7692bar2024230147
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Research Articles
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56. https://doi.org/10.1016/j.jclepro.2013.11.039
Bonina, C., Koskinen, K., Eaton, B., & Gawer, A. (2021). Digital platforms for development: Foundations and research agenda. Information Systems Journal, 31(6), 869-902. https://doi.org/10.1111/isj.12326
Cabral, S., Mahoney, J. T., McGahan, A. M., & Potoski, M. (2019). Value creation and value appropriation in public and nonprofit organizations. Strategic Management Journal, 40(4), 465–475. https://doi.org/10.1002/smj.3008
Choudary, S. P. (2015). Platform scale: How an emerging business model helps startups build large empires with minimum investment. Platform Thinking Labs.
Cusumano, M. A., Gawer, A., & Yoffie, D. B. (2019). The business of platforms: Strategy in the age of digital competition, innovation, and power. HarperCollins.
Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532. https://doi.org/10.2307/258557
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: opportunities and challenges. Academy of Management Journal, 50(1), 25–32. https://doi.org/10.1007/BF01033590
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Epstein, M. J., Buhovac, A. R., & Yuthas, K. (2015). Managing social, environmental and financial performance simultaneously. Long Range Planning, 48(1), 35-45. https://doi.org/10.1016/j.lrp.2012.11.001
Evans, D. S., & Schmalensee, R. (2016). Matchmakers: The new economics of multisided platforms. Harvard Business Review Press.
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417–433. https://doi.org/10.1111/jpim.12105
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Klein, S., Schneider, S., & Spieth, P. (2021). How to stay on the road? A business model perspective on mission drift in social purpose organizations. Journal of Business Research, 125, 658–671. https://doi.org/10.1016/j.jbusres.2020.01.053
Langley, A. (1999). Strategies for theorizing from process data. The Academy of Management Review, 24(4), 691-710. https://doi.org/10.2307/259349
Long, T. B., & van Waes, A. (2021). When bike sharing business models go bad: Incorporating responsibility into business model innovation. Journal of Cleaner Production, 297. https://doi.org/10.1016/j.jclepro.2021.126679
Michelini, L., Grieco, C., Ciulli, F., & Di Leo, A. (2020). Uncovering the impact of food sharing platform business models: a theory of change approach. British Food Journal, 122(5), 1437–1462. https://doi.org/10.1108/BFJ-06-2019-0422
Mini, T., & Widjaja, T. (2019). Tensions in digital platform business models: A literature review. Fortieth International Conference on Information Systems, Munich. https://www.researchgate.net/publication/338685477
Okano, M. T., De Souza, E., & Fernandes, M. E. (2018). The case of BVSA: study of the use of digital business platforms to offer social services and sustainability. Annual Conference of the International Association for Management of Technology, 1–16
Parker, G. G., Van Alstyne, M. W., & Choudary, S. P. (2016). Platform revolution: How networked markets are transforming the economy - and how to make them work for you. W. W. Norton & Company.
Reuter, E. (2021). Hybrid business models in the sharing economy: The role of business model design for managing the environmental paradox. Business Strategy and the Environment, 31(2), 603-618. https://doi.org/10.1002/bse.2939
Rong, K., Patton, D., & Chen, W. (2018). Business models dynamics and business ecosystems in the emerging 3D printing industry. Technological Forecasting and Social Change, 134(June), 234–245. https://doi.org/10.1016/j.techfore.2018.06.015
Rozentale, I., & van Baalen, P. J. (2021). Crafting business models for conflicting goals: Lessons from creative service firms. Long Range Planning, 54(4). https://doi.org/10.1016/j.lrp.2021.102092
Saldaña, J. (2021). The coding manual for qualitative researchers (4th ed.). SAGE.
Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201-213. https://doi.org/10.1016/j.emj.2014.11.002
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. https://doi.org/10.1177/1086026615599806
Schneider, S., & Clauß, T. (2020). Business models for sustainability: Choices and Consequences. Organization and Environment, 33(3), 384-407. https://doi.org/10.1177/1086026619854217
Smith, W. K., Binns, A., & Tushman, M. L. (2010). Complex business models: Managing strategic paradoxes simultaneously. Long Range Planning, 43(2-3), 448-461. https://doi.org/10.1016/j.lrp.2009.12.003
Smith, W. K., Gonin, M., & Besharov, M. L. (2013). Managing social-business tensions: A review and research agenda for social enterprise. Business Ethics Quarterly, 23(3), 407-442. https://doi.org/10.5840/beq201323327
Smith, W. K., & Lewis, M. W. (2011). Toward a theory of paradox: A dynamic equilibrium model of organizing. Academy of Management Review, 36(2), 381- 403. https://doi.org/10.5465/amr.2011.59330958
Spieth, P., Schneider, S., Clauß, T., & Eichenberg, D. (2019). Value drivers of social businesses: A business model perspective. Long Range Planning, 52(3), 427- 444. https://doi.org/10.1016/j.lrp.2018.04.004
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003
Tiwana, A. (2014). Platform ecosystems: Aligning architecture, governance, and strategy. Morgan Kaufmann.
Velter, M. G. E., Bitzer, V., Bocken, N. M. P., & Kemp, R. (2020). Sustainable business model innovation: The role of boundary work for multistakeholder alignment. Journal of Cleaner Production, 247, 119497. https://doi.org/10.1016/j.jclepro.2019.119497
Vrontis, D., Morea, D., Basile, G., Bonacci, I., & Mazzitelli, A. (2021). Consequences of technology and social innovation on traditional business model. Technological Forecasting & Social Change, 170. https://doi.org/10.1016/j.techfore.2021.120877
Woodard, C. J., Ramasubbu, N., Tschang, F. T., Sambamurthy, V., Bharadwaj, A., Sawy, O. A., & Pavlou, P. A. (2013). Design capital and design moves: The logic of digital business strategy. MIS Quarterly, 37(2), 537-564. https://www.jstor.org/stable/43825922
Wu, Y. J., Liu, W. J., & Yuan, C. H. (2020). A mobile-based barrier-free service transportation platform for people with disabilities. Computers in Human Behavior, 107(October 2018), 105776. https://doi.org/10.1016/j.chb.2018.11.005
Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage. https://doi.org/10.1177/109634809702100108
Yun, J. H. J., Won, D. K., Park, K. B., Yang, J. H., & Zhao, X. (2017). Growth of a platform business model as an entrepreneurial ecosystem and its effects on regional development. European Planning Studies, 25(5), 805–826. https://doi.org/10.1080/09654313.2017.1282082
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the Grameen experience. Long Range Planning, 43(2-3), 308-325. https://doi.org/10.1016/j.lrp.2009.12.005
Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
Zott, C., & Amit, R. (2017). Business model innovation: How to create value in a digital world. GfK Marketing Intelligence Review, 9(1), 18-23. https://doi.org/10.1515/gfkmir-2017-0003
Barki, E., Comini, G., Filho, J. G. S., & Turra, M. (2017). Map of inclusive and impactful small businesses in Brazil 2017. https://sinapse.gife.org.br/download/retrato-dos-pequenos-negocios-inclusivos-e-de-impacto-no-brasil-2017
Battilana, J., & Dorado, S. (2010). Building sustainable hybrid organizations: The case of commercial microfinance organizations. Academy of Management Journal, 53(6), 1419-1440. https://doi.org/10.5465/amj.2010.57318391
Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing - Insights from the Study of Social Enterprises. Academy of Management Annals, 8(1), 39-441. https://doi.org/10.1080/19416520.2014.893615
Bellostas, A. J., López-Arceiz, F. J., & Mateos, L. (2016). Social Value and Economic Value in Social Enterprises: Value Creation Model of Spanish Sheltered Workshops. Voluntas, 27(1), 367–391. https://doi.org/10.1007/s11266-015-9554-6
Biloslavo, R., Bagnoli, C., & Edgar, D. (2018). An eco-critical perspective on business models: The value triangle as an approach to closing the sustainability gap. Journal of Cleaner Production, 174, 746-762. https://doi.org/10.1016/j.jclepro.2017.10.281
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56. https://doi.org/10.1016/j.jclepro.2013.11.039
Bonina, C., Koskinen, K., Eaton, B., & Gawer, A. (2021). Digital platforms for development: Foundations and research agenda. Information Systems Journal, 31(6), 869-902. https://doi.org/10.1111/isj.12326
Cabral, S., Mahoney, J. T., McGahan, A. M., & Potoski, M. (2019). Value creation and value appropriation in public and nonprofit organizations. Strategic Management Journal, 40(4), 465–475. https://doi.org/10.1002/smj.3008
Choudary, S. P. (2015). Platform scale: How an emerging business model helps startups build large empires with minimum investment. Platform Thinking Labs.
Cusumano, M. A., Gawer, A., & Yoffie, D. B. (2019). The business of platforms: Strategy in the age of digital competition, innovation, and power. HarperCollins.
Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532. https://doi.org/10.2307/258557
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: opportunities and challenges. Academy of Management Journal, 50(1), 25–32. https://doi.org/10.1007/BF01033590
Eisenhardt, K. M., Graebner, M. E., & Sonenshein, S. (2016). Grand challenges and inductive methods: Rigor without rigor mortis. Academy of Management, 59(4), 1113–1123. https://doi.org/10.5465/amj.2016.4004
Epstein, M. J., Buhovac, A. R., & Yuthas, K. (2015). Managing social, environmental and financial performance simultaneously. Long Range Planning, 48(1), 35-45. https://doi.org/10.1016/j.lrp.2012.11.001
Evans, D. S., & Schmalensee, R. (2016). Matchmakers: The new economics of multisided platforms. Harvard Business Review Press.
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417–433. https://doi.org/10.1111/jpim.12105
Gehman, J., Glaser, V. L., Eisenhardt, K. M., Gioia, D., Langley, A., & Corley, K. G. (2018). Finding theory–method fit: A comparison of three qualitative approaches to theory building. Journal of Management Inquiry, 27(3), 284-300. https://doi.org/10.1177/1056492617706029
Haffar, M., & Searcy, C. (2019). How organizational logics shape trade-off decision-making in. Long Range Planning, 52(6), 101912. https://doi.org/10.1016/j.lrp.2019.101912
Hahn, T., Preuss, L., Pinkse, J., & Figge, F. (2014). Cognitive frames in corporate sustainability: Managerial sensemaking with paradoxical and business cases frames. Academy of Management, 39(4), 463-487. https://www.jstor.org/stable/43699260
Klein, S., Schneider, S., & Spieth, P. (2021). How to stay on the road? A business model perspective on mission drift in social purpose organizations. Journal of Business Research, 125, 658–671. https://doi.org/10.1016/j.jbusres.2020.01.053
Langley, A. (1999). Strategies for theorizing from process data. The Academy of Management Review, 24(4), 691-710. https://doi.org/10.2307/259349
Long, T. B., & van Waes, A. (2021). When bike sharing business models go bad: Incorporating responsibility into business model innovation. Journal of Cleaner Production, 297. https://doi.org/10.1016/j.jclepro.2021.126679
Michelini, L., Grieco, C., Ciulli, F., & Di Leo, A. (2020). Uncovering the impact of food sharing platform business models: a theory of change approach. British Food Journal, 122(5), 1437–1462. https://doi.org/10.1108/BFJ-06-2019-0422
Mini, T., & Widjaja, T. (2019). Tensions in digital platform business models: A literature review. Fortieth International Conference on Information Systems, Munich. https://www.researchgate.net/publication/338685477
Okano, M. T., De Souza, E., & Fernandes, M. E. (2018). The case of BVSA: study of the use of digital business platforms to offer social services and sustainability. Annual Conference of the International Association for Management of Technology, 1–16
Parker, G. G., Van Alstyne, M. W., & Choudary, S. P. (2016). Platform revolution: How networked markets are transforming the economy - and how to make them work for you. W. W. Norton & Company.
Reuter, E. (2021). Hybrid business models in the sharing economy: The role of business model design for managing the environmental paradox. Business Strategy and the Environment, 31(2), 603-618. https://doi.org/10.1002/bse.2939
Rong, K., Patton, D., & Chen, W. (2018). Business models dynamics and business ecosystems in the emerging 3D printing industry. Technological Forecasting and Social Change, 134(June), 234–245. https://doi.org/10.1016/j.techfore.2018.06.015
Rozentale, I., & van Baalen, P. J. (2021). Crafting business models for conflicting goals: Lessons from creative service firms. Long Range Planning, 54(4). https://doi.org/10.1016/j.lrp.2021.102092
Saldaña, J. (2021). The coding manual for qualitative researchers (4th ed.). SAGE.
Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201-213. https://doi.org/10.1016/j.emj.2014.11.002
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. https://doi.org/10.1177/1086026615599806
Schneider, S., & Clauß, T. (2020). Business models for sustainability: Choices and Consequences. Organization and Environment, 33(3), 384-407. https://doi.org/10.1177/1086026619854217
Smith, W. K., Binns, A., & Tushman, M. L. (2010). Complex business models: Managing strategic paradoxes simultaneously. Long Range Planning, 43(2-3), 448-461. https://doi.org/10.1016/j.lrp.2009.12.003
Smith, W. K., Gonin, M., & Besharov, M. L. (2013). Managing social-business tensions: A review and research agenda for social enterprise. Business Ethics Quarterly, 23(3), 407-442. https://doi.org/10.5840/beq201323327
Smith, W. K., & Lewis, M. W. (2011). Toward a theory of paradox: A dynamic equilibrium model of organizing. Academy of Management Review, 36(2), 381- 403. https://doi.org/10.5465/amr.2011.59330958
Spieth, P., Schneider, S., Clauß, T., & Eichenberg, D. (2019). Value drivers of social businesses: A business model perspective. Long Range Planning, 52(3), 427- 444. https://doi.org/10.1016/j.lrp.2018.04.004
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194. https://doi.org/10.1016/j.lrp.2009.07.003
Tiwana, A. (2014). Platform ecosystems: Aligning architecture, governance, and strategy. Morgan Kaufmann.
Velter, M. G. E., Bitzer, V., Bocken, N. M. P., & Kemp, R. (2020). Sustainable business model innovation: The role of boundary work for multistakeholder alignment. Journal of Cleaner Production, 247, 119497. https://doi.org/10.1016/j.jclepro.2019.119497
Vrontis, D., Morea, D., Basile, G., Bonacci, I., & Mazzitelli, A. (2021). Consequences of technology and social innovation on traditional business model. Technological Forecasting & Social Change, 170. https://doi.org/10.1016/j.techfore.2021.120877
Woodard, C. J., Ramasubbu, N., Tschang, F. T., Sambamurthy, V., Bharadwaj, A., Sawy, O. A., & Pavlou, P. A. (2013). Design capital and design moves: The logic of digital business strategy. MIS Quarterly, 37(2), 537-564. https://www.jstor.org/stable/43825922
Wu, Y. J., Liu, W. J., & Yuan, C. H. (2020). A mobile-based barrier-free service transportation platform for people with disabilities. Computers in Human Behavior, 107(October 2018), 105776. https://doi.org/10.1016/j.chb.2018.11.005
Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage. https://doi.org/10.1177/109634809702100108
Yun, J. H. J., Won, D. K., Park, K. B., Yang, J. H., & Zhao, X. (2017). Growth of a platform business model as an entrepreneurial ecosystem and its effects on regional development. European Planning Studies, 25(5), 805–826. https://doi.org/10.1080/09654313.2017.1282082
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the Grameen experience. Long Range Planning, 43(2-3), 308-325. https://doi.org/10.1016/j.lrp.2009.12.005
Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2-3), 216-226. https://doi.org/10.1016/j.lrp.2009.07.004
Zott, C., & Amit, R. (2017). Business model innovation: How to create value in a digital world. GfK Marketing Intelligence Review, 9(1), 18-23. https://doi.org/10.1515/gfkmir-2017-0003