1 Introduction

Recently, sustainable value creation (i.e. the harmonisation of environmental, social, and economic value) in businesses and other organisations has become increasingly prioritised as a result of greater awareness of planetary boundaries (Bansal, 2019; Freudenreich et al., 2020; Kopnina, 2017; Steffen et al., 2015). Agricultural businesses, who maintain, manage, and create value from natural resources on farmland (e.g. food production and water management), play an important role in creating sustainable value through ecosystem services (ES) in addition to its traditional role of creating economic value through food production (Daily, 1997; Islam et al., 2019; Porter et al., 2009; Sandhu et al., 2010). ES are characterised by benefits ecological systems provide to humans and are critical to the function of life-support systems on earth (Costanza et al., 1997). They are characterised as provisioning (e.g. food or biomass production), regulating (e.g. climate, floods or water quality), cultural (e.g. recreational, spiritual, and aesthetic) and supporting (e.g. photosynthesis, soil formation, and nutrient cycling) (MEA, 2005). The ecosystem services’ significant contributions to human welfare make them a valuable part of the global economy and their valuation could play an important part in securing societal needs of long-term functioning ecosystems (Costanza et al., 2017; Porter et al., 2009). However, current arable production systems tend to favour food production at the cost of provision of other ecosystem services (Westerink et al., 2020), partly because full-cost accounting incorporating value of ecosystem services linked to their ability of providing public goods often lacks clear market demand due to their intangibility and long termism (Bocken & Geradts, 2019; Eyhorn et al., 2019). Consequently, agricultural business managers associate inclusion of sustainability-oriented ES, such as climate regulation, with uncertain incomes (Smith & Sullivan, 2014) which can negatively affect their decision-making about provision of ecosystem services which extends past food production (Gavetti and Levinethal, 2000). Previous research shows that the cognition of business managers will drive decision-making by piecing different information together into knowledge structures that are used for assessment and evaluation of business opportunities (Baron, 2004; Malmström et al., 2015; Mitchell et al., 2004). Thus, a cognition-based perspective is effective for recognising and seizing new sustainable business opportunities (Gaglio, 2004; Pieroni et al., 2019). Managerial cognition and the interpretation of internal capabilities and changes in the external environment such as competition or subsidies therefore greatly shape business strategies and decisions on activities for creating, delivering, and capturing value (Arru, 2020; Kaplan, 2011; Teece, 2010; Yang et al., 2019). Moreover, the understanding of managerial cognition is especially important for realising sustainable business activities that require radical changes in current business models (BMs) (Bocken & Geradts, 2019; Lütz & Bastian, 2002).

A BM, which describes the business logic of a company, i.e. how economic value is created, captured, and delivered, is sometimes referred to as a cognitive map used to evaluate decisions for change (e.g. Teece, 2010; Zott & Amit, 2007). Thus, a BM can describe both a company’s current and future plans for financial success through producing, marketing, and selling its goods and services (Karlsson et al., 2018). Paludiculture, which involves rewetting of peat soils that formerly have been drained for agricultural purposes with the aim of increasing food production as well as cultivating new crops adjusted to wet soil conditions (Wichtmann et al., 2016), exemplifies a radical business activity with new ES that might require comprehensive BM changes for its capitalisation. Drainage and conventional cultivation of peat soils lead to oxidation and breakdown of organic material in the soil, resulting in large greenhouse gas emissions (Wilson et al., 2016). Therefore, there is a need to develop strategies that reduce these emissions by rewetting the soil (Wichtmann et al., 2016; Wilson et al., 2016). BM changes that re-establish wet soil conditions, including rewetting of peat soils while keeping the water level in line with the ground level, could enable value-creating activities for agricultural businesses based on crop production at the same time as greenhouse gas emissions are reduced (Martens et al., 2021; Vroom et al., 2018; Wichtmann et al., 2016). Previous research shows that business activities that provide direct feedback (e.g. with direct financial effects such as cost reductions and increased sales) and visible, measurable, and comparable results within short time frames are more frequently implemented by businesses (Baumgartner & Ebner, 2010; Dyllick & Muff, 2016). As a result, sustainable value-creating activities that aim to produce economic, social, and environmental value for the common good in a long-term perspective (e.g. climate and water regulation) (Karlsson, 2019a; Power, 2010) are more difficult to motivate and implement (Nelson et al., 2009).

Sustainability-oriented BM changes can be realised via a business model innovation process for sustainability (BMIpfS) that stimulates a systematic and holistic mindset of the involved actors (Stubbs & Cocklin, 2008; Zott & Amit, 2010). The BMIpfS requires businesses to make strategic decisions related to market, customers, and value propositions to optimise social and environmental value creation (Bocken et al., 2014; Schaltegger et al., 2016). As a result, the BMIpfS can facilitate agricultural businesses’ understanding of business activities and enable a greater sense of control of land-use changes, make them more likely to maintain these changes over time, and encourage comparable changes in the future (Fielding et al., 2008). The application of the BMIpfS can thus be crucial for driving the development of sustainable BMs (Karlsson et al., 2018) for agricultural businesses in which the creation and processing of ES are important elements. More specifically, to design new and sustainable BMs, greater understanding is needed of business drivers in relation to managerial cognition, behaviours, and decision-making regarding the initiation of the BMIpfS (Dentchev et al., 2018; Evans et al., 2017; Magretta, 2002; Yang et al., 2017). Through BM changes supported by the BMIpfS, paludiculture could become a sustainable value-creating activity for agricultural businesses and their stakeholders (e.g. customers, suppliers, and retailers) by creating financial value from ES while simultaneously preserving the climate regulating services of the ecosystems. By developing current BMs to include paludiculture, agricultural businesses and their stakeholders can benefit from new innovative farming practices and business opportunities (Freudenreich et al., 2020; Schaltegger et al., 2019) such as the production of biomass for bioenergy purposes (Eller et al., 2020; Ren et al., 2019).

Given this background, the aim of this paper is to further our understanding of the barriers and drivers, as perceived by agricultural business managers, for initiating the BMIpfS based on the case of paludiculture. An increased understanding of the interplay between managerial cognition and business decisions, in relation to the inclusion of ES in BMs, can provide important insights on how to support BM changes for increased sustainable value creation. To address this knowledge gap, we performed an interview study amongst ten agricultural business managers with farmland suitable for paludiculture in southern Sweden. The interviews revealed drivers and barriers connected to initiation of the BMIpfS which were turned into a conceptual model of moderating factors on the BMIpfS initiation in an agricultural business context. Realisation of potential value which is yet to be captured as a driver and avoiding financial risks as a barrier were reported as the two factors with the strongest effects on the managers’ willingness to initiate the BMIpfS. However, business managers mainly take a reactive approach towards BM change and would benefit from governmental support towards a more long-term approach to business model changes for sustainability and from acquiring more knowledge about market demand for sustainability-oriented ES. Overcoming cognitive constraints as well as successful facilitation and implementation of knowledge transfer and government subsidies that support the valuation of ES could improve the willingness to initiate the BMIpfS even if the change is perceived as radical. The rest of this paper is structured as follows. Section 2 presents the theoretical background and the relevant concepts for the study. Section 3 presents the paper’s research method. Section 4 presents the paper’s findings of drivers for land-use change that could support the initiation of the BMIpfS. Section 5 discusses the results and contributions of this research, including the theoretical and managerial implications and suggestions for future research. Section 6 presents the conclusions.

2 Theoretical background

2.1 The business model

Since the beginning of the dot.com era and e-business technologies in the mid-1990s, the BM concept has become increasingly recognised in research and by businesses for performing industry descriptions or business analyses (Goyal et al., 2017; Lambert & Davidson, 2012). Traditionally, a BM is conceived as a plan that shows how a company creates, delivers, and captures economic value from existing or new business ventures (Osterwalder et al., 2005). BMs are therefore cognitive structures that can generate ideas and stimulate higher-level thinking on change decisions and business redesigns (Doz & Kosonen, 2010; Täuscher & Abdelkafi, 2017). Consequently, BMs are conceptual tools that explain how business activities are structured and conducted and that clarify business logics (Boons & Lüdeke-Freund, 2013; Chesbrough and Rosenbloom, 2002; Osterwalder, 2004). Teece (2010) argues that every company has a BM that functions as a cognitive map used to make and evaluate change decisions; however, the level of awareness of the BM varies amongst companies. The ability of businesses to change and adapt existing BMs to efficiently deal with the dynamics of the market economy, such as the heterogeneity amongst stakeholders, producers and customers and consumer choice, has been highlighted as an important aspect for competitive business development (Amit & Zott, 2010; Chesbrough, 2010; D'Amore et al., 2022; Di Vaio et al., 2020). Karlsson et al. (2017) show how competitive and sustainable business development in the agricultural sector can be achieved via innovation of business models governed by stakeholder collaboration and commitment in the form of long-term business contracts.

In BM research, the concept of value, which often implies economic growth, is of central importance (e.g. Osterwalder et al., 2005; Teece, 2010). As a result, traditional or mainstream BMs primarily focus on economic profit that results from the commercialisation of products and/or services (Teece, 2010) while overlooking the indirect (and potentially negative) effects that the production, distribution, and consumption of some products and/or services can cause (Bocken et al., 2014; Dyllick & Muff, 2016; Stubbs & Cocklin, 2008). In response to this negative possibility, some businesses have begun to address stakeholder well-being in the conduct of their activities (e.g. Breuer et al., 2018; Ritala et al., 2018). Previous research also shows that BM changes that enable sustainable value creation, i.e. the integration of economic, environmental, and social value creation for and with stakeholders, are crucial for maintaining and improving competitiveness in a long-term perspective (Freudenreich et al., 2020; Schaltegger et al., 2019).

2.2 Business model innovation for sustainability

Business model innovation is a way for businesses to create value in new ways under conditions of resource shortage, economic change, or declining competitiveness and profitability (Amit & Zott, 2010). Business model innovation is best understood as a dynamic process with overlapping activities that involve a variety of actors focused on continuous execution of BM changes (e.g. Amit & Zott, 2012; Demil & Lecocq, 2010; Laasch, 2019; Wirtz & Daiser, 2018). Sosna et al. (2010) claim that changes in or redesign of individual activities can result in BM improvements because of their interdependent and dynamic relationships. On the one hand, these relationships may advance the interactivity and efficiency of business model innovation; on the other hand, they may contribute to the unpredictability and complexity of business model innovation (Bucherer et al., 2012).

The aim of the BMIpfS is to design BMs that support sustainable development that produces positive (or reduces negative) environmental effects on society and that also produces long-term prosperity for businesses and their stakeholders (Geissdoerfer et al., 2018). The BMIpfS requires that businesses take a long-term perspective on their business strategies and goals (Schaltegger et al., 2016), meaning that changes due to the process will be noticeable for all stakeholders throughout the value chain.

Because initiation of the BMIpfS can be a large undertaking, with many uncertainties about its outcome, businesses may hesitate to begin the process (Bocken & Geradts, 2019; Evans et al., 2017; Karlsson et al., 2018). However, when business managers learn more about external support systems (e.g. government subsidies) for the initiation of the BMIpfS, this knowledge may relieve some of their doubts. This may be particularly the case when they learn other actors in their value chain have similar concerns and desires about sustainability (Girotra & Netessine, 2013; Laasch, 2019). A deeper understanding of the BMIpfS may thus present new opportunities for innovation development, especially development related to sustainability (Evans et al., 2017; Yang et al., 2019). For example, the BMIpfS can lead to the discovery of the sources and forms of uncaptured value which refers to potential value that can be captured but has not yet been captured in the business model (Yang et al., 2017). Identification of uncaptured value can lead to an increased understanding of value opportunities connected to sustainability and ease the BMIpfS. Thus, the uncaptured value perspective reveals how the BMIpfS can result in BM changes that capture economic, social, and environmental value (Yang et al., 2017), transforming the value uncaptured into sustainable value opportunities.

Although Foss and Saebi (2017) describe the BMIpfS as iterative from an organisational change perspective, its conceptualisation is perhaps more manageable when divided into the four main phases identified in the 4I-framework (Frankenberger et al., 2013). These phases are (i) initiation (system analysis, need for innovation); (ii) ideation (generation of new ideas, solutions, and alternatives); (iii) integration (BM development); and (iv) implementation (new BM realisation, marketable solutions). Karlsson et al. (2018) focus on the initiation and ideation phases of the 4I-framework in a case study on sustainability in farm-based biogas production. They found the initiation phase of the BMIpfS includes visualising an existing BM in a way that facilitates subsequent evaluation of the need and readiness for BM sustainability changes. Moreover, Karlsson (2019b) finds that the pre-phase of the BMIpfS in the agricultural business context deals with internal and external antecedents that enable the initiation phase when strategic business decisions are taken on such issues as value creation, stakeholder collaboration, and sales of products and/or services.

2.2.1 The role of managerial cognition in sustainable business change

Various researchers find that because business managers formulate strategies based on their perceptions and experiences, we need to examine how these managers’ cognitive structures affect their willingness to initiate the BMIpfS (e.g. Martins et al., 2015; Yang et al., 2019). According to Gavetti and Levinethal (2000, p. 113), cognition refers to “a forward-looking form of intelligence that is premised on an actor’s beliefs about the linkage between the choice of actions and the subsequent impact of those actions on outcomes”. Previous research has found that personal attitudes, which are values-based to varying extents, link to operating cost benefits, revenue growth, and organisational structures that promote sustainability in business processes (Kiron et al., 2013; Rauter et al., 2017; Williams & Schaefer, 2013).

According to Van Tulder et al. (2013) and Long et al. (2018), there are four main cognitive approaches which business managers can adopt in relation to sustainable BM development: inactive, reactive, active, and proactive approaches. The inactive approach, which views sustainability as a governmental task, does not connect sustainability to business benefits. The reactive approach emphasises the effects from stakeholder pressure for sustainability on business reputation rather than on changes to existing BMs. The active and proactive approaches have more relevance as far as the initiation of the BMIpfS. The active approach views sustainability as a market opportunity for product and/or service innovation and a driver for sustainable BM change. The proactive approach integrates business strategies with sustainability challenges. Thus, businesses following the proactive approach do not operate based on traditional profit-normative BMs but rather on sustainable BMs which primarily aims at solving environmental and social problems and generate profits from the creation of sustainable value.

Business managers use cognitive structures to reduce the complexity of decision-making when uncertain contexts send ambiguous signals (Martins et al., 2015; Rouleau, 2005). Managerial cognition thus includes both conscious and subconscious thought structures that affect how managers evaluate BM changes (Kaplan, 2011; Laasch, 2019). According to Malmström et al. (2015), however, such cognition, while potentially effective in the construction of BMs, may cause some managers to make mistakes in interpreting business opportunities.

Moreover, business managers also need to see how decisions towards more sustainable business activities can align with their individual concerns and goals (Bansal, 2003). According to Lindenberg and Steg (2007) and Johansson et al. (2015), sustainability-oriented cognition and behaviour can be understood in the perspective of hedonic goals, gain goals, and normative goals. A hedonic goal can be described as a desire to feel better in a particular situation, a gain goal aims to safeguard and improve resources, and a normative goal reflects the desire to act appropriately based on behaviour expectations (Lindenberg & Steg, 2007; Steg et al., 2014). In most cases, one goal category will dominate and steer the behaviour and decision-making such as in the case of agricultural businesses where it has been suggested that gain goals often guide the business decisions (Franzén et al., 2016; Hansson et al., 2012; Poppenborg & Koellner, 2013). The main reason for gain goal dominance amongst agricultural businesses is a strong interest in maintaining ES with direct, short-term, visible results (Power, 2010). Moreover, gain goals as guides in business decisions indicate that agricultural business managers are driven by the aim of maintaining and improving resources and that they are sensitive to changes in personal monetary assets, such as saving money, increasing profits, and avoiding business threats (Johansson et al., 2015; Karlsson et al., 2017).

3 Method

3.1 Study design

An inductive and qualitative research approach was used in this research. This approach, which is suitable for expanding current understanding of the complex phenomenon of sustainability-oriented business changes (e.g. Lüdeke-Freund & Dembek, 2017; Schaltegger et al., 2016), leads to empirical findings based on deep interactions with respondents. According to Bocken and Bogaert (2016) and Geissdoerfer et al. (2018), the approach is particularly suitable for researchers who wish to increase the knowledge and usefulness of the BMIpfS when business sustainability is in focus. We used qualitative thematic content analysis (Elo & Kyngäs, 2008; Graneheim et al., 2017) to identify patterns, similarities, and differences in ten agricultural business managers’ perceptions of the drivers and barriers in the initiation of the BMIpfS. We conducted semi-structured interviews and analysed the responses to create a holistic organisation of categories into themes of latent meanings (Baxter, 1994).

3.2 Participants and procedure

The participants for this research were selected using strategic sampling. This is a sampling procedure that increases the possibility of acquiring relevant and useful data for achieving specific research objectives (e.g. Lincoln & Guba, 1985). Marshall and Rossman (2016) claim that strategic sampling can provide deeper and more detailed findings than randomised sampling. To meet the study’s inclusion criteria, the participants were agricultural business managers with cultivation of peat soils. Additionally, their farmland was suitable for paludiculture, i.e. located close to water. Based on these criteria, 21 agricultural businesses with farms of different sizes were selected from six different municipalities in south Sweden. The identification of peat soils was enabled through maps obtained from the Geological Survey of Sweden. The property boundaries of the agricultural businesses were identified through publicly available maps, managed by the Swedish Land Survey. The business managers were initially contacted through a letter explaining the purpose of the study, followed up by a telephone call inviting them to participate. Ten managers participated in the research. Those who declined participation stated they had no time or interest in the research.

Table 1 presents data on the agricultural businesses in our research. Business size varied from 30 to 500 hectares with a median size of 200 hectares. The ratio of peat soils to total farmland varied from 3 to 55% with a median ratio of 30%. Crops grown included grains, potatoes, and vegetables. Grains and animal pasture dominated on the peat soils.

Table 1 Data on the agricultural businesses in this research
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3.3 Data collection

The data were collected during 2016 through semi-structured telephone interviews. The interviews with the ten business managers lasted between 20 and 60 min each with an average length of around 30 min. Telephone interviews, rather than face-to-face interviews, were used because of the geographic distance between the researcher-interviewer and the managers. In addition, the telephone interviews enabled “mobile interviewing”—interviews conducted with interviewees who are on the move. This is a less formal way of performing interviews which aims to encourage the interviewee to speak more freely (Brown & Durrheim, 2009). By using this interview technique, some of the ten managers were interviewed, while they were working on their farms. All interviews were digitally recorded, transcribed verbatim, and selectively translated from Swedish to English for use in this paper.

The interviews began with a fixed set of questions about farm size, ratio of peat soils relative to farmland, farming activities (e.g. crop production and animal husbandry), and number of employees. The interviews continued with semi-structured questions that allowed the business managers to talk freely about topics they thought were most relevant (Galletta, 2013; Marshall & Rossman, 2016). As needed, the researcher–interviewer asked clarifying follow-up questions. The interview data were consecutively collected and compared throughout the process. The study was closed when saturation was reached, i.e. when new data did not give further insights (Marshall & Rossman, 2016).

The semi-structured interview format featured topics that addressed the drivers and barriers in the initiation of the BMIpfS and emphasised the importance of the connection between personal values on sustainability and organisational values that promote sustainable change (Bansal, 2003; Rauter et al., 2017). The topics were the following:

  1. 1.

    Land use, land management, and profit from peat soils;

  2. 2.

    Alternative land use, rewetting of peat soils, and the introduction of new crops;

  3. 3.

    Environment fees, regulations, and subsidies; and

  4. 4.

    Future business strategies, including business expansion or contraction.

The research purpose previously mailed to the business managers was repeated in the telephone interviews, and the managers were informed that their participation was voluntary and that they could withdraw from the study at any time. They were also told that while the interviews would be recorded, all presentations of the results would be anonymous.

3.4 Data analysis

Qualitative thematic content analysis (Graneheim & Lundman, 2004) was used to analyse the interview data. This is an analytic method often used to describe a research area at manifest and latent levels (Baxter, 1994; Zotterman et al., 2015). Two researchers (the interviewer author and another author), using stepwise replication (Anney, 2014), independently analysed the data to enhance the research reliability. In the analysis, meaning units (words, sentences, and paragraphs) that have the same meaning, content, and context were identified.

From the meaning units, themes and categories were identified. Table 2, which summarises the results of the content analysis, presents various comments (i.e. meaning units) by the business managers. The two themes (the latent content of the text), the barriers and drivers related to the initiation of the BMIpfS, link the categories on an interpretative level (Morse, 2008). The eight categories, grouped by the two themes, are labels for the meaning units and describe the content (the manifest content).

Table 2 Content analysis: Themes, categories, and meaning units
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4 Results

The investigation into the effects of business managers’ cognitive structures and their willingness to initiate the BMIpfS revealed concerns connected to the inclusion of new ES in agricultural BMs. These business concerns were at their core based on financial considerations that acted as either drivers or barriers for the initiation of the BMIpfS initiation depending on whether the managers viewed the inclusion of new ES as business risks or as opportunities.

4.1 Barriers for initiating the BMIpfS

Barriers identified in the interviews with the business managers revealed their main concern was with the financial risks associated with the radical changes required to introduce paludiculture. They were concerned with how these changes would affect their long-term profit (especially the impact on their revenue streams). This was emphasised by their low tolerance for uncertainty when making decisions about business changes, especially because they thought the proposed changes were antithetical to their traditional value-creating activities and their self-perception of what it means to be a food producer. Unclear benefits from meeting sustainability targets were added to their doubts.

4.1.1 Financial risk avoidance

Because they wish to avoid financial risk when making decisions, the business managers identified financial risk avoidance as a barrier to change. They were concerned about increased costs and loss of revenue. One manager explained this barrier as follows: “Putting land under water will not grant the agricultural business any income:” “It is a huge change … and the payment for biomass production will not be enough”. This financial risk avoidance barrier resulted in a strong firm focus on new and multiple types of value propositions, especially in connection with stakeholders’ social and environmental concerns. A manager said: “Many know that it might be good for the environment to put farmland under water, but it will take a lot of money to motivate the business managers”. The focus on avoiding financial risk also meant the managers were doubtful about governmental standardised financial compensations used to stimulate environmental measures in agriculture. “Getting paid for loss of income is not satisfactory; these standardized amounts given as compensation are not set high enough”.

4.1.2 Low tolerance for uncertain business changes

Proposed land-use changes, with their uncertainty, were perceived as risky because of the difficulty of predicting the effects these changes would have on revenue streams, especially in the long term. Investments were based on the current BMs, and farmland management changes may affect the returns on these investments. This barrier also implied a preference for traditional crop production, even with the acceptance of lower yields, instead of a preference for larger farmland changes that could be better suited based on wet farmland conditions. The barrier of uncertainty was also highlighted by a comparison of paludiculture with environmental initiatives perceived as less successful, such as the cultivation of some energy crops. The assumption was that the land-use change would not be a valuable option. This low tolerance for uncertainty was evident by the managers’ belief that expected results from the land-use change were compared with best-case scenarios in current crop production, which was not achieved in the current BM. This low tolerance for uncertain business changes was well expressed in the following statement: “A really good harvest of grains, which I do not get on my land, will yield much more compared to the biomass produced from paludiculture”.

4.1.3 Restriction by traditional value creation activities

The business managers’ identification as agricultural business managers was strongly connected to their existing food production capability. Food production was viewed as one of the world’s greatest challenges today. The managers took great pride in being part of the solution. This emphasis on their current capabilities and on their importance as food producers created a barrier that made sustainability measures secondary to food production. It was mainly the amount of farmland for food production that was used to measure if the production was sustainable. “It is at the forefront to sustain the whole world with food… should we then only consider the environment and put land under water? It feels wrong to reduce the farmland”. The role of food producer also acted as a barrier in paludiculture because enabling ES was not regarded as production in the same way food production was “It feels strange to just put land under water and stand by and watch. Getting paid for doing nothing feels odd to me”, as one manger explained.

4.1.4 Unclear sustainability targets and benefits

There are many governmental initiatives linked to environmental measures and sustainability that target the agricultural sector. Such a plethora of options and reimbursement programmes means the governmental sustainability agenda is complex and unclear. Government assistance for agriculture creates a barrier that makes it difficult to decide which measures to take. This was emphasised by the perception that financial support systems, which often change, are translated by the managers into targets for an environment that is also changing. “I am not interested in measures where I am dependent on financial support. The politics around these issues constantly change. It is not possible to trust them”. In some cases, financial compensation was also seen as a sign that environmental measures are not sought by the market. These uncertain business benefits acted as a barrier for more radical changes. As one manager explained: “It is not possible to move back and forth between different types of production. There is a need for secure, long-term income” and “The financial supports are often granted for five years, but in order to make more lasting changes, such as in paludiculture, it is important that the support is maintained for longer time periods”.

4.2 Drivers for initiating the BMIpfS

The drivers reported by the managers were based in the core idea that realising uncaptured value requires taking advantage of business opportunities, both on a short-term and a long-term basis. The managers were driven by their belief that sustainable value creation is a business responsibility to stakeholders and to the world in which challenges to food supplies play an important part. The drivers included the idea that a breaking point may arrive when profit cannot be sustained and a new balance between shareholder and stakeholder value is needed. To proactively avoid such breaking points, the last driver involved valuing natural resources, ecosystem services, and the production they provide as part of sustainable farming systems.

4.2.1 Realisation of uncaptured value

The realisation that environmental measures can offer value from previously uncaptured value created an open mindset and an opportunistic attitude among the managers. This openness led to the idea that increased production from ES could result in sufficient income. As a manager said “The type of production is insignificant as long as I can make a profit”. The possibility of making a profit must, however, be stable over time and must offer more than compensation for loss of income. Such possibilities were highlighted by the following statements: “It is a very interesting thought to get paid for quantified environmental benefits” and “There is a profitability aspect in taking care of farm animals in the best possible way. It should be the same for environmental measures on the farm”. A holistic perspective on production led to an awareness of uncaptured value as a driving factor that included stakeholder considerations and needs.

4.2.2 Sustainable value creation as a business responsibility

The translation of personal environmental concerns into business responsibilities was a driver behind the initiation of the BMIpfS. Associated with these concerns was a long-term view on profit and the desire to run a successful business. This meant accepting uncertainty and embracing business sustainability. Such business sustainability required the development of more sustainable food production systems connected to the responsibility for feeding an increasing global population, which in turn requires innovative management. A manager described this responsibility: “The results depend on my skills as a farmer… to embrace new opportunities… to listen to the advisors or consultants who recognize sustainable development as an overarching target”. The agricultural business was seen as a calling. “It is my task in life to produce good, sustainable foods just like it is a doctor’s task to save lives”. Being driven by this proactive, long-term outlook meant having an open mind, responding in advance to perceived business risks, and taking advantage of opportunities. However, at present, these proactive initiatives were still taken within the boundaries of traditional farmland use and food production.

4.2.3 Reaching the breaking point

An open attitude towards change increased with the managers’ awareness that their current BMs were unsustainable from a long-term perspective. However, their recognition that present farmland management was slowly depleting the soil’s ability to provide sufficient yields was not always enough to initiate a change. In some cases, the decreasing financial returns drove land-use change. A manager commented: “It works in a satisfactory way today, but it will reach a breaking point in the future when it will not be profitable enough. Then I will consider new alternatives”. Another manager further explained this reactive approach to initiation of BM changes: “When times are tough, I focus on survival and carry on with business-as-usual, day by day, until the economy gets better again. Then I can consider the environment and think ahead”.

4.2.4 Valuing natural resources

This driver highlights the special relationship that agricultural business managers have with their farmland. As described by one manager, “The farmland becomes like a business partner. It is rewarding to try different options and to figure out how the land can be used in the best possible way”. These views reflected business strategies that look past financial measurements and address multiple sustainability values important for the environment and for the society. Another manager explained: “The financial and biological aspects are connected. It must all be viewed as a system where I need to have an awareness of my next move in order to improve my yields while allowing all living things to co-exist”. This realisation of cause and effect in terms of the impact different farmland activities have on natural ecosystems promotes a view of food production as a part of the larger farming system. Such systems thinking allows for production of more ES to be considered for inclusion in business models where food production is still the main value creation activity (e.g. increased numbers of pollinators and more stable weather conditions).

4.3 Conceptualisation of results

For this study, we developed a conceptual model based on the drivers and barriers reported by the business managers (Fig. 1). The model illustrates how the identified drivers and barriers connect to the initiation of the BMIpfS in agriculture. These moderating factors are the result of the business managers’ cognitive structures. Realisation of uncaptured value as a driver and financial risk avoidance as a barrier were reported as the two factors with the strongest effects on the managers’ willingness or reluctance, respectively, to initiate the BMIpfS. If the drivers are supported and the barriers are overcome, there is great potential for creating BMs for sustainability following the BMIpfS.

Fig. 1
figure 1

A conceptual model of moderating factors on the BMIpfS initiation in an agricultural business context

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5 Discussion

By focusing on managerial cognition, this study identifies barriers and drivers as moderating factors vis à vis the willingness amongst agricultural business managers to initiate the BMIpfS based on the case of ES from paludiculture, a radical land-use change. Based on these moderating factors, we elaborate on how to support the early phases of the BMIpfS by facilitating the cognitive framing of the business opportunities in connection with radical change that could motivate the initiation of the BMIpfS.

5.1 Moderating factors for BMIpfS

ES from paludiculture is a large undertaking which affects both practical farmland management and the revenue streams from farmland activities. This radicality impedes the willingness to include paludiculture in current BMs amongst the business managers since they seem more open to adopting sustainable value creation connected to small land-use changes (such as the introduction of new crops). This supports previous studies of how the process initiation for radical measures is associated with more barriers compared to barriers to incremental changes (Bocken & Geradts, 2019; Lütz & Bastian, 2002). The results of this study align with previous findings about how agricultural business managers mainly are driven by gain goals, committed to traditional value creation activities (i.e. food production) to avoid financial risks and to maintain control related to income when making decisions about business changes (Fielding et al., 2008; Johansson et al., 2015; Lindenberg & Steg, 2007). Such low tolerance for uncertain and radical business changes (Alvarez Jaramillo et al., 2019) could impede the realisation of sustainable value that farmland provides. Business managers’ strategic sustainability commitment to the BMIpfS plays a significant role in initiating and realising actions taken intended to increase business sustainability (Durand et al., 2019; Freudenreich et al., 2020; Karlsson, 2019b; Rauter et al., 2017).

An important strategic aspect of managers’ sustainability commitment is to ensure that BMs are nonrigid and subjects of recurrent adaptations due to internal and external pressures (Lozano, 2018) in order to achieve and maintain optimal conditions for the intended maximisation of social and environmental value (Schaltegger et al., 2016). However, similar to the corporate sustainability strategies used by Swedish agricultural businesses engaged in biogas production (Karlsson, 2019b), the business managers in this study mainly take a traditional inside-out business strategy when making business decisions; they mainly focus on economic value based on a rigid, traditional BM (Dyllick & Muff, 2016). The managers primarily take a reactive approach towards sustainability, with shorter time frames and low intentions of BM change for sustainability. As a result, they are mainly focused on economic profits as they address sustainability issues through laws, regulations, and stakeholder pressure but without significantly changing their existing BMs (Long et al., 2018; Lozano, 2018; Van Tulder et al., 2013).

Moreover, the managers in this study took a reactive approach to paludiculture but expressed an ambition to create more diverse and resilient businesses (Mitchell & Coles, 2003), particularly in connection with food production. However, they revealed uncertainty about how to capture and maintain sustainable value. Such an uncaptured value perspective (Yang et al., 2017) especially applied to the businesses with scarce financial resources. Business managers in this situation seemed to disconnect environmental and social value from how they create, deliver, and capture economic value. They argued that they needed to focus their full attention on their more traditional activities that produce sufficient income and ensure company survival. However, previous research (e.g. Bocken et al., 2013; Yang et al., 2017) shows that the identification of uncaptured value can stimulate business model innovation towards sustainability (in this study, identified as reaching the breaking point). More specifically, businesses in unsustainable conditions with financial constraints can develop a positive attitude towards pro-environmental measures as a result of improved awareness and knowledge of how such measures can be integrated with existing BMs and can contribute to profit maximisation in a long-term perspective (Amit & Zott, 2012; Battershill & Gilg, 1997; Kiron et al., 2013; Porter, 1991).

The understanding of how to achieve profit based on gain goals (Johansson et al., 2015; Lindenberg & Steg, 2007) could also be used to support business managers when they evaluate potential financial and practical risks. Thus, this understanding could be used to decrease the uncertainties connected to the initiation of the BMIpfS. Increased control, such as achieved through setting clear sustainability targets and benefits, has been shown to make business managers more likely to initiate proactive and long-term changes (Fielding et al., 2008). In this way, they benefit from informed decisions about the BMIpfS and the subsequent, sustainability-oriented investments. Such targets could come from governmental financial subsidies support systems. Insights from this study align with previous studies (Hansson et al., 2012; Smith & Sullivan, 2014) about how support systems should be developed so that subsidies are no longer viewed as financial compensation for the potential loss of productivity but rather as rewards for active, long-term, and increased environmental performance that can be profitable based on sustainable value creation from ES. Consequently, the agricultural business managers require support in recognising their roles as important contributors and detractors of sustainability (Zhang et al., 2007) and in overcoming cognitive constraints in order to recognise, initiate, and ideate new BMs (Arru, 2020; Martins et al., 2015). This especially applies to initiatives perceived as radical that seemingly promote a more reactive approach amongst the managers (Laasch, 2019; Long et al., 2018).

5.2 Facilitating the BMIpfS initiation

The cognitive framing of the business managers’ perceptions and experiences towards sustainability commitments in this study can provide greater understanding of the early phases of the BMIpfS from a sustainability perspective (Frankenberger et al., 2013; Karlsson, 2019b; Rauter et al., 2017). The results show that radical changes are harder to achieve since the holistic value perspective needed is more difficult to comprehend, especially with respect to earning a profit as a result of environmental and social value creation for and with stakeholders (Freudenreich et al., 2020; Geissdoerfer et al., 2018; Schaltegger et al., 2019). If businesses are to realise the possibilities with these radical sustainability-oriented BM changes, managers’ willingness and ability to make change should be supported (Durand et al., 2019). We suggest that the cognition of business managers can play a key role in the BMIpfS (Martins et al., 2015) if used to enable more active approaches towards process initiation leading to the BMIpfS. Such strategies could facilitate the realisation of uncaptured value which lead to an increased understanding of business opportunities that meets the gain goals of the business managers (Steg et al., 2014) and highlights the financially intangible environmental and social values that could benefit businesses (Evans et al., 2017; Islam et al., 2019; Yang et al., 2017), thus tackles market immaturity (Albats et al., 2021). This also includes an examination of the return on investments for sustainability initiatives, of the market demand, and of the sustainability benefits that can decrease the perception of financial risk (Long et al., 2018; Schaltegger et al., 2012). Further, incremental changes as catalysts for more radical changes could be facilitated because incremental changes can lead to an increased willingness to make larger changes as explained by, for example, Laasch ( 2019) and Roesch-McNally et al. (2018).

The openness to incremental changes within the traditional BM can be used to realise the potential of more radical changes that go beyond business-as-usual and support managers as they actively seek change, evaluate its impact, and take a more inclusive managerial cognitive response. The ability of the business manager grows with experience (Dyllick & Muff, 2016; Long et al., 2018; Van Tulder et al., 2013). Moreover, performance-based support systems could be facilitated that can govern the ability of the manager as a producer of sustainable value and can support sustainable value creation as a business opportunity (Dentchev et al., 2018; Long et al., 2018; Smith & Sullivan, 2014). Through updated advisory support and financial subsidies that emphasise profit based on economic, social, and environmental values, sustainable value creation could be considered a long-term investment instead of a short-term solution that compensates for loss of income (Karlsson, 2019a; Nelson et al., 2009; Power, 2010). Lastly, in order to create a more active approach to BM change, long-term business considerations could be facilitated (Karlsson et al., 2017; Schaltegger et al., 2016). In this study, changes with shorter time frames and more immediate returns were favoured as the business managers who associated them with fewer risks. However, the same business managers still viewed their business prospects from a long-term perspective and identified an unsustainable breaking point for current activities when change would be inevitable. Long-term business considerations could enable a proactive management that could foresee and influence change and help managers become resourceful enough to act in line with the principle of sustainability before it was mandated (Long et al., 2018; Lozano, 2012).

5.3 Theoretical and practical contributions

From a theoretical perspective, this study provides an increased understanding of the drivers and barriers as moderating factors for the initiation of the BMIpfS. It also complements previous research regarding the connection between individual, sustainability concerns and organisational values in a change process (Bansal, 2003; Rauter et al., 2017). This study supports findings by Martins et al. (2015) on how managerial cognition is part of a business strategic methodology for innovation and change. Additionally, it increases our understanding of changes perceived as radical and exemplifies how moderating factors for the BMIpfS are part of the cognitive framing for understanding businesses’ sustainability strategies (Long et al., 2018; Martins et al., 2015; Van Tulder et al., 2013). Thus, this study can be used to facilitate a more active and proactive approach to the initiation of the BMIpfS. Such a managerial cognition perspective is one way of connecting various research streams to develop BMIpfS theory (Dentchev et al., 2018; Lüdeke-Freund & Dembek, 2017). The discussion on facilitating the initiation of change processes based on managerial cognition amongst the business managers in this study builds on Magretta’s (2002) results on how individual motivation is part of the foundation for business models and on Sosna et al.’s (2010) findings on how the business managers’ cognition could provide the most important input to the initial stages of business model innovation.

From a practical perspective, this study contributes to our understanding of how to overcome business managers’ associations of ES management with increased cost and maintenance work (Bocken & Geradts, 2019; Smith & Sullivan, 2014) by showing how business managers view drivers and barriers. These results could be important for policy makers in the development of agricultural support systems and programmes. We found that measures that facilitate the agricultural business managers’ perception of value capture, control of changes, performance, and long termism could support their active approach to radical change and their willingness to initiate a BMIpfS. These results align with the research on goal framing in sustainability-oriented behaviour that shows that agricultural business managers mainly are guided by gain goals (Franzén et al., 2016; Hansson et al., 2012; Johansson et al., 2015; Karlsson et al., 2017; Lindenberg & Steg, 2007; Poppenborg & Koellner, 2013). Such business managers have strong concerns about changes that affect their monetary assets. The results also show that it is unclear from the business managers’ perspective how to bring sustainable value to the market. Assistance is needed by one or several actors that can facilitate (clarify, motivate, and practically support) change (Kopnina, 2017). Lastly, through the contributions of this study, the need amongst the agricultural business managers can be better understood and met. This, in turn, will benefit the implementation of paludiculture and other sustainability-oriented BM changes that can play a crucial role in decreasing greenhouse gas emissions and in mitigating the negative effects of climate change (Vroom et al., 2018; Wichtmann et al., 2016).

5.4 Limitations and suggestions for future research

The results of this study show that realisation of radical, sustainability-oriented BM changes will require clear strategies and facilitation that provide more support for active and proactive approaches to the process initiation leading to the BMIpfS. This study is limited to the investigation of moderating factors for BMIpfS based on radical farmland change in a small business context. It is also limited to the initiation stage of the BMIpfS; thus, it does not address the other established phases of the process (Frankenberger et al., 2013; Karlsson et al., 2018). To further understand the results and move beyond the limitations of this study, we identify several future research opportunities. For example, upcoming studies could focus on exploring contexts that propose incremental changes in larger businesses with different, and more extensive, management structures (Wesselink et al., 2017). Moreover, future studies can investigate how support that facilitates business change in a sustainability context should be governed and organised (Dentchev et al., 2018.) to progress through the phases of the BMIpfS. Relevant research questions for future studies are the following: What does the role of a BMIpfS facilitator entail? Which competencies are needed? At which stage of the processes is the facilitation most efficient? Does the facilitation need to be adjusted during the process and, if so, in what ways? One part of this exploration would be to examine how performance-based subsidies and programmes, based on sustainability concerns that support business profit as well as a broad stakeholder value from a value chain perspective, could be organised. Part of this exploration could be to validate the drivers and barriers from this study with different stakeholders to further understand how the barriers could be overcome and the drivers promoted. In turn, this could lead to an exploration of how business cases for sustainability in this and other contexts (Schaltegger et al., 2019). Such research could examine how the value from new ES can be identified and developed. Such business cases could promote the commercialisation of ES through systems as Payments for Ecosystem Services (e.g. Costanza et al., 2017; Farley & Costanza, 2010; Kubiszewski et al., 2017; Porter et al., 2009) including the paludiculture initiative. Furthermore, future research could increase our understanding of cognitive framing to adjust the facilitation to the level of sustainability activity amongst the business managers. One suggestion would be to study groups of business managers with inactive/reactive and active/proactive approaches to draw inspiration from the active/proactive group and motivate the inactive/reactive group to take action for BM changes for sustainability.

6 Conclusions

Agricultural business managers often associate sustainable business practices, such as rewetting of farmland, with uncertain incomes which can negatively affect their willingness to innovate existing BMs to include sustainable business practices. By identifying barriers and drivers amongst agricultural business managers, this study brings new understanding of the moderating factors in the interplay between managerial cognition and BM change, and how these factors can be used to facilitate the initiation of BMIpfS. BMs act as links between business strategies and activities and constitute the cornerstones for the cognitive approaches to the change process towards BMs for sustainability. Motivating and supporting business managers as they undertake the BMIpfS and begin considering new ways to take on the role as providers of ecosystem service are, thus, an essential task in the effort to stay within our planetary boundaries. The moderating factors identified in this study involve clarification of the financial aspects of sustainability measures as well as the support needed to overcome cognitive constraints from mainly taking a reactive approach towards BM change, especially when the change is perceived as radical. Our results show that there is a need for facilitation in order to use these moderating factors to motivate proactive and long-term sustainable business changes. If such facilitation were successfully governed and realised, it could lead to the initiation of the BMIpfS. If carried through, this facilitation could enable the creation of new BMs for sustainability. The facilitation should focus on raising the activity level of the mainstream group of businesses that take an inactive and reactive sustainability approach. Managing financial support, transferring knowledge, and highlighting successful examples on sustainable business transitions can support a proactive approach to BM changes for sustainability amongst these businesses. Such increased support can benefit the willingness of business managers in taking proactive business decisions, leading to long-term performance and profits based on sustainable value creation from ES.