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Exploring the Relationship Between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry

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Abstract

The objective of this paper is to examine the relationship between business model innovation, corporate sustainability, and the underlying organisational values. Moreover, the paper examines how the three dimensions correlate with corporate financial performance. It is concluded that companies with innovative business models are more likely to address corporate sustainability and that business model innovation and corporate sustainability alike are typically found in organisations rooted in values of flexibility and discretion. Business model innovation and corporate sustainability thus seem to have their origin in the fundamental principles guiding the organisation. In addition, the study also finds a positive relationship between the core organisational values and financial performance. The analysis of the paper is based on survey responses from 492 managers within the Swedish fashion industry.

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Correspondence to Esben Rahbek Gjerdrum Pedersen.

Appendix 1: Survey Questions

Appendix 1: Survey Questions

Business Model Innovation

QUESTION: Over the past three years, how would you assess the strategic focus of your company along the following dimensions:

  • 1 = Focus is on improving EXISTING products and/or services. 10 = Focus is on developing radically NEW products and/or services.

  • 1 = Focus is on serving EXISTING markets and customer segments. 10 = Focus is on identifying and serving entirely NEW markets and customer segments.

  • 1 = Focus is on nurturing EXISTING resources and competences (technology, people, IT systems, etc.). 10 = Focus is on developing and/or acquiring NEW resources and competences (technology, people, IT systems, etc.).

  • 1 = Focus is on improving EXISTING core processes and activities (design, logistics, marketing, etc.). 10 = Focus is on developing NEW core processes and activities (design, logistics, marketing etc.).

  • 1 = Focus is on deepening relationships with EXISTING strategic business partners (suppliers, distributors, end users, etc.). 10 = Focus is on establishing relationships with NEW strategic business partners (suppliers, distributors, end users, etc.).

  • 1 = Focus is on improving EXISTING tools for building customer relationships (personal service, memberships, bonus systems, etc.). 10 = Focus is on developing NEW tools for building customer relationships (personal service, memberships, bonus systems etc.).

  • 1 = Focus is on selling products and/or services through EXISTING channels (own stores, partner stores, online, etc.). 10 = Focus is on selling products and/or services through NEW channels (own stores, partner stores, online, etc.).

  • 1 = Focus is on minimising EXISTING costs incurred when operating the company. 10 = Focus is on making MAJOR changes in the combination of costs incurred when operating the company.

  • 1 = Focus is on improving sales from EXISTING revenue streams (products, services, leasing, sponsorships etc.). 10 = We have developed NEW ways of generating revenue (products, services, leasing, sponsorships etc.).

Source: Osterwalder & Pigneur combined with Lindgren and Taran (2011.

Organisational Values

QUESTION Please assess the extent to which the following statements characterise the behaviour and attitude of people in you organisation (1 = Strongly disagree, 3 = Neutral, 5 = Strongly agree):

  • Participation, open discussion

  • Empowerment of employees to act

  • Assessing employee concerns and ideas

  • Human relations, teamwork, cohesion

  • Flexibility, decentralisation

  • Expansion, growth, and development

  • Innovation and change

  • Creative problem-solving processes

  • Control and centralisation

  • Routinisation, formalisation and structure

  • Stability, continuity, order

  • Predictable performance outcomes

  • Task focus, accomplishment, goal achievement

  • Direction, objective setting, goal clarity

  • Efficiency, productivity, profitability

  • Outcome excellence, quality

Source: Prajogo and McDermott (2011)

Corporate Sustainability

QUESTION To what extent do you agree with the following statements about your company’s social and environmental activities? (1 = Totally disagree, 10 = Totally agree):

  • The company has clearly defined social and environmental objectives.

  • The company allocates substantial resources to social and environmental improvements.

  • The company regularly measures and reports social and environmental performance.

  • The company always tries to substitute polluting materials/products with less polluting ones.

  • Managers and employees receive training and education in social and environmental responsibility.

  • Management always considers social and environmental impacts when making important business decisions.

  • The company recognises and rewards managers/employees who contribute to social and environmental improvements.

  • The company is open, honest, and transparent in its internal and external communication of social and environmental impacts.

  • The company works hard to ensure high social and environmental standards in the supply chain.

  • The company actively promotes social and environmental-friendly customer/consumer behaviour.

Financial Performance

QUESTION Over the past 3 years, how would you evaluate the financial performance of the company compared to your closest competitors? (1 = Much worse, 10 = much better):

  • Development in sales

  • Development in earnings

  • Development in market share

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Pedersen, E.R.G., Gwozdz, W. & Hvass, K.K. Exploring the Relationship Between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry. J Bus Ethics 149, 267–284 (2018). https://doi.org/10.1007/s10551-016-3044-7

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