The Dark Side of Business Model Innovation

Existing literature has tended to focus on the positive benefits and outcomes of business model innovation (BMI). To this end, BMI has been described as a powerful tool for firms to sustain competitive advantage, promote growth, and generate superior returns. But, there is evidence to suggest that BMI can also have a dark side – with negative consequences. The present study explores the dark side of BMI. The study starts with thematic analysis of existing literature aiming to document examples of the negative consequences, identifying the driving factors and circumstances leading to the negative consequences, and translating them into categories/themes. Following this, the study then populates the negative consequences and the driving factors and circumstances through Delphi studies involving academics and BMI professionals, as well as through case studies that provide the empirical examples. In brief, three clusters of negative consequences are identified, including those that affect the firm as an entity; those that affect the firm’s stakeholders; and those that are specific or context-dependent. Likewise, the driving factors and circumstances are grouped into three clusters: managerial choices and the processes, internal firm circumstances and external firm circumstances. The study also explores how the dark side of BMI may occur and identifies the driving factors and circumstances that are more likely to lead to the negative consequences. The study contributes to the literature by providing an examination of the dark side of BMI and thereby a discussion on its possible theorization, a more nuanced discussion about the consequences that may result from undertaking BMI and the way it may be managed and opening up a number of new avenues for future research including the approach for its investigation.