The Role of Corporate Reputation & Distinctive Organization Capability in Developing Business Model Innovation: Case study of Indonesia ICT Firm in Facing Industry Resolution 4.0

 
 
 
  • Abstract
  • Keywords
  • References
  • PDF
  • Abstract


    Business model innovation is key important in facing industry 4.0 where the digital technology through internet and mobile influences the life style of people. Our paper has objectives to provide the antecedents of Business model innovation and to compare the impact between corporate reputation and distinctive organizational capability in developing business model innovation. The study is based on digital disruption phenomenon, where established companies are disrupted the new business model by new entrance through leveraging digital capability. The study is focusing on Information, Communication and Technology (ICT) incumbent companies in developing business model innovation as the second curve to sustain their business. ICT industry is the important sector to enable the development in other industry and has significant influence in economic growth. Currently, the higher economy growth relies on the emerging market such as Indonesia. Indonesia ICT market has unique characteristics where the innovation has grown rapidly but the infrastructure lacked behind and also the market was very competitive. Hence, there was the gap between the opportunity in innovation and the development of digital infrastructure, and for incumbent firm was the mitigation of investment risk of the ICT infrastructure and compete with new entrance that bring new business model and market. The Incumbent has the advantage of the corporate reputation and required to develop the new capability in providing the distinctive capability. However, the study of developing business model innovation for incumbent firm in market focus on corporate reputation has limited. The study is done through empirical research using 35 samples of Indonesia ICT firm. The analytical approach and the solution technique used Smart Partial Least Square (PLS). The Research finding shows that the distinctive organization capability has significant influence compare with the corporate reputation in developing business model innovation. The study has the implication that in theory, in developing business model innovation focus on distinctive organization capabilities rather that rely on corporate reputation. It means the ICT Incumbents firms are required to transform their capability align with market change. For managerial management, this study has implication the urgency in developing distinctive organizational capability in respective units, especially in intangible asset.   Further research can be enhanced by expanding the research sample and industry, and also can be expanded into longitudinal study as part of transformational model for incumbent firms.

     


  • Keywords


    Business model Innovation, distinctive organization capabilities, corporate reputation, industry 4.0.

  • References


      [1] Abdelkafi, N., Makhotin, S. and Posselt, T. (2013). Business Model Innovations for Electric Mobility — What Can Be Learned from Existing Business Model Patterns?. International Journal of Innovation Management, 17(01), pp.1340003 – 1340044

      [2] Amit, R. & Zott, C. (2001). Value Creation in e-Business Strategic Management Journal,. Vol.22, pp. 493-520.

      [3] Amit, R., Zott, C., Pearson, A. (2012). Creating value through business model innovation. MIT Sloan Manage. Rev. 53, 41–49.

      [4] Amit,R., & Zott, C. (2010). Business Model Innovation : Creating Values in Times of Change.Working Paper, WP870, IESE Business School University og Navara.

      [5] Ansoff, H Igor & Mc Donnell, Edward J. (2010). Implanting Strategic Management, Prentice hall.

      [6] Aspara, J., Lamberg, J. A., Laukia, A., & Tikkanen, H. (2013). Corporate business model transformation and inter-organizational cognition: The case of nokia. Long Range Planning, 46(6), 459–474.

      [7] Barney, J. 1991, Firm Resources and Sustained Competitive Advantage, Journal of Management, 17(1), pp. 99-120

      [8] Bauer, W., Hämmerle, M., Schlund, S. and Vocke, C. (2015). Transforming to a Hyper-connected Society and Economy – Towards an “Industry 4.0”. Procedia Manufacturing, 3, pp.417-424.

      [9] Berman, S.J. (2012) Digital transformation: opportunities to create new business models", Strategy & Leadership, Vol. 40 Issue: 2, pp.16-24.

      [10] Chesbrough, H. (2007) Business model innovation: it’s not just about technology anymore.’ Strategy and Leadership, vol. 35, no. 6, pp. 12-17.

      [11] Chesbrough, H. (2010) Business Model Innovation: Opportunities and Barriers. Long Range Planning, 43, 354-363.

      [12] Chesbrough, H.W. & Rosenbloom, R.S (2002). The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin-Off Companies, Industrial and Corporate Change 11(3)

      [13] Christensen, C. (1997). Innovator Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press.

      [14] Daniel, E. & Wilson, H. (2003). The Role of dynamic capabilities in e-business transformation. European Journal of Information Systems, 12(4).

      [15] Das, K., Gryseels, M., Sudhir, P. and Tan, K. (2016). Unlocking Indonesia’s Digital Opportunity. [online] Mckinsey. Available at: https://www.mckinsey.com/~/media/McKinsey/Locations/Asia/Indonesia/Our%20Insights/Unlocking%20Indonesias%20digital%20opportunity/Unlocking_Indonesias_digital_opportunity.ashx.

      [16] Eksell, A. and Härenstam, A. (2017). Business Model Innovation for a digital Future: A two-sided single case study of the drivers, opportunities, and barriers of business model innovation in a digitalization context. Master’s thesis in Management and Economics of Innovation. Chalmers University Of Technology.

      [17] Frankenberger, K., Weiblen, T., Csik, M., and Gassmann, O. (2013). The 4l-framework of business model innovation: a structured view on process phases and challenges. International Journal of Product Development, 18, 249-273.

      [18] Gardberg, N. A., & Fombrun, C. J. (2002). The Global Reputation Quotient Project: First Steps Towards a Cross-Nationally Valid Measure of Corporate Reputation. Corporate Reputation Review, 4(4), 303–307.

      [19] Gianos, John F. (2013). A Brief Introduction to Ansoffian Theory and the Optimal Strategic Performance-positioning Matrix on Small Business (OSPP). Journal of Management Research, 5(2).

      [20] Giesen, E., Berman, S. J., Bell, R., & Blitz, A. (2007). Three ways to successfully innovate your business model. Strategy and Leadership, 35(6), 27–33.

      [21] Henfridsson, O., Mathiassen, L., and Svahn, F. 2014. “Managing Technological Change in the Digital Age:the Role of Architectural Frames,” Journal of Information Technology (29:1), pp. 27-43.

      [22] Hurley, R. and Hult, G. (1998). Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination. Journal of Marketing, 62(3), p.42.

      [23] IBM Global Business Service (2015). Digital Transformation: Creating New Business Models Where Digital Meets Physical. [online] Available at: https://www-935.ibm.com/services/us/gbs/thoughtleadership/pdf/us_ibv_digita_transformation_808.PDF.

      [24] IMD. (2017). IMD World Digital Competitiveness Ranking 2017, 180.

      [25] Jacobi, R., & Brenner, E. (2017). How large corporations survive digitalization. Digital Marketplaces Unleashed, 83–97.

      [26] Kagermann, H. (2015). Change Through Digitization—Value Creation in the Age of Industry 4.0. Management of Permanent Change, pp.23-45.

      [27] Kiel, D., Muller, J., Arnold, C. and Voight, K. (2017). Sustainable Industrial Value Creation: Benefit and Challenges of Industry 4.0. In: The XXVIII ISPIM Innovation Conference - Composing the Innovation Symphony. Vienna, Austria: International Society for Professional Innovation Management (ISPIM).

      [28] Kuznetsov, N. (2014). Management Innovation Companies Based Business Cost Indicators. Asian Social Science, 10(17).

      [29] Lourenço, I. C., Callen, J. L., Branco, M. C., & Curto, J. D. (2014). The Value Relevance of Reputation for Sustainability Leadership. Journal of Business Ethics, 119(1), 17–28.

      [30] Loucks, J., Macaulay, J., Noronha, A., Wade, M., (2016), Digital Vortex: How Today’s Market leader can beat Distruptive Competitors at their Own Game, IMD, Lausanne, Swiitzerland.

      [31] Massa. L., Tucci, C. (2014). Business Model Innovation; Oxford Handbook of Innovation Management; Oxford: Oxford University Press, 420-441..

      [32] Markides, C., and Charitou, C. D. (2004). Competing with Dual Business Models: A Contingency Approach. The Academy of Management Executive (1993-2005), Vol. 18( 3), 22-36.

      [33] Matzner, M., Büttgen, M., Demirkan, H., Spohrer, J., Alter, S., Fritzsche, A., Ng, I., Jonas, J., Martinez, V., Möslein, K. and Neely, A. (2018). Digital Transformation in Service Management. SMR - Journal of Service Management Research, 2(2), pp.3-21.

      [34] Monios, J. and Bergqvist, R. (2015). Using a “virtual joint venture” to facilitate the adoption of intermodal transport. Supply Chain Management: An International Journal, 20(5), pp.534-548.

      [35] Pink, D. (2005). A whole new mind. New York: Riverhead Books

      [36] Raivio, Y., Luukkaine, S., Juntunen, A. (2011). Open Telco : A new Business Potential. In Proceedings of the 6th International Conference on Mobile Technology, Application & System, 1-6.

      [37] Robinson, M., Kleffner, A., & Bertels, S. (2011). Signaling Sustainability Leadership: Empirical Evidence of the Value of DJSI Membership. Journal of Business Ethics, 101(3), 493–505.

      [38] Rossman, G. B., & Wilson, B. L. (1985). Numbers and words: Combining quantitative and qualitative methods in a single large-scale evaluation study. Evaluation Review, 9(5), 627-643.

      [39] Sandel, S. (2013). Digital Leadership: how Creativity in Business can Propel Your Brand & Boots Your Result, Allen House Publish- ing Company Limited.

      [40] Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95–119.

      [41] Schweitzer, J. (2014). Leadership and innovation capability development in strategic alliances. Leadership & Organization Development Journal, 35(5), pp.442-469.

      [42] Startup Rangking, (2018), the country startup rangking, available at https://www.startupranking.com/countries

      [43] Teece, D. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research policy, 15(6), p. 285-305.

      [44] Teece, D. (2012). Next-Generation Competition: New Concepts for Understanding How Innovation Shapes Competition and Policy in the Digital Economy. Journal of Law, Economics, & Policy, 9(1), pp.97-118

      [45] Tenenhaus, M., Amato, S., and Esposito Vinzi, V. (2004). A Global goodness –of-fit index for PLS structural quation modelling, Proceedings of the XLII SIS Scientitific Meeting, Vol. Controbuted Paper, CLEUP, padova, pp.739-742.

      [46] Walsh, G., Mitchell, V. W., Jackson, P. R., & Beatty, S. E. (2009). Examining the antecedents and consequences of corporate reputation: A customer perspective. British Journal of Management, 20(2), 187–203.

      [47] Wasono, L. W., & Furinto, A. (2018). The effect of digital leadership and innovation management for incumbent telecommunication company in the digital disruptive era, 7(June), 125–130.

      [48] Whetleen, T. and Hunger, J. (2012). Strategic management and business policy. 13th ed. Boston: Pearson.

      [49] World Bank, (2004), Contribution of Information and Communication Technologies to Growth, world bank working paper no. 24.

      [50] Zott, C. and Amit, R. (2007). Business Model Design and the Performance of Entrepreneurial Firms. Organization Science, 18(2), pp.181-199.

      [51] Zott, C., Amit, R. and Massa, L. (2011). The Business Model: Recent Developments and Future Research. Journal of Management, 37(4), pp.1019-104


 

View

Download

Article ID: 28316
 
DOI: 10.14419/ijet.v8i1.10.28316




Copyright © 2012-2015 Science Publishing Corporation Inc. All rights reserved.