Business Models as Complex Nonlinear Systems: Providing a Conceptual Framework for Growth and Innovation

Abstract

For a long time, researchers and practitioners have implicitly drawn from the notion of complexity and complex systems to better explain business model dynamics. However, for analytical tractability, the nonlinear nature of the construct has never been explicitly acknowledged. To date, the business model construct is still investigated according to the classical method of enquiry of Newtonian legacy.

This study conducts a comparative analysis between complex nonlinear systems and business models, providing a new and interesting perspective to understand the construct.

 The value of directly addressing the construct’s nonlinear dynamic is twofold.

First, it will try to resolve the conceptual ambiguity that has traditionally surrounded the discipline of business model and business model innovation by providing a new method to study the construct.

Also, by linking the business models’ qualities (emergent properties, feedback loops, interdependency of its components, sensitivity to initial conditions and notion of equilibrium) under the umbrella of complexity theory, this paper hopes to resolve the disconnect in the current research effort and to encourage further dialogue and studies on the subject of business model and complexity science.