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Doing well by doing good: The business model innovation process for sustainability in farm-based biogas production
Halmstad University, School of Business, Engineering and Science, The Rydberg Laboratory for Applied Sciences (RLAS). Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL).ORCID iD: 0000-0003-3068-5269
2019 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Research on innovation that leads to change and adaptation in dynamic business environments has increased rapidly in recent decades. This doctoral thesis, which focuses on business model innovation (BMI), contributes to that research with its examination of how businesses can alter their structures to create, deliver, and capture greater economic value as well as environmental and social value. The overarching aim of the thesis is to explore how the business model innovation process for sustainability (BMIpfS) can contribute to profitable biogas production at Swedish farm businesses. Biogas, which is a renewable energy resource produced from microbial decomposition of organic material in an oxygen free environment, can be used to produce heat, electricity, or vehicle fuel. The thesis examines the initiation, implementation, and use of the BMIpfS at biogas-producing farms in ways that support the development of business models for sustainability (BMfS). In addition to economic value, a BMfS enables farm businesses and external stakeholders (e.g., municipalities and local companies) to capture environmental value and social value from biogas production and create business cases for sustainability (BCfS) that can improve biogas profitability.

Both an inductive and deductive reasoning approach is taken in this research that is presented in a case study, two action research studies, and two survey studies. The case study identifies and describes various success factors for BMI for sustainability in a biogas network. The action research studies explore how BMI process can be modified to address sustainability considerations and the outcomes useful for supporting stakeholder collaboration and facilitating the development of a BMfS. The survey studies investigate how the farm businesses’ corporate sustainability strategies and stakeholder considerations influence the development of BMfS and the creation of BCfS. All studies were conducted at farm businesses in Sweden. The data were collected in interviews, workshops, and questionnaires.

The results from this research show that BMI for sustainability takes place in three main phases: the pre-phase, the ongoing phase, and the post-phase. Based on these three phases, the BMIpfS Framework is developed. The Framework illustrates how a business model (BM) can be changed and adapted to realize sustainable value creation. Several factors determine the success of the BMIpfS Framework at biogas-producing farm businesses. In the pre-phase, these factors include a long-term perspective on biogas profitability, integration of sustainability considerations into business strategies, promotion of cooperation with customers, and the establishment of interactions with the consumer markets. Use of the Flourishing Business Canvas tool in the ongoing phase can enhance external stakeholders’ understanding of BMs and BMI, and can promote idea generation for the BMfS. Sustainability-oriented BM prototypes are used in the post-phase to support network collaboration in development of BMfS and in the creation of BCfS, both of which are intended to increase biogas profitability by solving sustainability issues.

This thesis contributes to the literature with its findings on how the BMIpfS Framework can be used in organizational changes. These findings show how an organization can move from its existing BM to a more sustainability-oriented BM. The thesis identifies the internal and external antecedents related to the initiation and implementation of the BMIpfS and offers new insights on the development of BMfS through the integration of sustainabil­ity considerations using business modelling tools that facilitate BM experimentation and stakeholder collaboration. Moreover, the thesis explains how use of the BMIpfS Framework can create sustainability-oriented BM prototypes that enhance network BM collaboration with stakeholders in the value chain (i.e. BMfS development and BCfS creation). As far as practical contributions, the thesis highlights the usefulness of the BMIpfS Framework in farm-based biogas production. With the BMIpfS Framework, the thesis presents a structured approach that practitioners can follow in initiating and implementing sustainability-oriented changes to their existing BMs. Practitioners who want to increase the profitability of their biogas production through sustainability should initially focus their BMI activities on the business infrastructure (key partner identification and interaction) and customer interface (relationships, distribution channels, and segments) of existing BMs.

This thesis ultimately concludes that biogas-producing farm businesses should initiate and implement a BMIpfS that leads to economic, environmental, and social value creation. Stakeholder considerations and interactions are key factors in all phases of BMIpfS. In this process, sustainable business modelling tools and BM prototype development can be used to facilitate incremental sustainability-oriented changes to existing BMs. The BMIpfS Framework has an important role for the development and implementation of BMfS in the biogas industry as a contributor to the circular economy that features renewable and sustainable energy systems. 

Abstract [sv]

Innovationsforskning som leder till företagsmässig förändring och anpassning i ett dynamiskt affärsklimat har ökat dramatiskt de senaste decennierna. Denna doktorsavhandling som fokuserar på affärsmodellsinnovation (BMI) bidrar till denna forskning genom att undersöka hur företag kan förändra dess struktur för att skapa, leverera, och fånga ekonomiskt värde samt miljömässigt- och socialt värde. Det övergripande syftet med avhandlingen är att undersöka hur affärsmodellsinnovationsprocessen för hållbarhet (BMIpfS) kan bidra till lönsam biogasproduktion hos svenska lantbruksföretag. Biogas är en förnybar energiresurs som produceras genom mikrobiell nedbrytning av organiskt material i en syrefri miljö och används för att framställa värme, el eller fordonsbränsle. Avhandlingen undersöker hur initieringen, implementeringen och användningen av BMIpfS kan främja utvecklingen av affärsmodeller för hållbarhet (BMfS). Genom en BMfS kan lantbruksföretag och deras intressenter (t.ex. kommuner och lokala företag), utöver ekonomiskt värde, också fånga miljömässigt- och socialt värde från biogasproduktion. Detta kan skapa affärscase för hållbarhet (BCfS) som kan förbättra biogaslönsamheten.

Forskningsansatsen som tillämpas i avhandlingen kombinerar induktiva och deduktiva inslag och inkluderar en fallstudie, två aktionforskningsstudier och två enkätundersökningsstudier. Fallstudien identifierar och beskriver framgångsfaktorer för BMI för hållbarhet i ett biogasnätverk. Aktionsforskningsstudierna utforskar hur BMI-processen kan modifieras för att integrera hållbarhetsaspekter, samt vilka processresultat som kan vara användbara för att stödja och underlätta intressentsamarbete och utveckling av BMfS. Enkätstudierna undersöker hur lantbruksföretagens hållbarhetsstrategier och förhållningssätt till intressenter påverkar utvecklingen av BMfS och BCfS. Samtliga studier utfördes i en svensk kontext och data samlades in genom intervjuer, workshops och enkäter.

Resultaten visar att BMI för hållbarhet sker i tre huvudsakliga faser (pre phase, ongoing phase, post phase). Baserat på dessa tre faser utvecklades BMIpfS-ramverket. BMIpfS-ramverket visar hur en affärsmodell (BM) kan förändras och anpassas för att realisera hållbart värdeskapande. Flera faktorer påverkar hur framgångsrikt BMfS-ramverket blir för biogasproducerande lantbruksföretag. I pre phase inbegriper dessa faktorer ett långsiktigt perspektiv på biogaslönsamhet, integrering av hållbarhetsöverväganden i affärsstrategin och etableringen av affärssamarbeten för att få tillgång till kunder och en säker marknad. I ongoing phase kan användningen av affärsmodelleringsverktyget Flourishing Business Canvas underlätta förståelsen av befintlig BM och stödja idégenerering och affärsmodellering för utvecklingen av en BMfS tillsammans med relevanta intressenter. I post phase används hållbarhetsinriktade BM-prototyper för att stödja nätverkssamarbete vid utvecklingen av BMfS och i skapandet av BCfS som båda syftar till att öka biogaslönsamheten genom att lösa hållbarhetsproblem.

Avhandlingens resultat bidrar med ny teoretisk kunskap genom att visa hur BMIpfS-ramverket kan användas i organisatoriska förändringar. Dessa resultat visar hur en organisation kan gå ifrån sin befintliga BM till en mer hållbarhetsinriktad BM. Avhandlingen identifierar interna och externa faktorer som kan föranleda initieringen och implementeringen av BMIpfS, och bidrar till en ökad förståelse kring utvecklingen av BMfS genom att visa hur integreringen av hållbarhetsaspekter kan genomföras med hjälp av affärsmodelleringsverktyg som underlättar experimenterande med BM samt initierandet av intressentsamarbete. Dessutom visar avhandlingen hur användningen av BMIpfS-ramverket kan skapa hållbarhetsinriktade BM-prototyper som kan förbättra nätverksbaserat affärsmodellssamarbete med intressenter i värdekedjan för att utveckla BMfS och skapa BCfS.

De praktiska bidragen från doktorsavhandlingen framhåller användbarheten av BMIpfS-ramverket  för gårdsbaserad biogas. Med BMIpfS-ramverket presenterar avhandlingen ett strukturerat tillvägagångssätt som företagare kan följa för att initiera och genomföra hållbarhetsinriktade förändringar av befintlig BM. Företagare som avser förbättra biogasens lönsamhet genom hållbarhet bör börja med att förändra affärsinfrastrukturen (identifiering och interaktion med nyckelpartners) och kundgränssnittet (relationer, distributionskanaler och kundsegment) i befintlig BM.

Avhandlingen konkluderar att biogasproducerade lantbruksföretag som avser förbättra lönsamheten bör initiera och implementera en BMIpfS som kan skapa ekonomiskt, miljömässigt och socialt värde. Överväganden kring, och interaktioner med, intressenter är av central betydelse i alla tre faser av BMIpfS. I BMIpfS kan hållbara affärsmodelleringsverktyg och utvecklingen av affärsmodellsprotoyper användas för att underlätta inkrementella och hållbarhetsinriktade förändringar av företagens befintliga BM. Användningen av BMIpfS-ramverket för att främja utveckling och implementering av BMfS i biogasbranschen kan spela en viktig roll för att öka biogasproducenters betydelse i ett framtida förnybart och hållbart energisystem, liksom dess bidrag till den cirkulära ekonomin.

Place, publisher, year, edition, pages
Halmstad: Halmstad University Press, 2019. , p. 89
Series
Halmstad University Dissertations ; 63
Keywords [en]
Business model innovation, Sustainable value creation, Stakeholders, Biogas production, Farmers
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hh:diva-40716ISBN: 978-91-88749-34-5 (print)ISBN: 978-91-88749-35-2 (electronic)OAI: oai:DiVA.org:hh-40716DiVA, id: diva2:1361683
Public defence
2019-12-06, O124, Linjegatan 12, Halmstad, 10:00 (English)
Opponent
Supervisors
Available from: 2019-10-17 Created: 2019-10-16 Last updated: 2019-10-17Bibliographically approved
List of papers
1. Success factors for agricultural biogas production in Sweden: A case study of business model innovation
Open this publication in new window or tab >>Success factors for agricultural biogas production in Sweden: A case study of business model innovation
2016 (Swedish)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786, Vol. 142, no Part 4, p. 2925-2934Article in journal (Refereed) Published
Abstract [en]

As government officials, policymakers, and the general public increasingly express their concern about global warming caused by greenhouse gas emissions, scientists search for alternative sources of vehicle fuel and electric power. One sustainable energy source that shows considerable promise is biogas produced from organic waste. For various reasons, biogas plants in Sweden struggle with profitability. This is especially true for agricultural biogas plants. Suggestions on how to deal with this problem include the use of business model innovation (BMI) to develop agricultural networks and to implement new strategies for arranging, producing, and marketing farm-produced biogas. This qualitative study, influenced by grounded theory, identifies and examines the success factors in an agricultural network in which biogas is produced at four farms in Sweden with distribution by pipeline to a refinery for purification and conversion to vehicle fuel. Fourteen interviews were conducted with various individuals in this network: farmers, a local politician, municipal employees, and external consultants. Of the six success factors identified in the network for farm-produced biogas, the long-term perspective on profitability was found most important. The six factors were used to create a conceptual business model framework for such networks that adds new value propositions while retaining the original value propositions. We propose that long-term government subsidies and other incentives can make farm-produced biogas profitable, not only in social and environmental terms but also in economic terms. Our main conclusion is that BMI can be used to create public-private networks that invest in farm-based biogas production. Such investments can stimulate rural development and provide new business possibilities for SMEs in the agricultural sector. This study also shows that BMI that takes a long-term perspective can result in high-value environmental and social benefits as well as financial profitability.

Place, publisher, year, edition, pages
Amsterdam: Elsevier, 2016
Keywords
Business model innovation, Biogas production, Network, SMEs (small and medium-sized enterprises)
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-32368 (URN)10.1016/j.jclepro.2016.10.178 (DOI)000391516300048 ()2-s2.0-85028238891 (Scopus ID)
Available from: 2016-11-04 Created: 2016-11-04 Last updated: 2019-10-16Bibliographically approved
2. Early Phases of the Business Model Innovation Process for Sustainability: Addressing the Status Quo of a Swedish Biogas-Producing Farm Cooperative
Open this publication in new window or tab >>Early Phases of the Business Model Innovation Process for Sustainability: Addressing the Status Quo of a Swedish Biogas-Producing Farm Cooperative
2018 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786, Vol. 172, p. 2759-2772Article in journal (Refereed) Published
Abstract [en]

In recent years in Sweden, interest has grown concerning the possibilities of biogas production from organic waste. This interest reflects a general concern over environmental sustainability in society. However, given the lack of financial backing and the competition of other energy producers, few Swedish biogas plants have been profitable. This is particularly the situation with farm-based biogas producers. One response to this problem in the farm-based biogas industry is to engage in business model innovation that can lead to new ways of organizing business structures and activities. This qualitative study, which takes an action research approach, explores the early phases (initiation and ideation) of the business model innovation process for sustainability at a biogas-producing farm cooperative in southern Sweden. The main activities and the actors who are central to the execution of these activities are identified in six sub-phases. The paper describes two Flourishing Business Canvas workshops in which the participants were the researchers, members of the farm cooperative, external consultants, and university students. This study contributes theoretically to the literature with its detailed examination of the early phases of the business model innovation process for sustainability. It also contributes to practice with its conceptual model that demonstrates how biogas producers and farm managers can innovate and transform their current business models towards sustainability in order to improve competitiveness and long-term profitability. (C) 2017 Elsevier Ltd. All rights reserved.

Place, publisher, year, edition, pages
Amsterdam: , 2018
Keywords
Business model innovation, Process phases, Sustainability, Flourishing Business Canvas, Biogas production
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-36227 (URN)10.1016/j.jclepro.2017.11.136 (DOI)000423002200130 ()2-s2.0-85038874690 (Scopus ID)
Projects
Biogas 2020
Available from: 2018-02-05 Created: 2018-02-05 Last updated: 2019-10-16Bibliographically approved
3. Business modelling in farm-based biogas production: towards network-level business models and stakeholder business cases for sustainability
Open this publication in new window or tab >>Business modelling in farm-based biogas production: towards network-level business models and stakeholder business cases for sustainability
2019 (English)In: Sustainability Science, ISSN 1862-4065, E-ISSN 1862-4057, Vol. 14, no 4, p. 1071-1090Article in journal (Refereed) Published
Abstract [en]

Farm-based biogas production is a promising renewable energy technology with the potential for creating sustainable economic, environmental, and social value. However, Swedish farmers engaged in this activity struggle to turn a profit because of high-investment costs and severe price competition with fossil fuels. One way to address this situation is to re-organize the activity by innovating the business model (BM) towards sustainability. In this study, a team of researchers took an action research approach that proposed solutions for the financial difficulties at a farm cooperative that intended to develop its farm-based biogas production. Two participatory workshops (including researchers, producers, students, and consultants) were conducted using the sustainable business-modelling tool called the Flourishing Business Canvas (FBC). Based on the 215 ideas developed in the workshops, five sustainable BM prototypes were created. These five prototypes form the basis of an approach for initiating the development of a network-level BM for sustainability that highlights its superiority over a single-firm BM. The network-level BM’s main advantage in the farm-based biogas context is its strong focus on stakeholder collaboration that supports the development of a stakeholder business case for sustainability. Overall, this study highlights the usefulness of the network concept in the practice of sustainable BM development. Collaborative business modelling for developing network-level BMs that address environmental and social problems for and with stakeholders can be an effective way to increase long-term financial profit and promote the growth of a firm, a network, or an industry. © 2018 The Author(s)

Place, publisher, year, edition, pages
Tokyo: Springer-Verlag Tokyo Inc., 2019
Keywords
Business modelling, Stakeholders, Business case, Sustainability, Biogas production
National Category
Social Sciences Interdisciplinary
Identifiers
urn:nbn:se:hh:diva-37236 (URN)10.1007/s11625-018-0584-z (DOI)000471345600017 ()2-s2.0-85047941054 (Scopus ID)
Projects
Biogas 2020
Note

Funding: the Biogas 2020 project in the EU-Interreg ÖKS programme

Available from: 2018-06-21 Created: 2018-06-21 Last updated: 2019-10-16Bibliographically approved
4. Business models and business cases for financial sustainability: Insights on corporate sustainability in the Swedish farm-based biogas industry
Open this publication in new window or tab >>Business models and business cases for financial sustainability: Insights on corporate sustainability in the Swedish farm-based biogas industry
2019 (English)In: Sustainable Production and Consumption, ISSN 2352-5509, E-ISSN 1614-2373, Vol. 18, p. 115-129Article in journal (Refereed) Published
Abstract [en]

In recent years, Swedish farmers have begun investing in biogas technology in an attempt to become more sustainable. Biogas production from organic waste on farms combines renewable energy production with increased resource efficiency. However, many farmers have found this activity less profitable than expected. This paper investigates the corporate sustainability strategy used by Swedish farm businesses, in particular how this strategy influences the development of business models and business cases for sustainability in the effort to increase economic profitability from biogas production. A questionnaire, administered to farm business managers, was used to collect the paper’s empirical data. The study’s findings show that the farmers currently use a reactive corporate sustainability strategy that hinders profits because biogas production is realized as an indirect financial business case for sustainability. The study concludes that the farmers could benefit financially from biogas production if they adopted a proactive corporate sustainability strategy. Such a strategy, if adopted, enables the development of a business model for sustainability, the capture of sustainable value for stakeholders, and the creation of biogas production as a direct financial business case for sustainability. This study contributes to the literature on business cases for sustainability, specifically in how their creation is connected to, and influenced by, the corporate sustainability strategy and by related business model changes. The study adds to our understanding of how sustainable investments can contribute to long-term, sustainable business success. © 2019 Institution of Chemical Engineers

Place, publisher, year, edition, pages
Amsterdam: Elsevier, 2019
Keywords
Sustainability, Business models, Business cases, Biogas, Farmers
National Category
Economics and Business
Identifiers
urn:nbn:se:hh:diva-38864 (URN)10.1016/j.spc.2019.01.005 (DOI)2-s2.0-85061101576 (Scopus ID)
Projects
Biogas 2020 EU-Interreg ÖKS
Available from: 2019-02-08 Created: 2019-02-08 Last updated: 2019-10-16Bibliographically approved
5. A cross-country comparison and validation of firms’ stakeholder considerations in sustainable business practices
Open this publication in new window or tab >>A cross-country comparison and validation of firms’ stakeholder considerations in sustainable business practices
Show others...
2018 (English)In: Corporate Governance : The International Journal of Effective Board Performance, ISSN 1472-0701, E-ISSN 1758-6054, Vol. 18, no 3, p. 408-424Article in journal (Refereed) Published
Abstract [en]

Purpose: The purpose of this study is to compare and validate firms’ internal and external stakeholder considerations in sustainable business practices across business settings. It aims to assess the validity and reliability of a stakeholder framework appearing in previous studies.

Design/methodology/approach: The study uses a questionnaire survey and a cross-industry sample consisting of the largest firms in corporate Sweden. Multivariate analysis tests the stakeholder framework. Each of the 294 key informants was initially identified and contacted by telephone, generating a response rate of 36.5 per cent.

Findings: The tested stakeholder framework appears valid and reliable across countries to assess the internal stakeholders of focal firms, as well as their up- and downstream, market and societal stakeholders. This study provides additional empirical support to categorize firms’ stakeholder considerations in sustainable business practices.

Research limitations/implications: This study validates previous findings in terms of Swedish firms’ considerations of internal and external stakeholders in sustainable business practices in relation to one similar country (Norway) and one different country (Spain). The study also shows how the three countries perceive the focal company and societal stakeholders differently. Practical implications: The tested framework sheds light on focal firms’ stakeholder considerations in sustainable business practices and elucidates the extent to which firms’ account for their internal and external stakeholders in sustainable business practices.

Originality/value: This study contributes to the development of valid and reliable stakeholder theory across contexts and through time. In particular, it contributes to the development of a valid and reliable framework to categorize firms’ stakeholder considerations in sustainable business practices. © 2018, Emerald Publishing Limited.

Place, publisher, year, edition, pages
Bingley: Emerald Group Publishing Limited, 2018
Keywords
Stakeholders, Corporate social responsibility, Supply chain management
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-36493 (URN)10.1108/CG-07-2017-0131 (DOI)000433897200003 ()2-s2.0-85043459490 (Scopus ID)
Available from: 2018-03-22 Created: 2018-03-22 Last updated: 2019-10-16Bibliographically approved

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