Understanding the implications of business model innovation in small and medium enterprises: Measurement development and face validation

Understanding the implications of business model innovation in small and medium enterprises: Measurement development and face validation

Madian, A.C.

De Reuver, M. (mentor)
Bouwman, H. (mentor)
Roosenboom-Kwee, Z. (mentor)
Verburg, R.M. (mentor)

Technology, Policy and Management

ICT

Management of Technology

2015-08-24

Innovation has been regarded by European Commission (EU) as the important factor for economic growth. Small and Medium Enterprises (SMEs) are known as the source of these innovations, thus the source of economic growth. SMEs role during economic crisis is crucial as they can create employment. But they are still have pressing problems in finding customers and access to financial capital. Innovations can help them in solving these problems, but it should go beyond the typical product or process innovation. In order to capture the value from innovations, a new and innovative business model is needed by SMEs. Thus in a sense, the business model should undergo innovation itself. Business model innovation (BMI) can improve business performance, and it might be moderated by the turbulence in the surrounding environment. Moreover, before SMEs can capture the value of innovation, they require the willingness and the ability to adopt it, or in other word, innovativeness. Policies that support BMI in SMEs are needed. These policies can further enhance the Small Business Act (SBA) that was already implemented. BMI policies should be made based on facts and empirical evidences, but unfortunately, a unified measurement instrument to assess them does not exist, which making it impossible to provide empirical evidence. Being aware of the situation described above, a project called Envision was made to help addressing the problem, and this research is part of the project. While there are several previous studies that have investigated the relationship between business model innovation (BMI) with business performance, less research were focusing on the relationship between BMI and innovativeness. The moderating effect of environmental turbulence was also more commonly found in studies about product innovation, not specifically on business model innovation. Moreover, most of these previous studies were not focusing on Small & Medium Enterprises (SMEs) but rather on a mix of large firms and SMEs. In addition, the definition and measurement of BMI is still not clear and have not gain common acceptance, which yield the primary research question: What are the new face validated measurements that can be used to measure the implication of BMI to both business performance and innovativeness of SMEs, with the moderating effect of Environmental Turbulence? Extensive literature survey, meta-analysis, and secondary research were conducted to find the relationship between the concepts and their existing measurements. From these research strategy, some hypothesized relationship were supported by qualitative meta-analysis and some existing measurement scales (summative scale) were found. Gaps were then identified from this summative scales based on a measurement instrument criteria or blueprint in this research and the feedback were used to construct new measurements (formative scale). Based on the comparison between measurement instrument blueprint and existing measurements, 153 new items were developed out of the total 176 initial items. Face validation was conducted to provide evaluation on the clarity and relevancy of the items by judges. The face validation procedure consists of two stages where six judges were involved in the first stage and only one judge was involved the second stage. The result is 158 items that can be used for further validation in future research. The objective of the research has been achieved, as the research has generated measurements that are face valid. As the theoretical validity assessment procedure was not completed yet in this research (especially in assessing construct validity), the measurements that were generated cannot be said to be completely reliable and valid. Further research should be aimed primarily on continuing the validation procedure. In addition to contributing to the Envision project, this research has made significant contribution to the BMI literatures.

business model innovation
innovativeness
business performance
measurement
environmental turbulence
face validation
business model

http://resolver.tudelft.nl/uuid:48c76d6c-a39a-4d1c-a61b-0c2e646233ef

Student theses

master thesis

(c) 2015 Madian, A.C.