Sustainable Business Models: The Contribution of Network Organization and Governance Modes

We provide a framework for the design of sustainable business models. While extant literature on business models focuses on unlocking positive externalities, we propose a business model framework that effectively addresses negative externalities. A taxonomy based on transorganizational models and governance modes classifies instruments that counsel behaviour patterns. Sustainability strategies that deal with externalities often merge instruments to manage multi-stakeholder responsibilities and exchanges. The framework draws upon three established research themes network organizational models, governance modes, and instrumental stakeholder theory to distinguish between six instrument classes. To illustrate its potential for analysis the paper compiles instruments within these classes, contrasts selected instruments, and applies the framework to diverse sustainability examples. We find preliminary evidence for superior performance of plural instruments for sustainability strategies, and identify key areas of research for advancing sustainable business models.