Top management team internal social capital, market dynamics and business model design: a dynamic managerial capability perspective

Abstract

Purpose: Drawing on the dynamic managerial capability perspective and the dynamic capability perspective of business model (BM) literature, this paper aims to investigate how top management team internal social capital (TISC) promotes BM design and how such effects are moderated by market dynamics (i.e. demand uncertainty and competitive intensity). Design/methodology/approach: The proposed hypotheses were tested by a questionnaire-based survey. The empirical study was conducted on a sample of 210 firms in China. The model was tested via hierarchical regression analysis. Findings: TISC has a positive effect on BM efficiency but an inverted U-shaped effect on BM novelty. The effects of TISC on BM efficiency and novelty are contingent on demand uncertainty and competitive intensity in different ways. Specifically, this study finds that demand uncertainty strengthens the inverted U-shaped effect of TISC on BM novelty. This study also finds that competitive intensity strengthens the positive effect of TISC on BM efficiency but weakens the inverted U-shaped effect of TISC on BM novelty. Originality/value: The conclusion contributes to the dynamic capability perspective of BM literature in two ways. First, it offers a dynamic managerial capability perspective for understanding the antecedents of BM design. It highlights TISC, a root of dynamic managerial capability, as an important internal antecedent of BM design. Second, it provides a more nuanced understanding of the role of TISC in BM design. The findings show the distinct effects of TISC on BM efficiency and novelty. This study also discusses the contingency role market dynamics play in the TISC–BM design relationship.