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Performance Consequences of Fit between Financials and Strategy Descriptions in the Renewable Energy Industry: A contingent view on the business model consistency heuristic

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  • Oschlies, Melanie K.
  • Loock, Moritz

Abstract

A dimension that has received little attention in business model-performance assessments is consistency or “configuration as a quality”. Business model consistency in this regard indicates the degree of fit of different business model elements. Managers and researchers seem to follow a business model consistency heuristic that regards a high degree of consistency superior to lower degrees of consistency. However, when considering costs of consistency within emerging industries we also find arguments in favor of a low degree of consistency. This paper explores contingency factors that determine whether consistency is rational or not. Our proxy for measuring consistency is the fit between financials and business descriptions within multi-year observations of 210 wind and solar firms in the renewable energy industry. We find that contingency factors such as industry, business model-themes or pattern of firm growth can impact the consistency-performance relationship positively as well as negatively. Based on our findings, we propose to account for the distinct contingencies of business model consistency rather than uncritically considering business model consistency as being rational per se. Implications for managers, investors and researchers apply.

Suggested Citation

  • Oschlies, Melanie K. & Loock, Moritz, 2015. "Performance Consequences of Fit between Financials and Strategy Descriptions in the Renewable Energy Industry: A contingent view on the business model consistency heuristic," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 69(3), pages 302-321.
    • Handle: RePEc:nms:untern:10.5771/0042-059x-2015-3-302
    DOI: 10.5771/0042-059X-2015-3-302
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