IDEAS home Printed from https://ideas.repec.org/a/spr/elmark/v30y2020i4d10.1007_s12525-019-00361-y.html
   My bibliography  Save this article

When does it pay off to integrate sustainability in the business model? – A game-theoretic analysis

Author

Listed:
  • Henner Gimpel

    (FIM Research Center, University of Augsburg, Project Group Business & Information Systems Engineering of the Fraunhofer FIT)

  • Valerie Graf-Drasch

    (FIM Research Center, University of Augsburg, Project Group Business & Information Systems Engineering of the Fraunhofer FIT)

  • Alexander Kammerer

    (FIM Research Center, University of Augsburg)

  • Maximilian Keller

    (FIM Research Center, University of Augsburg)

  • Xinyi Zheng

    (FIM Research Center, University of Augsburg)

Abstract

Acknowledging sustainability as a challenge of utmost importance, organizations face questions on dealing with different dimensions of sustainability. Respective actions include a fundamental shift in the purpose of business and almost every aspect of how it is conducted, or in short: an integration of sustainability in organizations’ business model. However, as sustainability is no altruistic end in itself, respective transformation must resonate with organizations’ economic conditions and their position in the market. But when does it pay off for organizations to integrate sustainability in their business model? Within this research paper we find answers by applying a game-theoretic framework and examining competition strategies for organizations integrating sustainability in their business model. Hereby we consider different market scenarios where symmetric and asymmetric, weak and strong, as well as a varying number of organizations interact. Our results suggest different strategies organizations can apply to gain competitive advantage.

Suggested Citation

  • Henner Gimpel & Valerie Graf-Drasch & Alexander Kammerer & Maximilian Keller & Xinyi Zheng, 2020. "When does it pay off to integrate sustainability in the business model? – A game-theoretic analysis," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(4), pages 699-716, December.
    • Handle: RePEc:spr:elmark:v:30:y:2020:i:4:d:10.1007_s12525-019-00361-y
    DOI: 10.1007/s12525-019-00361-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12525-019-00361-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12525-019-00361-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    2. Despeisse, M. & Baumers, M. & Brown, P. & Charnley, F. & Ford, S.J. & Garmulewicz, A. & Knowles, S. & Minshall, T.H.W. & Mortara, L. & Reed-Tsochas, F.P. & Rowley, J., 2017. "Unlocking value for a circular economy through 3D printing: A research agenda," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 75-84.
    3. Markus Milne & Rob Gray, 2013. "W(h)ither Ecology? The Triple Bottom Line, the Global Reporting Initiative, and Corporate Sustainability Reporting," Journal of Business Ethics, Springer, vol. 118(1), pages 13-29, November.
    4. Walter R. Stahel, 2016. "The circular economy," Nature, Nature, vol. 531(7595), pages 435-438, March.
    5. Johann Fellner & Jakob Lederer & Christoph Scharff & David Laner, 2017. "Present Potentials and Limitations of a Circular Economy with Respect to Primary Raw Material Demand," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 494-496, June.
    6. Salzmann, Oliver & Ionescu-somers, Aileen & Steger, Ulrich, 2005. "The Business Case for Corporate Sustainability:: Literature Review and Research Options," European Management Journal, Elsevier, vol. 23(1), pages 27-36, February.
    7. Stefan Schaltegger & Florian Lüdeke-Freund & Erik G. Hansen, 2012. "Business cases for sustainability: the role of business model innovation for corporate sustainability," International Journal of Innovation and Sustainable Development, Inderscience Enterprises Ltd, vol. 6(2), pages 95-119.
    8. Steve Evans & Doroteya Vladimirova & Maria Holgado & Kirsten Van Fossen & Miying Yang & Elisabete A. Silva & Claire Y. Barlow, 2017. "Business Model Innovation for Sustainability: Towards a Unified Perspective for Creation of Sustainable Business Models," Business Strategy and the Environment, Wiley Blackwell, vol. 26(5), pages 597-608, July.
    9. Gianmarco Bressanelli & Federico Adrodegari & Marco Perona & Nicola Saccani, 2018. "Exploring How Usage-Focused Business Models Enable Circular Economy through Digital Technologies," Sustainability, MDPI, vol. 10(3), pages 1-21, February.
    10. Christoph Böhringer & Michael Finus & Carsten Vogt (ed.), 2002. "Controlling Global Warming," Books, Edward Elgar Publishing, number 2535.
    11. Aseem Prakash & Matthew Potoski, 2012. "Voluntary environmental programs: A comparative perspective," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 123-138, December.
    12. Albert Jolink & Eva Niesten, 2015. "Sustainable Development and Business Models of Entrepreneurs in the Organic Food Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 24(6), pages 386-401, September.
    13. Kai Fang & Reinout Heijungs & Zheng Duan & Geert R. De Snoo, 2015. "The Environmental Sustainability of Nations: Benchmarking the Carbon, Water and Land Footprints against Allocated Planetary Boundaries," Sustainability, MDPI, vol. 7(8), pages 1-21, August.
    14. Bettina Klose & Dan Kovenock, 2015. "The all-pay auction with complete information and identity-dependent externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 1-19, May.
    15. Rainer Lueg & Maria Medelby Pedersen & Søren Nørregaard Clemmensen, 2015. "The Role of Corporate Sustainability in a Low‐Cost Business Model – A Case Study in the Scandinavian Fashion Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 24(5), pages 344-359, July.
    16. Kreps, David M., 1990. "Game Theory and Economic Modelling," OUP Catalogue, Oxford University Press, number 9780198283812.
    17. Trevor Zink & Roland Geyer, 2017. "Circular Economy Rebound," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 593-602, June.
    18. Juho Hamari & Mimmi Sjöklint & Antti Ukkonen, 2016. "The sharing economy: Why people participate in collaborative consumption," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 67(9), pages 2047-2059, September.
    19. Henning Breuer & Klaus Fichter & Florian Lüdeke-Freund & Irina Tiemann, 2018. "Sustainability-oriented business model development: principles, criteria and tools," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 10(2), pages 256-286.
    20. Finus, Michael, 2008. "Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges," International Review of Environmental and Resource Economics, now publishers, vol. 2(1), pages 29-67, June.
    21. John R. Bryson & Rachel Lombardi, 2009. "Balancing product and process sustainability against business profitability: sustainability as a competitive strategy in the property development process," Business Strategy and the Environment, Wiley Blackwell, vol. 18(2), pages 97-107, February.
    22. Stefan Schaltegger & Marcus Wagner, 2011. "Sustainable entrepreneurship and sustainability innovation: categories and interactions," Business Strategy and the Environment, Wiley Blackwell, vol. 20(4), pages 222-237, May.
    23. Mateusz Lewandowski, 2016. "Designing the Business Models for Circular Economy—Towards the Conceptual Framework," Sustainability, MDPI, vol. 8(1), pages 1-28, January.
    24. Pejvak Oghazi & Rana Mostaghel, 2018. "Circular Business Model Challenges and Lessons Learned—An Industrial Perspective," Sustainability, MDPI, vol. 10(3), pages 1-19, March.
    25. Thomas P. Lyon & John W. Maxwell, 2007. "Public Voluntary Programs Reconsidered," Working Papers 2007-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    26. Brandenburg, Marcus & Govindan, Kannan & Sarkis, Joseph & Seuring, Stefan, 2014. "Quantitative models for sustainable supply chain management: Developments and directions," European Journal of Operational Research, Elsevier, vol. 233(2), pages 299-312.
    27. Lloret, Antonio, 2016. "Modeling corporate sustainability strategy," Journal of Business Research, Elsevier, vol. 69(2), pages 418-425.
    28. Luis Miguel Fonseca & José Pedro Domingues & Maria Teresa Pereira & Florinda Figueiredo Martins & Dominik Zimon, 2018. "Assessment of Circular Economy within Portuguese Organizations," Sustainability, MDPI, vol. 10(7), pages 1-24, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hans Ulrich Buhl & Valerie Graf-Drasch & Christian Wiethe, 2023. "What to say and what to do: the disparity of the communication and investment in sustainability targets, given customer expectations," Journal of Business Economics, Springer, vol. 93(3), pages 485-507, April.
    2. Nora Nahr & Marikka Heikkilä, 2022. "Uncovering the identity of Electronic Markets research through text mining techniques," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1257-1277, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Rosa De Giacomo & Raimund Bleischwitz, 2020. "Business models for environmental sustainability: Contemporary shortcomings and some perspectives," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3352-3369, December.
    2. Nadia Preghenella & Cinzia Battistella, 2021. "Exploring business models for sustainability: A bibliographic investigation of the literature and future research directions," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2505-2522, July.
    3. Florian Lüdeke‐Freund, 2020. "Sustainable entrepreneurship, innovation, and business models: Integrative framework and propositions for future research," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 665-681, February.
    4. Nancy Bocken & Lars Strupeit & Katherine Whalen & Julia Nußholz, 2019. "A Review and Evaluation of Circular Business Model Innovation Tools," Sustainability, MDPI, vol. 11(8), pages 1-25, April.
    5. Gilbert Silvius & Aydan Ismayilova & Vicente Sales-Vivó & Micol Costi, 2021. "Exploring Barriers for Circularity in the EU Furniture Industry," Sustainability, MDPI, vol. 13(19), pages 1-25, October.
    6. Ida K. Rovanto & Anu Bask, 2021. "Systemic circular business model application at the company, supply chain and society levels—A view into circular economy native and adopter companies," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1153-1173, February.
    7. Florian Lüdeke‐Freund & Stefan Gold & Nancy M. P. Bocken, 2019. "A Review and Typology of Circular Economy Business Model Patterns," Journal of Industrial Ecology, Yale University, vol. 23(1), pages 36-61, February.
    8. Federico Cosenz & Vinicius Picanço Rodrigues & Francesco Rosati, 2020. "Dynamic business modeling for sustainability: Exploring a system dynamics perspective to develop sustainable business models," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 651-664, February.
    9. Tomasz Rokicki & Aleksandra Perkowska & Bogdan Klepacki & Hubert Szczepaniuk & Edyta Karolina Szczepaniuk & Stanisław Bereziński & Paulina Ziółkowska, 2020. "The Importance of Higher Education in the EU Countries in Achieving the Objectives of the Circular Economy in the Energy Sector," Energies, MDPI, vol. 13(17), pages 1-17, August.
    10. Stefan Schaltegger & Roger Burritt, 2018. "Business Cases and Corporate Engagement with Sustainability: Differentiating Ethical Motivations," Journal of Business Ethics, Springer, vol. 147(2), pages 241-259, January.
    11. Astrid Cocquyt & Saskia Crucke & Hendrik Slabbinck, 2020. "Organizational characteristics explaining participation in sustainable business models in the sharing economy: Evidence from the fashion industry using conjoint analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2603-2613, September.
    12. Claudia Aparecida De Mattos & Thiago Lourenço Meira De Albuquerque, 2018. "Enabling Factors and Strategies for the Transition Toward a Circular Economy (CE)," Sustainability, MDPI, vol. 10(12), pages 1-18, December.
    13. Antonella Zucchella & Pietro Previtali & Roger Strange, 2022. "Proactive and reactive views in the transition towards circular business models. A grounded study in the plastic packaging industry," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1073-1102, September.
    14. Anna M. Hansson & Eja Pedersen & Niklas P. E. Karlsson & Stefan E. B. Weisner, 2023. "Barriers and drivers for sustainable business model innovation based on a radical farmland change scenario," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8083-8106, August.
    15. Marcos Ferasso & Tatiana Beliaeva & Sascha Kraus & Thomas Clauss & Domingo Ribeiro‐Soriano, 2020. "Circular economy business models: The state of research and avenues ahead," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3006-3024, December.
    16. Karolina Bähr & Alexander Fliaster, 2023. "The twofold transition: Framing digital innovations and incumbents' value propositions for sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 32(2), pages 920-935, February.
    17. Chembessi Chedrak & Gohoungodji Paulin & Juste Rajaonson, 2023. "“A fine wine, better with age”: Circular economy historical roots and influential publications: A bibliometric analysis using Reference Publication Year Spectroscopy (RPYS)," Journal of Industrial Ecology, Yale University, vol. 27(6), pages 1593-1612, December.
    18. María Jesús Ávila-Gutiérrez & Alejandro Martín-Gómez & Francisco Aguayo-González & Juan Ramón Lama-Ruiz, 2020. "Eco-Holonic 4.0 Circular Business Model to Conceptualize Sustainable Value Chain towards Digital Transition," Sustainability, MDPI, vol. 12(5), pages 1-32, March.
    19. Elena Aurelia Botezat & Anca Otilia Dodescu & Sebastian Văduva & Silvia Liana Fotea, 2018. "An Exploration of Circular Economy Practices and Performance Among Romanian Producers," Sustainability, MDPI, vol. 10(9), pages 1-17, September.
    20. Simone Sehnem & Adriane A. Farias S. L. de Queiroz & Susana Carla Farias Pereira & Gabriel dos Santos Correia & Edson Kuzma, 2022. "Circular economy and innovation: A look from the perspective of organizational capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 236-250, January.

    More about this item

    Keywords

    Sustainability; Sustainability business model; Game theory;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elmark:v:30:y:2020:i:4:d:10.1007_s12525-019-00361-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.