Power gaps and interdependencies in business model activity systems: the case of Cyberlibris

Abstract

Objectives
This article examines the power relationships that have unfolded during interactions between interdependent actors during business development for the case of a digital library company, Cyberlibris. It highlights the importance of power gaps during business model (BM) development that impact on overall value creation

Prior Work
Value creation transcends business frontiers (Amit and Zott 2001-2010;Dyer and Singh, 1998; Chesbrough, 2003). Taking a broader 'activity system' view (Amit and Zott) brings actor independencies and interactions to the foreground of our understanding of BM development. This study extends this work by focussing particularly on the power gaps that unfold through resource interdependencies during the BM development in the Cyberlibris case.

Approach
The case study approach is used, comprising primary data (40 interviews) and secondary data (documentary analysis). Underpinned by the resource based view, the analysis charts the interdependencies in the BM activity system and goes on to identify and discuss power gaps (and their implications).

Results
The paper highlights the power gaps between different actors in the BM activity system, and shows how those power gaps impact on value creation and the development of the BM over time. This study shows that value creation depends on the power gaps between focal firm and business actors of its BM. The study suggests that a considerable power gap between actors might hinder value creation overall, and highlights the importance of not just material or economic resources, but also symbolic resources, particularly legitimacy.

Implications
Bringing the resource-based view to examine interdependencies in BM activity systems highlights the need to take a less reductive view of BM development that accounts for power gaps in relationships and different understandings of value.

Value
Generally, the work contributes to the literature on business model development and value creation, more specifically to a more critical strand that challenges the notion of entrepreneurship as merely an instrument of economic rationality. At a high level, the work has value for policy makers, as business model development becomes increasingly central in many new areas of organisational life as new ways of organising emerge in relation to financial constraints.

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