Perhaps the main challenge in business-society relations is a challenge of imagination: Are we able to envision a world of high ecological quality that is socially just, and is economically prosperous? And how can companies contribute to it? It is a question of sustainability, which in the end revolves around the quest for a better world.
The recently launched Sustainable Development Goals urge to fundamentally rethink conceptions of value and to develop hybrid business models: business models that not only lead to the creation of economic, social, and ecological value, but actually integrate these types of value by considering them as equal. Hybrid business models challenge the idea of sustainability as being merely a means to a business end and represent a choice for normative values that reflect a deeper purpose, including an ambition to challenge or change the social-economic system and the business culture they are part of.
It is important to better understand these hybrid business models in order for business to become truly sustainable. This report aims to contribute to this understanding by conceptualizing and enriching the picture of hybrid business models. It employs a multi-method, interpretative approach based on interviews with both leading practitioners and academics, burgeoning academic and popular literature, and two focus groups. In order to enrich the picture about hybrid business models, this report includes many examples and an interview with international sustainability thought leader Dr. Wayne Visser.
Since the concept of hybrid business models represents a category of rather heterogeneous business models that focus on integrated value creation, this report identifies two generic types of hybrid business models: incremental hybrid business models and radical hybrid business models. These types of hybrid business models, especially when compared to traditional business models, differ in their orientation on several dimensions related to value creation, sustainability impact, and other aspects of enterprise.
The results from the empirical research into hybrid business models are presented through four lenses: Drivers, Barriers, Critical Success Factors, and Implications. Within each of these lenses, several thematic storylines are identified about hybrid business models. This report concludes that sustainability intelligence – consisting of naive, native, and narrative intelligence – is needed to spur the development of hybrid business models and for business to become truly sustainable.
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