Business Models and Complexity

Purpose: To offer a -necessarily non-exhaustive- analysis of the meaning and significance of the notion of a complex system for research on the Business Model (BM).

Design/Methodology/Approach: Conceptual paper

Findings: Drawing from early research in complexity and debates that have inspired work in General System Theory, system thinking and cybernetics, we identify four insights, notably i) modeling of complex systems, ii) interdependencies, iii) nested hierarchies and iv) information processing that, we contend, have the potential to shed light on novel possibilities for understanding BMs. We offer an analysis.

Research Limitations/Implications: Limitation: exclusive focus on early interpretation of the notion of complexity as referring to a characteristic of a system. The paper does not explore the implications of the more modern understanding of complexity as referring to the ‘behavior’ of a system (complex system vs. complex behavior)

Practical Implications: we may be attempting to represent a system which is very complex, the BM and the organization behind it, at the level of the anatomy, only reflecting its main components. This is subject to inherent limitations.

Originality/Value: To show that, within the line of inquiry understanding the business model (BM) as some reality existing at the level of the firm, a BM may resemble what students of complexity refer to as a complex system. To explore the meaning and significance of the notion of complexity and of a complex system for research on the BM.