Developing sustainable business model innovation through stakeholder management and dynamic capability: A longitudinal case study

Sustainable business model innovation (SBMI) describes the environmental sustainability of innovative business model; even though the SBMI is well known it fails to justify its influence in the literature. Prior studies have addressed the aspects of stakeholder management (SM) and dynamic capability (DC), which are crucial for the model to sustain competitive advantage and seize business opportunities. Despite rising attention on SBMI from both researchers and practitioners, little research exists in longitudinal studies to reveal its evolution and record the characteristics of the different types of SBMI. This study is a longitudinal study that uses a sewage treatment firm in Dalian, China to understand multiple stages involved in SBMI, such as government-dependent, technology-based, and social-oriented observed over 15 years. This longitudinal study found that integrating stakeholder management strategies provides the resource base for implementing SBMI. DC plays a leverage role between SM and SBMI, and the roles of the four DCs are different in various SBMIs. Sensing and learning capabilities are vital in the initial stage, and integrating and learning ones build the knowledge network in a technology-based business model. Of the society-oriented capabilities, the integrating and coordinating capabilities increase stakeholders’ willingness to participate. This case study explores opportunities for developing SBMIs by analyzing this business pattern over a span of 15 years. • The evolutionary process of SBMI for a Chinese STE is discussed from the perspective of SM and DC. • HXW's SBMI experienced three stages from “government-dependent” to “technology-based” and then to “society-oriented” in 15 years. • Integrating stakeholder management strategies provided the resource base for implementing SBMI. • DC played the leverage role between SM and SBMI, and the roles of the four DCs were different in various SBMIs.