The social embeddedness of business model enactment : Implications for theory and practice

Purpose – The purpose of this paper is to analyze the intra‐firm dynamics of business model enactment, paying particular attention to the social context in which that enactment occurs. Design/methodology/approach – The article develops its hypotheses from qualitative case studies. In particular, the article presents two exploratory cases designed to generate questions and hypotheses. Findings – The article generates two hypotheses: first, the social capital of a firm enhances its capacity to enact its intra‐firm business model; and second, when business model redesign alters the organizational location in which activities and transactions are performed, social capital will become especially salient. Research limitations/implications – Exploratory research is both suggestive and limited. Additional descriptive and explanatory research will more fully explore the phenomenon of the role of social capital in enacted business model design, as well as present data bearing on cause‐effect relationships. Practical implications – For the manager, the implication of the research relates especially to building an enactment capacity for the firm's business model; attention to social relationships and investment in social capital will enhance a firm's enactment capacity. Originality/value – The article is the first to consider the intra‐firm dynamics of business model design and to integrate the concept of social capital into an understanding of design enactment.