The homeostasis paradox of new business models
Publication Year: 2013
In the current economy there are new business models emerging but there are no theoretical frameworks for it. The phenomenon of service innovation and issues concerning change and adaptiveness of business models are being discussed. The findings point out that adaptive variability does not neccessarily lead to reestablishment to the original state of equilibrium. The fresh state of a new business model can be considered as new referential state for future homeostatic changes to establish equilibrium until other shattering changes are made. Restoring equilibrium states is a strategic choice, companies can choose to contextual variety as negative feedback for homeostatic changes or positive feedback for disruptive changes. A company can do two things if instabilities are faced: • attenuation strategy, make homeostatic changes in order to maintain state of equilibrium. • amplification strategy, amplify disruptions by contextualizing the disruptive technologies into a new busness model proposition for the market.
This paper is found important by me because it helps academics to understand critically the phenomenon of emerging new business models emerging. It is a simple and easy to understand paper in compare to many others in my view. It is possible that two different organizations have a total opposite strategy, but it can for both be their key to succes. By choosing a totally defensive & passive behaviour one can have succes because it wil reach homeostase. On the other hand being totally active & offensive one can also have great succes because it will create new power. My reflection on this view is, that I would suggest to choose one side and go totally with it. If your company is more passive than make it very passive till the bottom. If your company is very active then make it more active as possible. Having one of the strategies can give power, but if you use them together, both will be useless, because they will work in opposite direction to each other. The paper gave me a very interesting idea and made me think about approaching a right strategy.