This paper aims to examine Borders response to business model innovation (BMI) by Amazon in the bookselling industry. The case illuminates potential causes for protracted…
This paper aims to examine Borders response to business model innovation (BMI) by Amazon in the bookselling industry. The case illuminates potential causes for protracted periods of organizational unlearning, explaining why organizational unlearning, although beneficial in many documented cases, can also be insufficient to prevent failure.
Archival data are used to study Borders’s historical evolution from 1995 to its 2011 bankruptcy. Theoretical inferences are drawn from this case to shed light on the process of organizational unlearning.
Borders failed because its top managers were unable to adjust its traditionalist superstore identity to respond in an adequate manner to the changes in their environment. Instead, the company went through protracted phases of weathering the storm, denial and unlearning, resulting in bankruptcy. This extreme case of failure explains why sometimes, organizational unlearning might be insufficient, resulting in organizational demise rather than renewal.
A longitudinal study of an extreme case allows the author to build links between the research on organizational unlearning and the scholarship on organizational identity.
Organizations may survive longer if their top managers engage in the process of organizational identity change in response to BMI in their industry. The article proposes a few actions that organizations might usefully take to react to BMI before it is too late.
Better understanding of failure may enable preventive behavior.
This article explains how organizational identity prevents learning the right things and augments the dangers organizations face during unlearning.
Despite increasing interest in business model innovation (BMI), there is only limited scholarship that examines how business model (BM) innovators present and explain…
Despite increasing interest in business model innovation (BMI), there is only limited scholarship that examines how business model (BM) innovators present and explain their innovations to various stakeholders. As BMI often involves the creation of a new ecosystem, understanding how innovators can gain support of future ecosystem members is important. Based on a longitudinal case study of Salesforce, a pioneer in cloud computing, the authors show how the innovator’s skillful framing to different audiences fosters the emergence of an ecosystem around the new BM. The authors suggest that effective framing constitutes an important strategic process that enables BM innovators to shape new ecosystems due to the performative power of words.