While much legitimacy research is based on the organizational or industry level, we know very little about legitimacy attainment on the business model level. The implementation of innovative business models brings a rapid improvement to enterprises. However, when regulation policies lag behind the development of innovative business models, it will limit the expansion of fast growing enterprises. Solving the paradox in the process of business model development is a very important but unrevealed research agenda. To solve this paradox, we focus on how business models utilize their essence even names to conduct institutional bricolage, and thus gather beneficial elements to attain legitimacy. Being one of the typical business models in the sharing economy, the bike-sharing business model successfully transforms into a publicly acceptable category in less than a year. For this reason, we conduct a case study into institutional bricolage of the ofo bicycle and the Mobike, who are the representative companies in the bike-sharing business model. The results show that the business model can use its name to play the role of institutional bricolage in increasing and moderating legitimacy. Specifically, institutional bricolage based on the name can associate the business model with beneficial elements deriving from its name, which extracts the legitimacy from institutional environment for the innovative business model. Besides that, it improves public recognition of the business model’s social value. It also dissolves the disorder and chaos around the innovative business model through subordinating participants to the latent institutional arrangements beneath the business model’s name. Thus, the legitimacy of the business model is moderated as a result of institutional bricolage. This article builds a theoretical frame depicting how to use institutional bricolage to overcome obstacles to the innovative business model’s development. On the one hand, this theoretical frame reveals the possible path of increasing the legitimacy of the business model when the model is more in the name than the reality. On the other hand, it clarifies the mechanism for solving the dilemma in the innovative business model’s development. Owing to this theoretical frame, the results promote the practice of enterprises with the innovative business model in the sharing economy as an inspiration. The limitation of this article is that the results based solely on the bike-sharing business model, which needs to be verified and improved by studying other types of the innovative business model in the future. Further research can examine the interrelationship between public support and business models composed of different degrees of commercial components and " sharing” components in the sharing economy.
How does a Name Enable the Success of a Business Model? A Case Study of the Bike-Sharing Business Model and Institutional Bricolage
Foreign Economics & Management Vol. 40, Issue 10, pp. 139 - 152 (2018) DOI:10.16538/j.cnki.fem.2018.10.011
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Cite this article
Yao Xiaotao, Huang Qianzhi, Liu Linlin. How does a Name Enable the Success of a Business Model? A Case Study of the Bike-Sharing Business Model and Institutional Bricolage[J]. Foreign Economics & Management, 2018, 40(10): 139-152.