The Organizational Dimension of Business Model Exploration: Evidence from the European Postal Industry

Abstract

National postal operators have traditionally been both government owned and operated, in a market characterized by slow and steady growth in mail and financial transactions. Postal organizations were known to be both conservative and bureaucratic, a model that has now become obsolete. Over the past decade postal operators across Europe and much of the developed world have seen acceleration in digital substitution, as well as a liberalization of the market, such that posts today face lower volumes, but higher competition. Postal operators have had to engage in a massive transformation of their organizations to meet these challenges and have simultaneously sought to diversify their businesses to seek new growth opportunities. This chapter explores examples of postal business model innovations from three European countries and seeks to understand the dynamic organizational tensions that have led to experimentation in organizational design in the case of these innovations. We find the key tensions to be linked to cognitive dominant logic, resource struggles, capability substitution and product substitution. We illustrate how business model innovation may be considered to be a two-staged process of exploration and subsequent exploitation, and suggest areas of organizational design that deserve further research.

Keywords: Business model innovation, exploration, exploitation, organization