Sustainable innovations and business models in the automobile industry : a multiple case study of electric vehicles

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SUSTAINABLE INNOVATIONS AND BUSINESS

MODELS IN THE AUTOMOBILE INDUSTRY:

A MULTIPLE CASE STUDY OF ELECTRIC VEHICLES

D.L. Driever

MSc Business Administration

University of Amsterdam

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SUSTAINABLE INNOVATIONS AND BUSINESS

MODELS IN THE AUTOMOBILE INDUSTRY:

A MULTIPLE CASE STUDY OF ELECTRIC VEHICLES

University of Amsterdam – Amsterdam Business School MSc Business Administration – International Management Track

Master Thesis – Final Version

Student: D.L. Driever Student Number: 10900985

Date: 25-01-2016

First Supervisor: D.J.H.M. van den Buuse Second Supervisor: Dr. M.K. Westermann-Behaylo

Statement of Originality

This document is written by Student Desie Driever, who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

This research investigates the Corporate Social Responsibility (CSR) strategy, sustainable innovations and business models of Multi National Enterprises (MNEs) that wholesale Electric Vehicles (EVs) within the automobile industry. It is argued that the business model within the EV industry stabilizes over time, and strategic CSR and sustainable innovation have influence on the business model. The business models of EVs were investigated prior to this research by several papers, yet this research focuses on the global EV industry (Bohnsack et al., 2014; Kley et al., 2011; Pinkse et al., 2013; Zapata & Nieuwenhuis, 2010). A sample of five automobile MNEs were selected according to their sales performance in 2015 of one of their EV models. Following, a cross-case study design is used in which gathered documentary data is examined. Subsequent analysis has led to the conclusion that strategic CSR is an integrated part in the global organization. Furthermore, as all of the MNEs have made use of incremental and radical innovations it can also be stated that sustainable innovations cause the need for business model improvements. The findings of this research suggest that all MNEs within the sample have adopted an innovative business model. Subsequently, the findings in this research partly support a dominant business model, as some of the MNEs manufacture EVs designed for special preferences. Hereby it can be argued that the business models within the automobile industry are still evolving, as it is an emerging industry.

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Acknowledgements

I would like to thank my thesis supervisor, Daniël van den Buuse, for his guidance and support during the process of this thesis. Appreciated insights and suggestions were given during the meetings and by contacts trough mail. Valuable recommendations throughout the meetings, concerning the structure and content of the thesis, contributed to an enhanced result.

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Index of Tables and Figures

Tables

Table 01 - Business Model Conceptualization………..………. 12

Table 02 - Working Propositions Overview………..………. 26

Table 03 - Linking Coding Categories with Working Propositions …..…….………... 31

Table 04 - Ranking EV sales 2015…..………..……….32

Table 05 - Description of Selected Cases………..………. 33

Table 06 - Business Model Canvas Nissan Leaf………..……….. 38

Table 07 - Working Propositions Nissan Leaf………..………. 39

Table 08 - Business Model Canvas Tesla Model S………..………. 44

Table 09 - Working Propositions Tesla Model S………... 45

Table 10 - Business Model Canvas Mitsubishi Outlander PHEV……….. 50

Table 11 - Working Propositions Mitsubishi Outlander PHEV………. 51

Table 12 - Business Model Canvas BYD Qin……… 56

Table 13 - Working Propositions BYD Qin………... 57

Table 14 - Business Model Canvas BMW i3………... 62

Table 15 - Working Propositions BMW i3……….63

Table 16 - Cross-case Analysis of Working Propositions………...………... 65

Table 17 - Conclusion of Working Proposition regarding Strategic CSR….………..………...72

Table 18 - Conclusion of Working Propositions regarding Sustainable Innovations………... 73

Table 19 - Conclusion of Working Propositions regarding Innovative Business Models ………...…. 74

Table 20 - Conclusion of Working Propositions regarding Dominant Business Model………... 75

Figures

Figure 1 - Conceptual Model……….. 19

Figure 2 - Research Conceptualization………... 27

List of Abbreviates

BMC………....Business Model Canvas CSR………...Corporate Social Responsibility EV………..….Electric Vehicles

MNE……...Multi National Enterprise PS………Partially Supported RQ………..….Research Question S……….…….Supported

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1. Introduction

As reasoned by MacDuffie & Fujimoto (2010), “Making automobiles safe and reducing their environmental impact are important concerns while at the same time, their high cost raises consumer expectations for styling, power, handling, reliability, and amenities” (p. 23). In order to overcome the challenge of providing a more sustainable vehicle while not lacking on delivering style, power and reliability, sustainable innovations may provide the solution (Bohnsack et al., 2014; Hockerts & Wüstenhagen; 2010; Johnson & Suskewicz, 2009; Kley et al., 2011). Sustainable technologies can be used to use resources more effectively and additionally to reduce the gas emissions (Bohnsack et al., 2014). Due to global resource shortages and climate change the traditional auto mobility had to be reconsidered. A sustainable innovation as the EV can overcome the former mentioned difficulties; therefore a greater market penetration can be expected (Bohnsack et al., 2014; Kley et al., 2011).

However, as the supply chain of the EV is different compared to the supply chain of the traditional vehicle, different business models are in place. Business models took a central role in the case of EV in literature since the proposition is made that innovative offers increase customer benefits (Bohnsack et al., 2014; Hockerts & Wüstenhagen; 2010; Johnson & Suskewicz, 2009; Kley et al., 2011). Competitive advantages may be obtained through creating new business models premised on novel structures and approached or by re-engineering the architecture of the existing business (Budde Christensen et al., 2012). This could be in the sense that innovative technologies have the potential to meet key sustainability targets, and innovative business models may be a prerequisite to the success of these technologies, the innovative business models may hence the contribution to environmental targets (Budde Christensen et al., 2012). Furthermore, Boons & Lüdeke-Freund (2013) state in this context: “Sustainable business models with a focus on technological innovation are market devices that overcome internal and external barriers of marketing clean technologies; of significance is the business model’s ability to create a fit between technology characteristics and (new) commercialization approaches that both can succeed on given and new markets” (p. 14). However, in

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emerging industries business models are developing and the appropriate business model is hard to uncover.

Global demand for cars is increasing at a prompt pace as the consuming middle class is growing rapidly (Altenburg et al., 2012). The sale of new cars has increased with over 8% in Europe in the first quarter of 2015, compared to the first quarter of 2014 (CBS: Kwartaalmonitor Auto- en Motorbranche, 2015). However, due to rapid growth and the climate change, new challenges have arrived for the automobile industry. Recent negotiations of the climate top in Paris prove the importance of adopting a CSR strategy (Sustainable Innovation Forum, 2015). Gas emissions have to be reduced by half before 2050 compared to the levels of 1990, and at the same time consumers demand more features (Altenburg et al., 2012; IPCC, 2014). Global emissions of CO2 must be reduced by 50%-85% by 2050 in order to avoid the 2°C temperature rise, that will cause catastrophic climate change (IPCC, 2014). This reduction means that developed countries need to reduce their emissions with 80%-95% by 2050 in order to counter-balance with emerging markets (EU, 2011). One of the main contributors to CO2 is the transport sector, where private car use is the highest contributor, however reducing the CO2 levels in this sector may be challenging as the CO2 levels rise according to economic growth (EEA, 2010). This research focuses on the impact of the automobile sector and their improvements on the environment. As big changes are needed in the automobile industry, radical innovations may be necessary in order to respond to external pressures (EEA, 2010; van den Hoed, 2007). Conversely, the automobile industry tends to favor incremental and process-oriented innovations instead of radical innovations (van den Hoed, 2007). Also, the global financial crisis affected the automobile industry. In order to overcome many job losses, governments stimulated the industry by incentives with sustainability requirements (Bohnsack et al., 2014). These incentives created opportunities for automobile MNEs to develop and innovate EVs (Bohnsack et al., 2014).

Previous studies already touched upon the matter, yet this research focuses on the global market where other studies are focusing on specific countries (Budde Christensen et al., 2012; Kley et al., 2011). Recent studies focused on business models and EV in Denmark, China, or differences in business

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models between entrepreneurial and incumbent automobile MNEs (Bohnsack et al., 2014; Budde Christensen et al., 2012; Kley et al., 2011). As EVs are designed to take the global environment into consideration, it is important that EVs will be as widely spread as possible (Altenburg et al., 2012). Mainstream business model literature is recently focused on the successful introduction of innovations in new markets, yet the field of introducing sustainable innovations is still underexplored (Baden-Fuller & Morgan, 2010; Boons & Lüdeke-Freund, 2013). This research seeks to analyze what the choices are in case of the business model for automobile MNEs to widely wholesale their electric vehicles (EVs) and if the dominant business model in this industry is currently determined. The Research Question (RQ) of this research is corresponding with the research gap identified in the theoretical framework: “Is there a unified business model within the Electric Vehicle Industry and what is the contribution of sustainable innovations and strategic CSR to the business model?” In order answer the RQ five MNEs operating in the automobile industry that are wholesaling EVs will be investigated.

This study aims to provide new insights in the determination of finding a dominant business model in EV industry. Furthermore, this research provides insides in how business models and sustainable innovations are linked. The results could help managers to understand how to select the appropriate business model when operating in emerging industries. The remainder of this research is structured as follows. First, the concepts of CSR, sustainable innovations and business models will be discussed, and the way in which they interlink. Next, the concepts will be linked in the working propositions (WPs), where the theoretical framework is used as the foundation for the WPs. Also the EV market will be discussed and the right business models according to Bohnsack et al. (2014) will be expounded. The succeeding section provides the methodology for the research and the sample of the five MNEs that is determined for this research. Subsequent the multiple case study design is discussed and validity of this research is confirmed. This research concludes with the results, discussion, limitations of this research and recommendations for future research.

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2. Theoretical Foundation

Many researchers have investigated business models and business models for innovations (Bohnsack et al., 2014; Budde Christensen et al., 2012; Kley et al., 2011). To complement prior research, this study draws on these theories to research the strategic behavior of selecting business models in the automobile industry, and if dominant business models in this industry have yet appeared. In this chapter, different theories used will be discussed to form the WPs in the subsequent chapter. First, the concepts of CSR and strategic CSR are discussed, where the different views of researchers, the advantages and the potential competitive advantages are examined. In the second paragraph the focus is on sustainable innovations. Sustainable innovations are linked with CSR, as the sustainable innovations can be a part of the CSR strategy. Hence, it could be stated that sustainable innovations can be an integrative part of the CSR strategy. Business models are discussed in the last paragraph of the theoretical foundation. First, the concept of business models is discussed briefly and subsequent the business models used for sustainable innovations are discussed. Here, the article of Bohnsack et al. (2014) is a key paper, as business models for EVs have been examined in this paper thoroughly. The succeeding paragraph concludes the theoretical framework and discusses the theories of the chapter briefly.

2.1 Corporate Social Responsibility

The advantages of a CSR strategy for companies have been discussed in previous literature comprehensively, yet there is no consensus on the advantages or disadvantages of a CSR strategy (Sheehy, 2015, Banerjee, 2008, Aguinis & Glavas, 2012). This lack of consensus starts with the disagreement concerning the definition of CSR (Sheehy, 2015). However, half of the existing research on CSR is developed after 2005, demonstrating an extensive growth of interest in this field of research (Aguinis & Glavas, 2012; Banerjee, 2008; Sheehy, 2015; Porter & Kramer, 2006). This may be due to the fact that CSR is becoming a mainstream activity for MNEs. Sheehy (2015) attempts to provide a solution for the lack of a unified definition of CSR. Here, CSR is defined as “an international private business regulation that is political in nature combined with the fundamental definition that CSR’ responses to industrial harms and the provision of public good” (Sheehy, 2015, p. 635). In a similar

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vein, McWilliams & Siegel (2001) define CSR as “actions of firms that appear to further some social good, beyond the interests of the firm and that which is required by law” (p.117). Furthermore, definitions of CSR include: a contribution to sustainable economic development, going beyond legal requirements, abating pollution and supporting products with social attributes (Banerjee, 2008; McWilliams & Siegel, 2001). To avoid confusion in different definitions available, in this research the definition of CSR of Aguinis (2011) is respected: “Context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” (p. 855). This definition is respected as it integrates organizational policies as well as the triple bottom line. Although the definition considers the organizational policies and actions, this research does acknowledge the fact that such policies and actions are influenced by all actors at all levels of analysis (Aguinis & Glavas, 2012).

As there is no consensus in the definition of CSR in recent literature, incongruities consists regarding the adoption of a CSR strategy. In general, proponents of adopting a CSR strategy have used one or multiple of the following reasons: moral obligation, sustainability, license to operate, and reputation (Porter & Kramer, 2006). Porter & Kramer (2006) reason that CSR can be a source of opportunity, innovation or advantage. Friedman (1970) on the other hand argues that the business of business is increasing its profits, and contributing in CSR activities is equal to theft of its shareholders. This holds for all businesses unless CSR activities generate goodwill and it retains employees. This is considered to be a politically conservative view, which although is espoused as economic, is neither political as it is economic (Krugman, 2007). The political view defines and uses CSR as a corporate and economic policy, in order to enhance particular preferences (Sheehy, 2015). In addition, Banerjee (2008) also argues that a competitive advantage cannot be achieved through CSR, however this is as it is easily imitable. Inversely, Banerjee’s (2008) arguments are moderately in line with Porter & Kramer, stating that CSR is a necessity for MNEs and that there is no evidence CSR can harm the wealth generating capabilities of a firm.

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In order to find some consensus in CSR literature, Aguinis & Glavas (2012) reviewed 588 journals and 102 books, and identified the main predictors, mediators, moderators and outcomes of CSR on institutional, organizational and individual level of analysis. For this research the outcomes on the organizational level are most applicable. They found that in 59% of the literature a positive outcome of CSR was measured on the organizational level. Here, the positive outcomes were mainly due to reputation, attractiveness to investors, reduced risk, efficiency and product quality (Aguinis & Glavas, 2012). In line with this research it could be argued that adopting a CSR strategy for MNEs is beneficial. However, CSR is not a strategy that should just be advantageous, it should also integrate social and environmental concerns in the core business of the MNE, which is considered to be strategic CSR.

Strategic CSR should be an overarching strategy that globally integrates the highest corporate level, instead of tactically responding to current environmental issues (Maio, 2003). This creates CSR being an integrated part in the global organization and identity, which drives its actions and image (Polonsky & Jevons, 2009). Gelbmann (2010) adds that strategic CSR should fulfill the general requirements of a strategic character as management responsibility and legal compliance. As CSR is part of the strategy of the MNE, it embraces issues that reshape the organizational activities and makes CSR a core value (Polonsky & Jevons, 2009). This means that MNEs adopt strategic CSR if actions that are considered good corporate citizenship shape the inputs and processes of the MNE (Bruyaka et al., 2013). Some MNEs are ‘born social’ and CSR activities have been integrated in the strategy form inception, which makes sustainability an accepted element within the organization (Polonsky & Jevons, 2009). MNEs are increasingly treating CSR as a strategic tool to maximize its corporate value (Polonsky & Jevons, 2009).

CSR as a strategic tool is currently mainly working for corporations and not for society (Banerjee, 2008). As stated formerly, there is a lack of consensus regarding the definition of CSR. Consequently, the requirements for MNEs accomplishing CSR trademarks are vague, which makes it easier for MNEs to fulfill these requirements, while not acting in a sustainable manner (Banerjee, 2008).

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Furthermore, in the existing literature there is no unified motivation discovered why companies may want to adopt a CSR strategy. Waddock (2008) states that MNEs might adopt a CSR strategy due to external pressures instead of the potential outcomes the CSR strategy may generate. This is due to the fact that there is a rapid evolution of new infrastructure pressuring companies in adopting a CSR strategy (Waddock, 2008). These pressure may change the way companies act in order to sustain their legitimacy, and be accepted as social actors. Half of today’s assets of companies consist intangible assets such as goodwill and reputation. These intangible assets rely on the quality of stakeholder relationships therefore adopting a CSR strategy proves to be critical (Waddock, 2008).

Adopting a CSR strategy could lead to positive outcomes, however if this strategy is adopted mainly for reputational reasons the outcomes may not be a significant improvement. Kourula & Halme (2008) elaborate on the purpose of MNEs going beyond the mandatory CSR actions. They distinguish three main typologies, namely motivation-based, expected responsibility-based and stage typology. The motivation-based typology is based on the motivation to engage in CSR by strategic intent or enforced egoism. The expected responsibility-based typology is built on normative responsibilities like legal, ethical and economic responsibilities. And the last typology, the stage typology, is based on different levels of CSR development of MNEs (Kourula & Halme, 2008). They also mention the difference of CSR integration and innovation, where integrating CSR means the strategy stays close to the existing core business. With CSR innovation, the core business will be enlarged or new businesses will be developed. The latter concept is concerned with CSR as a source of business innovations (Kourula & Halme, 2008). Furthermore, it is stated that true sustainability requires innovation in any kind (Gobble, 2012). These sustainable innovations could fulfill demand of current or future markets (Zahra & Covin, 1995). Therefore, sustainable innovations can be part of strategic CSR adopted by MNEs, and the concepts of CSR and sustainable innovations are entwined. In order to analyze the competitive contribution of sustainable innovations, the next paragraph will elaborate on the concept.

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2.2 Sustainable Innovations

As mentioned in the previous paragraph, sustainable innovations and CSR are two concepts that are interlinked. As Gobble (2012) stated, true sustainability requires innovation in any kind, fundamental, disruptive or system wide. Sustainability can be defined as meeting the social, economic and environmental needs of this generation, but without compromising the potential for future outcome (Gobble, 2012; Kahvul & Bruton, 2013; Porter & Kramer, 2006). The focus and importance of sustainability is recently confirmed, as over 90 countries have latterly made voluntary pledges and commitments for reducing their emissions (Sustainable Innovation Forum, 2015). Next to that, non-state climate initiatives have advanced enormously where many of the more successful initiatives are combined government and non-government actors, these initiatives often convey emission reduction and sustainable growth (Sustainable Innovation Forum, 2015). Innovation based on products is concerned with the ability of a MNE to modify existing products, or create new products that fulfill the demand of current or future markets (Zahra & Covin, 1995). Together the concepts of sustainability and innovation would imply the ability of MNEs to modify existing products, or create new products that fulfill the demand of current and future markets, without compromising social, economic and environmental needs of the current or future generations.

Sustainable innovations are studied thoroughly in past research, and definitions are substantial (Boons & Lüdeke-Freund, 2013; Carillo-Hermosilla et al., 2010; Gobble, 2012; Kahvul & Bruton, 2013). In general the definitions of sustainable innovations are interlinked with reduction of harmfulness in the future, and reduction of negative impacts on resource usage (Carillo-Hermosilla et al., 2010). Sustainable innovations are often associated with the term eco-innovation, which is defined as “the reduction of the environmental impact caused by consumption and production activities, whether the main motivation for their development or deployment is environmental or not” (Carillo-Hermosilla et al., 2010, p. 1073). Due to environmental innovations that internalize external costs, where a compensating benefit is not granted to the innovator, innovations regarding sustainability are regularly associated with extensive costs (Sartorius, 2006). However, Hull & Rothenberg (2008) found that the

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corporate financial performance is enhanced by the corporate social performance, and this effect is moderated by innovation. Innovation is essential to the survival of MNEs and is generally conceded as a positive influence on firm performance when environmental factors are taken into account (Hamel & Prahalad, 1994; Schumpeter, 1934; Zahra & Covin, 1995). According to Rogers (1983), there are five general attributes of innovation, namely relative advantage, compatibility, complexity, observability and trialability. Tornatzky & Klein (1982) also researched the attributes of innovations, and they came up with the same five attributes plus an additional five, consisting of cost, communicability, divisibility, profitability and social approval.

Additionally, innovations can be divided into radical or incremental innovations. Radical or disruptive innovations change the established trajectory of the product, market or industry of performance improvement (Richter, 2013). Radical innovations transform the field and can improve the position of the firm, but this is unpredictable and uncertain and the payback period can be relatively long (Xu & Yan, 2014). However, intermittently radical innovations are needed to improve the product to meet customer needs. The pace of technological progress of disruptive innovations is greater than most consumers find necessary, and usually only tend to be attractive to the more forward-looking customers (Christensen et al., 2000; Pinkse et al., 2013). Conversely, by providing technological progress, upcoming MNEs can benefit and eventually offer better products cheaper, simpler and more convenient to the consumer (Christensen et al., 2000). Sartorius (2006) states that radical innovations can be important to achieve improved sustainability. However, as disruptive technologies change the field, different business models may be in order (Johnson & Suskewicz, 2009). In the case of incremental innovations this is not necessary considering the technological innovation will not significantly impact the value proposition (Richter, 2013). Incremental or sustaining innovations comprise improvements of existing technologies with lower uncertainty, here the potential is lower but the payback is quicker (Richter, 2013; Xu & Yan, 2014). Most of the innovations are considered to be incremental innovations (Richter, 2013).

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Sustainable innovations hold the promise to reduce emissions and make efficient use of the available resources, however they still face problems penetrating mainstream markets (Budde Christensen et al., 2012; Hockerts & Wüstenhagen, 2010). Also, sustainable technologies often do not fit existing methods as production, management expertise and customer preferences (Johnson & Suskewicz, 2009). Therefore, in order to be viable, changes in the business model might be in order to fully benefit from the sustainable innovations. This would however imply a fundamental reconsideration of the value proposition, value network and the revenue/cost model (Budde Christensen et al., 2012; Richter, 2013). Therefore, in the next paragraph the concept of business models will expounded and the different components are explained.

2.3 Business Models

As mentioned in the prior paragraph, sustainable innovations are in need of changes within the business model in order to be commercially viable. As Chesbrough (2010) states, companies commercialize new ideas and technologies through business models. Equivalently, the paper adds that mediocre technologies within great business models may be more valuable than great technologies using mediocre business models (Chesbrough, 2010). In recent years business models received great attention, which may be due to complex and continuously changing business environments (Zott et al., 2011). Business models could be described as practical models that describe the generic levels of the organization of a firm, and consequently how the firm is profitable by creating and distributing value (Baden-Fuller & Morgan, 2010). Osterwalder & Pigneur (2009) define business models as “the rationale of how an organization creates, delivers and captures values” (p.14). Baden-Fuller & Morgan (2010) and Teece (2010) coincide with this definition and Teece (2010) states that the business model “defines how the enterprise creates and delivers value to customers, and then converts payments received into profits” (p. 173). Teece (2010) complements that MNEs should be ready for replication of business models, nonetheless MNEs should be open for innovation and variation of their business model.

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Boons & Lüdeke-Freund (2013) state that a business model is a plan in which a venture specifies how it can become profitable, and they identify the following elements of a generic business model concept: value propositions, supply chain, customer interface and a financial model. Richter (2013) identifies four main components of the business model that are shown in Table 1. The business model conceptualization is derived from Osterwalder & Pigneur (2009), and this conceptualization is extensively tested in practice and in case of renewable energies it has been successfully applied (Richter, 2013). The business model conceptualization consists of the value proposition, customer interface, infrastructure and the revenue model. The value proposition comprises the value that is offered to the customer in the sense of the product or service, where renewable and green energy can be a source of additional value to the customer (Osterwalder & Pigneur, 2009; Richter, 2013). The customer interface portrays the interaction between a company and its customers; this consists of the customer relationship, customer segments and distribution channels (Richter, 2013). The organization of the value creation is described in the infrastructure of the business model and consists of assets, knowhow and partnerships (Richter, 2013). Conclusively, the last component of the business model conceptualization is the revenue model. The revenue model is key to the MNE, and represents the relationship between the costs and revenues (Osterwalder & Pigneur, 2009).

Table 1 - Business Model Conceptualization Business model pillar Description

Value proposition “Is the bundle of products and services that creates value for the customer and allows the company to earn revenues”.

Customer interface “Comprises the overall interaction with the customer. It consists of customer relationship, customer segments and distribution channels”.

Infrastructure “Describes the architecture of the company’s value creation. It includes assets, knowhow and partnerships”.

Revenue model “Represents the relationship between costs to produce the value proposition and the revenues that are generated by offering the value proposition to the customers”.

Source: Richter, 2013, p. 1227

Another model that conceptualizes the business model is the business model canvas (BMC). The BMC consists of nine building blocks that describe the parts of the business model conceptualization shown

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in Table 1. The BMC is a “shared language for describing, visualizing, assessing and changing business models” (Osterwalder et al., 2010, p. 12). The blocks include customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities and key partners. Customer segments entails the people and organizations for which the products and services are provided, and for whom it creates value. The value proposition describes the collection of products that creates the value for the customer. The channels are the route in which the MNE intents to create awareness for its products and services. The customer relationships are the type of relationships that are established by the MNE and its customers. The revenue streams present the way through which the MNE generates and creates value from its customers. The key resources are the resources that are necessary in order to create the value to its customers. The key activities represent the activities that have to be performed in order to create value. The key partners present the external relationships that are essential to the success of the MNE and to optimize the business operations. The last block is the cost structure, that represents the fixed and variable costs while operating business. The blocks are arranged in such a way to help present the business activities in an organized, aligned and illustrated way (Shaland et al., 2015). It provides a more holistic and practical application for visualizing the different activities conducted by MNEs, and has been proven a helpful tool in the business environment (Osterwalder et al., 2010; Rytkönen & Nenonen, 2013).

MNEs can gain competitive advantages through business models, however this is not the same as a business strategy (Teece, 2010). This strategic potential could lie in the development of innovative business models, and identifying new sources of value creation, where its uniqueness lies with value creation instead of value appropriation (Sosna et al., 2010; Zott et al., 2011). Business model innovation is a process of trial and error in combination with ex-post adaptation (Chesbrough, 2010; Sosna et al., 2010). Especially in case of disruptive technologies the need for business model innovation might be elevated (Richter, 2013). This is due to the fact that MNEs might be incapable of commercializing the value of disruptive technologies through an already adopted business model. Therefore innovation of the business model is in order, and in this sense the business model can be a source of competitive advantage by means of business model innovation (Boons & Lüdeke-Freund

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2013; Chesbrough, 2010). Therefore managers should always seek new ways to adapt and innovate their existing business models in order to stay competitive.

Turbulent technological environments are ideal for new business models to emerge, as new ways of conducting business become apparent (Budde Christensen et al., 2012). But over time convergence might take place and a dominant business model might be ‘shared’ by multiple competitors (Teece, 2010). First, MNEs start with a business model, and in response to external triggers the business model will be altered until the business model that best suits the objectives of the MNE is found (Sosna et al., 2010). For most emerging industries they eventually tend to stability in business model selection, as the wider market becomes more settled (Budde Christensen et al., 2012). Therefore, a business model evolves over time through internal consistency and adaptation to its environment (Bohnsack et al., 2014; Teece, 2010). Conversely, it is hard to state what the appropriate or right business model is (Chesbrough, 2010). And in the case of emerging industries the generic business model that will become the standard is yet to find (Bohnsack et al., 2014; Teece, 2010).

Bohnsack et al. (2014) recently developed four business model archetypes by distinguishing two dimensions of the value proposition. Here, the differences in value propositions are made between the luxury or economy segment, that attempts to capture the target customer and the corporate identity. Furthermore, the distinction is made between the main purpose of the car, if this is with a specific-purpose or multi-specific-purpose, the differences between sports cars and family cars. Together, the four following business model archetypes are developed: luxury specific-purpose business model, luxury purpose business model, economy specific-purpose business model and the economy multi-purpose business model. The first archetype provides specific-multi-purpose only cars in the luxury segment for consumers. The specific-purpose could entail leisure or urban commuting where driving experience and image are dominant. The second business model archetype has multiple-purposes instead of a single purpose as the first archetype. Nonetheless, it is focused on the luxury segment. It targets the high-performance market and does share many features with the previous business model archetype; such as low price sensitivity and recharging services are limited. This archetype tends to be

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a sedan that can transfer more than two people for multiple rides. Therefore, larger batteries are needed to complement the extra power needed, which adds complexity to the value network and revenue/cost model. The third business model archetype is focused on the economy segment, with a specific-purpose. Here, the EVs are targeted at urban commuters and commercial customers where customers are price-sensitive. The additional investment costs, limited range and lengthy recharging time are barriers to overcome in this segment, however the positive sustainability impact and reduced fuel costs are of high importance. In this business model archetype MNEs focus on components that could be provided for lower costs in order to meet customer needs. Economy specific-purpose EVs are also suitable for commercial customers. The final business model archetype is again focused on the economy segment, yet is a multi-purpose business model. Here the greatest challenges exist, as there is demand for large-sized cars except initial investment costs need to stay low. In order to overcome these challenges, a wide range of incremental adjustments has been adopted by MNEs using this business model. This is done by changing the revenue/cost model by leasing the EV, by selling the EV apart from the battery, or by using government incentives to lower the price for consumers. Initial sources of income are found in the form of selling used batteries and licensing technology to other MNEs.

The former three paragraphs described strategic CSR, sustainable innovations and business models. As stated before, true sustainability is only sustainability when it adopts innovations in any kind (Gobble, 2012). Furthermore, sustainable innovations are still facing problems penetrating mainstream markets and are therefore in need of changes in the business model (Budde Christensen et al., 2012). The next paragraph will elaborate on the EV context on which this research is focusing.

2.4 Electric Vehicles

The focus of this research lies with EVs, which are a sustainable innovation in the automobile industry. EVs differ from traditional automobile vehicles on several key dimensions, like higher initial investments and limited driving range (Budde Christensen et al., 2012; Bohnsack et al., 2014; Kley et al., 2011). The core difference is the propulsion technology, the electric motor versus an internal

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combustion engine, which provides an impact in driving experience and the functioning of the car (Bohnsack et al., 2014). Traditional mobility services had to be reconsidered as global resources face shortages, and as a consequence the EV is introduced (Bohnsack et al., 2014; Kley et al., 2011). However, this is not the first time the EV is being introduced. The first time the EV appeared was in 1834 and popularity increased over time, however traditional mobility became less expensive and its popularity diminished (Kley et al., 2011). Due to the oil crisis in 1970 the interest in EV increased, nevertheless as soon as the oil crisis was resolved the interest in EV waned (Kley et al., 2011). Presently the interest in EVs is in return due to global resource shortages and climate change (Hockerts & Wüstenhagen, 2010; Kley et al., 2011).

EVs present advantages over traditional mobility as efficiency and environmental advantages (Gómez San Román et al., 2011). But they also pose new challenges as technical, economic, policy and regulatory challenges; nevertheless the future of the EV seems promising (Gómez San Román et al., 2011). Due to considerable progress being made in battery technologies, some of the technical obstacles could be solved more easily (Kley et al., 2011). However, batteries still have to be improved as batteries generate fairly little energy per kg of battery, which results in batteries of 200 kg in order to achieve acceptable driving ranges (Altenburg et al., 2012). Furthermore, next to high prices of the battery, recharging a typical 16 kWh battery takes four to five hours with the normal single phase (Altenburg et al., 2012). Also the infrastructure issue exists, due to the need of a wide coverage of recharging stations as workspace charging stations and public charging stations, which will result in challenges in urban planning in densely populated areas (Altenburg et al., 2012; Bohnsack et al., 2014).

A transition to large-scale deployment of EVs requires radical and systematic changes, in the sense of going beyond incremental improvements of the design and introducing new core technologies (Altenburg et al., 2012). As mentioned earlier, radical innovation transform the field and can improve the position of the firm and require newness, change and shits in technological paradigm (Van den Hoed, 2007; Xu & Yan, 2014). According to van den Hoed (2007) established, or incumbent firms are

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generally too late and are having difficulties with radical innovations, while entrepreneurial firms adopt disruptive innovations more easily. This research also identifies five situations for the automobile industry in which MNEs should adopt radical innovations, namely: new entries, external shocks of crisis, performance of the new technology, market changes and industry competition (van den Hoed, 2007). However, incremental adjustments also may be in order to improve the overall quality of the EV, as tires with low rolling resistance (Pinkse et al., 2013). The type of innovation depends on the difference to prior manufacturing and product usage, where either radical or incremental innovations are needed (Pinkse et al., 2013). As alternative fuel can be used with minimal modifications compared to the traditional automobile it is considered an incremental innovation (Zapata & Nieuwenhuis, 2010). Alternative powertrains, as EVs, on the other hand make use of different systems regarding the internal combustion engine, which results in new investments for different manufacturing systems, which makes the EV a radical innovation (Zapata & Nieuwenhuis, 2010). However, after a radical innovation, several incremental adjustments can be expected in order for the product to advance and compete with the dominant design, and eventually even replace the dominant design (Pinkse et al., 2013).

As the EV is interlinked with innovation, either radical or incremental, differences in the business model to successfully commercialize the technological innovations can be expected (Pinkse et al., 2013; Zapata & Nieuwenhuis, 2010). Furthermore, in order to overcome the technical, economical, policy and regulatory challenges new sources of value trough a viable business model may be examined (Altenburg et al., 2012; Budde Christensen et al., 2012; Bohnsack et al., 2014; Kley et al., 2011).

2.5 Conclusion

This section explained the concepts of CSR, sustainable innovations and business models, and the way they interlink. The definition of CSR is still without a consensus within the current literature. Furthermore, the advantages or disadvantages of adopting strategic CSR are also without any agreement. In the article of Aguinis & Glavas (2012) it is found that CSR has a positive influence on

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the organizational level. This is mainly due to reputation, attractiveness to investors, reduced risk, efficiency and product quality (Aguinis & Glavas, 2012). Additionally, it is stated that strategic CSR is an overarching strategy that globally integrates the corporate level, which embraces issues that reshape the organizational activities (Maio, 2003; Polonsky & Jevons, 2009). Furthermore, it is argued that CSR is only truly CSR when exploiting innovations (Gobble, 2012). Therefore, the concept of sustainable innovations is explained in the second paragraph. Sustainable innovations are innovations that fulfill the demand of current and future markets, without compromising social, economic and environmental needs of the current or future generations (Zahra & Covin, 1995). Innovations can be divided into radical and incremental innovations. Radical innovations change the established trajectory of the product, market or industry and transform the field (Richter, 2013; Xu & Yan, 2014). Incremental innovations comprise improvement of existing technologies (Richter, 2013). Sustainable innovations hold the promise to reduce emissions, however they still face problems penetrating mainstream markets (Budde Christensen et al., 2012; Hockerts & Wüstenhagen, 2010). Therefore, in order to fully benefit from sustainable innovations, the appropriate business models must be selected. A business model is a plan in which a venture specifies how it can become profitable (Boons & Lüdeke-Freund, 2013). New ideas and technologies are commercialized though business models, and a great business model may be even more important than a great technology (Chesbrough, 2010). The business model conceptualization and the BMC are models that conceptualize the different components of the business model. However, the great business model might not always be as apparent, especially in emerging industries. In this research the dominant business model within the EV industry will be investigated, and the influence of sustainable innovations and strategic CSR on this business model will be examined. In the next chapter, the concepts discussed in this chapter are summarized and will lead to WPs.

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3. Conceptual model and working propositions

Building on strategic CSR and sustainable innovations that make use of innovative business models, this research presents four WPs on the choice of business models in the automobile sector. These WPs are constructed in order to provide the tools to answer the following research question: “Is there a unified business model within the Electric Vehicle Industry and what is the contribution of sustainable innovations and strategic CSR to the business model?” The first section of this chapter combines CSR strategy and sustainable innovations. The following section provides insides concerning innovative business models and the dominant business model in the EV industry. The conceptual model illustrated in Figure 1 shows the relationships between the theories used, the WPs and the research question.

Source: Author

Business Model Evolution of EVs in the Automobile Industry WP1: Strategic CSR

WP2: Radical and Incremental Innovations

WP3: Innovative Business Models

WP4: The Dominant Business Model Strategic CSR Sustainable

Innovations

Business Models Figure 1- Conceptual Model

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3.1 Strategic CSR and Sustainable Innovations

Porter & Kramer (2006) reason that CSR can be a source of opportunity, innovation or advantage. However, CSR is not a strategy that should just be advantageous, it should also integrate social and environmental concerns. Strategic CSR should be an overarching strategy that globally integrates the highest corporate level instead of tactically responding to current environmental issues (Maio, 2003). This creates CSR being an integrated part in the global organization and identity, that drives its actions and image (Polonsky & Jevons, 2009). Gelbmann (2010) adds that strategic CSR should fulfill the general requirements of a strategic character, as management responsibility and legal compliance. As CSR is part of the strategy of the MNE it embraces issues that reshape the organizational activities and makes CSR a core value (Polonsky & Jevons, 2009). Since strategic CSR is expected to reshape organizational activities it can be stated that business models have to be adapted as well. Therefore the following working proposition is established to research the impact of strategic CSR on business model evolution.

As previously stated, innovations can be divided into radical or incremental innovations. Radical or disruptive innovations change the established trajectory of the product, market or industry of performance improvement (Richter, 2013). Radical innovations transform the field and can improve the position of the firm, but this is unpredictable and uncertain and the payback period can be relatively long (Xu & Yan, 2014). However, intermittently radical innovations are needed to improve the product to meet customer needs and by providing technological progress, upcoming MNEs can benefit and eventually offer better products cheaper, simpler and more convenient to the consumer (Christensen et al., 2000). Sartorius (2006) states that radical innovations can be important to achieve improved sustainability. However, as disruptive technologies change the field different business models may be in order (Johnson & Suskewicz, 2009). Zapata & Nieuwenhuis (2010) state that battery electric fuelled automobiles are radical innovations. They argue so since alternative power WP1: MNEs that wholesale EVs and adopt a strategic CSR are expected to be related to the evolutions of business models

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traits replace the existing internal combustion and so it creates greater costs of innovation and new investment costs (Zapata & Nieuwenhuis, 2010). As radical innovations are interlinked with the adoption of new business models, it can be argued that MNEs operating in the automobile industry that wholesale EVs, that are considered radical innovations, will adopt and evolve new business models. Therefore, the following WPs will determine whether radical innovations will influence the adoption and evolution of the business model of the MNE.

In the case of incremental innovations, new business models are not particularly necessary considering the technological innovation will not significantly impact the value proposition (Richter, 2013). Incremental or sustaining innovations comprise improvements of existing technologies with lower uncertainty, here the potential is lower but the payback is quicker (Richter, 2013; Xu & Yan, 2014). Most of the innovations are considered to be incremental innovations (Richter, 2013). However, as after the initial radical innovation of the EV, incremental adjustments can be expected to advance the EV (Pinkse et al., 2013). As disruptive technologies are expected to deliver value beyond consumer needs, and upcoming MNEs could benefit from the technological progress by providing better products cheaper, simpler and more convenient to the consumer (Christensen et al., 2000). Therefore, it could be expected that incremental innovations with regard to the EV do not influence the evolution or adoption of business models. The following working proposition will establish the influence of incremental innovations on the evolution of the business model.

WP2a: Radical innovations adopted by MNEs that wholesale EVs are related to the evolution of business models

WP2b: Incremental innovations adopted by MNEs that wholesale EVs are not related to the evolution of business models

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3.2 Business Models for Sustainable Innovations

As argued by Boons & Lüdeke-Freund (2013): “Sustainable business models with a focus on technological innovation are market devices that overcome internal and external barriers of marketing clean technologies; of significance is the business model’s ability to create a fit between technology characteristics and (new) commercialization approaches that both can succeed on given and new markets” (p. 14). In order to find this fit in the business model’s ability between technology characteristics and commercialization we first determine whether MNEs wholesaling EVs make use of innovative business models. Strategic potential could lie in the development of innovative business models, and identifying new sources of value creation where its uniqueness lies with value creation instead of value appropriation (Sosna et al., 2010; Zott et al., 2011). Business model innovation is a process of trial and error in combination with ex-post adaptation (Chesbrough, 2010; Sosna et al., 2010). Especially in case of disruptive technologies the need for business model innovation might be elevated (Richter, 2013). This is due to the fact that MNEs might be incapable of commercializing the value through an existing business model of disruptive technologies. Therefore, innovation of the business model is in order, and in this sense the business model can be a source of competitive advantage by means of business model innovation (Boons & Lüdeke-Freund, 2013; Chesbrough, 2010). Consequently, the following working proposition is established to determine the adoption of innovative business models in combination with the EV as sustainable innovation.

As Budde Christensen et al. (2012) put it, “it might be that innovative technologies that have the potential to meet key sustainability targets are not easily introduced by existing business models within a sector, and that only by changes to the business model would such technologies become commercially viable” (p. 499). Additionally, sustainable technologies challenge prevailing business practices and need new ways to create economic value (Bohnsack et al., 2014). Consequently, it can

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be argued that innovative technologies have a need for innovative business models. It is argued that MNEs with an innovative character are more willing a to adopt new business models or make changes to the existing business model. Therefore the following proposition will be investigated.

As the climate demands more sustainable solutions for the automobile industry to maintain sustainable in the future and to lower gas emissions, a greater market penetration of electric vehicles can be expected. However, as electric vehicles demands other players in the supply chain it can be expected that different business models could develop, and it is unclear which business models are most effective (Kley et al., 2011). Bohnsack et al. (2014) recently developed four business model archetypes by distinguishing two dimensions of the value proposition. In this research the business model archetypes are used and examined if a dominant business model has been discovered. However, as the cases used in this research are between 2006-2010 it could be argued that meanwhile a dominant business model occurred. Therefore the business models of Bohnsack et al. (2014) will be used in order to test if a dominant business model is yet transparent in the EV industry.

In the paper of Bohnsack et al. (2014), the differences in value propositions are made between the luxury and economy segment and the multi- or specific-purpose. This difference tries to attempt to capture the target customer and the corporate identity. Furthermore, the distinction is made between the main purpose of the car, if this is with a specific-purpose or multi-purpose, the differences between sports cars and family cars. Together, the four following business model archetypes are developed: luxury purpose business model, luxury multi-purpose business model, economy specific-purpose business model and economy multi-specific-purpose business model. The following working propositions are based on the establishment of the dominant business model within the EV industry. As (Christensen et al., 2000; Pinkse et al., 2013) argued, at first the more forward-looking consumers WP3b: MNEs that wholesale EVs with an innovative character positively influence the adoption of innovative business models

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are interested in the radical innovation, and technological innovation is beyond customers’ needs, which would imply a specific purpose. After the initial phase, the innovation will reach the greater public and therefore it is expected that the multi-purpose business models are dominant within the EV industry. The following WP that consists of two parts will establish whether the multi-purpose business model is indeed the dominant business model.

The first archetype provides specific-purpose cars in the luxury segment for consumers. Here, driving experience and image are dominant. The specific-purpose could entail leisure or urban commuting. As this business model contains a specific-purpose, it is not expected that this business model is the dominant business model. The second business model archetype with a specific-purpose is focused on the economy segment. Here, the EVs are targeted at urban commuters and commercial customers where customers are price-sensitive. The additional investment costs, limited range and lengthy recharging time are barriers to overcome in this segment, however the positive sustainability impact and reduced fuel costs are of high importance. In this business model archetype, MNEs focus on components that could be provided to lower costs, in order to meet customer needs. Economy specific-purpose EVs are also suitable for commercial customers. However, as this business model has a specific purpose, it is not expected that this is the dominant business model. The former two business model archetypes are not expected to be the dominant business model and this is presented in WP4a.

The multi-purpose business model archetypes have multiple-purposes instead of a single purpose. The first business model archetype is focused on the luxury segment. It targets the high-performance market and does share many features with the previous luxury segment business model archetype such, as low price sensitivity and recharging services are limited. This archetype tends to be a sedan WP4a: The luxury or economy specific-purpose business model is not the dominant business model in the EV industry

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that can transfer more than two people for multiple rides. Therefore, larger batteries are required to complement the extra power needed, which adds complexity to the value network and revenue/cost model. As this business model is a multi-purpose business model, it can be expected that this is the dominant business model within the EV industry. The final business model archetype is again focused on the economy segment, yet this is a multi-purpose business model. Here the greatest challenges exist, as there is demand for large-sized cars except initial investment costs need to stay low. In order to overcome these challenges a wide range of incremental adjustments have been adopted by MNEs using this business model. This is done by changing the revenue/cost model by leasing the EV, by selling the EV apart from the battery, or by using government incentives to lower the price for consumers. Initial sources of income are found in the form of selling used batteries and licensing technology to other MNEs. As the former business model archetypes have multi-purposes it can be expected that this is the dominant business model, and this prediction is disclosed in WP 4b.

3.3 Conclusion

In order to answer the research question of the research: “Is there a unified business model within the Electric Vehicle Industry and what is the contribution of sustainable innovations and strategic CSR to the business model?” the prior WPs were formed. In table 2 the WPs are summarized and categorized according the established themes.

WP4b: The luxury or economy multi-purpose business model is the dominant business model in the EV industry

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Table 2 - Working Propositions Overview

Theme 1: CSR and sustainable innovations and their influence on business models

WP1 MNEs that wholesale EVs and adopt a CSR strategy are expected to be related to the evolutions of business models

WP2a Radical innovations adopted by MNEs that wholesale EVs are related to the evolution of business models

WP2b Incremental innovations adopted by MNEs that wholesale EVs are not related to the evolution of business models

Theme 2: Business models of MNEs that wholesale EVs and the dominant business model WP3a MNEs that wholesale EVs are expected to have innovative business models

WP3b MNEs that wholesale EVs with an innovative character positively influence the adoption of innovative business models

WP4a The luxury or economy specific-purpose business model is not the dominant business model in the EV industry

WP4b The luxury or economy multi-purpose business model is the dominant business model in the EV industry

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4. Research Design

In this chapter the research design incorporated in this research is discussed. First the research conceptualization is discussed, followed by the multiple-case research design. Then the generalizability, reliability and validity are established, followed by a discussion regarding data selection and analyzing and the case selection. As research on sustainable innovations in combination with business models is yet underexplored and relatively young, a qualitative research design is most appropriate (Eisenhardt, 1989). Furthermore, qualitative research is more suitable when researching motivations, perceptions or beliefs of certain phenomenon (Eisenhardt, 1989). Therefore, a qualitative method is chosen for this research to gain deeper insights on business models for sustainable innovations, and a multiple-case study is applied to investigate the business model choice of five MNEs. In Figure 2 the research design of this research is illustrated.

Source: Author

Figure 2 - Research Conceptualization

Qualitative Research Design

Interpretivist Epistemology

Deductive Research Approach

Secondary Data Multiple-Case Study

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The overall framework of the thesis will be a qualitative multiple case study at firm level on the business models of automobile MNEs, focused on the ones that wholesale EVs. As this research is investigating the ‘how’ and ‘why’ a qualitative study is appropriate (Eisenhardt, 1989). The research will be explanatory, and the unit of analysis is holistic. This thesis will implement an interpretivist perspective where the how and why are questioned in the research. For this research this is helpful as the interpretivist perspective is measurable and also causal relations can be identified (Saunders et al., 2012). Interpretivism and positivism are the two main philosophical research paradigms acknowledged that are part of the epistemological assumptions identified by Gephart (1999). Epistemological assumptions are linked with knowledge of reality; it is concerned with what constitutes knowledge and how to interpret knowledge (Krijnen & Kee, 2007). The positivism perspective focuses on the factual part of reality, and logical reasoning can identify this. Interpretivists have a contradictory view, as they believe reality is multiple and relative (Lincoln & Guba, 1985). Usually the goal of interpretivist research is to understand the perspective of the participant of the setting for social action (Locke et al., 2004). In order to collect the appropriate data for the interpretivist view of research, interviews and systematic observations are commonly used (Locke et al., 2004). Therefore, this view is in line with this research, and the interpretivist epistemology will be used.

4.1 Multiple-Case Study Research Design

This section will elaborate on the multiple case study research design that is used for this research. Since a case study is an in-depth exploration that will show the uniqueness and complexity of a problem in a tangible context, it is fitting for this research to use this study design (Simons, 2009). Case studies attempt to empirically examine a contemporary phenomenon within a real-life context, where the boundaries between the real-life context and the phenomenon are unclear (Yin, 1994). Within case studies there is a distinction between single-case and multiple-case studies. A single-case study can be used to investigate extreme of unique cases, where typical behavior is likely to be found (Yin, 1994). On the other hand, Baxter & Jack (2008) argue that using a multiple case study research design creates an overview of multiple facets instead of a limited view of just one case. In order to

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find patterns of behavior of organizations, multiple cases are the unit of analysis. Correspondingly, a multiple case study research design provides the opportunity to analyze within each setting and compare those settings, and makes the research more compelling (Yin, 1994). As this research aims to find a dominant business model within the EV industry, it is necessary to create an overview of multiple cases. To facilitate a comparison between MNEs within the EV industry on their behavior concerning their business model, and the adoption of strategic CSR and sustainable innovations, the multiple-case study research design suits this goal the best. The goal of a multiple case study is to find the similarities and differences between the analyzed cases, and this provides the opportunity to find novel, testable and rich information (Baxter & Jack, 2008; Eisenhardt, 1989). The multiple-case study in this research is divided in a within-case study and a cross-case study. The within-case study provides an opportunity to analyze the cases within each setting. Contrarily, the cross-case study compares those settings, making the results more compelling (Yin, 1994). In this research, the aim is to find the similarities in business models, CSR strategies and sustainable innovations. This research aims to find exploratory findings concerning business model choice in the automobile industry as the how and the why are investigated (Yin, 1994).

4.2 Maximizing Generalizability, Reliability & Validity

As the multiple-case study is examined in an uncontrolled nature, it is essential to increase the quality of the research by maximizing the generalizability, reliability and validity of the research design. Yin (1994) argues that the quality of the research is improved by maximizing the generalizability, reliability and validity of the research. As this research is exploratory in nature, external validity or generalizability is the main concern (Yin, 1994). External validity is the extent of which the results generated by the study are generalizable across other studies or settings. Generalizability is achieved through the familiarization with the cases. When the researcher becomes intimately familiar with the cases as an individual object, it creates the ability to generalize across cases (Eisenhardt, 1989). In a similar vein, this can be done by using multiple sources of evidence, which is accomplished through the usage of a multiple-case study and multiple reports. Moreover, Eisenhardt (1989) states that, using a multiple-case study with replication logic enhances the reliability and validity in the design of the

Sustainable innovations and business models in the automobile industry : a multiple case study of electric vehicles

SUSTAINABLE INNOVATIONS AND BUSINESS

MODELS IN THE AUTOMOBILE INDUSTRY:

A MULTIPLE CASE STUDY OF ELECTRIC VEHICLES

D.L. Driever

MSc Business Administration

University of Amsterdam

SUSTAINABLE INNOVATIONS AND BUSINESS

MODELS IN THE AUTOMOBILE INDUSTRY:

A MULTIPLE CASE STUDY OF ELECTRIC VEHICLES

Statement of Originality

Abstract

Acknowledgements

Table of Contents

Index of Tables and Figures

Tables

Figures

List of Abbreviates

1. Introduction

2. Theoretical Foundation

2.1 Corporate Social Responsibility

2.2 Sustainable Innovations

2.3 Business Models

2.4 Electric Vehicles

2.5 Conclusion

3. Conceptual model and working propositions

3.1 Strategic CSR and Sustainable Innovations

3.2 Business Models for Sustainable Innovations

3.3 Conclusion

4. Research Design

4.1 Multiple-Case Study Research Design

4.2 Maximizing Generalizability, Reliability & Validity