Ecosystems as Systems and Business Models as Modules: a Conceptualization

Purpose: The purpose of this study is to bring conceptual clarity to the business model and ecosystem literature. Design/methodology/approach: The paper uses a systems thinking approach to develop a conceptualization of business model and ecosystem constructs that seeks to integrate their divergent literature streams. Findings: This paper posits that ecosystems and business models are concepts that emerged simultaneously for the same reasons. They also share several common attributes, while being firm-centric and industry-centric concepts respectively. This study expounds the relationship between the two, classifying them as distinct levels within a single dimension. Research limitations/implications: The contribution of this study is in bringing conceptual clarity to these widely used terms and providing direction for the integration of their divergent literature streams. Practical implications: This paper also offers heuristics to help practitioners understand how the viability of a system rests, to a great extent, on the alignment of its modular configuration. Originality/value: Building on this understanding, the study suggests that business models and ecosystems together exhibit a clear system–module relationship, where business models, rather than firms per se, represent units within their respective ecosystems. Furthermore, it explains why sustaining system-level equilibrium is contingent on facilitating value appropriation at the modular level.