Knowledge distance and business model reconfiguration: the moderating role of tie strength

Abstract

Purpose

The purpose of this paper is to determine how knowledge distance, which encompasses cognitive and geographic distance, influences efficiency-centered and novelty-centered business model reconfiguration (BMR), and the moderating role of tie strength.

Design/methodology/approach

The authors analyze a sample of 132 Tunisian incumbent firms by multiple hierarchical regressions.

Findings

First, the effect of knowledge distance on novelty-centered BMR may differ depending on whether the firm introduces novelty within or outside its organizational boundaries. Specifically, the authors introduce two new types of novelty-centered BMR: intra-novelty and extra-novelty, which respectively take into account whether the reconfigured activities are governed within or outside the focal firm’s boundaries. Second, cognitive distance has an inverted U-shaped effect on efficiency-centered and intra-novelty-centered BMR. Third, tie strength has a moderating role, with varying effects depending on the type of BMR pursued.

Practical implications

This study provides guidance for managers on structuring alliances and collaborations when pursuing BMR. It provides recommendations on partner characteristics, as well as relationship tie strength, that are most beneficial for different types of BMR.

Originality/value

This paper answers the call for research on how knowledge obtained from distant sources can contribute to BMR. Additionally, the paper introduces a previously absent distinction in the BMR literature. The findings suggest that studying the antecedents of BMR should not be limited to the level of design themes but also encompass the level of design elements such as governance.