Influence of dynamic capabilities on novelty-centered business model design: a moderated mediating effect analysis

Purpose - The purpose of this paper is to examine the underlying mediating mechanism and contextual conditions in the relationship between dynamic capabilities and novelty-centered business model design (NCBMD). Design/methodology/approach - Using data from 146 firms in China and the process conditional modeling, the authors acquire evidence supporting the hypothesized moderated mediation. Findings - The authors find that interfunctional coordination plays a crucial mediator role in the relationship between dynamic capabilities and NCBMD. Environmental dynamism positively moderates the mediating effect of interfunctional coordination on the relationship of dynamic capabilities and NCBMD. Research limitations/implications - First, the research setting focuses on a specific intermediary mechanism of dynamic capabilities on NCBMD. Second, dynamic capabilities are considered as an integrative construct in the study. Future research could further examine the effect mechanism of dynamic capabilities' sub-dimensions, which might provide more theoretical findings. Third, the impact of public policies, an important source of environmental dynamism, on NCBMD needs a fine-grained analysis. Fourth, the sample data restricts the popularity of the conclusion. Practical implications - First, firms should be aware of the irreplaceable role of dynamic capabilities in the process of designing a novel business model. Second, firms promoting the design of business models should pay more attention to interfunctional coordination. Third, the significant moderating mediation effect reveals that the importance of interfunctional coordination for the relationship between dynamic capabilities and NCBMD under a highly dynamic environment. Originality/value - First, the authors reveal how a firm's dynamic capabilities can promote NCBMD. By focusing on the influence of dynamic capabilities on NCBMD, the authors elucidate the source of value creation from the perspective of organizational capability. Second, the analysis of mediating effect delineates the bridging mechanism of dynamic capabilities and NCBMD. These findings emphasize the important role of interfunctional coordination in designing a novel business model. Third, given the context of this research, the results present implications for the role of a dynamic environment. For the methodology of theoretical research, the different findings indicate that scholars could further refine the manipulation of moderators, which contributes to elucidate new conclusions ignored in the past studies. Accordingly, this research extends both theoretical research and methodology.