Challenges to Responsible Value Creation During the Covid-19 Pandemic: A Multiple Case Study on SMEs’ Transformative Responses

Despite the growing literature on the implications of Covid-19 for small- and medium-sized enterprises (SMEs), there is a lack of knowledge on the relationship between Covid-19 and the business model (BM) challenges faced by SMEs engaged in responsible value creation, that is, striving to create economic, social, and environmental value through innovative services and products. The aim of this article is to provide insights into how Covid-19 triggered transformative responses in the BMs of such SMEs by focusing on SMEs producing responsible innovation in health and social care. Drawing on the multilevel model of BM challenges to responsible value creation, which identifies eight interconnected challenges at the micro, meso and macro levels, our qualitative case study examines 16 SMEs in Brazil and Canada. Semi-structured interviews were conducted with participants of each organization and supplemented with public documents and information shared on their websites and social media. Our findings show that Covid-19 prompted diverse BM challenges (e.g., upholding a responsible mission, achieving financial sustainability) that exacerbated pre-existing entrepreneurial vulnerabilities but also boosted organizational capacities. Many transformative responses to these challenges were observed. Covid-related market opportunities led SMEs to re-examine their entrepreneurial identity (micro level), supply chain disruptions and rising production costs triggered substantial organizational transformations (meso level), and the fulfillment of ethical, legal, and social requirements required extra time and efforts in a period of high institutional uncertainty (macro level). A multilevel approach to BM challenges can help practitioners engaged in responsible value creation draw lessons from the pandemic and be better prepared for what may remain a challenging entrepreneurial journey.