Exploring the causal complexity of business models with organizational performance: a study for the pharmaceutical industry

PurposeAuthors analyze a business model (BM) based on organizational performance. BMs are strategic tools used to achieve high performance. This study is based on two characteristics of causal complexity: conjunction and equifinality. Authors also examine the applicability of causal asymmetry in the relationship between BMs and organizational performance.Design/methodology/approachGenerally, the relationship between BM elements and organizational performance is analyzed using a correlational approach. This relationship is marked by causal complexity, which cannot be analyzed via such approach. Authors applied a fuzzy-set qualitative comparative analysis with data from three time-periods and two performance variables for pharmaceutical firms.FindingsQualitative comparative analysis revealed that high performance resulted from configurations (combinations) of BM elements and not from the effects of individual elements. In addition, multiple configurations are available for achieving high performance. Causal asymmetry was observed in the configuration of the BM elements for high and low performances.Research limitations/implicationsUsing qualitative comparative analysis of data sets from three time-periods in the context of the pharmaceutical industry BM, authors integrated the theoretical constructs of causal complexity, namely conjunction, equifinality and causal asymmetry.Practical implicationsFindings related to conjunctions will help managers shift their focus from individual BM elements to combinations of BM elements. Additionally, the findings related to equifinality and causal asymmetry will allow flexibility in designing their company’s BM according to the resource constraints their company faces.Originality/valueThis was one of the first few studies on BMs using the twin indicators of the organizational performance relationship and causal complexity.