Business model innovation and its impact on corporate sustainability

Life in a world with scarce resources influenced the way of managing better life and work at the same time, and not only for humans, but also businesses have chosen the most innovative way of doing business, to save these resources for the same use by future generations. This situation has affected business activities and operations to change over the years. Previously, businesses performed their functions through the traditional way of operating. Compared to nowadays, the incorporation of information technology changed the concept of the business model from a traditional concept to the digital or innovative one. Innovation is considered to be one of the main preservers of social well-being, economic and environmental factors. Also, it encourages sustainable development, by reducing resource usage and increasing productivity. The effort to survive and preserve a living environment for generations to come requires a permanent commitment from all participants in society.

The concept of sustainability, in general, is a new term that has recently started to be used and practiced with a special emphasis by many companies to create a competitive advantage in the market (Tsalis et al., 2020). Contemporary investigations in regard to sustainability, green economy, and ecosystem have been conducted to analyze the impact on organizational outcomes. Therefore, this study aims to highlight the role of Business Model Innovation on Corporate Sustainability across three Western Balkan countries in Kosovo, Albania, and North Macedonia.

Kosovo, Albania, and North Macedonia as neighboring countries arise a research interest in this field since all three countries have been signatories of the UN document for the achievement of 17 sustainable development objectives by 2030. The economic and political situation, contemporary changes, inflation, and changes in political agendas, have made these countries stagnate from time to time concerning sustainable development in general, but also the enterprises, most of them, refuse to make drastic changes in the way of how they have offered products and services so far (Gega, 2022). The focus of this research will be on finding the role of Business Model Innovation, how each element of Business Canvas affects corporate sustainability, across companies in Kosovo, Albania, and North Macedonia, with a special emphasis to contribute and stimulate the businesses to transform their actual Business Model into a Sustainable Business Model. This investigation will provide a comprehensive overview of the Business Model Innovation, Business Canvas elements, and Corporate Sustainability, and will provide answers to important concerns, such as:

How do Kosovo, Albania, and North Macedonia businesses perceive sustainability?

Are they oriented toward a Business Model Innovation?

Do companies offer regular training for employees, to work more sustainably, taking into account first the economic, social, and environmental factors?

Are specific government policies designed to ensure corporate sustainability?

Similar studies that were developed in this field, incorporated the variables, such as: Business Model Innovation, Corporate Sustainability, Corporate Social Responsibility, Green Technology Innovation, Sustainable Business Model Innovation, Sustainable Corporate Performance, and others, for instance, (Zhou et al., 2023, Oliveira-Dias et al., 2022, Chen, 2022, Ferlito and Faraci, 2022, Hall et al., 2022 and others). There exist studies that.t address the BMI using elements of Business Canvas. Therefore, this study, as mentioned above, focuses on the role played by business model innovation, respectively the elements of the business canvas, such as: (value proposition, customer segments, customer relationships, key activities, key resources, key partners, channels, cost structure, and revenue stream) in corporate sustainability.

A very recent investigation, which discusses the interactivity that Sustainable Business Model Innovation and Green Technology Innovation have in influencing Sustainable Corporate Performance, by Zhou et al., (2023), based on the panel data of 1468 Chinese manufacturing firms, from 2010 to 2020, concluded that the relationship between Business Model Innovation and Green Technology Innovation has a significant positive effect on Corporate Sustainable Performance. Sustainable Business Model has been identified as an explanatory variable in the model used in this study. However, it is not divided into other defining sub-variables, only items that respond as a whole to this Business Model have been used. Oliveira-Dias et al., (2022) followed a qualitative study, which analyzed dynamic capabilities, business model innovation, sustainable development of Brazilian startups in the logistic sector, in this case they came to the conclusion that dynamic capabilities, which include sensing, seizing and transforming are an internal driver of a company that influences Sustainable Business Model Innovation.

The independent variable of Business Model Innovation is also used in this research to achieve the main aim, but contrary to the previously mentioned studies, it defines this variable through the nine elements of the Business Canvas. It also uses independent variables such as: employee training, employee empowerment and decentralization, skills management, and government policies to explain their effect on the dependent variable, which in this study is Corporate Sustainability.

A review of research to compare the effect of Business Model Innovation on circular economy and sustainability has been followed by Pieroni et al., (2019), where 92 studies have been deliberate in-depth, including the conceptual models, tools, and methods used in this research. Most of them are published in the Journal of Cleaner Production. Considering that it is a field of recent years, specifically less than 15 years, there is a lack of research of this nature, especially research with an empirical approach. These 92 studies that were reviewed in the study by Pieroni et al., (2019) were categorized into three divisions: sensing, which means identifying new opportunities to generate ideas for BM; seizing, which means continuous testing of new Business Model concepts; as well as transformation, which determines the transformation of the Traditional Business Model into an Innovative Business Model, respectively the suitability of organizations for the incorporation of new BMI ideas and concepts. Sustainability is a new and not sufficiently studied field, as it has been emphasized by many authors, where there is still a need for new studies, especially by empirically analyzing the data. This suggestion is also recommended by Carayannis et al., (2014), who have critically analyzed the literature concerning this area.

The contribution of this research will be threefold. First, a considerable number of studies have followed the qualitative approach, by using semi-structured interviews or critically analyzing the literature (Oliveira-Dias et al., 2022, Ferlito and Faraci, 2022, Jolink and Niesten, 2015, Geissdoerfer et al., 2018, Bakoğlu and Yıldırım, 2016 and others), which were criticized for the immeasurability of the results, whereby the data, apart from not showing empirical results, cannot be generalized. For this reason, we employed the quantitative approach of data analysis, namely the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique, to address the problem of measurability. Second, in recent studies, for instance, (Zhou et al., 2023, Oliveira-Dias et al., 2022, Chen, 2022, Ferlito and Faraci, 2022, Hall et al., 2022) and other scientists, who have analyzed the link between Business Model Innovation and Corporate Sustainability have included only a few variables such as, Corporate Sustainability, Circular Economy, Sustainable Business, Sustainable Corporate Performance or Sustainabile Development as a dependent variable, and Business Model Innovation, Organizational values, firm performance, dynamic capabilities, open innovation, green technology innovation as independent variables. We differ from them because we included nine elements of Business Canvas to define the Business Model Innovation, also, other independent variables, employee training, employee empowerment and decentralization, managerial capabilities, and government policies. Third, the lack of similar research is also evident in Albania, Kosovo, and North Macedonia. Research of this nature, with special emphasis on an innovative business model and corporate sustainability, has never been followed in these three countries. Thus, this research will be an added value by providing a significant practical contribution to the way businesses operate, digitalization of businesses, and it will fill a considerable gap in the regional literature and accordingly, will generally contribute to the global literature of this field.

This research is organized into four sections, first, the literature review will be deliberated, then an analysis of methodology, followed by findings, and discussions, and finally, conclusions and areas for further research.

Kaltrina Kajtazi, is a Teaching Assistant at the University of Mitrovica “Isa Boletini”, Republic of Kosovo. For more than 3 years, she worked at the Universum College in Kosovo, as a lecturer on the subjects of Human Resources Management, Digital Marketing, Organizational Behavior, and Sustainable Development. She has published several scientific papers in indexed journals, as well as a chapter in a book related to Women Entrepreneurs by Emerald Group Publishing. Now she is finishing her