Business models and innovation in a changing institutional context

The traditional business models of airlines are under pressure. Research has shown that the sector faces a general tendency to adapt to business models and ‘service innovations’ developed by low cost airlines. Former national flagship airlines, such as British Airways and very recently Lufthansa, have started to re-position themselves in the market. What is more, established business models of charter airlines and regional airlines seem to have reached their limits in terms of a strong performance. Questions are being raised over the ways in which the new prevailing formulas for success or ‘service innovations’ emerge, co-evolve with and are shaped by changes in established national institutions (e.g. employment and industrial relation systems) and the spread of new transnational institutions (e.g. increasing role of transnational regulation and associations). A central concern within this debate is the role of key actors (managers, employees and other internal and external stakeholders) in adjusting to the current dynamic environmental conditions. Accordingly, we are interested in the study and comparison of: a) the key business models and service innovations within the sector; b) the speed of adoption and forms of local adaptation in business models under the conjoint influence of market and national institutional pressures; c) the role of key actors such as local managers as ‘interpreters’ of proposed new ‘service innovations’ and of new transnational managerial cadres (elites) in promoting these new developments; and d) the influence of co-evolution of institutional and industrial factors on the dominance and diffusion of business models and innovations (e.g. service or corporate governance practices) at the population level over time.

Prof. Mike Geppert, Univ. of Surrey

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