1 19th Bled eConference eValues Bled, Slovenia, June 5 - 7, 2006 A Business Model Research Schema Susan Lambert Flinders University, School of Commerce, Australia susan.lambert@flinders.edu.au Abstract This paper suggests a schema for business model research that has the potential to progress the research, in a structured manner, from conceptual to theoretical. It draws on the scientific and business research literature to identify the types of research necessary to further knowledge and promotes the inductive-deductive model of research. The importance of conducting empirical research to evaluate current conceptualisations of business models and developing a theory of business models is stressed. An important aspect of any research agenda is the creation of a general classification of domain objects that can serve a wide range of current and future uses. Classification literature relating to the biological, behavioural, organisational and social sciences has been referenced in this paper in support of this claim. Existing classifications of business models are evaluated, determining that the only classifications that have been proposed to date are typologies and that no general taxonomy of business models currently exists. 1 Current Business Model Research Consistent with the objectives of scientific research, the overall objective of business model research is to develop a theory of business models that can aid researchers and practitioners in explaining phenomena and making predictions. Theory development is an ongoing process that occurs over long periods of time, however business model research is in its very early days. The term itself only emerged towards the end of the twentieth century and the focus has been on defining business models and identifying the elements of business models (Pateli 2002 Pateli and Giaglis 2004 Osterwalder, Pigneur et al. 2005). What has emerged is an array of conceptualisations of business models that have been conceived from differing views of the problem domain and that are rarely grounded in existing theory (Porter 2001 Hedman and Kalling 2003). Some definitions are quite abstract and outward looking (Timmers 1998 Hamel 2000 Weill and Vitale 2001 Hawkins 2002 Rappa 2006) whilst others are detailed and all encompassing of business functions (Chesbrough and Rosenbloom 2000 Mahadevan 2000 Dubosson-Torbay, Osterwalder et al. 2002). One of the explanations for this is that the definitions and the attributes of the business model are established according to the

Susan Lambert 2 business model���s intended use and that they are not sufficiently grounded in theory (Hedman and Kalling 2003). Some researchers require the business model to form the basis of enterprise models and therefore include the internal workings of the organisation whereas others require the business model to focus on the relationships with external entities within their domain (Lambert 2003) . Pateli and Giaglis (2004 p 308) conclude that: ���while some researchers perceive the business model as a purely business concept that explains the logic of doing business for a firm (Timmers 1998 Linder and Cantrell 2000 Petrovic, Kittl et al. 2001 Rappa 2003), others consider it as a link between strategy, business processes, and information systems (Nilsson, Tolis et al. 1999 Osterwalder and Pigneur 2002) Progessing from research directed purely at defining business models and listing their components, some researchers have proposed conceptual models that illustrate the composition of business models and relationships between components (Alt and Zimmermann 2001 Amit and Zott 2001 Gordijn and Akkermans 2001 Osterwalder and Pigneur 2002 Hedman and Kalling 2003 Osterwalder, Pigneur et al. 2005). Osterwalder, Pigneur et al. (2005), propose a business model ontology that draws extensively and systematically on the foregoing research. The ontology consists of four business model ���pillars��� represented by nine business model elements. (See Osterwalder (2004) for a detailed discussion of the process.) This ontology was conceived with a view to creating ���concepts and tools that help [the] manager to capture, understand, communicate, design, analyze, and change the business logic of their firm��� (Osterwalder, Pigneur et al. 2005 p.19) . The need for implementation tools such as this is recognised by Pateli and Giaglis (2004). 2 Overview of the Research Problem and the Business Model Research Schema (BMRS) Business model research has been dominated by studies that propose business model definitions and components however ���the research community is yet to invent a common language, in terms not only of terminology but basically in terms of conceptualization, for discussing and analyzing business models��� (Pateli and Giaglis 2004 p.312). The conceptual nature of the research has resulted in there being a myriad of concepts, ontologies and frameworks of business models all of which have merit, but none of which have been universally accepted. Hanks, Watson et al. (1993 p.11) recognised a similar problem in relation to research into organisational life cycle models. They concluded that due to ���the absence of careful empirical analysis, a plethora of conceptually based models have emerged���, and that evaluation of the models can only be achieved through systematic empirical research. Small enterprise and accounting researchers found themselves in a similar position a decade or so ago and recognised that progress would only be made through exploratory, inductive, empirical research (McMahon 1998). In this paper a distinction is made between concepts and theories. ���Concepts are the building blocks of theory. A concept is an idea expressed as a symbol or in words��� (Neuman 2003 p.44). ���[Concepts] are used to communicate the essence of an observation��� (Cavana, Delahaye et al. 2003 p33). A theory is ���a set of systematically interrelated concepts, definitions, and propositions that are advanced to explain and predict phenomena (facts)��� (Cooper and Schindler 2000 p.51). The objective of this paper is to propose a schema for research into business models that has the potential to progress future research towards a theory that can assist in explaining