Networked Business Models: Are they the key to creating sustainable social and economic value for non-profit social purpose organisations?

Delivering public services with an emphasis on adding value under increasing environmental pressures and diminishing state funding has led to an increased focus on non-profit Social Purpose Organisations (SPOs). To be sustainable in changing environments, SPOs are participating in consortiums, which form networked business models in order to extend their potential for greater value through social and economic value co-creation (VCC) with multiple stakeholders. However, there is a lack of understanding on SPOs business models in general and in particular how SPOs can co-create social and economic value in networked business models. Furthermore, there is a lack of understanding of the challenges faced by dynamic interactions of diverse actors within networked business models. Consequently, the aim of this paper is to explore how networked SPOs engage in business model innovation in order to co-create social and economic value. An exploratory qualitative methodology was adopted using seven networked UK SPOs. The findings identify that SPOs operate dual singular and networked business models to enhance social and economic value and their sustainability when faced with changing external environments. Antecedents, challenges and moderators of VCC across networked stakeholders at different micro, meso, and macro levels of context are identified. This research extends business model research by providing a networked view of the business model and identifying how different multi-level interactions and network interdependencies can influence SPOs business models and VCC activities. Furthermore, the findings provide new insights into the dynamics of networked business models and how SPOs can balance social and economic value. Our study offers insights for a wide range of regional stakeholders involved in consortiums (i.e. SPOs, funders, service users, employers) through both identifying moderators that help in managing VCC challenges experienced in a network and illustrating how networked business models can enhance the potential for greater user value.