The governance of sustainable business model innovation—An Ordonomic Approach

This paper develops an ordonomic approach to the governance of sustainable business model innovation (SBMI). We clarify the distinctive roles of optimization and governance for the management of sustainable value networks and develop a sustainability cube as a new management tool for the governance of SBMI. Our cube helps management to identify and overcome social dilemmas within value networks, i.e. to form and reform relevant business relationships, thus creating and tapping second-order win-win-win potentials. Furthermore, our cube encourages management to interpret negative externality problems as “missing markets”, i.e. as an entrepreneurial challenge and as a business opportunity to serve as yet unmet needs. Finally, our cube offers an avenue to develop and strengthen the specific management competencies that foster a successful governance of SBMI. •Conceptual distinction between optimization and governance.•Distinguish between first-order effects of optimization and second-order effects of governance.•Perceive sustainability challenges through a “missing market” lens.•The ordonomic sustainability cube as a new management tool.