Contents

Transformation of the Business Model: Purpose and Authenticity to Form New Approach to Business Development

Chapter ONE: Introduction to the Study

Statement of the Problem

Business nowadays is becoming more socially orientated due to the certain trend of open communication, emphasis on relationships and value as a desirable outcome of the certain social and individual activities. Ethical, environmentally concerned and socially responsible approaches in business are becoming a norm due to increase of the number of the new consumers [www.newconsumer.com 2007] and overall uncertainty about the future perspectives in business. Ethical and relevant to it approaches now seems to be not a weak attempt, but developing alternatives to improve the quality of life on a personal and social level, to sustain the resources and to achieve overall happiness within the business functions or business activities.

Most of the business is now focusing on maximizing value on internal and external levels. And the question is what the new value is for the customer and what can create the real value. The answer can be the business with the specific purpose, which is positioned before the profit in the mind of the business organization. Hence, such firms which contribute positive approach in business are operating mainly not focusing on profit, but on certain value, as the outcome of the positively purposeful business activities, with the expectation of return. It is hard to name this approach strategic, thus it can be considered as alternative approach.

It is important to mention that conventionally the major numbers of the businesses are still adopting aggressive strategy to achieve success in business and to obtain the maxim possible profit thought the business activities, which is traditionally seen as the priority for the business. Value and its components, hadnt been emphasized within the strategic approach, though the main advantages are represented as the core competences and capabilities, which are the main aspects of the business. Hence the business models are organized for cost cutting, increase of productivity and exploitation of resources, which make critically negative effects on society and environment, in addition, business is emerging with politics to reinforce the impact [The Corporation 2003]. These facts were ignored by the reason that initially the business has to justify the profit at any price. Aggressive competition in business has become a norm and further destruction, stress and other negative consequences had followed. Conventional business approach doesnt take an individual needs for the better wellbeing into account to plan business activities. Consequently, individuals have to support or to accept the norm or to choose alternative direction towards individual freedom, true happiness and personal fulfillment within the alternative business approach, which usually represents a weak attempt.

Assuming that realizing a certain purpose in business can give a chance to people who would like to fulfill their personal needs for positive contribution, express individual vision on the common basis and be responsible for their own business activities, but not to be involved in global profit generation, by the reason if the corporative profile is not supported. Ethics, sustainability, environment consideration and fulfillment at work are very important for these individuals, which further create the reason for the new business model formation, to satisfy certain aspirations. Mentioned aspects are directed to create the value for the individual and society within the business framework to exist in relatively uncertain conditions of the present environment. Hence on this basis there must be certain approach in business, which can stimulate the creation of the new value for the individual, society and environment. It is important not to neglect such aspects, as those represent the essential individual needs.

Here is the next question what is the tool for the conceptual approaches in business and assuming that it is not just the business organization, but the business model, which sets up certain components to create the value of the business and to provide sustainability for the organization. It is important to mention that the concept is not that effective on its own; it should be strengthened by the certain model.

Business model is a logical structure (as business is striving to function flawlessly on different levels) which combines certain ideas, based on traditions or trends, and is set to function effectively and efficiently and to serve the vision of the individuals. Some specific business activity forms definite business model, which operates like mechanism to support, to deliver and to develop the value of the business in products, services, impacts on society and environment.

There is the number of different business approaches are declared to exist, among them is Authentic Business, the leader of authentic business community [Crofts 2005] identifies that the business is concerned with the environment and personal happiness, satisfaction, personal growth and lifestyle of the individuals, who find themselves passionate to create new business to operate successfully [www. authenticbusiness.com 2007]. Though, Crofts [2007] states that he represents certain approach, but realises that it requires a certain business model, which would be capable to sustain the approach. On this basis there is certain understanding that any alternative approach in business should be justified and supported by the business model as a unique structure, to make an approach more effective and efficient. Assuming that business model could reduce misconceptions by the means of certain business logic or business rule.

Traditional strategic approach is a business norm. Michael E. Porter has set up the guides for aggressive competition and simple frameworks for the business analysis, which stimulates the business to consume, with the negative impact on society and environment, to generate profit [The Corporation 2003], what the business returns to society and environment in valuable equivalent is almost neglected, though corporate social responsibility is set to perform contributions to society and environment under the social legislation. By the mentioned reason conventional business approach of competitive advantage creates misbalance [Chan Kim and Mauborgne (2005) ] between business from one side and society and environment from the other side in, which makes social and environmental problems arise [The Corporation 2003]. Competitive strategy is not making contribution on external level, though corporation can be forced to make contribution under the legislation. Such approach is not adopted by the business organisations, which adapt positive purpose realisation in business, which aim is to improve the value for the society to gain customers appreciation, then to increase sustainable position the market, which is seen as more difficult task due to strong strategic profit orientated opponents.

Business is for the customer and the customer choice can be dramatic in spite of the well planned strategic approaches. If customers choose to support recent trend of the concern about society, environment and individual fulfillment, then new approach in business is highly important for 3

the further business development and establishing itself in the certain niche as Kim and Mauborgne [2005] suggest. Conceptual approach in business is promising to evaluate the approaches constantly to offer the best one, which is able to satisfy the new needs of society to develop new trends in business, based on appreciation human being and their contribution to the business.

Due to the certain trend there is a requirement to reorganize the businesses to satisfy new needs of the customers and to create the structure, based on the concept. In the following parts the reasons behind the origins of the alternative approach are represented. Exploring the Nature of Modern Business Fundamentals

In this paper the main question is of initial approach in business, hence business fundamentals are important to discuss. Conventional approach in business is resulting in negative affects on society and environment (developed consumerism with negative consequences and decreased overall social unhappiness with the business world), which builds up certain social opposition of the society to the business world, which forces existing businesses to make efforts to shift approach and to transform the business, e.g. from aggressive to responsible and responsive.

From the review of the recent trends in business there is significant move to identify and develop human capital and customers as the main component of the business (IBM Corporation), which signifies that business fundamentals are transforming from tangible capital (natural goods) to intangible capital power (people and moral goods). It is important to look precisely at the real needs of the human part of the business and to identify what is essential for the new level business performance. Requirements for the individual satisfaction and fulfillments are supposed to become important for the new business approach. Purpose, as positive goal, and authenticity, as real value, are considered to appear better intangible business fundamental, as they represent human concern for the well being.

Business fundamentals are essential in the question of the new approach. Fundamentals by Sussland [2004] are seen as the human capital with the real drivers of the business as knowledge, which is able to create value to satisfy the key stakeholders. It is important to understand the real value of the business in the modern conditions. Sussland [2004] suggests that value is the key factor of the strong enterprise, provided by core competences, which is conventionally true, but considering the fact that competences can loose its value over time is important too. The author mentions that resulting dispersion of resources within the organization reduces the profit 4

potential of the enterprise as a whole and, unless purposefully dealt with, becomes a crucial policy constraint, which negatively reflects on performance.

As a business demand enterprise must able to satisfy its stakeholders and to operate efficiently [Sussland 2004], which represents value only on internal level of the business, the contribution to society and environment, which suggests to be considered by the enterprise.

Business value by Sussland [2004] is only considered as the profit potential that can be generated by the interaction of the resources and the processes, which is right in the conventional way of business organization. Business value is only internal value represented as profit; other aspects are not taking in consideration.

Lazlo [2005], who is highly supportive for sustainability, identifies business fundamentals as the value creative initiative and sustainable value strategy with the initial stakeholders discovery within the social and environmental concern, which will result in shared values and the profit as economic success.

Nature of the business value is now changing from numbers to concepts [Collins 2007]. Concept of value is the primarily one in the modern business. In this paper concept of the core purpose and authenticity as sustainable support are assumed to become fundamental aspects of the new business. The value of the concept in business is unique, as it represents the outcome of the certain human intelligence (due to the certain components of human intellect) as the main aspect of the human capital, invested in certain business.

Collins [2007] manifests the concept of purpose as the part of the core ideology within the center of business organization for the further progress stimulation on the basis of the operational autonomy. Collins views on business fundamentals are considered to be the accepted in this paper.

Business fundamentals are currently very different from business to business and manifested in the form of various businesses models. Hence it becomes very important to understand the nature of the business model and its role for the society and environment. In addition the nature of the business changes and transformations follows the society changes and the changes on the individual level with the aim to achieve certain fulfillment [Zahar and Marshall 2005] and to improve wellbeing. 5

To achieve human wellbeing within the business requires certain shift in approach and restructure to form the new business model. Towers [2006] suggests that there is a need to reassess and fundamentally realign structures and priorities, which is paramount, is consequence any organisation that cant make the leap must face the prospect of being left behind in this new age.

Discovering Purpose and Authenticity in Modern Business

Purpose and authenticity are intangible aspects, which are connected with the certain social awareness of the new values in life on social, environmental and individual levels, which consequences in business transformation as a trend. In this paper there are few authors are raising the importance of purpose and authenticity in business, which could be accepted as an alternative to strategic approach.

Customers

of

the

new

generation

are

represented

as

the

new

consumer

[www.newconsumer.com], also appear as new age business, the age of spiritual awareness with the new requirements in business (could be the roots of ethical and moral approaches) and other communities have a need for the business model to support the certain conceptual business activities. Purpose and authenticity also could become motivational tools for those who strive for the new approach in business. Why business model is emphasised in this research, because it is a primary structure for the conceptual realisation in business on the basis of the core purpose and authenticity, and appears to be as dynamic structure in opposition to conventional approach, which is not supported due to aggressive warfare approaches for the external benefits, while purpose and authenticity are concerned on both external and external benefits.

In this research the generic trend of the new age is deliberately not divided on ethics, environmental concern, social responsibility and lifestyle, by the reason they have one origin as it could be spiritual development, also discovered as the new component of the human intellect [Zohar 2005] along with intellectual, which will be mentioned in part TWO Connection of Purposeful and Authentic Approaches in Business with the Individual There is new demand for the new business structure and business model, which could perfectly fit the requirements of the new age groups and individuals. 6

Purpose and authenticity are the new value focused approaches, which could be embedded in the business model for the further realisation in the existing environment with the aim to improve human wellbeing, to reduce uncertainty and to increase sustainability and support balance between society, environment and business.

Importance of Business Model Formation

Initial identification of the business model is essential, by the reason that business is considered as an activity for the profit generation, and model , where model is considered as a structure of various logical components, then the concept is justifying the business model. Hence, it makes business model a dynamic structure for the conceptual business activities of an individual in organisation. Business model is a product of development and innovation [Osterwalder 2005] to function for the certain purpose and value, where innovation is developing the methods and tools to improve the conditions for the purpose realisation. In a motor industry the purpose is to provide considerate customers with the environmentally friendly vehicles, this purpose is to achieve sustainable value and ethical performance.

Business model is not officially established theory, and currently there are certain researches [http://business-model-design.blogspot.com 2005] are produced to clarify the understanding of the business model. According to the general definition of the business model, it is complex real world object [http://business-model-design.blogspot.com/2005/11/what-is-business-model.html], which consists of building blocks represented as various business activities to support and to develop the business organisation. In a positive meaning business model is set to function for the society and this could be the ultimate purpose of the modern business. In this paper there will be a perspective of purpose and authenticity investigated, which are identified as the core principles or concepts for the business model.

Certainly innovations and technology have significant impact on the business model, improving the technological and informational components of the business [Osterwalder 2005], but initially the business is functioning to satisfy the needs of society in general and human as individual on the basis of value, which should be highly considered. There are plenty of definitions of the business model, all definition have similarity to express the variety and advantages of the business model as a business tool for conceptualisation and coordination the components of the business and the certain business activities [ http://conceptspace.london.edu/ 2007]. 7

Unfortunately, strategically orientated business, as the activity to generate profit, have made a negative impact on society. The business activities within the business model can create new approach to build up balances business organisation on the basis of concept, which could be strengthen by intangible aspects. Business model allows applying any approach in business, which is significant for the alternative approach.

Business model is important due to the move from the strategic approaches in business to the conceptual approaches [ORC International 2007], which will ensure the quality of the business and sustainability of the business performance. Business model is unique structure which provides business organisation with essential elements, supported by the unique vision, purpose and builds value as a result [Mourkogiannis 2006].

The aim of identifying a business model is to provide the platform for business concept justification by the means of strong business logic, which is set to enforce the routes and the methods by which business objects are accessed and updated

[http://en.wikipedia.org/wiki/Business_logic 2007].

Introducing Purpose as Core of the Modern Business Model

Understanding that the business model is the platform for the concept, it is vital to identify the position of the concept within the business model, as it supposed to influence all the components of the business. In this paper the concept could be considered as the core of the business model, hence it is important not to misinterpret core of the business with the centralised business, as the physical centre of the business.

Any solid structure contains the core and respectively the business requires the core concept to support relevant business activities. In this paper there is an attempt to justify the purpose as the core of the business and the main intangible aspect for the individuals, who are involved in certain business.

Human capital is general representation of internal value of the company. Purpose could be condition of the human capital to sustain the business. This conceptual core is essential for the human capital, as it supposed to contain certain value and further to stimulate human capital to 8

support the purpose and other significant intangible aspect of the business. Purpose could function either on individual level or social level, but it appears to be the major drive for achievement.

Identifying the Signs of Business Transformation

Transformation of the business is an essential topic nowadays, which is not clarified by some specific theory and every business organisation is trying to identify the appropriate methods for the business transformation, focusing on various aspects of the business. In this paper the transformation on intangible level is investigated due to importance of the factor in suggested approach.

Most of the business models are transforming due to innovation in technology, though it represents a part of the reason for transformation, in this paper the human factor is considered as the moving power for the transformation. This is transformation of individual, the development of demand on individual level and of society in general to form the new purpose of the world [Towers 2007].

The reason of the business transformation alone with innovation can be that culture has become the part of the business world and now it is quite difficult to distinct traditional culture from culture adjusted up to demand by insightful marketing. That is why there is a need for the business model, which considers the certain culture as the essential element of the structure, produced by human trough communication and other social aspect.

Nowadays human creates their existence within the business in predominant way, which consequences in certain changes and creating the reasons for the new approaches, according to the new demand for the business structure to satisfy it.

Purpose of the Study

Purpose of the study is to identify the conceptual approach in business model formation and to discover the sources of the new approaches in business, considering the signs which show that conventional approaches are losing the value and there is a new task for the business world to see new approaches to satisfy the new social needs and aspirations, to consider social and environmental changes.

The aim of the research is to see how the purpose could create, support and sustain the business. It is initial moment to imagine business as an autonomic individual or an organism which functions and makes an external impact; hence the business model is a structure for the certain business establishment. In the good scenario purpose is expected to provide the quality and sustainability for the business, while structure is the second dependant on the core purpose and appears to be logical and effective system, which makes the purpose of the business materialized in value and to be delivered externally. The position of the purpose in the business model is very important, hence identifying its place in the business model is essential.

Hypotheses of the Study

H1: Business model is a conceptual tool to justify and support certain business approach.

H2: Business activities based on purpose and authenticity can create a certain conceptual approach for the further formation of the sustainable business model.

H3: Traditional businesses are experiencing transformations due to certain growth of intangible aspects in business.

Research Questions:

What is the role of business model in business formation?

What is purpose and authenticity in the business context?

Does purpose and authenticity offer alternative approach in business than competition? 10

What place purpose and authenticity take in the business model?

Chapter TWO. Literature Review

Business and management research is concerned with the social world in which we live [Saunders, Lewis and Thornhill 2007]. It is reasonable to say that business makes a huge impact on society by the means of certain activities like resource management, marketing, distribution and sales. In the present time marketing is aggressively replacing the traditional culture and tends to manipulate the choices of the society. Marketing is aggressively reinforcing competitive advantage and significant investments are put in this direction. Conventionally such approaches have become a norm in business. In contrast authentic approach in business is set to reduce the role of marketing through manifesting the importance of the real value for the customer, which is supported by the certain positive purpose, further to contribute to society and environment by delivering the meaning and value fort the customer [Crofts 2005]. All this aspects should be applied within the business model for the effective results and sustainable development.

Identifying Business Model and its Conceptual Nature

By definition from the academic paper [Osterwalder, Pigneur and Tucci 2005] A business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams. The most important aspect of this definition is that initially the business model is conceptual tool [Chesbrough and Rosenbloom 2002], which is consistent of value elements with the expression of the business logic and business purpose to achieve value on different levels of business [Laszlo 2005]. In this paper it the emphasis is put on the importance of the business concept in the first place, and that all the outcomes of the business depend on the approach, which conventionally is identified as strategy. It can not be ignored that the strategy has the consequences and the classical strategies are developed from military approaches which had 11

adopted the name warfare strategies initially introduces by military leaders Sun Tzu in his book The art of war and has become a classics in the business world. This approach can be considered as the core concept of the business model, which is aggressively enforced with competitive advantage.

In the new century there is a significant alternative movement supported by the new approaches in business has started to be notices, and if the conventional approaches are based on competition and warfare strategies, then unconventional approach is focusing on finding the niche in the market [Chan Kim and Mauborgne (2005)] and enriching business with social and individual content as well as to make a positive impact on society and environment. This could represent transformation or shift of values; hence from the focus on the material values as profit there is a change to social and individual values as fulfilment and happiness. Transformation of tangible values into intangible is currently taking place, which was neglected in the period of warfare business approaches, based only on strategy and competition. The business model is now set to include the factor of that value transformation.

There are dynamic changes in business and the moving power is human intellect. Hence changes in business are of certain intellectual nature of a human (the components of the intellect will be discussed further in the paper), which further has created the platform for the business transformation on the basis of the new human needs and aspirations.

Human intellect is dynamic and progressive, from this point of view it means that intellect transforms the business in various forms and the outcome could be a certain approach in business, hence specific business model as the tool for the activity. As an example of the new approaches in business is Authentic Business [Crofts 2005], Funky Business [Ridderstrle and Nordstrm 2002] and Sustainable Business [Laszlo 2005]. Emerging business approacches are forming new models of business activities, and the conventional businesses are in the phase of transformation. Transformation will be described in the Chapter Current Transformations of the Existing Business Models.

The core of value of the business model could be the most important and fundamental aspect, not the profit, as it appears to be the raw interpretation of the values and the reason for the aggressive competition. By this reason transformation of the business model could signify that the business encounter problems with the core values or their concept is in the phase of experiencing evolvement due to external changes in society and environment. 12

According to the academic paper produced by Osterwalder [2005] business model is based on individual or group concepts and business activities and internal and external relationships are the paramount of the business model, as the power for the business activities and business model can be identified and supported by the main concept of the creators and attract conceptual business partners and participants.

Business model is generic definition of the new approach in business, which includes conceptual, logical and structural aspects, further to combine them into entire complex system to form certain justified business activities. Business model can be divided into consistent parts, while the core concept is applied to for the whole system and justifies the business model in its any condition. Business model could be state-of-the-art fundamental structure of the business organisation [http://www.businessmodeldesign.com 2007]. Business model could be set not to stimulate the business organisation to adapt to strategic and competitive environment, but to provide an opportunity to model unique structure of the business activities and to reinforce it with the concept to build sustainable business organisation of a high quality to establish certain benchmark for sustainability.

Business model is a just a structure which has to be nurtured by some specific activity, provided by human capital. This specific activity is identified as synergy, which is highly important intangible component (specifically human) of the modern business model, in this paper synergy is mentioned to emphasise importance of intangible aspects in business. Synergy by definition (from the Greek synergos, meaning working together [circa1660] ) refers to the phenomenon in which two or more discrete influences or agents acting together create an effect greater than that predicted by knowing only the separate effects of the individual agents [http://en.wikipedia.org/wiki/Synergy 2007]. Number of the business companies adapt term synergy to express progressiveness, e.g. 1*1*1=111 is formula of Synergy according to well known business 2007] coaches and

[http://www.1000ventures.com/business_guide/crosscuttings/synergy.html

cohesiveness of their business activities with the aim to improve business outcome. Synergy in business is the benefit derived from combining two or more elements or businesses so that the performance of the combination is higher than that of the sum of the individual elements or businesses [ http://www.1000ventures.com/business_guide/crosscuttings/synergy.html 2007]. Importance of synergy aspect in business is very high due to support of the certain concepts in business, further to form sustainable business model, hence the business gains conceptual 13

strength, reinforced by necessary business relationships. Synergy would be important to support and strengthen new approaches in business on the basis of relationships, which will be mentioned in the Chapter THREE Theory of Implementation of the Conceptual Business Model.

Value innovation is another concept, which plays the key role in business model formation as the value would become the top goal of the modern business. Understanding the real value can be the purpose of the business and the organisation would be structured in order to create the that certain value. According to the modern business coach

[http://www.1000ventures.com/business_guide/ innovation_value.html 2007] value innovation is the process of constant value evaluation (transvaluation) on the basis of the real and expected future customer needs. Amazon is one of the companies, which focus is on value innovation for the customers, along with Dell, which is launching new computers with Linux operating system, where Linux is the product of the open source community, these two companies has identified the growing trends for the customer innovative value. The value should be the most important goal of the modern business, where also value seen as the outcome of the certain conceptual approaches and differentiation as intangible aspect.

The certain information shows the fact that the role conceptual approach to form the new business model is growing and the business concept is expected to be unique and based on the social needs and aspiration, trends and environmental conditions.

Conceptual approaches are applied by the certain businesses, which are primarily focusing on differentiation of its products or the services. The simple strategic approach to differentiate now is representing many forms, depending on the concept, which provides differentiation in order to form the certain business model.

14

Connection of Purpose and Authenticity in Business with the Individual

It is important to start from the individual to discuss the value of mentioned conceptual approaches in business, as the individual has the most complex nature and affects the business performance on different levels. Value in this context is almost intuitive intangible aspect, which is has certain relation to ethics, morality and good aspects of human being. Understanding the origins of the individual needs and aspirations, apart from the needs for the economic value products or services, is essential. Individuals significantly contribute in the further business model formation on the basis of their needs, aspirations and desire to realise the whole potential of their intellect.

It is important to mention that individual is striving for the purpose, which is positively seen as the goal to realise individual potential, further to achieve happiness and successes with the overall aim to improve human wellbeing. On this basis an assumption occurs that the purpose is actually beyond the profit, as purpose contains the reason to generate happiness, not profit. Profit is considered to be traditional reason for the business, which eventually can fail to make an individual happy, due to total tangibility and inability to be effective on intangible level of individual.

Crofts [2005] Collins [2005] and Mourkogiannis [2006] are supporting the idea of purpose importance in business and considering the purpose as the root reason for the future business transformations. Trough the purpose the business will ultimately focus on identifying the significant aspects, which can make customers and employees satisfied, happy and fulfilled to become more productive, so it would make the profit second important externally, but would appear as equivalent of social appreciation of the value delivered to the customers on external level, will become the return on value. It is important to mention that purpose primarily effective on individual level, furthered to form the network of those who share and appreciate the certain purpose. Basis of individual is important in this approach.

Understanding the purpose makes better self awareness of individual. By Mourkogiannis [2006] purpose is not simply motivational tool; it is also works as inspiration and leads to understanding personal moral ideas. Purpose works as inner identification (self realisation), person with better inner identification is simply more happy, which affects the business activities.

15

Purpose is central to good human being. Modern spiritual philosophy sees the purpose in life as improving the environment and world condition for all beings [http://en.wikipedia.org/ wiki/Purpose 2007]. Life improving is major motivation for an individual; the aim is positive development and personal growth on the basis of the intellectual components of individual. In the latest time it has become highly important to focus not only on business outcomes, but even to shift the focus on individual welfare and human wellbeing to emphasise on ethics, morale and other intangible aspect of individual. This cannot be ignored in terms of business as initially social structure.

Purpose is directly connected with the human capital, further it exists as the positive reason for development the aspects of the business with the aim to achieve better results for the better wellbeing, when this could be concerned by specific business. Human capital is certain number of individuals within the business; hence input of each individual is important for the business performance on the basis of purpose.

There is a question what makes an individual to realise their purpose within the business (businesses is seen as the essential activity fort the certain individual to achieve specific tangible or intangible goals). Previous research on authenticity had been carried out, which aim was to identify the impact of authenticity on the business venture performance. Authenticity had been identified as the quality of the leader in organisation [Jensen (2003)]. The author identified authenticity as the psychological capital of the leader, which represents other psychological qualities like optimism and trustworthiness. Here is strong agreement that authentic leader affects the employees positively, but it just a positive influential impact, the most important is how employee see the goal without the leaders impact. Assuming that the purpose can be better alternative of the leader in the business organisation, as purpose holds the meaning of the business and striving to deliver the value of it to the individual, every individual according to their knowledge and skills make a contribution to the business purpose.

As it was discussed, individual as the part of the human capital has intellect, which is quite general meaning of the asset. Intellect is conventionally considered as IQ or EQ (EI), which is known emotional intelligence. Alone with IQ and EQ, SQ recently has been introduced as Spiritual Intelligence [Zohar and Marshall 2005] as a one of the components of the complex individual nature and its further impact on the business development as the ultimate modern activity.

16

Explaining SQ as important component of individual intelligence Zohar [2005] describes it as the transformative intelligence that allows breaking old paradigms and to recognise or invent new ones. In an individual according to the author all three components of intelligence IQ, EQ and SQ are striving for the balance, as a usual pattern individuals with high IQ are developing business mechanics to generate profit, ignoring other aspects ethics, morale, responsibility, honesty, happiness, balance, these qualities are described by Zohar and Marshall [2005] as the array of values which are the natural outcomes of SQ of one. Low level of SQ could lead to certain destruction of human values, which is not positive for the individual and the society as whole. New trends in business as the everyday activity are developing under the demand for the development of spiritual intelligence. Individual by Zohar and Marshall [2005] could be

considered with all the three components of intellect as a human capital for the business. SQ was scientifically noticed on the basis of the experiments on the human neural mass in the late1990 and was described as the third intelligence that uses values, meaning and purpose.

Zohar [2005] states that the reason of SQ is the ability to get deep sense of organisational identity, sense of personality and purpose of the organisations as a sense of their meaning for the society and environment.

The assumption of this paper is that vision and creativity are natural outcomes of the spiritual intelligence of one individual. Creativity and vision could be the tools for the modern business transformation, when creativity and vision are the sources of the innovative approaches in business. Creativity as the asset of the individual being part of the human capital in business, which is a major method nowadays and almost intangible, the main evidence of its importance is differentiation strategy, which is now is the essential part of any business.

Alone with IQ, which is the equivalent of one individual potential for innovation and smart decision making, SQ goal is to develop and innovate intangible value, which contribute to ethics, morale and personal development within the business for the better, more fulfilled wellbeing. This can explain that the businesses are shifting from focusing on groups and teams to focusing on individuals and specific human resource aspects [IBM 2007]. IBM is currently shifted to B2E business-to-employee approach [B2E Resourcing, http://www.b2e-resourcing.com/ 2007], which signifies the importance of employee in business and the aim is to satisfy the needs and demands of the both parties. The importance of the individual as employee within the business is growing, hence to value employee means to realise the potential of the business on the intangible level. On this basis for the prospective outcome the purposes both sides either business and employee have 17

to match to provide the essential motivation, satisfaction and fulfilment. Specific characteristics of the B2E approach are the mixture of organization-specific and employee-defined components and the potential to be highly customized and easily altered to suit the particular employee [http://www.b2e-resourcing.com/ 2007], which supports employee friendly policy, in example adapted by NHS [ Partnership Information Network 2002]. This can be seen as the part of the business purpose, which is the intention to increase not only efficiency, but also employee satisfaction and a sense of community within the organization [http://www.b2e-resourcing.com/ 2007].

The main aspects of spiritual intelligence had been identified, which could be important for the business purpose (also array of values [Zahar and Marshall 2005]):

Balance Excellence Truth Inspiration

Respect Support Friendship Awareness

Education Wisdom Responsibility Authenticity

These values are described by author as the applying principles of the present and future transformation, which help to see deep perspective for the long-term development of the business on the basis of human capital (intangible), decreasing the importance of the physical (tangible) capital in business.

Conceptual approach in business is considered to be closely connected with the individual components on the basis of the individual values, which re set to support and to sustain the purpose of the certain business. The value of the intangible components of the individual could very important for the business formation.

18

Concept of Purpose and Authenticity for the Business

In the book Purpose: the Starting Point of Great Companies by Mourkogiannis [2006] the author identifies the purpose as the universal starting point of the business, opposes purpose to ideology of the certain business activities and manifests its ultimate positivism for the business development. Another contemporary author Crofts [2005] has introduced the concept of authentic business in his book Authentic Business: How to Create and Run Your Own Business identifies authenticity as the most important aspect of the business and further describes the first stage of starting an authentic business is to identify the purpose.

The business with focus on the purpose is promising to naturally improve the conditions of the society and environment on various levels [Crofts 2005], which then could support the qualitative business model formation. Certain problems in conventional business and recent signs of the efforts to transform the business models (IBM, Kodak. etc.) state a question of incorrect approaches in fundamental business activities and misunderstanding the essential nature of the gaps and opportunities [Chan Kim and Mauborgne 2005].

The business model, reinforced by purpose, takes in consideration human assets in the first place. Clearly identified purpose (assumed in this paper as the core purpose ) strengthens the company and creates the ground for the new opportunities [Mourkogiannis 2006]. In example Gryphon Consultants [http://www.gryphon.com.au/businesspurpose.html 2007] is an Australian

consulting company with more than 25 years of business experience declares the most important aspect of the business, which are the people of the business, business purpose, commitment and philosophy, it is obvious that the majority of the aspects are intangible, it can be justified that the company is offering intangible product like service and the role and the impact of the services is increasing in the modern life.

Purpose is the primary source for achievement, motivation and energy [Mourkogiannis 2006], which is identified as the most important aspect for the successful and sustainable company and has inspirational quality, which is very important to sustain the business model on human resources level. Positive purpose in business is a goal and could be in opposition to goal as profit [Crofts 2005]. Purpose reduces risk aversion and fear [Mourkogiannis 2006], which is very different from strategic approach, based on tough competition in the market and risk. Core Purpose of the business model is set to validate the business identity on intangible level [http://www.gryphon.com.au/businesspurpose.html 2007]. 19

Purpose could be as the ultimate positive condition of an individual, when purpose underpins trust between individuals both within and beyond the firm and becomes the synthesiser of qualitative relationships and business collaborations [Mourkogiannis 2006]. Purpose and authenticity in business have stabilising role for individuals in the business, the strongest intangible assets of the business. MacLeod has describes such approach as corporate business collaboration [1986].

In the business context authenticity could protect the purpose from distortion and loosing its initial value, further stimulates to becoming intangible power to sustain the purpose on desired level. A successful purpose both drives a company forward to value innovation and helps to sustain competitive advantage, hence the intangible engine of a company, the source of its energy [Mourkogiannis 2006]. The author describes purpose as a central meaning of the business, which can become the core of the business model, assuming that all the business activities are powered by purpose and sustained by authenticity for the positive results and genuine success.

Purpose versus profits is the major conflict and this is the most significant opposition, hence there are two types of the approaches in business either the focus on profits generation or building business activities around the purpose with the profit as a natural result of a qualitative approach. Purpose and authenticity in business are the aspects strongly attached to morality. Crofts [2005] and Mourkogiannis [2006] are highly supportive of this position.

Modern businesses are tending to consist of various intangible aspects on the basis of relationships, communications, values and common vision on the basis of one individual value. Spiritual intelligence (SQ), as the value of the individual, participates in identification of the desired purpose for the business, which is conventionally ignored. In majority, purpose is supposed to be the outcome of SQ.

Considering authentic business [Crofts 2005] as the new approach in business, this is assumed as the outcome of spiritual intelligence. Represented authentic business (also authentic transformation [Crofts (2007)]), is a group of individuals, believe that this type of approach, based on trust and personal fulfilment, have certain benefits, which are supported by key advantages, for the better decision making due to intuitive and emotional empowerment and stronger motivation due to genuine care about the all aspects of the business, in addition 20

achieved external support by the customers due to high appreciation of the business as the activity with the certain purpose[www.authentictransformation.com 2007]. According to Crofts those key advantages are to create authentic potential, which is to unleash true energy of the stuff and to align customers and suppliers as supporters of the business purpose. This approach is similar to approach based on synergy between businesses, customers and suppliers, when the business has strong meaning for all the involved parties. In this case the emphasis is on genuine quality authenticity, and its importance in building sustainable business model of tangible and intangible assets.

Crofts [2007] in his interview sates that authentic businesses benefit from massively lower marketing and HR (due to less stuff turnover) costs than conventional counterparts, up to 80% and 91% respectively. Hence the impact of conventional marketing on business outcomes is declining. In the case of authentic business, marketing could be seen as the other business activity, which could be directly focused on value for the customers with the following benefits for the business out of delivered value.

The overall role of authenticity in the modern business is growing and some organisations, mostly consultancy groups, one of them is Business Vision believe that successes in business is built on relationships that are founded on trust [http://www.vision.com/ 2007], which is one of the most essences of authenticity, then the group states that it is clear communication and coordination of actions, supported by technology form strong business, this statement can be considered as the declaration of the authentic approaches in business communications.

Concept of Purpose and Authenticity to Form the New Business Model

Mourkogiannis [2006] states that for the new business formation it is highly important to identify the Purpose, which is on the authors opinion is the hardest task. None of the authors on the purpose in business have suggested the method of how to identify the purpose, though Mourkogiannis [2006] proposed the method of developing the purpose in 10 steps:

1. Review the strategy 2. Draw out the implications 3. Understand the moral ideas 4. Understand the company traditions 5. Take a purpose inventory of the top team 21

6. Take a moral inventory of the community 7. Identify the purpose 8. Create metrics and models 9. Test strategy and purpose 10. Decide and launch a campaign to make the purpose work

In the above list of steps for the purpose development, one of the steps is suggesting to identify the purpose. The author mentions that to identify the purpose could be the hardest part as the individual or a group have to fully realise the purpose and it business role on internal and external levels. If the purpose comes first it should play the core role in business for the sustainable development and as the motivational tool for the employees and the customers.

The purpose in comparison with the strategy represents the capability to build the business with the long-term perspective [Mourkogiannis 2006]. Obviously this approach requires some initial intangible investment like SQ (spiritual capital, which was described in the part Connection of Purposeful and Authentic Approaches in Business with the Individual) where spiritual capital is that intangible essential component of the human capital, which would be able to make the purpose and authenticity as a strong supportive aspects for the sustainable business. It is important to remind the business is a social venture and initially needs and aspirations of the individuals are more likely to be satisfied entirely and have benefits for the employees to work for the purpose they share [Crofts 2005].

Considering conventional approach in business in terms of differentiation or cost leadership, approach, supporting purpose and authenticity is expected to create certain services or products, which would be nurtured by moral, ethical, environmental, social and individual fulfilments in business. Cost leadership could be achieved only in condition of the positive purpose and authenticity under the self-regulated policy, which would mean that such business has certain principles.

Approach based on purpose and authenticity is socially and environmentally potential and is set to create better conditions for the sustainable future of the business in the long-term run. This is the basis for the sustainable development [Crofts 2005]. Lazlo [2005] also supports similar position, but his view is based on value creating initiative in organisation.In formation of the new business model it is essential to consider these aspects, as such approach is affecting important 22

conventional business activities like human recourses, product development, marketing, sales, and though in the process significance of some business activities can be reduced, but significance of other business activities could be increased with the emphasis on human capital and all the opportunities can be gained on this basis.

Certainly purpose and authenticity are intangible components and importance of intangible aspects in the modern business is growing, as of those which create the value. The outcome of the purpose is value; the outcome of the authenticity is genuine value, which is also unique. Value formula was identified by [Collins 2007], where the author had identified value as the component of core ideology for the new business formation.

In representation of importance of intangible aspects like purpose and authenticity for the new business are highly important. These are the aspects are not delivered by the leader (though the leader manifests the values for individuals), but further on a daily basis these aspects should be supported and developed by individuals (or human capital), who are involved in any business activity [Crofts 2005].

In relation to the group purpose open source in software development is relevant to this discussion of this concept, as the origin of the open source is the purpose not the profit in the first place. Open source culture as the result of the development the non-profit activities through the purpose to create secure and customised operational system for the PC. The best example is Linux software open source community in opposition to Microsoft Corporation, which initially operating through the educational establishments and currently entering the business world through new channels of distributions.

In relation to product as the main outcome of the business activities, there is a steady growth of the ethical consumerism (where the origins of the ethical choices of individual had been discussed), hence the sign of society development based on the needs of individuals. In Sunday Times Online in the article Do the Right-On Thing [2007] it was mentioned that the Cooperative Bank's annual Ethical Consumerism report reveals a sharp increase in sales of ethical products and services, rising from 9.3 billion in 1999 to 25.8 billion in 2004. This could be an opportunity for the conventional approaches in business (on the basis of find the gap) and the purpose to keep developing ethical and moral consumerism for the alternative approach in business. And according to a recent Mori poll, the general public want their say too, with 78% agreeing that they want to hear about companies' responsibilities to their customers, employees, 23

communities and the environment is the evidence from the same source. These are the reasons to form the new business model, based on the concepts of purpose and authenticity, where the purpose is to be ethical, responsible for the society and environment and the relevant activities in this field. There is the question why consumers now tend to choose those ethical products, the answer can be that in pursuit of profit the society forgot some more neglected some important aspect of wellbeing too, which now are gaining its significance.

Glennon [2007] assuming that relationships between the customer and the business are the paramount, as the communication with the customer is able to achieve better understanding of the customer needs and further form essential business activities, which are formed into customer conversation business model [Glennon 2007]. The author emphasises that the customer needs trusted relationships with the business, not even the product itself. In example www.amazon.com and Dell have build their success on the trusted and transparent relationships and further these companies perfectly manage relationships with the customers on different levels, which signifies that there is an element of almost intuitive understanding of the customers needs and aspirations. There is a certain change in business approach, the new business model should be set to allow customers to direct and to form certain business activities and one of the purposes is to form strong customer relationships externally and to motivate stuff to build customer relationships according to Glennon [2007], which requires stuff to share business purpose on the individual level, otherwise it would be difficult to build customer relationships, based on trust and support. Here is an assumption that intangible aspects are playing the main role in modern business and should be capable to maintain creation of desired customer relationships and precisely understand customer needs. New conceptual approaches in business and the new methods of using the human capital with the technological support can create the new capabilities for the modern business. Glennon [2007] didnt mention strategic approach in forming new customer relationships, which signifies that customer relationships cannot be built on the basis of the strategic approaches, but can be created on the basis of the new business model.

On the basis of relationship and communication orientated business development, authenticity plays a role of providing trust and transparency for the business. Authenticity will help to earn trust with internal, such as employees and partners and external environment as customers and society, which can create intangible sustainable benefit for the business. According to Crofts [2005] authenticity works as an excepted norm within the organisation and stimulates certain

24

demand in the market for the genuine products and services, the customers can trust and appreciate. This aspect is providing certain customer loyalty on the basis appreciated value.

Identifying the Core of the Business Model

Collins [2007] in his book Built to Last: Successful Habits of Visionary Companies clearly manifests the idea of the conceptual core of the business organisations, the author offered to preserve the core, which consists of ideology, purpose and value, but the core is divided, which can bring problems or conflicts between ideology and purpose, purpose and value and ideology and value on internal and external environment of business.

Traditionally the core of the business had been represented as the certain authentic leader of the venture [Jensen 2003], the person, who provides the business with the vision and goals on their individual level. But by Collins [2007] charismatic leadership is not seen as the key mechanism for work, the author considers that the main difference lies in the establishment of missionorientated research and proper targets. How clear target is identified. Here is an assumption that the proper target or goal is the specific purpose itself in non-strategic meaning. So if historically the charismatic and outstanding leader was to set up the targets and had been the core source within the organisation, then today there is the purpose or the goal (strategically), which is delivered to any individual, who is working for the specific result. Mourkogiannis [2006] insists that purpose in business functions as identity for the involved individuals, which is on the inner individual level. The person lives their part within the business and the purpose is the most attractive component of the business organisation, purpose is seen as priority.

There is certain trend to identify the core of the business model, which can be presented in different modifications. The most obvious business core is tangible in the representation of leading and governing individuals such as CEO, CFO, CIO, etc. or a group. This fact is considerable due to the reason that the company has to manage its tangible resources in the first place, finances as a highly important economic factor of the business, which is the outcome of the successful business design, planning and recourses coordination, to provide essential feasibility for the business.

The core of the business also has to provide successful functioning of the human resources and relationships as different intangible resources and should be treated in appropriate way. Spinosa 25

[2005] in his interview emphasises on relationships. The author mentions that establishing good working relationships with business units is the key, particularly if they are free to run their own IT operations. The essential question is how to establish good working relationships within the company. The assumption of this paper is that it should be intangible core, which is able to develop and stimulate relationships on the day-to-day basis. This should be the intangible motivational core for the human asset of the business.

In example of the business model template, produced by Osterwalder [2005], there is a certain emphasis on the central component of the business model, which appears as a core part of the chain model. Partner
Network

Core aspect

Customer
Relationships

Core
Capacities

Value
Configuration

Value
Proposition

Distribution Channel

Customer
Segment

Cost
Structure

Succes s/Failu re

Revenue
Streams

Figure 1. Business Model Template [Osterwalder 2005]

Conceptual business model offered by Osterwalder [2005] represent cycle between 9 key building blocks with the core as the Value Proposition, where the author puts an emphasis on value, which should be initially identified as the offer to the market. The model includes the mixture of tangible aspects, such as core capacities, distribution channel, customer segment, cost structure, revenue streams and partner network (partner network is seen as an aspect which tangible and intangible simultaneously and highly significant for the business development), intangible aspects of the Osterwalder [2005] business model are value proposition, value configuration, customer relationships and can be partners network due to its social nature. As obvious majority of the aspects are tangible, but the key aspect or core aspect is the author had positioned value, which proves the assumption that business model should contain the certain core. Osterwalder [2005] has chosen value for the core, in contrast Collins [2005] has chose core ideology to become a core of the business structure, where all the activities would be build to 26

support certain business ideology. Osterwalder [2005] hasnt given an explanation of the central position of the value, presumably value is the priority, when the rest aspects are dependent on this intangible component of the business. It is also important to mention that the represented business model is based on strategic free approach in business; hence core orientated valuecreating approach.

Purpose and Authenticity as the Core of the Business Model

Any sustainable structure contains the certain core and respectively the business requires the core concept to support relevant business activities. In this paper there is an attempt to justify the purpose as the core of the business and the main intangible aspect for the individuals, who are involved in specific business. Human capital is a general representation of the internal value of the company; purpose is a condition for the human capital to sustain the business.

By Mourkogiannis [2005] in his book about the importance of the purpose in business, purpose described as the core energy that fuels anything else, which is supported in this paper.

It is natural that every solid structure requires certain core to be sustainable over time. On this basis there are few aspects can be considered to be the core of the business, for example ideology, goal, leader and value. Analyzing these aspects there are one common quality is appearing that all the potential core aspects are tend to change dramatically and the second none of them promise happiness as outcome.

Ideology can be myth or being significant only in a certain period of time (alone with fashion), and manifesting specific interests of the certain leader. Though Collins [2007] in his book Built to Last: Successful Habits for Visionary Companies declares ideology as a core, which provides continuality, stability and direction for the business, which can be true, but ideology is an internal aspect, which means the company has ideology, but the usefulness of ideology for the society and environment can be missed or not supported.

Disney as an example of the strong core ideology created Disney University and required every employee to attend Disney Traditions seminars as the propaganda of Disney Culture. Here is no freedom of choice for the employee, which can be seen as the negative aspect within the modern business context, when the employee is free to choose, without external pressure, if valued as the 27

creative and intellectual human capital, hence Disney Traditions seminars can be seen as the certain strategic ideological force of partly unknown conceptual nature.

In addition ideology has a strong political meaning in the beginning of the last century, in the modern context when the customer is considered as the significant aspect of the business, ideology looses it actual meaning.

Good point to support the assumptions of this paper that Collins [2007] emphasises that there must be a core within the business, which in interplay with the progress as the main drive can bring desired results for the visionary company. In addition the author states that highly visionary company does not simply have some vague set of intentions or passionate zeal around the core and progress, but also have concrete, tangible mechanisms to preserve the core ideology and stimulate the progress. In this case Collins [2007] consider Mariott, which institutes rigorous employee screening mechanisms, indoctrination progress and elaborate customer feedback loops, these are more methods to improve business operations on the customer care level.

Further the author had represented the interaction between the core ideology and the progress in a yin and yang figure of Chinese dualistic philosophy, where two forces reinforce each other. Futher Collins [2007] conceptual framework, which the author recommends for CEOs, managers and entrepreneurs to design and diagnose the organisation.

Preserve the Core: Core Ideolog y Core Va lues Core Purpose

Stimula te Progress: Drive for Prog ress

Figure 2. Conceptual framework for the visionary companies [Collins 2007].

Collins [2007] has built the formula, which he stated as useful guide to build up certain core ideology for the business. 28

Core Ideology = Core Values + Purpose, where

Core Values are the organisations essential and enduring tenets small set of general guiding principles; not to be confused with specific cultural or operating practices or not to be compromised for financial gain or short-term expediency [Collins 2007]. The author mentions certain principles as policies and actions, but the nature and the strengths of the principals are uncertain. The company can declare core values like quality, honesty, trust, customer care, but in practice it is hard to sustain the values on the basis of ideology, there must be the certain reason for the values to exist or the get the values as the outcome of certain business activities, the to state the tangible or intangible value as the asset of the business. Simply value is the outcome of the certain activity, but not the aspect before activity.

Purpose, according to Collins [2007], is organisations fundamental reason for existence beyond just making money a perpetual guiding star on the horizon; not to be confused with the specific goals or business strategies. Further the author states that purpose need to be wholly unique, which resembles differentiation strategy, when the business approach should be different to make the company successful. But the author emphasises that the primary role of purpose is to guide and inspire, not necessary differentiate. This is very important assumption in the context of this research, and the emphasis is on the guiding and inspiring qualities of purpose, the attempt to make the purpose as the ultimate core of the certain business.

Collins [2007] had notices that the purpose is unique, which is true due its integration with the other aspects for the business. One of the aspects which make the difference for the business purpose is authenticity. This aspect was emphasised by Crofts [2005] in his book Authentic Business and the internet resource http://www.authentictransformation.co.uk/ [2007]. The author reveals that authentic business has a purpose for the benefits of the society and environment, where society is: customers, suppliers, partners, the individuals or the groups, who strive to support the purpose.

In continuation of discussing the possible core of the business other aspects after ideology like values, vision and physical leader are not sustainable, but can certainly make special contributions. Vision is the term most fits the purpose, as the origins of vision are mostly intuitive. Vision is the insight into the future of the business, which allows choosing certain direction for the business. Vision itself cannot be the core of the business as exists as a valuable 29

idea for the business. Vision is connected with the present business transformation; assuming that vision could be the output of SQ (spiritual intelligence), as it represents belief in certain concept or idea.

Leader as creative, smart and visionary central individual of the business is possible only at the start as the major inspirer. In the case of Linus Torvalds, who have launched the Linux software product on non-commercial basis had spread the vision and then fixed it with the purpose to build up open source software by the means of the supporters and purpose shares, which resulted in the powerful global community and strong developing alternative to the products Microsoft corporation.

Current of Transformations of the Existing Business Structures

Definitions of business transformation vary, but the trend of transformation is growing, which indicates the shift from the conventional business methods to the new approaches of various natures from technological innovation to social and individual development with the growth of awareness of the business as unique socially responsible and responsive system.

Certainly overpowerful and somewhat destructive business corporations are now set up to be transformed to balance the trend in business to be ethic, environmentally and socially friendly, value delivering and employee friendly. There is an obvious shift from aggressiveness to creativity and intelligence in all aspects of the business. There is a great demand of the society for the new approaches in business activities, which is an important for the future success of the company. Acquisition is aiming ethical firms to recover the image of the company due to the ethical issues in the past. In example Body Shop had been acquired by LOreal, Ben and Jerry by Unilever, which signifies that the companies lack that important component and basically acquire it by commercial acquisition. Both companies Body Shop and Ben & Jerry initially had a strong purpose which manifested in quality, naturality and uniqueness of the products on the basis of the ethical approach in production, hence those companies have created the positive profile, which is the equivalent of the business value for the society and environment. Body Shop and Ben & Jerry are qualifying as authentic companies, with genuine products and ethical and moral approach for the better wellbeing.

30

There is transformation of the values are taking place, when the physical product is not significant anymore, but the intangible aspects related to the product or the service are important as purpose, vision, relationships, communications, authenticity, culture, history of the business etc..

There is no obvious pattern that can be repeated at will in any business, so there is belief that there is a need to have to look at behaviors- behaviors that can be absorbed and translated into the sort of focus that can transform the business [Towers 2006]. This statement indicates the importance of relationship and communication in business transformation, when the human factor is the most significant.

Discovering the signs of the new age in business MacLeod [1986] has noticed that new economic model is forming by the individuals who are striving to be autonomous and selfsustained and the model had adopted the name community development corporation. This type of business model is set to promote local self-help and development. MacLeod [1986] reflected the trend for the new business formations.

Nowadays corporations experience problems as the violent business organisation brining globalisation and negative impact on society by developing consumerism and taking advantage of various resources [The Corporation Documentary Film 2003]. Due to negative social reaction the on corporate strategic methods, the corporations have discovered new measurement of business performance which is value and added corporate social responsibility as the tool ethics in business due to the social demand. Modern companies are constantly measuring performance, it has become a norm to measure impact on society and environment, as the society has become more critical of the business organisations. These actions have started the major business transformation, when the conventional approaches have become to be criticised by changing to more ethical and moral society.

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Figure 3. Business transformation [Capgemini Consulting and The Economist Intelligence Unit 2007 Trends in Business Transformation. Survey of European Executives]

This figure indicates that there is no stable ground in business anymore and all the aspects of the business are under certain transformation and change.

New age in business brings high dynamics and great amount of intangible assets as the value is more perceives as an intangible asset of the business. Three things have literally changed the face of business. These things are IT, internet and BI or business intelligence [The New Age Business Conferencing Centres 2007]. It is important to mention that here is a strong trend of communication increase in business, which in turns means that people value each other on intangible level, share experience and knowledge, which gives the chance to rediscover the purpose in the business and individual levels. There is high level of renewal of the business structure exists on the communication level. It is important to mention that traditional marketing with the major component advertising is loosing it effectiveness in the conventional way. In the context of this paper advertising is not an authentic aspect of the business, but considered as promotional tool of the high cost, communication and relationship are now capable to reduce the effectiveness of advertising, however advertising is still important conventional business activity.

Currie [2007] explains business transformation by the rapid growth of the new mediums, like internet, mobile phone technology, which makes a huge impact on creative industries and traditional business models by his opinion need constant revision and the move towards a 32

convergence creates highly competitive changing market place. Currie also mentions the importance of ties between the environments of the city and the industry. The last is emphasising the role of communication within the business, as the communication is one of the predominant aspects of business transformation, it is more available and becomes the great mean of the intellectual exchange.

Open source is the most significant sign of the business transformation and has the predominant factor for the development of specific knowledge and practices to achieve desirable performance. Open source is an element of the new age culture and has a specific purpose, first of all to serve the knowledge, collaboration and communication. Originally open source is the set of principles and practices to develop software on non-commercial basis for the further free distribution and development. Participants in such a culture are able to modify the collective outcomes and share them with the community. Some consider open source as one of various possible design approaches, while others consider it a critical strategic element of their operations [http://en.wikipedia.org/wiki/Open_source 2007]. Open source has an autonomic authentic nature, as all the activities with in the open source are transparent, which is the most important spect of the whole open sourse collaborative activity. This is a clear oppositin of Microsoft and Lynux, where Lunux is developing from its core purpose to provide ultimate sucurity for the PC users, when Microsoft is acting strategically and had been critisised for the aggressive

approaches in business and unauthenticity of its recent products.

The transformation of the business structure is taking place, when conventional components are loosing ther effectiveness. Kontes [2004] in his article is concerned with the new corporate center, the author aware that the center of the business is the most important and the need for the change wihin the organisation of business is growing, which is also noticed bu Crofts [2005] and Laszlo [2005]. This changes by the author should provide the balance of resources and achieve long-term intrinsic value, though those changes develop unclear roles and responsibilities for creating value, which also adds complexity of decision making. The traditional corporate centre model is not effective in balancing resourses and developing communication and decision making.

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CEO

Finance

Human Resources

Information Technology

Business
Development

Legal & Investor Relations

Other Examples
Marketing Risk Mgmt Regulatory Mgmt Knowledge Mgmt Quality Mgmt

Figure 4. Example of Typical Corporate Centre Model [Kontes 2004]

The above figure illustrates conventional structure of the business, where every department is a tangible asset within the traditional business. The structure is clear and every department has it function within the conventional approach, though there is no information about the business concept (purpose) and business nature, further there are no connections links between the departments and the structure lacks the core, when the CEO is playing the governing role. Other examples are the alternative departments within the business, which specific companies include in the business structure with the aim to improve the business performance. The oval dissatisfaction with the conventional business structure takes place.

To transform the business structure with the emphasis on the corporate centre Kontes [2004] suggest to create a new model of the centre, which he believes has a complex role. The main task is to specify the roles of management in value creation and to create clusters of activities that drive value and balance resources, which in the frame of this specific research is development due to value orientation strategies offered by Kontes [2004], also the author strongly suggests the strategy formulation, in this research purpose identification is replacing the strategy, as the strategy has a warfare meaning, which was discussed in this paper. On the basis of the new value creating strategy Kontes [2004] had formed the alternative corporate centre model.

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CEO

Enterprise Strategy Group Mission: Best portfolio of businesses and competitive strategies for maximizing value

Strategic
Management

Executive
Development

Centers of Excellence

Finance Group

Group Best organization structure, processes and information for maximizing value

Group Best people, capabilities and rewards for maximizing value Best specialist knowledge and skills for maximizing value Best compliance and control, treasury and tax management for maximizing value

Corporate Service Unit Best support services for protecting and maximizing value

Figure 5. Example of Alternative Corporate Centre Model [Kontes 2004]

There is certain transformation within the departments of the business organisation and the positive fact of the proposed transformation that the organisation is totally focusing on maximising the value and most of the changes are to support the value strategy. The essential aspect of the alternative corporate centre model is that the departments are now changes into the business activity groups, with the aim to focus on group decision making to achieve synergy effect, further to manifest the certain purpose of the human capital within the organisation, as human resources department is not taking place in the new formation. There is strong emphasize on the purposes within the organisation, when each specific group has its goal to maximise the value by involving appropriate resources.

Transformation is a proof that the view of traditional business structures is changing due to the new trends in business, which have social, ethical and environmental origins, hence the question of the value arise. It is obvious that value for the business is profit, but it more complicated question about what is the value for the sophisticated customer, hence the companies have to reorganise its structure to deliver new value to the customer on internal and external levels, that is why the businesses are transforming.

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Ther a certain conflict between two approaches is taking place: startegic and alternative to strategic,which has been discribed in the previous chapters, where alternative approah is concerned with the purpose, value and authenticity, which inturn are intangible aspects,and originate from the individual needs, hence businesse start to develop intangible aspects like relationships, partnerships, social respinsibility, value which is becoming a norm, but it doesnt appropriately fit onto the conventional structure of strategic approach.

Companies across the world have indulged in restructuring that has focused on moving chairs around, while avoiding the issue that the structures that they are trying to apply arent fit to the purpose of the new world [Towers 2006].

Chapter THREE: Theory of Implementation of the Conceptual Business Model

On the basis of the literature review there is certain trend in business to identify the purpose [Mourcogiannis 2005] and being authentic [Crofts 2005] to create sustainable value internally and externally for the society and environment [Lazlo 2005]. This can be seen as the challenging approach as it requires certain investment of the spiritual capital [Zohar 2005] into business and to find a certain niche [Kim and Mauborgne 2005] for the purpose realisation in business, reinforced by the business model [Osterwalder 2005], represented as the conceptual tool for the business logic. Such approach is also seen as the synergy for the positive formation of the business, but this approach excludes aggressive strategic and competitive approaches, which are naturally seen as opposition by the mentioned authors.

Role of the Individual in the Business Model Formation

For the initial understanding the reasons of the alternative business modelling, it is important to aware that individual as the essential part of business contains three elements of intelligence: IQ, EQ and SQ.

36

em

t en

C
ure ult

Ma na g

IQ

EQ SQ

Visio n
Figure 6. Human Capital. Components of the Human Intellect and their Business Relevance.

The above figure indicates that individual requires investing spiritual capital (product of SQ spiritual intelligence) to create certain performance, to enrich the business with the vision of the individual, vision is an intuitive quality of the individual, which also stimulates creativity. Japanese proverb says that vision without action is a daydream and action without vision is a nightmare. Here can be notices that vision also motivates individual for the appropriate purpose and stimulates certainly thinking individuals to collaborate in the business venture for its better positive performance. The assumption is that spiritual intelligence is the component of the individual, which is able to identify the purpose and authenticity (as the moral and ethical aspect) and to make contribution to business suitability.

Explaining the areas of the individual intellectual components, it was identified that IQ is the mental intelligence, the certain mental capability of the individual to learn and understand new things, to solve problems and think abstractly, which are highly important in the field of business management. EQ (or EI) emotional intelligence is relatively recently recognised component of the human intelligence, which is concerned with the behaviour of the individual in organisation, hence behaviour builds up the culture, and culture is very important aspect of the business, which is the an effective intangible capital of the business, also seen as the outcome of the emotional management in business. Spiritual capital (SQ) is mostly intuitive component of the human intelligence, which is future orientated, hence it is considered to form the certain vision and ability to form array of values [Zohar and Marshall (2005)] to sustain the purpose. Spiritual intelligence is the most aesthetic one among three components of the human intelligence. In addition spiritual intelligence makes contribution to the business culture, by creating its uniqueness as key of value-adding process [Ridderstrale and Nordstrom (2002)]. 37

Implementation of this theory can help to recognise the right individual for the certain business, not only based on the previous experience and knowledge, but in addition understanding that individual aware the purpose of the business and able to share and develop the business trend by investing spiritual capital for insightful value creation along with intellectual for making smart decisions and emotional for nurturing the culture of the business organisation.

Business Model to Strengthen Business Plan

Uncertainties in modern business make it difficult to make a plan for the specific business activities in the dynamically and dramatically changing society and environment. Though, it is important step to build projection of the business activities. Business plan is not reflecting the importance of the business in the context of its meaning and impact on the society and environment and it is not containing the core elements, which can make the business sustainable over time. Business plan is a temporary document which focuses on imaginary financial

projections, but not on certain business concept, which can bring success to the business organisation in the future further to ensure sustainability, which cannot be reflected in the business plan, but can be supported and theoretically justified by the business model. Weakness of the business plan was reflected by the business organisations, especially those business organisations, which are involved in creative industries.

Business model should be more effective in business planning than business plan itself due to certain new trends in business, when according to Johnston and Bate [2003] competition these days depends less on products and markets or even on competencies than on concepts and business models that change the rules of the competitive game. Developing new business ideas and models is the key to business effectiveness. Hence business organisations should be concerned with the business modelling, which would be focused on the unique approach in business and create the solid platform for the further business planning and financial projections.

Business plan cannot be considered as a business forecasting tool, though business model can be used as an ultimate conceptual tool for structuring the business fundamentally and wrapping the structure with the essential business activities and operations, understanding the core purpose and the quality of the business concept, which is highly important, then project forecasting could be produces. 38

In this paper there is an assumption that business plan is the narrow business document, which is not justifying the potential existence of the business, but has no focus on the certain business development and justification components of the business model. Though widely used traditional approaches are reflected in the business plan, which are not essentially affective, but conventionally accepted. Due to this fact business plan lacks justification of its effectiveness.

As an example of the certain lack of effectiveness of the business plan should be an organised special event during Edinburgh Film Festival 2007, where the actual failure of the projected business plan for Renaissance Films Production of a high budget had been introduced, and the question of the business modelling had been arisen, due to the highly uncertain and radically different approaches to develop growing industry of the independent film productions, it is important to mention that independent film productions are striving to be of non-commercialised nature, profit business organisations due to its purpose to be creative and truly educational, which has created certain open question about the correct approach, however business plan didnt help to realise the project successfully. The participants of the discussion Ilott (director of the Film Business Academy), Kuhn (CEO of Qwerty Films and former CEO of PolyGram Filmed Entertainment) and Finney (CEO of Renaissance Films) emphasised on the importance of intangible assets in the creative industry, which is currently not the essential part of the business planning due to main financial focus in business, hence financial projections can be satisfactory, but the real outcome wouldnt always match the business plan. Here the importance of intangible aspects is highlighted, but the reason of the business plan failure was not identified, though Kuhn had noticed that relationships and communications within the business are paramount, where human capital is the major capital, which help to create certain synergy and creativity, which cannot be achieved conventionally, hence the emphasis would be on the genuine concept of the business.

In this paper there is the assumption that business model is an essential aspect of the business planning, which justifies the business activities, making it more clear on the level of the core purpose, reflecting the intangible aspects and their role within the specific business model. By the means of identifying the purpose for the business and positioning it as the core of the business model it would be easy to identify the role of the business within society and environment, which is essential for the further successful realisation of the business.

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Business Architecture to Create Business Model

Understanding the individual components and their business relevance, which can contribute to the process of the certain business model creation as a cohesive process, hence creativity and insight has to be the qualities of the business architecture, as architecture is creative and technological method simultaneously.

To make the successful projection of the conceptual business model it requires new approach in structuring and planning the business. Considering complexity and uncertainty of the modern life, and development of various conceptual approaches, the business requires business architecture. Business architecture is relatively new professional establishment. According to the innovative approaches in modelling business architects act are different, they all design and run a new venture to achieve its sustainable growth [http://www.1000advices.com /guru/ business_ architect.htm 2007].

According to the literature review business model is a primary a conceptual tool, which aim is to organise and coordinate resources and relationships and to provide the business model with the core elements, which are set to sustain the business in a certain niche, considering its effectiveness, efficiency and the conceptual approach. In the context of this paper authentic purpose is the core concept of the business and the business model would be structured to support it.

Effective business model cannot create itself or even be created by the business individuals, who are appearing to be the originators and supporters of the business purpose as the concept; by this reason the importance of the business architecture is meaningful. Considering the fact that radical approach in business is expected, architecture will help to strengthen the concept for the further business formation and transformation. Business architecture is helping to combine essential requirements for the certain business organisation.

Business architecture is concerned with business concept model and the following business process model, which is focused on structure, technology and efficiency of the business processes. Business architecture helps to identify certain components of the business, which could provide effectiveness. In this paper focus is on conceptual business architecture, which would identify the core elements of the business organisation and their role in building an effective solid business platform. 40

There are certain guidelines for the business architecture are identified as Individual Employee Productivity, Collaborations and Partnerships, Technology as Investment, Outcomes Focus and Simplicity. Further the components of the business architecture are identified as People, Processes and Policies, Organisational Performance and Controls, Financial Systems and Reporting and Enabling Technology with the core as Business Portal.

[http://uc2010.ucsd.edu/nbarch/index.htm 2007].

In this part of the document there is an attempt to explain the usefulness of the business model creation instead of the business plan projection, which is considered as transformation Business model as a conceptual tool [Osterwalder 2005] has a core which supports changing business activities in the dynamic business world when new various business activities have a short life cycle due to changes in environment and Business model is set to move on the next level of organising the business activities fundamentally. In this document the focus is on the core of the business model the purpose and authenticity as a concept.

Theory of the Conceptual Business Model

Initial stage for the business model formation is identifying the core of the business its Purpose. Taking in consideration PESTLE model, traditionally used to analyse the external events for the identification of the opportunities for the further business development, the conceptual model for identifying the purpose or the purposes for the business formation is used. This model allows to see interaction and overlaps between vital aspects of the human life, as society, environment and technology (innovations).Politics, economics and legislation are not included in the model due its strategic nature, which is not almost appropriate for the further positively orientated purpose analysis and identification, but these aspects are highly influential and limiting for the business development and can be applied for the certain scenario analysis.

On the basis of the analysis the purpose is tobecome the primary source of achievement, and it reveals the underlying human dynamics of any human activity [Mourkogiannis 2005]. Purpose is an initial source for the visionary business development, based on moral goods and purpose is essentially positive human concern to form the new quality business and can become a certain

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reason for the value creation, but not yet a value, as to create a value it requires making certain investment in the purpose realisation.

Environmental Aspects

T echnologic al Aspects

Purpose
S ocial Aspec ts

Figure 7. P-set Model. Conceptual Model for Identifying the Positive Purpose for the Business.

Similar to PESTLE model analysis P-set model analysis is concerned with gathering data on each aspect separately and identifying the possible overlap between the aspects, their influences on each other and the new opportunities, produces by mutual interaction. Identification of the general purpose is the ability to see the overlap between the aspects of the model. Purpose as the positive drive for development will provide the business with the sustainability. As an example of the purpose identification is the successful business of Amazon.com, where the company identified that modern society strives for the quick and easy communication with the aim to exchange knowledge and experience (social aspect) along with obtaining and selling the products on the other side internet distribution (technological aspect) aspect has started to develop, Amason.com has identified the overlap of the two significant aspects and developed highly innovative and interactive internet service with the purpose to provide customers wit the most convenient, interactive, accurate and quick internet service. Such approach allows developing the achieved value over created operations. Purpose is the drive for the further relevant or the new value development in the specific direction. In the case of Amazon.com technological innovations and transforming social needs crating the purpose for the business development on the basis of the social interactions and technological innovation. Also purpose is an attribute of the certain community, in sharing the purpose; hence purpose is the main motivational factor.

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In the case of overlap between environment conditions and social and individual needs, along with the consideration of the all known components of the human intellect, with the emphasis on SQ (spiritual intellect) which was discusses in the chapter Connection of Purposeful and Authentic Approaches in Business with Individual, the purpose is concerned with human happiness and the purpose would be to care about environment and develop the quality of the human life by the means of business activities. The numbers of the ethical companies are concerned to provide the customers with the genuine quality natural products, which produced authentically. The purpose is to produce and to deliver the products, which are able to sustain environment and to satisfy customers moral needs, which was neglected before, such approach creates a certain sustainable and meaningful value for the certain customers. The purpose is seen as the drive for the certain businesses activities, identification of the purpose can eliminate the need for differentiation, as the purpose is formed as the core for the business activities, created on the basis of the aspects of the human life and human capabilities and recourses.

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Figure 8. Conceptual Business Model

On the basis of the literature review, considering the trends in business formation the conceptual business model would be represented with the core element and the emphasis on the social aspects, as opposition to strategic. The majority of the business model components are intangible, according to the model there are 25% of tangible components, which are Resources Management, Product Management and Cost and Revenue Management, the moving power of the business model is intangible, based on value, communications, relationships, networks, performances and competences.

As it was mentioned before the business model has a core, which is Purpose, as the main value stimulating core component of the business. According to Mourkogiannis [2005] Purpose is the starting point of the great companies, by this reason it is put in the central position, so every other component of the business model would be purpose focused. The importance of the purpose in business is also mentioned by Collins [2005], Crofts [2005], these author see purpose as an inspirational factor, which is concerned with human happiness. Roberts [2007] says 44

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purpose is set to motivate and to coordinate human economic activity for the value creating goal. Hence purpose is the initial unique goal for the value achievement in business.

Next components of the business model following core Purpose are 4 intangible elements, are the outputs of intangible investments in business on the basis of the components of the human capital, such as emotional capital (EQ) and spiritual capital (SQ) with the aim to create and sustain Vision, Culture, Synergy and Authenticity.

Vision + Culture + Synergy + Authenticity = Insight + Lifestyle + Power +Trust

These 4 elements, further would be called intangible strengths, which are marked in colour should be trough all the business model to build up the business with intangible strengths, provided by the human capital, further to add more value to the core Purpose and to stimulate and motivate those who involved in business on the basis of Vision, Culture, Synergy and Authenticity. It is important to mention that these components are now the trends of the intangible aspects in business, which proves that importance of intangible aspects of the business is currently growing.

The main starting point of the business would be to identify the purpose [Figure 7], then to add 4 intangible elements to strengthen the Purpose, as to provide the business with intangible resources.

It is important to mention that represented approach has no aspects as commitment, loyalty and strategy, as the approach is based on inspired, motivated and coordinated business actions for the value achievement internally and externally.

The first to the centre white circle is reflecting the certain initial business activities, which can be represented as the primarily level activities to create the first stage platform for the business, which includes Value Coordination, Relationship Management, Communication Management and Recourses Management. Where Value Coordination is initial stage where the process is identified as the timely, unrestricted flow of information and knowledge between all parties involved in business [http://www.bermstudios.com/servicev.html (2007)]. Relationship

management is the business activity, can relate to B2E activities, to achieve desired balance between employees, employer and business on the basis of mutual agreement, such business activity is responsible to attract relevant people, who would support and share the common 45

business purpose and other core aspects of the business as vision, culture and authenticity with enthusiasm on the basis that sharing purpose is essential. Communication Management is concerned with attracting relevant partners and customers, can relate to B2B and B2C activities, for the common purpose and to further develop certain network of purpose supporters to exchange knowledge and information. Recourses Management is concerned with the usage of obtained recourses to create natural goods, can relate to engineering, technology, manufacturing and operations, the aim of the activity is to manage resources authentically and efficiently with the support of value coordination activity.

After the first to the centre white circle the colour circle follows, which indicates that the next level business activities should be nurtured by the 4 strengths: vision, culture, synergy and authenticity, which means that every decision within the present business model should be based on these aspects.

The second to the centre white circle is reflecting the beginning of business development, which consists of Product Management, Distribution Management, Performance Management and Development Management. These 4 business activities are also supported by 4 intangible strengths and based on the primarily business activities of the first white circle. One of the most essential business activities is Product Management would be supported by Resources management and concerned with the product quality (such as developing ethical and sustainable products) and efficiency of production, further to find and achieve the perfect balance between sustainable effectiveness and efficiency. Distribution Management would be supported by Communications Management and distribution network (which also would become the tool for knowledge and information exchange) is set to be created. Performance Management would be concerned with design and implementation of the business operations further to achieve sustainability and operational excellence, this component is tied to Relationship Management (traditionally and naturally business operations are dependant on human resources) with the aim to improve overall internal and external organisational performance on the basis of employee satisfaction and employee sustainability. Performance Management can make radical decision on the basis of the most sustainable effective and efficient methods in realising the Core Purpose. Development Management is concerned with the initial achieved value improvement according to the core Purpose of the business organisation. Development management is the component between initial Value Coordination and visionary Value Development.

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The third to the centre white circle is the highest due to its aim to explore and to develop new values and methods in business, based on the primarily, which are represented in the first two circles. This stage is an advanced, considering the certain insight into the future of the business and consists of such components as Cost and Revenue Management, Network Management and the essentially advanced as Competence Development and Value Development, these components of the business model require advanced business expertise, research and forecast. Cost and Revenue Management is concerned with the financial operations, considering security and risks, and further to develop sustainable financial performance of the business organisation, where the component would be considered as of the highest importance due to its vital role in business organisation and would be considered as the certain area for the constant improvement, based on innovations and creativity.

The last colour circle is the circle of executives represents the top of the decision making process, where the decisions are made on the basis of expertise in specific areas of business and with the support of 4 intangible strengths: Vision, Culture, Synergy and Authenticity. In this business model there are 4 executives (the group of executives): CEO, CFO, CIO and CTO, who are responsible for the sustainable realisation of the core Purpose and economic performance of the business organisation. Specifically chief executive officer (CEO) would be focused on value and sustainability development, including the areas of importance as society and environment, responsible for the certain segment of the business model, chief financial officer (CFO) would be focused on cost and revenue improvement, financial structure of the business and overall economic performance, chief information officer (CIO) is providing the business with the innovative decisions for the network management, based on expertise in information technology and latest trends in this specific area of business, CIO segment includes communications and distribution and chief technology officer (CTO) is responsible with the R&D and technological processes within the business organisation, CTO is responsible for the specific segment and the second from the centre white circle, which includes Performance Management, Product Management, Distribution Management and Development Management.

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Chapter FOUR: Implementation Issues of the Conceptual Business Model

Conceptual approach in business is relatively new; hence traditional approaches are still more adapted due to clear and relatively simple structure, based on majority of tangible components of the business. In addition conceptual approach is focusing on the certain purpose as it is represented in the business model, when traditional approach is strategic and profit orientated.

The conflict between the concept and the economical benefits can be the problem in conceptual approach, which manifests certain value for the society and environment with the profit as return. The difficulty of the represented conceptual model is to identify the core purpose, which would serve and satisfy all the components of the structure and would become motivational and almost inspirational positive goal. Any conceptual approach requires strong supportive elements, which where represented as Vision, Culture, Synergy and Authenticity, which are dependent on the intangible investments of the human capital.

Implementation of the business model requires certain specific investments of each individual involved certain business. The business model represented in this paper requires more intangible investments, which is quite difficult to measure, estimate and evaluate. Spiritual capitals along with intellectual capital are the most significant investments to sustain conceptual business model with the purpose as the core. And the problem would be to attract certain individuals on the basis of purpose in business, though the number of such individuals is growing, as those who strive for the certain transformation, the initial development stage of the represented business model probably wouldnt be economically beneficial for the individuals, though individuals could benefit with their personal fulfilment according to their needs and aspirations. The process of building a sustainable business on the basis of the proposed business model is time consuming.

The major part of the business model is supported by intangible recourses, which could create uncertainty within the process of its realisation and then it would be difficult to sustain the business model, though correct choice of human capital can provide the business model with vital support. The business model is value orientated, when such values are sometimes difficult to identify, the same situation would be with the purpose and other intangible elements.

The problem can arise from the lack of communication and misunderstanding, as it is initial condition to make the model to function. The business model is expected to function with the 48

support of the purpose enthusiasts, not to confuse with commitment or loyalty, when the people have their personal needs, aspirations and interest in purpose based business model.

For the positive outcome of business the individual requires to support and to share the purpose of the business and to make a certain personal contribution. In addition the person should be motivated not by the profit increase, but by the purpose realisation. If the business approach doesnt motivate the individual, the business based on purpose wouldnt be effective on their part, then further evaluation, based on purpose of their business activity would be required.

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Chapter FIVE: Summary and Conclusions

The research on the above topic proved, that there are plenty of approaches to transform the business, which indicated that current business transformations are likely to represent socially orientated (communications and relationships) creative approaches to change the conventional business methods. At least there are two main directions are clear: strategic competitive profit orientated and alternative socially and environmentally concerned, based on certain purpose to improve human wellbeing on different levels.

Alternative approach in business requires new business structure, which would be capable to strengthen and sustain certain business activities on this basis. With this aim business model was introduced to become the business platform for the new conceptual approach development based on purpose and authenticity. Purpose and authenticity and their role in the business model were investigated, with addition of what specific contribution these aspects are set to make for the businesses and society.

It was identified that only certain business structure in the form of business model would be useful in such approach to develop business, as conventional theories are not satisfying the alternative view on business.

In relation to individual it was investigated, what is the cause of the present business transformations and the answer could be that individual is developing new need and aspiration, which could be satisfied by alternative approach in business. It could be enough to say the certain individuals wouldnt want to compete strategically to generate profit, but would desire to fulfil their individual needs and aspiration. Certain third important component of the human intellect has been discovered, which is spiritual intelligence (SQ), and assumption has been made that it is the reason of the current social changes and growth of the new demand for ethical and moral outcomes of the business and desire for the personal fulfilment. It was identified that intangible aspects are more significant in the modern business.

Understanding the nature of the business transformations and further possible framework for the future business development were considered the most important aspect in this paper. From the contemporary literature review were chosen the most significant trends, which focus on development sustainable business structure, which would be capable to consider important tangible and as it was quite clear intangible in its majority aspects of the business. 50

On the basis of identified trends in business and society the certain conceptual business model is proposed in this paper. The business model has specified business activities for the start and the further sustainable development of the business, which is based on such positive aspects as purpose and authenticity. Purpose has positioned as the intangible core of the business model with the aim to motivate individuals, who are involved in certain business. Purpose has been introduced as vital aspect of the business and the P-set model for the identification of potential core purpose has been suggested. The proposed business model is based on purpose and relevant essential business activities (management), which are guided by executive individuals who obtain expertise in the certain fields of technology, information, finance and sustainable value (vision) on different levels.

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