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Drawing on research undertaken in the history and philosophy of science, with particular reference to the extensive literature which discusses the use of models in biology and economics, we explore the question ‘Are Business Models useful?’ We point out that they act as various forms of model: to provide means to describe and classify businesses; to operate as sites for scientific investigation; and to act as recipes for creative managers. We argue that studying business models as models is rewarding in that it enables us to see how they embody multiple and mediating roles. We illustrate our ideas with reference to practices in the real world and to academic analyses, especially in this Long Range Planning Special Issue on Business Models.

Does the idea of business models matter? The term has become widely used in board rooms, by managers in organisations, by consultants, by commentators of business, and even on radio and television programmes aimed at the general public. Indeed, it is more widely used nowadays than almost any other concept in strategy: when people are asked ‘what is strategy’? most give an answer that includes the words business model. The ubiquity of the term and the plethora of its uses suggest that business models are profoundly important to the world of work – yet management academics rarely put the concept centre stage, preferring their established stresses on such concepts as competitive advantage, core capabilities, routines and resources. Public perception of its usefulness seems to fly against this academic reluctance (in main-stream journals and texts) to acknowledge the term, its uses and its consequences. This article suggests answers to the questions ‘Why is the concept of business models useful’? and ‘Who uses them, for what, and how?’ We have sought answers that take seriously the ways in which business models function as models in various different forms, and brought into the management field insights drawn from writing and first hand research by historians and philosophers of science who have probed how models are used in disciplines beyond the management arena. Models, modelling and their discussion have a long history - particularly in biology and economics - that pre-dates the arrival of the business model concept in management thinking. We mobilize our thoughts in three sections: • The first compares scale models and role models to explain how the notion of business models enables us to classify businesses in a taxonomy or a typology. Although management scholars have long sought to classify their world, we argue that using the business model notion - and business models themselves - as classifying devices provide valuable ways to expand our understanding of business phenomena and the development of ideal types. • The second section compares business models with the model organisms of biology and the mathematical models of economics to show how business models form instruments of scientific enquiry. This section is more strikingly novel to management academics, for it looks at the biology analogy in a new light: not that of an evolutionary theory of the firm (e.g. Nelson and Winter), but of the use of the methodology of the life sciences.1 • The third section suggests that specific business models function like recipes: as practical models of technology that are ready for copying, but also open for variation and innovation. Here we move back to a more comfortable arena for management scholar-teacher-practitioners, but also one that opens up perspectives for further development. Taken together, these three sections reveal how models, and modelling generally, and the use of business models in particular, already play a central role in progressing management thinking.

Our discussions suggest that business models have a multivalent character as models. They can be found as exemplar role models that might be copied, or presented as nutshell descriptions of a business organisation: simplified, short-hand descriptions equivalent to scale models. We can think of them not only as capturing the characteristics of observed kinds in the world (within a taxonomy), but also as abstract ideal types (in a typology) in the sense Weber outlined. And when we do so, we can see how this analysis of business models as models challenges the idea and ideal of any single, or fixed, taxonomy or typology of business models. Rather, the developing analysis of business models itself has prompted the expansion of taxonomies and typologies in ways which throw new light on the nature and role of business models themselves. Business models also function as models in the scientific sense. They can be investigated as model organisms (as in biology) that stand in as representatives for a class of things. Or they may appear as schemas in academic slides and as representations that can be manipulated like economic models, where, like scientific models in many fields, they appear as generic in-between kinds-of-descriptions that are neither general theory nor full empirical descriptions. And when we look carefully at these very different kinds of scientific models, we see that they function as laboratories that enable the scholar both to generate concepts and theories and to investigate empirical domains. Just as in other fields of science – from biology to economics to physics - business models function as mediators to enable users to figure out how their world works in the practical context, as well as in the academic.36 Finally, we have explored the analogy of models as recipes to understand the role of variation and innovation within the constraints of ingredients and purposes, and their use by managers to motivate strategy changes, and to experiment with their organisations. We are not suggesting that business models are models in just one of these senses, or play just one of these roles, because these senses and functions are not mutually exclusive. Business models are not recipes or scientific models or scale and role models, but can play any - or all - of these different roles for different firms and for different purposes: and will often play multiple roles at the same time (as Table 1 shows). This explains not only why the idea of business models seems to be so pervasive and yet also so challenging to grasp, but at the same time why the concept is so potentially rewarding for the future of management research. Business models are not recipes or scientific models or scale and role models… they play any - or all - these roles, often at the same time