Towards an understanding of distributed business models in rural grassroots initiatives: peer coordination and collective effectuation

Abstract

This exploratory study investigates the emergence of distributed business models within grassroots initiatives in rural areas, with a focus on food systems, transportation and decentralised energy production and consumption. Building on business model research, Ostrom's work on commons governance and Sarasvathy's effectuation theory, the study examines how community actors develop alternative business models through experimentation and peer governance. Based on ten open-ended interviews and field observations in a rural area of a Nordic country, the study identifies three main patterns: peer coordination and local reciprocity, collective effectuation and institutional misfit. Based on ten open-ended interviews and field observations in a rural area of a Nordic country, the study identifies three main patterns: peer coordination and local reciprocity, collective effectuation and institutional misfit. The findings show that these grassroots arrangements can generate social, practical and ecological value, but remain vulnerable to limited coordination capacity, regulatory constraints, technical lock-ins and weak municipal or institutional support. The paper contributes to business model research by showing how distributed value creation can operate as a socially embedded activity system rather than as a centrally orchestrated platform. It also extends the effectuation theory by showing how entrepreneurial action can be enacted collectively in community settings.