IRS Valerie Starke

Wednesday, 9 May 2018, 12:15, TIM Social Area

  Valerie Starke

How cognitive schemes affect business model change

In recent business model innovation research, individual perception receives increasing attention. From the cognitive perspective, managers use representations of the firm’s business model – a business model schema – as a cognitive device when making decisions (Aversa, et al., 2015). Such cognitive schemas represent complex activities in a parsimonious, simplified form and affect information processing through simplifying and filtering. Due to this selective attention, managers tend to perceive information that is congruent to their current business model and ignore incongruent information. External threats to an organization’s business model (e.g. in terms of new technologies, digitalization etc.) are incongruent information that are perceived too late for an adequate reaction. In our research, we investigate how and under which circumstances organizations can seize opportunities proactively to innovate their business model.

Two conscious mental operations, namely analogical reasoning and conceptual combination, allow managers to shift their attention towards schema incongruent information and modify their existing business model strategically. Furthermore, we postulate that manager’s psychological capital (hope, self-efficacy, optimism and resilience) will influence the degree of the resulting business schema change (from incremental to radical). Positive psychological capital reflects an individual resource which is “measurable, open to development, and can be managed for more effective work performance” (Luthans, 2004, p.47). Since positive psychological capital makes individuals more confident, we expect managers with high positive psychological capital to change their cognitive schema faster and more effectively.

To test our hypotheses we conduct a quasi-experimental design study. Our research contributes to explaining successful business model innovation. The cognitive perspective is a promising approach for organizations to strategically innovate their business model schema.

Valerie Starke