Entrepreneurial Cognition of the Business Model Construct: A Mixed Methods Study of STEM and non-STEM Entrepreneurs

Gabi A Kaffka,Raja Singaram,Jeroen Kraaijenbrink,Aard J Groen

doi:10.53703/001c.29741

Abstract

Applying the theory of socially situated cognition, we study how entrepreneurs cognitively process the business model construct during the early stages of launching technology-based new ventures. Through an abductive reasoning procedure, we aggregate four underlying socially situated cognitive functions of the business model and describe how these functions facilitate opportunity development. We examine if the entrepreneur’s educational background (STEM vs non-STEM) influences their cognitive processing of the construct. We discuss the contribution of our study to the literature on managerial cognition, business models, and to practice in detail.

Highlights

Managerial cognition literature within strategy features numerous studies that examine the cognitive influences of CEOs and top management teams on the strategy process in established firms
We argue that entrepreneurial cognition could enable entrepreneurs to leverage the cognitive functions of the business model (BM) while designing the value creation elements of the construct as real attributes of their new venture (Massa et al, 2017)
The search behavior, thinking style and decision-making of the entrepreneurs affect BM innovation in young ventures (Snihur & Zott, 2020). We extend this literature by focusing on the opportunity development phase of new ventures to study the cognitive processes used by the entrepreneurs while designing BMs

Summary

Introduction

Managerial cognition literature within strategy features numerous studies that examine the cognitive influences of CEOs and top management teams on the strategy process in established firms (for reviews see Bromiley & Rau, 2016; Narayanan et al, 2011). Entrepreneurial cognition of the entrepreneurs – knowledge structures that include the cognitive scripts, schemas and processes related to new venture decision-making – plays an important role in strategy generation and execution of new ventures (Payne et al, 2005; Maron et al, 2019). Design of the initial business model (BM) is crucial to the strategy formulation of new ventures and it is certainly subject to the influence of the entrepreneurs’ cognitive processes (Morris et al, 2006; Zott & Amit, 2007). We argue that entrepreneurial cognition could enable entrepreneurs to leverage the cognitive functions of the BM while designing the value creation elements of the construct as real attributes of their new venture (Massa et al, 2017).

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