Business Model Innovation Failure: the Role of Cognitive Dissonance within Dominant and Emerging Logics

Bitetti, Leandro and Gibbert, Michael (2020) Business Model Innovation Failure: the Role of Cognitive Dissonance within Dominant and Emerging Logics. In: DRUIDphd20 Academy Conference, 16-17.01.2020, Odense.

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Abstract

Dominant logic is generally seen as a cognitive barrier along the different steps of business model innovation processes. In fact, an innovative business model often requires the emergence of a new logic that ensures consistency. To achieve that, entrepreneurs and managers should challenge the dominant logic. This particularly applies in microfirms, where the business owner plays a key role within innovation processes. We engaged in an action research with forty butcher’s shops’ owners with the goal of facilitating business model innovation, while challenging the butcher’s dominant logic. Despite having found several innovative business model options, only few butcher’s shops started implementing innovation projects. Our study firstly reveals that by contrasting the traditional business model to the innovative business models, conflicts between dominant and emerging logics appear at every business model components (i.e. value proposition, value creation, value network, value delivery, and value appropriation). Furthermore, these conflicts triggered a state of cognitive dissonance among dominant and emerging logics. In order to investigate how butcher’s shops’ owners restored equilibrium we, then, conducted a multiple holistic case study, with four positive cases (i.e. innovative butchers), and four negative cases (i.e. non-innovative butchers). Findings reveal that positive cases resolved cognitive dissonance by embracing emerging logics through a set of consistent ideas supporting the emerging logic, and assessing the limitation of the dominant logic within the different components of their business model. In contrast, negative cases resolved cognitive dissonance by adding elements sustaining the dominant logic, and by reducing the importance of elements sustaining emerging logics. The present study contributes to the business model innovation literature, by identifying cognitive dissonance between dominant and emerging logics at the different business model components as a powerful obstacle or facilitator of the process. According to the interpretation of business models as cognitive schemas, conflicts within dominant and emerging logics require entrepreneurs or managers to compete against itself to enable business model innovation.

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