Dominant Logic and Business Model Innovation: Resolving Cognitive Dissonance on the Component Level

Bitetti, Leandro and Gibbert, Michael (2020) Dominant Logic and Business Model Innovation: Resolving Cognitive Dissonance on the Component Level. In: AOM2020 Annual Meeting, 7-11.8.2020, Virtual.

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Abstract

Dominant logic is generally seen as a cognitive barrier in the different steps of business model innovation processes. This particularly applies to micro-firms, where the business owner espouses the dominant logic and at the same time plays a vital role in innovating and potentially changing it. We engaged in an action research with forty butcher’s shops’ owners to shed more light on the conflicts between dominant and emerging logics at every business model component (i.e. (1) value proposition, (2) value creation, (3) value network, (4) value delivery, and (5) value appropriation). Furthermore, these conflicts triggered a state of cognitive dissonance among dominant and emerging logics. To investigate how butcher’s shops’ owners restored equilibrium we subsequently conducted a multiple embedded case study, with four positive cases (i.e. innovative butchers), and four negative cases (i.e. non-innovative butchers). Positive cases resolved cognitive dissonance by embracing emerging logics through a set of consistent ideas supporting the emerging logic at all five business model components, assessing the limitation of the dominant logic at the value proposition, as well as on the value delivery levels. In contrast, negative cases resolved cognitive dissonance by adding elements sustaining the dominant logic at the value proposition, value creation, value delivery, and value capture levels, and by reducing the importance of factors supporting emerging logics at all five business model components. The present study contributes to the business model innovation literature, by pointing to the dual role of cognitive dissonance between dominant and emerging logics at the level of different business model components.

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