Examining CEOs’ Business Model Schemas: A Cognitive Mapping of Differences Between Industry Insiders and Outsiders

Abstract

At the level of a cognitive schema, a business model is a mental map of a firm’s value-creating, value-delivering, and value-capturing activities and the linkages between them. An important question in the study of business models as cognitive schemas is whether and how schemas differ across industry actors and whether the differences are connected to the variation observed in actual business models in the industry. This chapter examines, in particular, the ways in which business model schemas of industry insiders differ from those of industry outsiders. Using data from interviews with chief executive officers (CEOs) of 30 legal-tech firms, we graphically construct and analyze the CEOs’ schemas of important causal interdependencies between their firms’ activities. The analysis shows systematic differences between insiders and outsider CEOs’ schemas. We theorize that these differences underlie insider and outsider CEOs’ distinct approaches to opportunity recognition, expertise perception, and value framing, and have consequences for actual business model evolution in the industry.

Citation

Narayan, S., Sidhu, J.S., Baden-Fuller, C. and Volberda, H.W. (2020), "Examining CEOs’ Business Model Schemas: A Cognitive Mapping of Differences Between Industry Insiders and Outsiders", Sund, K.J., Galavan, R.J. and Bogers, M. (Ed.) Business Models and Cognition (New Horizons in Managerial and Organizational Cognition, Vol. 4), Emerald Publishing Limited, Leeds, pp. 15-37. https://doi.org/10.1108/S2397-521020200000004003