Business model innovation has received increasing interest within science and managerial practice over the last years. Accordingly, scientists have developed various approaches on business model innovation. However, it has been recognized that established companies face particular challenges successfully innovating their business model. Current academic research considers the company’s established dominant logic to be the main barrier hindering the innovation process. In contrast to that none of current theories on business model innovation covers the overcoming of the dominant logic in their approaches. The research gap leads to the question, how does a new approach for business model innovation looks like which support today’s companies in their current and future challenges.
To answer this question, Chapter 1 highlights the need for action. Based on that, Chapter 2 deals with the theory of business model innovation and dominant logic. Chapter 4 highlights the research gap reflecting on the role of dominant logic within business model innovation. Chapter 5 aims at developing the according strategy, which acknowledges and effectively addresses the innovation barrier of the dominant logic. Finally, the last Chapter summarizes the findings how the new academic approaches on business model innovation is characterized and discuss the validation of the new theory.
Table of Contents
I. INTRODUCTION
II. FUNDAMENTALS
III. DOMINANT LOGIC WITHIN BUSINESS MODEL INNOVATION
IV. REARCH GAP
V. A NEW APPROACH FOR BUSINESS MODEL INNOVATION
5.1 Strategy Overview
5.2 Phase I: Initiation
5.3 Phase II: Co-Sensing
5.4 Phase III: Presencing
5.5 Phase IV: Creation
VI. CONCLUSION AND DISCUSSIONS
Research Objective and Core Themes
The primary research objective is to develop a comprehensive strategic framework that enables established companies to successfully navigate business model innovation by explicitly acknowledging and addressing the "dominant logic" as a significant internal barrier. The work seeks to bridge the gap between existing academic models, which often ignore cognitive constraints, and the practical necessity for companies to adapt to volatile market conditions.
- Analysis of dominant logic as a major barrier to innovation.
- Evaluation of existing business model innovation approaches.
- Integration of organizational change processes with business model design.
- Application of "Theory U" to facilitate mindset shifts within core innovation teams.
Excerpt from the Book
The Influence of Dominant Logic on Business Model Innovation
As elaborated in the previous chapter, the dominant logic can particularly impede an organization’s ability to innovate by filtering and restricting the management’s perception, awareness and understanding of the inter- and intra-organizational context. Aspects not deemed important by the dominant logic are mostly ignored. Consequently, information that possibly indicate a change of the environment and therefore a need for the company to adapt and innovate itself may not reach the relevant decision making processes (Csik, 2014, pp. 38-39; Tikkanen et al., 2005, p. 792; Hacklin&Wallnöfer, 2012, p. 170).
Additionally to the elaborated definition in Chapter 2, Tikkanen et al. (2005, p. 790) conceptualize a business model not only as a "sum of material, objectively existing in structures and processes" but also as "cognitive meaning structures at the level of a business organization". This highlights that the dominant logic of a company is not only strongly interlinked with the business model but even drives the tendency to avoid business model revision and thus ’protects’ the existing business model (Bouchikhi&Kimberly, 2003; Csik, 2014, p. 39; Cavalcante, Kesting&Ulhoi, 2011, p. 1328).
Summary of Chapters
I. INTRODUCTION: This chapter highlights the challenges incumbent companies face in a volatile environment and establishes the need for a new strategy for business model innovation.
II. FUNDAMENTALS: This section provides the theoretical foundation by defining business model innovation and the concept of dominant logic.
III. DOMINANT LOGIC WITHIN BUSINESS MODEL INNOVATION: This chapter investigates how dominant logic filters organizational perception and impedes the ability to innovate.
IV. REARCH GAP: This chapter reviews current academic approaches and identifies that existing research fails to adequately address dominant logic as an innovation barrier.
V. A NEW APPROACH FOR BUSINESS MODEL INNOVATION: This chapter introduces a new strategic framework based on Theory U to overcome dominant logic during the analysis and creation phases.
VI. CONCLUSION AND DISCUSSIONS: This chapter summarizes the findings and validates the need for a framework that aligns business model innovation with organizational change processes.
Keywords
Business model innovation, dominant logic, organizational change, Theory U, disruptive innovation, cognitive structures, strategic management, internal antecedents, innovation barrier, corporate strategy, digital transformation, mindset, value proposition, VUCA world, consumer-centricity.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on why established companies often struggle with business model innovation and how their internal "dominant logic" acts as a barrier that prevents them from recognizing and acting upon market disruptions.
What are the central themes explored?
The central themes include the intersection of cognitive psychology and strategic management, the limitations of current business model frameworks, and the necessity of organizational unlearning to foster innovation.
What is the primary goal of the proposed approach?
The goal is to create a strategic framework that helps companies overcome the "blinders" of their existing business models by integrating a systematic change process directly into the innovation phase.
Which scientific methodology is utilized?
The author conducts a theoretical analysis of existing literature and combines it with organizational change theory—specifically Scharmer's "Theory U"—to construct a practical, multi-phase framework.
What is covered in the main section of the paper?
The main part of the paper details the theoretical background of dominant logic, highlights the research gap in existing literature, and provides a step-by-step roadmap for implementing the new innovation framework.
Which keywords best describe this work?
Key terms include Business Model Innovation, Dominant Logic, Disruptive Innovation, Organizational Change, Theory U, and Cognitive Structures.
How does the "dominant logic" specifically hinder innovation according to the author?
It acts as a filter that restricts management's perception and awareness, causing them to ignore environmental signals that contradict their established beliefs, thus protecting the status quo.
How does the proposed framework incorporate "Theory U"?
The framework aligns the phases of "Initiation," "Co-Sensing," "Presencing," and "Creation" with the "U" shape process, guiding the team to let go of old mental models before attempting to design new business models.
Why is the "Creation" phase considered so critical in this new approach?
Because it is the stage where the newly cultivated mindset is applied to generate valuable ideas outside the bounds of the previous dominant logic, ensuring that the resulting business models are truly innovative.
- Quote paper
- Michael Lang (Author), Annika Koerdt (Author), 2019, A New Approach for Developing Business Model Innovation, Munich, GRIN Verlag, https://www.grin.com/document/510083
