Balancing Business Model Innovation

Name of applicant

Kristian Johan Sund


Roskilde University


DKK 75,196



Type of grant

Field Trips / Research Stays < 100,000


The study of business model innovation has become very popular in the strategy and innovation literatures. My research examines the links between business models and cognition. Business models can be studied as a form of cognitive structure, mental map, or schema of how the firm creates value. My research has highlighted how managers’ cognitions and sensemaking influence business model design and the role of shared logics in enabling such innovation. The information and knowledge search behaviour of managers, and perceptual differences between groups of managers in the same firm, thus affects the type of BMI being pursued. With this project it is planned to visit colleagues at UC Berkeley and Stanford University, to collect data on relevant firms in the Silicon Vallley.


Established firms must balance the resources devoted on the one hand to the optimization of existing products, processes, and structures, and on the other to innovation, including business model innovation. The cognitive perspective on such innovation offers a useful explanatory mechanism for why such innovation often fails. What managers perceive to be important affects this balance. But what if managers have incorrect perceptions? Specifically, what if managers misperceive changes taking place in the external environment? Or if they perceive things differently? This can help explain under what conditions established firms are more or less likely to be successful in innovation their business models. Archaeologists must reconsider how we define and study social inequality by considering the specific circumstances under which early societies with fluid and flexible forms of social differentiation are transformed into hierarchical nation states.


It is the plan to conduct a single visit to both UC Berkeley and Stanford University in fall 2021. During this visit I will be discussing the theoretical foundations and practical examples of a cognitive view on incumbent business model innovation, based on the idea that decision-makers in this context can have either a high or low degree of knowledge calibration regarding industry change. In the case of miscalibration (i.e. incorrect perceptions), my theory would be that firms might incorrectly balance their resources towards either (innovation) exploration or (optimization) exploitation. The exact practical implications of this remain to be explored, and this is one of the things I hope to explore by collecting data on relevant firms in the Silicon Valley area.

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