Cognition and Business Models

Book excerpt: This book explores how theories of cognition inform our theoretical understanding of business models and business model innovation. A business model can either be viewed as an objective description of an activity system, or as an abstract, conceptual, and perceptual construct, that is the result of cognition. From this second point of view, the business model becomes a schematic mental model that is created, shaped, and shared over time. In other words, managers hold in their mind perceptual constructs that constitute schemas of the business model. This book examines how the underlying processes of the creation, shaping, and sharing of business (mental) models take place at individual, organizational, and even inter-organizational levels. Theories of managerial and organizational cognition are explored to inform our understanding of business modelling and business model innovation. The reader is thus provided with an overview of existing literature and reflections on future avenues of research to explore the cognitive foundations of business modelling.