The Relevance of Managerial Cognition for IPSS Business Model Development

Facing the potential advantages and specific challenges of IPSS business model development we refer to a critical field for its succession: the hindering and supporting influence of managerial cognition. Related to microfoundations in dynamic capability research, we analyze for the development of IPSS how managerial cognitions influence a firms’ capability to realize new business model opportunities and to seize and reorganize its resources in order to take advantage from these opportunities. We apply the research on managerial cognition to the field of IPSS. Our empirical exploration is based on a qualitative case study analysis, comprising of interviews and cognitive mapping. We discover managers’ cognitions concerning new market opportunities, their perception of the necessity to change and their coping patterns for resource allocation. Our key finding is that IPSS are nor primarily considered as opportunities but rather threats with different strategies of coping mechanisms. There is a high consciousness for increasing sensemaking activities inside and outside the organization to adopt to new ways of value creation.