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How do entrepreneurs benefit from acting like scientists in business model development? Strategic commitments, uncertainty and economic performance

Novelli, E. ORCID: 0000-0002-6899-1096 & Spina, C. (2024). How do entrepreneurs benefit from acting like scientists in business model development? Strategic commitments, uncertainty and economic performance. Strategic Management Journal,

Abstract

RESEARCH SUMMARY
This study abductively investigates how a firm’s degree of business model development –the extent to which its strategic choices are crystallized—moderates the impact of a scientific approach to decisionmaking on performance. We present findings from a field experiment involving 261 entrepreneurs, where treated entrepreneurs learn to apply a scientific approach, while control counterparts receive comparable content without this approach. Treated entrepreneurs at a higher degree of business model development elaborated their theories of value focusing on lower-level choices, leading to superior economic performance compared to control firms. Conversely, treated entrepreneurs at a lower level of business model development reevaluated fundamental aspects of their business models, resulting in increased epistemic uncertainty and less favorable economic outcomes in the short term compared to controls.

MANAGERIAL ABSTRACT
Using a field experiment involving 261 entrepreneurs, we explored how the degree to which their business strategy is already defined can influence the benefits of adopting a scientific approach to decisionmaking. In the experiment, half of the entrepreneurs were taught to use a scientific approach for making decisions (the treated group), while the others received similar training without the scientific approach (the control group). Our results show that treated entrepreneurs with already defined strategies benefited more, experiencing improved performance even in the short term. Conversely, treated entrepreneurs with strategies still under definition experienced more uncertainty and lower short-term economic performance, as the scientific approach prompted them to reassess and adjust their core strategic decisions.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Novelli, E. & Spina, C. (2024). How do entrepreneurs benefit from acting like scientists in business model development? Strategic commitments, uncertainty and economic performance. Strategic Management Journal, which is to be published in final form at https://onlinelibrary.wiley.com/journal/10970266. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publisher Keywords: Entrepreneurial strategy, Experimentation, Field Experiment, Uncertainty, Business Model
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments: Bayes Business School
Bayes Business School > Management
SWORD Depositor:
[thumbnail of Novelli_Spina_2024.pdf] Text - Accepted Version
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