A Cognitive Mapping Approach to Business Models: Representing Causal Structures and Mechanisms

Research has highlighted the cognitive nature of the business model intended as a cognitive representation describing a business’ value creation and value capture activities. Whereas the content of the business model has been extensively investigated from this perspective, less attention has been paid to the business model’s causal structure – i.e. the pattern of causeeffect relations that, in top managers’ or entrepreneurs’ understandings, link value creation and value capture activities. Building on the strategic cognition literature, this paper argues that conceptualizing and analyzing business models as cognitive maps can shed light on four important properties of a business model’s causal structure: the levels of complexity, focus, and clustering that characterize the causal structure; and the mechanisms underlying the causal links featured in that structure. I use examples of business models drawn from the literature as illustrations to describe these four properties. Finally, I discuss the value of a cognitive mapping approach for augmenting extant theories and practices of business model design.