Making business model decisions like scientists: Strategic commitment, uncertainty, and economic performance

Abstract

Research Summary

This study abductively investigates how a firm’s degree of business model development—the extent to which strategic choices are crystallized—moderates the impact of a scientific approach to decision-making 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. Results show that the effect of scientific decision making varies with business model development. Treated entrepreneurs with higher degrees of business model development elaborated their theories of value focusing on lower-level choices, achieving superior economic performance compared to controls. Conversely, treated entrepreneurs with lower levels of business model development reevaluated fundamental aspects, resulting in increased epistemic uncertainty and less favorable short-term economic outcomes compared to controls.

Managerial Abstract

Using a field experiment with 261 entrepreneurs, we explored how the degree of business strategy definition influences the benefits of adopting a scientific approach to decision-making. 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). 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.

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