Investigating the Relationship between Strategic Sensemaking and Business Model Innovation

Abstract

Business model innovation is especially significant when the environment is prone to changes and complexities. Sensemaking functionality is to eliminate this ambiguity and help the organization achieve the accurate understanding of the environment in order to adjust the business model devised by the top management. This paper aims at studying the relationship between sensemaking capability and business model innovation. Environmental dynamism factors and top management team (TMT) characteristics are included as moderate variables. The survey was conducted among 287 organizations in IT and ICT industry, through a questionnaire. The data were analyzed using partial least squares structural equation modeling (PLS-SEM) method, which revealed there is a significant relationship between sensemaking and business model innovation. Business environmental dynamism and TMT’s education (among TMT characteristics) were identified as the mediators of such a relationship.

Keywords

• Business environment dynamism
• Business Model Innovation
• Strategic sensemaking
• Strategy topology
• Top management team