IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/5qxnb.html
   My bibliography  Save this paper

Risk framing and business model adaptation: A conceptualization based on threat-rigidity theory

Author

Listed:
  • Aarøen, Camilla
  • Selart, Marcus

Abstract

Firm leaders’ inclination to adapt their business model is sensitive to how risk is framed (as an external threat or an opportunity) in the macro-economic environment. We apply threat-rigidity theory to examine the relationship between risk framing and business model adaptation. We also investigate if emotionality has explanatory value for how managers adapt to business models. We test our hypotheses in a field experiment involving 134 Scandinavian managers. Here, we relate managers’ inclinations to adapt to different business models to different risk scenarios. The results reveal that, in general, managers are more risk seeking in gain scenarios than in loss scenarios. This finding is in line with the threat-rigidity theory. Emotionality was found to relate more to risk aversion than to risk seeking in the domain of potential gain. We argue that emotionality has explanatory value for how managers adapt to business models, because emotions are key influences on risk perception.

Suggested Citation

  • Aarøen, Camilla & Selart, Marcus, 2020. "Risk framing and business model adaptation: A conceptualization based on threat-rigidity theory," SocArXiv 5qxnb, Center for Open Science.
  • Handle: RePEc:osf:socarx:5qxnb
    DOI: 10.31219/osf.io/5qxnb
    as

    Download full text from publisher

    File URL: https://osf.io/download/5ef8fcc902d64d011d6c350d/
    Download Restriction: no

    File URL: https://libkey.io/10.31219/osf.io/5qxnb?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lennart Sjöberg & Anders af Wåhlberg, 2002. "Risk Perception and New Age Beliefs," Risk Analysis, John Wiley & Sons, vol. 22(4), pages 751-764, August.
    2. Pierre-Xavier Meschi & Emmanuel Métais, 2015. "Too Big to Learn: The Effects of Major Acquisition Failures on Subsequent Acquisition Divestment," Post-Print hal-01839633, HAL.
    3. B. Demil & X. Lecocq, 2010. "Business model evolution : in search of dynamic consistency," Post-Print hal-00572915, HAL.
    4. Marcus Selart & Svein Johansen & Synnøve Nesse, 2013. "Employee Reactions to Leader-Initiated Crisis Preparation: Core Dimensions," Journal of Business Ethics, Springer, vol. 116(1), pages 99-106, August.
    5. Andreas Oehler & Stefan Wendt & Florian Wedlich & Matthias Horn, 2018. "Investors' Personality Influences Investment Decisions: Experimental Evidence on Extraversion and Neuroticism," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 19(1), pages 30-48, January.
    6. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    7. Ocasio, William., 1993. "The structuring of organizational attention and the enactment of economic adversity : a reconciliation of theories of failure-induced change and threat-rigidity," Working papers 3577-93., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    8. Sérgio Cavalcante, 2014. "Preparing for business model change: the “pre-stage” finding," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(2), pages 449-469, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vanessa Weimann & Maike Gerken & Marcel Hülsbeck, 2020. "Business model innovation in family firms: dynamic capabilities and the moderating role of socioemotional wealth," Journal of Business Economics, Springer, vol. 90(3), pages 369-399, April.
    2. Alexia Athanasopoulou & Mark De Reuver, 2020. "How do business model tools facilitate business model exploration? Evidence from action research," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 495-508, September.
    3. Daniela Andreini & Cristina Bettinelli & Nicolai J. Foss & Marco Mismetti, 2022. "Business model innovation: a review of the process-based literature," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(4), pages 1089-1121, December.
    4. Daliborka Witschel & Aaron Döhla & Maximilian Kaiser & Kai-Ingo Voigt & Thilo Pfletschinger, 2019. "Riding on the wave of digitization: insights how and under what settings dynamic capabilities facilitate digital-driven business model change," Journal of Business Economics, Springer, vol. 89(8), pages 1023-1095, December.
    5. Agnes Asemokha & Jackson Musona & Lasse Torkkeli & Sami Saarenketo, 2019. "Business model innovation and entrepreneurial orientation relationships in SMEs: Implications for international performance," Journal of International Entrepreneurship, Springer, vol. 17(3), pages 425-453, September.
    6. Nicolás C. Bronfman & Luis Abdón Cifuentes & Michael L. deKay & Henry H. Willis, 2007. "Accounting for Variation in the Explanatory Power of the Psychometric Paradigm: The Effects of Aggregation and Focus," Journal of Risk Research, Taylor & Francis Journals, vol. 10(4), pages 527-554, June.
    7. Ionica Oncioiu & Sorinel Căpuşneanu & Dan Ioan Topor & Ana Maria Ifrim & Ramona Camelia Silvestru & Monica Ioana Toader, 2021. "Improving Business Processes in a Construction Project and Increasing Performance by Using Target Costing," SAGE Open, , vol. 11(1), pages 21582440219, February.
    8. Christiana Müller & Stefan Vorbach, 2015. "Enabling Business Model Change: Evidence from High-Technology Firms," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 11(1), pages 53-75.
    9. Newburry, William & Gardberg, Naomi A. & Sanchez, Juan I., 2014. "Employer Attractiveness in Latin America: The Association Among Foreignness, Internationalization and Talent Recruitment," Journal of International Management, Elsevier, vol. 20(3), pages 327-344.
    10. Jean–Luc Arregle & Bat Batjargal & Michael A. Hitt & Justin W. Webb & Toyah Miller & Anne S. Tsui, 2015. "Family Ties in Entrepreneurs’ Social Networks and New Venture Growth," Entrepreneurship Theory and Practice, , vol. 39(2), pages 313-344, March.
    11. Ahammad, Mohammad Faisal & Tarba, Shlomo Yedidia & Liu, Yipeng & Glaister, Keith W., 2016. "Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention," International Business Review, Elsevier, vol. 25(1), pages 66-75.
    12. Behrooz Gharleghi & Asghar Afshar Jahanshahi & Khaled Nawaser, 2018. "The Outcomes of Corporate Social Responsibility to Employees: Empirical Evidence from a Developing Country," Sustainability, MDPI, vol. 10(3), pages 1-15, March.
    13. Emmanuelle Reuter, 2022. "Hybrid business models in the sharing economy: The role of business model design for managing the environmental paradox," Business Strategy and the Environment, Wiley Blackwell, vol. 31(2), pages 603-618, February.
    14. Yi-Ju Lo & Tung Hung, 2015. "Structure offshoring and returns on offshoring," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 443-479, June.
    15. Omar Shafqat & Elena Malakhtka & Nina Chrobot & Per Lundqvist, 2021. "End Use Energy Services Framework Co-Creation with Multiple Stakeholders—A Living Lab-Based Case Study," Sustainability, MDPI, vol. 13(14), pages 1-24, July.
    16. Hock-Doepgen, Marianne & Clauss, Thomas & Kraus, Sascha & Cheng, Cheng-Feng, 2021. "Knowledge management capabilities and organizational risk-taking for business model innovation in SMEs," Journal of Business Research, Elsevier, vol. 130(C), pages 683-697.
    17. Jörn H. Block & Christian O. Fisch & James Lau & Martin Obschonka & André Presse, 2019. "How Do Labor Market Institutions Influence the Preference to Work in Family Firms? A Multilevel Analysis Across 40 Countries," Entrepreneurship Theory and Practice, , vol. 43(6), pages 1067-1093, November.
    18. Hualde, Alfredo & Micheli, Jordy, 2016. "The evolution of call centres and the implications for service quality and workforce management in Mexico," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 43205, March.
    19. Kawai, Norifumi & Chung, Chul, 2019. "Expatriate utilization, subsidiary knowledge creation and performance: The moderating role of subsidiary strategic context," Journal of World Business, Elsevier, vol. 54(1), pages 24-36.
    20. Cinzia Battistella & Gianluca Murgia & Fabio Nonino, 2021. "Free-driven web-based business models," Electronic Commerce Research, Springer, vol. 21(2), pages 445-486, June.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:5qxnb. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.