The impact of entrepreneurial cognition on opportunity-capitalizing capabilities and business model change: Evidence from Egypt

Abstract

This study advances the upper echelons literature by examining the (a) cognitive microfoundations of business model change and (b) intervening organizational mechanisms that help to explain the influence of strategic leaders on firm outcomes. We develop our theory by considering features of the African context, including underdeveloped factor markets and institutions and their heterogeneity within African countries. The paper examines two aspects of cognition – entrepreneurial alertness and cognitive adaptability – explains their influence on firm’s opportunity-capitalizing capabilities and business models, and argues that opportunity-capitalizing capabilities mediate influence of each cognition variable on business model change. Using a sample of micro-enterprises in the emerging economy context of Egypt, we find support for the hypotheses. We also present interview data to corroborate the findings.