Business modeling as configuring heuristics

Abstract

While recent research has referred to a cognitive view on ‘business modeling’, it remains unclear in specifying the cognitive foundations of how such modeling happens. This paper proposes building on heuristics as models of individual cognition, which have proved effective foundations of adaptive individual and managerial behaviors. By also drawing on gestalt theory to specify principles of modeling as rule-based form giving, we propose business modeling as a managerial cognitive process of configuring heuristics. The paper makes three contributions. First, we introduce heuristics to the business modeling literature, and so provide an established theory of adaptive individual behavior that strengthens the cognitive foundations of business modeling. Second, we conceptualize and theorize on the cognitive activity of business modeling as an iterative process of configuring heuristics by applying gestalt principles. Although the literature on business models has referred to the theories of configurations and gestalt, it has been left to this work to make the theoretical linkages between heuristics, gestalt theory and business modeling explicit. Third, our work contributes to the micro-foundations of the cognitive processes underlying business modeling and thus to broader accounts of adaptive managerial behaviors.