Storm Clouds and Silver Linings: Responding to Disruptive Innovations Through Cognitive Resilience

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Incumbent firms facing disruptive business model innovations must decide whether to respond through inaction, resistance, adoption, or resilience. We focus on resilient responses to simultaneous perceived threat and opportunity by managers of small incumbent firms. Using cognitive framing arguments, we argue that risk experience moderates perceptions of opportunity, whereas perceived urgency moderates situation threat. We test our framework in the real estate brokerage context, where small incumbents face considerable challenges from disruptive business model innovations, such as discount brokers. Analysis of data from 126 real estate brokers broadly confirms our fraframework. We conclude with implications of our research for small business incumbents.
Article deposited according to publisher policy in Sherpa/RoMEO, Oct. 4, 2010. This is a pre print file as per the journal publisher's requirements.
Dewald, J. and Bowen, F. E. (2010), “Storm clouds and silver linings: responding to disruptive innovations through cognitive resilience”, Entrepreneurship Theory and Practice, 34(1): 197-218.