Identifying microfoundations of dynamic managerial capabilities for business model innovation

Abstract Research Summary Although business model innovation (BMI) is said to be underpinned by managerial capabilities, there is a lack of studies that delve into the mechanisms through which these capabilities support BMI. In this study, we highlight internal and external advice seeking as underlying microfoundations of dynamic managerial capabilities for BMI and examine the mediating role of coordination flexibility capabilities (CFCs). With a survey dataset of 254 senior managers, our research reveals that external advice seeking capabilities positively influence BMI. Interestingly, the impact of internal advice seeking on BMI is fully mediated by CFC. Furthermore, our results indicate that the extent to which internal advice seeking impacts CFC is strengthened in firms with high levels of digitalization. Managerial Summary While business model innovation (BMI) is often linked to the skills of managers, there is a lack of research exploring which particular skills actually drive BMI. In our study, we focus on how seeking advice internally and externally are crucial skills for managers in contributing to BMI, with coordination flexibility capabilities (CFC) playing a mediating role. Using data from a survey of 254 senior managers, we found that seeking external advice has a positive impact on BMI. Surprisingly, the influence of seeking internal advice on BMI is only significant when firms have high CFC at the organizational level. Additionally, we discovered that the relationship between internal advice seeking and CFC is stronger in highly digitalized firms.