Antecedents and consequences of business model innovation in the IT industry

Business model innovation has gained increasing attention from scholars in the last few years. However, there is a lack of large-scale empirical research on business model innovation and fewer attempts have been made to study whether and how various factors can affect innovation in business models. As a consequence, this study aims to investigate the impact of knowledge absorptive capacity, organizational agility, and top management mindfulness on business model innovation as these factors contribute to organizational changes in business models. Data were collected from IT firms operating in Pakistan. The results indicate that business model innovation is significantly dependent on the knowledge absorptive capacity, agility, and mindfulness of the top management. Furthermore, business model innovation was established as a mediator in the relationship between these factors and business performance. From a managerial perspective, the findings are significant as organizations need to focus on the antecedents to make the necessary change to their business models to improve their competitive advantage and firm performance.