Business model evolution and firm performance of entrepreneurial companies

This research explores the business model (BM) evolution process of entrepreneurial companies and investigates the relationship between BM evolution and firm performance. Recently, it has been increasingly recognised that the innovative design (and re-design) of BMs is crucial to the performance of entrepreneurial firms, as BM can be associated with superior value creation and competitive advantage. However, there has been limited theoretical and empirical evidence in relation to the micro-mechanisms behind the BM evolution process and the entrepreneurial outcomes of BM evolution. This research seeks to fill this gap by opening up the ‘black box’ of the BM evolution process, exploring the micro-patterns that facilitate the continuous shaping, changing, and renewing of BMs and examining how BM evolutions create and capture value in a dynamic manner. Drawing together the BM and strategic entrepreneurship literature, this research seeks to understand: (1) how and why companies introduce BM innovations and imitations; (2) how BM innovations and imitations interplay as patterns in the BM evolution process; and (3) how BM evolution patterns affect firm performances. This research adopts a longitudinal multiple case study design that focuses on the emerging phenomenon of BM evolution. Twelve entrepreneurial firms in the Chinese Online Group Buying (OGB) industry were selected for their continuous and intensive developments of BMs and their varying success rates in this highly competitive market. Two rounds of data collection were carried out between 2013 and 2014, which generates 31 interviews with founders/co-founders and in total 5,034 pages of data. Following a three-stage research framework, the data analysis begins by mapping the BM evolution process of the twelve companies and classifying the changes in the BMs into innovations and imitations. The second stage focuses down to the BM level, which addresses the BM evolution as a dynamic process by exploring how BM innovations and imitations unfold and interplay over time. The final stage focuses on the firm level, providing theoretical explanations as to the effects of BM evolution patterns on firm performance. This research provides new insights into the nature of BM evolution by elaborating on the missing link between BM dynamics and firm performance. The findings identify four patterns of BM evolution that have different effects on a firm’s short- and long-term performance. This research contributes to the BM literature by presenting what the BM evolution process actually looks like. Moreover, it takes a step towards the process theory of the interplay between BM innovations and imitations, which addresses the role of companies’ actions, and more importantly, reactions to the competitors. Insights are also given into how entrepreneurial companies achieve and sustain value creation and capture by successfully combining the BM evolution patterns. Finally, the findings on BM evolution contributes to the strategic entrepreneurship literature by increasing the understanding of how companies compete in a more dynamic and complex environment. It reveals that, the achievement of superior firm performance is more than a simple question of whether to innovate or imitate, but rather an integration of innovation and imitation strategies over time. This study concludes with a discussion of the findings and their implications for theory and practice.

The influence of actions on auditory perception: cognitive and neural mechanisms

It is well known that self-generated stimuli are processed differently from externally generated stimuli. For example, many people have noticed since childhood that it is very difficult to make a self-tickling. In the auditory domain, self-generated sounds elicit smaller brain responses as compared to externally generated sounds, known as the sensory attenuation (SA) effect. SA is manifested in reduced amplitudes of evoked responses as measured through MEEG, decreased firing rates of neurons and a lower level of perceived loudness for self-generated sounds. The predominant explanation for SA is based on the idea that self-generated stimuli are predicted (e.g., the forward model account). It is the nature of their predictability that is crucial for SA. On the contrary, the sensory gating account emphasizes a general suppressive effect of actions on sensory processing, regardless of the predictability of the stimuli. Both accounts have received empirical support, which suggests that both mechanisms may exist. In chapter 2, three behavioural studies concerning the influence of motor activation on auditory perception were presented. Study 1 compared the effect of SA and attention in an auditory detection task and showed that SA was present even when substantial attention was paid to unpredictable stimuli. Study 2 compared the loudness perception of tones generated by others between Chinese and British participants. Compared to externally generated tones, a decrease in perceived loudness for others generated tones was found among Chinese but not among the British. In study 3, partial evidence was found that even when reading words that are related to action, auditory detection performance was impaired. In chapter 3, the classic SA effect of M100 suppression was replicated with MEG in study 4. With time-frequency analysis, a potential neural information processing sequence was found in auditory cortex. Prior to the onset of self-generated tones, there was an increase of oscillatory power in the alpha band. After the stimulus onset, reduced gamma power and alpha/beta phase locking were found. The three temporally segregated oscillatory events correlated with each other and with SA effect, which may be the underlying neural implementation of SA. In chapter 4, a TMS-MEG study was presented investigating the role of the cerebellum in adapting to delayed presentation of self-generated tones (study 5). It demonstrated that in sham stimulation condition, the brain can adapt to the delay (about 100 ms) within 300 trials of learning by showing a significant increase of SA effect in the suppression of M100, but not M200 component. Whereas after stimulating the cerebellum with a suppressive TMS protocol, the adaptation in M100 suppression disappeared and the pattern of M200 suppression reversed to M200 enhancement. These data support the idea that the suppressive effect of actions on auditory processing is a consequence of both motor driven sensory predictions and general sensory gating. The results also demonstrate the importance of neural oscillations in implementing SA effect and the critical role of the cerebellum in learning sensory predictions under sensory perturbation.