Small business managers rely on judgment and heuristics when making critical strategic decisions. We explore this phenomenon, expanding the theory on cognition and strategy to explain the cognitive determinants of strategic decisions leading to small firm business model change. We integrate existing theories (entrepreneurial opportunity exploitation, cognitive resilience, prospect theory, behavioral theory of the firm, threat-rigidity) into a framework explaining strategic intentions, based on managers’ perception of business opportunity interacting with assessment of the external environment, current performance, and prior experience. The framework is empirically tested in the context of anadian real estate brokerage industry, facing potentially major disruptive change.
