Entrepreneurial alertness during severe crises: The effect on internal corporate venturing through business model innovation as a strategic response

This study exploits a unique sample of 536 Belgian SME business owners, collected immediately after the first COVID-19 lockdown, and provides new insights into how, during severe crises, business owners' entrepreneurial alertness functions as a critical strategic opportunity discovery skill for SMEs. Concretely, we find that entrepreneurial alertness can determine the emergence of a business model innovation (BMI) as a strategic response to severe crises, which then stimulates business owners' intent to start a new internal corporate venture (ICV). Creating such a new separate organizational entity within the structure of the existing firm can be strategically used as a tool to pursue the successful implementation of this BMI. Robustness and sensitivity analyses show that our results hold, and, in addition, we find that if business owners are lowly skilled in being able to be alert to discover innovative new opportunities for their firm, that this lack of skills negatively influences engaging in BMI and the subsequent intent to create such a new ICV to effectively implement the BMI. We discuss this study's contributions to the literature on BMI and (strategic) corporate venturing and address this study's practical implications.