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Elizabeth J. Altman Open and User Innovation Workshop July 30, 2014

Joining an Ecosystem: Organizational and Strategic Implications. Elizabeth J. Altman Open and User Innovation Workshop July 30, 2014. Platforms lead the global economy: 12 of Interbrand’s 2013 Top G lobal B rands have platform-based businesses.

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Elizabeth J. Altman Open and User Innovation Workshop July 30, 2014

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  1. Joining an Ecosystem: Organizational and Strategic Implications Elizabeth J. Altman Open and User Innovation Workshop July 30, 2014

  2. Platforms lead the global economy: 12 of Interbrand’s 2013 Top Global Brands have platform-based businesses Sources: Interbrand website; Van Alstyne, 2013

  3. All top brands are now part of app and accessory ecosystems  Interdependent with platforms

  4. Research Setting: Joining an Ecosystem Most platform and ecosystem research focuses on the platform manager End User This research focuses on incumbent firms joining ecosystems

  5. Research Question As platform-based businesses become increasingly prevalent in the global economy, what are the mechanisms affecting incumbent organizations that join ecosystems? • What are the organizational identity implications? • How does asymmetry between complementors and platform managers affect this transition?

  6. Literature • Multi-Sided Platforms (Parker & Van Alstyne, 2005; Hagiu, 2014) • Primarily economic centric • Minimal organization and management theory • Focus on platform managers and not complementors (joiners) • Ecosystems (Adner & Kapoor, 2010; Wareham, et al., 2014) • Centers on building and governing ecosystems • Addresses competition with and between ecosystems • Organizational Identity (Albert & Whetten, 1985; Corley, et al., 2006; Tripsas, 2009) • Does not address interdependencies related to complementors interacting with platforms and joining ecosystems • Multiple identity research does not fully explain partial shifts • Asymmetry (Casciaro & Piskorski, 2005; Gulati & Sytch, 2007; Katila, et al., 2008) • Addresses asymmetric alliances, not complementors with platforms • Considers power imbalances, but not in ecosystems

  7. Data • Field site: Accessories for laptops, tablets, mobile phones, etc. • Strong brand with long term focus • Single holistic case study design: Revelatory case -- No prior access • Product division as unit of analysis • Three year longitudinal data: inductive field-based research • ~ 50 semi-structured interviews • Three rounds of interviews with same people each a year+ apart • Cross-functional(GM & staff) & Cross-level (managers & subordinates) • Archival information and observation • Promo emails, advertisements, etc. collected over three years • Previous experience with firm from executive role Round 1 Round 1a Round 2 Round 3 2011 2012 2013 2014

  8. Initial Emerging Theme: Identity Change Reluctant Joining – Becoming dependent “Apple created such an environment we finally had to swallow our pride... That was a philosophical change.... We dip our flag, and we’ve got to learn to work with them.” - General Manager, Zuni Product Division, 10-28-11 2.5 years later– Actively participating “... so, first of all, we have Apple versions of almost everything... There’s not a single product that we don’t have an Apple version of… not one.” - Marketing Director, Zuni Product Division, 3-11-14

  9. Initial Emerging Theme: Asymmetry Asymmetry – Losing Control “The whole relationship with Apple is quite new… Now, we have this external force that is coming and giving us nudges to what is right and wrong. As an organization, for the last 30 years, we decided what was right and wrong.” - Product Manager, Zuni Product Division, 3-15-12

  10. Preliminary Findings Joining an ecosystem where there is a platform owner that controls product-related decisions (e.g., specs, branding, etc.) poses management and organizational challenges. • Dynamics of identity transition • Organizational identity may be threatened by this transition • Multiple dimensions of identity – only some threatened? • Relationships between dimensions; variation in how dimensions affected • Situational characteristics may affect the challenges • Ecosystem type may affect the transition • Asymmetry between joiner and platform owner (planet vs. sun) • Consistency of organizational identity of joiner • Nature of interaction required between joiner and platform owner

  11. Future Directions • Final round of data collection, analysis, and theory development • Image and Identity – How others view the organization • Multi-level analysis – Micro as well as macro considerations • Additional methodological approaches • Multi-case: Multi-divisional and/or multi-field site • Cross-industry • Textual analysis • Alternative explanations • What is different about this transition versus other org changes? • Are the organizational identity implications similar to those in M&A, strategic alliances, or other strategic changes?

  12. Thank You

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