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The paper examines the evolution of firms' product scope as their once independent products turned into components of an integrated product system and ultimately complements of an open ecosystem. An increase in interdependencies with other actors' products creates opportunities for governing components internally but also reduces the benefit of internalizing complements due to the ease of mix and match by end-customers. Following a research-question approach with quantitative and qualitative data in the U.S. medical imaging device industry (1981-2008), I find that on average incumbent imaging equipment firms reduced product diversity when they became part of integrated product systems or an ecosystem but diversified when they gained access to the connecting technology early on. These findings suggest that the nature of interdependencies and the (timing of) access to the core innovation for managing interdependencies matters. [ABSTRACT FROM AUTHOR]

We examine whether and when the relative importance of resource stakeholders reduces managerial attention to shareholder value under abrupt capital market pressure. Drawing on the stakeholder resource-based view, we conceptualize firms' value distribution as a bargaining process and theorize that the salience of resource stakeholders that directs managerial actions hinges on two factors: value-creating capability of contributed resources and stakeholders' bargaining position within a firm. Our empirical context is the U.S. stock market (2002-2007), when the SEC's randomized experiment removed short-sale restrictions from randomly selected stocks. Using a difference-in-difference-in-differences design, we find that increased short-selling pressure led to an increase in firms' marketing and selling activities, but the tendency was mitigated in the presence of other important stakeholders--repeat customers and a downstream workforce. [ABSTRACT FROM AUTHOR]

In this symposium, we bring together the four papers that examine the origin and impact of what defines ecosystem rules. While recent work actively recognizes ecosystems as a ubiquitous architecture of economic activities, the literature often assumes ecosystem alignment structure as given. Less understood is how the common rules of ecosystems that define alignment structure emerge and how they drive differences in firms' market position in an ecosystem. The four papers discuss what structural and institutional conditions drive asymmetric power distribution in interdependency, and how firms shape and materialize technological interdependence to their advantages. Employing diverse theoretical perspectives and methodologies, the papers in this symposium address an interesting set of questions to advance our understanding of ecosystem alignment structure. The symposium should be of interest to scholars of strategic management and technology innovation management. * What Drives and Defines Digital Platform Power? * Presenter: Michael G Jacobides; London Business School * The Role of Institutional User Community in Technology Standard-setting and Ecosystem Evolution * Presenter: Najoung Lim; U. of Maryland * Presenter: Rajshree Agarwal; U. of Maryland * Shaping Ecosystem Rules: How Interdependencies Affect Firms' Shaping Success Through Tech Standard * Presenter: Ram Ranganathan; U. of Texas at Austin * Presenter: John S. Chen; U. of Florida * Presenter: Anindya Ghosh; Tilburg U. * Value Creation Trade-off in Ecosystems:Leveraging Complementarities While Managing Interdependencies * Presenter: Shiva Agarwal; U. of Texas at Austin * Presenter: Rahul Kapoor; The Wharton School, U. of Pennsylvania [ABSTRACT FROM AUTHOR]

Why do firms' R&D units differ in their abilities to exploit technological diversity? We argue that the differences can arise from the heterogeneity in their internal social network structures. Viewing innovation as exchange and combination process of diverse knowledge, we examine how knowledge distribution shaped by the internal network structures affects each of these processes. We argue that the two global properties of intra-unit network structure - clustering and connectivity, each measured by clustering coefficient and average path length - differently moderate the inverted U-shaped relationship between technological diversity and innovation. An investigation of a 20-year unbalanced panel of 22 pharmaceutical R&D units reveals the curvilinear relationship between technological diversity and innovation and the negative moderating role of intra- unit network clustering on this relationship. The results indicate that the clustered network wherein inventors' colleagues are also colleagues reduces both benefits and costs from technological diversity. We further test the moderating role of small-world network structure, finding statistical support that the more small-worldly an intra-unit network is, the more the unit has ability to generate novel and valuable recombination out of heterogeneous knowledge resources. By questioning the assumption of a strong correspondence between network structure and knowledge diversity, this study contributes to knowledge diversity and innovation literature and further provides implications to managers in designing informal structure of their R&D units. [ABSTRACT FROM AUTHOR]