Platform and Ecosystem Transitions: Strategic and Organizational Implications

By most conventional measures of corporate success (revenue, market capitalization, global brand growth, etc.) businesses operating as multi-sided platforms (MSPs) and their associated ecosystems constitute the majority of the fastest growing organizations in the global economy. In the strategy and economics fields there is a burgeoning literature related to MSP-governed businesses and their ecosystems primarily focused on pricing, growth, governance, and competitive considerations. Yet, in organizational studies and innovation there is a dearth of research analyzing characteristics of these businesses and their complementors and the managerial challenges they present. More specifically, an increasing number of mature incumbent organizations in a variety of industries are starting to operate in environments in which they either need to operate as MSP-based businesses, or join ecosystems governed by them to compete successfully and grow. This dissertation consists of two book chapters and one empirical project aligned with one overarching question: As information constraints approach zero and MSP-governed businesses and their complementors become increasingly more prevalent in the global economy, what are the strategic and organizational issues affecting incumbent organizations that choose to become MSPs or compete as complementors to them? The first chapter, incorporating a forthcoming book chapter (see Altman, Nagle, & Tushman, 2015) is a theoretical study exploring the effects on management research and organizations when the costs of information processing, storage, and communication approach zero and organizations engage with a wide range of communities. As these information constraints are reduced, one effect is that MSP-based businesses and ecosystems thrive and impact large sectors of the economy. Thus, this chapter sets the context for the dissertation as it outlines the environment in which MSP-governed businesses and their complementors operate and introduces theoretical challenges posed by the growth of these networks. The second chapter, an empirical paper, focuses on challenges encountered by incumbent organizations joining MSP-governed ecosystems as complementors. This project is a multi-year qualitative inductive field-based research study analyzing the transition of a well-known consumer technology product provider as it joins a powerful MSP-based ecosystem. The accessory organization enters an asymmetric power relationship encountering, and responding to, multiple types of dependencies. I identify three types of dependencies faced by the organization: technological, information, and values-based, and three response strategies the organization deploys: compliance, influence, and innovation. I suggest that these dependencies and responses are related to, but distinct from, extant work on power and dependencies. I also classify three phases of complementor maturity through which the organization passes. I induce a grounded theory model identifying relationships between the concepts and discuss theoretical implications. The final chapter, also a forthcoming book chapter (see Altman & Tripsas, 2015), addresses organizational identity implications of transitions mature organizations undergo as they shift from product to MSP-based business models in which business considerations include network effects and interdependence. This chapter explains that organizational identity may affect, and may be affected by, product-to-platform transitions. It suggests that an organization must question its identity and modify it to be consistent with its re-defined business model.