Developing a coevolutionary account of innovation ecosystems

Whilst research in innovation ecosystems has focused on the connectivity, interdependence, and coevolution of actors, technologies, and institutions, there has been a gap in the study of these relationships between actors, with little explanation given on how mutually interdependent parties adapt. In this paper, we draw further on the ecological metaphor to present a view of innovation ecosystems as complex adaptive systems, where patterns of change emerge from microlevel coevolutionary interactions between actors. Drawing on this view, we explore related implications for our understanding of ecosystem boundaries, coevolutionary rules of interaction, and how ecosystems are energized through innovation. Specifically, we contribute to the literature by developing a novel account of innovation ecosystems where actors are bound together through changing modes of coevolution. Drawing on this account, we explore key theoretical and practical implications for our understanding of ecosystem actors, rules of interaction, and the wider innovation ecosystem. We conclude that innovation both maintains and drives change within the innovation ecosystem, by altering the microlevel rules of interaction and coevolutionary relationships between actors.     

Investigating Adoption of Free Beta Applications in a Platform‐Based Business Ecosystem

Planning new product development (NPD) activities is becoming increasingly difficult, as contemporary businesses compete at the level of business ecosystems in addition to the firm‐level product‐market competition. These business ecosystems are built around platforms interlinking suppliers, complementors, distributors, developers, etc. together. The competitiveness of these ecosystems relies on members utilizing the shared platform for their own performance improvement, especially in terms of developing new valuable offerings for end users. Therefore, managing the development of the platform‐based applications and gaining timely end‐user input for NPD are of vital importance both to the ecosystem as a whole and to the developers. Subsequently, to succeed in NPD planning developers utilizing beta testing need a thorough understanding of the adoption dynamics of beta products. Developers need to plan for example resource allocation; development costs; and timing of commercial, end‐product launches. Therefore, the anticipation of the adoption dynamics of beta products emerges as an important antecedent in planning NPD activities when beta testing is used for gaining end‐user input to the NPD process. Consequently, we investigate how free beta software products that are built upon software platforms diffuse among their end users in a cocreation community. We specifically study whether the adoption of these beta products follows Bass or Gompertz model dynamics used in the previous literature when modeling the adoption of stand‐alone products. Further, we also investigate the forecasting abilities of these two models. Our results show that the adoption dynamics of free beta products in a cocreation community follow Gompertz's model rather than the Bass model. Additionally, we find that the Gompertz model performs better than the Bass model in forecasting both short and long out‐of‐sample time periods. We further discuss the managerial and research implications of our study.     

Marketing ecosystem: An outside-in view for sustainable advantage

In the modern business environment, consumers are increasingly influenced by megatrends involving marketplace, technology, socioeconomics, geopolitics, and natural environment. Simultaneously, the data and insights that can inform consumer attitudes and behaviors often reside outside of firms' direct control. Consciously incorporating these interdependent factors into firms' decision-making is essential for adaptability and sustainable profitability.Building on the “outside-in” perspective, we propose that firm strategies should be informed through the lens of the marketing ecosystem that considers the interrelated and dynamic megatrends. By leveraging advances in data and technology, firms can sense-make the marketplace by extracting insights from massive amounts of diverse consumer data with modern-day analytics. By mapping out the megatrends with marketing analytics, firms can 1) more accurately predict consumers' changing preferences and formulate appropriate strategies to engage with them; and 2) become more market-adaptable and competitive in the present and the future.To deliver sustainably compelling value to customers, firms should adopt an ecosystem mindset and cooperate with various stakeholders. A broad-thinking, agile, and humble firm culture can enable the development of more robust outside-in capabilities. We elaborate on the megatrends in the interconnected world of the marketing ecosystem, and propose emerging research directions in each area.     

Value propositions as communication practice: Taking a wider view

The aim of this article is to examine the concept and functioning of value propositions, seen through a service-dominant logic (S-D) lens. The variety of perspectives used to understand value propositions are examined, from unidirectional communication of value to reciprocal promises of value. The concept of reciprocal value propositions is examined in the light of S-D logic's fundamental premises. Examples are included to show how reciprocal value propositions can be used to initiate and guide resource integration activities between initiators and participants across a range of stakeholders of the firm. Some ‘taken for granted’ assumptions about market exchange are examined which act as a constraint on innovation in developing reciprocal value propositions, and more generally, stand in the way of innovative marketing practice. We also argue that reciprocal value propositions reveal opportunities for focal firm engagement with suppliers, customers, and other beneficiaries beyond sale/purchase transactions, as part of a platform for communicative interaction. In summary, we position reciprocal value propositions as a communication practice that brings exchange activities, relationship development, and knowledge renewal closer together.     

Leadership succession and firm performance in an emerging economy: Successor origin,relational embeddedness,and legitimacy

We examine how leadership transition affects firm performance in emerging economies. Building upon the social embeddedness and neo‐institutional perspectives, we argue for the importance of alignment between successor origin and social context for firm performance. We suggest that as a baseline outside successors enhance firm profitability because of the large‐scale and rapid changes in emerging markets. However, this outsider premium is reduced in firms embedded in family and business group relationships, where family and inside successors can better access network resources. But the outsider premium is amplified in firms embedded in a mature market‐based logic, such as high tech or foreign invested firms, because the perceived legitimacy of outsiders facilitates resource acquisition. Our arguments are supported through the analysis of Taiwanese listed firms between 1996 and 2005. Copyright © 2012 John Wiley & Sons, Ltd.     

Value creation by knowledge‐based ecosystems: evidence from a field study

A growing number of research and development‐driven companies are located in knowledge‐based ecosystems. Value creation by these ecosystems draws on the dynamics of single firms (interacting and partnering) as well as the ecosystem at large. Drawing on a field study of a Dutch high‐tech campus, two key sources of value creation are identified: (1) facilitation of the innovation process for individual companies and (2) creation of an innovation community. Furthermore, the coevolution of the ecosystem's business model with firm‐level business models explains why technology‐based firms join, stay in, or leave the ecosystem at a certain point in time. A remarkable finding is that ecosystem managers have to deliberately facilitate exit routes for companies that no longer fit the ecosystem in order to enhance and reinforce its business model. As such, this study suggests a dynamic capability perspective on knowledge‐based ecosystems that need to develop a business model at the ecosystem level to create sufficient innovative capacity and entrepreneurial fitness.     

How CEO hubris affects corporate social (ir)responsibility

Grounded in the upper echelons perspective and stakeholder theory, this study establishes a link between CEO hubris and corporate social responsibility (CSR). We first develop the theoretical argument that CEO hubris is negatively related to a firm's socially responsible activities but positively related to its socially irresponsible activities. We then explore the boundary conditions of hubris effects and how these relationships are moderated by resource dependence mechanisms. With a longitudinal dataset of S&P 1500 index firms for the period 2001–2010, we find that the relationship between CEO hubris and CSR is weakened when the firm depends more on stakeholders for resources, such as when its internal resource endowments are diminished as indicated by firm size and slack, and when the external market becomes more uncertain and competitive. The implications of our findings for upper echelons theory and the CSR research are discussed. Copyright © 2014 John Wiley & Sons, Ltd.     

Synergies among Producer Firms,Lead Users,and User Communities: The Case of the LEGO Producer–User Ecosystem

While many firms today proactively involve users in their new product development efforts using a wide variety of methods such as the lead user method, firm‐hosted user communities, or mass customization toolkits, some pioneering firms are experimenting with the creation of sustainable producer–user ecosystems designed for the continuous exploration and exploitation of business opportunities. In this paper, the functioning of such ecosystems is studied with particular emphasis on the synergies they can yield. Based on an explorative and longitudinal multiple case study design, the producer–user ecosystem of the firm LEGO is analyzed, and three main actors in the ecosystem are identified: entrepreneurial lead users who aim to start their own businesses, a vibrant user community, and the LEGO company as the focal producer firm and facilitator for multiple user‐to‐user and user‐to‐producer interactions. Our study reveals three kinds of synergies: (1) reduced risk for entrepreneurial lead users and the focal producer firm, (2) the extension of the design space of the focal producer firm's products, and (3) the creation of buzz within the user community. Finally, the theoretical and managerial implications of our findings for innovation researchers and practitioners are discussed.     

Stakeholder influences on sustainability practices in the Canadian forest products industry

We examined how managers' perceptions of different types of stakeholder influences in the Canadian forestry industry affect the types of sustainability practices that their firms adopt. Both influences involving withholding of resources by social and ecological stakeholders and those involving directed usage of resources from economic stakeholders were found to drive such practices. We found that the industry and its stakeholders have moved beyond a focus on early stages of sustainability performance such as pollution control and eco‐efficiency. However, more advanced practices, such as those involving the redefinition of business and industrial ecosystems where firms locate in a region so that they can exchange and utilize wastes generated by other firms, are in their infancy. Stakeholders and firms in the industry are focused on the intermediate sustainability phases involving recirculation of materials and redesign of processes including sustainable harvesting of lumber. Copyright © 2004 John Wiley & Sons, Ltd.     

Towards a theory of ecosystems

Research Summary: The recent surge of interest in “ecosystems” in strategy research and practice has mainly focused on what ecosystems are and how they operate. We complement this literature by considering when and why ecosystems emerge, and what makes them distinct from other governance forms. We argue that modularity enables ecosystem emergence as it allows a set of distinct yet interdependent organizations to coordinate without full hierarchical fiat. We show how ecosystems address multilateral dependences based on various types of complementarities—supermodular or unique, unidirectional or bidirectional—which determine the ecosystem's value‐add. We argue that at the core of ecosystems lie nongeneric complementarities, and the creation of sets of roles that face similar rules. We conclude with implications for mainstream strategy and suggestions for future research. Managerial Summary: We consider what makes ecosystems different from other business constellations, including markets, alliances, or hierarchically managed supply chains. Ecosystems, we posit, are interacting organizations, enabled by modularity, not hierarchically managed, bound together by the nonredeployability of their collective investment elsewhere. Ecosystems add value as they allow managers to coordinate their multilateral dependence through sets of roles that face similar rules, thus obviating the need to enter into customized contractual agreements with each partner. We explain how different types of complementarities (unique or supermodular, generic or specific, uni‐ or bi‐directional) shape ecosystems and offer a “theory of ecosystems” that can explain what they are, when they emerge, and why alignment occurs. Finally, we outline the critical factors affecting ecosystem emergence, evolution, and success—or failure.     

Managing for stakeholders,stakeholder utility functions,and competitive advantage

A firm that manages for stakeholders allocates more resources to satisfy the needs and demands of its legitimate stakeholders than would be necessary to simply retain their willful participation in the firm's productive activities. We explain why this sort of behavior unlocks additional potential for value creation, as well as the conditions that either facilitate or disrupt the value‐creation process. Firms that manage for stakeholders develop trusting relationships with them based on principles of distributional, procedural, and interactional justice. Under these conditions, stakeholders are more likely to share nuanced information regarding their utility functions, thereby increasing the ability of the firm to allocate its resources to areas that will best satisfy them (thus increasing demand for business transactions with the firm). In addition, this information can spur innovation, as well as allow the firm to deal better with changes in the environment. Competitive advantages stemming from a managing‐for‐stakeholders approach are argued to be sustainable because they are associated with path dependence and causal ambiguity. These explanations provide a strong rationale for including stakeholder theory in the discussion of firm competitiveness and performance. Copyright © 2009 John Wiley & Sons, Ltd.     

Firm litigation risk and the insurance value of corporate social performance

This paper advances the risk management perspective that superior social performance enhances firm value by serving as an ex ante valuable insurance mechanism. We posit that good social performance is more valuable as an insurance mechanism for firms with higher litigation risks. Moreover, value generation of corporate social performance (CSP) depends on whether a firm has gained pragmatic legitimacy (i.e., a firm's financial health) and moral legitimacy (i.e., whether or not a firm operates in a socially contested industry) among its stakeholders. We find that the value of CSP as insurance against litigation risk is practically significant, adding 2 to 4 percent to firm value. But CSP is less likely to create value if the firm is in financial distress or is operating in socially contested industries. Copyright © 2013 John Wiley & Sons, Ltd.     

Resource relatedness and the mode of entry into new businesses: Internal resource accumulation vs. access by collaborative arrangement

When firms seek to enter a new business segment, they have to decide how to best gain access to the required resources. This paper analyzes how resource relatedness influences a firm's decision between internal development and collaborative arrangement as modes of entry. We distinguish between a firm's capacity to transfer its established resources to the new segment (resource transferability) and the integration and synergistic combination of current firm resources with target segment resources in day‐to‐day operations (resource complementarity). Resource transferability makes entry by internal development more likely, but this effect depends on segment characteristics. Synergies from complementary resources can be exploited more easily within firm boundaries than across an alliance interface. However, certain partner characteristics can substitute in part for belonging to the same firm. Copyright © 2014 John Wiley & Sons, Ltd.     

Information technology resources,innovativeness, and supply chain capabilities as drivers of business performance: A retrospective and future research directions

Four articles considered among the Industrial Marketing Management citation classics developed frameworks that aimed to capture the factors contributing to the business performance of a firm. In this paper, we provide an overview of the developments in the field since their publication more than ten years ago and explore avenues for future research. First, we provide a retrospective on the original articles and provide a brief literature review regarding how the business performance research has evolved since then. Second, we identify potential research gaps and provide future research directions with respect to resources and capabilities that drive performance. Finally, we provide our perspective regarding other factors that could influence firm performance and other firm performance measures that should be considered by future research.     

Coordinating and competing in ecosystems: How organizational forms shape new technology investments

We consider firms in the context of their business ecosystems and explore how differences in the ways in which firms are organized with respect to complementary activities affect their decision to invest in new technologies. We argue that, in addition to creating differences in incentives and bureaucratic costs, firm‐complementor organizational form plays an important role in the firm's ability to coordinate accompanying changes in complementary activities so as to shape the benefits from investing early in the new technology. We test our predictions in the U.S. healthcare industry from 1995–2006. The study makes a strong case for viewing firms' competitive strategies in the context of their business ecosystems and for the existence of an important link between firms' coordination choices and their strategic investments. Copyright © 2012 John Wiley & Sons, Ltd.     

Sustainably superior versus greenwasher: A scale measure of B2B sustainability positioning

Business-to-business (B2B) buyers are finding it increasingly difficult to judge the true sustainability of supply chain partners (Oruezabala & Rico, 2012). Yet three-quarters of buyers in the OECD report they will dismiss potential supply chain partners who fail to meet sustainability criteria (Pierre, 2008). B2B firms then, cannot afford any confusion over their sustainability practices and positioning. Unfortunately, there are no sustainability positioning measures for firms to assess this, and there is no agreed upon operationalization of a highly sustainable firm vs a weakly sustainable firm. As such, this research creates a B2B sustainability positioning scale and taxonomy. First, interviews with buyers and marketing managers determine perceptions of supplier sustainability practices and defines B2B levels of sustainability. Second, exploratory and confirmatory scale development studies are conducted with 578 experienced industrial buyers. The resulting B2B sustainability positioning scale shows that a sustainably superior positioning for B2B addresses five key factors: (1) sustainability credibility, (2) concern for environmental impact, (3) a careful consideration of stakeholders, (4) resource efficiency, and (5) a holistic philosophy. This scale is intended as a tool to help B2B marketers understand and better leverage their sustainability practices and communications around sustainability.“We're trying to be cleaner and greener: We recycle waste and switch things off. We use paper from responsibly managed forests whenever possible. We ask our printers to actively reduce waste and energy consumption. We check out our suppliers' working conditions...”– The back jacket of books from DK Publishers, 2018.     

Chinese firms’ sustainable development—The role of future orientation,environmental commitment,and employee training

In this research, we study the issues of corporate sustainable development in China. Based on relevant research, we propose a theoretical model showing the relationship among business environmental commitment, cultural value, employee training, and firm performance of sustainable development. It is argued that a cultural value (i.e., organizational future orientation) should be a key antecedent predicting business environmental commitment. On the other hand, a firm’s sustainable performance, such as performance in environmental protection, should be a major consequence of its business environmental commitment. Moreover, the relationship between business environmental commitment and sustainable performance can be moderated positively by the level of employee training. Other conditions being equal, the better the employee training is, the stronger the relationship between business environmental commitment and sustainable development performance. Testing the relevant hypotheses in China, we find evidence supporting our model proposed in this paper. We conclude with a discussion on the implications of our findings for academic researchers and practitioners.     

企业捐赠作用的综合解析

本文提出一个综合的理论解释框架,将捐赠作用划分为四类:合法保护——企业通过捐赠购买利益相关者的“伤害权,”提高组织的合法性,减少企业经营中的不确定性,维持企业正常运行;伤害保险——慈善捐赠将形成积极的道德资本,当企业经营活动伤害到利益相关者时,道德资本能降低受害者制裁/报复企业的强度,并减少企业关系资产的损失;间接增值——慈善捐赠可以通过改善企业与利益相关者的关系来间接提升企业绩效;直接增值——精心设计的战略性慈善捐赠可以改善企业经营环境,直接提升企业绩效。     

Big losses in ecosystem niches: how core firm decisions drive complementary product shakeouts

This study examines shakeouts in the context of business ecosystems. Market turbulence generated by core firm decisions in competing differentiated ecosystems can generate financial losses and exit for complementary niche market firms. I develop hypotheses predicting which niche markets will suffer larger losses and be more susceptible to shakeouts, and how core firm decisions will drive complementor performance and survival. I then apply these hypotheses to brand‐based differentiated ecosystems in the automotive industry, where networks of suppliers, customers, and complementors surround car manufacturers. More specifically, I study the complementary niche market of automotive leasing, where manufacturers sway leasing markets through product change, entry, and subsidization. To test the hypotheses, I use a proprietary dataset of 200,000 individual car leases between 1997–2002 to identify how manufacturer product design and niche market entry drive complementor losses and exit. These data allow a unique opportunity to understand how the strategic choices of core firms can have substantial and often devastating effects on niche markets in their ecosystem. Further, the results suggest how the dynamic capabilities to adapt to core firm behavior might improve performance for certain niche market complementors. Copyright © 2008 John Wiley & Sons, Ltd.     

Managing technological uncertainty in science incubation: a prospective sensemaking perspective

This paper focuses on the adaption challenge that confronts the top management team (TMT) of science incubators in situations of substantial technological uncertainty. To do that, we draw on the three‐year longitudinal analysis of a major bioscience catalyst in the United Kingdom. Through the lens of ‘prospective sensemaking’, we follow the TMT as they work with stakeholders in their ecosystem to make sense of a significant technological shift: the convergence of life sciences, IT and other sciences in the health care environment. Our analysis reveals how prospective sensemaking resulted in the launch of a new strategy to exploit these emerging opportunities. However, stakeholders’ increasingly fragmented interpretation of the term convergence and the anticipation of legitimacy challenges in the wider ecosystem resulted in the repositioning of the incubator. Our findings contribute to extant research on science incubation. In particular, the paper sheds light on the complex interactions of incubator TMT’s with stakeholders in situations of technological change and uncertainty. Moreover, responding to technological change does not only affect the structural conditions of an incubator. Rather, it may also require changes to the positioning of the incubator in order to maintain legitimacy in the wider ecosystem. The paper also suggests managerial as well as policy‐level implications.