From Product Platform Ecosystem to Innovation Platform Ecosystem: An Institutional Perspective on the Governance of Ecosystem Transformations
The Wharton School, The University of Pennsylvania
Krcmar Lab, Technical University of Munich
Friday, Oct 29
10:30am – 12 pm | Alter 603
With the advance of cloud computing, incumbent companies across different industries such as banking, insurance, and enterprise software have the opportunity to transform existing product platform ecosystems into innovation platforms ecosystems, increasing generativity in their ecosystems. This transformation is challenging because it not only entails a technological shift but also changes to the complex interactions between the ecosystem orchestrator and ecosystem actors such as partners and customers. To study how incumbent companies can govern ecosystem transformations, we interpret ecosystems as institutional fields. We analyze how incumbent companies can leverage the three institutional pillars (regulatory, normative, and cultural-cognitive) to address governance tradeoffs that arise once the transformation is triggered. In a multiyear, grounded theory study, we analyze SAP’s introduction of a cloud platform for enterprise software applications and show that the company aligned its governance approach with the three institutional pillars, iteratively increasing the legitimacy of the transformed ecosystem among partners and customers. We contribute to the literature on ecosystem transformation and platform governance by showing that a transformed ecosystem needs to gain legitimacy among ecosystem actors, a process that can be supported by the ecosystem orchestrator through governance mechanisms based on the three institutional pillars. We also highlight the potential of institutional theory as a lens for understanding dynamic changes in ecosystems and provide practical implications for incumbent companies that undergo ecosystem transformations.