Technology Ecosystem Governance

Abstract

Technology platform strategies offer a novel way to orchestrate a rich portfolio of contributions made by the many independent actors who form an ecosystem of heterogeneous complementors around a stable platform core. This form of organising has been successfully used in the smartphone, gaming, commercial software, and other industrial sectors. While technology ecosystems require stability and homogeneity to leverage common investments in standard components, they also need variability and heterogeneity to meet evolving market demand. Although the required balance between stability and evolvability in the ecosystem has been addressed conceptually in the literature, we have less understanding of its underlying mechanics or appropriate governance. Through an extensive case study of a business software ecosystem consisting of a major multinational manufacturer of enterprise resource planning (ERP) software at the core, and a heterogeneous system of independent implementation partners and solution developers on the periphery, our research identifies three salient tensions that characterize the ecosystem: standard-variety; control-autonomy; and collective-individual. We then highlight the specific ecosystem governance mechanisms designed to simultaneously manage desirable and undesirable variance across each tension. Paradoxical tensions may manifest as dualities, where tensions are framed as complementary and mutually-enabling. Alternatively, they may manifest as dualisms, where actors are faced with contradictory and disabling ‘either/or’ decisions. We identify conditions where latent, complementary tensions become manifest as salient, contradictory tensions. By identifying conditions in which complementary logics are overshadowed by contradictory logics, our study further contributes to the understanding of the dynamics of technology ecosystems, as well as the effective design of technology ecosystem governance that can explicitly embrace paradoxical tensions towards generative outcomes.

Keywords: technology ecosystems, platforms, governance, paradox, tensions

JEL Classification: O33, O38