Platform-Based Organization and Boundary Choices: 'Opening-Up' While Still Coordinating and Orchestrating

73 Pages Posted: 10 Mar 2017 Last revised: 26 Apr 2017

See all articles by Kevin Boudreau

Kevin Boudreau

Northeastern University; National Bureau of Economic Research (NBER)

Date Written: April 24, 2017

Abstract

Rather than organize as traditional firms, many of today's companies organize as platforms that sit at the nexus of multiple exchange and production relationships. This paper considers a most basic question of organization in platform contexts: the choice of boundaries.

Herein, I investigate how classical economic theories of firm boundaries apply to platform-based organization and empirically study how executives made boundary choices in response to changing market and technical challenges in the early mobile computing industry (the predecessor to today's smartphones).

Rather than a strict or unavoidable tradeoff between “openness-versus-control,” most successful platform owners chose their boundaries in a way to simultaneously open-up to outside developers while maintaining coordination across the entire system.

Keywords: Platforms, Boundaries, Scope, Organization, Innovation and Technical Change, Entrepreneurship, Smartphones

JEL Classification: D4, E26, J4, L1, L8, 03

Suggested Citation

Boudreau, Kevin, Platform-Based Organization and Boundary Choices: 'Opening-Up' While Still Coordinating and Orchestrating (April 24, 2017). Available at SSRN: https://ssrn.com/abstract=2929725 or http://dx.doi.org/10.2139/ssrn.2929725

Kevin Boudreau (Contact Author)

Northeastern University ( email )

805 Columbus Ave, Interdisciplinary Sci & Eng Bldg
Huntington Ave
Boston, MA 02115
United States

HOME PAGE: http://www.kevinboudreau.com

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

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