Complexity Management in Service Businesses through Platform Adoption

Abstract

In recent years, companies have started to offer solutions characterized by the presence of both products and services. This helps solving the challenges deriving from increased competition and market instability, through generation of new sources of competitive advantage. In the literature, this phenomenon is referred with the term “servitization”. Implementing a servitization strategy increases environmental complexity because of the growth in the number of interrelations and interactions of the activities taking place in the service processes, as well as interorganizational and intraorganizational relationships between the different actors. Platform has been identified as an organizational paradigm which may have potential to support companies in managing the increased complexity. However, studies about platform approaches with this focus are limited. Therefore, this study links the theoretical knowledge on complexity management with that of platforms, revealing the potentialities of platforms in managing complexity in service business context. Furthermore, based on the empirical findings from two case companies, the paper elaborates the mechanisms through which platforms can help companies to manage complexity through reducing and absorbing it.