Designing platform ecosystems for collaboration, innovation and growth

Abstract

PurposeThis paper explores the design dimensions that foster identity construction, legitimation, and growth of digitally mediated platform ecosystems.Design/methodology/approachA midrange theorizing approach was adopted to assimilate and induct the extant literature on ecosystems, platform business models and innovation, yielding testable propositions on ecosystem design for empirical testing.FindingsThe paper suggests that decentralized governance, partner engagement and shared context are three dimensions of criticality for designing a distinct platform ecosystem. These design dimensions nurture interactions, transactions, relationships between platform participants and external actors to make ecosystems authentic and legitimate. Decentralization is relevant for inducing flexibility and autonomy of participants on the platform. Engagement impacts the intensity of relationships the platform has with other firms in the ecosystem, while shared context is essential for creating knowledge and harnessing innovation on the platform.Research limitations/implicationsThe paper identifies a set of three testable propositions on ecosystem design for further empirical analysis by ecosystem researchers.Practical implicationsTo achieve future readiness, organizations must become resilient to the market environment. With that intent, traditional businesses are revising their operating models to become more collaborative, integrative and efficient. Adoption of digital initiatives for redesigning towards platform ecosystems will make traditional models more relevant as markets evolve. But as a new organization form, platform ecosystem faces the challenge of legitimacy. Author suggests that managers use the organization design lever to meet the challenge.Originality/valueEmergence of platform-based businesses and transformation of existing models to platform ecosystems are impacting today's competitive environment. During initial phases of evolution, ecosystems aim for identity and legitimacy. The authors contribute to organizational aspects of the platform ecosystem design literature by identifying decentralization of governance, engagement and shared context as dimensions of criticality for future-ready platforms. Secondly, these dimensions are associated with identity and legitimation of platform ecosystems. Decentralization is relevant for supply-side producers of goods and services on the platform, engagement has impact on both supply and demand-side participants of platforms, and shared context is essential for knowledge creation and harnessing innovation.