Abstract
The Extended Enterprise, an advanced form of supply-chain integration, focusses on maximizing overall performance while also optimizing the performance of the stand-alone organizations involved. This necessitates not only inter-organizational collaboration but also inter-organizational performance measures. However, the continued use of and emphasis on, intra-organizational performance measures impedes collaborative efforts that transcend organizational boundaries and interests. We argue that an Extended Enterprise can only emerge and sustain through the development of a Service Logic perspective on value co-creation. Value co-creation encourages the establishment of performance measures for the evolving collaboration by taking into account the changing value-in-use of the products and services provided by all the firms involved. Our theoretical argument sheds new light on the formation of inter-organizational collaborations and addresses the role of organization design in this process.
Highlights
The Extended Enterprise, an advanced form of supply-chain integration, focusses on maximizing overall performance while optimizing the performance of the stand-alone organizations involved
Since the 1980s, various forms of collaboration have been witnessed between organizations in response to changing socioeconomic, technological, political and ecological environments. These “meta-organizations comprise networks of firms or individuals not bound by authority based on employment relationships, but characterized by a system-level goal” (Gulati et al 2012, p.573)
After having introduced the Service Logic, we will discuss the usefulness of its value co-creation principle for integrating the process and structural perspective on EEs and the possible implications for organization design research and practice
Summary
The Extended Enterprise, an advanced form of supply-chain integration, focusses on maximizing overall performance while optimizing the performance of the stand-alone organizations involved. Neither perspective addresses the underlying firm-centric logic upon which organization design, and the present performance management and measurement systems and the employment-relationship pull, is based (Gulati et al 2012).
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