Structuralist Theory

Decent Essays

Despite the recent surge in the ecosystem strategies of firms in both the practitioners and academics sphere, our understanding of why some ecosystem orchestrators create and capture more value than others still remain incomplete (Adner, 2017). Prior studies have traditionally explained the performance of focal firms from either the structural properties of the ecosystem (structuralist perspective) or from the network/relational embeddedness of partners within the ecosystem (actor centric perspective). In this study, we provide an alternative explanation for the heterogeneity in the performance of focal firms by focusing on the architectural features of the ecosystem, which constitutes of technologies and actors interacting within the …show more content…

In line with our hypotheses, this study reveals that increasing level of technology complexity reinforces the architecture of the focal firms’ technology and drives the emergency of the bottleneck, which in turn enhances the firm performance. This finding is consistent with prior works such as Baldwin, 2005; Adner & Kapoour, 2010; Ethiraj, 2007; Ethiraj & Posen, 2013), who find that controlling bottleneck – key components where value is accrued can significantly contribute to performance of focal firms. Our finding adds to these studies by showing that rich interconnectivity among partners technologies offer the focal firm with greater control over its technology and make it much difficult for rival firms to access its partners, which reduces the number of partners to which rival licensors can license their technology to. The finding also reinforces Jacobides and Tae, 2014 arguments that controlling strategic bottleneck that results from supply limitation, when reinforces with architectural control and legal protection such as patents significantly enhances the licensor bargaining power and improves its capacity to capture value from its ecosystem. In addition, our finding also contributes to the licensing literature from the competitive perspective (Cava et al, 1983; Arora, Forfuri & Gambardella, 2003;

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