Digital Enablement

The Consumerizational and Transformational Effects of Digital Technology

Shan Ling Pan, M S Sandeep

• Publisher: WSPC
• Year: 2018
• ISBN:
  9789813209145
• Topic: Business
• Subtopic: IT Industry
• Index: Business

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This collection of papers from the Digital Enablement Conference 2016 aims to illustrate various aspects of the digital enablement phenomenon. Over the last two decades, advances in digital technology have fundamentally transformed the way we do business, work, and live. As new technologies emerge, they offer new possibilities for addressing increasingly complex economic and social problems.

Digital enablement refers to the consumerizational and transformational roles of digital technology in driving business and social innovation, and has profound, multi-disciplinary implications. Some of these include: Facilitating new business models that transform the way firms transact, market, and engage with customers; providing new means of income generation for disadvantaged groups; and generating new means of social interaction, which empowers employees, customers, small businesses, and entire communities.

This book introduces readers to case studies of digital enablement in business and society. It offers unique insights into the phenomenon from multiple contexts, giving readers a nuanced understanding of the roles digital enablement can play.

--> Contents:

• Digital Entrepreneurship Ecosystem as a New Form of Organizing: A Case of Zhongguancun (Wenyu Du and Wenjie Li)
• Mechanism of Balancing the Tension between Consistency and Relevance of Brand Ambidexterity by Digital Enablement — A Case Study of HUANYI International Travel Agency (Chunqing Li and Songling Li)
• The Characteristics of Sustainable Supply Chain Innovation: A Case Study of YHD, China (De Gao, Zhiduan Xu, Man Gu and Yilong Z Ruan)
• The Role of Social Media in Social Advocacy (Shamshul Bahri and Ali Fauzi)
• Digital Performance Management Based on the Perspective of Organizational Control: A Case Study of Advantech (Ning Zhou, Xiaoting Han, Tingting Hu, Yin Zhou and Wenjun Jiang)
• Research from the Perspective of Resource Orchestration on How Marginal Enterprises Reconfigure the Digital Ecosystem: A Case of Duch 3D Printing in China (Zhengyan Cui and Taohua Ouyang)
• Red Collar Group: Transform Towards Smart Manufacturing (Jing (Elaine) Chen, Shan L Pan and Qingfeng Zeng)
• Data Connection: Scene Marketing Creates Demand (Daojun Sun, Yanyan Wang and Chunhu Cui)
• Establishing an Ecosystem for Digital Entrepreneurship: A Case of Zhongguancun (Jiamin Yin and Wenyu (Derek) Du)
• Meeting New Friends via Habitual Use of Mobile Instant Messaging (MIM) Apps: System Fit & Cultural Preference (Charlie Chen and Peter Ractham)
• Exploring the Development of China's Mobile Payment from the Perspective of Resource-based Platform Strategies (Jiang Yu, Wenmiao Hu and Yue Zhang)
• Exploring Service Dominant Logic and Business Model for IT Firms to Transition to the Cloud Era: A Focus Group Study (Jau-Rong Chen)
• Towards Commercialization of University Research Outcomes: Comparative Theories (Tamrin Amboala, Joan Richardson and John Lenarcic)
• Blockchain Brings a New IT Capability: A Case Study of HNA Group (Wenchi Ying and Suling Jia)
• The Role of Disruptive Innovation in Building a Shared Economic Platform: A Case Study of Sheke Net (SKN), China (Haibo Hu, Tao Huang and Yang Cheng)
• Developing Capabilities for the IT-enabled Organizational Transformation: A Case of Traditional Manufacturing Enterprise in China (Delin Zheng, Zhengyan Cui, Taohua Ouyang and Zhenya Tan)
• Transaction Orientation vs Relationship Orientation: Consumer Logic of Enterprise Digital Empowerment (Xin Dai, Ying Zhou and Jingyuan Gong)
• How Do Scarcity Messages Lead to Impulsive Online Purchase? The Perspective of Arousal (Junpeng Guo, Liwei Xin and Yi Wu)
• The Perspective of Manufacturing Enterprise Innovation Ecosystem Evolution Based on Technology Affordance: Transformation Path of the Bright Moon Company (Bo Hu, Baozhou Lu and Zhibin Liu)

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--> Readership: Employees, customers, small businesses, academics, students and communities interested in how digital technology can drive business and social innovation. -->
Keywords:Digital Enablement;ICT;Information Systems;China;Case Study;QualitativeReview:0

Chapter 1

Digital Entrepreneurship Ecosystem as a New Form of Organizing: A Case of Zhongguancun

Wenyu Du

Management Science and Engineering Department School of Business, Renmin University of China [email protected]

Wenjie Li

Management Science and Engineering Department School of Business, Renmin University of China [email protected]

Abstract

Digital entrepreneurship ecosystem (DEE) plays a significant role for generating digital innovations because it contains variable resources and facilitates the collective collaborations. Many regions have established the DEE to support digital innovations in order to improve their economic environment. However, researches on digital innovation at ecosystem level are limited. In addition, the knowledge about “how to organize DEE” is inadequate. To unveil the organizing forms of DEE, we consider DEE as a “new” form of organizing for the absence of traditional organizing elements such as hierarchy and formal authority. Through this theoretical lens, DEE can be analyzed as an organization, rather than a combination of actors. Empirically, we conducted a case study of Zhongguancun (ZGC), a successful DEE in China, and interviewed 51 heterogeneous people. We found that eight activities compose the organizing form of DEE.

Keywords: Digital entrepreneurship, Ecosystem, New forms of organizing.

Introduction

Since digital innovation becomes a critical factor to gain firms’ competition, it is common that digital innovations mainly take place within firms, rather than in competitive market (Autio et al., 2015). However, digital innovation also takes place outside the boundary of firms through collective collaboration, which complements the resources limitation of single firm (Adner and Kapoor, 2010). Thus, we need to treat digital innovations at the ecosystem level, which could provide a platform to aggregate various resources and facilitates such collaboration (Lindgren et al., 2008). In practice, digital entrepreneurship ecosystem (DEE) has already been complimented to accelerate digital innovations, such as Silicon Valley. Many regions also started to establish DEEs to support digital innovations as a means to revive local economy, such as London, Berlin, Paris, Tel Aviv in Israel, Singapore, and China (Herrmann et al., 2015; McKinsey Global Institution, 2015; Yip, 2015).

Therefore, DEE plays an important role as an accelerator for creating digital start-ups. Currently, however, researches on digital innovation at the ecosystem level are limited, which hampers our understanding of DEEs (Shen et al., 2015). To illustrate, existing research on digital innovation mainly focuses on individual, organizational, and industrial levels (Bharadwaj et al., 2013; Sambamurthy et al., 2003; Yoo et al., 2010). Even those research in the ecosystem context has mainly addressed organizational or industrial activities within the ecosystem (Lee and Berente, 2011; Selander et al., 2010). Given this urgent, Information System Journal (ISJ), the top journal in IS literature, calls for papers on unveiling the characteristics of digital entrepreneurship in a wide context (Shen et al., 2015, p. 1).

Contrary to the traditional thinking of organizing, many DEEs can organize variable actors well without formal authority. However, the knowledge about “how does DEE organize” is inadequate, posing a great knowledge gap for both scholars and practitioners. Different from traditional organizations, actors in DEE do not share the same goal and are free to make their decision based on their own goals and benefits, which may lead to the conflicts rather than collaboration. For example, the actors may prefer to drain the value within the ecosystem for maximum of their benefit, rather than share it with other actors. Therefore, exploring the details of organizing processes that facilitate inter-organizational coordination and collaboration is a worthy research point (Gulati et al., 2012).

Thus, our study aims to analyze the DEE as a whole to answer the question “how does a DEE organize to support digital innovations.” In order to answer this question, we adopt the theoretical lens of forms of organizing (Puranam et al., 2014), in which the four universal problems — problems of task division, task allocation, reward distribution, and information flow — have to be addressed. Since DEE is different from the traditional form of organizing for lack of traditional organizing elements such as formal authority, the solutions to these four problems may be novel (Puranam et al., 2014). Thus, the organizing process of DEE is relatively novel and we can treat DEE as a “new” form of organizing. This theoretical lens enables us to analyze DEE as an organization rather than a pure combination of actors. These universal problems of organizing provide us with an operational framework to analyze the organizing activities in DEEs.

We conducted a case study on Zhongguancun (ZGC), a successful DEE known as the Silicon Valley of China. Analyzing data collected from 51 interviewees with high heterogeneity, we find eight activities to achieve the organizing form of DEE. Our chapter has three contributions. First, we contribute by extending the research on digital innovation from individual or organizational level to an ecosystem level by analyzing the DEE as a whole (Shen et al., 2015). This is because the DEE is conducive to digital innovation exploitation since it aggregates various resources and facilitates inter-firm collaboration. Second, our chapter makes contributions by complementing the design study of organization through the case exhibition of DEE as a new form of organizing (Gulati et al., 2012; Puranam et al., 2014). Finally, our chapter contributes to the entrepreneurship literature by unveiling the organizing processes of an entrepreneurial ecosystem (Autio et al., 2015).

Literature review

Digital innovation and DEE

According to the Yoo et al. (2010), digital innovation can be defined as the implementation of new combinations of digital and non-digital components to produce novel products and processes. Due to the limitation of resource and knowledge available within individual organizations, many firms seek to leverage external resources to generate digital innovations (Selander et al., 2010). Meanwhile, the collaboration networks of inter-firms (Schilling and Phelps, 2007) and boundary-spinning practices (Lindgren et al., 2008) have significant effect on innovations. Thus, digital innovation typically involves multiple actors and interactions. In other words, ecosystem which contains variable resources and information is significant for digital innovations.

Innovation and entrepreneurship are inherent (Bessant and Tidd, 2007) since many digital entrepreneurships are based on digital innovations and also create digital innovations. Meanwhile, the DEE is important for the success of digital entrepreneurship for the integration of resource and supportive element beyond the firm level (Spigel, 2015). Yet, research on digital entrepreneurship at the ecosystem level is limited. Most of them focus on individual and organizational levels, in which entrepreneurial process and context are the main research points (Shane and Venkataraman, 2000; Zahra et al., 2014). Other researches on digital entrepreneurship at a wide context are clusters (Delgado et al., 2010) and networks (Nambisan and Sawhney, 2011). Although these researches have different perspectives, they share a common ground that a macro scope is needed to understand the strategy of digital entrepreneurship (Spigel, 2015). Thus, the term “ecosystem” became popular in the digital entrepreneurship literatures.

For the underdevelopment and undertheorization of ecosystem, a tool or framework is needed to analyze the ecosystem structurally (Autio et al., 2015; Spigel, 2015). Because agents within the ecosystem are legally independent entities, it is straight to consider ecosystem as a multi-organizational problem, as most researches did. Nonetheless, the conception of “meta-organization”, in which firms or individuals are not bound by formal authority, based on employment relationships (Gulati et al., 2012), enables us to involve the framework of organization theory to analyze ecosystem. In order to unveil the black box of DEE’s organizing process, we adopt the framework of form of organizing. Details will be shown in the next section.

Forms of organizing

There are two fundamental problems of organizing: the division of labor and the integration of effort (Puranam et al., 2014). According to the research of Puranam et al. (2014), the problem “division of labor” can be divided into two sub-problems: task division and task allocation; the problem “integration of effort” can also be described as reward provision and information flow (summarized in Table 1).

Task division refers to the problem of mapping the goals of the organization into tasks and subtasks (Puranam et al., 2014, p. 165). It describes the problem of how to breakdown the system goal into contributory subtasks in an organization. In other words, it decides what jobs the system has. For task division, Puranam et al. (2014) argued that the following three principles should be relevant: excluding members who do not fit in the system goal, no essential tasks remaining incomplete, and little redundancy among subtasks. These principles can be achieved by the initial design (MacCormack et al., 2006), the participation and contribution by members (Puranam et al., 2014), co-specialization of members (Thomas and Autio, 2012) and the transparency of task division (Baldwin and Clark, 2006).

Task allocation refers to the problems of mapping the tasks obtained through task division to individual agents (Puranam et al., 2014, p. 165). It describes the problem of how to allocate a job to the right one. The common mechanisms of task allocation are assignment (Hackman and Oldham, 1976) and self-selection based on capability, resource, and preference (Puranam et al., 2014). The process of self-selection can be considered as decision making, which can be influenced by both internal and external factors. Competition is an external factor for an organization, but it is also a critical factor for a successful ecosystem (Moore, 1993; Peltoniemi and Vuori, 2004). Therefore, the self-selection based on competition is also a pattern of task allocation.

Table 1. Summary of Forms of Organizing

Fundamental Problems		Description		Example of Solutions
Task Division		The problem of mapping the goals of the organization into tasks and subtasks		✓ Initial structure designed by founder (MacCormack et al., 2006) ✓ Participation and contribution by other members (Puranam et al., 2014) ✓ Transparency of task division (Baldwin and Clark, 2006)
Task Allocation		The problems of mapping the tasks obtained through task division to individual agents		✓ Assignment (Hackman and Oldham, 1976) ✓ Self-selection based on internal factors (Puranam et al., 2014) ✓ Self-selection based on external factors such as competition
Reward Distribution		The problem of mapping a set of rewards to the agents in the organization and motivating the agents to cooperate		✓ Compensations (Prendergast, 1999) ✓ Intrinsic motivation (Hackman and Oldham, 1976) ✓ Social norms (Shah, 2006); ✓ Value creation (Thomas and Autio, 2012) ✓ Culture as a tool kit (Spigel, 2015)
Information Flow		The problem that an organization’s agents have the information needed to execute their tasks and coordinate actions with others		✓ Physical collocation (Puranam et al., 2014) ✓ Virtual tools (Puranam et al., 2014) ✓ Conference (Garud, 2008)

The distribution of rewards refers to the problem of mapping a set of rewards to the agents in ...