Firms, crowds, and innovation

Idiosyncrasies, isomorphic pressures and decoupling in technology platform business

Purpose

This study aims to explore the ways and contexts in which fintech firms are being developed, operated in the market and responds to competitive pressures and technological changes through isomorphism and decoupling mechanism.

Design/methodology/approach

How can new technology platform business successfully distinguish themselves from competitors while also ensuring that they are seen as legitimate and appropriate? This paper draws on a case study of fintech start-ups in Indonesia.

Findings

This study shows that managing market pressures for distinctiveness (customer-appealing) versus business pressures for profits (investor returns) drives firms’ quest for optimal distinctiveness. It is evident that fintech firms increase their control by consolidating themselves through their industrial association and by forming a close relationship with regulators. However, to escape the iron cage of the field, they increasingly control the coupling of profitability and compliance.

Originality/value

Through a qualitative-inductive approach, this study provides insights into technological development of platform business in the context of financial services and responsive movement towards cashless society.

The Aggregation–Learning Trade-off

Organizational decision making that leverages the collective wisdom and knowledge of multiple individuals is ubiquitous in management practice, occurring in settings such as top management teams, corporate boards, and the teams and groups that pervade modern organizations. Decision-making structures employed by organizations shape the effectiveness of knowledge aggregation. We argue that decision-making structures play a second crucial role in that they shape the learning of individuals that participate in organizational decision making. In organizational decision making, individuals do not engage in learning by doing but, rather, in what we call learning by participating, which is distinct in that individuals learn by receiving feedback not on their own choices but, rather, on the choice made by the organization. We examine how learning by participating influences the efficacy of aggregation and learning across alternative decision-making structures and group sizes. Our central insight is that learning by participating leads to an aggregation–learning trade-off in which structures that are effective in aggregating information can be ineffective in fostering individual learning. We discuss implications for research on organizations in the areas of learning, microfoundations, teams, and crowds.

OPEN INNOVATION GROUNDWORK

Although the concept of open innovation has gained much attention in the field of innovation management, few studies have so far theorized how such initiatives are being enacted in practice. This study is based on an inductive empirical analysis of how AstraZeneca, a large biopharmaceutical corporation, implemented an open innovation initiative called BioVentureHub. In the paper we introduce a theoretical model of open innovation enactment based on four interrelated processes. Three of these processes — conceptualization, mobilization, and operationalization — include activities related to preparing for open innovation, what we call open innovation groundwork. The fourth process — facilitation — involves translating the groundwork into actual open innovation.

The study contributes to the broader open innovation domain by its detailed account and theorizing of how open innovation is established in practice. Our methodological approach complements the previous research on open innovation that mostly are based on retrospective accounts or are conceptual in nature. Moreover, the study contributes by illustrating a novel initiative from the life science industry, where open innovation is frequently discussed but where still only a few empirical examples are found in academic literature