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      Managed Ecosystems and Translucent Institutional Logics: Engaging Communities
      26 Mar 2019Working Paper Summaries

      Managed Ecosystems and Translucent Institutional Logics: Engaging Communities

      by Elizabeth J. Altman, Frank Nagle, and Michael Tushman
      Organizations increasingly rely on engagement with external communities of contributors. This paper explores transitions to a managed-ecosystem governance mode and its implications for strategy and innovation. To be successful, firms must develop the capabilities to shepherd communities, leverage without exploiting them, and share intellectual property rights.
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      Author Abstract

      When organizations need input into their innovation or production process, they have traditionally faced the decision to make the input themselves or buy it through the market. However, rapidly decreasing information costs allow firms to harness external communities that are neither employees of the firm hierarchy, nor traditional contracted market participants such as supply chain partners. We introduce the managed ecosystem governance form in which a central organization engages external communities and also manages these communities by maintaining some degree of control over their activities. This model is evident in various organizational approaches including multi-sided platforms, crowdsourcing, and the gig economy. Building upon the knowledge-based view of the firm, we argue that these increasingly common governance models offer a wealth of opportunities but require organizations to adopt a translucent institutional logic that is in-between the traditional closed logic of the firm and the open logic of the market. To successfully employ this model, firms must learn to shepherd communities, leverage them without exploiting them, and share intellectual property rights.

      Paper Information

      • Full Working Paper Text
      • Working Paper Publication Date:
      • HBS Working Paper Number: HBS Working Paper #19-096
      • Faculty Unit(s): Strategy; Organizational Behavior
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      Frank Nagle
      Frank Nagle
      Assistant Professor of Business Administration
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      Michael L. Tushman
      Michael L. Tushman
      Baker Foundation Professor
      Paul R. Lawrence MBA Class of 1942 Professor of Business Administration, Emeritus
      Charles B. (Tex) Thornton Chair of the Advanced Management Program
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