title: Dynamic Capabilities Revisited: Exploring The Resource Management Patterns of Platform-Based Organisations
Creators: name: Yang, Yunlu
Publisher: name: University of Kent
Year: 2023

description: The dynamic capability theory, the advanced version of the Resource-based View and a classic theory in the strategic management field, provides academics with an evolutionary perspective to understand organisational resource management. The dominant take of dynamic capability studies tends to emphasise top managers and the firm's leading role in reconfiguring organisational resources and creating new competencies to react to environmental changes. Thus far, I have a majority of dynamic capability studies adopting an inward-looking view that highlights profound decisions and systematic activities solely dominated by the firm. Nevertheless, a limited outward-looking view is adopted to study the phenomenon of the opening ecosystem. As an emerging phenomenon, the opening digital platform ecosystem has been attracting the attention of strategic management scholars. The main characteristic that differentiates the opening digital platform organisation from traditional organisations is that it requires us to see things from an ecosystem level and discuss the profitability of a loosely organised community rather than an individual. The idea of an opening ecosystem highlights the distributed responsibility of innovation and seizing opportunities. The platform organisation can benefit from complementary contributions and co-evolve with external parties by engaging various cross-industry members in the ecosystem. In addition, the basic component of a digital platform organisation-generative technologies facilitates the organisation to leverage external innovations and create a wide range of unpredictable applications. Thus, making the evolutionary path of a digital platform less fixed and depending more on emerging solutions and situated capabilities. Therefore, I argue that the extant firm-level logic of the dynamic capability view is insufficient for explaining the unique strategy of an opening digital platform. I need to shift the view to outside the organisation and incorporate more focus on the efforts of external parties in the value-creating process. I, thus, decide to react to the growing callings of further exploring the orchestration of ecosystems through the dynamic capability theoretical lens. The primary purpose of my research is to understand what kinds of dynamic capabilities facilitate the growth of an opening platform ecosystem and how these dynamic capabilities sustain dynamism while encountering rapid growth and extreme uncertainties. My primary research questions are divided into two parts. First, I directly tackle how platform organisations build and sustain rapid growth. By road mapping the growing path of an opening digital platform, I tried to understand what dynamic capabilities allow the platform to incorporate external efforts and how it achieves fast growth. Second, I try to further unfold the internal process of a digital platform organisation by studying how middle managers' routines support the dynamic capability of a digital platform organisation. I further explore the internal activities that support the dynamism of an opening digital platform organisation. By trying to answer these two questions, I endeavour to unfold the mechanism of an opening digital platform ecosystem deeply. I take processual studies of one of the top Chinese digital platform organisations-Tencent and deeply unfold its growing path and resource reconfiguration processes. I aim to generate context-specific, detailed and holistic explanations that are impossible to develop by quantitative research. Through my inductive single case studies, I uncover complex interactions among elements such as the organisation, members of the organisation and the ecosystem, projects, culture and behaviours of different actors in the context of a digital platform organisation. I choose the single case study because it allows us to focus on an extreme sample and conduct historical case study to observe interplays among different constructions within the phenomenon. My findings are 19 process models, which reveal resource reconfiguration processes inside and outside the platform organisation. These process models show how resources are reconfigured during interactions among external parties, the platform organisation, managers and employees. I, therefore, contribute to the dynamic capability theory from the following perspectives. First, I submit that departing from the traditional firm-level logic, the value proposition of the digital platform organisation could be highly externalised. Rather than keeping the process controlled internally and relying on the knowledge and experiences of top managers, issues and understandings of the market would gradually emerge as the platform shares resources with externals and gains feedback from them. Then, the new understanding of the market would, in turn, guide resource reconfiguration activities and create new competencies. Thus, the growth of a digital platform organisation is not a unilateral manager-led process; it is a highly malleable and interactive process engaging both the platform leader and external parties. Second, the leadership of the digital platform and top managers have depreciated significantly. The platform no longer plays the role of a "broker" and dominate the design of organisation strategy. Despite that, extant dynamic capability studies emphasise the power and control of the firm and top managers; I highlight that platform users and complementors are not entirely under control. Complementors are the external actors who interact with the focal firm to generate and commercialise innovations that benefit the end customer. Complementors provide the platform organisation with their resources, capabilities, and innovations to enable customers to utilise the final product, rather than the firm itself (e.g., Adner 2012; Adner and Kapoor 2010; Kapoor and Lee 2013). Consequently, the concept of the ecosystem aims to capture the connection between a core product, its components, and its complementary products/services ("complements"), which collectively enhance the value for customers. Such a shifting leadership requires the managerial focus to shift from controlling the activities of complementors to providing resources and facilitating innovations. I find that platform evolution is not an isolated activity conducted by the organisation. Instead, the evolution is interconnected with a diverse range of stakeholders. The responsibility of an opening platform is to align internal and external value-creation activities and achieve continuous growth while helping external parties grow, develop products and conduct innovations. Finally, yet importantly, I emphasise resource versatility rather than resource control. The traditional resource-managing logic of dynamic capability studies still focuses on controlling resources and developing an "isolating mechanism". Instead, I argue that platform resources need to be shared around different actors in the ecosystem to facilitate the development of market understandings and the creation of multiple applications. Platform leaders should focus less on controlling and isolating their resources and try to stimulate more peripheral innovations and contributions by supporting different actors with platform resources. Thus, avoiding the sticky nature of organisational resources.