This paper examines the effects of control mechanisms on a platform. First, the theoretical background of important terms in this field is given to gain a common understanding, which is necessary for classification as well as results. In this thesis, platforms are defined as products and services, which bring together user groups and enable transactions between the groups by providing infrastructure to do so. Second, literature dealing with this field of study is processed to provide a comprehensive and transparent overview about current research, including the platform type, dependent variables, and findings.
Input, output, process, clan, self-control, as well as open and closed platforms, rules & values and boundary resources are identified as the most relevant control mechanisms. Thereby the first research question what types of control mechanisms are discussed in literature, is answered. The findings then are analyzed for these different types of control to address the remaining research questions how control mechanisms effect platforms and when this is useful. It can be pointed out that most mechanisms go along with advantages and disadvantages, as theory suggests. Thus, decision makers have to be clear about the goal they want to achieve when changing platform governance or control to use these effects for their advantage. If a platform aims at optimizing e.g. the degree of openness, this depends on the question: what is optimal for the platform?
As ecosystems typically face the trade-off between quality (e.g. apps) and quantity (e.g. number of users), platform owners have to strategically position the platform somewhere along this continuum. The finding that some control mechanisms are superior to others for achieving certain goals, however, can directly be beneficial to managers. Also, the methods applied by the studies are analyzed, coming to the conclusion that case studies represent the predominant method in this field. Lastly, the results are discussed, contributions and limitations of this work are considered. Also, shortcomings and research gaps in this field are highlighted and future research areas are exemplified. Especially the conduction of an event study and adopting a more strategic approach are intriguing for a master thesis to fully cover the implications of managers’ decision regarding platform ecosystems.
Table of Contents
1 Introduction
2 Theoretical Foundation
2.1 Platform and platform ecosystems
2.2 Network effects
2.3 Control and governance mechanisms
2.4 Governance challenges
3 Methodology
4 Results
4.1 Literature classification
4.2 Summary of research findings
4.2.1 Effects of input control
4.2.2 Effects of output control and process control
4.2.3 Effects of clan control and self-control
4.2.4 Effects of opening a platform
4.2.5 Effects of boundary resources
4.3 Analysis of methods used in literature
5 Discussion
6 Conclusion
Objectives and Core Topics
This seminar thesis aims to review the current platform literature to establish a comprehensive framework regarding the orchestration of platform ecosystems. The core research focus is to identify which governance and control mechanisms are discussed in scientific literature, analyze how these mechanisms influence the platform, and determine in which situational contexts these impacts are beneficial for platform performance.
- Platform Governance and Control Mechanisms
- Network Effects and Platform Success
- Strategic Trade-offs in Platform Orchestration
- Methodological Analysis of Existing Platform Research
- Effects of Openness and Boundary Resources
Excerpt from the Thesis
2.4 Governance challenges
A central challenge of platform governance is to retain sufficient control to ensure the quality of the platform and simultaneously surrender enough control to foster innovation by producers or developers (Boudreau, 2010; Tiwana et al., 2010). This tension is also described by Wareham et al. (2014), who argue that the challenge of designing the platform governance is to “appropriately bound participant behaviour without excessively constraining the desired level of generativity” (Wareham et al., 2014, pp. 1195–1196). Hereby, a generative system can create new output without getting input from any source. This argument has been highlighted in literature frequently, referring to the need of technology ecosystems to be stable and evolvable at the same time (Wareham et al., 2014). It is closely connected to the decision, whether the platform should be open or closed, and identically, considering that an open platform could increase the network effects or reduce user’s concern to be locked-in in the platform, meaning they cannot easily leave the platform and enter another, opening a platform also reduces users’ switching costs and increases competition (G. Parker & Van Alstyne, 2008).
Besides this stability-evolvability trade-off, three others have been identified by Wareham et al. (2014): standard-variety, control-autonomy, and collective-individual. The first one refers to the output of platforms: while interfaces of the platform remain stable, other parts, even core components need to change over time. Control-autonomy refers to the actors of platforms, arguing that even though a larger number of developers can be beneficial and increase the speed of innovation, too much unsupervised developers could also cause agency-costs or reduce the platform’s quality. Finally, the last tension deals with the identification of complementors: governance must not only incentivize individuals to deliver a good service or product to the platform but also provide an incentive for members to work together and create complementary innovation (Wareham et al., 2014).
Summary of Chapters
1 Introduction: Introduces the growing significance of digital platforms in the global economy and defines the research gap regarding the impact of platform control mechanisms on performance.
2 Theoretical Foundation: Establishes common terminology for platform ecosystems, network effects, and categorizes various governance and control mechanisms used in modern platforms.
3 Methodology: Details the systematic literature review process, explaining the search strategies and selection criteria used to analyze relevant research.
4 Results: Synthesizes empirical findings regarding the effects of specific control types—such as input, output, process, and clan control—as well as the strategic trade-offs of opening a platform.
5 Discussion: Reflects on the findings to provide managerial insights and addresses limitations in current literature, while highlighting gaps for future academic investigation.
6 Conclusion: Summarizes the key insights of the thesis, confirming that there is no universal "best" governance strategy, but rather a need for strategic alignment based on specific platform goals.
Key Keywords
Platform ecosystem, Platform governance, Control mechanisms, Network effects, Input control, Output control, Process control, Platform performance, Digital platform, Platform openness, Boundary resources, Complementors, Developer autonomy, Ecosystem strategy, Platform orchestration
Frequently Asked Questions
What is the primary subject of this thesis?
The thesis focuses on the effects of different control and governance mechanisms on the performance of digital platform ecosystems.
What are the central themes discussed in the work?
The work covers platform definitions, control theory in the context of ecosystems, network effects, the trade-off between control and innovation, and the usage of boundary resources.
What is the main goal or research question?
The main goals are to identify orchestration mechanisms in the literature, analyze their impact on platform performance, and understand in which situations these impacts are useful.
Which scientific methods are employed?
The author conducted a structured literature review following the approach suggested by Webster and Watson (2002), covering journals from the "basket of eight" and other relevant management fields.
What does the main body of the text address?
It provides a classification of governance mechanisms, summarizes empirical research findings regarding their effects, and analyzes common research methods used in the field.
Which keywords characterize this work?
Key terms include platform governance, control mechanisms, network effects, platform performance, and platform openness.
How does "opening" a platform affect its ecosystem according to the study?
The thesis finds that opening a platform is a double-edged sword: it can increase developer satisfaction and innovation, but may also lead to security risks, decreased quality, and increased competition.
What is the role of boundary resources?
Boundary resources, such as software tools and regulations, allow platform owners to maintain control while simultaneously providing developers with the resources needed to innovate within the ecosystem.
- Quote paper
- Christian Schmidt (Author), 2018, Orchestrating a Platform Ecosystem. The Effects of Platform Control on Platform Performance, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/450033
