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ABSTRACT
Keywords
Application, Business Ecosystem, Information System, Ontology
INTRODUCTION
Organizational information platforms have advanced significantly during the past few decades.
These developments have resulted in significant increase in effectiveness and efficiency of executing
organizational business processes. Organizational information platforms are tightly coupled with
organizational strategy and management of organizational business processes (Sauer and Willcocks,
2002; Chroneer, 2005; Zhang, Xue, Dhaliwal, 2016). Consequently understanding developments in
the patterns of organizational information platforms requires a multifaceted investigation of business
processes, strategy and environment. This study explores the development of organizational information
systems from an organizational business process perspective in the context of business strategy and
business ecosystem. We argue that the development of organizational structures and management of
business processes has moved beyond the intra-organizational sphere of organizations and that the
contemporary businesses cannot fully define their business model –i.e. customer value proposition
and profit formula– within the context of their traditional business environment. The traditional view
that separates organizational environment into two spheres of “specific environment” and “general
environment” (c.f. Jauch and Osborn, 1981) may be useful for identifying key stakeholders and the
relations among them; however for the purpose of profit formulation and strategic planning we argue
that organizational environment should be viewed within the context of business ecosystems. After
discussing the organizational developments in this domain, the study focuses on the evolution of
adequate organizational business information systems which further supports the business ecosystem
view of organizational environment.
DOI: 10.4018/IJIDE.2017010104
Copyright © 2017, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
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(ARRA) of 2009 (also known as the U.S. stimulus package) and it was later removed from ARRA
funding consideration due to the Buy American provision in the act (Public Law, 111–5, p. 303).
Various stakeholders, including the government officials, businesses and the general public were
puzzled about the assignment of some key parts of this project to a Chinese construction company
while the –once globally dominant– U.S. construction companies should have been in need of new
projects during the recovery. The fact is, on one hand companies compete in their business ecosystem,
and on the other hand business ecosystems are competing with each other. Business ecosystems while
can have inter-connections can be differentiated based on geographic location or industry. In the
above example, the ecosystem of Chinese construction companies has gained significant experience,
knowhow and resources during the past few decades of significant growth in China and around the
world. However, the U.S. construction industry has not made similar advancements during the same
period to nurture its business ecosystem. Existence of key “nurturing processes” has been found to
be key success factor in development of enriched business ecosystems in China (Rong, Wu, Shi and
Guo, 2015a). In conclusion, we believe that the ecosystem view of business environment can help
us to better understand the patterns of business operations; and furthermore an open system view
is the best approach in analyzing the business ecosystems. In the following the concept of business
ecosystems as open systems are further explored.
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1993). The discussion of “competing supply chains” can also fits into the organizational level view
of business ecosystems.
Business ecosystems can also be analyzed at the industry level. At this level the business
ecosystem usually can be defined by its stakeholders including the industry suppliers, customers,
as well as related domestic and international industries. Figure 1 displays the business ecosystem
of the car manufacturing in the United States. The key economic drives of the industry (ecosystem)
–as displayed in Figure 1– shed some lights into the other domestic and global, micro- and macro-
economic elements of the business ecosystem, including consumer behavior, cost of complementary
products, treasury yields, and global commodity prices.
According to IBISWorld report the major players in this business ecosystem are Toyota, General
Motors, Ford, Fiat Chrysler, Hyundai-Kia and Honda. From industry level perspective the members
of the ecosystem not only are completing with each other but also they can share resources and
platforms. For example in the case of Toyota vs. GM, while at the organizational level of business
ecosystem they are competitors, at the industry level of business ecosystem they can share resources
and capabilities; such as the shared Toyota/GM manufacturing plant in Fremont California which was
active and beneficial for a number of years to both companies. Following the works of Moore (1993)
and Rong et al. (2015b) we recognize that the industry level analysis is not limited to one industry but
includes cross-industry business processes and stakeholders. The cross-industry business ecosystems
together shape Rothschild’s (1990) view of economy as an ecosystem.
Pilinkiene and Maciulis (2014) provided a classification of ecosystem into five types: industrial,
innovation, business, digital business, and entrepreneurship ecosystems. Within our –more macro-
level– classification, industrial, innovation and digital ecosystems fall under the category of industry
level business ecosystems; while business and entrepreneurship fall under our organizational level
business ecosystem. The typology of business ecosystems are displayed in Figure 2.
In this figure two categories of business ecosystems are presented along with their prominent
founders. In addition, the five categories of business ecosystems are presented from the work of
Pilinkiene and Maciulis (2014). Furthermore, some examples of each of the five perspectives of
business ecosystems are presented from the work of Pilinkiene and Maciulis (2014) as well as our
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literature search. It is important to note that due to the different views of each category the definitions
of the concepts may vary. For exam the Moore’s (1993) definition of “business ecosystem” is different
from the classification approach of Pilinkiene and Maciulis (2014) and the authors of this study.
Considering the relative novelty of the concept of business ecosystem a unified and widely accepted
classification has not formed yet; hence, this is a fruitful area of research for future studies. For the
purpose of this study the macro-level classification (Industry level ecosystem vs. Organizational level
ecosystem) is utilized. However further insight is provided to draw a clearer picture of the concept
of business ecosystem. Figure 3 displays a summary of our proposed business ecosystem ontology.
At the organizational level businesses are focused on designing a business model that provides
superior value proposition to customers while the profit formula is promising and sustainable. Various
factors from the industry (including those related to specific-environment and cross-industry factors)
shape the stakeholders’ relations and industry lifecycle. At the highest level of analysis domestic as
well as global micro/macro-economic factors shape or affect the industry ecosystem. The industry
level ecosystems create the ecosystem view of the economy.
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the proposed model, we pay particular attention to 1) ontological development method and 2)
the relationship between technological advancement and developing a scientific view of business
ecosystem.
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Wood, 2005, p355). From this perspective, technology has “an immediate impact on science” while
science does not have a significant effect on technology until a useful application has been found for
it (Drucker, 1993, p.287). Hence we argue that this is the application of the technology that mostly
affects –and awakens– the business practices and shapes ecosystems not the technology (information
technology in our study) itself. Figure 5 displays the Drucker’s view of advancement in technology.
Drucker (1961) best explained this argument by stating that “the immediate effect of the emergence
of technology was not only rapid technological progress: it was the establishment of technologies as
systematic disciplines to be taught and learned and finally the re-orientation of science toward feeding
these new disciplines of technological application”. Comparing this model to the ontology development
model of Wand and Weber (1993), we identified important similarities and differences. In both models,
the ontology of the business ecosystem is inspired by the real world technology adoption and design.
However, the main difference is the effect of conceptual model (in this case, business ecosystem ontology)
on the real world design (in this case, practice of information technology adoption).
Figure 6 displays our proposed application of ontological and Drucker’s view in the ontological
development model of organizational information technology adoption. We name this model Wand-
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perspective business ecosystem helps with conceptualization of complex “value co-creation over time”
(Muzellec et al., 2015). A successful business model therefore needs to be responsive to changes in
the business ecosystem. Muzellec et al. (2015) argue that business models in the Internet era, will be
able to sustain if they can successfully help their organization to navigate in “a dynamic ecosystem
which constantly changes”.
Beside the changes in the business models as described here, another influential role of internet
in disrupting the business ecosystem has been the formation of Internet of Things (IoT). IoT not only
affects the organizational supply chain (i.e. at the organizational level) but also evolves the business
ecosystem (i.e. at the industry level) (Rong et al. 2015b). The IoT will affect both value proposition
and profit formula. Looking at IoT within the context of Muzellec’s et al. (2015) “two-sided” effect
of internet, it is evident that the business ecosystem will continue to experience significant evolution
both at organizational and industry levels. Rong et al. (2015b) argue that industries that employ
IoT will experience exposure to other industries and hence will have “cross-industry stakeholders.”
Therefore, in addition to changes in the business ecosystem, we should expect to see more integrated
business ecosystems across different industries. From an open system view this phenomenon can be
theoretically explained however for academics and practitioners who want to manage their business
process in the complex business environment many complexities remain; which can be a subject of
future study. For example, Rong et al. (2015b) recommends that due to complexities of studying
business processes (supply chain processes) in the complex IoT domain, the concepts can be more
feasibly studied only at the industry ecosystem level.
One of the main elements of our proposed WWD business ecosystem model of organizational
information system development is the role of application; in which new conceptual ecosystem
ontology (e.g. one infused by a new technology, new business process management practice, etc.) will
only create new design in the business environment if it has useful application in terms of customer and
business value creation. Interestingly, Rong’s et al. (2015 b) conclusion in their study is a supporting
evidence for the validity of our proposed WWD business ecosystem model. Rong et al. (2015 b)
suggest “that new technological innovation per se has no inherent value so that a healthy ecosystem
needs to be developed in order to fully realize commercial potential of the new technology”. This is
in line with our WWD model and Drucker’s view, that scientific innovation does not have an effect
on real world designs until it has found useful applications.
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managers to recognize the past and current developments of organizational information systems to
gain competency in leading their organizations toward the future.
We briefly discussed how organizational information platforms evolved from the EDI networks
to the organizations which are part of an ecosystem in the world of IoT. The level of organizational
integration defines the relationship of the organization as an actor in the network. Here we look at
integration in terms of depth of information system utilization. Lavassani, Movahedi and Kumar
(2010) analyzed integration at the business strategy level and identified four levels of integration
based on the works of Himmelman (2001) and Romero et al. (2008). These four levels –in order–
are: Networking, coordination, cooperation and collaboration. Lavassani et al. (2010) argue that as
organizations decide to employ richer integrations medium (from EDI and ERP systems to web-based
exchanges and collaborations), the goal of integration evolves as well.
In the early stages of integration at ‘networking’ and ‘coordination’ levels the goal is to merely
establish a common information platform so that actors in the network can adjust their activities.
Achieving just in time delivery and lean warehouse management practices would be sample expected
outcomes of such integration. With increase in the level of integration function to ‘cooperation’
organizations start to share resources. For example, two car manufacturers that decide to share an
assembly line. At the ‘collaboration’ level – the highest level of integration–, the actors (organizations)
start sharing responsibilities as well. An example is the collaboration of a TV brand that designs a
TV to be manufactured and delivered by a manufacturer.
The fact is, in the contemporary business environment integration through collaboration in many
cases is not an advantage but a requirement for organizations to survive and prosper in the business
ecosystem (Panetto, Jardim-Goncalves and Molina, 2012). One of the challenges of analyzing
organizational collaborative networks is that such modeling “is usually done in some organizational
settings” (Krogstie, 2012, p. 138). Future studies need to be conducted to explore the modeling of
organizational collaborative networks and their information systems adoption in the contexts of
business ecosystem.
CONCLUSION
Management of organizations within their business ecosystem is becoming the new art of managers
and entrepreneurs. If structure is to follow strategy (Chandler, 1962) and strategy is affected by
and affects the business ecosystem, then the organizational structure and management of business
processes should be conducted with business ecosystem in mind.
We started by exploring different perspectives of analyzing organizations. From organizational
ecosystem perspective, an open system view of organization was found to be the most appropriate
view for the contemporary organizations. From an open system perspective, “organizations are
viewed as a system of interdependent activities” (Scott, 2003, p. 29). Hence, the evolution of business
ecosystems as it relates to organizational information systems can be best viewed and analyzed from
an open system view of organizations. Our view about the importance of open system perspective in
defining the organizational ecosystem, is not to overlook the importance of the natural and rational
views; rather it stems from the fact that rational and natural views of organizations are more concerned
with internal components of organizations, while in the open system view “external elements can be
more critical” to the organizational survival (Scott, 2003, P29).
Following the categorization of business ecosystems to organizational and industry levels an
ontology of business ecosystem is presented. Furthermore, an ontological model for developments
of information technology adoption in the context of business ecosystems has been proposed based
on the seminal works of Drucker (1976) and Wand and Weber (1993). Finally, we provided a more
detail discussion about the adoption of organizational information systems in business ecosystem
which entails a shift of focus from networking to collaborating. Investigating business ecosystems
is an emerging field of study which requires further advancements in development of models and
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concepts. We hope our proposed models can be applied to the real world designs of information
technology adoption in business ecosystems, be challenged and be inspiration for development of
new ontological models. Further research is required to enhance our understanding and application
of business ecosystems.
Since “social media is already a critical part of the information ecosystem” as a “media platforms”
(Zeng, Chen, Lusch and Li, 2010) we see opportunities for future research to be conducted in
this domain. Future studies can also focus on the application of business ecosystems in complex
industries and businesses. In particular investigating the motives, mechanism and process of building
collaborative alliance among business ecosystems can be fruitful areas for future studies; this can
include proposing and evaluating the collaborative strategies along with their advantages and
disadvantages in nurturing the business ecosystem.
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ENDNOTES
1
Behavioral structure is defined as opposed to the normative structure, i.e. “if we focus on what participants
actually do rather than on what they are supposed to do” (Scott, 2003, p. 27)
2
ABC News, U.S. Bridges, Roads Being Built by Chinese Firms http://abcnews.go.com/WNT/video/
us-bridges-roads-built-chinese-firms-14594513
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