Business Ecosystem from Viewpoints of Organization, Business Model, and Organizational Capability

Abstract

The business ecosystem concept has generated great interest from both strategic management researchers and practitioners over the last twenty years. Many strategic management theorists have explored the remarkable benefits of this model as well as its attendant weaknesses. The objective of this paper is to examine this business model from a wider perspective. In order to understand this new ecosystem business model, it is important to first compare it with the prevailing Chandlerian model of the previous century. This paper therefore presents a comparative analysis of the open-innovation oriented, network-based ecosystem model and the closed-innovation oriented, integrated-hierarchy model. The implication of this study is that augmenting the business as ecosystem model with theoretical constructs from the field of dynamic capabilities can be effective in redressing its characteristic shortcomings such as the problem of coordination costs between organizations.