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Abstract

In social theory, emergence is the process of novelty (1) creation, (2) growth, and (3) formation into a recognizable social object, process, or structure. Emergence is recognized as important for the existence of novel features of society such as new organizations, new practices, or new relations between actors. In this introduction to the volume on emergence, we introduce a framework for examining emergence processes and theories that have been applied or can be applied to each of the three stages. We also review each volume chapter and discuss their relation to each other. Finally, we make suggestions on the future of research on social emergence processes.
Emergence: How Novelty, Growth, and Formation Shape Organizations and Their
Ecosystems
MARC-DAVID L. SEIDEL
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC V6T 1Z2 Canada
(604) 827-5155
seidel@mail.ubc.ca
HENRICH R. GREVE
INSEAD
1 Ayer Rajah Avenue
138 676 Singapore
+65-6799-5259
henrich.greve@insead.edu
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INTRODUCTION
The roots of emergence in the organizational sociology literature parallel fundamental
theories from evolutionary biology. Evolutionary biology historically divided studies into those
looking at natural selection and those looking at speciation (Wagner & Lynch, 2010). Natural
selection is directly parallel to the work of organizational ecologists (Hannan & Freeman, 1977)
who study the various environmental factors that impact founding and death rates of
organizations with characteristics more or less well suited to changes in the organizational
environment. Speciation, which studies descendants who differentiate enough from one another
to be categorized as new species, directly parallels the work of resource partitioning (Carroll,
1985) and competing institutional logics (Reay & Hinings, 2009) researchers. Evolutionary
biologists have recently started a third stream focusing on evolutionary novelties, in an attempt
to understand the evolutionary sources of the emergence of novel functions or structures (Wagner
& Lynch, 2010). While much of this work focuses on how new types of body parts originate, it
has strong implications for the study of emergence in the sociology of organizations and
innovation ecosystems more broadly. While previous sociological work has done an admirable
job of understanding selection and differentiation processes, it has given much less attention to
the origin of novelty and how it grows to form initial structure and subsequent changes to the
ecosystem (Engel & Teece, 2012).
The recent growth in research on the topic of evolutionary novelties, combined with
recent discussions of the importance of innovation ecosystems more broadly, inspired this
volume of Research in the Sociology of Organizations. Emergence is an easy to understand
intuitive concept, as it simply means that an object comes into existence or appearance. However
it needs further unpacking as a description of a widespread social process. We see emergence as
a process that involves 1) the creation of novelty, 2) its growth to a salient size, and 3) its
formation into a recognizable social object, process, or structure. Each step should be understood
through theory and empirical work. Yet the theory of each step can differ from, though it may be
related to, the theory of the other two. As a consequence, emergence is a much more complex
research topic than is suggested by a single word. Innovation relies on emergence by definition,
yet we have just a basic understanding of it.
Because research on emergence is itself emergent, we will use this introduction to draw
from research that either directly addresses emergence or has implications for emergence. We do
this because while emergence is sufficiently broad and fundamental that scholars have already
addressed it in parts, it is still not a well formed research topic. We also make some theoretical
statements we believe are novel, both because current theory on emergence seems to have
theoretical gaps and because we believe that new suggestions, even if they prove to be wrong,
could be helpful for inspiring research to better understand emergence and its subsequent impact
on innovation ecosystems.
We start by highlighting that emergence can be a rapid and highly consequential process.
To start with the speed, we could point out that photography sharing as an online social process
can be approximately dated to the start of Instagram in 2010 (of course there are precursors), and
the post rate on Instagram has grown dramatically since its start to reach 70 million posts per day
as of early 2016. As Figure 1 shows, Instagram has had a rapid diffusion pattern in Google
searches, followed by “selfie” and “selfie-stick.” A new form of social media emerged and was
rapidly adopted, followed by the emergence of a rapid increase in a form of photography that had
earlier been rare and a new product (and arguably, new behaviors and social norms). The
introduction of recent selfie-stick bans in a number of places, and debates about the rise in selfie-
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stick injuries in travel medicine (Flaherty & Choi, 2016) suggest that the societal reactions are
still emerging as the entire self photo ecosystem develops.
=== Insert Figure 1 about here ===
Continuing with consequential1 emergence, the emergence of innovative financial
derivatives led to the breaking down of the Glass-Steagall Act of 1933 as the existing regulations
requiring the separation of investment and commercial banking were not capable of dealing with
the emergent category-crossing innovations (Funk & Hirschman, 2014). On a related note, the
practice of mortgage-backed securities was over 100 years old when increasing interest in this
market by banks and other financial market actors triggered a sequence of regulatory changes
from the 1980’s onward allowing expansion of this financial product and its derivatives. The
resulting reduction in loan quality was a major contributor to the US housing market bubble,
which in turn triggered the 2007 financial crisis that started in the US but grew into a worldwide
crisis with many economies entering recession (Brunnermeier, 2009). The emergence of a new
class of products in the portfolio of an existing, and experienced, set of organizational forms had
consequences that neither the organizations nor their regulators predicted. The emergence of the
new market in mortgage-backed securities neatly followed the steps we outlined. The securities
that spurred the growth incorporated novelty such as tranches with heterogeneous risk but a
cumulated (for the security as a whole) risk assessment. A key factor of their emergence was the
rapid growth of the market, and a second key factor was formation through regulatory changes
that allowed increased access to this market to financial actors as well as a growth of
organizational practices such as lending with minimal examination of individual credit histories.
As we know all too well, the entire financial ecosystem was impacted. Emergence involves
novelty, growth, and formation, and it can be rapid and consequential.
Understanding such processes is important because emergence means the formation of
novel features of society. These novel features can be new organizations, new practices, or new
relations. The fundamental changes in the broader ecosystem these new features lead to offer
opportunities for some parts of society but also create a need to adapt for other parts. There is
already some research on specific forms of emergence. Organizational ecology has examined the
emergence of new organizational forms (Carroll & Hannan, 2000; Hannan & Freeman, 1977),
and institutional theory has examined the emergence of new institutions (DiMaggio & Powell,
1983; Meyer & Rowan, 1977). These are seen as different processes because institutions
typically are adopted by existing organizations rather than new ones. Nevertheless, the focus on
legitimacy in both literatures reflects that emergence is a phenomenon with features shared
across outcomes. As we note below, a number of other research streams have addressed
emergence or issues related to emergence, but an integrated approach is still needed.
In the following we will assess a potential path toward a theory of emergence by going
through the steps of novelty, growth, and formation, in each case noting the extant theory and
evidence that seems most informative for the goal of forming a general emergence theory. We
also make some suggestions for the outlines of this theory and note some theoretical questions
that need to be addressed through further theory formation and empirical analysis. We next go
through these steps again, but review each chapter of the volume as illustrative examples of
research that can be conducted to advance the general emergence theory. Because many of the
most important issues of emergence cross the categories of novelty, growth, and formation, the
1 We realize that some readers view Instagram, selfies, and selfie-stick as highly important, and see the previous
example as already covering the consequential argument. We would like to make the case also for readers who do
not share that opinion.
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chapters cannot be cleanly separated into these steps, but we place them in the category that they
address most clearly and mention their contributions that cross categories. We conclude by
discussing some current emerging phenomena which have the potential to drastically impact
modern organizations, and as such are ripe for further research from an organizational theory of
emergence perspective.
Through this sequence, we offer this introduction both as a general theoretical statement
on emergence, its importance on innovation ecosystems, and as an example of how the theory
can be addressed empirically. We note that the chapter authors were not aware of the full
development of this framing theory when they wrote their chapters. To the extent that the
chapters fit our theoretical framework, it is because emergence is a phenomenon that has clear
theoretical and empirical implications that researchers can discover, and replicate, across studies.
Naturally it also helped that we have gone through these chapters and drawn inspiration from
them, as well as from prior research.
NOVELTY
The first step in a theory of emergence is to explain novelty. This is a classical problem
that the innovation literature has addressed with an emphasis on how knowledge can be used and
advanced in order to create technological or product novelty (Damanpour, 1991). For research on
emergence, the application of innovation research is limited because it typically overlooks that
novelty is not an inherent feature of a social object: it needs to be recognized as novel. This is
important for the theory of emergence because it means that the starting point is related to
rhetoric and labeling around the social object, or what is referred to as theoretization (Strang &
Meyer, 1994). Theoretization means that an organizational form, a practice, or social structure or
process is given a name and a set of reasons for existence, usually in the form of claims about its
good effects. Such naming and justifying can be contested, as examined in the literature on
institutional logics (Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011; Thornton &
Ocasio, 1999), and such contestation will in turn have effects on the growth and formation steps
of the emergence process. Before examining these effects, however, we must consider the likely
sources of novelty and their implications for the emergence process. Although much work has
been devoted to this issue (Scott, 2013), we can simplify the delineation of sources into external
and internal actors.
Many external actors can introduce practices, but the state has been a prominent target of
investigation due to its significant power. State intervention is also often open-ended, leaving
significant room for other actors to influence the emergence process. For example,
environmental regulation was shown to affect the chemical industry differently over time, in part
because regulatory changes triggered attempts by environmental organizations to control the
industry and the industry itself modified its responses (Hoffman, 1999). As a result, new
practices emerged over time both in actual pollution control and the interaction among industry
participants and observers, including observers involved in social control (Greve, Palmer, &
Pozner, 2010). The employment relation has been shown to have similar long-term and complex
consequences of state intervention (e.g., Baron, Dobbin, & Jennings, 1986; Petersen, Saporta, &
Seidel, 2005). External competition can enhance novelty substantially through innovative
responsiveness to competitive threats (Turner, Mitchell, & Bettis, 2010). Social movement
influence on emergence has been documented both in the adoption of new practice by
organizations (Briscoe & Safford, 2008; Lounsbury, 2001) and in the formation of new
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organizations (Greve, Pozner, & Rao, 2006). Even academic research itself has been shown to
influence the emergence of inter-organizational network structures (Seidel & Westphal, 2004).
Among internal actors who contribute novelty, it is an old well established finding from
the literature on innovations and business practices that marginal actors are a key source of
novelty (Jeppesen & Lakhani, 2010; Leblebici, Salancik, Copay, & King, 1991). Because they
are less advantaged by the status quo, they are more likely to adopt practices that diverge from it,
or form organizations that diverge, making them likely pioneers even when the novel behaviors
are known more broadly. An important caveat to this finding is that the knowledge necessary in
order to introduce novelty is easier to obtain through contacts with other organizations, making
approaches other than co-location important to gain knowledge (Funk, 2013; Nagarajan &
Mitchell, 1998). In fact, organizational members have been shown to learn through actively
participating in decision making processes on the boards of other organizations and then
implementing similar methodologies internally with differing results in the context of their own
organizations (Westphal, Seidel, & Stewart, 2001). The knowledge access gained through contact
with others means that central actors can also be important (Paruchuri, 2010). This is especially
true because their centrality leads to easy observation, as well as potential legitimacy. So when a
central actor contributes novelty the likelihood that it will be recognized and attended to is
greater (Greve, 2009; Powell, Koput, & Smith-Doerr, 1996).
A key discussion in the provision of novelty is the degree to which novelty is accidental
(Austin, Devin, & Sullivan, 2012), a natural result of sense-making (Suchman & Cahill, 1996),
or whether the process involves intentionality and self-interest. This has been an important
question especially in institutional theory, where frequent discussion of institutions becoming
taken for granted with little inspection (Tolbert & Zucker, 1983) is contrasted with studies
providing evidence on social actors who introduce novelty in ways that fulfill specific societal
goals or simply benefit them (DiMaggio, 1991; Khaire & Wadhwani, 2010; Sine & Lee, 2009).
The benefits of such intentional introductions are that, by making the novel practice taken for
granted, they set the conditions for growth and allow greater leeway in manipulating its features
(Hsu & Grodal, 2015).
Broadly speaking, emergence is impossible without novelty by definition. Many
organizational theories assume variations naturally occur and then compete for ultimate survival
of the ones best suited to the business and broader institutional environment. Yet novelty does
not, by definition, guarantee quality. Just as academic research novelty for novelty’s sake does
not necessarily cumulate and grow (Davis, 2015), there are many bad, yet novel, ideas in many
fields. Even non-ideal innovations can sometimes flourish and grow through a variety of social
processes such as first mover advantage and path dependence (Arthur, 1989; Greve & Seidel,
2015). So while innovation frequently has a positive connotation, we remain agnostic as to the
ultimate suitability and benefits to broader society of any novelty. This first step in the theory of
emergence instead focuses on how novelty emerges, not if the novelty represents a positive or
negative overall change. We deal with the question of growth in the next section.
GROWTH
The next step in the theory of emergence is to explain growth. This is the area of research
with the most prior work, so we first quickly summarize extant theory, before pointing to the
potential for new theory development. The major lines of research explaining growth are
organizational ecology and institutional theory, with the diffusion of innovations literature also
making helpful contributions. Although there has been considerable separation between these
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literatures in the phenomenon of interest, the researchers engaged, and some features of the
theory development, their views on emergence are remarkably consistent.
Organizational ecology has examined the growth of organizational populations through
the theory of density dependence, which posits that the balance between legitimacy of the
organizational form and competition among its organizations shifts over time, so the density of
organizations has an inverted-U shaped relation to founding rates and a U-shaped relation to
failure rates (Hannan & Freeman, 1987). This theory has seen a very significant amount of
empirical testing, and has held up consistently (Carroll & Hannan, 2000). Simulations and
observation of many organizational populations have established that this leads to a rapid
increase in the organizational density once it crosses a threshold, followed by stabilization at a
higher level (Carroll & Hannan, 1995). Although other theories refine the models of density
dependence and are used to explain specific growth patterns such as organizational forms that
increase in diversity and density after a period of concentration (Boone, Carroll, &
Witteloostuijn, 2002; Carroll, 1985; Freeman & Lomi, 1994), density dependence is the leading
theory explaining growth in organizational ecology. It is highly consistent with our intuition of
emergence, as it accounts for the fact that organizational populations can be observed to grow
from obscurity to prominence over a very short time period.
Institutional theory explains the growth of institutions and their adoptions by
organizations by coercive, normative, and mimetic pressures on organizations (DiMaggio &
Powell, 1983). These often act in concert, such as when the state initiates coercive pressure, an
occupation exploits this pressure for a normative solution advantageous to them, and
organizations imitate each other in adopting the solution (Edelman, 1990; Sutton, Dobbin,
Meyer, & Scott, 1994). Much of the research effort has focused on mimetic adoption, however,
as it is a clear example of organizations engaging in institutionalization endogenously with little
outside influence (Galaskiewicz & Wasserman, 1989; Han, 1994; Lounsbury, 2001). Mimetic
adoption is a mechanism that also leads to rapid growth beyond a threshold, as has been
observed in many processes of institutionalization (Scott, 2001). Typically the studies do not
show full adoption, because there are various forms of organizational heterogeneity that can lead
to groups of organizations resisting institutional pressures and adopting late or never (Davis &
Greve, 1997; Jonsson, 2009). Such heterogeneous adoption patterns are also well known from
the diffusion of innovations (Strang & Soule, 1998).
The similarity in the use of legitimacy as a driver of density dependence, and a part of
institutional theory, is clear in the literature. Yet differences have also been raised (Baum &
Powell, 1995; Hannan & Carroll, 1995). More fundamentally, an important similarity between
these lines of research is that they lead to path-dependent emergence, which is a process that
received notice early on in research on technological evolution (Arthur, 1989). Path-dependence
explains the rapid growth often seen in emergence, and it also suggests that emergence can have
a strong stochastic component where early leads can be decisive. This phenomenon has attracted
attention in the diffusion of innovations, as it can account for which of multiple competing
innovations becomes established regardless of their suitability (Greve & Seidel, 2015). It seems
clear that path-dependent processes involving a mimetic feature, such as those in density
dependence and mimetic isomorphism, are an important feature of any social theory on the
growth phase of emergence.
The theory should also have predictions on the limits of path dependence. Our knowledge
of emergence is incomplete and possibly biased because researchers disproportionately sample
emergence processes that succeed, in the sense of resulting in a significant presence of the new
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organization or practice (Denrell & Kovacs, 2008). Some research to correct this gap has been
done, with early findings suggesting that emergence is responsive to negative feedback about the
efficacy of the new practice, and this can be sufficient to counteract mimetic effects (Greve,
2011). Other mechanisms also play a role, and a particularly interesting finding is that the growth
phase of emergence can be held back when high diversity among adopters leads to fragmentation
of the emergent practice (McKendrick & Carroll, 2001). Similarly time plays a broader role in
the ultimate growth of innovations and changes competitive dynamics from introduction periods
to growth and maturity stages (Agarwal, Sarkar, & Echamebadi, 2002). Learning orientations
can also enhance or limit path-dependence of the growth of novelty (Schilling, 2002). When
organizations attempt to deal with too much novelty simultaneously it can have a strong limiting
effect on growth (Barnett & Freeman, 2001), serving as a natural regulator on path dependence.
These findings have the important implication that while the growth and formation steps
of emergence can be seen as analytically separate, they are highly interdependent, and theory
building needs to take this interdependence into account. It is impossible to fully understand
growth without understanding the connection to formation (Sandell, 2001). We now turn to the
formation step to strengthen the theoretical linkages between growth and formation.
FORMATION
Much of the research on growth has taken the form of the social object for granted, and
has not seen its societal definition – the formation process – as a central topic of research. The
main exception to this rule has been the repeated attention to the definition of organizational
form and its formation in organizational ecology (Hannan, Polos, & Carroll, 2007). Yet
formation processes are central in defining environmental expectations and taken-for-granted
understandings. They can also affect other emergence processes such as later growth, and
perhaps also the understanding of novel social objects. For example, life insurance as both a
desirable activity for individuals and as an organizational form crucially depended on the altering
the understanding of it from placing a monetary value on life (and even betting on its demise) to
a way of safe-guarding the family (Quinn, 2008). This redefinition came after the initial growth
of an organizational form dedicated to performing this economic transaction, and was in turn a
formative event that led to subsequent growth and institutionalization of life insurance.
There are records of many cases of organizational forms going through the formation
process which uncover important components of the process that appear effective either
individually or in unison (Aldrich & Fiol, 1994). Researchers have found effects of events
spurring communication with the general public (Greve et al., 2006; Rao, 1994), associations
unifying practices and presenting a homogeneous depiction of them (Haveman, Rao, &
Paruchuri, 2007), media coverage of pioneering organizations (Kennedy, 2008), industry
environment on collaboration network forms (Tatarynowicz, Sytch, & Gulati, 2016), and self-
reinforcement in path dependency of formation (Maielli, 2015).
One important recent addition to theory of the formation step of emergence is research on
organizational identity and categories. This work has seen pioneering studies on the emergence
of new activity types in organizational populations (Rao, Monin, & Durand, 2003), and has
inspired additional work on how organizations define themselves and delineate boundaries to
give an emergent practice a distinct identity (King, Clemens, & Fry, 2011; Perretti, Negro, &
Lomi, 2008). The research also shows that such efforts can be counteracted by organizations
seeking to cross boundaries or merge categories (Carnabuci, Operti, & Kovacs, 2015; Negro,
Hannan, & Rao, 2011; Pontikes & Barnett, 2015), which makes formation of a clear identity
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difficult. The relative strength of these opposing mechanisms, as well as the role of external
legitimating factors such as media coverage (Schultz, Marin, & Boal, 2014) are important for
determining how soon and in what form an emerging social object will be recognized.
The heterogeneity in adoption seen during the growth phase can also have effect on
formation, as it can establish schemas on how social objects correspond to each other. For
example, the diffusion of investor-friendly board practices labeled as “good corporate
governance” was mostly successful but was strongly resisted among firms with significant
family ownership (Shipilov, Greve, & Rowley, 2010), leading to the suggestion that governance
practice expectations and practices for different types of firms will differ. Similarly,
heterogeneity of clientele influenced the actual definition of the emerging category of “modern
architecture” during its formation (Jones, Maoret, Massa, & Svejenova, 2012).
The key to understanding formation is the central role that a recognizable social object,
and its legitimation, plays in formation. One of the issues with research on formation is that there
is a strong survivor bias. Emergence has strong selection built into the process prior to the
formation step. The majority of novelty will never grow, and likely will not even be seen by most
(Arts & Veugelers, 2015). Even if novelty makes it out of that selection process and starts to
grow it may still not reach the step of form formation (de Jong, von Hippel, Gault, Kuusisto, &
Raasch, 2015). Some novelty that grows may just be treated as incremental product change
(Marino, Aversa, Mesquita, & Anand, 2015), while other novelty that grows may be hindered by
regulation (Dodgson, Hughes, Foster, & Metcalfe, 2011; Rauch & Schleicher, 2015), market
rejection (Carpentier & Suret, 2015), or non-optimal oriented diffusion mechanisms (Greve &
Seidel, 2015; Kim & Lyon, 2015; Reitzig & Sorenson, 2013). While some novelty that grows
and ultimately fails is studied, much novelty is entirely missed by the survival bias built into
historical research. The failure to detect novelty that forms incompletely or not at all suggests
that research on interrupted and failed formation processes could yield important new insights.
NEW EVIDENCE OF EACH STEP
This volume contains a series of contributions that outline key parts of the theory of
emergence and provide new evidence. We categorize each of the contributions into one of the
three steps of emergence. But such categorization is of itself necessarily artificial as the three
steps are so tightly related. So we default to grouping based upon the step where we see the
primary contribution of the work, with the caveat that many of the pieces have implications for
other steps of emergence as well.
Novelty
Important tasks in research on emergence are to identify the sources of novelty and
examine whether the source of novelty affects the emergence process. In “Empty Categories and
Industry Emergence: The Rise and Fall of Japanese Ji-biru” Edman and Ahmadjian (2017)
examine the Japanese “regional beer” (ji-biru) movement. While this industry is superficially
similar to the craft beer industry in many nations (Carroll & Swaminathan, 2000), it differs in
that ji-biru was promoted by actors outside brewing, with a strong role of local governments that
saw ji-biru as a form of regional promotion related to tourism. The novelty was driven by the
creation of an “empty category” of ji-biru that was then targeted for supportive rhetoric and
founding attempts, but without a starting foundation of entrepreneurs and consumers. The
investigation identifies two unique aspects of novelty emergence. The first is the potential for
novelty to be introduced through purposive actions of external actors, leading to a process of
alignment by opportunity seeking individuals such as consultants and organizational founders.
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The second is that the easy and supportive entry environment afforded by such empty categories
led to fragmentation of the industry because the motives for entry, and the knowledge involved in
organizational founding, was so diverse that formation of a clearly defined ji-biru organizational
form was impeded even though the density of ji-biru organizations grew substantially. Thus, their
findings demonstrate that empty categories can be helpful for the growth phase while harming
the formation phase of the emergence process.
In “Different Shades of Green: The Impact of Complex and Uncertain Environments in
the Strategies of Innovative Hybrid Organizations” Almandoz, Lee, and Marquis (2017) address
the details of how organizations adapt to fields in which formation of the emergent form has not
yet occurred. They show that newly formed organizations draw from related organizational
forms for building blocks, but also on their conceptualization of how the new organizational
form should be distinct. The resulting dialogue between existing knowledge and new exploration
is guided by feedback from the environment, but with a significant role of the interpretation
given by the management team. The result is that two organizations that initially appear similar
in their targeted organizational form go through a path-dependent evolutionary process that
creates diversity based upon the multi-dimensional aspects of the organizational imprinting
coming from internal decision making combined with local and time dependent environmental
differences. These findings have interesting links with the Edman and Ahmadjian (2017) chapter
because they highlight a different source of diversity which may potentially slow down
formation.
In “A Patchwork of Identities: Emergence of Charter Schools as a New Organizational
Form” Jha and Beckman (2017) also look at the fragmentation of novel organizations in the early
emergence of charter schools in Oakland, California. Linking the broader societal discourse to
ultimate organizational identity novelty, they similarly find that the diversity of founding teams,
and the lack of direct competition for resources, leads to a fragmented set of novel identities
emerging. These identities can in turn be justified by alternative institutional logics if the
discourse allows more than one of the logics to coexist. They note that the lack of direct
competition for resources allows the diverse emerged identities to continue.
In “Network Opportunity Emergence and Identification” Seidel (2017) directly looks at
the structure of competition and how competitive actions lead to the creation of opportunities for
emergence. He argues that as the structure of competition evolves towards a centralized network
that the structural holes which emerge are ripe ground for organizational innovation and entry.
Using the airline industry, he develops a framework that can allow entrepreneurs to map industry
structure and identify micro level opportunities for novelty emergence, and shows how the
framework applies to a variety of network types across a wide variety of industries. The
framework can predict both industries that are ripe for novelty emergence as well as the specific
niches in which novelty is most likely to flourish.
The four papers together have very important implications for the theory on novelty
emergence, both for their clear evidence on the origins of diversity and because they bring up
theoretical questions that future work can answer. The multiple sources of novelty all can provide
a set of innovations at risk of growing and ultimately reaching the step of formation. These
papers offer a base upon which the rest of the volume builds by more directly looking at the later
growth and formation processes.
Growth
The question of growth has seen the most research of the three steps in the emergence
process, but there are still important underexplored issues. In “The Social Construction of
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Market Categories: How Proximate Social Space Creates Strategic Incentives to be Early
Claimants of the Fiscal Sponsor Label” Burshell and Mitchell (2017) examine the crucial
question of how organizations decide to adopt a new form or practice when they face multiple
alternatives, including the option of making no new adoptions. Theoretically this differs from the
earlier work on mimetic isomorphism by not considering the simple situation of a single practice
spreading, but rather that of organizations choosing among novel practices. They find that the
theory of organizations choosing voluntary category assignment through claiming labels is an
important entry into this research question, and argue that organizations not only choose among
potentially new labels, but also among different sets of potential peer organizations that can be
monitored to see which labels are gaining acceptance. Using data on the adoption of the fiscal
sponsor label by voluntary organizations, they find that the use of other organizations as a
reference group does promote adoption and hence label growth. They also discover that the peer
groups can be given either a geographical or market segment delineation, with both having
effects, but geographical peer groups had more powerful effects.
In “A Theory of Crowds in Time and Space: Explaining the Cognitive Foundations of a
New Market” Seong (2017) moves beyond social movement theory to better understand which
types of novel crowds grow into fully fledged markets, and which disperse. Her framing of
crowd as a discourse space offers a framework to conceptualize the growth of discourse around
differing logics. The framework calls for independence during the early discourse novelty, and
some social influence during the subsequent selection and retention leading to growth. Overall
the piece helps to understand the interaction of cognition and institutions in the growth of
novelty to the point of ultimate market formation.
In “Assembling a field into place: Smart cities in Japan” Nyberg and Yarime (2017) move
beyond socio-cognition and detail the specific organizational actions that lead to growth of a new
field by detailing the growth of “smart cities” in Japan. They categorize the growth of a new field
as manufacturing assembly work, combining various components into concrete material
solutions. Interestingly, although logics are social constructions, the material solutions in the
field of “smart cities” are very important for shaping the institutional logics. Those solutions
serve to institutionalize the new field as it grows, and eventually lead to sustainable formation.
The three papers make useful contributions to the study of growth in their closer look at
how growth is not just an issue of an organizational form proliferating unchanged, or an
organizational practice being adopted unchanged. While these processes occur and have been
studied well, it is also important to take into account how organizations can choose forms, or
combinations of forms, and use these choices as tools for growth. The organizational choices are
in turn observed by others, with legitimizing effects that increase growth, and also direct growth
as some choices are observed to be more common than others, but the range of choices made is
also observed and used to assess what range of variation can be made within the emerging
organizational field.
Formation
Formation is the final step of the emergence process, and one that is highly consequential
because its outcomes can range from a failure to form a distinctive social object (McKendrick,
Jaffee, Carroll, & Khessina, 2003) through a single prominent one (Haveman et al., 2007) to a
division into multiple contesting ones (Negro et al., 2011). Formation is ultimately reliant and
interdependent with the novelty and growth steps, but has a strong influence on the ultimate
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emergence as well. The details of how the formation process works and produces the different
outcomes are still not well established, making this an important area for new contributions.
In “Boundary-Crossing Job Mobility, New Product Area Entry and the Performance of
Entrepreneurial Ventures “ Dokko and Wu (2017) study a type of formation, new product entry
in high tech. They find that diverse past experiences have direct impact on formation.
Entrepreneurs who cross functional boundaries show increased tendencies for new product entry,
while those who cross industries show an amplification of formation outcomes – both negative
and positive - with them having both a higher probability of failure and also a higher probability
of IPO. This key finding shows the importance of individual diverse experience in trying to
capitalize on novelty by making a bet on formation.
In “Analogical Learning and Categorical Identity During Market Emergence” Sørensen
and Feng (2017) take on the related challenge of examining cognitive effects, and find that
consumer use of existing knowledge structures shapes their reaction to new products, which
means that the mapping of existing firms into new product categories is done differently
depending on how the firms present their products. This affects their assessment of quality,
which in turn shapes the formation of the new market because firms that are more easily mapped
into the new product category gain market advantages net of their actual quality. A central
mechanism behind this finding is that customers more easily map existing product and industry
identities into the new one when the participating organizations use product and firm naming that
reflects back on a history seen as a natural precursor of the emerging industry.
In “Do Connections Always Help? Network Brokerage’s Negative Impact on the
Emergence of Status” Sullivan and Stewart (2017) are similarly interested in differentiation in
the formation process, but they address this through the influence of networks and structural
positions. They find that diverse brokerage, while known to be beneficial for outcomes such as
creativity (Burt, 2004), can be a drawback for social actors who seek recognition, as they are less
likely to be attended to by others, and less favorably evaluated. As a result, unless they already
have significant prior status, they are likely to obtain adverse status rankings by others. The
findings strongly suggest that actors in emerging fields, at least initially, have career paths that
benefit from network closure. This implies that the structuring of work and rhetoric in emerging
fields may involve a significant amount of creation of common understanding, which requires
greater network closure than in established fields with a pre-existing common understanding
already in place.
In “Look at Me: Overt Status-seeking Behavior and Competitive Emergence among
Securities Analysts,” Bowers, Greve, and Mitsuhashi (2017) examine how the emergence and
maintenance of status orders in markets can have significant impact on market behaviors,
especially when status is not enduring, but instead is regularly and temporarily conferred by
third-party actors who rate market participants. To do so, they study the emergence of
competition from status-seeking behavior in the security analyst industry. They demonstrate that
markets are formed by individual analysts seeking status, instead of seeking the optimal choices
for their clients. This focus on status-seeking behavior by analysts ultimately impacts the shape
of the market that emerges because analysts make market entry and exit choices with an eye to
attracting the attention and approval of third-party actors who can confer status. This status-
seeking behavior can lead to negative market outcomes as the market forms.
In “Emergence of a New Institutional Logic: Shaping the Institutionally Complex Field
of Community Radio in India” Riaz and Qureshi (2017) take an institutional logics perspective
on understanding the emergence of community radio in India. They look at how a new logic
11
emerges to dominate through a competitive process of logics. They find that during the
emergence of this institutional field, there was a continuing power struggle between the backers
of a logic emphasizing a community logic and the established state logic of how radio stations
had operated before. The struggle had a surprising outcome because an increased use of
development rhetoric by backers of community logics led to the emerging field being vulnerable
to be taken over by NGOs with much stronger development logic than community logic. Thus, a
complex interplay of institutional logics with different power bases shaped the ultimate
organizational form that emerged – a type of institutional imprinting.
The five papers show that formation of emerging institutional fields take paths that are
difficult to predict from a singular focus on the nature of each logic in the field, the market
demand, or the supply of innovators and entrepreneurs. Instead, interactions between these
groups, combined with structural features such as status orders or power, shape the development
process. A central component of the study of emerging fields is that the formation phase should
not be treated functionally as being designed to help any particular group, or even an
organizational field. Rather, the diversity of actors involved should be studied, their actions
should be seen as relatively self-interested but myopic, and the interplay shaped both by
immediate goals such as the ability to form an organization and inhabit a market shape, as well
as longer term goals such as a beneficial position in a status order. These goals influence
behaviors, but so do features specific to the emergence process such as institutional logics being
affected by rhetoric and by actions such as organizational founding and change.
DISCUSSION AND CONCLUSION
Combined these chapters illustrate the three steps of emergence. They show how a broad
range of factors both inside and outside an organizational population influence the creation of
novelty, its growth, and ultimate formation. The effects are important, and are likely to be
replicated in additional studies, as well as further developed when researchers also look beyond
to discover related effects. For example, it is clear that the societal discourse studied by Jha and
Beckman (2017) is closely related to the mapping of knowledge examined by Sørensen and Feng
(2017), though with interesting interactions being likely. Knowledge structures are likely to
constrain discourse, but discourse can in turn be used to alter knowledge structures and create
mapping. The success of such moves, in turn, is likely to be affected by the network structure of
discourse participants, and hence relates to the structure examined in both the Seidel (2017) and
Sullivan and Stewart (2017) pieces. Just as Edman and Ahmadjian (2017) show that external
forces can create an empty category later filled by various actors, Seong (2017) demonstrates the
role of independence in initial crowd discourse. The emphasis on label-claiming found by
Burshell and Mitchell (2017) is in contrast to the effects of material solutions emphasized by
Nyberg and Yarime (2017), suggesting a need to explore further the ability to shape emergence
through a balance discourse and material action. The capture of an emerging field by a third-
party organizational form discovered by Riaz and Qureshi (2017) and the shaping of markets
through status seeking found by Bowers, Greve, and Mitsuhashi (2017) both suggest that
emergence has effects that go beyond the organizations that are most closely engaged in the
emergence process. The interaction of internal decision making and local environments found by
Almandoz, Lee, and Marquis (2017) as well as the individual diversity of management
experience having direct impact on formation found by Dokko and Wu (2017) both demonstrate
the complex endogenous sources of influence on ultimate emergence.
12
We see the clearest extension from the work in this volume is to more closely examine
organizational actors as endogenous sources of formation, as they can engage in discourse,
discover and exploit cognitive structures through action, and use their network positions to shift
the evolution of the broader ecosystem in their favor. Indeed, examining organizational actors as
endogenous sources of ecosystem influence also allows entry into formation theory of
mechanisms such as power (Pfeffer & Salancik, 1978), which already has been seen as
overlooked in institutional research (Wry, Cobb, & Aldrich, 2013), and learning in networks,
which can fundamentally change the reception of new social practices (Kraatz, 1998).
Organizational actors do not control emergence, but they can exert significant influence and thus
are able to shape both the organizational field and the options available to related actors such as
customers, suppliers, entrepreneurs, and the state.
The nature of organizational theory research leads to the bulk of work on emergence
being completed historically. Such work can provide useful longitudinal understanding of the
underlying processes. But one risk with such work is that almost any process can be explained as
a special case when looked at post-hoc. Justifications for observed outcomes are course de
rigueur. We must push ourselves as a field to draw out fully generalizable conclusions and
theory, instead of just post-hoc justifications and forcing phenomenon to inelegantly fit into our
pre-established theoretical paradigms.
Research on emergence has the potential to significantly extend organizational theory and
evidence. Recall that institutional theory was established through examination of how formal
structures show features that had largely symbolic significance (Meyer & Rowan, 1977), and
gained momentum through the insight that organizational fields had coercive, normative, and
mimetic sources of isomorphism (DiMaggio & Powell, 1983). As this introduction and the
chapters in this volume show, these insights are useful for understanding emergence, but
emergence is a more complex phenomenon. Coercive, normative, and mimetic forces come into
play when a social object is already well-defined, and thus lack explanatory power until the
formation phase of emergence is complete. Pressures towards isomorphism is an interesting topic
of study when examining the spread of an already-formed social object, but in emergence it is
more interesting to see how the interplay of novelty creation, growth, and formation leads to
change in the emerging structures and practices over time.
The emerging innovation of blockchains, a decentralized distributed ledger of
transactions organized in a C-form (Seidel & Stewart, 2011), provides a nice current illustration
of these dynamics where we do not yet know the ultimate outcome. This decentralized trust
mechanism popularized by the formation of Bitcoin, a non-governmental “cryptocurrency” that
enables direct peer to peer financial transactions with no financial intermediary, appears to have
potential for a fundamental transformation of how people organize well beyond cryptocurrency
transactions. With the advent of blockchain-enabled smart contract platforms such as Ethereum,
one of the fundamental aspects of organizational trust enforcement, the legal contract, is called
into question. These distributed smart contracts fundamentally change the enforcement of
contract clauses and call into question the need of organizations for many tasks previously
organized into formal organizational structures to coordinate and avoid market contract costs and
risks. We do not yet know the outcome this emerging technological advance will have on
organizations and society more broadly, yet futurists are quick to paint a seductive picture of its
potential impact (Lachance, 2016) questioning the need and role for third party centralized trust
based institutions such as banks and governments.
13
While the future of such emergence is unknown, we are already seeing the emergence of
real world applications that have clear impact on existing organizations and ecosystems in
today’s world. Using smart contract software agents enabled by the Ethereum platform
blockchain, the first peer to peer sale of renewably generated solar power transacted on April 11,
2016 in Brooklyn, New York (Tapscott, 2016). While solar panel owners previously have sold
their excess electricity back to the grid operated by their local utility company, this peer to peer
sale eliminated the need for the central utility company in the transaction. Solar panel owners
were able to use smart contracts enabled by a blockchain to automatically sell their excess
electricity to neighbors without the need for a central organization to be involved at all. In such
structures, there is no central authority controlling the transaction, the smart contract on the
blockchain is the only enforcement mechanism and operates independently (Rutkin, 2016). The
implications for the energy industry ecosystem go beyond brokers being taken out of simple
transactions, and include the energy grid automatically rerouting electricity to avoid large scale
blackouts when components fail during natural disasters (Tapscott, 2016). In other words, the
emergent technological innovation of blockchains has the power to transform the very nature of
its organizational field fundamentally changing the power dynamics (pun only slightly intended)
of an entire industry. This is one clear example of how organizational theory incorporating power
and learning in networks needs to be researched and better understood from an emergence
perspective. There are many others already emerging, and an exponential number currently
unknown. Just as academic survey research has been shown to influence network structures
(Seidel & Westphal, 2004), it strikes us that as researchers and educators we are ourselves
endogenous to ecosystem emergence. As a field we should be regularly scanning for early steps
of emergence, and doing our best to understand the theoretical mechanisms operating by adding
our unique sociological insight.
More broadly, the theory and evidence in this volume calls for a general direction of
change in research topics to pay more attention to change over time as an outcome, and to the
organizational field as an endogenous force influencing the emergence process. Understanding
such endogenous forces can then help to better understand forces previously taken for granted as
exogenous, which may actually be influenced, such as industry structure and ecosystem
dynamics. We view better understanding of the innovation ecosystem, and the role that
individual actors play in forming the direction and characteristics of the ecosystem, as critical to
better understanding emergence from novelty through growth and ultimate formation. Indeed, it
is far too early in this research stream to see the full potential of theory that may prove to affect
the steps of emergence, but it is clearly a direction that will have major impacts on innovation
and societal outcomes.
14
Figure 1: Google Search Trends
The curves show relative search intensity (scaled to 100 at the most intense search period)
relative to weeks elapsed since the first mention of “Instagram.”
15
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... The former implies a planning approach to the adoption of digital technologies in the innovation process where the goals and decisions cascade linearly from the upper echelons to the lower levels of the firm. The latter instead conceives the emergence of digital technologies spontaneously, characterised by serendipitous, unintended, nonergodic consequences (North, 1990;Seidel & Greve, 2017). While the top-down approach conceives the innovation process as plannable by rational and knowledgeable managers, the bottom-up approach stresses the absence of a predefined order and structure instead formed by the patterns of repeated interaction between the different actors (e.g., individuals, teams, functions, organisations) involved in the innovation process (Garud & Giuliani, 2013). ...
... the fit between digital technologies and competences, whether 'competence-enhancing' or 'competence-destroying' (Tushman & Anderson, 1986), can be shaped and modulated within the innovation process. Indeed, according to the emergence perspective (Garud et al., 2010;Seidel & Greve, 2017), the potential outcomes of digital technology affordances in and around the innovation process might be infinite and differential in line with the innovation process architecture. Even social media, usually not considered a technology directly linked to the innovation process, can have important consequences on how individuals, within and outside the company, frame an innovation (Marion et al., 2014). ...
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The importance of digital innovation is widely acknowledged among managers and scholars alike. However, its actual conceptual treatment in academic research is not necessarily clear or precise. Most research considers digital innovation as the final result of adopting digital technologies, such as new products, processes, services, or business models. In other words, this research advances the concept of digital innovation as an outcome. In parallel to this research on digital innovation as an outcome, the concept of digital innovation as a process has emerged, linking innovation capabilities, organizational structures, boundaries, and technology management in organisations. The scattered existing research on digital innovation as a process explores the anatomy of the digital transformation of the innovation process by focusing on its phases, underlying mechanisms, barriers, and enabling factors. We argue that management research should pay more attention to this perspective on digital innovation. Therefore, in this essay, we take stock of research on the topic and identify four orchestration mechanisms that are inherently processual, enabling the firm to effectively coordinate and leverage different types of resources to create and capture value through the adoption and exploitation of digital technologies in the innovation process. Based on these orchestration mechanisms, we develop an agenda for future research that will hopefully inform further scholarly inquiry in the field of digital innovation.
... They may even lack some materially observable characteristics or processes, such as dedicated financing units or marketing groups (Forbes & Kirsch, 2011). This means that classic material measures of entrepreneurial outputs such as start-up counts, IPOs, acquisitions, or other exits may be less meaningful and evident in the emergence stage (Seidel & Greve, 2017). Instead, these emerging entrepreneurial ecosystems may seem more akin to knowledge systems, with their focus on innovation and not yet on material output (Kay et al., 2018;Powell & Snellman, 2004). ...
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... The novelty ecosystem is a network of interconnected interactions that are connected to a platform that incorporates both production and the use of participants. It creates appropriate value through employee interactions and feedback (Seidel & Greve, 2017). It is known that the attractiveness of the novelty ecosystem rests on its ability to evoke and highlight interdependencies among employees and the collectivism in which they operate and to provide a fresh way of thinking about knowledge generation, co-evolution and co-creation of value (Costanza, de Groot & Braat, 2017). ...
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... Emergence is a process whereby an inchoate novel form grows to fully constitute a new entity (Seidel and Greve, 2017), so the frame emergence process involves the growth of a frame, which is distinguished from changes in existing frames. The unique challenge of frame emergence becomes more palpable when seen from the perspective of actors living through a crisis. ...
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Adaptive responses to crisis rely on effective cognitive frames: understanding what is going on amid unfolding crisis and what should be done to address it. Research has shown that failing to drop a routine cognitive frame exacerbates crises, while nimbly adopting a novel frame enhances resilience. This suggests that actors in crisis have an urgent dual mission: to simultaneously destroy and construct frames. Existing research offers little guidance on how actors can accomplish this in the midst of their struggles to survive threatening and disrup- tive circumstances. I address this shortcoming by drawing from a 22-month ethnography of a Detroit business incubator, analyzing how it gradually devel- oped a novel diagnostic and prognostic frame of the city’s unfolding crisis. I propose and show that actors amid crisis construct a novel frame—while dis- mantling an old one—through a process of frame restructuration: the novel frame emerges from and co-evolves with unconventional actions that pragmati- cally address the exigencies of the crisis. Mutual constitution between prag- matic actions and the emergent frame can be critically propelled by the use of metaphor, which helps actors instantly reframe the context.
... A case in point is the rising importance of blockchains in organizing collaborations in the 4 th IR (Fernández-Caramés & Fraga-Lamas, 2019; Seidel & Greve, 2017;Viriyasitavat, Xu, Bi, & Sapsomboon, 2020). Blockchains-referring to a cryptography-based decentralized system consisting of an ongoing list of digital records-are often regarded as one of the most disruptive technological innovations of recent times (e.g., Lumineau et al., forthcoming). ...
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In this essay, we argue that the advent of the Fourth Industrial Revolution requires a reconceptualization of trust patterns within and across organizations. We propose fundamental changes in (1) what trust is, (2) how trust is produced, and (3) who needs to be trusted. First, and most broadly, the nature of trust is likely to become more impersonal, resulting in what Luhmann (1979) calls system trust. Trust between actors is increasingly substituted by trust in a system based on digital technology. Second, applying Zucker’s (1986) influential framework of trust production modes, process-based trust may be losing out to characteristic- and institution-based trust. Third, despite the move toward system trust, there will nonetheless be a need to trust certain individuals; however, these trustees are no longer the counterparts to the interaction but rather third parties in charge of the technological systems and data. Thus, the targets of interpersonal trust are changing. We contend that these fundamental shifts in the nature, production, and targets of trust have important implications for research on organizational trust as well as management scholarship more broadly.
... Even though these assumptions have been historically effective, the recent emergence of distributed trust systems such as BCT has fundamentally challenged these core tenets of organizational theory [35]. ...
... We complement these perspectives by drawing on the sociological and organizational literatures, which identify temporary gatherings as forums for tie formation and social change (Breiger, 1974;Rao & Dutta, 2012). Given the growing interest among scholars and practitioners in how managers mobilize resources to build ecosystems (Clough, Fang, Vissa, & Wu, 2019;Seidel & Greve, 2017) and how networks and ecosystems interact (Shipilov & Gawer, 2020), we are optimistic that sociological and organizational literatures have much to offer to our understanding of platform ecosystem management. We believe that our paper opens up a broad line of enquiry into the role of social coordination in ecosystem emergence. ...
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... Even though these assumptions have been historically effective, the recent emergence of distributed trust systems such as BCT has fundamentally challenged these core tenets of organizational theory [35]. ...
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Trust in corporations, governments and public services has been steadily declining over the last few decades. Lack of transparency and auditability has been a key driver for this decline. Blockchain technology has been commended as a solution that can help with disintermediation and filling the consistently increasing trust challenges faced by the corporate and public sectors. Public services are seeking solutions that can help establish trust and increase transparency with its citizens and businesses are undertaking extensive business analysis to determine the need and effectiveness of blockchain-like platforms as the basis for transforming their existing platforms. Due to the decisive nature, most of the analysis results thus indicate that if a trusted third party is an option, then blockchain should not be used. Here we highlight the challenges and opportunities of establishing trust and how blockchain technology can help public services bridge the trust gap with its citizens. We argue that all information technology systems rely on a suite of technologies, thus blockchain should be added to the current technology stack rather than taking an 'all or nothing' approach. We also argue that analysing the effectiveness of futuristic technology like blockchain with industrial age methodology and mindset may limit the realisation of its impact on society and economy. Therefore, we propose to take a heuristic approach, where different properties of blockchain technology need to be mapped against different aspects of current business process with a futuristic view in mind. Taking Companies House-a government organisation that holds over 4 million UK-based companies' records-as an example, we demonstrate how certain business processes in Companies House can benefit from adapting a blockchain-based solution.
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RESEARCH SUMMARY: While the notion of ecosystems has become prominent in scholarly and practitioner strategy literature in recent years, more can be done to bridge these two communities. In this introduction to the SMS Collection, we interrogate strategy scholarship from the perspective of ‘ecosystem architects,’ who are private or public sector actors interested in nurturing and developing a given ecosystem as a whole. In doing so, we collate and discuss key articles published in the journals of the Strategic Management Society which, considered together, shed new light on processes of ecosystem emergence and evolution. We distill a range of insights for ecosystem architect practitioners and outline four strategies for them to create conditions appropriate to their ecosystem and its stage of development. MANAGERIAL SUMMARY: What insights does strategy research offer to practitioners interested in nurturing the creation and ongoing development of a range of different types of ecosystems? In this introduction to the SMS Collection, we distill relevant findings and outline four strategies for public and private ecosystem architects to create conditions appropriate to their ecosystem and its stage of development. Specifically, we outline approaches to create conditions for coalescence, coopetition, cooperation and contained contestation within emerging and evolving ecosystems.
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Category research has flourished over the last decade. While this body of work has prioritized the behavioral and economic consequences of stable classification systems, the papers in this special issue challenge this orientation by highlighting the importance of category dynamics for improving our understanding of markets and fields. We show how these papers support the emergence of category maintenance, the recategorization of mature categories, and the consolidation of new categories as understudied phenomena and as the next research challenges to pursue. After connecting the main findings of the papers in this special issue into a unified process model, we discuss various alternative pathways to further explore those challenges. We also point to how this theoretical endeavor runs on slippery slopes and might lead to cul-de-sacs such as terminological balkanization. We conclude by highlighting the need for developing a more comprehensive understanding of category dynamics.
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This article explores the contingent role that social ties play in the emergence of status hierarchies. We argue that, while status is formed based on actors' perception and understanding of social cues, network structure, and position influence this process by influencing the attention and legitimacy given to the focal actor in accordance with social cues that signal an actor's identity. Using a large data set from an open-source software development community, we find that a broker linking diverse network members is less likely to receive status ratings from others and that the rating is more likely to be low when a broker receives a rating. Furthermore, we find evidence that the effects of brokerage are contingent upon certain factors that may affect the attention and legitimacy given to actors in the process of status evaluation, such as the actor's prior status. An actor's prior status was found to weaken the negative effect of brokerage. The importance of this study for theories of status, social networks, and attention is discussed.
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We examine the construction of "empty categories" - that is, categories created prior to the existence of producers and consumers - and their implications for industry emergence. Drawing on the case of the ji-biru category among Japanese microbreweries, we exemplify how external actors - including governments, the media, consultants, and other entities - frequently create empty categories that are "legitimate yet not legitimated" (Vergne & Wry, 2014). We show how such empty categories generate lower entry barriers, resulting in higher founding rates and significant innovation. We highlight how empty categories impede evolutionary forces by inhibiting shared understandings of what constitutes a legitimate category member.
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We draw on an in-depth investigation into the phenomenon of community radio in India to identify the emergence of an institutional logic in a field. We delineate five stages of emergence, starting with problematization of dominant logics and ending with formation of an institutionally complex field. Further, we highlight how such a process results in organizational forms that reflect ongoing struggles among dominant logics and the emerging logic. We contribute to neoinstitutional studies on the emergence of social objects and also draw the attention of emergence theorists to the contested manner in which emergence takes place in the social world.
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In the past five years, “sharing economy” firms like Uber, ZipCar, AirBnB and TaskRabbit have generated both huge market valuations and fierce regulatory contests in America’s cities. Incumbent firms in the taxi, hotel and other industries, as well consumer protection, labor and neighborhood activists, have pushed for regulations stifling or banning new sharing economy entrants. Sharing firms have fought back, using their popularity with consumers and novel political strategies, lobbying for freedom to operate as broadly as possible without government interference. But to date, both participants and observers of these “sharing wars” have relied on an unstated assumption: if the sharing firms win these fights, their future will be largely free from government regulation. Local governments will either shut sharing down, or they will leave it alone.But this assumption is almost surely wrong. If sharing firms prevail in the current fights over the right to operate (and indications suggest they will), it is unlikely that cities and states ignore them. Instead, as sharing economy firms move from being upstarts to important and permanent players in key urban industries like transportation, hospitality and dining, local and state governments are likely to adopt the type of mixed regulatory strategies they apply to types of firms with whom sharing firms share important traits, from property developers to incumbent taxi operators. Using tools of agglomeration economics and public choice, this Article sketches the future of such policy regimes.Specifically, local and state governments will adopt some combination of the following policies in addition to insisting on consumer/incumbent protections: (1) subsidizing sharing firms to encourage expansion of services that produce public goods, generate substantial consumer surplus and/or minimize the need for excessive regulation of the property market; (2) harnessing sharing firms as a tool for redistribution; and/or (3) contracting with sharing firms to provide traditional government services. The future of sharing economy regulation will be very different from its present, and the changes will pose profound legal, political and ethical questions for our cities.
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We examine how the organizational identity of established firms affects their strategic outcomes during the emergence phase of a new market. Drawing on cognitive theories of analogical learning, we build theory about how the established identities of producers influence the fluency with which consumers make sense of novel products, and hence affect valuations. We illustrate this theory through an empirical study of consumer evaluations of de alio entrants during the emergence of the digital camera industry.
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Studies of the social construction of markets have not determined which social environments, which we refer to as proximate social space, are most likely to trigger social construction processes. We find that U.S. nonprofit fiscal sponsors respond to greater potential for category emergence when proximate social space is defined by geography but not by market segment. Further, in addition to responding to potential claimants based on geographic peers, organizations also respond to actual claimants based on peers in the market segment. The pattern suggests that geographic social proximity triggers initial label claiming, which in turn triggers responses from market segment peers.
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How does career boundary-crossing affect an entrepreneur’s new venture? When entrepreneurs cross industry or functional boundaries to lead startups, they may lack specific experience needed for performance. Conversely, the diverse experiences they carry can enhance exploration and lead to the emergence of innovation in startups. We highlight important consequences of career boundary-crossing, using a multi-industry longitudinal sample of high-technology firms. We find that entrepreneurs who cross functional boundaries are more likely to lead their startups into new product areas. We also find that entrepreneurs’ industry boundary-crossing is associated with startup failure, but it also increases the probability of an IPO.
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The ubiquity of digitally intermediated interactions is changing the ways in which social interaction creates the cognitive and institutional underpinnings of new markets. Logics that define markets used to be localized, but they now emerge from crowds that span - and persist - across time and space. This article builds a theory of how crowds emerge and evolve in a way that influences the emergence of shared logics and helps explain why some markets are viable while others are not. What is revealed is that a crowd has a hidden niche structure that determines the fate of a new market.