Institutional Complexity as a Driver for Innovation in Service Ecosystems

Abstract

T his paper extends research on innovation as institutional change within service science and service-dominant (S-D) logic by conceptualizing the emergence of novel solutions in service ecosystems. We pay particular attention to how actors (individuals and organizations) are able to create new solutions that change the very institutional arrangements that guide and constrain them. We propose that institutional complexity-the multiplicity of institutional arrangements confronting actors with conflicting prescriptions for action-drives the emergence of novelty. Institutional complexity reduces the influence of prevailing institutions by activating conscious problem solving and making available multiple institutional "toolkits." These dynamic toolkits consist of the cultural norms and meanings, as well as material practices, associated with specific institutional arrangements, with which actors can jointly reconstruct and change value cocreation practices and advance change in the institutional arrangements of service ecosystems. This paper contributes to service science and S-D logic by providing a more comprehensive understanding of innovation driven by institutional complexity, in which the stability of institutional arrangements is reconciled with the actor-driven creation of novel solutions constitutive of institutional change.

Game-changers: dynamic capabilities’ influence on service ecosystems

“…As support for identifying those dynamic capabilities that shape ecosystems, this paper draws on the literature on dynamic capabilities (Teece, 2007;Pitelis and Teece, 2010;Wilden, 2016), and service-dominant logic (Madhavaram and Hunt, 2008;Lusch and Vargo, 2014;Siltaloppi et al, 2016). To date, the majority of dynamic capability researchers appear to agree that there are several types of capabilities, and that they exist at different orders, i.e., within a hierarchy of capabilities (Hine et al, 2014;Madhavaram and Hunt, 2008).…”

“…Thus, firms are both embedded in their institutional context (Chandler and Vargo, 2011;Siltaloppi et al, 2016) and able to recreate that context. In many cases, this duality has been investigated from the macro-level perspective and downwards rather than upwards from the micro-level: for example, Edvardsson et al (2011) suggest that "studies could examine how changes in the macro-environment (such as new laws and regulations) affect service systems and actors" (p. 336).…”

“…show that institutional complexity inherent in service ecosystems is conducive to institutional work (Siltaloppi et al, 2016) and that interdependent breaking, making, and maintaining of institutions is also valid when innovating service ecosystems .…”

Creating a shared narrative: the use of causal layered analysis to explore value co-creation in a novel service ecosystem

“…Instead of studying different contextspecific variables that make a system complex [51], or examining the value networks between the various actors taking part in the ecosystem [65], the focus of this study was to explore and critique the various stories the ecosystem actors present about the evolution of their value co-creation aims and activities. In doing so, the method of CLA was used to shed light on the multiplicity of institutional arrangements [17,66] that drive change and innovation in the studied service ecosystem.…”

Introduction to the Special Issue on Multiactor Value Creation in Service Innovation: Collaborative Value Creation in Service

“…The study examines the challenges that stakeholder integration poses for service innovation. Siltaloppi et al (2016) extend the research on innovation for service by conceptualizing the emergence of novel solutions in service ecosystems. In so doing, the study introduces institutional complexity as a driver of innovation in service ecosystems.…”