Carmelo Cennamo

Socioemotional Wealth and Proactive Stakeholder Engagement: Why Family-Controlled Firms Care More about Their Stakeholders

While family business research has prominently recognized that family firms are motivated by nonfinancial factors, the literature has remained relatively silent about whether or not these firms are more likely than others to engage actively with their stakeholders, who often have nonpecuniary demands. This paper argues that family firms are more prone to adopt proactive stakeholder engagement (PSE) activities because by doing so they preserve and enhance their socioemotional wealth (SEW). We explore the impact of the different dimensions of SEW on PSE and identify distinctive logics that explain the adoption of such practices. Finally, we offer a set of topics for future studies.

Preserving Socioemotional Wealth in Family Firms: : Asset or Liability? The Moderating Role of Business Context

We ask whether choices aimed at preserving socioemotional wealth (SEW) represent an asset or a liability in family–controlled firms. Specifically, we consider one major SEW–preserving mechanism—having as chief executive officer (CEO) a member of the controlling family—and hypothesize that this choice is (1) an asset in business contexts, such as industrial districts, in which tacit rules and social norms are relatively more important, but (2) a potential liability in contexts like stock exchange markets, where formal regulations and transparency principles take center stage. The results from our empirical analysis confirm these hypotheses.

Beyond What and Why Understanding Organizational Evolution Towards Sustainable Enterprise Models

In this article, we strive to contribute to the ongoing shift in the sustainability debate from its historical focus on definitional (“what”) and motivational (“why”) questions to the understanding of change and learning process questions (“how”) connected to the efforts some firms are making to evolve toward “sustainable enterprise” models. A conceptual framework to study these evolutionary processes is thus developed, and the complexities and research design trade-offs facing the related empirical inquiry highlighted. The main message advanced herein is that shifting the focus of analysis to the level of the initiatives undertaken to change the various elements in the enterprise model could prove the best way to frame the conceptual and empirical challenge before us. In a way, to make progress on the “what,” research should focus on the “how.”

Building the Value of Next-Generation Platforms The Paradox of Diminishing Returns

Next-generation technology provides users with new, advanced functionality that often renders the past technology obsolete, opening a window of opportunity for challengers. Major benefits can accrue to technology leaders, but for platform technologies that require complementary innovation from external complementors to create value for users, those benefits are limited by the difficulty of securing complements. The focus of this article is on the value users derive from the variety and quality of platform complements and its impact on leaders’ performance over time relative to followers. The article shows that next-generation platform leaders that build in-house complements and encourage broader participation by external complementors can enhance platform value to users at early market stages. Yet, later on, when the market has taken off, continuing to leverage these strategies will negatively affect the variety and quality of their complements, constraining their growth capacity and performance relative to followers. Leaders may thus lock themselves into suboptimal performance patterns and eventually fall behind their followers. The analysis provided herein offers new insights about what drives platform competition by highlighting the challenges platform leaders face, particularly in the growth stage of a platform’s market evolution, and the critical role played by complement quality in shaping platform competition over time.

Governing the City: Unleashing Value from the Business Ecosystem

Governing a city is arguably one of the most complex management tasks facing organizational leaders. Based on an analysis of Vienna, London, and Chicago, this article demonstrates that city leaders treat cities as ecosystems, structured and governed either as “extended enterprises” where inputs from specialized organizations are coordinated and integrated into the final service or as “platform markets” where direct interactions between third-party service providers and citizens are facilitated by the city leaders. If cities are viewed as the “ecosystem of ecosystems,” then successful city governance requires an orchestration approach where leaders choose the appropriate structure and manage the ecosystem dynamically in a constantly changing environment.

Platform Architecture and Quality Trade-offs of Multihoming Complements

Multihoming, the decision to design a complement to operate on multiple platforms, is becoming increasingly common in many platform markets. Perceived wisdom suggests that multihoming is beneficial...

The Gang of Four: Acquaintances, Friends or Foes? Towards an Integrated Perspective on Platform Competition

The economics literature extensively focused on pricing and openness as key strategic choices of platforms in two-sided markets, with the ultimate goal to obtain network effects and win over direct competitors within the boundaries of a single market. We argue that, due to the business model innovations, such as platform envelopment, the platform competition today grows beyond the boundaries of a single market. To theoretically derive the competition implications of these business model innovations, we use the lens of the multi-market contact theory. Our study argues that platform competition unfolds in two distinct, though interdependent stages. At first, platform owners make business model choices aimed at attainment of network effects and enhanced user experience within a single market. At the second stage, platforms expand from their core by enveloping into neighboring platform markets, seeking to further enhance user-experience through cross-platform complementarities. Platform envelopment is likely to coincide or lead to envelopment by the platform firm in the neighboring market; these parallel envelopments lead to convergence of neighboring markets and emergence of supra-platform market, where diverse platform players co-habitate: compete, collaborate and engage in business model innovation.

Intra-Platform Competition, Exclusivity and Dissimilarity Strategies in the Videogame Industry

This article examines two main strategic tradeoffs a platform firm may face when structuring its content offer. First, we study whether maximizing the amount of content released in exclusivity to the platform complement a strategy aimed at maximizing the content size and variety. Second, we inspect the competitive effect of the degree of dissimilarity (or similarity) across platforms’ offerings. We test these in the U.S. videogame industry over the period 1995-2008. Results show that, for high levels of competition among content producers, implementing these two maximizing strategies in combination mutually reduces each other’s benefits and decreases a platform’s market share. Moreover, moderate levels of a platform’s content dissimilarity decrease a platform’s market share, whereas large degrees of dissimilarity affect positively a platform’s market share.

Value Creation and Free-Riding in Platform Markets: The Asymmetric Impact of Competition on Quality Across the Platform Life Cycle

Platform-based technology ecosystems are new forms of organizing independent actors’ innovations around a stable product system. This collective organization is proving superior to traditional, vertically integrated systems in many sectors because of greater “generativity�? – the ecosystem’s capacity to foster complementary innovation from autonomous, heterogenous firms – which extends the usage scope and value of the platform to users. However, greater generativity can also lead to greater variance in the way ecosystem members’ contributions satisfy users’ needs, and it could potentially hinder the ecosystems’ value creation. We draw on collective action theory to examine generativity’s impact on user satisfaction and the mechanisms driving it. We argue that products enhancing user satisfaction contribute to a collective, shared asset, the platform system reputation, from which all participants benefit. Thus, generativity has both a positive (system reputation) and negative (free riding) effect on the ecosystem members’ incentives for developing products that enhance user satisfaction. We argue that the negative free riding effect prevails as the platform system matures and competition with alternative platform systems increases. Using data from the videogame industry, we find supportive evidence for the free riding effect, which generates an average loss in total revenue for first-rate games of about

Platform Architecture, Multihoming and Complement Quality: Evidence from the U.S. Video Game Industry

36.5M and a drop of about 3.3% in the console’s market share. By identifying the conditions that exacerbate free riding in platform ecosystems, our study contributes to the understanding of the evolutionary dynamics of platform ecosystems. It also highlights one feedback mechanism governing collective action in ecosystems and its implications for value creation.