Standardization and firms’ innovative activities within ecosystems : two essays on the Formula One industry

This dissertation studies how standardization can affect ecosystem member organizations’ innovations and performances both in organizational and individual levels. Standardization is an effective coordination tool to help ecosystems overcome coordination challenges by providing compatibility and interoperability within ecosystems. However, to achieve compatibility, standardization needs to fix and limit core technologies and components only to standardized cores and must enforce guidelines to its member organizations. In other words, the coordinating effect of standardization may require hefty prices from its ecosystem. To address the tension between standardization’s positive role as a coordination tool and necessary organizational costs to adopt standards, the current dissertation examines how standardization can influence various aspects of organizational functions. The dissertation is organized as the following. The first section a general introduction and overview of the dissertation. Then the dissertation proceeds to a literature review of relevant prior research on ecosystems and standardization that analyze the theoretical tension between standardization as a coordination tool and required costs to accommodate standards. The chapter will then proceed to identification of research opportunities based on the existing literature. Chapter I then demonstrates the constraining effect of standardization on firms’ innovation through the theoretical lens of knowledge recombination. In addition, using the perspectives of knowledge-based view and organizational change, Chapter II will analyze the disrupting effect of standardization on human capital performances within ecosystem member organizations. Lastly, the dissertation will then provide a conclusion and message of the dissertation. Using data on Formula One motorsports industry regarding standardization which consist of F1 teams’ innovations and drivers’ performances in 1970 - 2020, the dissertation empirically tests the proposed theories. The dissertation utilized machine learning based LDA topic modelling techniques to capture impacts of standardization on components of F1 race cars and track standardization activities among the components. The findings from the empirical analyses of this dissertation demonstrate that standardization can negatively affect various activities of ecosystems’ member organizations.