Novel organization form as a growth driver

Abstract

Scholars have conceptualized the competitive landscape confronting modem organizations as business ecosystems. An ecosystem is well suited to describe the complex interdependencies that exist among specialist organizations operating in a dynamic environment. Is a business ecosystem similar to a network form of organization? We do not think so. Based on our research on the relational network that exists between Indian software service organizations and their clients, we distill two features that distinguish a business ecosystem from traditional networks. These are (1) the ability of the relationship to simultaneously accommodate collaboration - a definitive feature of networks (Powell, 1990) with competition, a definitive feature of markets and (2) the involuntary nature of the interdependencies that prevail amoog the network players. We present our arguments through description and analysis of a novel organization form witnessed in the Indian software services industry - the Offshore Development Centre. In the process, we locate the competitive advantage of Indian software services organizations in their ability to create innovative organization structures and processes that enabled them to achieve rapid scaling even in the face of business volatility and technology chum.