An investigation of the impact of digital platforms on value creation – an affordance perspective

Abstract

Organisations across industries are increasingly exploring and exploiting the use of digital platforms for value creation. Digital platforms create value through capitalising on multiple leverage logics (e.g., innovation leverage and transaction leverage) to achieve economies of innovation and complementarity while promoting transaction opportunities through network externalities. However, how to harness the platform leverage logics as platforms evolve and maximise platform value in both service industries and manufacturing industries is a paramount but relatively overlooked phenomenon, which motivates this research. This study thus proposes one overarching research question (RQ): How do digital platforms enable value creation in service and manufacturing industries?

Accordingly, an interpretive case study is carried out, in which digital-born knowledge intensive service providers and consumer product manufacturing incumbents are investigated by drawing on technology affordance theory. Affordances denote what information technology (IT) artefacts allow users to do based on their features and users’ subjective interpretation of them.
To generate value by meeting the heterogenous needs of business customers,
knowledge-intensive firms collaborate with them to enable product and service
development, and the researcher finds four distinct innovation platform affordances pertinent in this open innovation context: organisational memory affordance, product/service development affordance, collaborative affordance, and opportunity discovery affordance. Moreover, the phases of affordance evolution in value creation are discovered, which are exploitative affordances, affordance ambidexterity, and connected affordance synergies. The platform evolution is found to be stimulated by the driving forces of IT–business misalignments. In the case of consumer product firms, functional affordances – process management affordance, data-driven operation affordance, collaborative affordance, product development affordance – are important to stimulate digital transformation. These affordances serve as a springboard to perceiving and enacting relational affordances through firms developing a familiarity with the platform referential whole and capacity for exaptation. Relational affordances enacted through ongoing, adaptive actions would facilitate the development of corresponding organisational capabilities, which facilitate increasing the effectiveness of actualised outcomes.

This thesis contributes to the literature on several fronts. First, it extends the
affordance theory. This thesis identifies the distinct affordances for each type of company based on the specific research contexts. Empirical evidence is generated to ascertain affordance evolution, and how manifold business practices can be performed to benefit from the same type of affordance. From this comes the identification of organisational capabilities that can in turn positively affect the actualised outcomes. Second, the thesis contributes to the body of literature on digital platforms in the context of value creation, shedding light on the interweaving interaction between platform evolution and market offerings in both business-to-business (B2B) and business-to-consumer (B2C) contexts. Third, by looking at how innovation platforms and internal production-oriented platforms
become more open innovation platforms in different research contexts, the thesis advances the knowledge on platform evolutions, especially their early stages till the formation of platform ecosystems.

This thesis also offers implications to managers as their firms intend to use or are using digital platforms. First, managers are informed of the driving forces of the platform evolution, that is, IT–business misalignments that can serve as a signal for firms to progress their platforms into the next stage and plan in advance to cope with misalignments. Managers should develop an awareness of leveraging synergistic affordances. As affordances evolve, firms could tap into synergistic effects of affordances to reap full benefits. Meanwhile, for managers in incumbent firms, it is critical for them to foster a familiarity with digital platform whole among the general employees, so that the digital
platforms, other objects (e.g., digital assets and nondigital resources), practices and the organisational identity can co-evolve and reinforce each other, which could promote the adoption of digital technologies to achieve an organisation-wide goal.

Date of Award	Nov 2023
Original language	English
Awarding Institution	University of Nottingham
Supervisor	Zhao Cai (Supervisor) & Hing Kai Chan (Supervisor)