Balancing on a Tightrope: Managing the Boundaries of a

Firm-sponsored OSS Community and its Impact on Innovation and Absorptive Capacity

March 2014

Robin TeiglandStockholm School of Economics

Sweden

Paul M. Di GangiLoyola University of Maryland

USA

Björn-Tore FlåtenUniversity of Agder

Norway

Elia GiovacchiniStockholm University

Sweden

Nicolas PastorinoeZ Systems

Director Community

Presentation StructureStart

Finish

Key Findings

Methodology

Conclusions

Research Questions

Background of the Study

The Firm

The Collective

vs

Second Life~ Built by employees within

organizational boundaries

Open Simulator~ Built by users and distributed freely regardless of affiliation.

Models of Knowledge Creation

* More and more, firms are becoming part of distributed knowledge creation. e.g. IBM, Oracle, Intel (Bonaccorsi et al., 2006)

* Community and firm share experiences and knowledge to co-create value

* Community is seen as a complementary asset to be leveraged and combined with firm’s internal assets to deliver competitive solutions

(Dahlander & Wallin, 2006)

* However resources of community that firm wants to leverage are outside firm boundaries and embedded in community with competing logic

* Firms try to influence the communities in different ways (Dahlander & Wallin, 2006; Dahlander &Magnusson, 2008; Jarvenpaa & Lang, 2011; West

& O’Mahony, 2008)

Involvement of Firms in Open Source Communities

Opportunities and Challenges with Firm-sponsored OSS Communities

OSS communities as complementary asset for firms with great potential for firms to turn community outputs into new service offerings

BUT, potential for goal conflict between the firm and the community since firms in control– Firm’s goal is to profit from the

investment– Community’s goal is to improve the

shared technology

But there’s tension...

Private ModelDistribution of returns

and delegation of value creation solely to

organization

Collective ModelOpenness and free

distribution of intellectual ideas for common or

public good

VS

von Hippel & von Krogh 2003

Theoretical BackgroundBoundary management (Jarvenpaa & Lang 2011)The set of activities involved in defining, negotiating, and protecting organizational resources and domains of action as well as managing external stakeholder relationships to achieve organizational goals

Four boundary management logics:1. Boundary of power2. Boundary of identity3. Boundary of competence4. Boundary of transactional efficiency

These four cannot be studied in isolation as it is their integrative management that influences the community’s innovation capacity

Absorptive capacity (Cohen & Levinthal 1990)The firm’s ability to continuously transform knowledge and ideas (e.g., learn) into new innovations

Please see our paper for references: Teigland, R., Di Gangi, P., Flåten, B-T., Giovacchini, E., Pastorino, N. (2014). Balancing on a tightrope: Managing the boundaries of a firm-sponsored OSS community and its impact on innovation and absorptive capacity. Information & Organization, 24, 25–47.

Research Questions

1. How does the boundary management of a firm-sponsored OSS community impact the community’s innovation capacity?

2. How does the boundary management of a firm-sponsored OSS community impact the firm’s absorptive capacity?

105 emp350+

Partners

42,000+Communitymembers

15,000+Customers in 130 countries

eZ Ecosystem

• Founded 1999• Content management software, #1 in media industry

• 250,000 sites in 170 countries• Customers: UN, FT, WSJ, Vogue, Hitachi, 3M, BMW

• 105 employees in 9 countries (US, Europe & Asia)

eZ Systems wants to create a killer community

“As a community... if you give them the little finger, they take the whole hand – they want more when you give them

something, and if they don't get something, then they get irritated. We are a company and not a charity, so we have to

make money – but this is a challenge and you have to differentiate between what you give away for free and what

you sell." - eZ senior manager

Research Methodology

• Case study of eZ Systems and its firm-sponsored OSS community

• 19 semi-structured interviews– 5 eZ employees– 14 affiliated partners, entrepreneurs, or OSS hobbyists– On average, interviewees were 34,9 years old, were

male, and held a minimum of an undergraduate degree (typically Computer Science)

– Interviews lasting 45-120 minutes each– All interviews recorded and transcribed

• Literature-driven thematic analysis with coding of the transcripts 11

RQ1: Boundary Management & Community Innovation Capacity

• Power– Sometimes maybe people do want to share results of their work, but their boss

does not want them to do so because the results of their work would then be given to the competition – so you always feel there is this tension of sharing some things but not everything … because of competitors.

• Identity– And then eZ systems says yes, no, you know, well, we could do this, and we could

do that, and bla-bla-bla, but at the end of the day, nothing is done. And that generates a negative point of view from the community towards eZ Systems.

• Competence– Most of the code was written by us (eZ), and extensions and addon modifications

were done by the community.• Transactional Efficiency

– The great advantage is that it will also allow us all to work together much more easily on larger product features. From A to Z - from the idea being submitted in eZ Roadmap to the final QA, testing and documentation, through functional specifications, technical specs, and development.

RQ2: Boundary Management & Firm Absorptive Capacity

• External Environment– We went the way that the community suggested …. and this is exactly where

we got very big value from community – if we had executed our internal plans, then we would have probably distanced ourselves from our customers and partners.

• Collective Dimension– He (Community manager) is formalizing the unspoken roles we have had for a

while. And he is trying to see how we can … bring people to do something we can use immediately through the community project.

• Individual Dimension– It is not very simple for employees to act in the community – everything is

taken as a statement by the company even if this was on personal level... But it becomes problematic because within the company there is not too much communication. So when roadmaps and priorities change and then an employee says something, this might not be true anymore.

Findings – Research Model

Key Findings

eZ’s boundary management of the community plays a crucial role in community’s innovation capacity, with Power having the most importance.

Importance of maintaining relationships not only within eZ to understand and absorb ideas and knowledge from community but also with the larger OSS and business community.

Community’s innovation capacity directly impacts eZ’s absorptive capacity. Additionally, an integrative IT platform supports the development of community innovation capacity and firm absorptive capacity.

12

3

Conclusions• The study extends our understanding of

boundary management of firm-sponsored OSS communities.

• Firms interested in leveraging a firm-sponsored community must balance on a tightrope since tension between the firm’s goals and the community’s goals.

Further research should investigate how firms that want to sponsor or engage communities can adapt their internal

organizations to better fit with community-intensive innovation activities.

Thank You!

If you have any questions or suggestions, please do not hesitate to contact us:

pdigangi@gmail.comrobin.teigland@hhs.se

bjorn-tore.flaten@uia.noegi@fek.su.se