Value capture in non-markets: Integrating the social domain in business models

Klaus Riskær Pedersen

Student thesis: Master thesis

Abstract

Increasingly, value capture by dynamic business models are facing challenges from innovation is open communities that do not allow for full integration of ownership on the firm level. Co-creating collaborative networks distribute ownership to products and services to benefactors that may not even form part of the co-creating process themselves. By allowing distributed ownership to assets, shared decision making and non-financial reward systems to develop, a non-market circumstance is established on the basis of previously firm-specific assets commoditizing into (privately produced) public goods. By a non-market governance replacing marketplace and firm level governance structures, resources and assets become consolidated out-side firm-boundaries, which introduces a major challenge to “the nature of the firm” in a networked economy. By the weakening of the dependency of a proprietary strategy, the concept of a networked information economy is introduced, which is characterized by decentralized individual action and new and important cooperative and coordinate action carried out though radically distributed, nonmarket mechanisms. Incumbent responses must be viewed against firm-level based resources and collaborative capabilities across whole industries. It seems however, that a true response to value capture under non-market circumstances require some sort of integration of the social domain into the conventional business models, and this paper is targeting possible working hypothesis that may allow for adaptive business models to be developed by incumbents or new entrants that operates within the intangible product industries.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2010
Number of pages88