Platform Interactions and Emergence of an Organizational Field: Case Study on Ola

Abstract

Most digital enterprises begin as technology start-ups offering niche services, and then evolve into digital platforms providing a range of services. Against the backdrop of almost non-existent logistic and supply chain infrastructure, weak regulatory framework, low penetration of smartphones and Internet, low consumer confidence and trust on online transactions, digital entrepreneurs in developing countries literally have to build the platform ecosystem along with their organization. In this paper, we use institutional theory as a lens to trace the emergence and evolution of digital platforms in India.  We posit that digital platforms are emerging organizational fields embodying new network logics with algorithms and technology-mediated interactions playing a central role in creating value. In particular, we take the case of Ola, an online cab aggregator from India to illustrate that digital platforms as organizational field evolve through three phases of (a) innovation introduction, (b) mobilization and (c) structuration. In the first phase, the organizational field characteristics are consequences of activities undertaken to raise cognitive legitimacy and respond to competitive forces. In the second phase, a mix of coercive and mimetic forces shape the institutional field resulting in increase in socio-political legitimacies. In the third phase, the process of structuration sets in as isomorphic forces become more normative. The theoretical framework developed in this paper contributes to extant information system research by putting forth that the characteristics of emerging organizational field are shaped by the interplay between the responses of the focal organization to isomorphic forces, and the actions taken by it to establish cognitive and socio-political legitimacies. Empirically the study is on digital platforms located in a large developing country with very high potential for online transactions but relatively low penetration of Internet and smartphones. Conceptualizing organizational field as digital platforms enables making sense of the changing business landscape, and examine issues of sustainability and legitimacy.