Standardization, Value Configurations and Implications for Business Model Innovation

Transcription

1 Standardization, Value Configurations and Implications for Business Model Innovation Magnus Johansson Standardisation Research Centre, The Institute of Economic Research, School of Economics and Management, Lund University, PO Box 7080, SE Lund, Sweden The standardization literature assigns three main potential economic effects to standardization: network effects, transaction cost reduction and scale effects (Blind, 2004). Apart from the economic effects, several attempts have been made at categorizing standards and standardization from a variety of perspectives such as David and Greenstein s (1990) focus on the process of standards emergence as a base of classification or the difference between committee standards and de facto standards (Egyedi and Blind, 2008). Other classifications acknowledge differences in and between deliveries and activities (c.f. Brunsson and Jacobsson, 2000; and Blind, 2011) or the internal versus external nature of a standard (Okhomatovskiy and David, 2012). In the literature on standards (defined here mainly as literature which uses the word standard or standardization in the title, in the keywords or the abstract of the publication), the market and institutional perspectives tend to dominate. We may find exceptions that take the firm perspective, such as Shapiro and Varian (1999) with regard to standard wars and Suarez (2004) along similar lines. Whereas Shapiro and Varian as well as Suarez discuss standards from the firm perspective mainly in association with asset ownership and control, this paper will primarily address the process of standardization and its role in association with activity configurations and business model innovation. Christensen, Grossman and Hwang (2009) have addressed the topic of business model innovation by adhering to the value configuration models as described by Stabell and Fjeldstad (1998), which originated from an activity based view in the field of strategy (Porter, 1985; Sheehan and Foss, 2007). Stabell and Fjeldstad (1998) proposed three value configurations: the chain, shop and network configurations but also recognized the relevance of hybrid versions of these. Christensen et al (2009) have linked these models to innovation by considering them to be generic descriptions of business models. Christensen et al emphasize the importance of moving from one configuration to another by innovating the firm s business model, and essentially the value creation logic of the firm. Of particular interest among the configurations during the last decades has been the network configuration which provides an activity based firm perspective on the utilization of network effects (Katz and Shapiro, 1985; 1994) and thus also relates to the role of industry platforms (Parker and Van Alstyne, 2005; Rochet and Tirole, 2003; Eisenmann et al, 2006). A fundamental aspect of realizing network effects of an industry platform is the utilization of standardization in order to enable compatibility across players accessing the network (Cusumano, 2010; Ulrich, 1995). Although less apparent at first sight, the chain (Porter, 1985; Stabell and Fjeldstad, 1998) and the package configurations (Johansson and Jonsson, 2012) also rely on aspects of standardization. For the chain configuration this can be seen if tracing its roots back to the description of long-linked technologies in Thompson (1967). Thus, standards and standardization seem to play an important role in value configurations but the more precise nature of standardization in association with each configuration has not been treated as a key topic in the literature. What is the role of standardization and standards for each of the value configurations?

2 This article aims at clarifying the specific use of standards and standardization in particular, in enabling each value configuration. By doing so it links the fields of value configurations and activity based competitive analysis with the field of standards and standardization. Through a review of the standardization literature and development of a framework the main standardization nature of the chain, network, package and shop configurations is outlined. Through the focus on value configurations comes a view on standards that will have to include internal as well as external standardization. Thus, several internal aspects of standardization will be included and not just those related to market effects and standardization through consensus processes in the context of external standardization bodies. Standardization and Standards The standardization literature includes a wide variety of standards and standardization definitions. Much of the literature focuses on formal standards, emerging through consensus processes in standards developing organizations (SDOs) (Blind, 2004; Blind, 2002). This category can also be expanded by including consensus processes through consortia and professional organizations such as in Egyedi and Blind (2008). Thus, the distinction is made between cooperative arrangements that include standardization through consensus processes and de facto standards, which are widely adopted specifications, products, services and practices. Others, such as Ahrne, Brunsson and Garsten (2000), Brunsson (2000), Brunsson and Jacobsson (2000b) and Feng (2003) apply a sociological and organizational view with a rather wide definition of standards. Feng essentially sees standards as specifications resulting from a process of specifying a technique or artifact (Note that the use of the term specifications in Feng (2003) is not related to specifications as published by formal standards organizations (Blind, 2011)). This wide definition allows Feng to consider standardization and standards on a societal level (applying standardization to concepts in society, such as knowledge) as well as within an organization. Tassey (2000) utilizes a similar distinction, but from a technology lifecycle and systems perspective, in that he distinguishes between standards which is a set of specifications and the process of standardization which enables the conformity associated with standards. Among other attempts at categorization we find the distinction between processes on the one hand and services and products on the other (Brunsson and Jacobsson, 2000a). This has some similarities with Blind s (2011) distinction between standardization of products, procedures and practice. Here, a distinction will be made between standardization of output, such as products and offerings or internal output in the form of parts, internal deliveries etc., versus standardization of processes (within which is included procedures and practices). This article will remain within organizations and markets but keep in mind a slightly wider use of the words standards and standardization rather than only associated with formal standardization. Here, the words standardization and standard will indeed relate to the process and the output of the process, respectively, but the discussion will not be completely limited to the one or the other. This approach is chosen in order to capture a wider use of the labels in literature on value configurations, organizational theory and competitive analysis. Whereas research with a standards and firm perspective often focus on assets (Shapiro and Varian, 1999) or firm-level factors (Suarez, 2004), this article adheres to the process of standardization in order to link it to strategy literature with its origins in the activity based view (Porter, 1985; Sheehan and Foss, 2007), such as value configurations (Stabell and Fjeldstad, 1998).

3 Another distinction relates to organizational boundaries. The origin of a standard can be internal as well as external (Okhmatovskiy and David, 2012), i.e. it can originate from within an organization as well as from an external standardization body. (Here, the prime focus is on internally developed standards as value configurations are models which essentially serve as part of competitive analysis (Stabell and Fjeldstad, 1998; cf. Porter, 1985), although some examples of externally developed standards will be discussed.) Following this line of argument, a standard can also be applied internally or externally. This is a key dimension which is added to the prior distinction between standards related to processes versus output. Thus, by considering internally developed process standards it is possible to distinguish between process standards applied internally and internal standards that are communicated externally. Process standards are closely linked to practices and actions (cf. Perez-Aleman, 2011; Jacobsson, 2000) and thus the internal aspects of process standards relate to the way that work is done in an organization. From the internal perspective, process standardization can also play a role in enabling modularity (Tu, Vonderembse, Ragu-Nathan and Ragu- Nathan, 2004; Fetzinger and Lee, 1997) However, as Okhomatovskiy and David (2012) have shown; an internally developed process standard can also be communicated externally in order to convey certain practices. Output standards can also be viewed from the perspective of their application, internal or external (Feng, 2003, captures the distinction between internal and external application when discussing uniformity of individual components versus products.). An internally developed standard can be applied internally in order to 1) reduce variety and 2) facilitate compatibility between components as sub deliveries. Internal application of output standards is fundamental for enabling modularity of components. An internally developed output standard can also be utilized externally in the form of an offering in a market. As a standardized item it can communicate certain characteristics compared to other products from the same firm or from other firms, i.e. it relies on a certain level of uniformity towards the environment. This is important from a transaction cost perspective as it affects search and control costs related to products. (Cf. Foss, 1996; Barzel, 1982). For externally applied standards a further distinction can be made in order to capture important market phenomena. Some standards reduce variety and provide compatibility across firms or customers (Blind, 2004). (Modularity, enabled by standardization, can also play a role beyond the boundaries of the firm when the development and production of components is outsourced.) These can also, as the internally applied standards above, relate to both processes and output. Finally, standards which not only provide uniformity and compatibility but can be applied across firms are considered. They can originate from a firm or from other sources such as alliances, consortia or SDOs (see the distinction between various standardization organizations in Blind, 2004 or Cargill, 1997). Thus the last category deals with diffusion of the standard in the market (Botzem and Dobusch, 2012). By combining these instances of output and processes relative their application we get figure 1. For the internal application there is no distinction in the figure between the standards that only provide uniformity and the ones that also provide compatibility. Although this is indeed an interesting distinction also internally, the focus here is mainly on the external effects of it as this is most often the main focus in the standardization literature Insert Figure 1 about here Processes are in this perspective considered as internal if they predominantly concern internal activities which can be performed without direct interaction with the environment. That is not

4 to say that external input is unnecessary but that direct interaction in day-to-day execution is limited. Processes of external application however are related to activities in direct interaction with the environment in the form of customers, suppliers etc. In the literature on standards, box E is seldom discussed in-depth. Whereas standardization as in box A is displayed by Feng (2003) as a historically important aspect of standards, box E is less present. From a strategic management and organization theory literature perspective this section is mostly associated with terms such as practices (cf Brown and Duguid, 1991) and routines due to the evolutionary perspective (Nelson and Winter, 1982). This article will not discuss this in length but merely note that the standardization literature may stretch into the internal aspects of reducing variety and providing compatibility concerning output but rarely as far as applying the concept of standards on internal processes, unless they are a result of internalizing externally specified process standards. Here the internal processes will be included in the analysis in order to point to differences between the value configurations. But it is not the prime focus and it is clear that applying the concept of standards for box E is questionable from the perspective of the literature dealing primarily with standards. Also, whereas extensive parts of the standardization literature deals only with standards which diffuse a substantial share of a market, this article also includes standardization of output or processes from one firm. This can be argued to be an important aspect since a standard on the single firm level can provide a reduction in transaction costs (cf. Barzel, 1982; Foss, 1997). Value Creation Models Value creation models (Stabell and Fjeldstad, 1998; Porter, 1985; Normann and Ramirez, 1993; 1994; Johansson and Jonsson, 2012) serve as descriptions of how value is created. Normann and Ramirez, through their concept of value constellations, pay specific attention to co-creation of value between players. Stabell and Fjeldstad s value configurations on the other hand focus more on the internal activity configuration of an organization. Stabell and Fjeldstad (1998) proposed three value configurations: the chain, shop and network configuration. At the center of each value configuration they placed value creation logics and the utilization of Thompson s (1967) technologies. The value creation logics (chain, shop and network) describe the value creation type of the configurations. Value configurations can be seen as business models (Christensen et al, 2009) although the focus primarily is on value creation (business models also tend to incorporate value capture aspects (cf. Teece, 2010)). Thus, business model innovation concerns innovation regarding the set of activities, their configuration or the parties involved in performing the activities (cf. Amit and Zott, 2012). The origin of Stabell and Fjeldstad (1998) is a development of Porter s (1985) value chain under the influence of Thompson s (1967) technologies. The typology in Thompson includes long-linked, intensive and mediating technologies. The value chain configuration, according to Stabell and Fjeldstad, utilize long-linked technologies that are associated with the mass production assembly line and of transforming input to output. The focus of mass production is the perfection of production of a standard product, repetitively and at a constant rate. The value shop configuration utilizes intensive technology to solve customer unique problems through iterative problem solving (Stabell and Fjeldstad, 1998). Intensive technology signifies that a variety of techniques is drawn on to achieve a change in some specific object (Thompson, 1967:17). Thompson also states: The intensive technology is a custom technology. Its successful employment rests in part on the availability of all the capacities potentially needed, but equally on the appropriate custom combination of selected capacities as required by the individual case or project. (Thompson, 1967:18). Typical examples of shop configurations are professional services firms such as consulting firms or medical practices. The network configuration relies on the linking of customers through mediating

5 technologies (Thompson, 1967). Stabell and Fjeldstad (1998) describe the role of the firm as supplying a network service and acting as a mediator between customers. Customers for the mediating firm in this case may be suppliers as well as buyers of other services and products than the network enabling services. The network logic utilizes network externalities (Katz and Shapiro, 1985) to create value. A classic example of a firm based on the network logic is the telecom network operator, bringing together multiple subscribers. In Johansson and Jonsson (2012) the set of three value configurations (and logics) was extended with a fourth, the package logic and configuration. The package logic is, as the shop logic, centered around problem solving, but problem solving across a range of potential customers and with the goal of making such common problem solving efficient through underlying solutions and of enabling transformation in succeeding activities. Typical examples may be firms producing designs for licensing, such as hardware IPs for the semiconductor industry. We can summarize the four value configurations and their logics in table Insert Table 1 about here Origins of Standardization in the Value Configurations Externally Applied Standardization In Stabell and Fjeldstad (1998) an explicit reference is made to Katz and Shapiro (1985) which refers to the direct network effects, i.e. single side effects. Since then the field of network effects has advanced through the definition of indirect network effects (Katz and Shapiro, 1994) and later discussion on two-sided markets (Parker and Van Alstyne, 2005; Rochet and Tirole, 2003; Eisenmann et al, 2006) and the role of platforms as multi-sided market enablers (Gawer and Cusmano, 2008). In turn, industry platforms rely on an aspect of standardization. Not all standards are platforms (Cusumano, 2010) but all platforms contain an aspect of standardization to enable network effects. This dependence on standards is noted by Stabell and Fjeldstad (1998) and has its origin as a fundamental aspect of the mediating technology to ensure compatibility (Thompson, 1967). In association with the mediating technology, standardized operation is required to handle multiple customers distributed in time as well as space. Another aspect of standards in association with value networks concerns growth of networks through inter-network connection. Such growth requires market diffusion of standards (Stabell and Fjeldstad, 1998) through industry-wide standards or through consortia or alliances. Stabell and Fjeldstad mention that value shop deliveries can include standardized solutions whereas the value creation process is designed to deal with unique cases. Johansson and Jonsson (2012) deal specifically with this, claiming that the value creation associated with the standardized solution is the basis for a unique value configuration, the package configuration (see the consequences of this in table 1, outlining four value configurations), thus facilitating standardized solutions which form a basis for internal and, in some cases, external output. In Stabell and Fjeldstad (1998: 416) the value chain has standardized output: Consider assembly line-based manufacturing as an example of a long-linked value creation technology. The assembly line is designed to produce standard products at low cost per unit by exploiting cost economies of scale. This is also noted by Thompson (1967) by referring to the outcome of activities according to the long-linked technology as single kinds of products.

6 Internally Applied Standardization The use of the concept of standardization in Thompson (1967) is also an internal one. I.e. although Thompson includes an external perspective in association with defining different technologies, standardization is in the sections related to interdependence internal as it is inspired by the definitions in March and Simon (1958). March and Simon claim standardization to concern three devices: Homogenization of semimanufactured products for subsequent steps, interchangeability between parts, and coordination of timing between subprocesses. These three are all aspects of reducing the infinite number of things in the world, potential and actual to a moderate number of well-defined varieties (March and Simon, 1958: 181). Standardization in March and Simon serves the purpose of enabling process specialization, and in turn efficiency. Whereas in March and Simon standardization is a general means of enabling process specialization, it is in Thompson a distinct way of coordinating activities. Furthermore, Thompson in the case of standardization stresses the aspects of pooled interdependence, i.e. what may involve several units or processes and not only successive processes. Successive processes however is the key example in March and Simon with regard to device three of standardization: coordinated timing. The tampering of labels (and the tampering to some extent of their content) by Thompson is beneficial in the sense that it enriches the typology with situations of stronger and more diverse mutual dependence but it also switches the role of standardization from a process specialization enabler into an activity coordination mechanism. Thus, independent of March and Simon s or Thompson s take on the labels, standardization is present from an internal perspective in all types of organizations. Table 2 summarizes standardization for activity coordination within each value configuration Insert Table 2 about here Another internal application of standardization in Thompson can be found in the repetitive nature of processes in association with the long-linked technologies and that proportions of resources involved can be standardized. Also, criteria can be established with regard to the resources involved. Thus, for the value chain, internal standardization takes place with regard to the process, the involvement of resources and the homogeneity of resources. Standardization of the process in the internal sense is similar to the concept of practices and to some extent routines. It is vital to acknowledge the differing perspectives on standardization displayed in Thompson (1967). When Thompson discusses standardization in association with technologies, he places the organization into its environmental context. On the other hand, when he discusses structure, the focus is primarily internal. Thus whereas compatibility in the first case is interorganizational in association with the mediating technology, it is in the latter case intraorganizational. However, with the wide definition Thompson applies to standardization for pooled resources it pretty much encompasses any instances where an organization makes any shared commitments or shares any resources. This paper requires a slightly more distinct use of the term standardization and thus requires viewing standards from the viewpoint of process or output, as in figure 1. Service versus Product Character Before summarizing the utilization of standards in value configurations in detail it is important to consider the most common distinction of deliveries of various organizations, i.e.

7 products versus services. The importance of recognizing this distinction here stems from the fact that aspects of it reside also in the distinction between output and process standards. Furthermore, both of these distinctions are also inherent in the value configurations. The marketing and strategy literature has dealt with the distinction between products and services for a substantial period (that services differ from goods from a marketing and strategy perspective was firmly established during the end of the 1970 s (Fisk, Brown and Bitner; 1993)). From the strategy perspective one of the first contributions which clarified the uniqueness of service firms versus product firms was Thomas (1978). Although being the subject of criticism (Winsor et al, 2002) much of the discussion has been based on the varying levels of tangibility between products and services (Rathmell, 1966; Shostack, 1977). As Rathmell (1966) points out, services are acts or processes, or as Parasurman, Zeithaml and Berry (1985) put it: performances, rather than tangible items. Thus, service organizations will rely more strongly on processes, directed at the market or individual customers, than on tangible output. And therefore, standardization of processes will play a specific role in the case of services, as services themselves are processes. In Parasuraman et al (1985) two more characteristics of services besides intangibility are mentioned: heterogeneity and inseparability. These are also inherent in some of the value configurations, and especially the shop configuration where deliveries are customized (and thus highly heterogeneous) and highly iterative towards the customer (and therefore production and consumption is inseparable). The heterogeneity aspect is difficult to relate to standardization as the goal of standardization is the opposite, to reduce heterogeneity. The issue of inseparability can to some extent be captured explicitly by considering those instances where standardization is involved in externally applied processes. By taking the nature of services versus products into account, the implications for services versus product firms is clarified. However, the prime distinction here is, as depicted in figure 1, that between output and processes. Delivery characteristics are to some extent inherent in the specific value configurations. Also, economic products are positioned somewhere along a continuum between products (goods) and services and thus between tangibility and intangibility (Rathmell, 1966). The Role of Standardization in Value Configuration Models This section summarizes the utilization of standardization in each of the value configurations based on figure 1. It will thus include externally as well as internally applied standardization in an attempt to provide an overview of the role of standardization in association with each value configuration. For external application the overview will be more detailed as it will distinguish between uniformity, compatibility and diffusion. Implications for services, due to their intangible nature, will be mentioned specifically in association with standardization of processes. Output standardization for the network configuration appears primarily for external application with a compatibility dimension in order to facilitate network effects. As an example, consider the Android operating system, including application development software, an output which is utilized by handset providers and application developers and thus enables a network effect by functioning as a platform. Of importance can also be standardization with diffusion among several platform facilitators in order to expand a value network through inter-network connection. It is also possible that the organization applies standardization of output internally to facilitate external compatibility. However, the prime focus of standardization in accordance with figure 1 is C and potentially D.

8 Process standardization in association with the network configuration is most prominent for service organizations as externally applied services with a compatibility dimension to enable network effects, i.e. execution follows a standardized pattern which enables several customers and several sides of a market to access the network (however, this is still internal execution and not market diffusing as such). Process standardization with wide diffusion is also possible, as for output standardization, in the case of expansion of a value network through inter-network connection. Standardization with internal application is also possible to facilitate external compatibility. The main types in accordance with figure 1 is type G and potentially H. Output standardization in association with the package configuration is to some extent relevant for internal application as the basis for sub-deliveries within the organization. The prime type of standardization is that for external application with high uniformity, either in the form of a product or service concept (the package configuration also includes signalling of offerings, rather than actual deliveries, to the environment such as through marketing, see Johansson and Jonsson, 2012). When it comes to diffusion, the firm may very well contribute to diffusion of its own standards or adopt external standards within a delimited area. However the prime outcome of the package logic, i.e. the packaged offering (or standardized solution) will most often retain some firm uniqueness unless the firm has internal cost advantages versus its competitors (which are then a result of uniqueness from its chain logic aspects) or if uniqueness can be protected through other means, such as unique access to other sources of value capture which benefit from complementarity (cf. Teece, 1986). Thus, the prime type of standardization is B, with A and D as potential areas of standardization. Process standardization for the package configuration may appear through internal application to enable problem solving (although the character of activities within the configuration always will contain some uniqueness as it involves solving a problem which is new or unique). Also, as in Okhomotovskiy and David (2012), conceptualizing an internally developed process, which also primarily is for guiding internal execution, may serve a purpose of sending signals to external observers. Standardization may also appear in external application as the package logic may facilitate development of a standardized process. However, this is then primarily a part of the chain logic. Thus, process standardization in association with the package configuration is primarily relevant for internal application, E in figure 1. Output standardization for the chain configuration occurs for internal application through sub-deliveries within the organization (the extent depends on whether execution is broken down into subsets which require uniformity and compatibility; compare Thompson, 1967 and March and Simon, 1958). It is also strongly present for external application as uniformity is a prime goal. As network effects are not strived for, compatibility in externally applied standardization is not necessary. Achieving high diffusion of externally applied standardized output may be favourable but is essentially an effect of diffusing a standardized solution, i.e. a result of standardizing in association with the package configuration. Thus, the prime areas of standardization of output for the chain configuration are A and B. Process standardization for the chain configuration appears for internal application in order to facilitate repetitive execution and internal efficiency over time. It also appears for external application for services in order to create uniformity. High diffusion of externally applied process standardization may be favourable if uniqueness can be protected through other means, such as unique access to other sources of value capture which benefit from complementarity (here without network effects). For instance, if a firm benefits from adhering to (or diffusing its own) process standards in an industry while maintaining uniqueness in

9 other aspects of its processes or its offerings, and thus maintaining cost advantages, differentiation, or advantages through complementarity, diffusion may be favourable. The prime character of the value shop configuration is the solving of customer unique problems. The level of external standardization is by definition low and thus this section will only highlight a few items rather than go through all of the sections of figure 1. Although internal processes and subdeliveries may have some common traits over time they also tend to have a high level of uniqueness from time to time and from project to project. In Stabell and Fjeldstad (1998), standardized solutions, are included in the value shop but this paper recognizes the central role of such as a key part of its own value creation logic and configuration in accordance with Johansson and Jonsson (2012). This is also in line with the way that Christensen et al (2009) view a standardized execution within healthcare (although they directly categorize this as a chain logic example without recognizing the importance of creating standardized solutions). An important exemption from the above standardized solutions in Stabell and Fjeldstad can be mentioned though, and that is the standardized process on the individual level, i.e. the individual professional has a standard procedure for approaching a problem through the information acquisition phase. Concluding Discussion This article highlights the areas in which standardization is prominent for each value configuration. This is important in the sense that it provides a map which could guide efforts related to value creation logic design and innovation. For the network value configuration it is central to standardize with a focus on external compatibility in order to create single or multiple sided markets. The package configuration primarily involves standardization of externally oriented output to reduce transaction costs (search and control costs) and generate scale effects relative to problem solving, often in the form of R&D efforts. Here the prime focus is on trying to establish the standardized output concept as a de facto standard or (if the innovative level of the proprietary standardized output is relatively low) align with or influence an industry standard. The appropriate action by the firm in this case will also depend on its market position and its ability to influence industry standard setting through formal or informal industry standardization and whether the firm can capitalize on complementary, unique solutions. Note that this does not exclude services, which is mentioned in the above outline, but external communication and standardization of a solution will also require codification for internal and external use and thus a sort of output. For the chain configuration the prime focus of standardization is on internal output and processes in order to create internal execution efficiency as well as of external output. And finally, standardization within the shop configuration has a primary potential on the individual level among professionals. For most organizations it is a matter of integrating two or several value creation logics into what Stabell and Fjeldstad (1998) call hybrid value configurations. Thus, from a standardization perspective, the firm often has to combine its standardization efforts in several areas. Similarly, firms in transition of their value creation logic dependence have to consider multiple types of standardization. Innovating through value creation transformation, as described in Christensen et al (2009), i.e. a shift in its set of activities, their configuration or the parties involved, could be accompanied by an alteration of standardization efforts. Christensen et al show how moves from reliance on a shop logic via a chain and finally a network logic can be seen as a disruptive innovation of the business model as opposed to disruptive innovation within the current business model. The framework proposed here and the outline of standardization in association with each configuration shows in what way standardization will have to change.

10 This paper also indicates a shortcoming in the value configuration perspective as of how to handle diffusion of a standard. This is partly due to the primary focus on network facilitation in the network configuration. Thus, less attention is paid to reduction of transaction costs or of creating market wide scale effects (it is briefly dealt with in association with diffusion above). It can also be viewed from the focus on the unique offering of the firm rather than the facilitation of market creation through influencing the institutional context of the firm. Thus, in value configurations, limited attention is paid to cooperative strategies. Cooperative strategies based on standardization is likely to require slightly different ways of configuring activities than is currently included in the configurations. Thus, further research could be directed at studying activity configurations in firms where participation and influence in consensus based standardization processes are essential for survival. By applying value configuration models this article provides a slightly new perspective on the role of standards and standardization. In that sense this article contributes to the role of standards from a firm and activity perspective, as value configurations originate from the activity based view (Porter, 1985; Sheehan & Foss, 2007), and thus put standards into the context of competitive advantage and the role of managerial influence through activities. Recognizing the role of standards in value configurations also highlights different settings depending on delivery types and the role that standards play within these settings. In particular, consideration should be taken to the role of standards in association with services. In some instances this can provide a different view on standardization efforts than present in the standardization literature. For instance, Brunsson and Jacobsson (2000a) distinguish between services and products on the one hand and processes on the other (processes being related to production, planning and control). As seen in the above discussion, it is important to recognize the external aspects of processes for a service organization, i.e. that services have a process character. By pursuing a discussion on standards in association with value configurations the use of the terms standard and standardization in organizational theory and the activity based view is highlighted. Although there is an overlap with usage of labels such as practices and routines it is apparent that the basic function of reducing variety and enabling compatibility are central to intra- as well as inter-organizational effects. Thus, in order to develop our understanding of standards and standardization further, more studies bridging these fields and clarifying the use of the concepts related to standards in each setting (and determining commonalities) should be pursued.

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14 APPENDIX Table 1 Overview of Value Configurations. (Stabell and Fjeldstad, 1998:415 and Johansson and Jonsson, 2012:548 ) Network Package Chain Shop Value creation logic Linking customers Solving common problems Transformation of inputs to products (Re)solving customer problems Primary technology Mediating Intensive Long-linked Intensive Primary activity technologies Network promotion and contract management Service provisioning Infrastructure operation Problem gathering Problem prioritization Problem decomposition Problem solving Control of parallel development Inbound logistics Operations Outbound logistics Problem finding and acquisition Problem solving Choice Execution Control/evaluation Marketing and support Main interactivity relationship logic Simultaneous, parallel Single to multiple point packaging funnel Sequential Cyclical, spiraling Primary activity interdependen ce Reciprocal Sequential Reciprocal Sequential Sequential Reciprocal Key cost drivers Scale Capacity utilization Scale/Development Capacity utilization Scale Capacity utilization Efficiency in referral Reuse of human resources Key value drivers Scale Capacity utilization Quality Reputation Business value system structure Layered and interconnected networks Packaging funnels in tree structure Interlinked chains Referred shops

15 Figure 1 Classification of Standards Output A B C D Process E F G H Internal application Uniformity Compatibility Diffusion Table 2 External application Value Configuration, Activity Interdependence and Activity Coordination. (Combination of Stabell and Fjeldstad, 1998; Johansson and Jonsson, 2012 and Thompson, 1967.) Network Package Chain Shop Activity interdependence Reciprocal Sequential Reciprocal Sequential Sequential Reciprocal Activity coordination Standardization Mutual adjustment Standardization Planned Mutual adjustment Standardization Planned Standardization Planned Mutual adjustment