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Knowing Pains: Identity Based Market Control and the Creation of the Hollywood Studio Business Model

Track: Organizational Behavior & Theory

Keywords: organizational forms, identity, market order

Organization theory scholars have recently devoted considerable attention to the development of new business models. To date much of the work has focused on the micro-social dynamics that promote recognition of common business models; by contrast, our study will focus on how specific practices adopted by firms come to be recognized as components of a larger business model and how the community of practice at the heart of the promotion of these business models is strengthened as more firms adopt those practices. From this discussion, we develop several testable hypotheses about growth and the new business model, recognition of the new business model and a reduction in competitive pressure, active coordination to avoid competition among firms that have adopted the new business model, and widespread recognition of the new business model in society as the ordered market grows. We test these hypotheses by studying the identities and dynamics of the population of for profit firms that produced and released feature films in the US until 1930. The emergence of the Hollywood studios during this period offers a very appropriate setting to test a framework focused on the development of entirely new business models. We find support for our hypotheses and close with the discussion of the theoretical contributions of our research.

Author(s):

Florian Schloderer - florian.schloderer@insead.edu
INSEAD

Stephen Mezias - stephen.mezias@insead.edu
INSEAD

 

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