An Empirical Analysis of an Organizational Continuum in a Japanese Accounting Cloud Service

An Empirical Analysis of an Organizational Continuum in a Japanese Accounting Cloud Service

Yutaka Mizuno (Graduate School of Engineering, Nagoya Institute of Technology, Nagoya, Japan) and Nobutaka Odake (Graduate School of Engineering, Nagoya Institute of Technology, Nagoya, Japan)
DOI: 10.4018/IJSSMET.2019040101

Abstract

The purpose of this article is to clarify an organizational continuum of a technological platform development in a Japanese accounting cloud service. The authors continuously have been studying an accounting cloud service, which adopts two-sided markets structure and freemium business model. As the results, the authors obtain three findings. First, the Japanese accounting cloud service, which runs its business with regional banks in retail banking, has been exploiting its platform into partners' customers. Second, it has been building up from a supply-chain platform to an industrial platform in four years since its entrepreneurship. Third, it has been transforming its cloud-to-cloud service connections from weak-tied interfaces to its own strong-tied interfaces. Therefore, starting-up cloud service providers should not only utilize weak-ties to establish a structural hole, but also should develop its own strong-ties and indirect ties to tighten upon its two-sided markets structure in its cloud ecosystem.
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In this section, this paper fills key research gaps in the existing literature: social network, innovation, network economy, and technological platforms.

Social Network

Granovetter (1983) indicated the strength of weak ties in interpersonal ties. Coleman (1988) defined social capital by its function that has a variety of entities with two elements in common: one is that they all consist of some aspect of social structure, and another is that they facilitate certain actions of actors -whether persons or corporate actors- within the structure. There are two arguments of network structures that create social capital: closure of social networks, and structural holes of social networks. Closure of social networks as social structure facilitates social capital (Coleman, 1988). Structural holes are an opportunity to broker the flow of information between people, and control the projects that bring together people from opposite sides of the hole (Burt, 2000). Burt (2001) discussed that structural holes and network closure can be brought together in a productive way. Burt (2001) concluded, “while brokerage across structural holes is the source of added value, closure can be critical to realizing the value buried in the structural holes”. Kim and Aldrich (2005) mentioned that entrepreneurs can apparently reap substantial returns on their social capital and boost their chances of commercial success. They offered a simple scenario in Figure 1 that entrepreneurs can reach out within two steps to one million potential resource providers by leveraging their direct ties.

Figure 1.

The potential of indirect ties (Source: Kim and Aldrich, 2005 p. 59)

IJSSMET.2019040101.f01

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