Explaining Standard Dominance: The Effect of Influential Network Positions and Structural Holes

Abstract

Innovative systems and infrastructures such as smart grids, the internet of things, cities, or highways require generally accepted common compatibility standards to enable components of such systems to interoperate. In some cases, various standards are developed by competing standards organizations, often resulting in standards battles. This paper focuses on factors that affect the outcome of these standards battles, and, specifically, on the effect of an influential position in an industry-wide standards networks and the existence of structural holes in that network on standard dominance. The empirical context is the consumer electronics, telecommunications, and ICT arenas. We conduct a study of 103 standards organizations from 2000 to 2011. We find support for the hypothesis that standards that are supported by standards organizations that have a central position in the industry-wide standards network have a high chance of achieving dominance. Thus, we show that apart from complementary assets and innovation strategies, firms can also adopt specific networking strategies to achieve a successful standard.