Technology-Enabled Innovation, Industry Transformation and the Emergence of Ambient Organizations

Technology-enabled business innovation may present the potential to structurally transform traditional industry practice, but uncertainty remains as to where and how such transformations might be accomplished. To maintain enterprise competitiveness and agility during these times of structural change, a frequent suggestion for strategic management is to seek loosely coupled partnerships or alliances with best practice providers for non-core functions. Original research into the nature of alliances in the financial services industry reveals the presence of tightly coupled, technology-enabled ventures that deliver core services electronically across organizational and industry boundaries. These alliances represent an emerging specialized organizational form, the virtual or ambient organization. Theoretical and practitioner literature provide little reference to ambient organizations, by any name, and confuse the terms: alliances, strategic partnerships and virtual organizations. Tightly coupled, technology-enabled ambient organizations that can cross industry boundaries provide a previously unrecognized linkage between organizational form and industry transformation. Analysis of four instances of ambient organization in and across three industries produces a model of their characteristics and features. Theoretical and empirical implications are examined.