Viability mechanisms in market systems: prerequisites for market shaping

Peters, Linda D.; Nenonen, Suvi; Polese, Francesco; Frow, Pennie; Payne, Adrian

Abstract

Purpose
This paper develops a conceptual framework based on the identification and examination of the mechanisms (termed “viability mechanisms”) under which market-shaping activities yield the emergence of a viable market: one able to adapt to the changing environment over time while remaining stable enough for actors to benefit from it.

Design/methodology/approach
The paper employs extant literature to build a conceptual framework identifying viability mechanisms for market shaping and a case illustration examining how a viable market for Finnish timber high-rise buildings was created. The case exemplifies how the identified viability mechanisms are practically manifested through proactive market-shaping.

Findings
The proposed conceptual framework incorporates four viability mechanisms identified in the extant literature: presence of dissipative structures, consonance among system elements, resonance among system elements, and reinforcing and balancing feedback loops. It illustrates how these mechanisms are manifested in a contemporary case setting resulting in a viable market.

Practical implications
First, firms and other market-shaping organizations should look for, or themselves foster, viability mechanisms within their market-shaping strategies. Second, as failure rates in innovation are extremely high, managers should seek to identify or influence viability mechanisms in order to avoid premature commercialization of innovations.

Originality/value
This research identifies how these viability mechanisms permit markets to emerge and survive over time. Further, it illuminates the workings of the non-linear relationship between actorlevel market-shaping actions and system-level market changes. As such, it provides a “missing link” to the scholarly and managerial discourse on market-shaping strategies. Unlike much extant market-shaping literature, this study draws substantively on the system

Citation

Peters, L. D., Nenonen, S., Polese, F., Frow, P., & Payne, A. (2020). Viability mechanisms in market systems: prerequisites for market shaping. Journal of Business and Industrial Marketing, 35(9), 1403-1412. https://doi.org/10.1108/jbim-04-2019-0139

• Journal Article Type: Article
• Acceptance Date: Apr 27, 2020
• Online Publication Date: May 21, 2020
• Publication Date: May 21, 2020
• Deposit Date: Apr 28, 2020
• Publicly Available Date: May 21, 2020
• Journal: Journal of Business & Industrial Marketing
• Print ISSN: 0885-8624
• Electronic ISSN: 0885-8624
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 35
• Issue: 9
• Pages: 1403-1412
• DOI: https://doi.org/10.1108/jbim-04-2019-0139
• Keywords: Market-shaping; markets-as-systems; systems theory; viability mechanisms; case study
• Public URL: https://nottingham-repository.worktribe.com/output/4353745
• Publisher URL: https://www.emerald.com/insight/content/doi/10.1108/JBIM-04-2019-0139/full/html