The advent of big data is fundamentally changing the business landscape. We open the ‘black box’ of the firm to explore how firms transform big data in order to create value and why firms differ in their abilities to create value from big data. Grounded in detailed evidence from China, the world’s largest digital market, where many firms actively engage in value creation activities from big data, we identify several novel features. We find that it is not the data itself, or individual data scientists, that generate value creation opportunities. Rather, value creation occurs through the process of data management, where managers are able to democratize, contextualize, experiment and execute data insights in a timely manner. We add richness to current theory by developing a conceptual framework of value creation from big data. We also identify avenues for future research and implications for practicing managers.
BakerTNelsonRE (2005) Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative Science Quarterly50: 329–366.
4.
BaldwinCYVon HippelE (2011) Modelling a paradigm shift: From producer innovation to user and open collaborative innovation. Organization Science22(6): 1399–1417.
5.
BarneyJB (1986) Strategic factor markets: Expectations, luck, and business strategy. Management Science32(10): 1231–1241.
6.
BarneyJB (1991) Firm resources and sustained competitive advantage. Journal of Management17(1): 99–120.
7.
BarneyJB (2001) Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management27(6): 643–650.
8.
BarneyJBArikanAM (2001) The resource-based view: Origins and implications. In: HittMAFreemanREHarrisonJS (eds) Handbook of Strategic Management. Oxford: Blackwell, pp. 124–188.
9.
BharadwajASEl SawyMAPavlouPAet al. (2013) Digital business strategy: Toward a next generation of insights. MIS Quarterly37(2): 471–482.
10.
BinghamCBEisenhardtKMFurrNR (2007) What makes a process a capability? Heuristics, strategy, and effective capture of opportunities’. Strategic Entrepreneurship Journal1: 27–47.
11.
BrandenburgerAMNalebuffBJ (1996) Co-Opetition. New York: Doubleday.
12.
BrownSLEisenhardtKM (1997) The art of continuous change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations. Administrative Science Quarterly42: 1–34.
13.
BrownSLEisenhardtKM (1998) Competing on the Edge: Strategy as Structured Chaos. Boston, MA: Harvard Business School Press.
14.
ChenHChiangRHLStoreyVC (2012) Business intelligence and analytics: From big data to big impact. MIS Quarterly36: 1165–1188.
15.
ChesbroughH (2003) Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston, MA: Harvard Business School Press.
16.
ChesbroughHWAppleyardMM (2007) Open innovation and strategy. California Management Review50(1): 57–76.
17.
ChettySK (1996) The case study method for research in small- and medium-sized firms. International Small Business Journal15: 73–85.
18.
CurleyMFormicaP (2013) The Experimental Nature of New Venture Creation, Capitalizing on Open Innovation 2.0. London: Springer.
19.
DavenportTHPatilDJ (2012) Data scientist: The sexiest job of the 21st century. Harvard Business Review90: 70–76.
20.
DavisJPEisenhardtKMBinghamCB (2009) Optimal structure, market dynamism, and the strategy of simple rules. Administrative Science Quarterly54(3): 413–452.
21.
DoanARamakrishnanRHalevyAY (2011) Crowdsourcing systems on the world-wide web. Communications of the ACM54(4): 86–96.
22.
DyerJHSinghH (1998) The relational view: Cooperative strategy and sources of inter organizational competitive advantage. Academy of Management Review23(4): 660–679.
23.
EisenhardtKM (1989) Building theories from case study research. Academy of Management Review14: 532–550.
24.
EisenhardtKMGraebnerME (2007) Theory building from cases: Opportunities and challenges. Academy of Management Journal50(1): 25–32.
25.
EisenhardtKMMartinJA (2000) Dynamic capabilities: What are they?Strategic Management Journal21(10–11): 1105–1121.
26.
EisenhardtKMSantosF (2001) Knowledge-based view: A new theory of strategy. In: PettigrewAMThomasHWhittingtonR (eds) Handbook of Strategy and Management. London: SAGE, pp. 139–164.
27.
FelinTHesterlyWS (2007) The knowledge-based view, nested heterogeneity, and new value creation: Philosophical considerations on the locus of knowledge. Academy of Management Review32: 195–218.
28.
GeorgeGHaasMRPentlandA (2014) Big data and management. Academy of Management Journal57(2): 321–326.
29.
GilesJ (2012) computational social science: Making the links. Nature488(7412): 448–450.
30.
GlaserBGStraussAL (1967) The Discovery of Grounded Theory: Strategies for Qualitative Research. Hawthorne, NY: Aldine.
31.
GlazerR (1991) Marketing in an information-intensive environment: Strategic implications of knowledge as an asset. Journal of Marketing55: 1–19.
32.
GnyawaliDRMadhavanR (2001) Cooperative networks and competitive dynamics: A structural embeddedness perspective. Academy of Management Review26: 431–445.
33.
GoesPB (2014) Big data and IS research. MIS Quarterly38(3): 3–6.
34.
GrantRM (1991) The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review33(3): 114–135.
35.
GrantRM (1996) Prospering in dynamically-competitive environments: Organizational capability as knowledge integration. Organization Science7: 375–387.
36.
GulatiRGargiuloM (1999) Where do interorganizational networks come from?American Journal of Sociology104(5): 1439–1493.
37.
HanKWOhKSImRMet al. (2012) Value co-creation and wealth spill over in open innovation alliances. MIS Quarterly36(1): 1–26.
HoopesDGMadsenTLWalkerG (2003) Why is there a resource-based view? Toward a theory of competitive heterogeneity. Strategic Management Journal24(10): 889–902.
40.
HuberGP (1984) The nature and design of post-industrial organizations. Management Science30: 928–951.
41.
JickTD (1979) Mixing qualitative and quantitative methods: Triangulation in action. Administrative Science Quarterly24: 602–611.
42.
KhannaTPalepuK (2000) The future of business groups in emerging markets: Long-run evidence from Chile. Academy of Management Journal43(3): 268–285.
43.
KogutBZanderU (1996) What firms do? Coordination, identify and learning. Organization Science7(5): 502–518.
44.
KraaijenbrinkJSpencerJCGroenAJ (2010) The resource-based view: A review and assessment of its critiques. Journal of Management36: 349–372.
45.
KrauseDHandfieldRBBeverlyBT (2007) The relationships between supplier development, commitment, social capital accumulation and performance improvement. Journal of Operations Management25: 528–545.
46.
LangleyAAbdallahC (2011) Templates and turns in qualitative studies of strategy and management. Research Methodology in Strategy and Management6: 201–235.
47.
LaursenKSalterA (2006) Open for innovation: The role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal27: 131–150.
48.
LaValleSLesserEShockleyRet al. (2011) Big data, analytics and the path from insights to value. MIT Sloan Management Review52: 20–31.
49.
LavieD (2006) The competitive advantage of interconnected firms: An extension of the resource-based view. Academy of Management Review31(3): 638–658.
50.
LazerDPentlandAAdamicL (2009) Computational social science. Science323(5915): 721–723.
51.
LepakDPSmithKGTaylorMS (2007) Value creation and value capture: A multi-level perspective. Academy of Management Review32(1): 180–194.
52.
LincolnYSGubaEC (1985) Naturalistic Inquiry. Beverly Hills, CA: SAGE.
53.
LippmanSARumeltRP (2003) A bargaining perspective on resource advantage. Strategic Management Journal24: 1069–1086.
54.
LockeK (2001) Grounded Theory in Management Research. Thousand Oaks, CA: SAGE.
55.
McAfeeABrynjolfssonE (2012) Big data: The management revolution. Harvard Business Review90(10): 60–68.
56.
McKinsey Global Institute (2011) Big Data: The Next Frontier for Innovation, Competition, and Productivity. Lexington, KY: McKinsey & Company.
57.
MadhokATallmanSB (1998) Resources, transactions and rents: Managing value through interfirm collaborative relationships. Organization Science9: 326–339.
58.
MahoneyJT (1995) The management of resources and the resource of management. Journal of Business Research33: 91–101.
59.
MahoneyJTPandianJR (1992) The resource-based view within the conversation of strategic management. Strategic Management Journal13: 363–380.
60.
MairJMartiI (2006) Social entrepreneurship research: A resource of explanation, prediction and delight. Journal of World Business41: 36–44.
61.
MairJMartiI (2009) Entrepreneurship in and around institutional voids: A case study from Bangladesh. Journal of Business Venturing24(5): 419–435.
62.
MartinJAEisenhardtKM (2010) Rewiring: Cross-business-unit collaborations and performance in multi-business organizations. Academy of Management Journal53(2): 265–301.
63.
MilesMBHubermanAM (1994) Qualitative Data Analysis: An Expanded Sourcebook. Thousand Oaks, CA: SAGE.
NonakaI (1994) A dynamic theory of organizational knowledge creation. Organization Science5(1): 14–37.
66.
OkhuysenGAEisenhardtKM (2002) Integrating knowledge in groups: How formal interventions enable flexibility. Organization Science13: 370–386.
67.
ParkerGVan AlstyneM (2005) Two-sided network effects: A theory of information product design. Management Science51: 1494–1504.
68.
PenroseET (1959) The Theory of the Growth of the Firm. New York: John Wiley & Sons.
69.
PeredoAMChrismanJJ (2006) Toward a theory of community-based enterprise. Academy of Management Review31(2): 309–328.
70.
PerryC (1998) Processes of a case study methodology for postgraduate research in marketing. European Journal of Marketing32: 785–802.
71.
PeterafMA (1993) The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal14: 179–191.
72.
PoratMU (1974) Defining an Information Sector in the U.S. Economy. Stanford, CA: Institution for Communication Research, Stanford University.
73.
PriemRL (2007) A consumer perspective on value creation. Academy of Management Review32: 219–235.
74.
PriemRLButlerJE (2001a) Is the resource-based view a useful perspective for strategic management research?Academy of Management Review26: 22–40.
75.
PriemRLButlerJE (2001b) Tautology in the resource-based view and the implications of externally determined resource value: Further comments. Academy of Management Review26: 57–66.
76.
RaiA (2016) Editor’s comments: Synergies between big data and theory. MIS Quarterly40(2): iii–xi.
77.
RindovaVKothaS (2001) Continuous morphing: Competing through dynamic capabilities, form, and function. Academy of Management Journal44: 1263–1280.
78.
RothaermelFTHittMJobeL (2006) Balancing vertical integration and strategic outsourcing: Effects on product portfolios, new product success, and firm performance. Strategic Management Journal27: 1033–1056.
79.
RumeltRP (1984) Towards a strategic theory of the firm. In: LambB (ed.) Competitive Strategic Management. Englewood Cliffs, NJ: Prentice Hall, pp. 556–570.
80.
SimonHA (1991) Bounded rationality and organisational learning. Organization Science2: 125–134.
81.
SirmonDGHittMAIrelandRD (2007) Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review32: 273–292.
82.
SirmonDGHittMAIrelandRDet al. (2011) Resource orchestration to create competitive advantage: Breath, depth and life cycle effects. Journal of Management37(5): 1390–1412.
83.
StiglitzJE (1975) Information and economic analysis. IMSSS technical report 155. Stanford, CA: Stanford University.
84.
TavakoliASchlagweinDSchoderD (2015) Open strategy: Consolidated definition and processual conceptualization. In: ICIS 2015 proceeding, Fort Worth, TX, 13–16 December.
ThompsonJD (1967) Organizations in Action – Social Science Bases of Administrative Theory. New York: McGraw-Hill.
87.
TsuiAS (2007) From homogenization to pluralism: International management research in the academy and beyond. Academy of Management Journal50(6): 1353–1364.
88.
VenkataramanS (1997) The distinctive domain of entrepreneurship research: An editor’s perspective. In: KatzJBrockhausR (eds) Advances in Entrepreneurship, Firm Emergence and Growth, vol. 3. Greenwich, CT: JAI Press, pp. 119–138.
89.
WeickKE (1993) The collapse of sensemaking in organizations: The Mann Gulch disaster. Administrative Science Quarterly38: 628–652.
90.
WestJ (2003) How open is open enough? Melding proprietary and open source platform strategies. Research Policy32(7): 1259–1285.
91.
WhettenDA (2009) An examination of the interface between context and theory applied to the study of Chinese organizations. Management and Organization Review5(1): 29–55.
92.
WhittingtonR (2014) Information system strategy and strategy as practice: A joint agenda. Journal of Strategic Information Systems23(1): 87–91.
YinRK (2003) Case Study Research: Design and Methods, 3rd edn.Thousand Oaks, CA: SAGE.
95.
ZengJGlaisterKW (2016) Competitive dynamics between multinational enterprises and local internet platform companies in the virtual market in China. British Journal of Management27(3): 479–496.
96.
ZolloMWinterSG (2002) Deliberate learning and the evolution of dynamic capabilities. Organization Science13(3): 339–353.
97.
ZottC (2003) Dynamic capabilities and the emergence of intraindustry differential firm performance: Insights from a simulation study. Strategic Management Journal24: 97–125.
