Strategies of platform governance and complementor adaptation when a platform is regulated

Abstract

This PhD thesis explores the responses of a platform owner and its complementors when the platform is administratively regulated. First, leveraging a longitudinal case study on the industry of online drug sales in China, I traced the responses of Cure Platform (pseudonym) across three distinct regulatory periods. Rather than targeting policy makers to change regulations, the platform owner leveraged regulations to navigate behaviors of online pharmacies (complementors), thus shaping their interdependence in each regulatory period. I identified two shared conditions of shaping interdependence: platform incorporation (i.e., platform draws in complementors by binding them with regulatory impacts) and regulatory spillover (i.e., regulatory impacts push complementors to accept platform solutions to regulations). The two conditions enabled the platform to manage online pharmacies when experiencing regulations. Building upon the findings, I proposed a framework of “managing complementors with regulations” to offer a new form of platform governance.
Second, I investigated the adaptation of complementors. When a platform is regulated, its complementors face the dilemma of adaptation, as platform solutions to regulations may affect complementors but complementors are usually inferior to negotiating with the platform. Using a multiple-case study approach with the same research context, I compared and contrasted adaptation strategies of six purposefully selected online pharmacies in two opposite regulatory periods: a strict regulation period and a favorable policy period. I found that instead of accepting platform solutions to regulations, online pharmacies adopted three distinct adaptation strategies—the dependent, the aggregator, and the jumper—to capture value from either platform solutions to regulations or institutional disturbance brought by regulations. By doing so, they navigated through different regulations while capturing value from platforms. Building upon the three strategies, I developed a model of “exploiting the great by the small” to elaborate how complementors can make adaptation when platform is regulated.
In addition to providing insights for platform governance, complementor strategies, and policy makers, this thesis also extends theoretical perspectives on institutional entrepreneurship and interorganizational dependence. The assumption of institutional entrepreneurship argues that entrepreneurs should transform existing institutional structures to realize the interests they value highly. I demonstrate that rather than changing institutions to capture value, organizations could also reverse the direction by using the constrained institutions to reap value from others, such as using institutional structures to tame partners. Regarding interorganizational dependence, while prior literature emphasizes organizational efforts to overturn dependence asymmetry to gain dependence advantage, my study suggests that eliminating the asymmetry may cripple, rather than benefit small organizations in an uncertain institutional environment. This is because it simultaneously reduces their alternative options by removing the foundation of partners’ opportunism—a key element that allows small organizations to free ride solutions provided by their great partners to handle the uncertainty.

Date of Award	15 Nov 2025
Original language	English
Awarding Institution	University of Nottingham
Supervisor	Haibo Zhou (Supervisor) & Jin Chen (Supervisor)