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The open innovation literature focuses on the organizational configurations suited for leveraging external contributions in innovation ecosystems. Less is known about the process by which a firm transforms its ecosystem relationships to establish the envisioned configuration. Such transformation is ruptured by competing values surfaced at the boundary to other ecosystem participants. Drawing on competing values theory, we develop a process perspective with which to understand the transformation of ecosystem relationships in digital innovation. Empirically, we conducted case study research on Sony Ericsson's efforts to increase external contributions in their development of mobile devices. We identify and analyze five value competitions (VC) over the 8-year process: each one of these VC involved tensions between Sony Ericsson's ambitions and the ecosystem and its established relationships with platform owners, operators, and competitors. Our process model provides new insight into how and why the process of ecosystem transformation involves tensions characterized competing values and how such tensions feed new ecosystem relationships. Our research extends existing open innovation theory and provides a basis for continued investigation of digital technology and ecosystem relationships.
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