The context of value co-creation is increasingly conceptualized as service systems (Maglio et al., 2009; Ng et al., 2009) or service ecosystems (Lusch and Vargo, 2014; Akaka and Vargo, 2015). Service ecosystems are akin to natural ecosystems in their ability to emerge and go through profound changes over time (Mars et al., 2012; Lusch et al., 2016). However, service ecosystems differ in that they are influenced by actor-created institutions and institutional arrangements (Vargo and Lusch, 2016). Or, as Mars et al. (2012: 277) suggest: actors in service ecosystems "create strategies and structures (e.g., institutions)" and thus "organizations can design and master-plan systems and networks". Therefore, service-dominant logic acknowledges that actors can influence how service ecosystems evolve by affecting the institutional arrangements. Institutional work (Lawrence and Suddaby, 2006) has investigated how actors can influence institutions surrounding them (Battilana et al., 2009; Garud et al., 2007). However, Phillips and Tracey (2007) argue that more research is needed about the capabilities actors need to conduct institutional work successfully. The connection between capabilities and actors' ability to influence institutional arrangement and, thus, service ecosystems has been highlighted in the dynamic capabilities discourse. Recently Teece (2011: 75) argues that the "coordinating and resource-allocating activities performed by managers shape markets as much as markets shape business", and Teece (2016: 211) suggests that "dynamic capabilities help enable an enterprise to [?] build and renew resources, assets [?] that lie both within and beyond its boundaries, reconfiguring them as needed to innovate and respond to (or bring about) changes in the market" [emphasis added]. Therefore, our research question is: what capabilities do firms use to shape service ecosystems? The paper investigates this question using grounded theory (Glaser & Strauss, 1967), building on a multi-national sample of 82 interviewees from 21 companies, who have successfully shaped their service ecosystem. Informed by Gioia et al. (2013), we categorized the data into informant-centric first order constructs (a total of 57), theory-centric second order themes (a total of 16), and overarching aggregate dimensions (a total of 5). The aggregated dimensions are grouped into two distinct capability categories: inducing capabilities, which and are directly responsible for inducing a change in the service ecosystem (second order themes: influencing sales items, price and pricing, customers and use, competing providers, matching methods, supply network, representations, norms), and augmenting capabilities, which enable, enhance or moderate the shaping efforts (second order themes: value creation orientation, systemic thinking, market visioning, business model development, partnering, credibility building, championing change). Our analysis suggests that inducing capabilities are context-specific, whereas augmenting capabilities are more generic in nature. As a conclusion we develop a conceptual model describing how inducing and augmenting capabilities relate to overall change in service ecosystems and to each other.
2017.