Competing Standard-Setting Organizations

Abstract

Standard-setting organizations (SSOs) establish goal-directed networks for innovators to jointly shape technology and markets through standards. The degree to which this can succeed depends to a large extent on network characteristics, which may differ substantially between SSOs. Many technological fields face intense competition between SSOs. Choosing the right one is thus a key strategic decision for innovators. Simultaneously, SSOs must reflect members’ preferences in their network set-ups and governance. Yet, little is known about these preferences. Based on extant literature, we derive hypotheses about how three themes of network attributes (membership base, rules, transaction costs) and contextual factors drive decision makers’ preferences. We conduct a comprehensive choice experiment with 141 standardization professionals in the Internet of Things field. Based on our data, we provide a more realistic indication of what firms value in SSOs than has been previously available. We also discuss our results’ implications for studying networks in other contexts.