U N I V E R S I TAT I S O U L U E N S I SACTAA

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OULU 2007

A 483

Anri Kivimäki

WIRELESS TELECOMMUNICATION STANDARDIZATION PROCESSES—ACTORS' VIEWPOINT

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Anri K

ivimäki

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A C T A U N I V E R S I T A T I S O U L U E N S I SA S c i e n t i a e R e r u m N a t u r a l i u m 4 8 3

ANRI KIVIMÄKI

WIRELESS TELECOMMUNICATION STANDARDIZATION PROCESSES—ACTORS' VIEWPOINT

Academic dissertation to be presented, with the assent ofthe Faculty of Science of the University of Oulu, for publicdefence in Raahensali (Auditorium L10), Linnanmaa, onMay 23rd, 2007, at 12 noon

OULUN YLIOPISTO, OULU 2007

Copyright © 2007Acta Univ. Oul. A 483, 2007

Supervised byProfessor Juhani WarstaProfessor Veikko Seppänen

Reviewed byProfessor Kalle LyytinenProfessor Eric Monteiro

ISBN 978-951-42-8412-0 (Paperback)ISBN 978-951-42-8413-7 (PDF)http://herkules.oulu.fi/isbn9789514284137/ISSN 0355-3191 (Printed)ISSN 1796-220X (Online)http://herkules.oulu.fi/issn03553191/

Cover designRaimo Ahonen

OULU UNIVERSITY PRESSOULU 2007

Kivimäki, Anri, Wireless telecommunication standardization processes—actors'viewpointFaculty of Science, University of Oulu, Department of Information Processing Science, Universityof Oulu, P.O.Box 3000, FI-90014 University of Oulu, Finland Acta Univ. Oul. A 483, 2007Oulu, Finland

AbstractInformation and communication technology are among the fastest growing industry sectors globally.One enabler for fast grow is created standards, which enables compatibility between technologies.This dissertation aims to create new knowledge concerning how standardization affects businessesthat develop and sell technologies and technology-based products and services. More precisely thisstudy focuses on the wireless telecommunication, which needs standards to function globally. Thisglobalization and standardization development sets requirements for companies and organizations inthe business; they are expected to be flexible, innovative, efficient, international, well resourced andcooperative. In order to achieve this on a global scale multiple actors – such as manufacturers,operators and developers – need to negotiate with a number of regional standardization bodies.

The standardization environment is under constant change; however, standards as such shouldremain stable. Understanding standardization processes has become important because newtechnologies, new forms of business organizations, trade issues and new institutions are emerging.All actors' in the standardization process should more thoroughly understand their role in the process,and recognize the important relations between the stages. From the actors' point of view the mostbeneficial issue in the wireless standardization process are networking and legitimacy of the process.

In this research we are interested in researching empirically how actors' can possibly benefit fromstandardization processes in their businesses. As actors' we regard as manufacturers, operators,regulators, standardization organizations and SMEs. It is important to identify key factors/inhibitorsthat shape the standardization process from the actors' point of view.

The theoretical framework of this study is built on the institutional theory. This theory provides aperspective as to how the actors can assimilate and act as part of the standardization environment. Thebroad reach of the institutional perspective is its major strength, making it potentially relevant to alllevels of analyzis and all time spans, from micro-level interactions to large-scale changes in nation-states. Standardization creates opportunities for actors such as market and technology insights,internationalizing, and networking.

The a priori dynamic process model developed shows the complexity and length of the wirelessstandardization process. From the process point of view the important points are the openness of theprocess, networking, cooperation, technological points and changes in the process. The new pointswhich arose from the material include IPR issues, research, open atmosphere, globalization, licensingissues, flexible working procedure and interpretation of standards and document management.

The empirical data of this study is derived by interviews. The interviews were carried out duringautumn 1998, 2000 and winter 2004. 35 experts were interviewed from different bodies involved in3rd generation wireless standardization and software companies.

Keywords: business, institutional theory, regulator, SME, standardization environent,standardization organizations, wireless standardization process

For my sons Joona and Henrik

Acknowledgements

I first entered the world of wireless standardization when I got my first permanent posi-tion after gaining my BA. The position was as a research and development assistant inNokia Mobile Phones, and this was over a decade ago. I gained real experience of theworld of standardization and the roles of different actors. I must say that at the time I nev-er imagined that I would some day write a thesis on the topic. After some years at work Iwent back to the University of Jyväskylä to continue my studies and I found myself in theStamina Group (1998-2000, funded by the Finnish Academy), which was doing researchinto telecommunications standardization. I must thank Prof. Kalle Lyytinen for taking meinto his group to write my Masters thesis on 3rd generation telecommunications standard-ization. I am also grateful to my former colleagues in the Stamina group: warm thanks toJuha Knuuttila, Vladslav Fomin, Ari Manninen and Ping Gao. I will always rememberthe interviews which we did together and discussions about standardization in our coffeebreaks. Now standardization research has led us to different places. In 2001, I foundmyself working as a senior technology advisor for Tekes in Oulu. The day-to-day worktook up my time for a couple of years, but I didn’t forget the research.

The research started to advance when I joined INFWEST.IT. At that time I also metmy supervisors. The INFWEST.IT seminars were important because of their interestinglectures and the practical advice given by the senior lecturers, but also for the peer sup-port provided during the seminars. As an independent researcher it was a great place tomeet other researchers and share experiences. I started my research again in autumn 2003,when I was expecting my first baby. My supervisors, Professor Juhani Warsta and Profes-sor Veikko Seppänen have not spared their efforts. I thank them for their guidance, inspi-ration and endless positive attitude towards this research. They have always been avail-able to read my work-in-progress writings, and their feedback has been very valuable andencouraging to me. I have been conducting this research alone, and without our regularmeetings during the process it would have been difficult. I also want to express my mostsincere and special thanks to my external reviewer, Professor Michael D. Myers, Associ-ate Dean (Postgraduate and Research) of the University of Auckland Business School. Heread the theory part in its early stages, and his comments reassured me that I was on theright path.

As with any scientific research, the role of empirical data is invaluable. The empiricalpart of the study would not have been possible without the co-operation of the differentactors: the manufacturer, operators, regulators, standardization organizations and SMEs.Since anonymity is to be preserved, no names are cited here. Without these people, how-ever, the claims made in this thesis could not have been empirically explored or validated.I would like to express my gratitude to all these companies and individuals in Finland,Belgium, Germany, Denmark, Switzerland and France for participating in this researchproject and sharing their experiences and ideas.

I would like to thank the two pre-examiners of this study, Kalle Lyytinen, Iris S. Wol-stein Professor in the Department of Information Systems at the Weatherhead School ofManagement, Case Western Reserve University, US, and Professor Eric Monteiro fromthe Department of Informatics, University of Trondheim, Norway, for their valuable com-ments and recommendations.

I am grateful to Mark Smith, who helped by proofreading the English of my thesis. Iam most grateful to Helena Saari, for checking the layout of this dissertation.

The financial support of INFWEST.IT, the Tauno Tönning Foundation and the AlfredKordelin Foundation has further assisted my work. With their support I was able to payfor child care for my two little boys, and work and concentrate on writing at home.

Finally, I thank my family and friends, many of whom do not even have any idea whatmy thesis is all about. Thanks for occupying my mind with other important issues. I wishto express my warmest gratitude to my parents, Sisko and Pentti. I want to thank my dearsisters, Outi and Tiina and their families, for their love, friendship and for joyful momentstogether. I have been very lucky to been blessed with great friends in my life. You have allput up with me through the times of stress, shared the joys and sorrows of life with me,encouraged me onwards, and have had faith in my ability to get this work completed.Thank you from the bottom of my heart. Also I want to thank my parents-in-law Mailaand Kalevi. Thanks also to Professor Helena Karasti, with whom I could share not onlymy research problems, but also my child care and sailing experiences. I want also to thankmy working colleagues in Oulu and Helsinki for their interest and support for this work.

Without help with child care this work would have been impossible to do. The warm-est thanks I owe my mother Sisko and mother-in-law Maila, whose took care not only ofmy boys, but also of me, when I was writing. Also I want to warmly thank Anja, who wasso kind, caring and flexible when taking care of the boys.

Last but not least, most significant for the success of this research project was theunceasing and wholehearted support that my family gave me during this process. Thankyou, my loved ones, Timo, Joona, and Henrik, for being with me at all times. You havefilled my days with joy and happiness and reminded me what is important in life.

Oulu, February, 2007

Anri Kivimäki

Abbreviations

3G Third Generation3G.IP Third Generation Internet Protocol3GPP Third Generation Partnership Project3GPP2 the counterpart of 3GPP, CDMA2000-based members of MT-2000

familyACTS Advanced Communication Technologies and ServicesAMPS Advanced Mobile Phone SystemANSI American National Standard InstituteAPSR American Political Science ReviewARIB Association of Radio Industries and BusinessARP (Autoradiopuhelin) Car Radio TelephoneASP Application Service ProviderATM Asynchronous Transfer ModeCCIR International Radio-Communication Consultative Committee (ITU)DCS Digital Cellular SystemCD Compact DiskCDMA Code Division Multiple AccessCEN/CENELEC European Committee for Standardization/ European Committee for

Electrotechnical StandardizationCEPT Conference of European Posts and TelecommunicationCR Change RequestCRP Change Request ProcedureDECT Digitally Enhanced Cordless Telecommunication SystemEDGE Enhanced Data rates for GSM EvolutionERO European Radio OfficeETSI European Telecommunication Standardization InstituteEU European UnionFCC Federal Communication CommissionFDD Frequency Division DuplexFOMA Freedom of Multimedia AccessFPLMTS Future Public Land Mobile Telecommunication Standardization

FSO Formal Standardization OrganizationGDP Gross Domestic ProductGERAN GSM/EDGE Radio Access NetworkGII Global Information InfrastructureGPRS General Packet Radio SystemGSM Groupe Spécial Mobile/Global System MobileGSM MoU/ Groupe/Global System Mobile memorandum of UnderstandingGSM AllianceHTML Hypertext Markup LanguageHSUPA High Speed Uplink Packet AccessIBM International Business MachinesICT Information and Communication TechnologyIETF Internet Engineering Task ForceIMT-2000 International Mobile Telecommunication (ITU)IP Internet ProtocolIPR Intellectual Property RightsIRE Institute of Radio EngineersIS Interim StandardISDN Integrated Services Digital NetworkISO International Organization for StandardizationIT Information TechnologyITU International Telecommunication UnionJPEG Joint Photographic Experts GroupLTS Large Technical SystemsMEXE Mobile Station Execution EnvironmentMFIF Multi-Functions Integrated FactoryMP3 MPEG-1 Audio Layer-3MPEG Moving Pictures Experts GroupMPT Ministry of Post and TelecommunicationNMT The Nordic Mobile TelephoneNSO National Standardization OrganizationNTT Nippon Telegraph and Telephone corporationOECD Organisation for Economic Co-operation and DevelopmentOMA Open Mobile AlliancePC Personal ComputerPCS Personal Communication SystemsPMR Public Mobile RadioPSTN Public Switched Telephone NetworkPTT Ministry or Department of Post, Telephone and TelegraphR&D Research and DevelopmentRACE Research in Advanced Communications in EuropeRAST Radio Standardization SDO Standard Developing OrganisationSIM Subscriber Identity ModuleIG Special Interest GroupSME Small and Medium Enterprise

SMG Special Mobile GroupSyncML Synchronization Markup LanguageTACS Total Access Communication SystemTC Technical CommitteeTCP/IP Transmission Control Protocol/Internet ProtocolTDD Time Division DuplexTDMA Time Division Multiple AccessT1 Telecomm Industry AssociationTIA Telecom Industry AssociationTSG Technical Specification GroupTTC Telecommunication Technology CommitteeUK United KingdomUMTS Universal Mobile Telecommunication SystemsUN United NationsUNECE United Nations Economic Commission for EuropeUS United StatesUTRA UMTS Terrestrial Radio Access/ Universal Terrestrial Radio AccessWAP Wireless Application ProtocolWCDMA Wideband CDMAVCR Video Cassette RecorderWG Working GroupVHS Video Home SystemWi-Fi Synonymous with WLAN technologies based predominantly on the

IEEE 802.11 standardWi-Max Worldwide Interoperability for Microwave AccessWLAN Wireless Local Area NetworkWRC/WARC World (Administration) Radio Conference WTO World Trade OrganizationWWW World Wide WebXML Extensive Markup Language

Contents

AbstractAcknowledgementsAbbreviationsContents1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171.2 Research problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201.3 Motivation of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

1.3.1 Personal motivation for solving the research problem . . . . . . . . . . . . . . . . . . 221.3.2 The motivation – understanding the essence of standardization . . . . . . . . . . 231.3.3 Wireless technology development in numbers . . . . . . . . . . . . . . . . . . . . . . . . 24

1.4 Scope of the research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251.5 Structure of the thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2 Development of the wireless environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.1 Wireless communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.2 Standardized wireless technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292.3 Comparing 1G and 2G to 3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332.4 The right timing of standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352.5 Globalization of the environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

3 Perspectives on standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393.1 Standardization preliminaries and the need for standardization . . . . . . . . . . . . . . . 393.2 Standards and standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403.3 Types of standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

3.3.1 De facto standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.3.2 Unsponsored and sponsored standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.3.3 De jure, formal standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

3.4 Main actors in the standardization process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433.4.1 Manufacturers and operators: research and development . . . . . . . . . . . . . . . 443.4.2 The role of SMEs in standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

3.5 The role of standardization organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463.5.1 Formal standardization organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483.5.2 Informal standardization organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

3.5.2.1 3GPP – A revolutionary approach . . . . . . . . . . . . . . . . . . . . . . . . . . 50

3.5.2.2 Forums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523.5.2.3 Example of the new consortia: 3G.IP . . . . . . . . . . . . . . . . . . . . . . . 54

3.5.3 Regulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543.5.4 Regional characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

3.6 Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573.7 The need for a general model of the standardization process . . . . . . . . . . . . . . . . . 583.8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

4 Towards the theoretical framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604.1 Organizational and institutional form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614.2 Network externalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614.3 Organizational theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634.4 Institutional theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644.5 Theory selection and perspectives on theory building . . . . . . . . . . . . . . . . . . . . . . 694.6 Institutional carriers and elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

4.6.1 Elements: Regulative systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734.6.1.1 Regulative-Cultures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734.6.1.2 Regulative-Structures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734.6.1.3 Regulative-Routines function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

4.6.2 Normative systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 744.6.2.1 Normative-Cultures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 754.6.2.2 Normative-Structures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 754.6.2.3 Normative-Routines function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

4.6.3 Cognitive systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764.6.3.1 Cognitive-Cultures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764.6.3.2 Cognitive-Structures function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774.6.3.3 Cognitive-Routines function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

4.6.4 Carrier element: Cultures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784.6.4.1 Cultures-Regulative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784.6.4.2 Cultures-Normative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794.6.4.3 Cultures-Cognitive function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

4.6.5 Carrier element: Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794.6.5.1 Structures-Regulative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804.6.5.2 Structures-Normative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804.6.5.3 Structures-Cognitive function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

4.6.6 Carrier element: Routines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814.6.6.1 Routines-Regulative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 824.6.6.2 Routines-Normative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 824.6.6.3 Routines-Cognitive function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

4.6.7 Summary – a model of institutional elements and carriers . . . . . . . . . . . . . . . 834.7 Stages of the institutional theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844.8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

5 The contribution of the institutional theory to standardization . . . . . . . . . . . . . . . . . . . . . 885.1 Background to the analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

5.1.1 Towards an a priori model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895.2 Standardization from the institutional theory’s point of view . . . . . . . . . . . . . . . . . 915.3 Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

5.3.1 Regulatory system in standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925.3.1.1 Regulative-Cultures function in standardization . . . . . . . . . . . . . . . 925.3.1.2 Regulative-Structures function in standardization . . . . . . . . . . . . . 945.3.1.3 Regulative-Routines function in standardization . . . . . . . . . . . . . . . 94

5.3.2 Normative systems in standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 955.3.2.1 Normative-Cultures function in standardization . . . . . . . . . . . . . . . 95

5.3.2.2 Normative-Structures function in standardization . . . . . . . . . . . . . . 965.3.2.3 Normative-Routines function in standardization . . . . . . . . . . . . . . 97

5.3.3 Cognitive systems in standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 975.3.3.1 Cognitive-Cultures function in standardization . . . . . . . . . . . . . . . . 975.3.3.2 Cognitive-Structures function in standardization . . . . . . . . . . . . . . . 985.3.3.3 Cognitive-Routines function in standardization . . . . . . . . . . . . . . . . 99

5.4 Carriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995.4.1 Carrier elements: Cultures in standardization . . . . . . . . . . . . . . . . . . . . . . . . . 99

5.4.1.1 Cultures-Regulative function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1005.4.1.2 Cultures-Normative function in standardization . . . . . . . . . . . . . . 1005.4.1.3 Cultures-Cognitive function in standardization . . . . . . . . . . . . . . . 100

5.4.2 Carrier elements: Structures in standardization . . . . . . . . . . . . . . . . . . . . . . 1015.4.2.1 Structures-Regulative function in standardization . . . . . . . . . . . . . 1015.4.2.2 Structures-Normative function in standardization . . . . . . . . . . . . . 1025.4.2.3 Structures-Cognitive function in standardization . . . . . . . . . . . . . . 102

5.4.3 Carrier elements: Routines in standardization . . . . . . . . . . . . . . . . . . . . . . . 1035.4.3.1 Routines-Regulative function in standardization . . . . . . . . . . . . . 1035.4.3.2 Routines-Normative function in standardization . . . . . . . . . . . . . . 1045.4.3.3 Routines-Cognitive function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

5.5 Conceptualizing standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1055.6 Application of the institutional theory to the standardization processes . . . . . . . . 1065.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

6 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1136.1 Research evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1136.2 Research approach and methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1146.3 Research setting and data collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

6.3.1 Data analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1196.3.2 Formulating coding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

6.4 Literature survey on standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1216.5 Reliability and validity of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1236.6 Towards analyzing the empirical data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1286.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

7 Empirical analysis of the effects of standardization on business strategies . . . . . . . . . . 1327.1 Standardization process, dynamic model outputs: the actors’ perspective . . . . . . 132

7.1.1 Stage I: Interest Stage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1337.1.1.1 Organizational rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1347.1.1.2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1377.1.1.3 Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1387.1.1.4 The Institutional perspective on Stage I . . . . . . . . . . . . . . . . . . . . . 1397.1.1.5 Summary of Stage I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

7.1.2 Trigger A. Business interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1407.1.3 Stage II: Networking for standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

7.1.3.1 Emergence and number of new actors . . . . . . . . . . . . . . . . . . . . . . 1427.1.3.2 Ascendance of new actors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1437.1.3.3 Institutional entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1437.1.3.4 Possibility of institutional change . . . . . . . . . . . . . . . . . . . . . . . . . 1437.1.3.5 Injection of new innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1447.1.3.6 The Institutional perspective on Stage II . . . . . . . . . . . . . . . . . . . . 1467.1.3.7 Summary of Stage II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

7.1.4 Trigger B. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1477.1.5 Stage III: Precompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

7.1.5.1 Technical viability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

7.1.5.2 New solutions and ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1507.1.5.3 Successful practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1527.1.5.4 The Institutional perspective on Stage III . . . . . . . . . . . . . . . . . . . 1527.1.5.5 Summary of Stage III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

7.1.6 Trigger C. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1537.1.7 Stage IV: Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

7.1.7.1 Development, specification of abstract categories. . . . . . . . . . . . . 1557.1.7.2 Technical solution selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1577.1.7.3 Depth of standardization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1587.1.7.4 The Institutional perspective on Stage IV . . . . . . . . . . . . . . . . . . . 1597.1.7.5 Summary of Stage IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

7.1.8 Trigger D. Proposal discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1607.1.9 Stage V: Standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

7.1.9.1 Increased objectification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1627.1.9.2 Pragmatic legitimacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1637.1.9.3 Organizational efficiency and innovation . . . . . . . . . . . . . . . . . . . 1647.1.9.4 The Institutional perspective on Stage V . . . . . . . . . . . . . . . . . . . . 1677.1.9.5 Summary of Stage V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1687.1.9.6 Trigger E. Life cycle revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

7.1.10Stage VI: Fads and fashions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1697.1.11 Stage VII: Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

7.1.11.1 Procedure and document management . . . . . . . . . . . . . . . . . . . . . . 1717.1.11.2 The Institutional perspective on Stage VII and summary . . . . . . . 172

7.1.12Trigger F. Reimplementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1727.2 Final dynamic standardization model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1737.3 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

8 Empirically validated wireless standardization model . . . . . . . . . . . . . . . . . . . . . . . . . . 1768.1 Description of the final model stages and triggers . . . . . . . . . . . . . . . . . . . . . . . . . 1768.2 Actors’ perspective on the standardization process . . . . . . . . . . . . . . . . . . . . . . . . 1798.3 The institutional theory in the context of the dynamic model . . . . . . . . . . . . . . . . 1828.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

9 Theoretical, empirical and managerial implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1879.1 Factors affecting the development of the wireless standardization environment . 1889.2 Theoretical implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1889.3 Institutional theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

9.3.1 The description of stages to create the models . . . . . . . . . . . . . . . . . . . . . . 1899.3.2 Institutional elements and carriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1919.3.3 A Priori dynamic model – the stages in institutional change . . . . . . . . . . . . 193

9.4 Managerial implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1949.5 Actors’ managerial perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1959.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

10 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19810.1 Research results and contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19810.2 Limitations of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20010.3 Recommendations for the future research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

ReferencesAppendices

1 Introduction

This chapter explains the background to the research, discusses the research problem andmethod, and gives the outline of the dissertation.

1.1 Background

Information Technology (IT) has pervaded our daily lives. Seldom do we think about howtechnology works, or what makes it work, or how a dominant design emerges, or whatfactors encourage or limit the implementation of new technology (i.e., the nudges orrestrainers) in one way or another. Some scholars have gone as far as arguing that it ispower or social consensus, rather than economic efficiency, that determines which broadpath is ultimately followed (Nelson & Winter 1982). We can add that it is an end user’sown or created need which drives technology development forward. In the current tech-nology environment, there are many issues to be taken into account to ensure that newtechnology works and ends up on a customer’s table or in a user’s pocket. A number ofdetailed studies document various features of the environment which are forced to adaptand change in response to new developments in the technology industry. These respon-sive processes include the setting up of collective bodies, decisions being taken by volun-tary organizations, government agencies and other political action. Granovetter (1985)states that almost invariably as a new industry develops it becomes evident that there is anew industry, and that it has collective interests and needs. However, according to Powell(1991), making a selection between competing technologies is a difficult and uncertainmanagerial choice.

Standardization enables compatibility between, for example, telecommunication net-works, railroads or various measurement systems. This creates many benefits for actors inthe standardization process. In this research we focus on how standardization affectsactors’ businesses, which develop and sell wireless technologies and technology-basedproducts and services. We are interested to research the topic from the standardizationprocess point of view. In this research we define actors as manufacturers, operators, stan-dardization organizations, regulators and SMEs.

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The first known standardization organization was established in 1890, when the Henry– a practical unit of self-induction – was established. In 1912 the first formal standardscommittee was founded, the Institute of Radio Engineers (IRE). Historically, standardiza-tion has revolutionary aspects, such as Gutenberg’s development of a printing press. Stan-dards provide the keys that allow components, units, systems, or even complex networksto interconnect and interact efficiently and effectively. Generally, a “standard” can bedefined as a set of technical specifications adhered to by a producer either tacitly or as aresult of a formal agreement. We regard standards in this research as negotiated agree-ments or “objects” between the actors in the standardization process. Standards are cre-ated in various organizations, which have their own rules about their work and environ-ments.

Standardization and its role has, however, changed a great deal during recent years.The standards that have been developed are far more complex than those that had beencreated before, but the original target of standardization seems to have remained much thesame: to enhance compatibility (Weiss & Cargill 1992). Looking back, standardizationhas played a prominent role in many spheres of industry, in, for example, railways, chem-icals and automobiles. If we look to the future, the role of standardization in for examplewireless IT development will continue to increase. In this research we take a technologi-cal perspective on standardization or, more specifically, on wireless telecommunicationstandardizations and concerns. Therefore, our discussion of technology is limited to wire-less technology only from the point of view of actors in the standardization process.

More and more standards are being created for different technologies. In this researchwe discuss wireless telecommunication systems, which integrate different services andtechnologies. The system needs standards to function globally. This globalization andstandardization development sets requirements for companies and organizations in thebusiness; they are expected to be flexible, innovative, efficient, international, wellresourced and cooperative. In order to achieve this on a global scale multiple actors –such as manufacturers, operators and system developers – need to negotiate with a num-ber of regional standardization bodies. Global organization of standardization and plansare needed to apply the required compatibility standards. This enables compatibilitybetween different interfaces and technologies. Without combinability with other net-works and devices it would be impossible to make a telephone call, or send a file orimages to a colleague or friend. Taking an example from the automobile industry, thestandardization of components has already made business more efficient and flexible, butdoes not restrict the usage of cars. Another type of example is International AccountingStandardization, whose purpose is to enable more reliable comparability between compa-nies in different countries and regions.

Information and communication technology (ICT) is among the fastest growing indus-try sectors globally. The success story of wireless telecommunication started threedecades ago in Nordic countries, when the Nordic Mobile Telephone (NMT) system waslaunched (Mouly & Pautet 1992, Toivola 1992, Manninen et al. 2000). The success ofGlobal System Mobile (GSM) broadened later to the idea of the next generation globalsystem – called the Universal Mobile Telecommunication System (UMTS). ThroughUMTS standardization a migration of information technology – especially the Internettechnologies Transmission Control Protocol/Internet protocol (TCP/IP-HTML) – into awireless telecommunication infrastructure will become commonplace. In the future it will

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be virtually impossible to distinguish between IT services and telecommunication ser-vices in a mobile telecommunications network. Telecommunication standardization hasand will thus create new businesses globally. This is enabled by commonly agreed rules –standards. For example, GSM standardization made possible global wireless telecommu-nication, which has led to the further development of telecommunication systems andenabling technologies.

Because standardization is of interest to multiple actors, it involves various parties:large and small companies, formal and informal organizations and regulators. These orga-nizations do the actual standardization by negotiating, arguing, proposing and decision-making. These organizations have various targets and strategies to carry out. They createthe standardization process.

In this research we are interested in studying empirically how actors, can possibly ben-efit from standardization processes in their businesses. It is important to identify key fac-tors/inhibitors that shape the standardization process from the actors’ point of view. Forthis purpose we develop an a priori model, in which standardization is conceptualized anddynamism is described in the process model, and the ways in which standardizationaffects business strategies and practices are made visible. The model is developed basedon institutional theory. We analyzed the collected qualitative material by using the modelcreated. As a result of this analysis of the material we have gained a clear perspective, notonly on how wireless systems standardization works, but on its effect on the researchedactors’ businesses. This also confirms the model’s applicability in understanding andexplaining the research problem. We also attempt to research market success or failurefrom the viewpoint of the wireless technology standardization process mainly from theperspective of actors. The success or failure aspects consider how actors have adoptedstandardization in their business and strategies – more precisely, how they improve net-working with other participants, technology compatibility, and profitability. According tode Vries (1999), market success depends on mechanisms such as backwards, forwardsand sideways compatibility, dominant design, competing standards, gateway technolo-gies, timing and modularization.

To understand this phenomenon we have studied various theories, such as networkexternality and organizational theory. The challenge for theorization is how to combineeconomic, organizational and institutional aspects of standardization from the viewpointof actors businesses. We can expect that social networks play an important role in thestandardization process as they are critical in creating compatibility between differenttechnological components and regimes that span across different nations, regions andorganizations. We will analyze and apply one organization behaviour theory, institutionaltheory. Institutional theory makes us aware of the importance of the wider social and cul-tural context surrounding and supporting organizational forms as the ground in whichorganizations are rooted. We are interested in researching the elements and carriers ofstandardization. For this we will use Scott and Cristensen’s (1995) model, which isexpected to meet the requirements for theory building. Furthermore, we have adaptedGreenwood et al.’s (2002) process model for standardization. The Greenwood et al. pro-cess model is further developed based on findings from this study. The results areexpected to make it possible to study whether an understanding of standardization pro-cesses lowers investments, makes the product more competitive, and improves the prod-uct’s technology quality, time to market, and ease of adoption for end users.

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The goal of the research is to understand how actors can apply standardization for theirbusiness needs. It is important to identify the key factors/inhibitors that shape the stan-dardization process and business from the actors’ point of view. We examine the role ofinstitutions, and organizations, and the impact of technical change on the standardizationprocess. The research is topical because global wireless telecommunication standardiza-tion processes will play a key role in the development of a common wireless communica-tion infrastructure between the US, the Far East and Europe. This evolution will stronglyaffect the telecommunication and software industry, communication culture, and businessmodels. Moreover it will require big investments.

This research area should be of interest to several actors: the telecommunicationsindustry, operators, software vendors, and various user organizations. The importance ofstandardization research has grown significantly due to rapid technology development,media convergence, globalization, and an increase in the number of actors involved.

1.2 Research problem

The third generation wireless technology was created in the aftermath of the success ofthe European GSM system. To be more precise, the investigation of the new technologydevelopment started in 1987, when the main components of the GSM standard wereagreed. This first commercial service started om 1991. The motivation for this initiativewas the rapid growth of base technologies (semiconductors, batteries, signalling technol-ogies, radio frequency technologies, and data mart technologies), the increasing numberof subscribers (overall the number of subscribers had grown to over a billion by 2005according to GSM MoU), the globalization of services, and the demand for new types ofservices. Timing aspects are also becoming critical in the standardization process,because of expanded markets and the product launching. After an overall introduction totelecommunication standardization we will investigate the key factors/inhibitors andfacilitators in the creation of global standards, and how standard-making is affected byperceptions concerning end-user needs, market growth and speed, and changes in institu-tional standardization regimes. The most important and valuable observations are expect-ed to show how not only big telecommunications firms, but also SMEs can benefit frominternational standardization in their business.

We want to investigate the main factors that affect actors and specially SMEs’ adop-tion of global standards when expanding GSM-based standards globally. We are inter-ested how actors can benefit from institutional, organizational and technical issues. By astandardization process organization we mean an organization, either informal or formal,which has developed and maintained the standardization process in which standards arecreated. Additionally, we need to examine the emerging “learning-by-doing” process,which leads to the generations of standards, and discover which forces and actors, if any,have some impact on it.

No doubt the upcoming global standardization regime for wireless communicationswill create new forms of technology regulation, new standardization organizations andnew forms of market creation. In this dissertation we investigate what new features can berecognized in global standardization processes. In the longer term, the evolution of wire-

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less telecommunications will have a significant role in the emerging global informationinfrastructure (GII). In this context we investigate how standards can govern wirelesstelecommunication technology in the future. This research primarily concentrates on thedevelopment of global wireless telecommunication standards from the viewpoint of Euro-pean participants. Due to this framework we are interested mainly in the work of telecom-munication standardization organizations such as the European Telecommunication Stan-dardization Institute (ETSI), the International Telecommunication Union (ITU), theUMTS Forum, and the GSM Alliance and telecommunication-oriented software standard-ization organizations, such as OMA, are of particular interest. We discuss mainly GSM(2nd generation), GPRS (2.5 generation), EDGE (2.5 generation), and UMTS (3rd genera-tion), which can be regarded as wireless technologies created and managed mainly byEuropean actors.

As stated above, this research is on wireless standardization development, analyzedusing static institutional and institutional process theory. The research is carried out inorder to answer the following question:

– “What is the standardization process like from the viewpoint of actors?”– “What are the changes in the wireless standardization process?”

We approach the standardization process by:– analyzing the actors: e.g., small/big actors, regions, the effect on standards and stra-

tegy (de facto, de jure, formal), tools (Irmer 1994) – analyzing their relations: e.g., cooperation, information exchange – analyzing the standards: de jure, de facto, formal, informal– using Institutional theory (e.g., DiMaggio 1983).

The target of the first question is to explain the research environment – the factors whichshape the standardization process. In order to properly understand the standardizationprocess we will discuss standards and standardization in detail in Chapter Two. Standard-ization organizations and types are presented in Chapter Three. To analyze the standard-ization process we have adopted an institutional process model from Greenwood et al.(2002), because it recognizes broad organizational, environmental, cultural and cognitiveissues. We wanted to use this point of view, because standardization itself contains insti-tutional features. Also, it may show multiple structures and events in the wireless stan-dardization environment and how actors participate in the process. First we adapt themodel to the standardization process following other available standardization creationworks. We then evaluate the model using the material gained from the interviews. Thereare hardly any scholarly and practical publications available on this topic.

In order to develop the framework, we examine how the material from interviews andliterature can be applied in the creation of the standardization process model using institu-tional theory. In this research the perspective is that of the actors’ role in the wireless stan-dardization process and, especially, how SMEs apply wireless standardization in theirbusiness strategies. We are interested in researching the topic because it would create andimprove business possibilities for the actors.

The research methods used in this study are described in detail in Chapter Six.

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1.3 Motivation of the study

The aim of the research is to present a coherent and comprehensive view of the wirelessapplication standardization process, relations and actors. By applying institutional theoryand process we outline the critical business and strategy factors. We are interested inexamining the factors and actors which make some telecommunication standardizationefforts successful and others not. This is important from the business point of view in theglobal markets. Particularly in the field of telecommunication it is important to under-stand standardization and its process, because to create an operable system needs not onlytechnical compatibility but also social compatibility or networking among actors.

The conceptual framework and the ensuing integrative process model should lead us toaddress a number of managerial questions. In addition, the results of the research shouldcreate a deeper understanding of the relations in the standardization process, and businessstrategies. In this thesis the research results are evaluated in the software business, but weexpect the results to be applicable also to other business fields.

1.3.1 Personal motivation for solving the research problem

The author’s intention to research standardization goes back a decade, when she got aposition as an R&D assistant for a global telecommunications company. At the same timeshe was finalising her final work for her “European Knowledge” course at the Universityof Turku. Her leader suggested reading the recently-published Green Paper on Telecom-munication in 1994, and writing the assignment about that. She did, and since then herresearch focus has been on telecommunications standards and standardization, in oneform or another. At that time, she also supported the “UMTS” or ETSI Technical Com-mittee (TC) Special Mobile Group (SMG5) committee in the actual creation of stan-dards. Her role involved the general organization of meetings, document handling andassisting in the meetings.

This study started as part of the Stamina research group’s research in the University ofJyväskylä, which began in spring 1998 (Lyytinen 1997) and continued until 2001. Sincethen, the author has continued as an independent researcher for the last three years,together with her day-to-day work (2001–2003). Her Masters thesis discussed “Evolutionin Telecommunication Standardization Practices: The Case of 3rd Generation WirelessCommunications” (Kivimäki 1999). She continued with the same topic and extended it torelations between the actors in the model she had created. However, time passed by andthe topic started to gain focus in 2003–2004 thanks to the author’s daily duties as a seniortechnology advisor in the National Technology Agency (www.tekes.fi). She had noticedthe recognition and adoption – or lack of it – of standards by telecommunication SMEs(particularly those in the software industry) in their technology or business strategy. Com-panies are aware of standardization and its possibilities, but mainly they do not have thenecessary tools, or the abilities to use them at the required intensity and level.

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1.3.2 The motivation – understanding the essence of standardization

Nelson has stated research requirements as follows (Nelson 1994, p. 56): “Conventional wisdom has it that the sciences, in general, do not aim to solve practicalproblems but rather to advance basic understanding of nature, but that enhanced basicunderstanding makes technological advances possible even if the work is not aimed to dothat.”

The rapid evolution in information technologies has increased the importance of stan-dards and standardization process (Cargill 1989, Krechmer 1996, Nielsen 1996, Cowan &Foray 1997, Foray 1998). This is due to drastic changes in technology, economies ofscale, the increased demands of both national and global administration, and the rapiddevelopment of services that has resulted from decreased regulation. The next generation(3G) wireless telecommunication systems in Europe are expected to: “encourage innova-tion, liberalization and competition in the provision of telecommunication and informa-tion technology service, leading to a larger market for mobile communication with lowerequipment prices and tariffs, and the ability to support a wide range of user require-ments” (Force 1996, p. 12).

The main scientific motivation of this study is to examine standardization in terms ofthe equalities and differences in adopting standardization process, such as timing andbusiness issues, the process features, and varying organizations’ roles in the selected stan-dardization processes. The push behind this evolution is digital technology, and the pullsare the emerging global markets, convergence, and user expectations and requirements.The ICT sector is a combination of manufacturing and service industries that capture,transmit and display data and information electronically. The telecommunication industryis the fastest growing field in the ICT sector currently and thus requires heavy invest-ments from researchers, operators and industry actors. At the same time the expectationsfor revenues are high. In order to understand these issues, old and new institutional theory(e.g., DiMaggio 1983, Powell 1990, Scott 2001) a static model and a process model issuggested. In recent years institutional theory has been addressed by, for example, Green-wood and Hinings (1996), and Greenwood et al. (2002), who have discussed professionalassociations in a highly institutionalized organizational field, and their role in legitimizechange. The other theoretical viewpoint has been provided by Robey and Boudreau(1999), who have suggested ways to reduce contradictions and to improve the quality ofinformation systems theory development. They have applied institutional theory to vari-ous cases. When analyzing the future of software services we assume that the world econ-omy will continue to remain stable, but regional differences may grow. We also expectthat new technology will in the future meet the service requirements and expectations setby users, operators and regulators. Because software technology is a relatively youngindustry with many uncertain elements, not all critical issues for service uptake, such ashealth risks, are researched.

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1.3.3 Wireless technology development in numbers

Looking back at the past, after the first intentions to further develop telecommunicationsystems have diversified. One of the first hints of the development of future global tele-communication systems came in November 1985. Study Group 8 of the InternationalRadio Consultative Committee (CCIR) recognized that in the future an international stan-dard for land mobile telecommunication systems would be needed, and that an InterimWorking Party should be established. The Party would define the targets for overallobjectives for future land mobile systems, the frequency systems and the degree of stan-dardization at the international level. The working party completed its work by 1987.

We must point out that the 3G standardization was started during the life cycle of GSMand also with NMT. In the beginning of UMTS standardization we have seen the successof GSM around the world, its impact on people’s everyday lives, and telecoms busi-nesses’ financial effects on both stock exchanges and national and regional economies.Study Group 8 of the CCIR recognized that the global standard would bring some eco-nomic advantages, such as mass production of mobile stations and network components.These reasons meant that at the beginning of the development a plan was created for awhole new telecommunication system. Now, nineteen years after the first intention todevelop a new system we can see that, despite the wonderful plans, post-GSM systemstandardization is still based on the previous systems, NMT and GSM. By this we meanthat the working procedures are similar and the technology is based on technology devel-oped for GSM Code Division Multiple Access (CDMA) technology was further devel-oped into Wideband CDMA (WCDMA).

If we look at the historical data concerning the success of the GSM system, the Table 1below shows clearly the turning points of GSM market success. In 1992 GSM wasadopted mainly in Nordic countries. In 1994, Nokia launched the model 2110, which canbe regarded as the first end-user-friendly terminal due to its small size, sufficient batterypower, colour covers and ease of use. The second turning point seems to be the year 1998,when the liberalization of telecommunications took place and led, for example, to pricereductions in many European countries.

Table 1. Historical Data (Source GSM MoU Association1).

Year (end of year) Countries/Areas on air Growth % Networks on air Growth %1992 7 131993 18 61 33 611994 42 57 68 511995 68 38 115 411996 97 30 184 381997 106 8.5 220 161998 111 2.7 320 22May 2005 208 670

1. as of 24.05.2004

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The development of the number of subscribers (Appendix 1) describes the mobile sub-scribers for OECD. The strong development in GSM’s worldwide competitiveness from1992 to 1993 can be seen in the table above. At the end of 2003, GSM was the choice of72% of the world’s digital mobile phone users. In the Appendix 2 are presented the reve-nues of the market adaptability of the GSM system. The careful standardization enabledfast system expansion without major problems. From the table above we can see that atthe beginning the number of subscribers triples every year.

The logical expansion of the GSM networks development meant that GSM first wenton the air in Europe. The technology was soon adopted in the Arab world as well. In mid-dle and Eastern Europe (e.g., Hungary, Poland, Czech Republic) it was also adapted rap-idly.

In the Asia-Pacific region, GSM was widely adopted. In Hong Kong in May 1997,GSM had 75.2% of all subscribers. GSM appeared in China in 1995 and two years laterthere were 5 million GSM subscribers. There was GSM coverage in 1400 cities in 41provinces. In contrast, it only operated in four cities in the US, where the IS-95 systemwas preferred. In Africa, the GSM standard was accepted the most widely in SouthAfrica. However, it later became a standard all over the continent. In 2005, the coverageis over 820 networks in 220 countries/areas of the world2.

To summarize the development we can state that during the years 1992–1998 therewas a significant amount of work to be done in order to carry out the standardizationwork already started in 80s. The hard work led first to European success and later to aglobally adopted system whose standardization began with the idea of Nordic engineers.Appendix 1 shows figures for user growth in the years 1991 and 2003. Based on thesenumbers we can state that the complete GSM standard has market leader position for thefurther development of telecommunication standardization, which is based on GSM stan-dard. The growing numbers of end users and the service requirements are the pushing fac-tors for 3G development.

1.4 Scope of the research

The scope of the term “standardization process” is restricted in this thesis to standardiza-tion tasks and the organizational role of the actors involved, such as device manufactur-ers, operators, regulators, and various other organizations. We are also interested in theirrelations. Technology development is not discussed in detail, because is it such a com-plex and large research issue. Standardization also covers such topics as standardizationpolitics, competition law, and Intellectual Property Rights (IPR), which will not be cov-ered in depth. These issues partly ensure that the wireless standardization process works;however, we will concentrate on the main standardization process. Bekkers et al. (2002)and Bekkers and Liotard (1999) have researched the role of IPRs in the process of stan-dardization in the telecommunications industry. Our regional viewpoint on standardiza-tion is European due to the interview material.

2. http://www.gsmworld.com/roaming/gsminfo/index.shtml, as of 3.11.2005

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This thesis focuses first on the standardization process from a conceptual or theoreticalviewpoint. Technological solutions for specific wireless standardization processes, suchas different technologies, network layers or services, are not covered in detail. However,wireless telecommunication systems integrate different services and technologies. Thewireless systems integrate four different service environments: global, suburban, neigh-bourhood and in-building. All these environments apply different technologies and stan-dards. In this research we focus on suburban environments in which cellular networks(e.g. GSM, UMTS) are applied. In this research our aim is to develop a general standard-ization process model, which covers various details. The practical insights resulting fromthe study, including, moreover, the empirical findings, will be elaborated in relation to thebusiness of actors.

1.5 Structure of the thesis

The structure of the thesis is as follows. Chapter 1 outlines and contextualizes theresearch problem and motivation. Chapter 2 presents the evolution of mobile wirelesstelecommunication systems. It introduces the definitions and technologies, and discussesthe importance of timing issues. In Chapter 3, standardization is discussed. The standard-ization process, and the need for such a process, is presented, along with the differentstandards, and the main actors: the technology participants, standardization organizationsand roles in the standardization environment. Chapter 4 discusses institutional theory. Weuse Scott and Christensen’s (1995) table to frame the context and as a tool towards abroad understanding of the standardization environment. We also present Greenwood etal.’s (1996) “Stages of Institutional Change” model. Chapter 5 presents institutional theo-ry as applied to the wireless standardization environment, and the standardization pro-cess model adopted by Greenwood et al. (ibid.). Chapter 6 presents the researchapproach. The research methods, interviews, and literature survey are presented. Chapter7 presents the evaluation of the results, both theoretical and empirical. After the theoriza-tion of standardization we select a more practical view on standardization. The final stan-dardization process model is presented. In Chapter 8 we present the results from the stan-dardization and institutional points of view. Chapter 9 summarizes the findings andincludes a discussion of the models and results. The managerial implications of theresearch are also discussed. Concluding remarks, limitations of the research and futureresearch topics are presented in Chapter 10.

2 Development of the wireless environment

“Technological systems consist of a set of components that together provide utility to custo-mers. System performance is dependent not only upon the performance of constituent com-ponents but also upon the extent to which they are compatible with one anothe" (Gabel1987, p. 83 in Scott 1995).

Wireless systems consist of various features, the roles of which must be is needed tounderstood in order to discuss standardization. In this chapter we therefore discuss wire-less technologies, and define concepts related to them.

The term technology has various definitions based on the term associated with “tech-nology”: information technology, telecommunication technology, signalling technologyetc. The difference between information technology and information systems is the sameas that between telecommunication technology and telecommunication systems: technol-ogy is the means, and systems are the ends (Briffaut 1995).

Telecommunication products consist of various kinds of components such as theswitching transmission, software and power components or modules. Various productstogether form a telecommunication system. In defining the term component we followEconomides (1989), who defines components as complements. One example is a personalcomputer, which can be divided into two components, i.e., a monitor and a central unit.Personal computers can be sold as systems, like the original Macintosh by Apple. Per-sonal computers are made of a number of compatible components such as disk-drive con-trollers, input/output cards, etc.

2.1 Wireless communications

Wireless communications usually refers to telecommunications where a user/customerhas access to the first communication link, in this case wireless and uses radio transmis-sion by using the user mobile. Mobile radio refers to a private network for radio commu-nication. Mobile telephony refers to radio voice communications using a network that isconnected to the public switched telephone network (PSTN). Cellular telephony refers to

28

mobile telephony in which the area of coverage is divided into a cell-like structure withdifferent cells using different frequencies (Lindmark 1995).

People use terms “mobile communications” and “landmobile communications”, whichhave nearly the same meanings. The difference is that landmobile refers to communica-tion stations without the restricted location that were found on land (Bekkers & Liotard1999). Bekkers and Smits (1999), propose the following definition for mobile communi-cations:

“Mobile communications is a form of communications in which a radio connection existsbetween a communications station whose location is not restricted and a fixed communica-tions station in which the communications stations may be transmission, reception andtransmission/reception stations.”

It is also important to define what a personal communication service is, because it is partof mobile telecommunications. A widely accepted definition of personal communicationservice is "the ability for a user to originate and receive calls or messages at any time,anywhere and in several roles, using a pocket terminal".

The telecommunication system is based on compatibility and interoperability, andthese are enhanced by standardization. The literature offers several definitions of compat-ibility and interoperability. Bailey et al. (1995), define compatibility as the ability of twocomponents to work within one system line, e.g., mobile phones. In contrast, incompati-ble products cannot achieve this, e.g., Macintosh and UNIX operating systems.

Compatibility between components can be achieved by creating standards. Operationsand connections in telecommunication networks and software need commonly createdrules, standards. These are specifications about the form and function of components andthe rules that determine interaction among them define a network’s architecture.

The compatibility of products brings benefits for several standardization actors, in theform of network externalities. These actors are comprised of users, manufacturers, opera-tors and regulators. The capabilities create demand-side economies of scale: there arebenefits in doing what the others do. Three main sources of these benefits here are: 1)interchangeability of complementary products, 2) ease of communications, and 3) costsavings (Farrell 1986).

Interoperability is defined as follows: information and services can be accessed by auser of one system while the services may reside on other systems. Interoperability isfound within a heterogeneous communications environment, e.g., the Internet. Non-interoperable products operate only within the limits of their own system. For example,satellite mobile phones such as the now-defunct Iridium or authority networks may inter-operate only within their specific system.

There are several classical examples of the interchangeability of complementary prod-ucts, such as computer software, Video Cassette Recorder (VCR) tapes, Compact Discs(CDs), and camera lenses. We have also had failures in the history of compatibility ofproducts: Beta vs. Video Home System (VHS), and QWERTY replacement (David 1985,Arthur 1990). Standardization, especially interchangeability of parts, facilitates mass pro-duction. During the standardization process, cost savings begin in the knowledge creationstage. Fewer alternatives need to be examined and the specification is hence developed ina shorter time. This has effects on the market side, and thus benefits the final user.

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However, current technological developments can make these systems interoperablethrough "gateways" when using open network applications e.g., TCP/IP, or World WideWeb (WWW). These systems can mask the incompatibilities from the user and allowunencumbered data exchange (Bailey et al. 1995) through "gateways" or "adopters". Nor-mally the compatible market creates a few dominant actors that operate globally. Accord-ingly, compatibility leads to a “lock-in effect”: i.e., users buy products which are compati-ble with their original purchases (Beggs 1992, Bailey et al. 1995).

Thus the compatibility is achieved by software which provides the compatibilitybetween different technologies/interfaces. The market requirement is also that new prod-ucts must also be backwards compatible, ensuring efficient usability in e.g., software ver-sion updates. To differentiate products, companies channel them into conventional dimen-sions, such as services, prices and product features e.g., colours, user interface. Therebytelecommunication standardization seeks to achieve compatibility between products andthereafter yield "increasing returns" (Arthur 1990) and interoperable systems that achievethese effects. For example, Bluetooth3 provides compatible, flexible, and high data ratelinks between any types of system components thus creating huge lock-in effects and"increasing relations".

2.2 Standardized wireless technologies

In this chapter we describe the two wireless technologies: GSM and UMTS.

The development of General System Mobile and Universal Mobile TelecommunicationSystem

Wireless telecommunication development started in the 1970s, when development of theearlier Car Radio Telephone (ARP) and NMT systems was well on the way. This researchhas been carried out thoroughly by, e.g., Manninen (2002) and Häikiö (1998). The tele-communication network is a complex system, which consists of subsystems and interfac-es as shown in Figure 14. However, as Mouly and Pautet (1992) explain, the GSM sys-tem is more than a concatenation of sub-systems: “some areas involve many pieces ofequipment and cannot be described satisfactorily by looking at each sub-system indepen-dently. Therefore, we must additionally look at how GSM operates from two differentviewpoints: a static one and dynamic one.”

3. Bluetooth is a global specification for wireless technology. It is designed for short-range wireless connecti-vity within three areas: data and choice access points, cable replacement and ad hoc networking. The Blue-tooth specifications define a system solution comprising hardware, software and interoperability require-ments. More information is available at www.bluetooth.com

4. http://www.c7.com/ss7/whitepapers/cellular/jain_for_map.ppt#281,4,Dia 4, viewed on 16.1.2006

30

Fig. 1. Simplified GSM architecture.

The basic features of both systems are shown in Table 2. It has become clear in the devel-opment process that GSM radio technology cannot support the higher bit rate servicesexpected, but there was no such limitation in the network platform (Dupuis 1995). Thisled to the need for GSM radio technology to share radio resources between users andcells. Radio resources yield comparable spectrum efficiency by using external factors,which makes one radio technology better suited to a particular radio environment thanothers. The radio environment may be e.g., a high-speed train or undergrounds or cord-less telephone.

Table 2. Basic features of GSM and UMTS systems.

GSM UMTSMain standardization body ETSIa

a. European Telecommunication Standard Institute

Originally ETSI, later 3GPPb

b. 3rd Generation Partnership Project

Phases Originally 3 Release 6Originally developed for European market Global marketStandardization finalized 1992 In Europe 1999

In commercial use 1991/92 in Europe 2003, 2001 in JapanFrequencies GSM: 890-915, 935-960 MHz

DCS1800: 1710-1785,1805-1880 MHz

1900-1980, 2010-2025, 2110-2170 MHz

Services Voice, data Voice, data, videoStandard type Open, de jure Open, de facto

NSS Network and Switching Subsystem

EIR Equipment Identity Register AuC Authentication Center GMSC Gateway MSC BSS Base Station System BSC Base Station

Controller BTS Base Transceiver

Station MS Mobile Station SSP Service Switching Point

Databases

Switches

Radio Systems

BTS

BSC

MS

MSC MSC GMSC SSP

PSTN

BSS

BSS

HLRVLR VLR EIR

SSP

AuC

NSS

PLMN

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GSM offers comprehensive services and system features. By 1997, GSM was alreadyoffering telephony, short message, fax and data services and also a wide range of supple-mentary services. System features were further standardized so that network operatorshad choice of speech coding methods, full rate, dual rate (half and full rate) and enhancedfull rate in order to meet their market requirements in terms of capacity and quality.

One important success factor and feature from the beginning of GSM standardizationhas been its high quality for telephony, data and fax services. GSM also offers high spec-trum efficiency, which is based on Time Division Multiple Access (TDMA) technologywith adaptive power control, slow frequency-hopping and discontinuous transmission.Another important feature is the adaptability of advanced security for end users, and anti-fraud measures which secure the customer’s privacy and the operators’ revenue.

The number of GSM Association (previously MoU5) members, and an agreement,enabled the manufacturers to develop and thus offer the widest choice of terminals forsubscribers, network systems for operators and agreed test systems. All the aforemen-tioned reasons have led to GSM equipment having a very high market volume, and thusthe fact that it can be offered to subscribers at very attractive prices.

The increased importance and the effects of telecommunication standardization wereseen at the end of GSM’s period of success, and these were a leading factor when plan-ning a global telecommunication system. The influence of a common agreement on tele-communication standardization can be seen when we compare the second generation suc-cess factors between US and Europe. In the first generation both continents had their ownsuccessful analogue systems, but when we come to the 2nd generation telecommunicationsystem we can clearly see the influence of standardization on the telecommunicationsindustry. In Europe, the commonly agreed telecommunications standard enabled the tele-communications industry to enlarge its markets, unlike in the US, where the industry cre-ated separate standards, leading the industry to produce telecommunications equipmentwhich was not based on commonly agreed standards.

In telecommunications, hybrid networks are required to enable various systems, suchas data, video, and fax, to function. It is highly desirable for the users of these services tobe able to communicate with each other, irrespective of the diversity of interconnectednetworks and terminals. The standardization process is needed to carry out the complexnetwork transfer work and provide benefits for all participants in the standardization pro-cess. The actors in wireless (3G) standardization can be classified as manufacturers, oper-ators (including 3rd party content providers), regulators and standardization bodies. Theinternational standards should provide the basic requirements for total communicationsystems covering both the network and the equipment. International standards are ofutmost importance to the success of telecommunication products and services.

In Europe, the 3G system is called UMTS, which is only a brand name given by thestandardizers. UMTS is based on an evolved GSM network as described in Figure 2. Infuture it will perhaps be called by some other name from the user perspective. In Japanthey have branded the 3G system as FOMA6.

5. Memorandum of Understanding6. Freedom of Mobile Multimedia Access, referred Financial Times 6.2.2000

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Fig. 2. Upgrade path to the third generation.

International Mobile Telecommunication (IMT-2000) was previously known as FuturePublic Land Mobile Telecommunication Standardization (FPLMTS). It was expected tocomprise multiple air interfaces, which would have enabled production (Steele 1992) of awide range of services (including PMR7 and radio paging services). GSM, along with itsDCS18008 variant, are standardized as a complete system, as was NMT (Mouly & Pautet1992). In the case of GSM radio technology, there were two approaches. One was theintroduction of dual band, i.e., a mix of GSM/DCS1800, and the other was the GSM/DECT9 interworking profile (Steele 1992, Dupuis 1995). It was also recognized that PMRservices were needed in the market. It was proposed that Public Mobile Radio (PMR) ser-vices should integrate to FPLMTS.

Standardized 3G technology provides various new features for end users and setsdemanding requirements for manufacturers. The new features in 3G include the flexibilityof the new air interface, meaning Wideband CDMA (WCDMA) technology, increasedend user capacity, from 384 kbit/s to 2Mbit/s, and real-time Internet Protocol (IP) capabil-ities. The manifold technology, which function in three layers and are at some stage con-nected together, require a structured and flexible standardization process to meet theindustry requirements in the requisite time.

We can stress that, in spite of huge market expectations and detailed technologicalstandardization, the problem for operators is that it is difficult to know end user expecta-tions and willingness to pay for the services provided. The special feature of 3G operatorsglobally is that operators need licences to provide services to customers. The licences pol-

7. Private Mobile Radio8. Digital Cellular System9. Digitally Enhanced Cordless Telecommunication System

33

icy in each country is decided at the national governmental level, which means that organ-isations under the governments act as regulators.

2.3 Comparing 1G and 2G to 3G

The differences between 1G, 2G and 3G standardization from the 3G development per-spective are described in Table 3. The term ‘generation’ is used in telecommunications todifferentiate the different stages in the development of technologies. We can currentlyrecognize 1st, 2nd, and 3rd generations. These generations are divided according to theirtechnology development: analogue and digital, and, more precisely, voice and data ser-vices. All these generations have different lifecycles, in terms of time and economies ofscale.

The evolution from the 2nd to the 3rd generation has had an impact on several aspectsof standardization issues. Firstly, we cannot underestimate the critical role the institu-tional function has played in Europe, specifically within the EU and among its nationalregulators. One reason for the success of GSM was a political vision and a will amongdecision-makers – those in the PTT10 and those within regulators – to create a single stan-dard in Europe (Robin 1994, Manninen 2002). That vision was laid down in the early 80s,when there were about seven analogue systems in Europe, and, therefore, no compatibil-ity (e.g., NMT in Scandinavia and TACS11 in the UK). The political vision was pushedfrom the regulator’s side. National regulators organized licensing, dealt with commercialcompetition, and allocated the spectrum. They do not have such a role any more, becausepan-regional institutions, such as the European Union (EU), and globally the World TradeOrganization (WTO), have taken the role.

10. Ministry or Department of Post, Telephone and Telegraph11. Total Access Communication System

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Table 3. Similarities and differences in the 1st, 2nd and 3rd gen. standardization processes(Kivimäki 1999).

The second reason for the development of GSM, the disadvantage of the earlier systems,was that the users could not take their phone and use it in the large European markets.The limitations of frequencies were noticed in Europe in the late 70s when the EUreserved a frequency band twice 25 MHz at around 900 MHz for mobile communica-tions.

The third and most important factor in the development of GSM was roaming. Itsfoundation had already been laid down in the NMT system in Scandinavia (Manninen2002), i.e., the ability to use a mobile phone across borders. Today, we could not imaginelife without this feature. In Europe the system did not have any competitors. The CDMAsystem was available, but it could not provide what operators were looking for at thattime.

Finally, the right timing led the main actors in Europe to start the creation of the 2nd

generation system as a single standard. The standardization process started from scratchwithin the technology cycle. The technology was developed in an open way. In other

Aspect 1st Generation Standardi-zation(NMT)

2nd Generation Standardi-zation (GSM)

3rd Generation Standardiza-tion (UMTS)

No. of organizations One Few organizations New forums, more organizations, manufactur-ers, operators

Main affecting components:Who are the key actors?

Regulators (PTTs/operators)

Regulators, manufactur-ers, operators

Regulators, manufacturers, operators, “3rd party developers”: Media, IT, Regional blocks (EU, USA, Far East)

Document handling Paper documents, even handwritten

Mainly paper documents posted before the plenary

On-line documentation serv ice via Internet

No. of active participants in ETSI TC SMG plenaries

Own group of ~20 participants

~40 ~200

Nature of standardization meth-ods

Formal, slow Formal, slow Evolutionary, complex, more informal, faster, flexi-ble

System standardization From scratch From scratch Based on 2nd gen. (GSM)Intellectual Property Rights and their role

Open standard Open standard IPRs important, can delay development

Emphasis during the Standardization Proc-ess

Technology focused Technology focused and driven

Recognize complex technology + the role of service concepts

Geographical span Mainly Nordic countries Regional/National GlobalDominant organiza-tions

PTTs Regulators/PTTs Manufacturers

The role of the regulators

Main decision maker Wield power, spectrum allocation, licensing

Less power, spectrum allocation, licensing, still crucial

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words, the key interfaces were publicly defined – free of IPRs – thus enforcing an equalcompetition environment (following the model adopted in NMT). In UMTS we cannotyet say whether the system will be launched at the right time, because the market environ-ment and technology has changed drastically compared to GSM market entrance. In spiteof large consumer market expectation surveys, the operators and manufacturers cannot beone hundred percent sure about end user adaptability.

2.4 The right timing of standardization

As mentioned earlier, standardization is a long-term initiative. NMT standardization tookapproximately eleven years, whilst its whole lifecycle is about thirty years. So we canstate that one vital point is to provide enough time for the specification stage. There was alot of uncertainty about what was possible from the technology and market points of viewduring the initial phases. GSM standardization began in 1982, when SMG was set up, andGSM Phase 2+ was finished in 1998, sixteen years later. Both NMT and GSM startedwith a vague vision, without a clear understanding of how to implement it. However, theGSM lifespan will still go on into the future for an unknown period of time.

The development of solutions went hand-in-hand with their specification, due to thedevelopment of microprocessor and semiconductor technology. Thus some servicesbecame possible during the inception of the idea and standard. This was an evolutionaryway to create the standard and is unlikely to happen in the near future in similar circum-stances. In UMTS, the first discussions began in the late 1980s and its standardizationstarted in 1992 when SMG allocated UMTS/FPLMTS issues to a specific group. It wasscheduled to end in 2000 in Europe, and in 2001 in Japan, but, due to several issues, bymid-2001 the first phase of the standardization was not finalized.

It is possible to reduce the standardization time to a shorter frame to accommodatemarket requirements, because the UMTS technology is based on GSM. In several tele-communications standardization processes, timescales are longer when compared to com-puting or Internet standards, where time scales can be counted in years. As an example isInternet standardization in Internet Engineering Task Force (IETF). But equally, the righttiming matters.

According to the original plan, UMTS standardization should have been ready at theend of 1999, in that its approval should have taken place in February 2000, which wouldhave made commercial network operation possible in January 2002 (Table 4). Despiteintense work, some standards were delayed. In contrast, some standards were ready ear-lier, thus making it possible for some manufacturers and operators to start implementationearlier. This depended on the national licensing policy and frequency allocation. In such ahectic standardization cycle, all “components” of the process need to be in close coopera-tion to form a globally efficient standard.

This challenge has been met by establishing the Third Generation Partnership Project(3GPP) group. One crucial point in creating the group was timing. The other was collect-ing all parties having an interest in the 3rd generation platforms to work together and pro-vide a solution with market acceptance. This makes the standardization process faster andreduces overlap.

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Table 4. The Time schedule for 3rd Generation Standardization in Different Regions(ITU).

It has also become obvious during the 3rd generation standardization process that actorsface huge financial risks. NMT specifications came out without a broader recognitionbecause the interest was so small. GSM was not recognized in terms of investment either,when the first specifications came out. Now, in UMTS, the big financial stakes have to beput up, by both manufacturers and operators, at the beginning of the process, even thoughthe standardization process is not now completely closed.

Furthermore, the network development has led to a situation (1995) in which variousnetworks exist in addition to the core network: analogue, digital, ISDN, router networks,cellular networks, private mobile radio and many other networks. This complex map ofnetworks has led to a situation in which it will take time from the operators and manufac-turers to create fixed mobile/mobile fixed conversions. Network development moves for-ward slowly, because the participants in the process view the problems from differentangles. For example, Asynchronous Transfer Mode (ATM) network operators see the fre-

1997 1998 1999 2000 2001 2002 2003-EUROPE UMTS:

Approval of M1 in ETSI

UMTS Phase 1 Standards System Development, Phase 1 UMTS Commer-cial operation

UMTS: Phase 1: Planning, Deploy-ment

UMTS: Phase 2 StandardsGSM900 Phase 2+ implementation

USA Deploy-ment 2003-5Introduc-tion 2005-10

JAPAN Detail standardiza-tion: Basic Service

Standard Modifica-tion

Service Introduc-tion

Detail standard-ization: High Bit Rate Service

2003-5 Service introduc-tion

ITU TG 8/1 Request for candi-date RTTs

TG 8/1 Cut of date for evolu-tion reports and decision on key charac- teristics

Determine the key characteristics

Complete standardiza-tion

3rd Gen. SATEL-LITE

2005-10

37

quency, implementation and mobility issues from a different angle than the one fromwhich IP network providers see them.

2.5 Globalization of the environment

Developments in technology have introduced various new terms to the field, and global-ization is among them. Previously, technology was mainly developed for national orregional purposes, but due to requirements such as those of competition and profitability,the markets have expanded. The term globalization is widely used in various contexts. Inindustrial globalization, new balances must be sought between competition and coopera-tion, and also in standardization. One description of globalization is given by MartinBangemann (ETSI 1995, p. 11):

“This globalization of the Information Society and the management of the transition to thisSociety, taking into account the needs of all interests of society at large, constitutes one ofthe most important tasks to be undertaken in the remaining part of the last decade of the 20th

century. To succeed, and to respond in the available time window, authorities, governmentsand states should encourage private initiatives and investments and should develop a dyna-mic and adaptive regulatory regime. The globalization will likewise rely on establishing afavourable international environment by having close cooperation between internationalorganizations, such as the ITU12, ISO13 and WTO.”

A more specific definition is given by Castillo, the chairman of the ETSI GA14 (duringthe 90s). He states that telecommunication globalization “proves that users of standardsrequire global solutions in order to benefit from new sources of strategic advantage inmarkets that are no longer bound by geographic frontiers […]. It has become synony-mous with liberties such as the freedom of speech and the right to knowledge” (ETSI1995, p. 13).

Following Snow the globalization is “the impersonal forces of global competition maynow, in other words, replace conscious antitrust policy at the national level, particularlyif such policy is seen to disadvantage the largest and most efficient USA firms in the inter-national arena“ (Snow 1995 p. 812). From the US perspective this provides an evenlarger and more open market for non-USA suppliers of telecommunications equipmentand services. Equally we can state that USA or Far East suppliers have similar possibili-ties for markets in Europe. Globalization requires companies to attempt “to international-ize their outputs through mergers, acquisitions and joint ventures, driven by a combina-tion of escalating costs of the new communications technologies and an explosion ofdemand for new communication services” (Dyson 1990).

A popular view of globalization is as the absence of borders and barriers to tradebetween nations (Sera 1992). Parker (1996) states that not only are organizations affectedby globalization, but the combined activities of all kinds of organizations also stimulate,facilitate, sustain and extend globalization. In international business, Parker (ibid.) broad-

12. International Telecommunication Union13. International Organisation for standardization14. General Assembly

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ens the term ‘globalization’ to ‘global enterprise’ and ‘international firm’. An interna-tional firm is one whose business activities cross national boundaries (Ball andMcCullough, 1990, in Parker 1996), or which is involved in business in two or morecountries (Daniels and Radebaugh, 1992, in Parker 1996). Parker refers to Hordes et al.(1995) “its headquarters are almost always based in a single country, although it mightestablish partial or complete operations in others. Its culture and organizational structureare consistent with the practices and norms of the home or headquarters country. Itadopts standardized technologies and business processes throughout its operations,regardless of where they are located, and it relies on similar policies, especially regardinghuman resources, worldwide.” Parker (ibid., p. 489, following Hout et al. 1982, Levitt1983, Barlett & Ghoshal 1989) continues that “global companies have been defined asthose with global strategies where economies of scale are realized from worldwide inte-gration and standardization”. Yip (1995) suggests that the global enterprise might depen-dent to a greater or lesser extent on the amount of its business that has a worldwide pres-ence. Hamel and Prahalad (1985, in (Parker 1996)) state that “efforts to balance world-wide standards with demands for the localization of products and services have also beencalled a global strategy”, although Yip (1995) describes this approach as ‘multilocal’ andAshkenas et al. (in Parker 1996) call it ‘glocal’.

2.6 Summary

In this chapter we have given an overview of wireless technology development, includ-ing also such factors as timing and globalization.

In spite of idealistic ideas of one global standard, this would have been too costly forall the actors. This can be regarded as one of the main reasons evolution is needed,because of operators’ huge investments in GSM networks. The operators’ target is tomake their business profitable, which means that the older system needs to go overbreakeven point, before starting the implementation of a new network. Smooth technol-ogy evolution steps enhance the smooth transition to the UMTS system. Thus the opera-tors can utilize the network resources efficiently. The critical factor for success is the opti-mization of the signalling load and the reduction of overall transmission capacity.

One reason to start developing the old system further was the foreseen limitations infrequency capacity. It was understood at an early stage of the development that the tele-communications equipment/terminal would have to operate world-wide and thus thiswould require a global standard. A global standard would mean that the telecommunica-tions market environment would be borderless, and this would also reduce the technol-ogy research and development costs. Global standards would create an environment inwhich the basic requirements for compatibility and interchangeability would be realized.

3 Perspectives on standardization

Standards are not only used with complex technologies. In fact, we use standards everyday, such as languages, or different paper formats. These standards are so commonly usedthat they have become invisible and are an important part of our life or environment.Another practical example is when we wake up in the morning. We usually have the sameregular way to wake up, take a shower, make coffee and read the paper, usually in thisorder. Technical standards are based on the same idea, i.e., commonly accepted rules onhow to act in specific technology issues. In addition, standards have to be available toeveryone, have a commonly known acceptance policy, and be combinable. Standardiza-tion is a process in which standards are created within a formal or informal standardiza-tion organization.

3.1 Standardization preliminaries and the need for standardization

The entire standardization process can be seen to consist of negotiations concerning thescope and depth of the standard, testing, different technological regimes, and recognitionof the final user needs and implementation of new processes. All these are shaped by con-tinuing changes in a complex social system. The negotiations can take place betweenactors, for example standardization bodies, and manufacturers. Testing is a crucial part ofstandardization which ensures that the developed technology functions correctly and thatthe standards are appropriate. New standardization processes are needed so that standard-ization follows developments in technology and improves organizations’ and manufactur-ers’ positions in the technology system. Such discussion is presented in, e.g., Oksala et al.(1996, p. 359), when addressing the question of how best to develop standards for the ITindustry.

To implement a standard after the standardization process the process must end with adetailed standard. After specification, a number of other elements need to be investigatedand finalized before commercial deployment. In the next sections we define the conceptsof standards and standardization more thoroughly, and present the main actors in the stan-dardization process.

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3.2 Standards and standardization

There are various types of standards: basic, terminology, products, testing, safety, ser-vice, engineering or planning, and organizational or social standards. These all have aspecific meaning. The focus of this research is on wireless technology standards. Howev-er, we want to give a more general definition of standards in this chapter. Various organi-zations have also created their own definitions of standards. The following definition giv-en by ISO and UNECE15 is widely accepted within official national standards institu-tions (Nicolas 1994):

“A technical specification or other document available to the public, drawn up with thecooperation and consensus or general approval of all interests affected by it, based on theconsolidated results of science, technology and experience, aimed at the promotion of opti-mum community benefits and approved by a body recognized on the national, regional orinternational level.”

According to Lathia (1995, 813) the “depth” of standardization will very much dependon a case-by-case analysis. Simply put, standards should be detailed enough to allowinterconnection and interoperation in a multi-vendor environment, open and “modular”(platforms) with a view to a “phased” approach for service provision usable in differentnetwork configurations (for example wireline or wireless), and rapidly updated as tech-nology advances.

Cargill (1989, p. 41) differentiates standards according to the behavioural definition ofparticipants in the wireless standardization process and the motivation of the participant(provider or user). To understand the motivation of the participant, further attributes anddefinitions can be developed (ibid., p. 41):

“A standard, of any form or type, represents a statement by its authors, who believe thattheir work will be understood, accepted, and implemented by the market. This belief is tem-pered by the understanding that the market will act in its own best interests, even if these donot coincide with the standard. A standard is also one of the agents used by the standardiza-tion process to bring about market change.”

We can assume that a manufacturer will accept and use standards if it believes that itcannot control the market directly, and that by standards it can do better. Acceptance ofthe market as externally controlled, and understanding of the tools available to influencethe market determine whether the manufacturer is interested in using standards. On theother hand, the users as individuals, separately or collectively accept and use standardsonly if they believe that standards offer a benefit. User behaviour is difficult to predictand furthermore the benefit which the user will gain from the standard is not necessarilydistinct or quantifiable – it is a trade-off of less desirable and more desirable factors(Cargill 1989).

The prime objectives of standardization from the point of view of economic and sociallife are (Nicolas 1994):1. promotion of quality products, processes and services by defining the characteristics

which determine their capacity to meet given needs, i.e., their fitness for use,

15. United Nations Economic Commission for Europe

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2. promotion of economy in human effort, materials and energy in the production andexchange of products, and

3. promotion of industrial efficiency through different ways of controlling.These facilitate mass production and interchangeability of components and products.

Standardization benefits actors in various ways, as stated by ETSI16. Standardization:– enables interoperability– encourages innovation, fosters enterprise and opens up new markets– creates trust and confidence in products– expands the market, brings down costs and increases competition– helps prevent the duplication of effort. Another way to classify standards is proposed (Krechmer 1996a). He classifies stan-

dards into four groups which are related to each other. The first group is unit standardsmeasurable by physical qualities. The second involves similarity standards that define thevariation permitted within a set of standards. Compatibility standards are the third group,which defines the interface between two or more connecting components that are compat-ible rather than similar. The fourth group is etiquette standards, which presents the initialnegotiation between independent communicating processes for the purpose of establish-ing communications, e.g., to say “How are you?”

We have defined mobile communication and related issues and described the technolo-gies in Chapters 2.1, 2.2 and 2.3. Standards and standardization we have defined in thesections above. Our attempt to find a good definition for wireless standard was challeng-ing. We could not find an unambiguous definition. In this research we use the definitionof a combination of standard and wireless technology. As can be seen, there is no one“right” definition for standards and standardization due to their abstract and intangiblenature.

3.3 Types of standards

As mentioned earlier, there are various types of standards. Each of them is formedaccording to the requirements of the participants, technology, product and environment.Within standards we distinguish between de facto, de jure, formal, voluntary, sponsored,unsponsored and open standards. However, we can distinguish different standards accord-ing to their life cycle too. The lifecycle of a standard starts with its creation and goesthrough publication, implementation, and modification, terminating with cancellation orreplacement. Furthermore, each published standard should be supplemented with fre-quently updated information on its lifecycle. This classification can help in human com-munication, in searching for information and organization of data. The common target isto make matters clear. More detailed information about classification of standards can befound in (de Vries 1999).

16. www.ETSI.org, referenced 12.10.05

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3.3.1 De facto standards

De facto standards are typically created by individual firms, groups of companies or inindustrial associations. De facto standardization is characterized by its reliance on marketforces. There are no regulating, institutional arrangements influencing the process. Defacto standards, e.g., NMT are often developed by industrial consortia or vendors. Openstandards are generally defined and cited as follows:

“An open standard is a publicly available specification that is developed and maintained byan open, public consensus process and that is consistent with international standards, whererelevant. Additionally, an “Open System” is one built to conform to one or more open stan-dards.”

According to Bird (1998), the key principles of open standards are that any standardmust be available to be implemented in a product without royalties or other charges, andthe standard must be developed through a known and predictable process. The processshould be open to inputs, and all interested parties should have the ability to influence theprocess. This kind of standardization process is achieved , e.g., in the Internet standard-ization in the IETF organisation. The description of the objectives of voluntary standard-ization is as follows:

“Standardization is the voluntary and methodical harmonization of material and non-mate-rial objects undertaken jointly by the interests concerned for the benefit of the community asa whole. It shall not lead to individual interest gaining a special economic advantage andrequires consensus agreement between all parties concerned.

The standards cover products, systems, processes and services and promote rationalizationand quality assurance in the fields of industry, technology, science and administration. Theyensure interworking and interchangeability of products and systems, rational order and com-munication between market partners. They are aimed at supporting the free movement ofgoods and services within Europe, at protecting the safety of persons and of property and atproviding an improvement in the environment and in quality in all fields of life. (CEN/CENELEC/ETSI17)”.

3.3.2 Unsponsored and sponsored standards

Unsponsored and sponsored standards are often the outcomes of market forces. Unspon-sored standards are sets of specifications, for which an originator holding a proprietaryinterest cannot be identified. These specifications highlight the technical features of aproduct. On the other hand, sponsored standards have one or more sponsoring entitiesholding a direct or indirect proprietary interest, which another firm can adopt from theparticular sets of technical specifications. Unsponsored and sponsored standards arewidely discussed in (David 1990). For examples, we can refer to WAP18, Bluetooth orSymbian coalition specifications, which change the current market technology.

17. European Committee for Standardization/ European Committee for Electrotechnical Standardization

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3.3.3 De jure, formal standards

De jure, official or committee standards are developed and approved in recognized com-mittees according to formal procedures. De jure standards are regarded more highly thande facto standards. By organizing standardization centrally, uncertainty about the identityof the winning standard may be eliminated, and the delay in market development may bereduced. Furthermore, when the standard is launched to the market after it is accepted, itenables users to adopt the new technology fully, profiting from the new networks andlower switching costs. Sponsored standards are also referred to as de jure standards. Thisdenotes a situation where a standard is approved and given a law-like status by an institu-tion authorized to do so, e.g., GSM in ETSI, ITU or ANSI19.

Formal standards are mandated standards, which are specified by governmental agen-cies that have some regulatory authority. For example, military standards often have a lawbacking them. Formal standards differ from de facto standards by being open, common,and public. De Vries (1999) raises questions concerning the definition of ‘formal’. Does itmean ‘recognized’, by governments, or by the international FSOs20, the ISO, or the ITU?Or does it refer to a more or less democratic, consensus-based decision-making processand openness to all interested parties? Interestingly, the literature provides no clearanswer to this question. De Vries (ibid.) follows Stuurman (1995, p. 22– 24), saying that‘formal’ refers to recognition by an SDO21. SDOs can be private or governmental organi-zations. An NSO’s22 standards are formal, common, open, and public and, in industrialcountries, decided by private organizations.

3.4 Main actors in the standardization process

There are many actors in the global standardization field: regulators, manufacturers, oper-ators and standardization organizations. They all have their own interest and role in thestandardization process and involve different participant groups. Standards provide mech-anisms that align the interests of diverse social groups and create incentives to developand operate with a common technological basis. This will be discussed in the followingchapters.

Telecommunication standardization organizations include ARIB23, ETSI, ITU, ANSIand TTC24. The GSM Association, previously GSM MoU Association, and UMTS

18. WAP (Wireless Application Protocol) is an open global specification that empowers global users with wire-less devices to easily access and interact with information and services instantly. The WAP Forum was anindustry association comprising around 90 members. They created a de facto standard for wireless informa-tion and telephony services on digital mobile phones and other wireless terminals. The WAP Forum hasconsolidated into the Open Mobile Alliance (OMA) and no longer exists as an independent organization.More information is available at (htp://www.openmobilealliance.org, referenced 12.10.05)

19. American National Standard Institute20. Formal Standardization Organization21. Standard Developing Organization22. NSO, National Standardization Organization23. Association of Radio Industries and Business

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Forum are examples of standardization organizations; ERO25 and CEPT26 are examplesof regulatory bodies. 3GPP is regarded as a global consortium. OMA is a fairly recentlyestablished standardization organization to support 3rd generation development. Variousnational regulatory bodies and manufacturers are important actors in the standardizationfield, but they are not presented separately in this research. In addition, there are manyimportant global standardization bodies such as the ISO or ATM Forum, but in spite oftheir importance they are not discussed in this research, because their role in wirelessstandardization is not that central.

Participation in standardization work is voluntary and largely without restriction, andthus competitors may act there together. However, accepting a standard reduces pre-com-petition. It is noticeable is that this does not eliminate competition altogether. In fact, it isbecoming more important to ensure that one manufacturer’s products will work withother manufacturers’ solutions (e.g., Bluetooth, WLAN27) and in the markets created. Forexample, Bluetooth technology integrates short-range radio-based technology into vary-ing devices. It is also an open standard. Bluetooth, Wi-Fi, and WLAN present the “hot-test technology” in telecommunications standardization, and hence are the “first genera-tion standards” of this kind of technology. As we have indicated, within the technologyarena there are different evolutions and generations of standardization taking place onmultiple layers. This leads to a situation where not everything is standardized in a formalway. Comparing the 3rd generation standardization to the 2nd in this context, the 3rd gen-eration is more technology development focused than the 2nd generation, which concen-trated more on standardization. And if we look further back, the 1st generation standard-ization was also focused more on technology development, because developers had todesign the whole system.

3.4.1 Manufacturers and operators: research and development

The manufacturers and operators of the products and services get the main benefits ofstandardization. Technology in itself does not create wealth for manufacturers or opera-tors; this is done by services, voice and videos through the network. Manufacturers areregarded as network and device producers, such as Nokia, Ericsson, Siemens and Sam-sung. Operators provide services through networks to the end users. Operators can owntheir own networks or hire and provide connections and services for users. Examples ofoperators are NTT, Vodafone, and France Telecom, among others.

The difference between manufacturers and leading-edge technology companies is thatthe latter are more specialized in specific leading technologies such as Internet softwareor signalling technologies. To launch new products requires continuous research; other-wise, the new products will not enter the market.

24. Telecommunication Technology Committee25. European Radio Office26. Conference of European Posts and Telecommunication27. Wireless Local Area Network

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Research produces innovations, and these lead to products. Innovations can bedescribed as a process of movement through three overlapping stages: invention, innova-tion and diffusion (Enos 1962, Mansfield 1968, King et al. 1994, Dosi et al. 1998). Inven-tion is a new idea or product, which may or may not have economic value. Innovation is aprocess whereby inventions move into usable form. Here, standard-making is an exampleof such an innovation. Furthermore, King et al. (1994) state that diffusion is the spread ofthe capacity to produce and/or use an innovation, and its use in practice. For example,several inventions will be required before the 3rd generation system is functioning to theextent for which it is designed. Telecommunications standard-related innovations cannotbe regarded as single innovations, but as collections of innovations, or parts of a larger“ensemble” of technological change. This is because the systems are complex, large andcomposed of components from other technologies. As Strandberg (1999) states, stan-dards are not the actors’ primary answer, and a standard itself does not mandate innova-tion. Standards provide incentives to the economical use of innovations that conform thestandard, or produce new innovations that meet the standard more efficiently.

The R&D process results on “prototype” products – innovation. In this sense, technol-ogy is related to standards, because there is a need for global compatibility that must bemet across committed research (Gabel 1991, Goodman 1998). Compatibility can also beachieved by “gateways” (Gabel 1991, Goodman 1998), i.e., products that are capable offollowing more than one standard. The important issue is how to catch the idea/knowl-edge, tacit or codified, in the process of converting knowledge into messages which canthen processed as information, i.e., standards (Cowan & Foray 1997). The codificationprocess, in principle, reduces the cost of knowledge. There are some claims that the distri-bution of knowledge between tacit and codified has not changed (Dasgupta 1994). Cowanand Foray (1997) point out that the stability in the knowledge environment is not univer-sal. Thus it is often the case that the knowledge environment involves subtle changes.

Research and development activities are seen as a seed of technological and economicgrowth. Traditionally, firms have benefited from their own R&D activities, thus develop-ing proprietary products and networks. This has created technological opportunity,increasing the productivity of R&D and the ability for appropriate returns from newdevelopments, making the R&D profitable. This means a heavy focus on R&D, such as insemiconductor development, because new semiconductors are created with a considerablespeed (Klevorick 1995). The intensity differs from the 1st generation and varies amongindustries such as the forestry industry. Alongside the technological development, com-patibility and interoperability requirements have been discussed. Therefore it is efficientto arrange interorganizational arrangements such as joint ventures or consortia, technol-ogy licensing, IPR, and sub-contracting with universities or private laboratories. Hightechnology companies can no longer live as “lone wolves”. They cooperate, or are forcedto, in terms of standardization, carrying out joint research projects and IPR contracting.R&D can act as a bridge between the technology development and commercialization. Indifferent environments, the objectives of R&D can vary due to political, cultural and eco-nomical effects.

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3.4.2 The role of SMEs in standardization

In this research we are interested in how SMEs can adapt standards development for theirproducts. The challenge, for the whole industry, not just for wireless technology, is howto get SMEs to use standards in their business, and thus gain benefits. Small and medium-sized enterprises are attracting increased attention in recognition of their economic roleand their contribution to growth. SMEs represent over 95% of enterprises in most OECDcountries, generate a substantial share of GDP28, and account for well over half of pri-vate sector employment. This creates 60 to 70% of employment, and generates a largeshare of new jobs in OECD economies (www.oecd.org)29.

The number of SMEs in Europe is significant (93.4 % of all companies) which means20 million enterprises with fewer than ten employees. According to European Commis-sion data, the proportion of enterprises with 11–50 employees is 5.8%, and the proportionwith 51–250 employees is 0.8%. The problem of understanding SMEs is that they live inanother world – in language, business model and complexity. The level of complexity dif-fers in different regions or globally. This means that the transfer and use of new businessconcepts in small and medium-sized enterprises is therefore difficult. Furthermore, theactual application of standards is problematic, due to their complicated text and rules, thecosts of buying and applying them, the fact that they will not necessarily fit in with thefirm’s day-to-day operations, the inability of the small enterprise to afford to participate inmaking them, and the fact that they are made by big companies who ignore small compa-nies (following Posthumus 2004).

However, firms of many other types can be considered global. Many small andmedium-sized firms are breaking with the existing business traditions within nations to goglobal, or act as “born global”, developing what it means to be global. As globalizationand technological change reduce the importance of economies of scale in many activities,the potential contribution of smaller firms is enhanced (www.oecd.org).

3.5 The role of standardization organizations

Standardization organizations, such as ETSI, ITU, and 3GPP, have the central role in theprocess. The standardization organization has a role with a specific right and authority. Itcan specify questions or problems in the standardization field from the viewpoint of alter-native standardization and technology solutions (Hanseth & Monteiro 1997). Accordingto Latour (1987), when we have reached consensus concerning the standards – i.e., inter-ests are aligned – we have had a race between different actors trying to manoeuvre them-selves into key positions as “gatekeepers” or “obligatory passage points”. The standard-ization organization creates a ‘space’ in which all participants in the process are able tomeet. From the space, participants can request a gateway “address” to track them down inorder to voice their concerns. For the actors, the ‘space’ is an important place in which to

28. Gross Domestic Product29. Referenced 15.5.05

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collect information and knowledge and distribute it to their own organization. The ‘space’enables actors to move from one culture to another culture.

The organization’s role can vary, according to the classifications of the standards. Theycan be open (de facto), mandatory (formal), or proprietary (de jure). The major actors cangenerally benefit from ownership of proprietary standards, while small companies areinterested in open standards (Goodman 1998). Microsoft operating system platforms areexamples of proprietary standards. Zaninotto (1998) comments on an interesting problemconcerning proprietary standards. He raises the question of the joint effects of private pro-prietary standards and networks. For example, Microsoft has covered the market, whichgives it some kind of monopoly power.

Organizations act also as evaluators of standards. In general, one can evaluate stan-dards as intrinsic and extrinsic. Intrinsic standards embody the compatibility specifica-tion, and extrinsic standards describe a relationship explaining how well the technologyembodied in the standard meets the needs of its users (Goodman 1998). Extrinsic stan-dards require that organizations and participants form a relationship in which industry,technology, and market actors establish a “gateway” where the standards are defined.Extrinsic standards include e.g., SIM30 card or data services development. The correcttiming plays a significant role in extrinsic standards, as we have seen in GSM standard-ization. GSM was released at the right time, and the system met the users’ needs. Exam-ples of intrinsic standards are the recently developed Bluetooth or WAP specifications.Libicki (1996) argues that for intrinsic standards quality is important, and that good out-comes are more quickly achieved in the standardization process when the technology“matures” before hitting the market. After all, what counts is the extension and adaptabil-ity of the standard. Standard adoption cannot be a one-sided adoption. Instead, adoptionrequires the acceptance of all the actors, especially that of the industry and users.

Participants in the standardization process also have different roles and targets in stan-dardization organizations according to the company’s strategy. The participant can act asa viewer, commentator, supporter, or reporter of a document. The diversity of appearancesin formal organizations may be caused by a lack of resources, a different focus concern-ing core issues, or a desire for visibility. However, cross-participation increases informa-tion flow and reduces barriers. For example, one chairman of a certain group can becomea vice-chairman of a subgroup. Integrations in standardization process are manufacturersand operators, who can participate in all standardization organizations. They have a sig-nificant role to play, and transfer information from one organization to another. Thus, theyact as information brokers. Acting in many organizations ensures that everybody works ina similar way. However, actors have their own interests concerning standardization andparticipation, and thus may form various consortia to achieve their goals. Over the years,the number of organizations or consortia has grown significantly. According to Weiss andCargill (1992), consortia:

“range from organizations whose primary role is to facilitate the adoption of existing stan-dards through promotional activities and conformance testing to those that are activelydeveloping new technologies that are intended to form the basis for either de facto or volun-tary standards.”

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Membership of a standard development organization is generally available to any partyfor a nominal fee; membership in a consortium may be limited to entities able to pay asubstantial membership fee. A consortium can also be defined as a collection of like-minded actors that participate in the development of what may be a market-accepted solu-tion to what is perceived to be a user problem. According to Weiss and Cargill (1992), thedifference between standardization organizations and consortia is the way in which theycreate and distribute rules. Standardization organizations operate under nationally pub-lished rules of consensus that mandate openness and equality of participation. Consortiamay create and distribute their own rules for participation and publication (Ibid. 1992).

Standardization bodies take pride in being open, but this openness can currently meanthat the process may slow down and lead to endless discussions, with the quest for “dem-ocratic” consensus including endless process or voting cycles. This is due to the growthof the number of participating members. The semi-“closed” groups such as OMA or Sym-bian show that when the forums show results, other market actors will join (Strandberg,1998). “Semi-closed” means in this context that the preparatory work will be done behindclosed doors and released when the work has progressed to a stage where openness can beapplied.

The organization process is becoming more complex. The number of working itemshas increased, and as a result many of them require specialized knowledge and necessitatethe establishment of ad hoc groups and working committees. At the same time, the chair-man’s work has not reduced. Their work requires efficient distribution of issues toexperts. Interestingly, the amount and complexity of the work has increased, and this isthe situation even though 3rd generation standardization does not have to start fromscratch, in contrast to the beginning of the 2nd generation standardization. This is due totighter time schedules, technology requirements and the global environment.

3.5.1 Formal standardization organizations

“Formal standardization bodies have to follow predefined procedures and rules that regulatethe status, organization and process of developing standards. In recognition of the limits ofboth market forces and hierarchical control, formal standardization is a key strategy fordeveloping an information infrastructure” (OECD, 1991 in Hanseth & Monteiro 1997).

Formal standards take a longer time to create, due to a longer and more formal accep-tance policy. However, formal standardization bodies are trying to improve their stand-ing, for example by opening up the process to specifications generated by some externalentity or forming liaisons with other specification-producing organizations, such as par-ticipating in 3GPP work (Jakobs et al. 1998).

ITU is an example of a global formal standardization body, and its members are alsomembers of the UN. Thus, its membership is wider than ETSI’s, for example. ITU acts asa gatekeeper between the telecom industry and the service market cycle. It can selecttechnologies under an “umbrella” from the technology cycle by recognizing trends andmarket requirements. This enables cooperation with regional and national regulators. In itsgatekeeper role, ITU shapes the “gateway” along several critical dimensions: timing, IPR,

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actors’ roles, intensity and role of artefacts. In this case, artefacts may be, for instance,standardized interfaces which enable compatibility.

ETSI is another example of a standardization body. Concerning market issues, it doesnot discuss market issues. With these issues it does cooperation with forums and otherinformal standardization organizations.

Formal organizations seek an appropriate balance between commercial and publicinterests, secure radio spectrum availability, and thereby provide an efficient use of radiofrequencies. The regulators form their own group, nationally and regionally, such as theEuropean Radio Office (ERO). They set regulations for frequency and give licences,identify spectrums, allocate spectrums for specific purposes, and clear a spectrum whenneeded. The radio spectrum is the backbone of wireless telecommunications as well as awide range of other services. It is thus an increasingly scarce resource.

3.5.2 Informal standardization organizations

Informal or voluntary standardization organizations do not have a law-like status such asthat of ITU. They are ad hoc organizations, created for a certain purpose, as was the WAPForum, and more recently OMA and Bluetooth. The use of voluntary standards is there-fore optional. The number of informal standardization organizations grew as we movedtowards the 3rd generation. Their work is expected to be more open, faster and flexible,but at the same time to be economical for the developers.

When comparing formal and informal standardization processes, the connectionbetween the coalition of organizations and standards is different: there are no formal orga-nizations in informal process. Manufacturers and operators can form a coalition to createstandards, i.e., various actors forming large networks also participate in the work of aforum. Within the various forum groups an agreement is formulated, and the result is thenbrought to the forum and an attempt to find a consensus is made. In a forum, membersattempt to find a consensus on issues which can be submitted to standardization bodies.The pull effect to create an informal standard can come for example from R&D innova-tions. Informal standards are often effective integrations between engineering push andmarket pull, due to the need for taking advantage of technology development for commer-cial use. These organizations are more interested in market issues.

During the 3rd generation, standardization has moved to develop standards for globalmarkets. This required the establishment of a new global consortium (3GPP) due to thetiming requirements and complex unsettled technical matters (e.g., radio access levelstandards). At the same time the hectic standardization process involves more experts.ETSI technical committee meetings, where GSM and UMTS are being standardized, have150 to 200 participants, while in the earlier days they had 40 to 50 participants (see Chap-ter 2.3, p. 34). On the positive side, the more participants are involved, the more ideas andmore creativity, the more sensitive issues there are to deal with, and the more public theenvironment becomes. In contrast, the more choices we have, the greater the design free-dom, and in principle, the greater our ability to optimize our standardization usage. Fur-thermore, the growth in numbers of participants has improved the document handling

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process. In the 1st generation there was no coordinated document handling procedure. Thedocuments could even be handwritten papers. At the beginning of the 2nd generation,standardization document distribution was organized by posting heavy bundles of papersto participants. At the end of 2nd generation standardization, document handling wasmoved to the Internet and CDs, which enabled equal on-line service to all participants. Onthe negative side, the increase in choices – especially choices that are not mutually exclu-sive – means more uncertainty about finding the appropriate strategy (Calhoun 1988).

Previously, the GSM MoU, now the GSM Association, played an important role in theintroduction of GSM. Now, operators’ commitment is needed for the acceptance ofUMTS (Samukic 1998). The critical point in the market is users’ adaptability to the ser-vice concept. In contrast to 2nd generation low-speed wireless data, 3rd generation high-speed data transmission will be successful if the cost to the average user is competitivewith the wireline alternative (Lee 1998).

3.5.2.1 3GPP – A revolutionary approach

The 3rd Generation Partnership Project (3GPP) has been established for the preparationand maintenance of technical specifications, and it is a non-profit association31. Techni-cal specifications for the 3rd generation Mobile Systems base have evolved from theGSM core network and radio access technology studies in ETSI as UTRA32 and inARIB33 as WCDMA (both FDD34 and TDD35 modes). 3GPP work on a global level as asingle group, and have several subgroups36. The project should provide a flexible work-ing method for global standardization. There are different kinds of members: partners,organization partners, market representation partners and individual members. Member-ship is open to all standard organization bodies irrespective of geographical location. Thegoal is that all work together. The number of members will grow when all work is in thesame “site”. When all members, meaning all standardization participants, are aimingtowards the same target, a faster, improved standardization process should take place. Inearlier generation standardization processes, organizations made their own specifica-tions. After that they exchanged information and attempted to coordinate the work. Cur-rently the organizations coordinate and distribute their work and projects concurrently.Currently the organizations coordinate and distribute their work and projects concurrent-ly, which should also make the 3G standardization process faster. The high group com-mitments of the organizations reflect the number of technical specifications. Much of thishas been made possible by network technologies and especially the Internet, whichallows real-time document exchange and collaboration.

31. Third generation partnership agreement, referenced 8.11.2005 http://www.3gpp.org/About/3gppagre.pdf32. UMTS Terrestrial Radio Access33. Association of Radio Industries and Business34. Frequency Division Duplex35. Time Division Duplex36. ETSI, SMG Tdoc 574/98. During the meeting in Tokyo 7–9 Oct 1998, ARIB, ETSI, T1, TTA and TTC

agreed this framework document

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3GPP was established in 1998 by five standardization organizations: TIA37, ETSI,ARIB, T1 and TTC38. The group established is a mixture of a forum and a formal stan-dardization organization; it is a global forum with the benefits of formal standardizationorganizations. It is a non-profit association. The definition of the 3GPP group is as fol-lows (www.etsi.org):

“3GPP will provide globally applicable technical specifications for 3rd Generation MobileSystems based on an evolved GSM core network and Universal Terrestrial Radio Access(UTRA), to be transposed by the relevant standardization bodies (Organizational Partners)into appropriate deliverables (e.g., standards).”

The idea behind the cooperation was to work together in one international group,divided into many subgroups39. The structured approach facilitates effective project plan-ning, making visible the various components and the dependencies between activities(ETSI Mobile News, 2000). The participants thought the setting-up of such a standardiza-tion organization would happen smoothly, but it was not as straightforward as theyexpected. To make the task easier, the new framework has three levels: features, buildingblocks and work items. The features make up the top level and will define the principalcharacteristics of future releases, which dictates which features of the mobile system willappear in which release. This is a significant improvement to the process, because it helpsimplementers, manufacturers and operators focus their work more precisely. Moreover,features are made up of the high level components, building blocks. “Work item” relatesto the planned production of an individual deliverable, such as a specification40.

The 3GPP was established for the preparation and maintenance of technical specifica-tions. When finishing work on the SMG group, some of the GSM specifications wereassigned to a newly created group, a Technical Specification Group (TSG) calledGERAN, meaning GSM/EDGE Radio Access Network. GERAN’s responsibilities are themaintenance and development of GSM specifications and technical reports, includingGSM evolved radio access technologies (such as GPRS) and Enhanced Data rates forGSM Evolution (EDGE) (ETSI, Mobile News, 2000). Technical specifications for the 3rd

generation Mobile Systems base have evolved from the GSM core network and radioaccess technology studies in ETSI as UTRA and in ARIB as WCDMA (both FDD andTDD modes). The right timing was important when transferring GSM specifications to3GPP, to enable smooth operations integration of the two generations.

The formal GSM standards were transferred 3GPP and renumbered. In the case of3GPP documents, which were formed in an informal project, the problem was how toassign 3GPP documents to formal ETSI standards. The problem was solved by acknowl-edging 3GPP in ETSI’s internal rules as an ETSI Technical Body, which means that tech-nical specifications and reports approved by 3GPP are recognised as ETSI technical spec-ifications and reports with “ETSI internal approval”. To ensure harmonized standards dis-

37. Telecom Industry Association38. The 3GPP is now a collaborative activity between the following recognized Standards Organizations:

ARIB (Japan), CWTS (China), ETSI (Europe), T1 (USA), TTA (Republic of Korea), TTC (Japan), (http://www.3gpp.org/ftp/tsg_ran/TSG_RAN/TSGR_05/Docs/Pdfs/rp-99497.pdf, referenced 18.10.2005)

39. The organizational structure can be found at http://www.3gpp.org/About_3GPP/structure.htm40. originally ETSI, Mobile News, 2000, referenced 8.11.2005 http://www.3gpp.org/Management/WorkP-

lan.htm

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tribution outside of Europe, the European Commission requested that ETSI produce har-monized standards, which recognize the different members of IMT-2000 and reduce barri-ers in international trade.

However, the different participants have their own interests, which they want to pushforward. This was the case, for example, when CDMA2000 was established to look afterthis group’s global interest. In the global market, the operator, for example, can operate indifferent regions with different network technologies, e.g., the GSM/UMTS network41 inEurope and CDMA/CDMA2000 in the US. This leads to a situation in which the partici-pants of standardization organizations must create a new way of cooperating. The partici-pants must find a balance for their cooperation in the competitive environment. The indi-viduals in the participating organizations created around 300 technical documents. Thesespecifications led to 3GPP Release 1, which contains WCDMA FDD mode and a GSM/GPRS-based core network. 3G Release 1999 is a consistent set of specifications andreports which was targeted for finalization in December 1999. However, the current stan-dardization phase after the beginning is that the 3GPP standardization work is going onand new releases have been published. The release 6 specification is about the enhance-ments to the uplink data speed. This will be known as High Speed Uplink Packet Access(HSUPA). HSUPA technology is expected to be introduced in 2007.

After the creation of an open GSM standard, the European bodies participating in thestandardization process also created an efficient way of maintaining the standard. Thework was done in ETSI. The standard was not only delivered to the industry, but ETSI TCSMG created a procedure to maintain it. This is the so-called Change Request Procedure(CRP), by which regular updates to standards can take place. The CRP has enabled theGSM system to evolve and to accommodate changes, and thus has enhanced the competi-tiveness of its market position and the flexibility of its evolution. Successful GSM devel-opment, type approval, testing and standardization processes led to the implementation ofthe process on a global level. The necessity of obtaining regional (e.g., European-wide)agreements on fundamental policy, procedural and design issues before the creation ofstandards was also implemented in the UMTS decision process.

3.5.2.2 Forums

The number of participating organizations and discussion arenas has increased and a newform is standardization forums. Forums like the UMTS Forum do not prepare standards,but play an informing and knowledge-creation role. A forum is a collection of people andcompanies – mostly of manufacturers and operators – which attempt to create favourableconditions for the adoption of different technologies such as UMTS. It looks at technicalissues and attempts to create a vision of a technological environment, of what is required,from a technological point of view, to move ahead. It focuses on what type of technicalresearch needs to be done. If there is a gap in the knowledge which needs to be filled, the

41. ‘UMTS network’ refers to a network operated by a single network operator and consisting of: UTRANaccess networks (WCDMA and/or TD-CDMA), optionally GSM BSS access networks, and a UMTS corenetwork.

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forum attempts to identify it. After identifying the gap, it contacts a standardization body,e.g., ETSI, presents the requirements and gets formal acceptance for the proposals byagreeing on a cooperation agreement with a formal standardization organization. In liai-son statements they can contact the IT community and present the requirements of thework to be done. Forums are catalysts for action, identifying an action plan and confirm-ing where it should take place. In future, telecommunications organizations will need towork more closely with the IT industry and engage with the appropriate associations, andthis will increase the role of forums.

The UMTS Forum was established in 1996. It is a non-profit organization under Swisslaw. It currently has over 200 member organizations around the world. The establishmentof the UMTS Forum was recommended by the UMTS Task Force in 1996. The UMTSForum is an international and independent body. It focuses on creating an environment forthe successful commercial realization of UMTS/IMT-2000 services. The forum isengaged in a wide range of activities to increase awareness and understanding of 3rd gen-eration opportunities and issues. The UMTS Forum works as a catalyst with specialistorganizations to examine standards, spectrum and other issues.

The forum is committed to building the industry consensus on UMTS and to success-ful introduction and development of UMTS that can satisfy future market demands forlow cost, high quality mobile communications. The UMTS Forum has created connec-tions with other established organizations, including standard-creation bodies, recognizedoperators and industry communities. It gives advice and recommendations, whenrequested, to such institutions as the European Commission and national administrationbodies. For example, the spectrum issue is extremely important and the forum has beenworking very closely with CEPT in Europe, and particularly with the European RadioCommunication Office and its CEPT group, which is concerned with the preparation ofWRC200042. The UMTS Forum is open to any legally-established corporation or individ-ual firm, partnership, governmental body or international organization that supports thepromotion and further development of mobile and personal communications in the formof UMTS. There are no geographical restrictions concerning where the candidate memberis located. The UMTS Forum has two levels of membership: Full and Associate. Thework of the UMTS Forum is divided into various working groups such as WG143 Regula-tory, WG2 Spectrum and WG3 Market Aspects.

Another group which is important is the GSM Association, which consists of operatorsand regulators. There is a cooperation agreement between the GSM Association 3rd gen-eration interest group and the UMTS Forum. The UMTS Forum expects that these rela-tionships will continue and develop as the 3rd generation develops. The GSM Associa-tion forms an interest group of GSM operators worldwide (due to a recent change in regu-lations, manufacturers and regulators can also be members). They each look after theirown commercial interests ETSI is a European standardization organization. Its memberscan be regulators, manufacturers or operators. The UMTS Forum concentrates on mar-kets, research, regulatory aspects and spectrum issues, and its members are mainly manu-facturers and operators, but also include regulators. All of these organizations are in close

42. World (Administration) Radio Conference43. Work Group

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cooperation by having cooperation agreements, or sharing chairmen or members (Nielsen1996).

3.5.2.3 Example of the new consortia: 3G.IP

During the recent years the number of participants in standardization has increased andthe environment has become more aware of the importance of standards due to marketpull. As the number of participants has grown this has brought new entrants to the envi-ronment, “3rd party developers”. These actors mainly come from the Internet communityand the entertainment industry. They are expected to have a significant role in future tele-communications concepts. Their entrance to the standardization arena is expected,because future terminals are expected to provide Internet connections and media services.

New consortia have been established to enable and foster global cooperation. 3G.IP.44

was established in June 1999. It is a group of operators and vendors who together haveformed a focus group towards developing standards for the implementation of wireless IPnetworks. The establishment of new organizations has been made possible by networktechnologies and especially the Internet, which allows real-time document exchange.Internet standards, on the other hand, are organized by the IETF, which began its work in1986.

3.5.3 Regulators

Tight interrelations between the regulator, the market and technology have substantialeffects on globalization and commercialization. In previous standardization processes, theregulators were most often monopolistic operators wielding significant power. With thedevelopment of technology, and environmental change, the regulators’ role has changed.PTTs have been divided into two organizations: regulators and operators. The new situa-tion has reduced the operator’s power. Regulators set the frameworks for the industry,markets and standards in the form of licences, spectrum allocations and service regula-tions (e.g., billing, numbering schemes, and portability).

The regulators have a crucial role in each region in promoting the region’s economyand competitive business. Governments fund research via their own institutions and thusthe relation to policy and the knowledge-creation cycle is becoming close. One exampleof government funding is ARPANET in the USA which, during the 1960s and 1980s, ledto growth in the Internet (Cerf 1999). Governments also recognize technology develop-ment by making laws and thus responding to public opinion, to the changing role of PTTs,for example. In Europe, the European Commission has had a decision-making role whileformulating telecommunication liberalization directives.

According to the UMTS Task Force Report in 1996 (p. 39), “it is essential for the legaland regulatory environment to reduce the risks and uncertainties and thereby stimulate

44. Third Generation Internet Protocol

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the mobile industry to make the required investment in research and technology develop-ment and standards.” In contrast, Hemenway (1975) argues that the National Bureau ofStandards declined to write interface standards for the computer industry because it fearedthat such standards would inhibit innovation.

3.5.4 Regional characteristics

In wireless standardization we can consider three dominating regions: Europe, Japan andthe US. All of these regions have their own characteristics in terms of standardization. Inearlier generations, their differences were more pronounced, but globalization hasreduced the gaps.

In the 60s and 70s each region and nation had their own national regulation policiesand standards. The first generation analogue systems provided voice services in a limitedarea, without compatibility or interoperability. The exception was Scandinavia, whereNMT was originally developed as a Pan-Nordic system with the goal of achieving com-patibility and interoperability. The standard was created by Scandinavian PTTs. It was thefirst system that offered roaming and interoperability. Moreover, the NMT standard wasopen and was offered free of charge to other operators and manufacturers. In contrast, inthe USA, telecommunications equipment manufacturers introduced a specification for acellular concept called AMPS45. This was an analogue system, but offered no roamingacross networks, thus limiting services to a specific region.

Europe follows ITU recommendations for spectrum issues, and European-wide spec-trum harmonization is carried out by CEPT. The European Commission has also issueddirectives that create a harmonized frequency allocation policy (CEC, 1998). A moreextensive view of the European policy on standardization is presented in the BangemannReport (1994). The European Commission has also promoted European and internationalstandards in public acquisitions in related to information technology in a 1986 decision46.

The EU has a significant role when it comes to supporting 3rd generation systems inthe context of research and in setting directives which will harmonize frequency alloca-tion for GSM, DECT and forthcoming UMTS technologies (CEC, 1998). In Europe, twoextensive research programs have been carried out concerning UMTS: RACE47 (da Silva1996a,b), and its successor ACTS48. Currently, the 6th Framework Programme is beingcarried out49. One common factor of these EU projects is that they contain a strong and

45. Advanced Mobile Phone System46. http://europa.eu.int/scadplus/leg/en/lvb/l24106.htm, referenced 11.1.200647. Research in Advanced Communications in Europe, from 1985 to 199548. Advanced Communication Technologies and Services, established under the Fourth Framework Pro-

gramme (1994–1998), represents the European Union’s major effort to support pre-competitive researchand development in the field of telecommunications. ACTS is one of the biggest European R&TD invest-ments with around 150 projects. For more information, see http://www.cordis.lu/infowin/acts/analysys/intro/index.html, referenced 10.11.2005

49. See the Sixth Framework Programme http://fp6.cordis.lu/index.cfm?fuseaction=UserSite.FP6HomePage,referenced 10.11.2005

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clearly focused thread of user activity on innovative technology. Secondly, their target isto improve European competition in the telecommunications business.

In the USA, the standard-setting process has been market-driven and dominated by theinterests of private industry. This enables actors to react faster, but at the same time leadsto a larger number of standards. In the USA the two main standardization bodies formobile radio systes are TIA50 and T1. TIA and T1 can set ANSI accredited standards. Inthe USA the FCC51 manages spectrum issues. The allocated spectrum for the 3rd genera-tion telecommunication is used currently by the PCS52 system. The USA is developingspectrum positions for the 3rd generation by identifying new frequency bands (Ojanperä1998). An extensive look at US standards development can be found in Reilly and Garcia(Garcia 1992, Reilly 1994).

Japan, exceptionally, has been led by one dominant actor, NTT53. The other actors areDDI and IDO (wireless operators), ARIB, and TTC. The manufacturers and operatorshave moved as a unified entity. This has created closed standard-setting and it has beendifficult for international companies to participate in the standard-setting process. Otherdifficulties have been presented by the language barrier and by differences in the busi-ness culture. But globalization has also landed in Japan. For the 3rd generation standarddocumentation, the chosen language has been English (Ojanperä 1998). In Japan, theMinistry of Post and Telecommunication (MPT) is responsible for spectrum regulation. In3rd generation spectrum regulation, Japan follows the ITU recommendation for IMT-2000. The relations between the regional actors are illustrated in simplified form in Figure3.

Fig. 3. The relations between the regional actors.

50. Telecom Industry Association51. Federal Communication Commission52. Personal Communication Systems53. Nippon Telegraph and Telephone corporation

ETSI

ITU

ARIB

ANSI

UMTSForum

GSMAssociation

TTC3GPP

EROCEPT

T1P1

Nations

Nations

Nations

EU

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From this figure we can identify the actors’ relations, uni- or bidirectional, to each other.It must be stated that the actors presented in the figure are the central actors from theEuropean perspective. With this figure we want to show the organizational complexity ofthe standardization organizations field. This complexity arises from the technology,which has numerous features which must be taken into account when one is planning todevelop a functioning mobile terminal, for example.

3.6 Environment

A standardization includes various actors and diverse environments that are the origins/arenas for these stakeholders. Such environments include global business protection,research policies and political regulation of the provision of consumer services. Such anenvironment changes when the technologies change. The 1st generation wireless stan-dardization environment was limited to the area inside a nation, except in Scandinaviawhere the standardization covered the whole of Scandinavia. During the 2nd generationstandardization the arena extended globally to three regions: Europe, Japan and the USA.At the beginning of the 2nd generation many nations had a duopolistic market situationand since the market liberalization of the 90s many countries have moved to an oligopo-listic market situation due to limited frequencies and the nature of investments. The 3rd

generation standardization environment is global.Actors in the environment include users, administrative bodies, manufacturers, service

and network operators, organizational bodies and regulators. The actors’ positions havechanged over time. The number of users has grown due to functional and regional expan-sion, and due to technological developments. The technologies have become more user-friendly, and equipment prices have come down. In addition, the manufacturers have toproduce a wider range of products and develop brand names to meet users’ requirements.Similarly, as part of service development, network operators need efficient equipment andmust increase network utilization by providing competitive services. Intense competitionhas also led both manufacturers and operators to joint ventures. Mergers and acquisitionsbetween companies have become common.

Most actors’ primary business does not involve standards per se. They know the valueand importance of standards in their primary business, if the standard meets their immedi-ate needs (Strandberg 1999). From this it follows that standards have a role in the creationof markets and the speeding up of technology cycles, when other environmental condi-tions are favourable. They can speed the cycle up considerably if they can create highenough expectations, which suggest high investments, high returns and rapid growth(Evans 1998). On the other hand, if expectations are low and pessimistic, standards canslow down the process.

The standardization environment varies between different nations. For example, tech-nology penetration varies between countries. This affects the readiness with which newcompanies want to enter the market, finance technology investments and open markets tonew entrants. Equally the diversity of users and a variety of preferences concerning ser-vices, equipment etc. affect the process. Moreover, different regions form their own mar-ket environments according to user requirements. For example, in Japan, users favour

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light terminals with voice and entertainment services. Technological developments haveaffected the environments radically. The telecommunications environment has trans-ferred from wireline technology to wireless technology. The market environment of fixedline and the 1st generation telecommunications was a homogeneous voice communica-tion system. From the 2nd generation it has become heterogeneous, in that it involves ser-vices between various systems and software, e.g., voice and data and, increasingly, Inter-net services. Actors during the 1st or at the beginning of the 2nd generation did not havemany opportunities to affect the service platform. More recently they have started to gainbenefits from network externalities in the form of extended network services.

Technical advances can be seen as an evolutionary process, which leads technologicalvariants to compete with each other at some point (Nelson 1994). The classic case is therivalry between VHS and Beta standards. In such cases, the market environment has asignificant impact on compatible products. The benefit of having a standardized technol-ogy becomes very tempting, which will sooner or later dissipate other potential opportu-nities. We can note that the benefit may be attractive for the winner, though the competi-tion itself may not be. This may lead, for example, to competition which delays marketgrowth by encouraging users to wait and see what the standard will be – that is, to seewhat other users will do (Besen & Farrell 1994): the so-called “herd effect”. Nelson(1994) notes that when new technology comes into existence, there is considerable uncer-tainty regarding which of several possible variants will succeed. This may also be thecase in the 3rd generation telecommunications, because there are a lot of uncertaintiesfrom the market point of view. In situations where competing technologies are cumula-tive, an early adopter can gain an advantage over the others. It can be a matter of the righttiming or a matter of chance that may lead to the race being over quickly (Farrell 1986).

3.7 The need for a general model of the standardization process

“A common threat among the standardization processes is that they all consist of proceduralsteps that mix the science of technology with the art of dealing with human behaviour”(Nielsen 1996).

We can find various standardization process models, but very few of them describe thestandardization process as an interplay between various actors in order to help analyze thedynamics of the standardization. By understanding the standardization process as vari-able institutional and organizational change we will gain a deeper understanding of suchissues as the correct timing, the role of R&D, technology and market strategies, and theimportance of network externalities, and be able to define more clearly the type and theextent of specifications and standards. We also recognize the role of user requirements inshaping different stages of the process.

Understanding the standardization process has become important, because new tech-nologies, new forms of business organizations, trade issues and new institutions areemerging. In addition, standards are under constant change. We have de facto, de jure andformal standards, but also sponsored and unsponsored standards. These all imply differentstandardization processes. Thus it would be beneficial if we could apply all these pro-

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cesses integrated into a generic standardization approach. For example, in an unsponsoredstandardization process the institutions do not have a significant role, but they are anessential component in a sponsored standardization process. Standards also form mecha-nisms for the diffusion process, enabling the evolution of multidimensional and complextelecommunications systems. As Nelson (1994) notes, standardization and technologymove forward. Things are not simply getting bigger or smaller, they are changing level.

A practical example of standardization process expansion is the case of China. ETSIhas done pioneering work by distributing knowledge concerning standardization pro-cesses. The Chinese standardization institution was invited to technical talks after ETSIheard of Chinese plans to start production of an independent GSM specification, whichwould have meant incompatibility, the loss of the roaming capability, and increases indevelopment costs of Chinese industry. After the negotiations they accepted one standard– the GSM standard. This was very important in maintaining GSM specifications at theglobal level. For example, roaming enables one to use different networks when movingfrom one place to another, even using the same terminal. Roaming also requires “play”rules, standards between countries, operators and manufacturers on how to operate withinthe network.

3.8 Summary

In the early days of GSM, the markets were national, and the technology was seen as arich boy’s toy. Moreover, it was not of great interest to politicians. Researchers, technolo-gy experts and “pull” organizations had a lot of freedom to carry out their work. Now, inthe 3rd generation, actors must think of the UMTS market globally and recognize thegrowing number of subscribers and economic stakes. From the technology point of view,globalization requires actors to address the problem of how several technologies willbecome standardized in different bodies: in addition to Europe, Japan with ARIB, theUSA with ANSI and Korea with TTC.

In previous generations, standardization work involved only a few standardizationorganizations, but due to the development of mobile phones towards convergence withpersonal PCs that can be carried in the pocket, more standardization organizations areinvolved. The development of mobile terminals towards personal pocket-sized PCs hasmeant that in one terminal a greater number of different kinds of interfaces are needed toget the terminal to function as end users expect. Various organizations have concentratedon one standardization component of the telecommunications system, such as Bluetooth,IPv6, or IETF. An important feature in 3G development is that these integrated services ortechnology standards must also be standardized at a global level, to meet convergencerequirements. Standards are not only needed to enable system technology to function, butmoreover to provide value-added services to end users. Providing value-added servicesfrom the multimode terminal to end users requires that the interfaces in the terminal arecombinable, and this leads to the fact that the standardization environment has extended.To describe this complex situation, a generic standardization process model is needed.

4 Towards the theoretical framework

In the previous chapter, a general outline of standardization was sketched, including dif-ferent wireless standards and organizations. Over the years, a number of theories havebeen presented that can be used for the analysis of standardization, organizations and pro-cesses. In this chapter we intend to combine some of the theories and insights from twodifferent fields: sociology and technology. Institutions and institutionalization are coreconcepts of general sociology. From the technology point of view, wireless telecommuni-cations and software are the fastest growing fields in technology development. We wantto consider wireless standardization from the theory building point of view, which pro-vides a broad enough perspective to social aspects of standardization and is possibleapply to a technological environment. Technology has entered our everyday life as aninvisible part of it. It plays different roles, such as tool, or social actor.

Over the years, the technology has been moulded on the one hand according to indus-try requirements and on the other hand by customer needs. Standardization representsboth factors. Standardization has gained significant importance because of globalization,the number of users, the financial benefits and competition. Standards and technologiesare social artefacts, and participants in the standardization process must create social net-works for using and shaping the technology. Thus social networks play an important rolein the standardization process, as they are critical in creating compatibility between dif-ferent technological components and regimes that span across different nations andregions. While standardization has important social benefits, it may also have social costsas well. A potential disadvantage of standardization is that people may be extremelyreluctant to adopt a new and better standard because of the coordination problemsinvolved, as in, for example, the QWERTY case, as researched by Hemenway (1975).

To research wireless technology standardization in depth, we need to discuss theory-building. We present three theoretical approaches from three different points of view: eco-nomic, organizational and institutional. As our research focus is on standardization actorsit is important that the selected theory is flexible and applicable enough. Our intention isto contemplate three different perspectives which do not compete with one another, andchoose one theory for further usage. In this chapter we first present the key elements ofnetwork externality, organizational theory in general, and institutional theory. After out-lining three theories, we select one theory for further development. We have selected

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these theoretical approaches because network externality theory discusses economicsfrom the viewpoint of standard setting and network externality, organizational theorygives a broader view of organizations, and institutional theory (according to DiMaggio(1983, 1988), Powell (1990, 1991), etc.) discusses formal organizations, but in recenttimes this theory has broadened its perspective, in work carried out by Scott (2001),Greenwood et al. (2002).

4.1 Organizational and institutional form

Each organization is a creation of its own history, of the kind of people who make up itsmembership, the groups and habits they have formed and the way it has adapted to itsenvironment. The outcome may be beneficial if the organization has a distinctive compe-tence and target, possibly an established reputation and a network with other organiza-tions. On the other hand, the process of settling down, of becoming an established andpossibly stabilized organization, may be costly and time-consuming. An innovative,agile, purposeful group may end up institutionalized to be bureaucratic, secure and useful,but without its former energy.

Organizational scientists are beginning to believe that organizations come in so manydifferent kinds that it is no longer possible to come up with a comprehensive definition of“organization”. However, traditional definitions are useful to differentiate organizationsfrom major social entities such as families or societies. Aldrich (1979, p. 458 in McK-elvey & Aldrich, 1983) has offered the following definition: “organizations are goal-directed, boundary-maintaining, activity systems”. McKelvey’s definition (1982, p. 458in McKelvey 1983) tries to avoid excluding any previously unrecognized element oforganizational form: “The internal structure and process of an organization and the inter-relation of its subunits which contribute to the unity of the whole of the organization andto the maintenance of its characteristic activities, function, or nature” (ibid.). The expla-nations of the formal structure of organizations are as divergent as the current approachesto presented theories.

4.2 Network externalities

Farrel and Saloner (1985, p. 70) point out that: “Consumers [Users] benefit from compati-bility in [telecommunications] in a number of ways. There may be a direct “networkexternality” in the sense that one consumer’s value for a good increases when anotherconsumer has a compatible good, as in the case of telephones or personal computer soft-ware” .The network externality theory is widely used to explain the expansion of standardiza-tion. The term ‘network externalities’ was suggested by Katz and Shapiro (1985) whenthey developed the oligopoly model in which a consumer values a product more highlywhen it is “compatible” with other products. Since we are examining organizations

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involved with the setting of standards, a review of this literature is warranted. Networkexternalities are investigated extensively by Farrell, Katz and Economides (Farrell &Saloner 1985, Katz 1985, Farrell 1986, Katz 1986, Economides 1994, Katz 1994). Davidand Greenstein (1990) give a thorough review of the economics literature related to stan-dard setting.

Network externalities, such as the compatibility of standards in certain markets or agiven community, increase the value of each instance. In this context we must mentionanother example of networks, Metcalfe’s Law54. When more people use a standard (e.g.,VHS), its value grows, though perhaps not as the square of the number of users. Forexample, the value of telephone systems or text processing software increases with thesize of the network, as well as when value-added products and services are introduced.This means that with horizontal compatibility, the more users hold facilities the morefunctional profit individual users will gain from their investments (Katz 1985). Thehigher the overall level of functionality, the more actors will be willing to bandwagon55

the system. A stable market stabilizes competition and thus reduces manufacturing costs.The stability of markets can be enhanced by compatibility standards where manufactur-ers do not have to put effort into development of competing standards. However, marketprocesses can become bandwagons, moving groups of people in directions that theywould not, as individuals, choose to go. This can lead to a lock-in56 effect. Users arelocked in through historical accident. According to David (1995, p. 25), this can lead todecentralized decision-making, which can result in too much standardization of the wrongstandards, arrived at too soon and resulting in the:

• selection of a technological system that is inferior to one that is either available orwould otherwise have become available;

• hindrance of a subsequent round of technological improvements;• the stranding or ‘orphaning’ of a substantial body of users who had adopted network

products that failed to become industry standards, consequently ceased to be sup-ported and further improved (ibid., p. 25–26), e.g., the case of Apple Macintosh com-puters.

In the case of network externalities, the lock-in effect is extremely strong. This leads to asituation in which the conversion to a new, better technology is only profitable when alarge number of actors/users are consumers of the particular good. Nobody dares tochange since it is not known whether the others will follow (Katz 1985, de Vries 1999). Agood is often more valuable to a user if many people use compatible or standardizedgoods. In wireless telecommunications, standards enable users to deploy a mobile termi-nal anywhere and at any time, thus creating a novel mechanism for global social interac-

54. Metcalfe’s Law states that the value of a network equals approximately the square of the number of users ofthe system (n2). Since a user cannot connect to itself, the actual calculation is the number of diagonals in ann-gon: n(n–1), or n2–n. http://en.wikipedia.org/wiki/Metcalfe's_law, referenced 15.10.2005

55. Bandwagoning: a tendency to choose the same solutions that others have already chosen de Vries H, J.(1999) Standardization: A Business Approach to the Role of National Standardization Organizations. Dor-drecht, The Netherlands, Kluwer Academic Publishers.

56. Lock-in: the tendency to stick to a certain standard once it is implemented, due to the cost of conversionIbid.

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tion (Hollan 1992). This mobility is partly enabled by hardware and software develop-ment and services.

Network externality theory has many advantages for many industries. When networkexternalities are significant, such as in telephone or railroad networks, market competitionhighlights three important issues: expectations, coordination and compatibility. Accordingto Katz and Shapiro (1986), the pattern of adoption depends on whether technologies aresponsored57. Examples of sponsored technologies are IBM metaframe or Microsoft Win-dows or Explorer. In relation to this, Katz and Shapiro (ibid., p. 822) have made four keyfindings: 1. Compatibility tends to be undersupplied by the market, but excessive standardization

can occur. 2. In the absence of sponsors, the technology superior today has a strategic advantage

and is likely to dominate the market, first mover advantage: it can become locked inas the standard.

3. When one of two rival technologies is sponsored, that technology has a strategicadvantage and may be adopted even if it is inferior.

4. When two competing technologies are both sponsored, the technology that will besuperior tomorrow has a strategic advantage.

The compatibility of products brings benefits for several parties involved in standardiza-tion, in the form of network externalities. These parties are comprised of users, manufac-turers, operators and regulators. These benefits make standardization a central issue inmany important industries. Their capabilities create demand-side economies of scale:there are benefits to do what the others do. Three main sources of these benefits are 1) theinterchangeability of complementary products, 2) ease of communication, and 3) costsavings (Farrell 1986, p. 941). In a presence of compatibility benefits it leads to a situa-tion that users are not that willing to change to a new standard or technology when it islaunched. Moreover, they are willing to switch to a superior standard when important net-work externalities are present in the current one.

4.3 Organizational theory

“Why there are so many kinds of organizations?” asked Hannan and Freeman (1977) in alandmark article. According to Meyer and Rowan (1977, p. 342), one of the central prob-lems in organizational theory is that of describing the conditions that give rise to a ratio-nalized formal structure. They go on to say that in conventional theories, rational struc-ture is assumed to be the most effective way to coordinate and control the complex ratio-nal networks involved in modern technical activities (Scott 1975). This means that eco-nomic markets place a premium on rationality and coordination. However, as marketsexpand, the rational networks in a given domain become more complex and differentiat-ed, and organizations in that domain must manage more internal and boundary-spanning

57. A sponsor is an entity that has property rights for the technology and hence is willing to make investmentsto promote it.

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interdependencies. A related topic was also discussed in network externality theory. Thisthinking leads to a problem, which Meyer and Rowan (1977) already pointed out at thetime: “Prevailing theories assume that the coordination and control of activity are thecritical dimensions on which formal organizations have succeeded in the modern world.”However, most empirical research on organizations casts doubts on this assumption. Thisassumption is based on the view that organizations function according to their formalblueprints. This means that coordination is routine, rules and procedures are followed andtheir actual activities conform to the prescriptions of the formal structure. We can arguethat if the operations of an organization are highly bureaucratic this may slow down theorganization’s activities. Then again, if the organization is well scrutinized, the organiza-tion’s activities may be accelerated. From the standardization point of view, formal orga-nizations’ critical activities are similar to those presented by Meyer and Rowan (ibid.),but we can expect that there are other aspects also. These will be discussed in Chapter 5.

There are various publications on organizational theory. Though it is beyond the scopeof this thesis to summarize the extensive literature on organizational theory, it is impor-tant to establish a view of literature as a whole. In organizational theory, the environmen-tal impact on organizations is a classic issue. There are probably few organizational theo-rists today who would challenge the idea that external factors strongly influence the innerlife of an organization. Many scholars, such as (Engwall 2003) has researched haveshown how environmental contingencies, such as uncertainty, complexity, rate of change,allocation of authority and availability of resources, have an impact on the internal behav-iour of an organization. In addition, more recent research has supplemented the picture ofexternal influences by emphasizing different institutional aspects of the environment,such as traditions, norms, values, and procedures taken for granted in the organization(Scott 1994). Other scholars have stressed the concept of embeddedness to highlight thefact that the “environment” is not exclusively on the outside of the organization, but thatorganizational actions always take place within a complex societal web of structures,resources, values, and actors (see Granovetter 1985). Greenwood and Hinings (1996)state the organizational change from the point of view of, firstly, the difference betweenconvergent and radical change and secondly, the difference between revolutionary andevolutionary change. They define change by scale and pace of upheaval and adjustment:evolutionary change occurs slowly and gradually, revolutionary change happens swiftlyand affects virtually all parts of the organization simultaneously.

4.4 Institutional theory

Scott and Christensen (1995, p. 33) define institutions as follows:“Institutions consist of cognitive, normative, and regulative structures and activi-ties that provide stability and meaning to social behaviour. Institutions are trans-ported by various carriers – cultures, structures, and routines – and they operateat multiple levels of jurisdiction.”

By the term institution we generally mean an organized, established procedure. Exam-ples from everyday life are marriage, voting, church and parliament. It can also be used to

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refer to a social order or pattern that has attained a certain state or property, and institu-tionalization is used to indicate the process of such attainment. Jepperson (1991) summa-rizes without giving a precise definition: “Institutions are socially constructed, routine-reproduced (ceteris paribus), program or rule systems. They operate as relative fixtures ofconstraining environments and are accompanied by taken-for-granted accounts.”

Institutional theory makes us aware of the importance of the wider social and culturalcontext surrounding and supporting organizational forms as the foundation in which orga-nizations are rooted. In Europe there are good examples of this. One is the initial attemptto reduce national barriers to economic exchange. This has led to extensive changes inEU institutional rules regarding capital and labour markets, competition and propertyrights. Many organizations have gone through massive organizational, structural and cul-tural changes. In a world economy increasingly characterized by globalization, blurringindustry boundaries brings an additional flavour to organizational change. This is due tothe development of technology, and fading company borders, due to alliances and net-works. This shows that institutional theory is a timely development.

The roots of institutional theory go back to the 1950s, when Parsons’ two essays in theinaugural volume of the Administrative Science Quarterly were published. The essayscontained the first explicit statements on organizational environments as institutional-cul-tural phenomena. Parsons also argued that institutional patterns within organizations mustbe compatible with those of other organizations and social units within society, and heexplored the institutionalized rules governing organizational behaviour. Today, the theoryhas not one but several variants and there are various interests inside the framework(Scott 1995, Aldrich 1999).

Originally, the theme of institutionalization was developed by Selznick in 1956 as aprocess of instilling values, and his students (Selznick, 1957, in Aldrich 1999). Another,later contribution was the March and Olsen (1984) article in the American Political Sci-ence Review (APSR), which was the beginning of the revolution against the methodologi-cal individualism of both behaviouralism and rational choice approaches. Following onfrom that and from these researcher’ subsequent work (March 1989, Olsen 1996), therehas been a proliferation of institutional theories and applications of those theories. Simi-larly, in economics (North 1990, Khalil 1995, Alston 1996) and in sociology (Zucker1987, DiMaggio 1991, Scott 1995) there has been a birth (or more appropriately a resur-rection) of institutional approaches to the basic questions in these disciplines. In recentyears, institutional theory has attracted the attention of several researchers (Davis 1991,Greewood 1996, Osborn 1997, Scott 2001, Dacin 2002, Greenwood 2002, Makhija 2002,Roth 2002, Seo 2002, Xu 2002). They have applied institutional theory to various cases.For example, Townley (2002) examines institutional theory and the extent to which thenature of a rationalized myth facilitates its acceptance or resistance. The study investi-gates how one particular value sphere – cultural facilities and museums – with its owndiscrete type of substantive, theoretical, practical, and formal rationality, responded to thedifferent understandings of those rationalities “carried” through the practices of businessplanning and performance measures (ibid. p. 166). Lawrence et al. (2002) explore theinstitutional effects of collaboration, focusing on the immediate local effects of individ-ual collaborations that may form the basis for broader, longer-term, field-level change. Asan example, they used the collaborative activities of Mère et Enfant, a small nongovern-mental organization that provides nutritional services to women and children in Pales-

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tine. Crowston and Myers (2004) have used institutional theory as one research perspec-tive when discussing the way that information technology has transformed entire indus-tries. They used the real estate industry as an example, to find differences in how IT isbeing used in New Zealand and in the USA.

Following Weber (1968), action is viewed as social only to the extent that actors attachsome meaning to it. According to DiMaggio and Powell (1983) individuals attempt tomaximize their behaviour over stable and consistent preference orderings, but they do so,institutional economists argue, in the face of cognitive limits, incomplete information, anddifficulties in monitoring and enforcing agreements. DiMaggio and Powell also say thatinstitutions arise and persist when they confer benefits greater than the transaction costs(the costs of negotiation, execution and enforcement) incurred in creating and sustainingthem. However, the new institutional economics takes the transaction as the primary unitof analysis, which is important in understanding how factors such as assets specify uncer-tainty and frequency to give rise to specific kinds of economic institutions. North (1989)states that according to organizational economists, institutions reduce uncertainty by pro-viding dependable and efficient frameworks for economic exchange. Nelson and Winter(1982) take an evolutionary approach, and view institutions as end products of randomvariation, selection, and retention rather than individual foresight. However, Peters (1998)argues that potentially the most important impediment to a more central position for insti-tutionalism is that the term means so many things to different scholars, and that some ofthe alternative approaches are not only different but even contradictory (see, e.g., Kato1995, Hall 1996). If one adopts certain versions of the institutional approach he or shemay have very different empirical evidence, and make very different predictions aboutbehaviour, than if one were to carry out the research using another version.

Scott and Meyer (1994, p. 2-3) remind us of the four core ideas of institutional think-ing:1. The visible structures and routines that make up organizations are direct reflections

and effects of rules and structures built into wider environments. 2. The dependence of organizations on the patterning built up in wider environments –

rather than on a purely internal technical and functional logic – produces organizatio-nal forms that are often rather loosely integrated structures.

3. The environmental patterns that drive organizing work through linkages and effectsgo beyond simple direct control.

4. The environmental patterns that create and change organizations can be described asrationalized and rationalizing.

Zucker (1977) defines institutionalization as follows: “Institutionalization is both aprocess and a property variable. It is the process by which individual actors transmitwhat is socially defined as real and, at the same time, at any point in the process themeaning of an act can be defined as more or less a taken-for-granted part of this socialreality” (ibid.). Zucker continues by saying that institutionalized acts must be perceivedas both objective and exterior. Acts are objective when they are potentially repeatable byother actors without changing the common understanding of the act, while acts are exte-rior when subjective understanding of the act is reconstructed as intersubjective under-standing so that the acts are seen as part of the external world (Zucker 1977).

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One approach in institutional theory is environmental stimuli, which must be cogni-tively processed by actors – “interpreted by individuals” employing socially constructedsymbol systems – before they can respond by taking action. Aldrich (1999) follows Hin-ings and Greenwood (1988). When environments are treated as institutions, analysts havetypically adopted a reproductive theme, focusing on how system- or sector-wide socialfacts are copied on the organizational level, with governmental units seen as the usualsource of facts.

In the 1950s, Selznick (1957) reviewed in (Perrow 1986), recognized that institutional-ized organization serves many important legitimating functions, but not the core tasks.Scott and Mayer (1983) and Zucker (1977) have noted that organizations confront eithertechnical or institutional environments, each exerting different types of pressures. Davisand North (1971) consider an institutional environment to comprise “the set of fundamen-tal political, social and legal ground rules that establishes the basis for production,exchange and distribution”. Scott and Meyer (1983) define technical environments as“those in which a product or service is produced and exchanged in a market such thatorganizations are rewarded for effective and efficient control of their product system.”.Garud and Kumaraswamy (1995b) suggest that “the technical environment of a techno-logical system consists of innovations and performance enhancements at the productlevel. The institutional environment of a technological system consists of a mosaic ofinterface and performance standards that together constitute the architecture of the tech-nological system.” Powell (1991, p. 186) states that architectural standards prescribe therules of engagement between system components and the criteria by which functionalefficiency of the technological system is interpreted. Garud and Kumaraswamy (1995a)state that, represented this way, architectural standards are to technological systems whatinstitutional environments are to organizations. In this thesis we use Garud and Kuma-raswamy’s (ibid.) definition.

Institutional elements invariably come from outside the organization. In the landmarkarticle “Iron Cage”, DiMaggio and Powell (1983) described these elements as comingfrom outside of organizations and causing change in organizations. When organizationsrespond to technical element as coming from outside of organization is not performed aswell as they would be in market-oriented organizations. DiMaggio and Powell (ibid.), andMeyer and Rowan (1977) describe activities through coupling elements of structure fromother activities and from each other, thus reducing their efficiency (ibid., p. 357). How-ever, in economic theory, the firms that operate in the technical sector “succeed to theextent that they develop efficient production activities and effective coordination struc-tures” (Scott 1983).

Organizations are important sources of institutionalization of new action. Already[institutionalized elements can “infect” other elements of new action (Zucker 1977). Insti-tutional elements (structures, actions, roles) are easily transmitted to newcomers, aremaintained over long periods of time without further justifications or elaboration, and arehighly resistant to change (Zucker 1977, Nelson & Winter 1982, Zucker 1987). Theresulting stability increases effectiveness when it is linked to the goals of the organiza-tion by creating “routines”. On the other hand, stability decreases effectiveness if moreefficient new actions of leading organiser are ignored.

Organizations as institutions can be defined according to three principles (Zucker1987):

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1) Institutional elements arise primarily from small group or organization-level pro-cesses.2) Formalized organizational structure and process tend to be both highly institutiona-lized and a source of new institutionalization.3) Institutionalization increases except when more efficient alternatives are ignored.

DiMaggio and Powell (1983) present the term organizational field. They define (ibid. p.148) “sets of organizations that, in the aggregate, constitute a recognized area of institu-tional life: key suppliers, resource and product consumers, regulatory agencies, and otherorganizations that produce similar services or products”. They also point to the homoge-nization of these organizations, and of new entrants, once the field is established. Porac etal. (1989) define the terms ‘sets’ and ‘communities’ of organizations that directly inter-act with one other or are influenced by each other in a meaningful way. Aldrich (1999)defines organizational field as a set of interacting groups, organizations and agencies ori-ented around a common substantive interest, such as medical care, educational policy, orsupport for the arts. However, analysts define fields based on their particular researchinterest. Depending upon the analyst’s purpose, a field could include suppliers, labourunions, consumer groups, regulatory agencies, trade associations, and other organizations.

The New Institutionalism

There are in fact many new institutional theories – in economics, organizational theory,political science and public choice, history, and sociology – which have little in common.The institutional perspective privileges the role of cognitive processes and symbol sys-tems. The institutional theory has been developed among scholars during the last fewdecades, and therefore Powell and DiMaggio (1991) distinguish between what is calledthe old and the new institutionalism. Greenwood et al. (1996), referencing Clard (1960,1972) and Selznick (1949, 1957), describe the old institutionalism as follows: “Issues ofinfluence, coalitions, and competing values were central, along with power and informalstructures”. The new institutionalism focuses on legitimacy, the embeddedness of organi-zational fields, and the centrality of classification, routines, scripts, and schema (Gree-wood 1996), referencing DiMaggio and Powell (1983), and Meyer and Rowan (1997).Scott (1994, p. 78) saw the change as follows: “I see convergent development among theapproaches of many analysts as they recognize the importance of meaning systems, sym-bolic elements, regulatory processes and governance systems”. This convergence aroundthe multiple themes of old and new institutionalism forms a neo-institutionalism (Gree-wood 1996).

Greenwood and Hinings (ibid.) state that the institutional theory is not usuallyregarded as a theory of organizational change. This is explained by isomorphism and thestability of organizational arrangements in a given population or group of organizations.Greenwood shows that to understand institutional change, the external processes of dein-stitutionalization have to be understood (organizations-in-sectors) together with the inter-nal dynamics of interpretation, adoption, and rejection by the individual organization.

In the following sections we will focus on the main aspects of the “old” and “new” the-ory and discuss the most important issues concerning our research. First we will justifyour theory selection.

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4.5 Theory selection and perspectives on theory building

In this section we present the views to our theory selection. Above we have discussednetwork externality, organizational theory and institutional theories which would be suit-able for further theory building.

Network externality shows how a certain community or organization can benefit byusing a standardized technology. Organizational theory attempts to cover the problem ofthe existence of various different and complex organizations. Institutional theory concen-trates on how organizations work, and makes us aware of the importance of the widersocial and cultural context surrounding and supporting organizational forms as the foun-dations in which organizations are rooted. This allows us to consider standardization froma broader perspective and environment.

Network externality illustrates technological issues that arise after a technologicaldecision on an industry-wide set of rules is made. The more adopters of the same technol-ogy, the less likely producers/actors are willing to undergo changes to a new regime(Powell 2000). Powell (ibid.) extends this argument beyond the realm of technology:“Common procedures that facilitate interorganizational communication may be main-tained, even in the face of considerable evidence that they are suboptimal, because thebenefits associated with familiarity may easily outweigh the gains associated with flexi-bility.” Powell (ibid.) continues by saying that social patterns may also reproduce them-selves without active intervention when practices and structures come to be taken forgranted and are not being questioned or compared. It follows that institutional patternsshape behaviours which become courses of action perceived as natural and legitimate.However, organizational procedures and forms may persist because of path-dependentpatterns of development in which initial choices preclude future options. These processescan be found both at the level of the individual organization and at the collective level ofthe industry field (ibid.). Powell takes path-dependent arguments as the most interestingobservations in organizational theory, referring to Stinchombe’s classic paper (Stinch-combe 1965) on founding processes.

Organizational studies have focused on aspects of organizations from various angles,including the contingency theory, and resource dependency and population ecology con-cepts. The contingency theory is contingent on environmental factors, the nature of thework being performed, and the wider task environment. Contingency theorists emphasizethe importance of technical and production processes, in particular the kinds of informa-tion needed to adequately cope with the challenges and uncertainties posed by the tasksperformed (Scott 2000a). The resource dependency theory focuses on the interdepen-dence of an organization with other organizations in its environment. Attention is shiftedfrom the internal structure of a single organization to the nature of the relation betweenthat organization and its exchange partners and competitors (ibid.). The population (ororganizational) ecology theory states that organizational change is more likely to occur byenvironmental selection than due to the organization’s internal or external constraints.

Greenwood and Hinings (1996) state that institutional theory shows how organiza-tional behaviours are responses not only to market pressures, but also to institutional pres-sures. By pressure they mean pressure from regulatory agencies, such as the state and pro-fessions, and pressure from general social expectations and from the actions of leadingorganizations. From the theoretical point of view, only economic and network benefits are

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discussed in network externality theory, but institutional theory recognizes behaviouraland cultural aspects as well. Institutional element ensures an appropriate balance of com-mercial and public interest. The institutional element has a crucial role in promoting aregion’s economy and competitive capability. The institutional element promotes legiti-macy, social welfare and national interests.

The broad reach of the institutional perspective is its major strength, making it poten-tially relevant to all levels of analysis and all time spans, from micro-level interactions tolarge scale changes in nation-states. The institutional context can be extended beyond thecontext of the formal standards bodies (Aldrich 1999). There is a network of organiza-tions active in or interested in standardization.

According to Scott (1995), although all of these approaches emphasize that organiza-tions are open systems, affected by and affecting the environments in which they exist,only institutional theory highlights the importance of the wider social and cultural envi-ronment as the foundation in which organizations are rooted. One reason is that institu-tionalism has different meanings in different disciplines (DiMaggio 1983). Meyer (1977)states that all organizations, to one degree or another, are embedded in both relational andinstitutionalized contexts, and are therefore concerned both with coordinating and con-trolling their activities and with prudently accounting them. According to Tolbert andZucker (1996), the ambiguity of institutional theory leads to the definition of ‘institution-alized’ itself, which contradicts the claim that institutional structures are apt to be decou-pled from behaviour. They state that to be institutional, a structure must generate action.

Little attention in institutional theory has been paid to Zucker’s (1977) early research,which focused on the consequences of varying levels of institutionalization, where insti-tutionalization is both a process and a property variable. Later, Greenwood (1996) cre-ated a model of institutional change (Figure 4, p 84), “recognizing institutionalists’change: reinstitutionalization and deinstitutionalization”. In this research our specificinterest is in the role played by manufacturers, operators and SMEs in standardizationorganizations or by associations which may play an important role as a regulatory mecha-nism. Greenwood (ibid.) suggests that professional organizations are important regula-tory agents (e.g., in accounting), which focuses on the conservative role of organizationsin reinforcing existing prescriptions for appropriate conduct.

We emphasize a new perspective on the standardization process from a theory point ofview, because the actors in, and the role and importance of standardization from variousangles have changed during the last few decades. Simultaneously globalization, technol-ogy compatibility requirements and competition, to name but a few factors, have led tothe change of importance of standardization. However, only a few scholars haveattempted any systematic integration of the two literatures, organization and standardiza-tion – to be more precise, institutional theory and wireless technology standardization.This is both surprising and disappointing, because each field can strongly enrich the other.Egyedi (1996) has entered the field, and she compared standardization and institutionaltheory from the telematic services point of view. Institutional theory applies to organiza-tional fields, organizations, structures and cultures, but it has seldom been applied to stan-dardization (Garud 1995a). Greenwood et al. (2002) report that Davis et al. (1994) usedthe largest U.S. corporations as their institutional field. Scott et al. (2000) restrict theirscope to organizations within the San Francisco Bay region, but show the influence ofcausal forces at national and regional levels. Parkhe (2003) applies international alliances

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to the institutional field in his process model. Garud et al. (2002) explores the complexmixture of cooperative and competitive practices involved when companies collectivelycraft common standards to govern technology.

The generalizability and reach of institutional theory can be greatly expanded by suchnovel applications of the institutional theory as wireless technology standardization. Theunderstanding of standardization and actors can be deepened by examining them throughthe institutional theory, in order to better understand how the standardization processfunction. The purpose of the next section is therefore to construct a perspective on actors’roles in the standardization process, based on institutional theory.

In summary, we can state that institutional theory is an applicable and appropriate the-oretical perspective for the analysis of standardization process development and particu-larly for the evaluation and selection purposes, because it explicitly addresses uncertaintyand ambiguity, characteristics that are salient during the selection and evaluation of tech-nology. There are various perspectives for this. Firstly, it has been suggested that applica-tion of institutional theory reduces contradictions and improves the quality of informa-tion systems theory development (Robey 1999). Secondly, new institutional theoryemphasizes the importance of external influences and provides a mechanism, mimeticisomorphism, for companies to reduce decision ambiguity and uncertainty by copyingdecisions choices made by others (Meyer 1977, DiMaggio 1983). Thirdly, standardizationorganizations were previously regarded as institutions, boundary objects or as an “IronCage”, because of their authority status. Nowadays, these organizations are also forced tochange their organizational structures and working processes. However, compared to net-work externality and organizational theory, institutional theory has its weaknesses, too.The institutional organization itself is assumed to be quite stable; aspects may lag behindwhen changing, even though the environment and technology move forward. Further-more, a strict focus on purely institutional issues in the organization may miss the aspectof practical issues.

4.6 Institutional carriers and elements

In this section we present institutional carriers and elements. Table 5 cross-classifies threeelements and carriers of institutions. By a carrier we mean an issue which reshapes anorganization in one direction or another at the interorganizational or external level. By anelement we mean a part of an organization which makes up the organization or is a basicissue in an organizational function (Scott 1995). In the following sections we discuss sep-arately carriers and elements by joining them together first from the element point ofview (e.g., regulative-cultures) and then from the carrier point of view (e.g., cultures-reg-ulative). However, regulations, norms and cognitive systems do not appear instantaneous-ly but develop over time. Scott and Christensen (ibid.) state that “the diffusion of com-mon activity patterns and structures through time is viewed as important evidence for thedeveloping strength of an institutional pattern”. This is an important issue for the devel-opment of the research theory in this thesis.

There is substantial agreement among scholars on the common elements of institu-tional analysis. Scott (ibid.) presents one analysis of the institutional elements: “Analysts

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vary in the extent to which they emphasize the cognitive, normative, or regulative facts ofinstitutions as well as where they situate these elements – whether cultures, structures orroutines are viewed as the primary carriers”. In this research we expect to be able to findthe aforementioned elements and carriers among the formal and informal actors in thestandardization process.

Organizations are complicated systems, which have various levels, sizes, targets andmeanings of work. Scott and Christensen propose a model (1995, p. xiv) (Table 5), inwhich the three elements and three types of carriers of institutions are presented. We shalladopt the table as a framework for our research, to analyze standardization organizations,both formal and informal. Institutional elements and carriers allow us to study standard-ization and organizations in a wide enough context. Later we will refer to this model as apart of a static institutional model, because it has half static (elements) and dynamic (car-riers) characters. In the following sections, the content of Table 5 is presented in detail.The functions are defined and related to the stage in the collection of papers from thefield. In this context we do not form new definitions except where appropriate definitionscannot be found for each function.

The subsequent sections proceed in the following order. First we discuss the elements’‘regulative’ column by passing though the carriers – first cultures, then structures, andfinally routines. Then we discuss ‘normative’ and ‘cognitive’ in the same order. Theseelements describe the model. This examination describes a part of an organization whichmakes up the organization or is a basic issue in an organizational function. After describ-ing these nine functions, we discuss the carriers’ functions. First we discuss cultures ascarriers, then combined with regulative elements and then normative elements. In study-ing the carrier point of view we illustrate how an organization reshapes itself or changesin one direction or another at the interorganizational or external level. Carriers create thedynamism of the model or process. We discuss the subsequent carriers in the same order.In total we have 18 different perspectives on institutional theory. Through discussing theissues thoroughly from two angles – elements and carriers – we can gain a better under-standing of theory. This helps us to apply the theory to our data. The way of processingframework lead repetition of elements and carriers. However, this ensures a thoroughanalysis of the wireless standardization process in Chapter 7, Empirical analysis. In thetext we have used bold face for the terms from Table 5. The terms which we will describefurther in the following chapters are shown in italics.

Table 5. Institutional Elements and Carriers.

ElementsCarriers Regulative Normative CognitiveCultures rules

lawsvalues

expectationscategories

typificationsStructures governance systems

power systemsregimes

authority systemsstructural isomorphism

identitiesRoutines compliance

obedienceconformity

performance of dutyperformance programs

scripts

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4.6.1 Elements: Regulative systems

One of the institutional elements is regulative systems, which means systems for resolv-ing conflicts of interest and differences. Regulative elements can be discussed in parallelwith the carrier elements: cultures, structures and routines.

4.6.1.1 Regulative-Cultures function

First we will define the terms rules and laws. According to the Oxford English Dictio-nary, ‘rule’ means “A principle, regulation, or maxim governing individual conduct”, and‘law’ “The body of rules, whether proceeding from formal enactment or from custom,which a particular state or community recognizes as binding on its members or subjects”.Rules and laws are formulated to which a regulatory machinery is attached. Institutionscan be established in situations in which the target is to benefit the interests of severalactors, in order to develop and enforce rules that bind together their own behaviour incertain respects. However, rules which, if enacted, would benefit all may fail to be estab-lished (Scott 1995).

Political scientists March and Olsen (1984, 1989) insist that behaviour being orientedto and governed by rules does not imply that behaviour is mindless or automatic. Thistherefore means that actors must determine which rules apply to which cases, and mustinterpret their meaning in particular situations. This behaviour we can qualify as perfor-mance policy. However, to argue that behaviour is not “rational” in the utility-maximizingsense is not to argue that it is not reasonable or intelligent (Scott 1995). In spite of therules and laws created, conflicts of interest sometimes arise, and differences must besolved. Actors obey these rules mainly out of self-interest, out of expedience, and in orderto avoid sanction. According to DiMaggio and Powell’s (1983) topology, the primaryinstitutional control mechanism is coercion. DiMaggio and Powell (1983) state that insti-tutions are often established by a powerful actor or coalition of actors, who enforce rulesthat favour their interests.

4.6.1.2 Regulative-Structures function

Generally, by governance systems we mean systems to ensure that the corporation ororganization will act in a manner that is fair, accountable, responsible and transparent. Wecan qualify these as structures. Power systems are a set of political beliefs or institutionsfounded or dependent upon coercion (Oxford Dictionary). We can regard as systemswhich have the power to process issues and construct organizations.

Durkheim (1962), Weber (1987) and Parsons (1960) locate institutions primarily inwider, social belief systems – in cultural carriers. However, Selznich (1957) views someinstitutional processes as carried by cultures, for example organizational ideologies, butothers as embedded in structures, in informal ties and cooptative relations within and

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among organizations. Keohane (1988, p. 382) points out that the development of largeorganizations “leaves open the issue of what kinds of institutions will develop, to whosebenefit, and how effective they will be”. This has led some scholars to follow a moresociological line of enquiry, which recognizes that “institutions do not merely reflect thepreferences and power of the unit constituting them; the institutions themselves shapethose preferences and that power” (Kratochwil 1986, Keohane 1988, p. 382, Krasner1988).

4.6.1.3 Regulative-Routines function

The regulative-routines function consists of compliance and obedience. By ‘compli-ance’ we mean the act of or an instance of complying, such as following rules. Accord-ing to the Oxford English Dictionary, ‘obedience’ can also be defined as submission toanother’s rules or authority, or compliance with a law or command. In further discussionsconcerning this function we use the term ‘compliance’ to describe this function.

Legislative and judicial authorities create and interpret legal mandates; administrativeagencies, such as regulatory authorities for communications, federal governments, orregional authorities, establish rules of practice; licences and acts become necessary inorder to practise an occupation. This means that the stronger the rational-legal order, thegreater the extent to which rationalized rules and procedures and personnel become insti-tutional requirements. Moreover, new formal organizations emerge, and extant organiza-tions acquire new structural elements (Meyer 1977). However, Nelson and Winter (1982)argue that rules and routines often embody accumulated experience.

4.6.2 Normative systems

The first of the major approaches to institutional analysis is the normative approach advo-cated by March and Olsen (1984, 1989, 1995). Funding scholars of institutional theory,sociologists, have championed the view of institutions as fundamentally normative sys-tems – as systems of normative expectations and internalized obligations. In the 60s,Durkheim (1962) stressed the importance of collective representations and normativeframeworks in stabilizing social life. Later, Weber (1968) noted how varying types ofnormative systems legitimized regulatory and administrative structures: the traditionalnorms and beliefs underlying patrimonial systems, and the rational-legal norms underly-ing bureaucratic structures.

According to Scott and Christensen (1995), the normative aspects of institutions give apriority to moral beliefs and internalized obligations as the basis for social meaning andorder. Behaviour is seen as an awareness of one’s role in a social situation and a concernto behave appropriately, in accordance with others’ expectations and internalized stan-dards of conduct. So, in this concept, behaviour is not guided by self-interest and expedi-ence. March and Olsen (1984, 1989, 1995) argue that people functioning within institu-

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tions behave as they do because of normative standards rather than because of their desireto maximize individual utilities. Furthermore, these standards of behaviour are acquiredthrough involvement with one or more institutions, and institutions are the major socialrepositories of values.

4.6.2.1 Normative-Cultures function

This function consists of values and expectations. ‘Values’, according to the OxfordEnglish Dictionary, “that amount of some commodity, medium of exchange, etc., which isconsidered to be an equivalent for something else; a fair or adequate equivalent orreturn”. By ‘expectations’ we mean “the action of waiting; the action or state of waitingfor or awaiting (something).” (ibid.)

Parsons (1960) developed the cultural-institutional approach by examining the ways inwhich the value system of the organization was legitimized by its connection to the widersocietal institutional norms and values (Scott 1995). Selznick (1949, 1957) had earlierexamined the ways in which individuals developed normative commitments to proce-dures, structures, and social relations both within and outside the organizations. DiMag-gio and Powell (1983) take a collectivist rather than an individualist view of humannature, emphasizing the power of social patterns to shape individual beliefs and behav-iour. This means that individuals are strongly influenced by collective norms and valuesthat impose social obligations on them, constraining their choices. According to Scott andChristensen (1995, p. xv), institutions are established by a powerful actor or coalition ofactors, who enforce rules that favour their interests.

According to Scott and Christensen (1995), the level of trust among participants,which sometimes enters into the arguments of institutional economists, should be treatedas part of the “environmental” conditions affecting institutional design, not as part of theinstitutional elements themselves.

4.6.2.2 Normative-Structures function

This function consists of regimes and authority systems. ‘Regime’ is defined as “the actof governing; government and rule” (Oxford English Dictionary). In this context we usethe synonym regimen to describe regime. ‘Authority’ is defined as “Power to enforceobedience” in the Oxford English Dictionary. In this combination, regimes and authoritysystems are expected to construction of organizations. Their primary institutional formsare rule systems and negotiated multilateral arrangements that operate at the cultural lev-el. In this context we can describe these as rules. In some cases, they are embodied inspecific structures, such as the United Nations at the international level (Scott 1995).

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4.6.2.3 Normative-Routines function

This function consists of conformity and performance of duty aspects. ‘Conformity’ isdefined as “action in accordance with some standard, e.g., with law, order, wishes, fash-ion; compliance, acquiescence” (Oxford English Dictionary). ‘Performance of duty’ cangenerally be regarded as measuring the capacity of an organization or actor. In this func-tion we concentrate on conformity aspects in our further discussions. We qualify confor-mity further as the equilibrated condition of the interactive system without conflict oneither side or grow apart motivation (Parsons 1979).

According to DiMaggio and Powell (1983), the institutional mechanisms at work arenot coercive but normative processes. Those scholars who emphasize the normative ele-ments tend to be social realists and emphasize a different conception of the “natural” stateof man. March (1981) provides a description of the difference between a normative con-ception and one emphasizing rational choice: “To describe behaviour as driven by rules isto see action as a matching of behaviour with a position or situation. The criterion isappropriateness rather than consequential optimality. The terminology is one of dutiesand roles rather than anticipatory decision making.”

4.6.3 Cognitive systems

The third institutional element is cognitive systems. The cognitive system has multipleroots: social psychology, anthropology, political science and sociology. The origin of thecognitive revolution in psychology goes back to the early work of Lewin (1951, in Scott1995) and Bruner (1951, in Scott, ibid.). They focused on the ways in which individualbehaviour in situations is governed by schema, frames or scripts (Markus & Zajonic1984, in Scott 1995). The first theorists to apply a cognitive conception of institutions tothe creation and legitimization of organizational forms were Meyer and Rowan (1977).Zucker (1977) developed a similar formulation and examined cognitive processes at themicro (interorganizational) level. Examples of cognitive systems include systems of sym-bols and beliefs.

4.6.3.1 Cognitive-Cultures function

This function consists of categories and typifications. According to the Oxford EnglishDictionary definition, a category is “a term (meaning literally ‘predication’ or ‘asser-tion’) given to certain general classes of terms, things, or notions.” The term ‘typifica-tion’ is defined as follows (ibid.): “The action of typifying; representation by a type orsymbol; also, that which typifies, or serves as a type, symbol, or specimen of something:an exemplification”. According to Scott and Christensen (1995), cognitive systems con-trol behaviour by controlling our conception of what the world is like and what kinds ofaction can be taken by what types of actors. We can use social categories and typifica-

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tions to help us determine what action or aspects and people are similar, and thus treatedaccording to one set of rules, and what other things and people are different, and thustreated differently. In the following discussions we use the term ‘categories’ to describethis function. In the 50s, the political scientists March and Simon ((March (1958) andSimon, (1957) in (Scott 1995)) were among the first to emphasize the extent to which theorder observed in organizations was a cognitive order. It was based on shaped shared pre-mises, rules and performance programs. Anthropologists and sociologists pay particularattention to the “constitutive rules” that are part of the cultural system. These rules areemployed in order to construct actor and action. A good example is games in which a setof rules and definitions is created; one example of this kind of game is baseball, whichcontains actors, such as pitchers and catchers, and actions, such as base-stealing andbunting. Other rule systems create doctors and patients, supervisors and workers, andlawyers and clients. These institutionalized systems are not viewed like “games”, and theactors and their actions are less likely to be viewed as socially constructed. Not only indi-vidual but also collective actors are socially constituted (Scott 1995). Cultural systemsprovide models for how to construct, for example, corporations. From a cognitive pointof view, institutions are not so much bundles of regulations or collections of norms, butknowledge systems.

According to Fridland (1991), “some of the most important struggles between groups,organizations and classes are over the appropriate relation between institutions, and bywhich institutional logic different activities should be regulated and to which categoriesof persons to apply. Are access to housing and health to be regulated by the market or bythe state? […] Should reproduction be regulated by state, family or church?”

This view of institutional theory focuses attention on the existence of a set of differen-tiated and specialized cognitive and normative systems – institutional logics – and pat-terned human activities that arise and tend to persist, with varying forms and content, inall societies (Scott 1987).

4.6.3.2 Cognitive-Structures function

The cognitive-structures function consists of structural isomorphism and identities.Based on the Oxford English Dictionary, ‘structure’ is “the mutual relation of the constit-uent parts or elements of a whole as determining its peculiar nature or character; make,frame.” Furthermore, “the general law of isomorphism affirms that bodies having a simi-lar chemical composition have also the same form; or, in other words, that analogous ele-ments and groups of elements may replace one another in composition without essentialalteration of crystalline form”. By ‘identity’ we mean “the quality or condition of beingthe same in substance, composition, nature, properties, or in particular qualities underconsideration; absolute or essential sameness; oneness” (Oxford English Dictionary). Inthe following chapters we combine the terms and present this function as structural iso-morphism.

As discussed in the cognitive-cultures function, we can use social categories and typi-fications to help us determine what things and people are similar. As DiMaggio and Pow-ell (1983) emphasize, there is great pressure on organizations engaged in the same type of

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activities to look and act alike – to become isomorphic. This study, along with Meyer etal. (1987), points to some important effects of this approach, especially to where thestructural changes are most likely to occur. Inducement strategies create increased organi-zational isomorphism, meaning structural similarity, but more at the intermediate than theoperative organizational level. DiMaggio (1983) reported an example of the states arts’council rather than on the arts organizations themselves is eligible for states funding.

4.6.3.3 Cognitive-Routines function

This function includes performance programs and scripts. By ‘program’ we mean “Adefinite plan or scheme of any intended proceedings; an outline or abstract of somethingto be done (whether in writing or not).” (Oxford English Dictionary). An example of aprogram would be a previously-scheduled timetable which contains actions or tasks.‘Script’ can be defined as something written; a piece of writing. Scott (2001, p. 23) refersto Schank and Abelson in the concept of script: “behaviour patterns and sequences calledup by specific roles or situations.” Moreover, the same cognitive theorists state thatscripts are guidelines for sense-making and choosing meaningful actions (ibid., p. 45).An example of a script from everyday life would be a manual, document, proposal ormemorandum.

4.6.4 Carrier element: Cultures

Next we will discuss elements from the carrier point of view and look at the theory fromthe viewpoint that reshapes an organization in one direction or another at the interorgani-zational or external level.

Geertz and D’Andrade have redefined the concepts of culture, from its earlier broadreference to the full range of customs, usages, and traditions. Geertz and D’Andradeemphasize its symbolic role: “Culture consists of socially established structures of mean-ing” (Geertz 1973, p. 12). Following Scott (2001, p. 53), “cultures are carriers that relyprimarily on interpretive structures – on codified patterns and rule systems. Such inter-pretive schemes inform and constrain ongoing behaviour but are also reinforced andchanged by these behaviours.”

4.6.4.1 Cultures-Regulative function

Rules and laws reshape organizations in various ways. All organizations have rules as tohow to perform internally or externally in different situations. From the cultural point ofview, the rules and laws in the regulative function, for example according to North(1990), tend to focus on the development of rules and laws embedded primarily in cultur-

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al carriers. One example is how property rights vary over time and place, what processgives rise to them, and how they affect economic forms and processes (Scott 1995). Inthis function we will explain the term ‘rules’ as structural behaviour. The term ‘law’ wedescribe as jurisdiction, which applies to specific organizations and environments.

4.6.4.2 Cultures-Normative function

This function consists of values and expectations. According to Zucker (1977), threeaspects of cultural persistence are directly affected by institutionalization: transmission,maintenance and resistance to change. There are two traditional explanations of culturalpersistence in the literature: the subsystem approach and the normative frameworkapproach. The subsystem approach focuses on specific clusters or sectors, such as ‘fami-ly, economy or policy’. Institutional subsystems are separate spheres of activity, eachwith distinctive clusters of norms and each forming a distinct part of a topology of institu-tions.

The normative approach focuses on the normative framework of institutions, whichstates that institutions persist because the norms are shared (Zucker 1977). Zucker regardsinstitutions as primarily carried by cultural systems, whether at the level of the world sys-tem, society, the organizational field, or a particular organization or corporate culture.

4.6.4.3 Cultures-Cognitive function

The cognitive theorists stress the importance of categories and typifications. The mostfamiliar feature of classification is the distinction between first and second categories.Nelson and Winter (1982) have developed an evolutionary economics approach, whichemphasizes the importance of cultural conceptions for the functioning of organizationsbut locates these elements primarily in the practice and routines of workers and workgroups. The qualifiers of this function are practices and routines, which characterize thecultural systems in broader environment.

4.6.5 Carrier element: Structures

Institutionalization involves processes by which social actions, obligations, or actualitiescome to take on rule-like status in social action. For example, the social status of a doctoror a lawyer is a highly institutionalized rule. Research and development is an institution-alized category of organizational activity, which has various meanings and values inmany sectors of society. Meyer and Rowan (1977) argue that “institutional rules mayhave effects on organizational structures and their implication in actual technical work

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which are very different from the effects generated by the networks of social behaviourand relationships which compose and surround a given organization”.

Formal organizations are generally understood to be systems of coordinated and con-trolled activities that arise when work is embedded in complex networks of technical rela-tions and boundary-spanning exchanges. However, in modern societies formal organiza-tional structures arise in highly institutionalized contexts. Professions, policies, and pro-grams are created along with the products and services which are produced rational way.This allows new organizations to spring up, and forces existing ones to incorporate newpractices and procedures (Meyer & Rowan 1977). According to Meyer and Rowan (ibid.)the theories of formal structure should have a clear distinction between the formal struc-ture of an organization and its actual day-to-day work activities. A formal structure is ablueprint for activities which includes the table of the organization: a list of offices,departments, positions and programs.

According to DiMaggio and Powell (1983, p. 148) the structure of an organizationalfield cannot be determined a priori, but must be defined on the basis of empirical investi-gation. Fields only exist to the extent that they are institutionally defined. The process ofinstitutional definition, or “structuration”, consists of four parts: an increase in the extentof interaction among organizations in the field: the emergence of sharply defined interor-ganizational structures of domination and patterns of coalition; an increase in the informa-tion load with which organizations in a field must contend; and the development of amutual awareness among participants in a set of organizations, that they are involved in acommon enterprise.

4.6.5.1 Structures-Regulative function

Governance systems and power systems form this function. In this function we willonly continue to describe the governance systems. Regardless of the organization’s struc-tures, bureaucratization, rationality, or effectiveness, we must recognize the environmentin which we act. We describe this function using the structures, because structures andrules are coded into structural distinctions and rules. According to Aldrich (1979), “themajor factors that organizations must take into account are other organizations”. Organi-zations compete not just for resources and customers, but also for political power andinstitutional legitimacy, and for social and economic shape. This competition means thatorganizations are forced to construct their actions in a more efficient way.

4.6.5.2 Structures-Normative function

This function comprises regimes and authority systems. Once different kinds of organi-zations are in the same competition situation or profession, powerful forces emerge thatlead them to become more similar to one other (DiMaggio & Powell 1983). Thus, for fur-ther discussions we will continue to describe regimes. We will use as the refining termschange structures, targets strategies, or new organizations may enter the field. DiMaggio

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and Powell (ibid.) also observe that strategies that are rational for individual organiza-tions may not be rational if adopted by large numbers. DiMaggio and Powell (ibid.) statethat, in the long run, organizational actors making rational decisions construct aroundthemselves an environment that constrains their ability to change further in later years.However, DiMaggio and Powell (ibid.) present early adopters of organizational innova-tions as commonly driven by a desire to improve performance. Normative theoristsdescribe the structures of governance systems from the viewpoint of authority aspects.These systems are for creating and enforcing codes, norms, and rules and as monitoringand sanctioning the activities of participants (Scott 2001). Thus we do not discuss thesefurther.

4.6.5.3 Structures-Cognitive function

This function consists of structural isomorphism and identities. The concept that cap-tures the process of homogenization is isomorphism. Hawley’s (1968) description of iso-morphism is as a constraining process that forces one unit in a population to resembleother units that face the same set of environmental conditions. Hannan and Freeman(1977) have extended the earlier idea. They argue that isomorphism can result in subopti-mal forms that are selected out of a population or because organizational decision-mak-ers learn appropriate responses and adjust their behaviour accordingly. The impact of iso-morphism with environmental institutions has some crucial consequences for organiza-tions. According to Meyer (1977, p. 348), there are three consequences. Firstly, suchorganizations incorporate elements which are legitimated externally, rather than in termsof efficiency. Secondly, they employ external or ceremonial criteria to define the value ofstructural elements. Thirdly, dependence on externally-fixed institutions reduces turbu-lence and maintains stability. The concept of institutional isomorphism is a useful tool fora better understanding of the politics and ceremony that pervade modern organizationallife. DiMaggio and Powell (1983) have identified three mechanisms of institutional iso-morphic change: 1. coercive: isomorphism that stems from political influence and the problem of legiti-

macy2. mimetic: isomorphism resulting from standard responses to uncertainty3. normative: isomorphism associated with professionalization.

4.6.6 Carrier element: Routines

The third carrier element is routines. Some organizations use routines, clearly definedtasks to produce outputs. When an output can be easily evaluated, the market often devel-ops, and consumers gain considerable rights of inspection and control. This may lead toefficiency often determining and creating success.

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4.6.6.1 Routines-Regulative function

This function is comprised of compliance and obedience. In the further descriptions ofthis function we describe it in terms of compliance, because in this context it describesthe best way that routines reshape the regulative elements. Political scientists March andOlsen (1989) argue that much behaviour in organizational situations is governed by rulesand routines. They note that “much of the behaviour we observe in political institutionsreflects the routine way in which people do what they are supposed to do” (ibid., p. 22).They insist that to conclude that behaviour is oriented towards and governed by rulesdoes not imply that behaviour is mindless or automatic. Actors must decide which rulesapply to which cases and behave according to those situations. These kinds of behaviourconstruct organizations.

4.6.6.2 Routines-Normative function

This function includes conformity and performance of duty. In this function we contin-ue to talk in terms of performance of duty, which describes the normative element fromthe routine’s viewpoint in the most appropriate way. Organizations use routines, whichmay increase the legitimacy of organizational performance. Organizational routines areseen as the important organizational carrier (Scott 1995). They may reshape the organiza-tion and its structures. Individual actors in social pressure are expected to behave inaccordance with others’ expectations and internalized standards of conduct. This mayincrease conformity.

4.6.6.3 Routines-Cognitive function

The two elements of this function are performance programs and scripts. The actor inan organization is governed by various scripts to follow. If the organizational behaviour iswell guided by written documents or the behaviour is believed to be appropriate it maycreate legitimacy for the organization to perform the standardization, for example. Fur-thermore, when the organization has clear targets at which to aim, it may legitimate itsexistence. We can regard the strategies followed by actors and organizations as perfor-mance programs. Following strategies requires actors and institutions to reshape theirprocedures from time to time.

Having considered institutional theory in terms of the theory framework, we next dis-cuss institutional theory dynamics, by first adapting institutional theory dynamics andthen, in Chapter 5, applying them further.

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4.6.7 Summary – a model of institutional elements and carriers

The sections above described the elements and carriers from the institutional point ofview based on the institutional literature. In Table 6 we have summarized in terms of theelements and carriers. The table describes the generic elements and carriers in moredetail. Each function has been divided into two parts to describe elements and carriers.This enables us to identify the issues which create either stability or change for organiza-tions, when discussing the stages of institutional change. Notice that in some functionsthe same terms, e.g., ‘action’, refer to different concepts.

Table 6. Applied Institutional Elements and Carriers model.

The table above describes in refining terms the institutional elements and carriers. Thedescriptions are based on the institutional theory literature. The regulative elements andcarriers describe the more formal terms of standardization such as following rules. Thisdescribes how well the actors follow and adapt roles within their organizations. Norma-tive elements and carriers dictate the values and performance of the organization oractors. Cognitive elements and carriers describe various terms and highlight the impor-tance of structural similarity. The structural similarity may increase the adoption of newroles and ease the transmission of roles to newcomers. We can state that, due to the com-plexity and variety of organizational phenomena, any particular set of distinctions will besomewhat arbitrary.

ElementsCarriers Regulative Normative Cognitive

Elements Carriers Elements Carriers Elements CarriersCultures Rules

Development/enforcement rulesPerformance policy

RulesStructural behaviour

LawsJurisdiction

ValuesValue system of organization

ExpectationTrust

ValuesNorms

ExpectationsCultural persist-ence

CategoriesActionActorKnowledge systems

CategoriesPracticesRoutines

Struc-tures

Governance Systems

StructuresPower Systems

Institutions

Governance Systems

Structures

RegimesConstruction of organizationsRules

RegimesChange struc-tures, target strategiesNew organizations

Structural isomorphism

Structural similarity

Structural Isomor-phism

LegitimateValue of structural elementsInstitutions

Routines ComplianceFollowing rulesExperience

ComplianceBehaviour

ConformityInteractive sys-tems

Performance of Duty

Organizational routinesSocial pressure

ScriptsAction

ScriptsDocuments

Perform-ance pro-grams

Strategy

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4.7 Stages of the institutional theory

In order to reveal the reasons for a complex networked technology’s success, we have tothink of it on the one hand as a standard, and on the other hand as a complex socially andtechnically constructed phenomenon (Pinch & Bijker 1987, Lyytinen & Damsgaard1998). We are interested in to research further how standardization affects actors and theirbusiness and for that we need a dynamic process model, from which we can find out howactors’ apply standardization. Significant works have been written by Greenwood andHinings (1996) on institutional theory dynamics and on change in institutional theoryGreenwood et al. (2002). They state that the institutional theory neither denies nor isinconsistent with change. Greenwood et al. present a model of the “Stages of institution-al change” (Figure 4), which outlines a model for nonisomorphic change. Nonisomor-phic can be regarded as the opposite of isomorphic, homogeneity in organizational formsand practices.

Fig. 4. Stages of institutional change (Greenwood et al. 2002)

Next we will describe and follow this model. In the original model the arrows, which rep-resent the Stages moving forward, were not described in detail. However, here we expandthe discussion of the model and add the description of movement trigger. According tothis model (Greenwood 2002), Stage I occurs when events, or “jolts”, destabilize estab-lished practices. These jolts may be caused by social upheaval (see, e.g., Zucker 1987),technological disruptions, competitive discontinuities or regulatory change (see, e.g.,Powell 1991).

These changes precipitate the organization into Stage II, “Deinstitutionalization”. Thecharacterizing element which pushes “jolts” forward is structures. Structures characterizes

I: Precipitating jolts • Social • Technological • Regulatory

II: Deinstitutionalization• Emergence of new

actors • Ascendance of actors • Institutional

entrepreneurship

III: Preinstitutionalization • Independent

innovation • Technical

viability paramount

IV: Theorization • Specification of

general organizational failing

• Justification of abstract possible solution

• Moral and/or pragmatic legitimacy

V: Diffusion • Increased

objectification

• Pragmatic legitimacy

VI: Reinstitutionalization • Cognitive

legitimacy

Fads and fashions

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the issues of an organizational relations point of view: institutions’ informal rather thanformal structures, and the immediate environment of organizations rather than more gen-eral cultural rules or characteristics of wider organizational fields (see DiMaggio 1991).As Greenwood et al. (Greenwood 2002, p. 60) discuss, the effect of actors “is to disturbsocially constructed field-level consensus by introducing new ideas and thus possibility ofchange”.

Tolbert and Zucker (1996) and Greenwood et al. (2002) raise interesting issues regard-ing deinstitutionalization. Greenwood et al. refer to deinstitutionalization as the way inwhich organizations legitimate change by hosting a process of discourse through whichchange is debated and endorsed. In this research we have partly approached this field, byexpanding our organizational framework to include firms, and both informal and formalorganizations. Tolbert and Zucker’s (1996, p. 185) analysis, based on DiMaggio (1983),Flingstein (1985) and Davis (1991), suggests that the identification of the determinants ofchanges at the level of institutionalization of structures represents an important and prom-ising avenue for both theoretical and empirical work: “A number of studies have shownthat when large and more centrally linked organizations are innovators and early adopt-ers of a given structure, the structure is more likely to become fully institutionalized thanother structures.” “Deinstitutionalization” is the process in which new actors enter thefield, existing actors ascend, or local entrepreneurship takes place (Suddaby 1999). Theeffect of this is to disturb the socially constructed field-level consensus by introducingnew ideas and thus the possibility of change.

The carrier pushing for the change is structures. “The carriers of institutionalized val-ues are organizational structures, informal structures and co-optative relations linkingthe organization with salient external actors, both individual and collective” (Scott 2001,p. 69). The new actors in the field might present and seek new innovations and role sys-tems and thus reshape the existing organizational structures and role systems.

Stage III is “Preinstitutionalization”, which is referred to by Tolbert and Zucker(1996). In “Preinstitutionalization”, organizations innovate independently, seeking techni-cally viable solutions to locally perceived problems.

Stage IV, known as “Theorization”, reflects this development. Strang and Meyer(1993) have suggested that for new practices to become widely adopted they have to be“theorized”. Such theoretical accounts simplify and distil the properties of new practicesand explain the outcomes they produce. According to scholars, this “theorization” con-sists of three points: specification of general organizational failing, justification ofabstract possible solution and moral and/or pragmatic legitimacy. Tolbert and Zucker(1996, p. 183) suggest that it involves “two major tasks”: the specification of a general“organizational failing” for which a local innovation is “a solution or treatment”, and thejustification of the innovation. According to Strang and Meyer (1993, p. 495), “modelsmust make the transition from theoretical formulation to social movement to institutionalimperative”. This transition is achieved either by nesting and aligning new ideas withinprevailing normative prescriptions, thus giving “moral” legitimacy (Suchman 1995), and/or by asserting their functional superiority, or “pragmatic” legitimacy (ibid.).

We argue that the moving power from the theorization to diffusion is the rational view-point. Rational choice theorists set critical question “–under what conditions- it is anactor’s self-interest to construct and maintain institutional structures that will govern notonly others’ but one’s own behaviour” (Scott 2001, p. 67). Also, we can refer in this con-

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text to economic historians that state that “individuals will be motivated to undertakesocially desirable activities only if they provide private benefits that exceed private costs”(ibid.).

Successful theorization is followed by “Diffusion”, Stage V. Davis (1991) has exploredthe patterns and mechanism by which ideas are transported within organizational commu-nities. As innovations diffuse, they become “objectified”, gaining social consensus con-cerning their pragmatic value; thus, they diffuse even further. From the Diffusion Stagethe movement has two directions: reinstitutionalization, and fads and fashions.

Finally, Stage VI, known as “Reinstitutionalization”, consists of full institutionaliza-tion and occurs as the density of adaptation provides ideas with cognitive legitimacy(Suchman 1995) and the ideas themselves become taken for granted as the natural andappropriate arrangement.

The important perspective on applying the model is the environmental issue. Here wehave presented the model from a neutral perspective, without applying it to a specificcontext. By applying the model to different types of environments, such as national regu-latory bodies or the telecommunications industry, the main features of the model maychange. The environment field offers an interesting perspective for further theory formula-tion. Also, in broadening our original institutional perspective we may reformulate theStages and carriers. Thus, we expand the term ‘institutions’, following Aldrich (1999), toconsist also of firms, and informal and formal organizations. Previously, institutions func-tioned in a stable system (Meyer 1977, p. 351); however, the world has changed. Theunstable environment also supplies institutional carriers – structures, cultures, and rou-tines – by various means. However, the full institutionalization of a structure is likely todepend on the combined effects of relatively low resistance by opposing groups, contin-ued cultural support and promotion by advocacy groups, and positive correlation withdesired outcomes (Tolbert 1996, p. 184). Environmental issues also affect elements, suchas cognitive systems.

4.8 Summary

In this chapter we have discussed various theories that relate to organizations. We wereattempting to find a theory to explain standardization as a process. We first presented thekey elements of network externality, organizational theory at a general level, and institu-tional theory.

Network externalities are often significant for telephone or railroad networks. Networkexternality theory has been used to explain the compatibility of, for example, telecommu-nication networks, band-wagoning and lock-in effect.

Organizational theory tries to answer the important question “why there are so manykinds of organizations?” (Hannan 1977). Meyer and Rowan (1977, p. 342) propose thenotion that one of the central problems of organizational theory is that of describing theconditions that give rise to rationalized formal structure. That will partly answer ourresearch question. Standardization requires various kinds of organizations, to fulfil differ-ent kinds of rules, laws and regulation, nationally and globally.

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Institutional theory makes us aware of the importance of the wider social and culturalcontext surrounding and supporting organizational forms as the foundation in which orga-nizations are rooted. It becomes clear that modern organizations have become increas-ingly complex as societies evolve and need to be filled with institutional rules. In theabove sections we discussed the elements and carriers one by one in order to understandthem more thoroughly. We focused on the main aspects of the theory and discussed themost relevant issues concerning our research. By highlighting the role of various actors inthe organizational environment, institutional theory offers an important and distinctiveextension to our repertoire of perspectives and approaches for explaining standardization.

We presented Scott and Christensen’s (1995) model, which describes institutional ele-ments and carriers. We then examined elements (regulative, normative, cognitive) thoughcarriers (cultures, structures, routines) and then from the carriers’ point of view. We fur-ther developed the model, to understand the institutional theory and support the creationof our theory. In total, we ended up with 18 functions to describe the model. Then we pre-sented Greenwood et al.’s (2002) model. This model describes Stages of the institutionalchange process, which we wanted to apply to the standardization environment, because ithas similar aspects. The original model stated that associations are important entities inthe different professional fields, for example in the accounting field, associations are notconservative agencies – they play multifaceted roles. We wanted to consider institutionaltheory from the two perspectives, to have a broad perspective on theory building. More-over, this enables a broader perspective on the standardization environment in the follow-ing chapter.

In Chapter 2 we presented the role of actors in the process. In Chapter 3 we discussedvarious types of standards and defined the key terms concerning wireless technology. Inthe current chapter the theoretical approach developed in this research, based on the insti-tutional approach, has provided a more complete explanation of organizational action. InChapter 5 we address our research problem and examine wireless standardization usingthe terms defined in previous chapters and applying the institutional theory. In the nextchapter we analyze the wireless standardization process. Our interest is not in analyzingstandards or standardization organizations as institutions but in the standardization pro-cess itself. We are interested to research the whole standardization process applying bothmore static and more dynamic institutional models.

5 The contribution of the institutional theory to standardization

Standardization has spread in various environments such as quality, environmental, andmeasure systems, and involves actors, environments, rules and technologies. The actorscan include different institutions, organizations, regulators, operators, and manufacturers.For that reason it is justifiable to evaluate a standardization theory by focusing on tech-nologies and organizations. However, it is possible to conceptualize standardization fromthe various points of view of different theoretical constructs as presented in Chapter 1.Shapiro and Varian (1999) make the criticism that many of the complex modern technolo-gies that underlie several systems and services in common use today are the result of bit-ter and acrimonious standards battles. Rogers (1995) points out that those early evalua-tions are fraught with high uncertainty because choosing technologies that do not survivein the marketplace is expensive and time-consuming, and affects companies’ competitive-ness.

This chapter analyzes and combines the standardization from Chapter 2, the standard-ization organizations and processes from Chapter 3 and institutional theory from Chapter4. The analysis follows the institutional framework as presented in Chapter 4. We areinterested to what is a standardization process is like from the viewpoint of an actors, andwhat the changes in the process are. Various elements are involved, and therefore in orderto answer the research questions, a comprehensive theoretical approach is required. Thisallows us to relate specific standardization actions to the role of standards bodies. In thischapter, the notions of institutional theories are used to clarify the relations between theactors in the standardization process.

The chapter starts with an overview of the analysis. Our aim in this chapter is to fur-ther develop the framework and the a priori model shown in Chapter 4. The model pre-sented is used as the basis for the a priori model for further development. This elaboratedmodel is subsequently used in the analysis of the empirical data in Chapter 7.

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5.1 Background to the analysis

Institutional theory represents a distinctive approach to economic, social and political ele-ments in the study of social phenomena in general, and organizations in particular. Stan-dards provide mechanisms that align the interests of diverse social groups and createincentives to develop and operate on a common technological basis. Institutionalists callattention to the role of ideational forces – of knowledge systems, beliefs and rule – in thestructure and operation of organizations. According to organizational economists, institu-tions reduce uncertainty by providing dependable and efficient frameworks for economicexchange (North 1989). Furthermore, when discussing terms and exact definitions, it ismore important to look at the general phenomena they aim to describe, i.e., the coordina-tion and structuration of activities (Geels 2004). As we can see, there are variousapproaches to institutions and we cannot expect to converge on a single set of assump-tions and goals, but should instead seek a combination of several approaches.

The standardization of complex technology can be seen to consist of two main ele-ments: organizations and technology (Garud 1995a). On the other hand, Egyedi (1996)claims that standardization is to be perceived as a collection of discussion or negotiationplatforms, where participants have their roots or loyalties elsewhere. The standardizationorganization actors’ main point of identification is the interest group, or the technologicalpractitioners’ community. Hence, the two factors ‘knowledge’ and ‘interest’ are classicfactors in studies on standardization. By cross-classifying technical and institutional envi-ronments or dimensions, they offer a topology in which certain organizations may be sub-ject to strong technical and institutional pressures simultaneously (Garud 1995a). Manytheorists have argued that dealing with this dialectical tension by adopting a more com-plex administrative form may result in internal conflict. Instead, Garud and Kuma-raswamy (ibid.) note that by coupling these two dimensions the dualistic relationship cre-ates a dynamic setting in which it is difficult for a dominant design to emerge.

Perez (1983) and Freeman (1991) suggest the concept of a “techno-economic para-digm” to understand the interplay between standards and institutions. They followSchumpeter here: different eras are dominated by different fundamental technologies. Tobe effective, these technologies demand that a set of institutions compatible with and sup-portive of them is established (Nelson 1994). If the institutions are not compatible, even ifthey have interest groups, the standardization, be in a flux. However, the ones suitable foran earlier set of fundamental technologies may be inappropriate for the new ones. In thecase of institutions changing with a lag, this may slow down the adoptation of new tech-nology in different periods. The slow adoptation of fundamental technology may slowdown the standardization process, and vice versa. This is particularly relevant in terms ofcompetition between different technology rivals and between different organizations.

5.1.1 Towards an a priori model

“A common threat among the standardization processes is that they all consist of proce-dural steps that mix the science of technology with the art of dealing with human behav-iour” (Nielsen 1996). In theory research we analyze multiple and complex standardiza-

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tion processes (Weiss 1992) by using the institutional approach, and create an a priorigeneral standardization model. We use institutional theory and static modelling as a toolto analyze the standardization process issues and environment.

We can find various IT standardization process models, but very few of them describethe wireless telecommunication standardization process as an interplay between variousstakeholders, although such would assists an analysis of the social dynamics of standard-ization. To meet the need for all participants in the standardization process to understandtheir role in the process more thoroughly and recognize important relations between com-ponents, we try to explain it through institutional theory. By understanding the wirelessstandardization process as a techno-social variable institutional/organizational change wewill gain a deeper understanding of such issues as structures and cultures of organiza-tions, the role of R&D, technology and market strategies, and the importance of networksand boundaries, and define more clearly the type and the depth of specifications and stan-dards.

In the previous chapter we defined action, actors, organizational fields, internal rela-tions, organizations and institutions using terms from institutional theory. For the furtherdevelopment of the theory and model we apply these definitions to the standardizationenvironment.

In Weber (1968), action is viewed as social only to the extent that actors attach mean-ing to it. In standardization, the actors can be considered to be the different actors in thestandardization arena as presented in Chapter 3: operators, manufacturers, regulators,SMEs and standardization organizations. Actors in the standardization process attachvalue and meaning to the process by exchanging technology data. In standardization, anaction occurs when participants in the standardization process, actors, attach some mean-ing to standardization such as technology knowledge or business networks. In this waytheir target is also to maximize their behaviour in the process.

Within the standardization process as viewed using institutional theory, organizationsarise in, for example, in small working or technical groups or in formalized organizationalstructures such as the WTO, ITU or ISO.

Standards are created in various organizations, as discussed in Chapter 3, which havetheir own rules about their work and environments. The institutional approach focuses onthe objectified and taken-for-granted nature of organizations and organizational environ-ments, as perceived by participants. The institutional perspective is used to examineactors, models, technology and networks, and their influence on the standardization pro-cess. Institutional theorists (Meyer 1977, Zucker 1977, DiMaggio 1983, Scott 1983) havenoted that organizations existed either technical or institutional environments, each exert-ing different types of pressures. “However, institutional theorists realized that viewingorganizations as confronting either a technical or an institutional environment at anygiven time creates a false dichotomy” (Garud 1995a, p. 227). The standards-creation pro-cess joins institutions and environments together, creating a dualistic relationship. Garudand Kumaraswamy (ibid.) have proposed that we can understand and better shape theevolution of technological systems by coupling their institutional and technical environ-ments. Furthermore, according to Weber, environmental stimuli must be cognitively pro-cessed by actors – in the case of our standardization environment (wireless telecommuni-cations), interpreted by individuals employing socially-constructed symbol systems –before the actors can respond by taking action. In this standardization case, we can regard

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socially-constructed symbol systems as different kinds of standardization organizations,formal and informal, acting in the standardization process. The actors’ roles in the process– for example, editor of the standard document – can also be regarded as a symbol sys-tem.

Standardization is a process and a property variable, in the process by which standard-ization actors transmit technology knowledge in various networks. Generally, standard-ization acts are repeatable in the process, because of agreed “Common Procedures” invarious standardization organizations. The standardization process is imitative or mimeticwhen adopting other organizations’ successful elements when uncertain about alternativessuch as business or technology issues. Normative transmission of social facts happensfrom external sources, such as the various professions participating in the standardizationprocess. The organizational field in standardization is recognized area of standardization“actors”: manufacturers, operators, various standardization organizations and regulators.These groups interact around a common substantive interest, a standard. Aldrich (1999)defines organizational field as a set of interacting groups, organizations and agencies ori-ented around a common substantive interest, such as medical care, educational policy, orsupport for the arts. In the global standardization environment there are various interna-tional relations. The conditions under which international cooperation occurs is challeng-ing for actors, because many of them are competitors in the same business area. Interna-tional regimes are regarded as multilateral agreements, in this case of standards, onceresulting from and facilitating cooperative behaviour. However, the purpose of standardsis not to regulate their relations with one another within a particular field, but to enabletechnology combinability between different wireless systems at the global level.

5.2 Standardization from the institutional theory’s point of view

In this Section we use institutional theory to form an a priori static model of standardiza-tion in the case of wireless technology. With reference to the literature and other collect-ed material we attempt to identify the key facts which explain standardization using insti-tutional theory. We will continue the application of institutional theory, and its broadframework created by Scott and Christensen (1995) as presented in the final results inSection 4.6.7 in Table 6, and the dynamic process model created by Greenwood and Hin-ings (1996) as outlined in Section 4.7, Figure 4. Table 7 shows the standardization ele-ments of standardization using institutional theory in Table 6.

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Table 7. Standardization elements and carriers using institutional theory.

Actors have an important role in the standardization process and our main attempt is tounderstand this to a level adequate for application in further research and empirical stud-ies. Moreover, actors interact in organizations and organizations are important sources ofnew institutionalization of new actions. We have formed this table based on the literatureas will be presented in Section 6.4 in Table 12 in the same order as in Chapter 4.

5.3 Elements

In the following chapters we analyze wireless standardization concepts using the regula-tive, normative and cognitive institutional elements. By ‘element’ we mean a part of anorganization which constructs the standardization organization or is a basic issue in theorganizational function. The environment of wireless standardization includes a largearray of different issues. However, the most relevant and most interesting in terms of thisstudy are discussed next.

5.3.1 Regulatory system in standardization

In the following sections we analyze standardization through the institutional theorymodel, as presented in Table 6 Chapter 4.

5.3.1.1 Regulative-Cultures function in standardization

This function is described as developed/enforcement rules, and performance policy in therefined terms. Using the terms in the standardization context we describe them as stan-dardization policies/organizational rules and frequency issues at the general level in thewireless standardization process. Rules and laws are described as generic issues.

ElementsCarriers Regulative Normative Cognitive

Elements Carriers Elements Carriers Elements CarriersCultures Standardization

policies/organizational rulesfrequency

jurisdiction networkstrust

environmen-tal values

actorsstandards

actorscategories

Struc-tures

small/large actors/organizationsglobal interest

small/large actors/organizations

coordination coordination cooperationapproval

compatibility

Routines roles roles congruenceprocedures

procedures objectivesperformance

objectives

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Standardization policies/organizational rules. The aim of regulatory systems is toresolve conflicts of interest and differences. Thus, legislative and judicial authorities cre-ate and interpret legal mandates – examples are the World Radio Conference (WRC) con-ferences in 2000 and 2003. In the wireless standardization arena there are a few organiza-tions which have a law-like status among the actors. The role standardization organiza-tions were presented and discussed more deeply in Sections 4.5 and 4.5.1. Current effortsare directed towards maintaining and further developing a global wireless telecommuni-cations network under the umbrella of ETSI and ITU. These organizations formulate therules and law-like decrees which each country and organization adopts. In Europe the sig-nificant regulator is the European Commission, which set its aim as ‘technical harmoniza-tion’ in the Green Paper on Telecommunication in 198758 and the White Paper onGrowth, Competitiveness and Employment in 199359. If telecommunications standardiza-tion did not exist, there would be no network externality effect among users, there wouldbe many competing technologies, and roaming and global competition would not exist.

The formal standardization organizations in the telecommunications sector, such asITU, have a regulatory status. Previously, the members of such organizations werenational representatives, but nowadays, members can also be corporate. Internationalstandardization bodies such as ITU comprise a varied collection of institutions that havelong been low profile and been little understood by outsiders. In recent decades, the eco-nomic importance of the work of the bodies and regional counterparts globally, and inparticular of their activities with regard to the standardization and harmonization of tech-nologies in the information and communication sector, has begun to be recognized andappreciated more widely among economists (David 1995, p. 27). In the future the demar-cation of technology standardization will be more important, because of the convergenceof various technologies: computing, broadcasting, and telecommunications.

Frequency. In wireless technology, standards enable the system to function andachieve compatibility at various levels of the technological system. This is enabled by anagreed frequency policy, which is more like rules than laws. The frequency policy orlicenses are regarded more rules in this context according to operating actors. However, inpractice it can be regarded as a set of law-like rules because, if it is not followed, thedeveloped technology (e.g., CDMA phones) will not be compatible with other phones.This was discussed in detail in Section 2.2.

Formal standardization is a long process as a whole. The ‘harmonization’ of technolo-gies or frequency in the communications sector requires years for the formulation andpublication of technical standards and procedures for certifying the products with suchstandards. The performance of these organizations will affect the vital infrastructures inthe development of the global economy in the foreseeable future. Formal standardizationorganizations were discussed in Section 3.5.1 and their role as regulators in Section 3.5.3.For example, every four years the ITU organizes the WRC conference, in which mainspectrum allocation is decided globally. The agreement requires time, because in every

58. Green Paper on the Liberalization of Telecommunications Infrastructure and Cable Television Networks:Part One – Principle and Timetable COM(94) 440, October 1994, and Green Paper on the Liberalization ofTelecommunications Infrastructure and Cable Television Networks – Part II – A Common Approach to theProvision of Infrastructure for Telecommunications in the European Union COM(94) 682, January 1995

59. White Paper on Growth, Competitiveness, and Employment: The Challenges and Ways Forward into the21st Century COM(93) 700 final, Brussels, 5 December 1993

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country frequencies – which may be in operation for other uses such as military purposes– must be reallocated according to the WRC proposals. This ensures global roaming.Regulation has a significant role in telecommunications standardization, because spec-trum is a scarce resource for all actors. If the actors in the standardization environmentcannot agree on a common spectrum allocation, for example, each region may end upwith its own telecommunications system.

5.3.1.2 Regulative-Structures function in standardization

This function is described in refined terms as structures, and institutions. In the wirelessstandardization approach we discuss this function in terms of small/large actors/organiza-tions and global interest.

Small/large actors/organizations. An international business is one where businessactivities cross national boundaries. International regimes are regarded as multilateralagreements, at once resulting from and facilitating cooperative behaviour, by means ofwhich states regulate their relations with one another within a particular issue area. Thiswas described in Section 3.5.4, in Figure 3. These were named governance systems aspresented in Table 5 in Section 4.6. In this function we describe them as organizations.Some of these international standardization organizations are formal and large organiza-tions such as ITU and ETSI, and others, such as OMA and the UMTS Forum, have com-plex sets of rules, standards and agencies as discussed in detail in Sections 3.5.1 and3.5.2.

Global interest. The first generation of wireless telecommunications systems wasbased on de facto standardization, which was based on voluntary cooperation betweenNordic countries. The second generation GSM system is based on de jure standardization,and was established by powerful actors in Europe and lead by ETSI. GSM standardizationas a whole was a challenging task and its aim was to favour all participants’ interests, forexample in recognizing IPR issues in the standardization process. GSM standardizationbecame a success and it has been extended beyond Europe to the US and the Far East asdiscussed in Sections 2.3. and 2.5. It reached the global interest. Thus the technology cre-ated by the various organizations has gained the power system mandate, rather than otherwireless technologies. To develop a power system requires continuous discussion. Tele-communications standardization organizations were originally established to discuss andsolve conflicts in technology development. Without them we would not have, in Europeor globally, functioning GSM or WCDMA systems.

5.3.1.3 Regulative-Routines function in standardization

The development of standardization requires new routines and controlling mechanisms.David (1995, p. 25) refers to the standardization from the point of view of de facto stan-dardization as an uncontrolled process. He argues that decentralized decision-making canresult in too much standardization, with the wrong standards, arrived at too soon. Howev-

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er, in many cases in standardization there are important political technology targetsamong the actors, which may require them not to behave in line with others’ expecta-tions. In applied institutional context we described this function in terms of followingrules and experience. In this context we use the refined term roles. This is discussed moredeeply in Section 3.5, the role of standardization organizations.

Roles. New ways of organizing require changes to routines in organizations. Moreover,the question is raised of how old knowledge among actors such as the rules and laws ofthe organizations formed, can be retained. In previous generations the number of partici-pants in standardization organizations was radically smaller, which enabled easier accu-mulation and distribution of information straight to individuals. Over the decades, thenumber of actors has increased radically, but on the other hand the ways of distributingthe information have become easier, e.g., using Internet or email. However, the currentchallenge is how to maintain topical rules and regulations due to the competitive situa-tion – for example, at the European level, due to the relatively new industry environmentand business. This requires new roles within organizations.

The challenge is to find a common agreement about technology development. Theactors may have interests at the national, regional or global level. This may mean thatrules which may benefit all may fail to be established. In the history of telecommunica-tions there are some cases of standards being created but failing to enter the market. Therecan be many reasons for this, such as the market not being ready or being entered too late,or standardized product being too technological for users. Thus technology developmentrequires experience, and the right entry to the market requires the product to meet cus-tomer expectations. These kinds of examples are visible in the Beta vs. VHS case, or inWireless Application Protocol (WAP) standardization.

5.3.2 Normative systems in standardization

Originally the approach to the normative system was that normative aspects of institu-tions give priority to moral beliefs and internalize obligations as the basis for socialmeaning and social order. Behaviour is seen as an awareness of one’s role in a social situ-ation and a concern to behave appropriately, in accordance with others’ expectations andinternalized standards of conduct. Nowadays, we can question this priority: does it existany more, due to timing issues, globalization and financial interests? Behaviour in stan-dardization organizations however, can be in accordance with others’ expectations, if thisis earlier agreed among the actors.

5.3.2.1 Normative-Cultures function in standardization

This function was described at the general level using the terms ‘values’ and ‘expecta-tions’ and the refined terms ‘value system of organization’ and ‘trust’. In the standardiza-tion context we describe this function in terms of networks and trust, which are describedin this section. Similar issues were presented in Sections 3.5.2.1 and 3.2.

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Networks. The power of social patterns is important in the standardization environ-ment. The large organizations have power and also partly form the social patterns or net-works of standardization. This is because the large organizations are represented by themajor actors, manufacturers and operators, in addition to formal organizations such asnational representatives. Earlier, in the standardization environment in NMT times, theindividual had a stronger role to act as an organization or work group leaders. Thus thevalue system of the organizations can be seen as legitimized by its wide discussionsbetween organizations and interest in participating in the process. This means that thestakes and expectations concerning standardization results are higher. Moreover, nowa-days, due to timing issues and the flow of data, expertise and financial resources, there islittle chance for non-rational forces.

Trust. Communication between actors requires a certain level of trust and conformity.The trust element can be seen as a normative element, which enters into the arguments ofinstitutional economists. The uncertainty about technology selection may increase theimportance of trust between actors in the standardization environment. This leads actorsto be strongly influenced by collective norms and values that impose social obligations onthem, constraining their choices.

5.3.2.2 Normative-Structures function in standardization

In standardization we describe this function with the term ‘coordination’. These issueswere discussed in Section 3.5.4. In the previous chapter we refined the function in termsof construction of organizations and rules. Standardization organizations, both formaland informal, can be regarded as authority systems in the standardization field. Bothkinds of organizations form various working or ad hoc groups at the national and region-al levels. This requires coordination among actors.

Coordination. Generally, the large worldwide organizations have power and a coordi-nation role in the standardization process. However, it has been argued that formal organi-zations slow down the process, because of their collectivist approach and organizationalbureaucracy. Furthermore, David (1995, p. 27) refers to institutional performance prob-lems. He mentions, for example, the delays in the drafting of proposals and approval ofstandards, the rising costs, needless uncertainties and confusion caused by a multiplicityof organizations asserting ‘jurisdiction’, and the non-responsiveness to economic interestswhich have been cited as defects of the process. The existing institutional regimes havecaused some ‘jurisdictional’ competition among different standards, which have techni-cal roots in technology convergence such as certain fields of telecommunication and com-puting. Hence, standards organizations have been witnessing great changes in the busi-ness constituencies they serve. This has resulted in changes in the industry structures,which are still continuing (ibid. p. 31).

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5.3.2.3 Normative-Routines function in standardization

Nowadays, the standardization process is more a collectivist conception than an individu-alist one, because the main target of standardization is to negotiate a widely acceptedagreement. This was discussed in Sections 3.2 and 3.5.2.1. In the wireless standardiza-tion context we can describe this function in terms of congruence and procedures.

Congruence. In many cases, standardization organizations are established by a power-ful actor or coalition of actors, who enforce rules that favour their interests. In the wire-less telecommunications industry it is important to ensure that the common interest is thecompatibility between networks, devices and services. The standardization organiza-tions’ target is to look after this capability and congruency.

Procedures. Examples can be seen in the procedures – IPR rules and Change RequestProcedures (CPR) – created in standardization organizations. These measure the perfor-mance of duty of organizations active in the standardization process. The measurementcan be the level of activity in the standardization process, e.g., participation in standard-ization meetings.

5.3.3 Cognitive systems in standardization

5.3.3.1 Cognitive-Cultures function in standardization

From a cognitive point of view, institutions are not so much bundles of regulations or col-lections of norms, but knowledge systems. From the wireless standardization viewpoint,the standardization process as a whole is an enormous knowledge system. Inside the orga-nizations there are various knowledge systems, which have a central role in the process.Furthermore, efficient knowledge systems require actors. Such knowledge systemsinclude different kinds of standards, which can be categorized. With the refined terms wedescribed the categories as action, actors, and knowledge systems.

Standards. Categorization may help to determine which aspects and actors are similar.The growing number of actors in the standardization process sets requirements for themaintenance of the knowledge systems. In the wireless standardization context, knowl-edge systems can be typified according to different standards: de jure, de facto and for-mal. The types of standards were described in Section 3.3. We can use social categoriesto help us to determine what things and people are similar. In standardization we can cate-gorize organizational actors in the environment as small, medium or large actors, or asmanufacturers, operators, regulators or 3rd party developers. This means that categoriesmight help us to determine what things and people are similar and are thus to be treatedaccording to one set of rules, and what other things and people are different and are thusto be treated differently.

Actors. It can be argued that it is difficult to control what kind of actions can be takenby what actors. Main actors in the standardization process were presented in Section 3.4.However, cultural systems provide models for all actors or groups of actors in the stan-

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dardization field to construct their own strategies for how to behave. The strategies ofbehaviour are based on national or corporate convenience. Furthermore, the number ofactors in the standardization environment – hundreds of actors – reduces the feasibility ofcontrol. However, the major actors in standardization can control the technological andorganizational environment (David 1995). On the other hand, small actors may concedethat they are better off having the dominant actors’ standards, than none at all. Further-more, the small actors may have no expectations of having their own technologiesadapted as the standard (Besen 1995).

5.3.3.2 Cognitive-Structures function in standardization

This function describes the organization’s way of acting and acceptance in the wirelessstandardization context. The general institutional function was presented in terms of iso-morphism and identities. We proposed in the refined model the terms of structured simi-larity. When applying this to the standardization context we use the terms cooperationand approval.

Cooperation. Standardization requires cooperation among actors and there is pressureon organizations engaged in the same types of activities to look and act alike. This isimportant in the standardization environment, because the actors’ target is to form stan-dards in cooperation. In this function, this term describes the wireless standardizationprocess, and it was discussed in greater depth in Section 3.5.2.1 when presenting the3GPP approach. 3GPP is a good example of wide cooperation among standardizationactors, where the global interest and the need for governance systems are recognized.

Furthermore, when organizations have similar functions, such as “change of request”processes, communication with other organizations in the environment is made possibleand simpler. Actors can be identified among other actors by their technology decisionsand strategies. However, Tingling and Parent (2002) state that selection of technologycreates uncertainty, especially for the early actors in the technology in question. Accord-ing to them, institutionalism, through mimetic isomorphism, affects the technology selec-tion decision process in that even though decisions made by certain organizations aremore relevant for those organizations, other firms will replicate their selection decision –even if they believe the copied choices to be inferior or suboptimal.

Approval. The development of voluntary (de facto) standardization within an institu-tional environment cannot take place in isolation from events in the market. For example,a manufacturer or group of manufacturers may elect to bypass the explicit negotiationprocess and decide to go it alone with de facto standardization (David & Forray 1995, p.32). However, to become commonly accepted, standards must win approval among theindustrial users or final consumers. Thus the value of all standards depends more andmore on their market acceptance rather than the result of the voting committee. Industrialcompetitors may decide to use de facto standards or other standards if there are clearlyascertainable financial benefits and as long as they exist and meet the needs. The role ofstandardization organizations was presented in Section 3.2.

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5.3.3.3 Cognitive-Routines function in standardization

The elements in this context describe the standardization process from the actor point ofview in terms of objectives and performance. These are important characteristics of stan-dardization. In the refined model we referred to this function using the term action.

Objectives. In a standardization environment all the actors have their own objectives.These days, the challenge for standardization organizations is how to cope with the num-ber of objectives of all the organizations and the number of actors. This issue was dis-cussed from a historical point of view in Section 2.3, and with reference to the morerecent situation in Section 3.4.

Performance. ETSI is one organization which maintains knowledge systems by form-ing procedures which maintain, develop and create new standards, documents and pro-posals, i.e., scripts. The types of standards were presented in Section 3.3. The publicationand formulation of technical standards and procedures for certifying the conformance ofproducts such as standards has long-lasting effects in defining national and global mar-kets, structuring international and interregional competition and patterns of trade andinfluencing the rate and direction of technological change (David & Forray 1995, p. 27).These issues govern the performance of individual or actor behaviour in the standardiza-tion environment and shape participating organizations’ various methods, e.g., their viewson strategy issues and internationalization. Similar issues were discussed in greater detailin Sections 2.4 and 2.5 when discussing timing and globalization of the wireless environ-ment.

5.4 Carriers

This section describes the carriers in standardization context. In institutional theory, cul-tures, structures and routines are regarded as carriers. These describe the activities anddynamism in standardization organizations.

5.4.1 Carrier elements: Cultures in standardization

Culture is the glue that holds organizations and actors together. Organizational culture,either formal or informal, shapes the behaviour of organizations. Previously, standardiza-tion organizations sought to rationalize technology that was changing very slowly, or in apredictable or regulated manner.

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5.4.1.1 Cultures-Regulative function

This function describes how rules and laws are used in the standardization culture. In ourrefined term we described this using the term ‘jurisdiction’.

Jurisdiction. Formal organizations produce formal and de jure standards, such as theGSM system. Due to the development/enforcement rules and structural behaviour thestandardization process is rather slow. The changing culture of the standardization processis reflected in the growing importance of so-called ‘anticipatory standards’. These stan-dards are set for events in the future and are intended to guide the emergence of new tech-nologies. Standards are also set in advance of the market’s ability to signal the features ofproducts (David 1995, p. 29). An informal organization, such as the IETF, is one whereall interested actors can suggest proposals. Their organizational structure is low and thusenables faster decision-making. In such an organization, organizational rules are quiteinformal, but on the other hand the decision does not have law-like status. Formal stan-dardization organizations were presented more in greater depth in Section 3.5.1 and infor-mal ones in Section 3.5.2.

5.4.1.2 Cultures-Normative function in standardization

In the wireless standardization context this function describes environmental values. Suchissues were further presented in Section 3.5.4 and regional characteristics were alsodescribed. The issue of the standardization environment was discussed in Section 3.6.The institutional model described this function in terms of values and expectations. Wesuggested the refined terms ‘norms’ and ‘cultural persistence’ to identify this functionfurther.

Environmental values. Business organizations operating solely in a domestic environ-ment traditionally derive their cultural habits and values from their country of origin. AsHofstede’s (1980, in Parker 1996) work shows, when firms became international theycontinue to derive their cultural habits and values from their country of origin. However,when organizations add operations and networks across borders, their members areexposed to additional cultures and adopt measures of norms, habits and even values fromthem (ibid., p. 494). As sales and profits are important for all firms in foreign markets, itis important to hire employees to build knowledge of various cultures. This leads to agreater generational uniformity of cultural understanding and congruency of decision-making. This reshapes organizational cultures.

5.4.1.3 Cultures-Cognitive function in standardization

From the carrier point of view, in the context of wireless standardization, this function,which reshapes organizations, is described in terms of categories and actors,. A similar

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issue, the development of wireless technology generations, is described in Section 2.3. Inour refined terms we identify this function with practices and routines.

Categories. Technology and market environments have cultural features which reshapeand categorize the standardization process as each environment has its own cultural back-ground such as engineering, research or marketing. However, despite their different cul-tural backgrounds, these groups need each other to form standards which can crossnational or regional borders. This cooperation has its roots in Nordic countries. DuringNMT, standardization was mainly organized by the Scandinavians, the so-called “NordicGang” (Knuuttila et al. 1996), as the cultural and market background was similar in allfour countries.

Actors. GSM development began in Europe in the 80s among Europeans. This broughtto the Stage various actors with various cultural backgrounds. This reshaped the standard-ization process. At the later revisions of GSM development, the actors in standardizationwere worldwide. This added an interesting flavour to the language used in proposals.Originally, NMT standardization was done in “nordiska”, which is mainly Swedish. Euro-pean-wide GSM standardization required one common language, and English becamethat language.

5.4.2 Carrier elements: Structures in standardization

As stated in section 4.6.5, the process of institutional definition, or “structuration”, con-sists of four parts (DiMaggio 1983). We can find similar parts in standardization: anincrease in the extent of interaction among standardization organizations and actors in thefield; the emergence of sharply defined interorganizational structures of domination andpatterns of coalition; an increase in the information load with which organizations in afield must contend; and the development of a mutual awareness among participants in aset of organizations that are involved in a common enterprise. Each standardization orga-nization has its own interorganizational structure which they follow. Generally, standardsare required to enable complex technological systems to function. The complexity hasincreased the further the wireless technology develops and penetrates. Standardized wire-less technologies are presented in Section 2.2. The increase in complexity causes anincrease of information load, both interorganizationally and among actors, and possiblychanges organizational structures.

5.4.2.1 Structures-Regulative function in standardization

In standardization we can see standardization organizations as part of the regulatory sys-tems presented, which form part of a power system. The main actors in standardizationare presented in Section 3.4. In our refined terms we described the function with ‘struc-tures’ and ‘role systems’, which we use to describe broadly the term of governance sys-tems. The small and large actors and organizations push forward the information and actin the standardization process.

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Small/large actors/organizations. These organizations are small and large organiza-tions and actors, which act at the national or/and global level. In regulatory systems, indi-vidual and collective actors are assumed to have interests, e.g., de facto standards, whichthey pursue in an expected rational manner. In differences and situations of conflict, rulesand laws are formulated to which a regulatory machine is attached. This requires changesto organizational routines and requires reshaping of structures. In these kinds of situa-tions, actors obey rules primarily out of self-interest, out of expedience, in order to avoidpossible sanctions and conflicts. In standardization the actors are expected to commonlytarget – to standardize – that which benefits the development of actors’ business and tech-nology.

However, the increased information load has necessitated the reorganization of organi-zation structures. For example, it has required changes of targets and strategies. Some-times it has even given opportunities to new organizations to enter the field. However,DiMaggio (1983) reports that early adopters of organizational innovations are commonlydriven by a desire to improve performance.

5.4.2.2 Structures-Normative function in standardization

From the structural perspective the standardization organizations and actors are goodexamples of regimes and authority systems. In our refined terms we described these usingthe terms ‘change structures’, ‘target strategies’, and ‘new organizations’. Furthermore,we identify this function using the term coordination.

Coordination. Wireless standardization involves very large public stakes, and thisrequires a great degree of coordination among the economic agents/actors and other orga-nizations involved. Formal organizations are generally understood to be systems of coor-dinated and controlled activities that arise when work is embedded in complex networksof technical relations, e.g., 3GPP (section 3.5.2.1.). Furthermore, institutionalized patternsand practices sustain an organization’s legitimacy and are unlikely to change (Robey1999). This is a challenged at the international level, which connects three region regimestogether. This can be named as authority systems. The dominating regions are presentedin Section 3.5.4. In wireless standardization, the formal organizations enable the estab-lishment of the wireless network by regulations and proposals. The actual economicalbenefits of network development are gained by the informal organizations such as themanufacturers, operators, informal standardization organizations and 3rd party develop-ers.

5.4.2.3 Structures-Cognitive function in standardization

A standardization environment includes various stakeholders and diverse environments.When new technology is invented, new actors enter the standardization environment.These new entrants have an important role in the environment; they bring new knowl-edge and new cultures. The example of new consortia is presented in Section 3.5.2.3.

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These may reshape the environment. The challenge for the standardization environmentis for it to change along with the general technology and business change. This will pre-vent structural isomorphism, thus maintaining organizational effectiveness and conformi-ty. Despite institutional stability and legitimacy, the other actors in the environment, themain beneficiaries, create the change. The pushing effects can come from global changein business demographics, values or policy guidelines in actors. The standardization envi-ronment is described in Section 3.6. In the wireless standardization context we describethe function using the term compatibility.

Compatibility. However, many organizational perspectives emphasize the importanceof materialist forces – technology, resources, and production systems. In wireless technol-ogy, we can see technology standards as playing a part in the networking of real organiza-tions. One example is the 3G terminal. One feature is the Internet or multimedia services,which require a certain level of security for the service. Mobile e-commerce requires pay-ment systems to be reliable and easy to use to gain financial data or use banking services.Both of these examples require compatibility between technology solutions and actorsand the approval of technology decisions. The wireless telecommunication technologywas presented in Section 2.2. DiMaggio and Powell (1983) identified three mechanismsof institutional isomorphic change and to wireless standardization we can apply as fol-lows:1. coercive: isomorphism that stems from political influence, e.g., regional economic

issues and the problem of legitimacy concerning informal standardization organiza-tions

2. mimetic: isomorphism resulting from standard responses to uncertainty, e.g., techno-logy decision

3. normative: isomorphism associated with professionalization and participation in stan-dardization organizations.

5.4.3 Carrier elements: Routines in standardization

5.4.3.1 Routines-Regulative function in standardization

In the standardization field it is difficult to find rules which govern routines in organiza-tional behaviour. Each organization forms its own routines for which it requires compli-ance. The main actors in the standardization process are presented in more detail in Sec-tion 3.4, and the roles of standardization organizations are described in greater depth inSection 3.5.

Roles. Routines and actions create various roles for actors in the standardization pro-cess. In different standardization organizations there are different forms of cooperationbetween workgroups or procedures, which integrate different organizations to exchangeknowledge and work together. This requires experience from actors and is mainly on avoluntary basis, not a coercive one. However, we can find differences between formal andinformal organizations and hence formal and informal standards. Formal standardization

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is governed by rules and formulations such as de jure standards, which take a longerperiod of time to develop. On the other hand, de facto standardization refers to formingcommonly agreed recommendations or standards more quickly with faster routines andless bureaucracy.

5.4.3.2 Routines-Normative function in standardization

The standardization process requires various procedures in order to work efficiently, i.e.,organizational routines. This creates visibility and legitimacy for the system. In ourrefined terms we discussed this function using the terms ‘organizational routines’ and‘social pressure’.

Procedures. To enable different actors to join a standardization process, commonly-agreed routines or procedures are required. Standardization process routines have beenformed over the last few decades. The need for standardization process is described inSection 3.1. The performance of duty in standardization has become more challenging.The change has been significant; the number of actors has exponentially increased alongwith the expansion of technology knowledge and requirements, timing requirements andglobalization. Furthermore, the institutional roles have changed drastically from the 1st

generation to the 3rd generation standardization process. This has reshaped the organiza-tions’ structures and actors’ behaviour in the environment. Institutions have less powerand procedures are more manufacturer- or operator-driven. Manufacturers’ and operators’roles are discussed in greater depth in Section 3.4.1. This creates a challenge from theperspective of organizational structures, to find conformity, e.g., in cooperation. Thisrequires clear guidelines for assessing performance in a wireless standardization environ-ment. The organizational process can be seen between different actors in the ChangeRequest Process for the document exchange process, for example. Furthermore, IPRissues are recognized in standardization in a formal way, which enables new actors toweigh the risks or rewards of participating in the standardization process, for example.

5.4.3.3 Routines-Cognitive function

The standards are written scripts, which are created by various actors in the wireless envi-ronment. Standards and standardization are presented more deeply in Section 3.2. We canregard the strategies followed by actors and organizations as performance programs. Byfollowing strategies, and written documents actors and institutions are required to reshapetheir procedures from time to time. The written documents and actions we can regard asobjectives.

Objectives. Wireless standardization is an emerging industry. Hence, it is important tohave clear guidelines for assessing performance. For a new actor it is important to have astrategy concerning how to enter the standardization environment. A new actor may findit difficult to consistently weigh risk/reward trade-offs. This requires clear objectives foractors in the standardization process in order to create appropriate standards. A special

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characteristic of the standardization process is that there are also competitors acting. Thusthe competition is structured within the process.

5.5 Conceptualizing standardization

We used wireless standardization practices to develop a framework of the process of stan-dardization and related issues. We used it to explain standardization processes from vari-ous angles. This brought to light new issues from the processes, such as the difficulty ofrecognizing the final user requirements, the timing aspect, the depth of standardization,technology/standard multiplicity, the new role of the institutional function, and the role ofthe “3rd party developers”. We can also identify from the model relations or Triggersbetween the Stages, and thus observe the role of the standardization organization as aninformation trader. In addition, the 3rd generation telecommunications standardizationdiffers from the 2nd generation because it will integrate the IT sector, media and telecom-munications, which gives the whole process a specific character.

Dynamism of institutional theory for standardization

The challenging question for our research is the dynamism of the standardization pro-cess, because it is expected to broaden the perspective of and add continuity to the pro-cess. The dynamics of the wireless standardization process can be traced to the intercon-nections between different stages. The triggers between the stages push the process for-ward. A single action or event at one stage, through triggers to the next stage, can gener-ate completely unexpected results.

Time has a critical role in standardization, especially when products are developed inquick-changing markets such as wireless telecommunications. The timing aspect broughtdynamism to the model, which partly shows the efficiency of the process. David (1995)has stated that the dynamic character of current technology makes it futile and misguidedto view standardization as a solely regulatory matter, to associate the totality of standardspolicy with the activity of promulgating very specific and technical norms to whichindustrial and commercial practice will be compelled to adhere. Oksala et al. (1996) alsostate that standards are an important factor in bringing stability to the technology. Thisleads to the question of the existence of divergences between private and public interestsin the outcomes of purely voluntary processes.

The technical environment has changed over several generations and creates ambiguityfor technological decisions. At the same time standardization has become global. Fromthe institutional theory perspective, elements which encourage and push organizations tochange come from the outside of organizations. We have more actors in the standardiza-tion environment: regulators, multinational manufacturers and operators, and the new 3rd

party developers. Actors develop the standardization organizations and are expected to berewarded for effective and efficient control of their standardization system. Moreover, atthe same time the markets have become heterogeneous.

Standardization organizations were previously regarded as “Iron Cage” or boundaryobjects. However they were forced to change. New forums and coalitions have entered

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the environment, causing a change in process speed when compared to the 1st and 2nd

generations. These new organizations can create standards more rapidly, because they aremore flexible and use ad hoc standardization forces. Creating standards for several similarissues has also increased the complexity of the standardization process. Hence, it appearsthat standardization organizations should become semi-autonomous. This is advantageousfor the users, as they will get better-defined systems. Furthermore, the complexity of thestandardization process has created pressures for the “gatekeeper” to keep timetables.These are set by industry and operator objectives. The nature of the standardization pro-cess has also changed from a technology focus to complex technology and service con-cepts. This differs from previous standardization processes where standards were con-cerned only with technology. From the institutional perspective, this describes the need ofactors to adapt to changes to the standardization process and integrate them into theirbusiness (see Holm, 1995).

The process cannot be managed successfully without acknowledging its intrinsicuncertainties. The environment of evolving technologies and the market situation inwhich the actors employ them are highly changeable. Above we have discussed timingissues, contingency and complexity of standards. This calls for improvement of marketperformance through greater attention to questions of selective timing and flexible publicorganization interventions, promotion of reforms, and innovations in institutional infra-structures supporting innovation and diffusion. This leads to the standardization andestablishment of different kinds of required standards as crucial. As David (1995, p. 34)states, “the need for standardization, and the costs of establishing standards of differentkinds, both in terms of effort of negotiation and selection that is required and of theopportunity costs of the options foreclosed by agreeing on a standard, are almost certainto change over the course of the life cycle of a technology.”

Nelson (1994) argues that the effective use of latent potential in a new technology canrequire significant institutional accommodation. Therefore this might take a long timebefore there is much effect on productivity. However, the actors in the standardizationprocess may through their own actions affect the diffusion of technology. Examples ofactors’ proactive action include investigating decisions or resource allocation for the tech-nology. Mansfield (1968) presents another view. He states that we must understand howrapidly new technology can replace an old one, causing intrafirm diffusion. Intrafirm dif-fusion denotes the change rate inside the company. We can propose that for this new tech-nology demand can be answered with standards. The standardization process creates thestructure and stability for technology diffusion. However, institutional theory explanationfor legitimating of new ideas through a process of mimicry is that ideas achieve legiti-macy if, and when, they are adopted as examples of other actors.

5.6 Application of the institutional theory to the standardization processes

A critical determinant of the standardization process is how – and how well – actorsbridge the institutional distance between them, and the foregoing discussion clearly

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shows that institutional theory has the power to deepen our understanding of the standard-ization processes. In Figure 5 (p. 110) we adapt and extend the dynamic model proposedby Greenwood et al. (2002) in order to better appreciate the process. Greenwood et al.’s“Stages of institutional change” model presents a nonisomorphic change. Greenwood etal. developed the Stages to describe the regulatory agencies, such as professional associa-tions, endorsing local innovations and shaping their diffusion. Parkhe (2003) adapted andextended the model in order to take into account the processes underlying the integrationof values, practices and systems in international alliances. In this research we apply theStages to the standardization process to better understand the changes in the standardiza-tion process and environment. Moreover, we apply the standardization elements and car-riers in Table 7 (p. 92), which describe the standardization process, using institutional the-ory. The elements and carriers from the functions can appear in one or more dynamicmodel Stages, identifying different issues in each Stage. Also, we have renamed the titlesof Stages to describe better the actual standardization process. We have assigned letters tothe pushing factors or Triggers between the Stages. We have also followed and combinedstandardization organizations and procedures as such as those presented by (Molka 1992,Habara 1994, Irmer 1994, Oksala 1996, Jakobs et al. 1998, Jakobs 2002, Jakobs 2001)and (Robin 1994).

I Interest Stage. As Figure 5 shows, the early jolts in the lifecycle of the standardiza-tion process may lead to a shock to the institutionalized norms of each actor. We haverenamed “Precipitating jolts” as the “Interest Stage”. This indicates the beginning of thewhole process. Jolts may be social, technological or regulatory in the original model, butin standardization we describe these with the concept of changes in networks, standards,and organizational rules. Networks describes issues of business and global interest. Busi-ness is important, because it is a pushing force of the standardization process. The globalviewpoint is important because it describes the standardization environment. For theactors the main reason to participate in the process is the expectation that they will gainfinancial benefits by standardizing their products for the global markets. Another impor-tant aspect in the process is networking and forming committees with other actors, withthe possibility of discovering common business interests. The actions can take place informal or informal environments. However, the important factor is to gain legitimacyfrom the beginning of the process.

Trigger A. From Stage I (“Interest”) to Stage II (“Networking”), the impact may movebusiness interests to foreseeable structural changes. The greater challenge is to recognizethe end users’ requirements at this Stage. This would be important to further reduce thenumber of wrong choices in the technology development and business processes. It isimportant to recognize actors’ objectives in the process.

II Networking Stage. We have renamed this Stage the “Networking Stage”. The origi-nal stage name was “Deinstitutionalization”, consisting of emergence of new actors,ascendance of actors and institutional entrepreneurship. When applying the model to thewireless standardization process there occur changes. We connect emergence of newactors and ascendance of actors. These changes may, in Stage II, with the emergence andnumber of new actors, lead to the ascendance of some actors, local/institutional entrepre-neurship, or the possibility of institutional changes. These may destabilize and weakencurrent institutions, as each of the actors face the prospect of institutional change arisingfrom the injection of new innovations, ideas or technology. At this Stage the very first

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drafts of the standard may be launched. This requires networking with other actors in theprocess. The global operators and telecommunication companies may have ascendanceroles at this Stage, because they have enough resources and power to allocate networkingand coordinate consortiums. The expectations of the implementation of new innovationsare high at this Stage.

Trigger B. The impact to move from Stage II to Stage III (“Precompetition”) becomesvisible when technological workgroups or committees are established, often informally.This requires coordination among actors.

III Precompetition Stage. To describe the Stage more thoroughly we have renamed“Preinstitutionalization” as the “Precompetition Stage”. This Stage describes the stan-dardization environment in which actors may need to act. The original Stage lists twoissues: ‘independent innovation’ and ‘technical viability paramount’. At this stage wecombine these two issues and name them technical viability. We describe this Stage inaddition to technical viability with the terms new solutions and ideas and successful prac-tices. When the networking becomes deeper, it requires cooperation among actors. Theshock and the resulting weakening of current institutions leads to tension between theactors who are forced to search for new solutions (Stage III, “Precompetition”). Theeffect of the new actors is to disturb the socially constructed field-level consensus byintroducing new ideas, thus creating the possibility for change. In Stage III there might bea battle of technological innovations due to a multiplicity of technology options, whichshould lead to a commonly adopted standard. However, the target of actors is to find new,innovative answers that meet the actors’ needs in the standardization process. This mayrequire the recognition of actors’ successful practices in the standardization process, thuscreating new possibilities for actors and their roles within the organizational field.

Trigger C. The impulse towards Stage IV (“Preparing”) is visible when formal techno-logical and organizational networks are formed. This leads to standardization proposaldiscussions in the field. The pushing issue can be technological or commercial, whichleads to actors discussing standard development. We present this Trigger as technologicaland commercial discussions.

IV Preparation Stage. In the institutional change model the Stage was named “Theori-zation” and consisted of the specification of general organizational failing, the justifica-tion of the abstract possible solution, and moral and/or pragmatic legitimacy. We haverenamed the Stage the “Preparation Stage” as it is expected to prepare the final standard-ization proposals for decision making. This stage consists of development and specifica-tion of abstract categories, technological solution selection, and depth of standardization.

The search for new solutions enters the “Preparation Stage” (Stage IV), as abstractcategorizations of the standardization process outcomes are developed (such as de facto,de jure, formal/informal standardization), a technological solution is chosen, and thesearch for a legitimization of the chosen solution begins. The new practices developedhave to be “theorized”. Actors’ environmental values, networks and trust issues might beforeseeable at this Stage. The depth of the standard is also under discussion. At this Stagesome actors might have standardization policy interests to follow, such as interests con-cerning market or technological solutions. At this Stage, the standardization processmight be cancelled or accepted for further discussion. This leads to the diffusion of inno-vation becoming “objectified”. In this case, ‘standardization’ means the gaining of social

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consensus concerning the pragmatic value of standards (Suchman 1995) and thus thestandards are diffused even further (Tolbert 1996, p. 183).

Trigger D. The movement from “Preparation to “Standardization” takes place whenthe standardization approval process and legitimating solution begin. The steps betweenIV and V (“Standardization”) occur when each actor undertakes to “sell” the new innova-tion or standard among the internal organizations of the actor and thus facilitate the adop-tion of a new solution and quicken the achievement of legitimacy (Stage V). This meanstechnological and commercial discussions. We describe these pushing issues as approvalprocess and legitimization.

V Standardization Stage. In this Stage the innovations – the technology standards –become “objectified”, gaining social consensus and coordination among actors. This isthe most important Stage of the process. In the original model this Stage was named “Dif-fusion”, which consisted of increasing objectification and pragmatic legitimacy. We haveadded a new issue: organizational efficiency and innovation.

The pragmatic legitimacy of standards is gained through networks of different actors,experience and acceptance. This is the final Stage in the implementation of a standardamong actors. However, the critical question to answer at this Stage is: why is a new tech-nology not instantaneously adopted by all potential actors? This may lead to a categoriza-tion of actors into early or late actors. This has an impact on organizational efficiency andinnovation. The preventing factors can include business possibilities, technological devel-opment, and organizational or political conflicts. This Stage stabilizes the standardizationenvironment if the created standard is ideal for actors. It also allows the development of avariety of interoperable products, which reduce costs through competition.

Trigger E. The pushing force are the accepted standards. The movement from Stage V(“Standardization”) to Stage VI occurs through various standard lifecycle revisions. Themaintenance revisions of technology standards enable the common usage of standards.This is an important issue, because otherwise it would be difficult to know which standarddocuments are the latest versions.

VI Fads and fashions. This Stage describes trends in the standardization process. Itdoes not lead further in the process.

VII Maintenance. We renamed Stage VII (“Reinstitutionalization”) “Maintenance”, inwhich standards are revised and updated to meet the changed integration requirements. Inthe original model the Stage was described with cognitive legitimacy.

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Fig. 5. Standardization process model following institutional theory.

This Stage creates continuity for the process. Stage VI enables and ensures the diffusion,adoption and achievement of legitimacy for the standards, through constant updating andmaintenance. This is organized formally, through standardization organizations such asETSI, semi-formally, for example through the UMTS Forum in the form of recommenda-tions, or informally, in OMA through the publication of recommendations.

In addition to Parkhe’s (2003) and Greenwood et al.’s (2002) models, we add the con-necting arrow “Reimplementation” between “Maintenance” (Stage VII) and “InterestStage” (Stage I), to ensure a continuous technology standardization process and develop-ment continuity.

The model shows clearly that different organizations and actors, which might be noni-somorphic, are involved in the standardization process. However, in creating an efficientwireless technology standardization process, the more isomorphic different organizationsare, the more efficient the theorization, legitimization, increased objectification and diffu-sion of various standards. The model also validates Greenwood et al.’s (2002) propositionthat institutional theory either denies or is inconsistent with change.

Organizations mimic because they anticipate similar benefits, and thus legitimacy ismainly gained at Stage V. Similar benefits, commonly accepted standards and possiblevisible economic benefits are gained at Stage V. Finally, Fig. 5 suggests that significantorganizational change may occur at Stages I–III, less change will take place at Stages IV–V, and the process will become stable at Stage VI. Stages I–III enable the adoption of newideas, and allow actors and values to enter the environment. Moreover, these changes canoccur in chain or overlapping with each other. This results in standard creation being timeconsuming process. However, the agility of actors in the process depends on political,technological, financial and organizational interests in the field.

I: Interest stage

B. Coordination

III. Precompetition

VI : Preparing

V: StandardizationE. life cycle

revisions

VI:Fads and fashions

F. Reimplemen tation

• Networks • Organizational rules • Standards

A. • Structural

changes • Objectives

• Emergence and number of new actors

• Ascendance of some actors

• Institutional entrepreneurship

• Possibility of institutional change arises

• Injection of new innovations

II: Networking

• Technical viability paramount

• New solutions and ideas

• Successful practices

D. Technological and commercial Discussions

• Development, specification of abstract categories

• Technological solution selection

• Depth of standardization

• Increased objectification

• Pragmatic legitimacy • Implementation • Organizational efficiency

and innovation

C.Discussions VII: Maintaining

• Cognitive legitimacy

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Institutional theory provides an explanation for the legitimization of new ideas throughthe process of mimicry. It shows that ideas achieve legitimacy if and when they areadopted by others and are thought to have economic benefits (Scott 1995). An example ofthis is the use of film and pop stars in advertising. Generally “legitimate” means a posi-tion in a hierarchy that gives the holder the power to make a decision. Organizationsmimic each other because they anticipate similar benefits and thus legitimacy is mainlygained in Stage V.

One important insight associated with institutional theory is that there will be differ-ences between early and late adopters of an organizational innovation with respect todeterminants and consequences (e.g., Dobbin 1993). Early actors tend to exhibit differentcharacteristics from late adopters. Research has shown that networked organizations orrelational ties (e.g., common board members) to other organizations that have adopted aninnovation make an organization more likely to adopt innovations (Burns & Dietz 1992,Davis 1997). Tolbert and Zucker (1996) and numerous theorists have suggested that earlyactors will be more likely to embrace new practices because these practices are viewed asimproving their effectiveness and efficiency. Later actors will adopt new practicesbecause they seek to be in conformity with prevailing norms. This indicates that the cre-ation of a standard is time consuming process. However, the development of the actorsroles in the process depends on their political, technological, financial and organizationalinterests in the field.

5.7 Summary

Originally, institutional theory focused on institutionalized patterns and practices con-cerning organizational legitimacy, and it has mainly remained in a stable form. Standard-ization is the planning, development, negotiation and approval of commonly agreed spec-ifications or rule-like agreements among a specific group of actors. Wireless telecommu-nications technology can be seen not only as a tool for communication and networkingbetween existing processes, but much more as an enabler and integral part of the requiredchanges in business approach. Institutional theory enables us to analyze actors in the frag-mented wireless standardization environment. We can state that the success of actors andtheir products depend on how efficiently the standardization environment develops. Themore actors there are and the more they adopt the developed standards, the more success-ful the actors will be and the more they will enlarge their businesses.

To summarize, we can state that standardization as a whole has gone through a revolu-tion in terms of its importance and structure. The importance of standardization hasincreased exponentially due to the amount of investments, technology integration, impacton infrastructure and global market and trade. Moreover, it attracts the interest of a grow-ing number of actors: institutions/regulators, manufacturers, operators and organizations.These have led to a dissection of organizational structures and processes.

We have discussed the standardization process as having the target of finding a solu-tion to the uniformity of wireless standards. The achievement of complete uniformity mayresult in certain economic benefits for actors, such as cost reductions through economiesof information and scale. It may also lead to a sufficient degree of coordination among

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actors. However, the complete coordination and uniformity of the specifications of allcomponents of a technological system may not be necessary or beneficial. On the con-trary, it might increase costs and create more complexity in the already complex systemand network. The crucial point is to recognize when the cycle of industrial development ismost beneficial, and when the achievement of each sort of coordination is most feasible(David 1995, p. 33). We will attempt to answer this question, in the next chapter, from theactor point of view.

Institutional theory emphasizes legitimacy, adoption and objectifications. All theseissues are discussed in Greenwood et al.’s (2002) “Stages of Institutional Change” model,which we have applied to the wireless technology standardization process. We have fur-ther developed the model, renamed the Stages and Triggers and completed the descrip-tions of Stages. The modified process is renamed as follows: Stages I. Interest, II. Net-working, III. Precompetition, IV Preparation, V. Standardization, VI Fads and Fashionsand VII Reinstitutionalization; Triggers A. Structural changes, B. Coordination, C. Dis-cussions, D. Technological and commercial discussions, E. Life cycle revisions and F.Reimplementation. The model clearly shows that different organizations and actors,which might be nonisomorphic, are involved in the standardization process. However, increating an efficient wireless technology standardization process, the more isomorphicdifferent organizations are, the more efficient the theorization, legitimization, increasedobjectification and diffusion of various standards. However, the presence of nonisomor-phic or new organizations may cause changes in the process more rapidly than if all theorganizations are isomorphic. The model also validates Greenwood et al.’s (ibid.) propo-sition that institutional theory either denies or is inconsistent with change. Legitimacy isimportant from two viewpoints: to legitimize the actors’ roles in the process and to legiti-mize the created standards and hence the products. Even though the standardization orga-nizations may have common objectives, the actors may have their own objectives in thestandardization process, which will benefit their own business.

The important question for our research involves the dynamism of the process. We seesimilar dynamics in other network industries such as computer technology, consumerelectronics and office automation as they converge due to technological advances thatfacilitate networking (Astley 1983). As these networks converge, networking interfacesbetween technologies assume greater importance. The dynamic character of current tech-nology makes it futile and misguided to view standardization as a solely regulatory matter– to equate the totality of standards policy with the activity of promulgating very specificand technical norms to which industrial and commercial practice will be compelled toadhere (David 1995). The dynamism of the process begins with Stages I–III and variestowards the ends of the Stages. The early adopters of technology have the main role andare the key actors in the process and make the process efficient and effective.

In conclusion, the standardization process as a whole is a time consuming and complextechnological and organizational process. Changes take place as shown in Figure 5 at dif-ferent Stages throughout the whole standardization process. The most significant changein the wireless standardization process during recent years has taken place in organiza-tional and standardization work.

In the next chapter we will analyze the empirical data gathered through the a priorimodel created in this chapter.

6 Research Design

This chapter describes how the research design for the study is laid out. To start with, theresearch evolution, approaches and methods are described. This is followed by a descrip-tion of the data collection and analysis methods used in the study. The reliability andvalidity of the research are also discussed.

6.1 Research evolution

This research was inspired by the need to gain a better understanding of wireless stan-dardization. The research was focused on the wireless standardization process from theactors’ viewpoint, because, in the author’s view, this had been somewhat overlooked, andscientific studies addressing these issues were scarce. The development of the researchprocess can be divided into the following five periods: actors and 3G technology focus(discussed in Chapters 2 and 3), theorizing standardization and its process (Chapters 4and 5) (see Chapter 6.4), and, empirical study, conceptualization, and abstraction (Chap-ter 7). This was, however, not the original intention when the research was initiated. Theoriginal intention was to write a case study consisting of publications, not a monograph.The process evolved as the author’s understanding of related issues became richer andmore contextualized. The purpose of this section is to provide the reader with an insightinto how the thinking of the author concerning the design of the research has evolved dur-ing the period of this study. This enables the reader to better evaluate the findings andconclusions produced by this research effort.

The making of this research can be described as a reflective long-term learning processwhere both the goals and the methods of the research have been adapted according to theresults and lessons learned. From the beginning of the research it was clear that thiswould be a qualitative inquiry. However, during the research, the shaping of the researchgoals and problems has been an inseparable part of the researcher’s learning process. Thephenomena have revealed themselves gradually through data, literature, and numerousinformal discussions with industry experts and academics. Because of this interpretative

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and qualitative nature of the research process, we will start by explaining some of thecharacteristics of such research.

6.2 Research approach and methods

This section summarizes and describes the approach and methods of the research. Thescope of this study is broad, as the main goal of the research is to describe and give adetailed account of the standardization process as a whole, and of its main actors.

For the researcher it is a challenging task to select the most appropriate research strat-egy and method for the research, because there are often many different possibilities. Gar-cia and Quek (2002) stress the importance of critical awareness; choosing a method is nota simple task and may lead to the research being stereotyped or distorted. In Table 8 wehave summarized the theories and methods used in this research.

Table 8. Research methods used.

Generally, research can be divided into basic and applied science. This depends on howclosely research impinges on practice. Natural science tends to be basic research anddesign science tends to be applied research. Natural science is descriptive and explanato-ry in intent. Design science offers prescriptions and creates artefacts that embody thoseprescriptions (March 1995). This research is basic research.

Empirical research

Research approaches can be categorized according to the type of research followed. Oneway is to divide the research into an empirical or a conceptual study. An empirical studycan be classified into a case study, and into quantitative or qualitative approaches. Thisstudy takes a qualitative approach. Like all research approaches, qualitative approachescomprise knowledge acquisition and data analysis phases. The researchers may questionhow to analyze text data generated by qualitative approaches (Lacity 1994). In thisresearch we have also faced this question, and in this section we attempt to find a propos-al for it.

Alasuutari (1993) divides qualitative analysis into two phases: the purification ofobservations and “unriddling”. This distinction can only be made analytically; in practicethey are always intertwined. The first phase is the ‘essential’ view of the theoreticalframework and particular questions. Hence, in this research, purification of observationsconsists of the standardization, actors, and organizations of wireless technology. The aimof the second phase of the purification of observations is to further reduce the amount of

Step Strategy ReasonInterview Active/semi-structured interview collecting recent dataData Atlas.ti organizing and coding dataResearch Methodology Qualitative research, interpretative interview material, rigourResearch Strategy flexible, qualitative “research and method are in an

early state”

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data by combining observations (ibid., p. 13). However, the analysis of data creates differ-ences between observers and thus leads to different analyzes and conclusions. On theother hand, this creates a rich set of data. In any case, in this research this does not apply,because there has been only one researcher. The second phase is unriddling, or the inter-pretation of findings, as it is known in empirical social research. According to Alasuutari(ibid., p. 16), in qualitative analysis unriddling means that on the basis of the clues pro-duced we give an interpretative explanation of the phenomenon being studied which pro-vides answers to the research questions. In this research the research questions are statedin Chapter 1.2. Nevertheless, the empirical research observations as such are seldomregarded as “results”: observations are regarded as clues which try to get “behind theobservations” (ibid.).

After choosing the qualitative approach we look at designing the study. The design isthe logical sequence that connects the empirical data to the study’s initial research ques-tions, and to its conclusions. It follows that “a research design is an action plan for get-ting from here to there, where here may be defined as the initial set of questions to beanswered, and there is some set of conclusions (answers) about these questions” (Yin1994, p. 19). The components of research design are listed in Table 9.

Table 9. The components of research design.

This study’s question is presented in Chapter 1. In this research we do not have any prop-ositions. When conducting research it is important to determine the unit of analysis mostappropriate for the data. There are various possibilities, such as a specific project, deci-sion, or task force. Benbasat et al. (1987) states that the researcher should consider whatgeneralizations are hoped for at the end of the project. At this stage we must also exam-ine the research questions to find appropriate answers for them. The empirical materialwe have gathered as one file is too big a unit of analysis, while Milgrom and Roberts(1990) suggest that an individual file may be too small a unit of analysis. We will apply amulti-level analysis to the understanding of the wireless standardization environment andprocess. In this research we have regarded interview data as documents, which means thatwe have 25 documents describing the same subject. One unit is N=SME, OPR, MAN,REG or ORG, totally we have 25 units (Figure 6). We have used a particular softwareprogram to handle the interviews data. In this context we apply Lacity and Willcocks’(1995) presentation of units: the SME a unit to understand their role in the standardiza-tion process (e.g. participation, roles); the OPR as operator a unit to understand their rolein the standardization environment (e.g. power structures, globalization); the MAN asmanufacturer unit to understand the characteristics of the technology developer (e.g. keyactor, roles, networking); REG as regulator to understand their role in the wireless stan-dardization environment (e.g. regional, rules, laws, legitimization); ORG as wireless stan-

Research Design• a study’s questions• its propositions, if any• its unit(s) of analysis• the logic linking the data to the propositions• the criteria for interpreting the findings

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dardization organization to understand their changing role in the environment (e.g. soft-ware SMEs business).

Fig. 6. The interviewed units.

In practice, the selection limits certain factors of the research. We have studied sites at theorganizational level: formal and informal standardization organizations, regulators, manu-facturers and operators. These was discussed in detail in Chapter 3. Furthermore, theinterviewed experts are from these organizations. The organizations are presented inAppendix 6.

Multiple data collection methods are used in this research. According to Yin (1994, p.56), several sources of evidence work well in qualitative research: 1. Documentation – Written material ranging from memoranda to newspaper clippings

to formal reports2. Archival records – Organization charts: service, personnel or financial records3. Interviews – These may be open-ended or focused4. Direct observation – Absorbing and noting details, actions, or subtleties of the field

environment5. Physical artefacts – devices, outputs, tools.

In this research we have applied points 1 and 2, as described in Appendix 7, and point 3,as described in Appendix 6. We have used interview questionnaires as well as memoran-da, and followed various newspapers and standardization organizations’ reports. To inter-view the right experts in the organizations, we have studied the organizations, both on theInternet and by interviewing other experts. We have organized 25 interviews and inter-viewed 35 experts from the wireless standardization environment in three different years.The total number includes 7 interviews organized in software SMEs. So, the data collec-tion has been systematic for six years, since 1999. According to Yin (1994), the keyforms of analyzing the data are pattern-matching, the building of explanations, and time-frequency analysis. In this research we follow pattern-matching by analyzing empiricalresearch material based on the selected theoretical models. The other research analysis

SME= Small and Medium Enterprise MAN= Manufacturer OPR=Operator REG= Regulator ORG=Standardization Organization

SMESME SME SME SMESMESME

MAN

OPR1OPR2 OPR3 OPR4

REG1REG2 REG3 REG4

ORG1

ORG2 ORG3 ORG4

MANMAN MAN

MANMAN

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model we have at times applied is time-frequency analysis, which means the measure-ment of the variables and research successive times.

This leads us to face the problem of process research’s60 scientific “relevance” and, inparticular, the “scientific” quality of the process research generated (Ferlie 1997). Thekey ideas of process research were developed in the 1970s (Argyris 1970, Sarason 1972,Geertz 1973, Pettrigrew 1973), but the large expansion of process research dates from the1980s. Process research can be defined more fully as the dynamic study of behaviour inorganizations, focusing on organizational context, sequences of incidents, activities andactions which unfold over time (Van de Ven, 1992). Pettigrew (1997) defines process as asequence of individual and collective events, actions, and activities unfolding over time incontext. According to Pettigrew, the driving assumption behind process thinking is thatsocial reality is not a steady state; it is a dynamic process. In the literature we can findnumerous “process models” which indicate that “process” is used in many different ways.Van de Ven (1992) has reduced the number of models to three: strategic decision making,strategic planning, and organizational development. Our aim is to produce a processualanalysis, which consists of linking processes to outcomes. As Pettigrew states, the overallambition is not only about pattern recognition of the process stream, or handling the ana-lytical complexities of explanation in interactionist fields, but also in linking these ana-lyzes to the outcomes of the process of investigation. In this research we follow Petti-grew’s (1997) precepts concerning internally consistent guiding assumptions.

In any research strategy one can use several methods, according to the type of researchrequired. Moreover, each research strategy has its advantages and disadvantages, and wemust select the strategy according to our research purposes. In this research we have usedvarious qualitative methods to analyze interviews and archival data, which will be dis-cussed in the next section.

6.3 Research setting and data collection

“Where does this knowledge come from, and how is it derived?” (Holstein 1995)

We organized interviews to answer the questions why and how about the topic. Accord-ing to Dexter (1970, in Lincoln 1985), interviewing is conversation with a purpose. Onelearns about contemporary life by way of interviews (Holstein 1995). We used activeinterviewing, which is flexible, but is an organized interview. The active interview isguided by the interviewer and his or her research agenda (ibid.). Generally, “mostresearchers recognize interviews as social interactions, but the literature on interviewstrategy and technique and technique remains primarily concerned with maximizing theflow of valid, reliable information while minimizing distortion of what the respondentknows” (Gorden, 1987 in Holstein 1995). The interview can be a potential source of bias,

60. Hinings (1997) defines process research as follows: “In process research we need conceptual frameworksthat deal with context, activities, actions, sequences, and time, all in a way that is dynamic”. He continuesthat processual research involves an array of concepts which are complex in theoretical and definitionalterms.

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misunderstandings, or errors. However, the corrective measure is simple: if the interview-er sets the questions understandably, the interviewee will provide the desired information.

The interviews were carried out during autumn 1998, 2000 and winter 2004 (Appendix6). The goal was to collect a rich set of data based on the theoretical framework andgather the latest knowledge in the area. 35 experts were interviewed from different bod-ies involved in 3rd generation wireless standardization and software companies. Initially,we sent more than 60 requests for interviews via email, and managed to organise 25 inter-views, as shown in Table 10.

Table 10. Interview distribution 1998–2004.

These parties were chosen because they play the most prominent role in wireless telecom-munications and standardization. SMEs were selected to get a views to software SMEsbusiness strategies. The selected SMEs have subcontracting and R&D relationships withglobal companies. This may partly affect to the SMEs strategical decision making con-cerning the standardization. The critical factor is that all the representatives on the manu-facturing side are from the same company. This may limit the viewpoint to the businessand process. However, the company is one of the leading ones in telecommunications ona global level. The interviewees from the SMEs were chosen based on experiences fromthe telecommunication industry. The experts and organizations in years 1998 and 2000were chosen based on created model. The experts were chosen based on their expertisewithin organizations that had extensive experience of wireless standardization and thesoftware business. Experts involved in standard making and senior managers from theseorganizations were interviewed. The interviews were scheduled to last approximately twohours, in order to cover the topic thoroughly. The interviews were carried out mainly ineach party’s offices, and an open set of questions was used. The questionnaire (Appendi-ces 3 and 4) was sent to the interviewees beforehand in 1998 and 2000 to allow them suf-ficient time to look at the questions and prepare answers. In 2004 (Appendix 5), the ques-tionnaires were not sent to the interviewees beforehand because the context requiredsome explanation. Moreover, it was easier to organize the interviews that way.

We used a semi-structured questionnaire thus enabling a flexible data-gathering strat-egy in an attempt to figure out an impartial set of data and characteristics of standardiza-tion process (Benbasat 1987). One part of the questionnaire dealt with background infor-mation on the interviewee and the organization, and on the standardization process,including factors such as relations, changes, timing, difficulties, and trends. As Hinings(1997) indicates, semi-structured interviewing requires careful monitoring to ensure thatprocessual research has not dominated it; it is in the essence of processual research andqualitative approaches that they are multi-methodological. We were also interested in how

1998 2000–2001 2003 TotalManufacturers 4 2 1 7Operators 3 4 7Standardization organizations 6 6Regulators 3 5 8Software SMEs 1 6 7Total 16 12 7 35

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the standardization process had changed. The role of time is essential in processualresearch, because of its social basis of time as an element in the theoretical approach(ibid.). The questions focused on the process model and related areas such as the Internet.If, during the interview, interesting new issues appeared, those were covered promptly. Asthe interview process continued, we started also to gain a priori knowledge of the topic,and were able to ask more specific questions. During the interview process, some issuesarose, such as IPR problems. Those were discussed more thoroughly on site.

The interviews in 1998 revolved around on the model created in (Kivimäki 1999), amore general view of 3rd generation telecommunication standardization. In 2000 theinterview framework was further developed and focused more on relations between theactors in the standardization process. In 1998 and 2000 the interview questions also var-ied, because the interview organizations varied. Later, the interview framework was con-structed for each interview separately, which led to semi-structured focused interviews.Experience from the previous interviews was, however used in constructing the interviewschema. The interviewee’s background and special features of the organization in ques-tion also affected the interview framework.

The interviews were tape-recorded and transcribed. A combined, 343-page interviewdocument with single-line spacing was produced, which formed the basis for further dataanalysis. Other documents were also requested during the interviews. These materialswere valuable due to the lack of published material concerning the research topic, andthey were also used in the subsequent data analysis. For example, there are hardly anypublications from the SME or software SMEs business strategies concerning the wirelessstandardization process. All transcripts and notes were analyzed in order to get a richenough understanding of differences in the standardization process and their outcomes:structures, changes in the organization and environment, and the drivers which affect thestandardization process and actors relations. We analyzed the data according to institu-tional theory (Chapter 4) and further developed the process model and analyzed in thecontext of wireless standardization (see Chapter 5). The important part of the research ispresented in Chapter 7, in which we present actors’ roles in the wireless standardizationenvironment.

All interviews and interviewees are treated anonymously here, due to the confidential-ity of the material. If we were to link interview documents to actual individuals and orga-nizations, the whole research would have been difficult to carry out. The notes from theindividual interview sessions are confidential documents, which were used only by theinterviewer. Therefore, when we refer to interviews, we state only the code of the organi-zation and the line numbers in the ATLAS.ti program. Interview comments in Finnish,which have used in text, have the researcher translated in English. By mapping the data inthis way we apply Lacity and Willcock (1995). The interview documents are further ana-lyzed using the ATLAS.ti analysis program.

6.3.1 Data analysis

The ATLAS.ti program was developed at the University of Berlin in 1990 (www.atlas-ti.de). At the university they had a research project called “Archiv für Technik, Leb-

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enswelt und Alltagssprache”, for which this program was created as a supportive instru-ment. From this we get the abbreviated name “ATLAS”. The letters “.ti” refers to theword “text interpretieren”. The program was nearly solely created by Thomas Muhr inBerlin. He got ideas for development from the Barney Glaser and Anselm Strauss book“The Discovery of Grounded Theory” (Lonkila 2002) referring to Glaser and Strauss,1976. An example of an earlier application of the ATLAS.ti program is in architecturalpractices in software-producing organizations (Smolander 2003). The program frame-work reflects the method basic ideas at the grounded theory, but the use of ATLAS is nottied to this method, or any other technique of qualitative method.

ATLAS was developed for the thematic classification of structured or semi-structured(for example group interviews, thematic interviews) textual material. The basic construc-tion of ATLAS is based on grounded theory method terminology. In the grounded theorymethod the emphasis is on creating “grounded material”, in which the researcher, can fur-ther create by the assistance of text reading classes and thematic coding own material in amore abstract concept construction. We have followed the most important basic rules ofATLAS, as shown in Table 11.

Table 11. The basic rules of ATLAS.

6.3.2 Formulating coding

We needed coded the data according to the concepts of developed analysis framework.The number of categories or functions was altogether 29. Working with such a high num-ber of categories requires sophisticated tools and methods for information management,because the human mind does not generally have the cognitive capacity to deal with sucha number of concepts simultaneously (Appendix 8).

Most of the sorting time when using ATLAS.ti is used to sort the research material.First we tested the created coding words in two interviews and then completed the codingfurther. We started coding according to the theoretical framework. Due to the quantity andrichness of the material, we used two coding data analysis framework. rounds and com-

Unit ExplanationHermeneutic unit HU The name of the researched material as a whole: refers

to all material and all notesPrimary Document PD, or Primary Text PT The material can be text, graphic files or audio or

video material Quotation The basic object, which can be taken from the textCode, key words The creation of quotation, the creation of thematic

code and one code or more linkage to created materialMemos, notes Includes, for example, the researcher’s own ideas and

theoretical thoughtsComment An object to which can be linked a certain attributeNetworks The user can build, with certain restrictions, semantic

networks by linking together the different objects of ATLAS primary text, quotations, codecs, and memos

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pleted coding words. Furthermore, when we read further interview material, we recog-nized the need for codified actors in the standardization process: SMEs, operators, manu-facturers, institutional actors, and standardization organizations.

6.4 Literature survey on standardization

The background data for this research was gathered from standardization documents,journal articles, memos, books, and other scientific publications. These publications aremainly from the 90s onwards. Standardization organizations provide updated and on-linestandardization documents and memos. They are available from the Internet via the homepages of various organisations61.

Eisenhardt (1989) states that an essential feature of theory building is comparison ofthe emergent concepts, theory, or hypothesis. It is important to ask the questions “what isthis similar to?”, “what does this contradict?”, and “why?” concerning the emergentresearch. One key to this process is to consider a broad range of literature. Eisenhardt pre-sents two reasons that examining literature which conflicts with the emergent theory isimportant. Firstly, if researchers ignore conflicting findings, the confidence in the findingsis reduced, for example, one may suspect the results of being incorrect. Secondly, andmore importantly, conflicting literature represents an opportunity. It enables theresearcher to present a creative, groundbreaking mode of thinking thus resulting in deeperinsight into both the emergent theory and the conflicting literature (ibid. p. 544). Litera-ture discussing similar findings is also important because it ties together underlying simi-larities in phenomena normally not associated with each other. This results in a theorywith stronger internal validity, wider generalizability and a higher conceptual level thancase study research (ibid.).

The topic of the research, how wireless standardization process affects to the actorsbusiness, is in its early stages. There are not many academic articles or papers availableon the process of wireless standardization. The IT standardization process has, however,raised interest among some researchers, as shown in Table 12.

61. e.g. www.etsi.org, www.itu.org, www.gsmworld.com, www.umts-forum.org

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Table 12. Standardization literature.

Empirical standardization research has been conducted by, for example, Lehr (1992) andWeiss and Sirbu (1990). We have also studied and collected materials on issues which areclosely related to the field, such as network externality theory, innovation research, andstudies covering relationships between regulators, manufacturers, and operators. Theseissues have a role in the wireless standardization process and were studied to gain a broadperspective and connection on standardization In order to understand the current situa-tion we have also studied standardization in a wider environment. Even though we con-centrate on wireless telecommunication standardization, we have examined literature onearlier telecommunication generations or classic standardization cases, such as theQWERTY case, to understand the role of standards (David 1985). We have obtained sev-eral journal publications on 3rd generation telecommunication (Goodman 1998, Samukic1998, da Silva 1996b, Ojanperä 1998, Rapeli 1995). The viewpoint on the 3rd generationstandardization process and the impact of how standards provide platforms for the expan-sion and development of new markets is described in (Glimsted 2001).

The standardization process creates technology push so we have studied general fea-tures of telecommunication technology. We have concentrated on TDMA62 (Glisic 1997),

Standardization theory/ per-spective

Description Writer

classical economic theories developed a classification of the standard-setting consortia by adopting classical economic theories

(Weiss 1992)

analyzed the process (Lehr 1992)empirical standardization process (Weiss 1990)

IT standardization process involvement of political forces (Libicki 1996) IT standardization process technological choices and strong focus on

business imperative(Cargill 1989)

economic processes of com-patibility standards, product standards

network externality (1985), (1986), (Katz 1985), (Katz 1986), (David 1985), (David 1990)

standardization process (Aden 1993), (Brunsson 1997), (Fitzgerald 1990), (Lehr 1992), (MacPerson 1990), (Nielsen 1996), (Schmidt & Werle 1998)

economic model (Besen & Johnson), (David 1990), (Farrell & Saloner 1988)

a political process a US perspective on standards development (Reilly 1994)a political process a European perspective on telecommunica-

tion standards, organizational view(Robin 1994)

theory of telecommunication standardization

standardization environment (Sherif 1999)

the dynamics of technological innovation

ICT Standard-setting from an innovation studies perspective

(Williams 1999)

standards, innovation, compet-itiveness

cross-section analysis: across industrial and institutional boundaries

(Hawkins 1995)

62. Time Division Multiple Access

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CDMA63 (Glisic 1995, 1997), and WCDMA64 (Ojanperä 1998), (Lee 1998, p. 386} tech-nologies, because TDMA is used in GSM (Mouly & Pautet 1992, Steele 1992, Rappaport1996), and CDMA, or WCDMA will be used in 3rd generation systems. Other technolo-gies related to 3rd generation telecommunication were examined as and when necessary inorder to understand the standardization process.

Standardization has received many new perspectives from developments in business,organization and technology, for example. Globalization has brought to the internationalmarkets new perspectives such as brand standardization (Medina 1998). The relationshipbetween standard settings and the diffusion of mobile telephone systems has been exam-ined by Funk (1998, 2003), and Funk and Methe (2001).

6.5 Reliability and validity of the study

“Validity is not a commodity that can be purchased with techniques… Rather, validity islike integrity, character, and quality, to be assessed relative to purposes and circumstances”(Brinber & McGrath 1985, p. 13 in Maxwell 1992).

It is important to judge the usefulness of the research to other interested parties. Thisjudgement includes the generalizability, reliability and validity of the research. Generaliz-ability refers to theoretical usability in fields other than the applied, or the explanatorypower (Strauss 1998), i.e., the ability to explain what might happen in a given situation.From the actors’ point of view, the results of this research are expected to be applicable toother fields than telecommunication – for example to accounting companies. We alsohave a broad focus: wireless standardization and the possible variables which can be stud-ied for different standardization processes or standards. The problem of generalization isa major difficulty with the case study method. Yin (1994, p. 10) states that scientific factsare rarely based on single experiments; they are usually based on a set of multiple experi-ments, which have replicated the same phenomenon under different conditions. In thisresearch we have followed this idea in interviews, using nearly the same questionnaire foreach interviewee. This has enabled us to find a multiple set of experiments about thesame issue, for example cultural issues. “Reliability” concerns the extent of the research,in which several researchers have reached the same understanding of the phenomenon. Inthis research the a priori model created is based on qualitative research methods, whichcan be repeated and are used by other researchers. Reliability is closely connected to uni-versality, repeatability and falsification. The validity of the research reviews the scalabili-ty of the research. Validity means that a theory, model or concept explicitly describesreality (Järvinen 2000). The seven software SMEs were interviewed to get a perspectiveon how software SMEs apply standardization in their business. Moreover, 18 other stan-dardization actors were interviewed to gain a wide enough perspective on the standard-ization environment.

Maxwell (1992) states that qualitative researchers agree that not all possible accountsof some individual, situation, phenomenon, activity, text, institution, or program are

63. Code Division Multiple Access64. Wideband CDMA

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equally useful, credible, or legitimate. The researcher should have a critical attitudetowards the data source. The researcher should also be able to make discriminations andnot restrict himself solely to the internal coherence, elegance, or plausibility of theaccount itself. Moreover, the researcher should be able to refer to the relationshipsbetween the account and something external to it – that is, the phenomena that theaccount is about (ibid.). In this research we have used the collected account to understandactors’ roles in standardization process. Maxwell defines validity, in a broad sense, as per-taining to this relationship between an account and something outside of that account,whether this something is construed as objective reality, the constructions of actors, or avariety of other possible interpretations (Maxwell 1992, p. 283). As the researcher is anobserver and interpreter of the world, they are part of it; they cannot throw away our ownexperiences and step outside of reality. Thus, this leads to the fact that it is always possi-ble to find different, equally valid accounts of different experiences. In this research theresearcher has participated in standardization meetings, when she was working in indus-try. This may have some effects on research results.

We apply the qualitative method in this research. However, following Garcia and Quek(2002), the use of multiple methods or triangulation reflects an attempt to secure an in-depth understanding of the phenomena in question. We apply this approach in thisresearch and take an interpretive perspective, even though there is considerable disagree-ment as to whether such combinations of multiple perspectives, methods or paradigmscan be accommodated in one study (Garcia 2002, Myers 2006). Klein and Myers (1999,p. 70–71) introduce a set of principles for the evaluation of interpretive field research ininformation systems. They offer seven principles which should be helpful for research-ers, because they “summarize the important insights in interpretivism which are (as yet)not embedded in the practice of interpretive research”. However, they continue that theseprinciples “are not bureaucratic rules of conduct, because the application of one or moreof them still requires considerable creative thought”. They decide to concentrate on thehermeneutic philosophers, especially Gadamer and Ricoeur, for three reasons. Firstly, it isimpossible to present the complete literature of interpretative philosophy. Secondly,hermeneutics has a relatively well settled philosophical base and therefore lends itself tobeing used as a “bridgehead” for making a contribution to the interpretative researchmethodology. Thirdly, both Gadamer and Ricoeur are well versed in interpretative philos-ophy and hermeneutics in particular. They base their approach on the idea of the herme-neutic circle, which suggest that “we come to understand a complex whole from precon-ceptions about the meanings of its parts and their interrelationships” (Klein 1999, p. 71).

Due to the nature of interpretative research, the researcher’s own ability to understandand interpret practitioners’ actions becomes the most valuable research instrument. Fur-thermore, the subjectivity of the researcher is necessarily an essential part of the researchprocess. It enables penetration of the facades that individuals and groups represent which,in turn, permits deeper understanding of actors’ perspectives and ways of life (Garcia).

Next we introduce a set of seven principles for conducting and evaluating interpretivefield studies (Klein 1999, p. 71):

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1. The fundamental principle of the hermeneutic circleThis principle suggests that all human understanding is achieved by iterating betweenconsidering the interdependent meaning of parts and the whole that they form. Thisprinciple of human understanding is fundamental to all the other principles.

2. The principle of contextualizationRequires critical reflection on the social and historical background of the research set-ting, so that the intended audience can see how the current situation under investiga-tion emerged.

3. The principle of interaction between the researchers and the subjectsRequires critical reflection on how the research materials (or data) were sociallyconstructed through the interaction between the researchers and participants.

4. The principle of dialogical reasoningRequires relation of the ideographic details revealed by the data interpretationthrough the application of principles one and two to theoretical, general concepts thatdescribe the nature of human understanding and social action.

5. The principle of abstraction and generalizationRequires sensitivity to possible contradictions between the theoretical preconcep-tions guiding the research design and actual findings (“the story told by the data”),with subsequent cycles of revision.

6. The principle of multiple interpretationsRequires sensitivity to possible differences in interpretations among the participantsas are typically expressed in multiple narratives or stories of the same sequence ofevents under study. Close to multiple witness accounts even if all involved recount itas they saw it.

7. The principle of suspicionRequires sensitivity to possible “biases” and systematic “distortions” in the narrativescollected from the participants.

These seven steps form a quality standard roadmap for constructing and evaluating a welldefined research setting for qualitative study. The issues which Klein and Myers proposeshould be considered when evaluating the quality of research are the principles of contex-tualization, interaction between the researcher and the subjects, abstraction and generali-zation, dialogical reasoning, multiple interpretations and suspicion. Furthermore, theysuggest that none of these principles should be left out arbitrarily and that the researchershould consider which of the principles apply, and in what way, in any particular researchsetting. The steps were used in this study as follows.

The first step was important for the research setting and extensively applied. The fun-damental principle of the hermeneutic circle allows us to understand and sort the researchtopic “from the whole to the part and back to the whole” (Gadamer 1976, in Klein &Myers 1999). This enabled us to understand the research topic more thoroughly when dis-cussing theory development. We could divide the empirical data into parts following theselected theory, and back to the whole. This analysis went further, to elaborate new andrefined models of standardization in wireless technology. Furthermore, the transcriptionsof the interviews were analyzed several times, using the ATLAS.ti program. The output ofthis effort was a good understanding of the data as a whole.

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The principle of contextualization was a more difficult to task to carry out explicitly, asthe research topic required sensitive (i.e., anonymously treated) interviews, which wasstrategically important for the companies and the experts interviewed. However, generallywe can set standardization in its social and historical context so that the intended audiencecan see how the current situation has emerged. The research context is depicted at a gen-eral level in Chapters 2 and 3. Appendix 6 presents the organizations interviewed.

The third principle of interaction between the researchers and the subjects addresseshow the researcher creates the data. This was discussed in Sections 6.2 and 6.5. Theresearcher herself participated in all the interviews, one third of them were transcribed bythe researcher herself and the rest was transcribed by a professional transcriber.

The essentials of the principle of abstraction and generalization are explained in sec-tions 6.2 and 6.3. For the reliability and validity of the research it is important that theo-retical abstractions and generalizations are carefully related to the field study details asthey were experienced and/or collected by the researcher. This enables the readers to fol-low how the researcher arrived at her theoretical insights. We have a total of 343 pages oftranscribed data. The researcher has recorded approximately 60 hours of interviews. Thisdata has been applied in making conclusions regarding the wireless standardization pro-cess. However, it must be emphasized that that in reality it might be difficult, using onlythe available data, to infer the same conclusions with the same exactness and experienceas the researcher has been able to do, as the researcher has much more data available andknowledge at hand. However, this information should be included so that the reader canfollow how the researcher arrived at her theoretical insights.

The fifth principle of dialogical reasoning aims to separate the researcher’s own intel-lectual history from the research subject and also to make it as transparent as possible tothe reader and the researcher herself. The researcher’s interest in and motivation concern-ing the subject is explained in section 1.3.1. However, the disadvantage is that theresearcher may have strong preconceptions about the subject. This may even start withthe basic research setting, including the predefined research questions as well as the pro-cess for selecting companies. During the research process the researcher noticed both herpersonal learning process concerning the subject and her development as an interviewer.The researcher must also, throughout the analysis process, be able to make a distinctionbetween her ideas and the opinions expressed by the interviewees. This was ensured bytape recording and the use of a professional transcriber.

The sixth principle is about multiple interpretations. In this research we interviewed 35experts from different organizations, because wireless standardization involves differenttypes of actors. This leads to an attempt, through the data analysis, to gain an understand-ing of conflicts related to power, economics and values. Moreover, we confronted thecontradictions potentially inherent in the multiple viewpoints, and followed up expertsunderstanding accordingly. In this research we could identify possible contradictionsbetween the experts by reviewing the data several times and comparing the results toother interviews with other actors. In this research we could find multiple interpretations,because of the actors’ different targets concerning standardization and different roles inthe process.

In the final principle of suspicion, the researcher critically questions the possible “falsepreconceptions” and aspects of reality presented to her. This is a challenging and difficultquestion for the researcher. In this study the researcher has taken the standpoint that all

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the interviewed experts have given their opinions as truthfully as possible and to the bestof their knowledge; in other words, they have not deliberately tried to change the truth ofthe story. However, this is difficult to prove, but here again the pre-understanding of theresearcher may be an advantage, as well as the number of interviews. Still, due to the sen-sitivity of research subject the interviewees may leave out some interesting and perhapsdifficult issues without the researcher noticing.

Dawson (1997) emphasizes three “real-world” examples when conducting research.These comprise: the question of tacit knowledge and the importance of learning from thefield; the element of longitudinal design in setting up a research programme and engagingin sustained fieldwork activity; and the value of combining a range of data-collectiontechniques and the need to accommodate multiple perspectives from one or a number ofdifferent sources over time (ibid. p. 390). He states that these help the researcher toexplain and understand the object of the study better. In this research we use tacit knowl-edge to explain the aim of the research and theory behind it, because in the standardiza-tion environment there is a lot of tacit knowledge. We do not to follow a form of “inartic-ulate intelligence”, where individuals are often unable to explain the “theoretical basis fortheir action” (Gray & Pratt, 1991, p. 164 in Dawson 1997). We have also organized longi-tudinal research in the years 1998, 2000 and 2004 and thus gained substantial fieldworkexperience. To gain a broad enough theoretical and environmental perspective on stan-dardization we have combined cross-discipline theory selection and a wide range of data-collection techniques, such as interviews and scholarly publications. Also Silverman(1993) presents as one validation form a method of triangulation whereby data from sev-eral different sources is compared using various methods. Yin (1994) also emphasizesthis.

In this study the above-mentioned principles were implemented by collecting datafrom interviews, and other documents were gathered. The database was formed to includeonly the digital material; among this were the transcribed tapes, field notes, letters,emails, telephone conversations and analysis memos. All the individual process activitieswere indexed and marked in the documents in which they were found (see Chapter 6.6).

Next, the possible sources of error in this study and how they may affect the results arediscussed:a) Selection of the analyzed actors

The standardization environment involves various kinds of participants. In this rese-arch we have selected and analyzed key manufacturers, operators, SMEs, differentstandardization organizations and regulators both in Finland and throughout Europe.Thus the actors have different background and business or organization modes. Thisselection has ensured a sufficiently broad perspective on the standardization environ-ment.

b) Selection of technologyWireless standardization was selected because of the researcher’s interest in thetechnology. Although we discuss technology standardization, we do not discusstechnology issues in detail, because various technologies are available and under-going processes of standardization. Thus this would require separate research and the-sis. Moreover, we attempt to keep the discussion at a more general level of wirelessstandardization.

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c) Coding of the dataThe method of coding empirical material was based on the selected theory models.However, there might have been other methods, which would have caused differentresults. By using the ATLAS.ti data analysis program we could systematically and indetail code empirical data and follow the hermeneutic circle as presented in principleone.

d) Opinions presented by the intervieweesAll the interviewees held at least a managerial position in their respective organiza-tions, i.e., they were key personnel who had an understanding of standardization andfollowed developments in standardization. However, the knowledge level varies,especially among SMEs. In three companies we had more than one expert to inter-view. This way, the companies interviewed hoped to ensure that the informationgiven was accurate, and provide the best knowledge for use in the research. With theanonymity of the interviewees as well as the companies assured, we were able toestablish a confidential atmosphere during the discussion sessions. Thus the intervie-wees were assumed to have a better opportunity to discuss strategic issues.

e) The limited nature of the model usedThe models applied represent only one kind of possible model for the examination ofthe standardization environment and process. However, the challenge for the researchis that in the form presented in Chapters 4, 5 and 7, they have not been applied tostandardization or any other field, to the best of our knowledge. Some of the prob-lems encountered applying these models are discussed in sections 9.3.2 and 9.3.3.

6.6 Towards analyzing the empirical data

The wireless standardization process has changed and formed during recent years. Thenumber of actors in the process has increased, and new actors have also entered the stan-dardization environment. Each actor has its own interest in participating in the process,such as marketing, business, networking, cooperation or technology development. Thematerial gathered includes descriptions of experiences of the process as viewed by seniormanagers of the interviewed companies (see Appendix 6). The interview data is used,along with the analysis of the documents collected, to evaluate the correspondence of thea priori model to the real world. Using material from different stages of standardizationprocess development, a picture is gained of how the standardization process and environ-ment have developed, how actors’ roles have changed, and how globalization has affectedthe process. Answers are sought to the questions concerning theoretical as well as practi-cal concepts as stated in Section 1.2.

For analysis purposes, data from 25 interviews was collated as shown in Appendix 6.The standardization process activities found were recorded, along with their attributes, intables in order of appearance in the transcribed texts, using ATLAS.ti, as presented inSection 6.3.1.

The references from the interview data are quoted as follows: the interview code (Pxx)when adapting ideas from an interviewee or Pxx and line numbers (Pxx, xxxx-xxxx) when

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quoting directly from the interviewee. When necessary, we have also mentioned in thebrackets the type of the actor, e.g. (Pxx, xxxx-xxxx, SME). Furthermore, when quoting adiscussion from the interview data directly, the text is in italics and the interview code (asin Appendix 6) and line numbers are given.

Thus, to build a complete view of wireless standardization we have made use of inter-views with various actors, i.e., interviews with standardization organizations, SMEs, largemanufacturers and regulators. As stated in the previous chapters, one aspect of standard-ization is the social interaction between actors, in this case in the wireless standardizationenvironment. We have presented the set of actors in Section 6.2, and described their rolesmore thoroughly in Chapter 3. By using the ATLAS.ti analysis program we have found inthe empirical data the number of quotations presented in Table 13.

The number of quotations describes the significance of actors in the process. Quota-tions related to standardization organizations came up in all the actors’ interviews. Themanufacturers seem to have an important role based on the number of quotations. Onereason might be that the high number of quotations related to manufacturers reflects thenumber of interviews carried out or the growing importance of the actors’ role in the pro-cess, compared to their second generation role. We interviewed the same number of regu-lators and operators, which resulted in nearly the same number of quotations. This mayreflect their stable role in the standardization process. The number of quotations concern-ing SMEs compared to other actors is clearly lower, even though we interviewed sevendifferent enterprises. This might indicate their role and importance in the process.

Table 13. The number of actors’ quotations based on interview material.

The static model tables were constructed and rechecked three times in order to ascertainthat the classification of activities did not change and drift during the work, as there isalso the possibility that the analyzer learns more as the work goes on, and the terms couldinadvertently change in meaning. Specifically, in the analysis of the interview material,we first allocated the material to the main elements and carriers. Then we divided theminto three sub-functions, creating 18 functions in total (Table 5). In Table 6 we describethe generic elements and carriers in more detail. We further developed the table andapplied the elements and carriers to the standardization environment (Table 7). At thesame time, we searched for indicators of the Stages of the process for the dynamic modelanalysis (Figure 4). Figure 5 describes the generic standardization process model. Thefinal standardization process model is presented in Figure 7. After that we came back tothe interview material several times and ensured the most appropriate allocation.

Table 14 presents how the standardization issues are divided in the wireless standard-ization environment, following the functions as prese ted in Chapter 5. The table can be

Actor No of quotationsStandardization Organization ORG 172Regulator REG 55Operator OPR 50Manufacturer MAN 74Small and Medium Enterprise SME 22Total no. of quotations 373

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read as follows: first take the element (regulative, normative, cognitive) and then the car-riers (cultures, structure, routines), or vice versa. For example, if we take the normativeelement and the cultures carriers, we find the number combination of 19/18. This meansthat we have found in the interview data 19 quotations based on the description of Section5.2.4.1 and 18 quotations as described in Section 5.3.1.2. Table 14 ATLAS.ti program(see Section 6.3.1).

Table 14. The number of quotations based on interview material.

From the element point of view the highest number of quotations is in the normative col-umn, 138 quotations. This may reflect the importance of actors’ roles, coordination, howto creation of trust and procedures in the process. The highest number of quotations bycarrier is in Structures: 153. This result based on the data may reflect an increase of inter-action among standardization organizations and actors in the field; the emergence ofsharply defined structures of domination and patterns of coalition; an increase in theinformation load with which organizations in a field must contend; and/or the develop-ment of a mutual awareness among participants. The normative/structures function hasthe highest number of quotations. This is described in term of coordination, which has acentral role in standardization and characterizes the actors’ activity in the standardizationprocess. The structures/regulative function describes the actors in the process as small/large actors/organizations, which reshape the process and push it forward. However, theresearcher expected the regulative functions to have a more central role. This can bedescribed using the terminology of Table 7 in Chapter 5 as standardization policies/orga-nizational rules and frequency. We can further claim that these construct the original insti-tutional ground for the standardization environment. These organizations are needed tocreate stability and legitimacy for the process, e.g. for frequency allocation. Generally,structures reflect the type of actors, coordination and global interests. For the 3rd genera-tion standardization process it is expected that new actors such as media representativeswill enter and thus reshape the existing structures and procedures. However, the newentrants have not entered in a very visible way, and acting actors could have their rolesand positions in the process. The cognitive carrier from the routines point of viewdescribes objectives, the actual reasons to participate in standardization: standards. Thesecan be described as written scripts, which are created by various actors.

When reading and analyzing the interview material and applying it to the model wefound that some points can be discussed in various functions or as a whole in the mainelement or carrier. This enables us to consider points from different angles.

ElementsCarriers Regulative Normative CognitiveCultures 19/18 19/18 21/15Structures 22/39 27/38 10/17Routines 11/17 17/19 5/28

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6.7 Summary

There are various ways of approaching the research topic. We have selected our researchmethods based on the nature of the study and the availability of methods for practical use.The research methodology followed in this study is qualitative, thus enabling flexibledata-gathering and processing.

The collected interview data has been organized using the ATLAS.ti program. Twenty-five interviews were conducted altogether, in order to gather sufficient data for the study.The interviews were active interviews and we used semi-structured questionnaires to col-lect data.

For qualitative research, it is important to judge the generalizability, reliability andvalidity of the research. The research describes the researcher’s ability to explain whatmight happen in a given research situation. Furthermore, the researcher should have acritical and subjective attitude to the account of the data source. There are various ways ofachieving this. We have followed Klein and Myers’ (1999) set of seven principles for theevaluation of interpretive field research in information systems. However, some possiblesources of error in this study are: selection of the analyzed actors; the selection of technol-ogy; the coding of the data; opinions presented by the interviewees; the limited nature ofthe model used.

7 Empirical analysis of the effects of standardization on business strategies

This chapter analyzes the empirical data using the a priori model. The analysis followsthe development of institutional theory and process building in the wireless standardiza-tion environment presented in Chapters 4 and 5.

Changes in business practices have resulted from the widespread adoption and diffu-sion of information and communication technologies. The changes experienced by theactor can be viewed as a process running parallel with the evolution of the business envi-ronment. To examine the standardization effects of information and communication tech-nology an institutional approach will be used. In this chapter we use the literature-basedstatic and dynamic enhanced models to analyze the actors’ possibilities in adapting wire-less standardization in their business strategies. It is argued that the acceptance of a newstandardization or innovation is affected by the complexity of the interactions between theactors and technology. Standardization offers choice, flexibility, and an opportunity foractors to expand their technology and network in wireless markets. Moreover, firms donot stand by themselves, but rather they exist in a context, in which they compete withrivals, are served by suppliers and sell to customers. In an industry in which special skillsare needed, growth and effectiveness is strongly conditioned by how rapidly and effec-tively a support structure grows up. This is analyzed in the Sections that follow.

7.1 Standardization process, dynamic model outputs:the actors’ perspective

In the wireless standardization environment there are various actors, each with differentobjectives for their participation in the standardization process. These organizations andactors are more or less nonisomorphic. Isomorphic convergence is required, whichimplies movement from one position to another (Greenwood 2002). Hence, in creating anefficient wireless technology standardization process, the more isomorphic different orga-nizations are, the more efficient the theorization, legitimization, and diffusion of various

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standard processes will be. This also enables the diffusion of wireless standardization.However, this depends on how efficiently the technological environment develops. Also,the institutionalization of the process is expected to increase the further the process devel-ops. If this does not occur, the process has not gained legitimacy and it may have frag-mented.

In the sections below we analyze the empirical data using the institutional static anddynamic models presented in Chapters 4 and 5. Through the process Stages we also dis-cuss environment and timing points, which have an influence on how the process pro-ceeds forward. For example the right time to release a standard may have a significantinfluence on how the standard is adopted.

In the table at the beginning of each section there is a description of factors for changein the left hand columns, as presented in Figure 7 in page 174 in italics. The middle col-umn presents the characteristics of Stage factors based on the research material. The righthand column, concepts, describes the changes in the process. However, when analyzingthe material new characteristics were identified and are shown in italics. The changeswhich contribute to the model are struck out. Each characterizing factor is further dividedinto its own subsections, which describe the factors in more depth. Also, the main institu-tional characteristics are presented in their own subsections. Each Stage and Trigger isdescribed in terms of institutional elements and carriers. The descriptions of Stages aresummarized at the end of each subsection in tables.

Furthermore, the Triggers are described in their own subsections, and the descriptionsare also in italics. Triggers describe the pushing factors from one Stage to the next Stage.The quotations referred to in each Stage and Trigger are descriptions from the ATLAS.tidata analysis program (Appendix 8, snapshot of ATLAS.ti). At the beginning of eachStage or Trigger the total number of quotations is given. In the text the quotations referredto are coexistent quotations in the data with Stage or Trigger, e.g., Stage I and manufac-turers (see Appendices 8 and 9).

7.1.1 Stage I: Interest Stage

“When GSM became standardized people were thinking in terms of Europe, nowadays peo-ple are thinking in terms of the world. And that makes things much more difficult.” (P48,4229–4301)

There are various reasons to participate from the very early stages of the standardizationprocess. The reasons are environmental – economical, market driven or, technology driv-en –, and actor based – competitor-driven or because of networking. Actions which pushthe process forward are common interests, in terms both of technology and of markets.User requirements and networks are also motive forces.

Stage I, the Interest Stage, is characterized by Organizational rules, Standards andNetworks (Table 15). These simultaneously destabilize and stabilize the environment, buton the other hand they provide a push to start the standardization process. Networking,new entrants, and agreements points describe organizational rules. Standards aredescribed in terms of technological applicability, frequency, and research. Number of

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actors, strategy decisions and detailed standardization describe networks. Organizationsstabilize the standardization environment, granting all actors similar opportunities to enterand operate in the environment. Business-related issues destabilize the standardizationenvironment, because of different organizational interests and targets.

Table 15. Interest stage characterizing issues.

Analyzing the Stage as defined in the earlier chapters we found 89 quotations describingStage I. These quotations reflect the uncertainty of the beginning point. Technology andmarket selection and user expectations were discussed in particular. Interestingly, becausewe have interviewed experts in different years, this shows how the environment haschanged. Experts describe the earlier times, when standardization was more local orregional. Now we must consider it globally. All actors are present at some Stage and haveat least one hit in the statistical results at this Stage. However, at this Stage manufacturers(6 hits) and standardization organizations (7 hits) have the most significant role, based onnumber of findings. However, for the small actors it would be beneficial to participate inthe beginning of the process to figure out the future business and technology directions,i.e., road maps, and network with other actors.

The beginning of the process may take years, but may also be very fast, if the actors inthe wireless standardization environment have equal objectives. Timing is an importantissue from the beginning of the process. We find timing descriptions in the data 6 times.In a way, timing is influenced more by the people who are business driven and motivatedto figure out what services can be supported at any given point. Timing is often crucialbecause there is always new technology ready for introduction, but we must come up withset standards to make it possible to bring services and products to the market at the sametime. From the actors’ point of view, if they had a chance to participate in forum meet-ings, they would save a couple of months, because they would be aware of the directionof standard development earlier (P37). This would be beneficial in the competition situa-tion.

7.1.1.1 Organizational rules

Various actors join Stage – those who have sufficient knowledge of markets and servicerequirements: when, what data speed, etc. One forum may have knowledge of wirelessservice requirements and other organization such as association may know the markets(P44). Actors in the industry may also form coalitions to further develop their own inter-ests. One major operator provides an example:

“This occurred at least for operator with what is called 3GIP. So 3GIP at the beginning itwas a private body between UK operator (changed), I think it was Microsoft and some man-

I. Interest Stage CharacteristicsOrganizational rules networking, new entrants, agreement pointsStandards technological applicability, frequency pointsNetworks no. of actors, strategy decisions detailed standardization

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ufacturers and it was familiar for European operator (changed) to go inside. So, I think thatsome promises to work inside this body and because it was related to IP, we were interestedto be aware what was happening there, we succeeded to participate to 3GIP.” (P47, 510–517)

IPR points have arisen from the empirical material more clearly. Problems related to IPRscannot be solved solely in standardization bodies. Despite the power of standardizationorganizations, they do not deal with commercial points such as IPRs. These must beresolved by the major commercial actors. One example from history was a question oflicense conditions for fees, and Qualcomm requesting a number of technical changes. Themain industrial actors have to solve problems related to IPRs by agreements and licenses.They have a critical role in the standardization process due to commercial interests anddifferent standardization strategies. In the worst case this may imply delays to the stan-dardization process. We must note that the decision of the 3rd generation concerningUTRA was unanimous approval of the solution. In contrast to the 3rd generation, in the1st generation standardization process, IPR issues were not even dealt with. Now theyhave become one of the main points in the process. GSM was created as an open stan-dard in ETSI. It had a clear IPR policy. IPR points in UMTS are dealt with in the samemanner as GSM, but they are also submitted to the ITU. This issue was dealt with whendeciding on UMTS radio technology in Paris (January 1998). The proposal receivedunanimous approval, even though some uncertainties in IPRs have received a lot of pub-licity (P48). According to one standardization expert:

“IPR is also, my view, matter for people who own the IPR, which is usually manufacturers,and to come agreements which hotels and bars, meeting rooms, they have something totrade. From broad industry perspective, people interested standards and they want themopen, they want the biggest economy of scale, they don’t want barriers, no one pay big roy-alties. So from user perspective since, operators perspective he want know things, the stan-dards body must ensure that it produces technology specification, which do not contain IRPproblems, So, body as ETSI and ITU, would always call upon technical ideas, to have theIPR situation clarified.”(P7, 5888-5899)

From the regulator’s point of view, various agreements are needed between actors,regarding laws and rules. In some standardization cases very detailed solutions are dis-cussed, not necessarily the best solution from a technical point of view. This is partly dueto the increased number of actors in the environment. The European Union has liberal-ized the markets (Green Paper, 1994). This has prepared the environment as a marketfield. Because of globalization and the different regions, there are battles over, e.g., tech-nology convergence concerning 3G/UMTS development, and whether technology shouldbe WTO compatible or not. The challenge for the regulator is how to act as neutrally aspossible. EU representatives commented on the issue, and have viewpoint:

“The policy is that telecommunication should not mandate standards, mandate technology.Everything should be, if there is a regulation that needs to be technologically neutral.” (P42,469–473)

However, for the standardization organization it is important to have a common agree-ment. In the case of 3G this was not clear, especially at the beginning of the process.According to the representative of standardization organization:

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“Let me say the majority of experts were the opinion that TDMA solution was the betterone. But political and industry policy level, we had very strong support of CDMA solution.Basically, in Madeira the majority of experts there the opinion that the TDMA solutionshould be selected. But, for instance we from France and Germany had strict order to votefor CDMA solution. So in Madeira, 10–2, country votes, so there was not really resolutionat Madeira in the meeting.” (P7, 8741-8749)

He continues:“We try to live together as much as possible. Then such a process has far reaching impact toall players. So, the final decision on such an important issue was not made in standardiza-tion groups. They are made in talks between the major players. In this standardization pro-cess we organize a process in floorground process which serves as a catalyst for this. We canenhance can built a consensus can contribute to building of consensus gain by this. If it’sreally critical in the end, we sees an agreement between the major players and that’s madeoutside of standardization groups, it must be made outside. Since these things must alsoresolved and then IPR issues etc. All commercial issues, since this are commercially com-petitive. It defences how much development time advantages companies gain by this”. (P7,8862-8876)

Within the standardization environment, the key issues are IPR and licensing policy, howthe standardization organizations use their power and the various expectations of theactors, because the shared target is to create commonly agreed standards. This is more thesituation in the formal standardization process. In the informal standardization processthere may not be any formal agreements, the standardization organization may act loose-ly, and the reasons to participate in standardization may vary, such as for research orproduct development.

However, it is commonly agreed that agreements are needed. The challenge whenagreeing standards is how to cope with the number of agreements. The ease of creatingagreements via the Internet has enabled the management of agreements. This creates acompetition situation between technology solutions, when, for example, dozens of stan-dards are available for the same problem. However, as an SME representative confirms,despite the number of standards available, some of them will in any case drop out. Espe-cially in the case of 3G development, despite the fact most European countries werebehind UMTS, not CDMA2000, the European Commission was forced to state thatUMTS was one candidate of other technology solutions (P44). To find a global solution,for example in 3G, required lobbying by the actors between four competitive technologysolutions and competitors (P7). This lobbying was not necessary for the best technologi-cal solution but against the leading manufacturers of industry. Consequently, it was a mar-ket competition situation (P7) and, in terms of institutional theory, a competition overgovernance systems.

The regional standardization organizations, such as ARIB, T1, ETSI and TTC, havesimilar decisions to make, e.g., in 3GPP partnership agreements. They have to agree suchthings as common working procedures, and the exact scope of the agreement. All theactors have their own interests, so it is not easy to find a common view (P48).

A representative of the large manufacturer interviewed describes the situation as fol-lows:

“I think the key one, is that trying to develop a standard which from outset is recognized asa global standard does mean that you have to get a agreement from all players. That what

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you are doing is globally recognized rather than develops something which some people, Iwouldn’t subscribe this, regard GSM as proprietary solution, which should be adopted asglobal standard. Now, I don’t believe it is a proprietary solution, but some people viewedlike that.” (P48, 4896–4899)

He continues:“You can’t have global standard if you try to dominate it. Because soon as you try excludeinterested parties you will end up with those going to force something those who areagainst. So it is important to get a global standard that is by consensus and you can not be bydictator. It has to be by consensus, that means anyone who wishes to participate or collabo-rate or contribute, must be allowed to join.” (P48, 4924–4930).

7.1.1.2 Standards

At the first Stage it is important to have a long enough perspective for the development.For example, research requires time. In Europe there have been various research pro-grammes which have produced technology results for standardization (P41). In some cas-es the standardization can start from a research perspective; from the created standard ora totally new proposal. The research activity can neutralize the technology when it is pub-lished. This lowers the competitors’ chances of patenting the solution. For example, IBMputs effort into research and development for years. They bring up patenting and licens-ing issues, and thus may lock in the situation for uncertain time and thus make better thecompetition situation (P48, 2099–2103). The target is to gain a better negotiation situa-tion in the global market. In the US, for instance, patenting policy is different from that inEurope. It is a more important part of companies’ business strategy (P7, 2542–2549).

In wireless standardization, the frequency interface is a central question in systemdevelopment. The central standardization organization’s leader commented:

“The situation in past was that we had lot of countries in European, which not necessarilythe using the spectrum in the same way. We trying to harmonize this use and we had calleddetailed spectrum investigation. Where we actually ask all the countries to give us detaileduse of spectrum then we try to come up plans on how to migrate everyone into same direc-tion. In the future we will have a harmonized way of using spectrum, where industry canput, have the economy of scale, so we don’t have that much interference of borders and alsoimport is that we can have same views of worldwide level, if certain things are discussedand so on.” (P48, 4129-4139)

In the 3G development it is mainly coordinated and regulated by the ITU in cooperationwith regional authorities, such as ERO. The decisions made, influence all actors productdevelopment. In the case, if frequency allocation is not followed by the actors and othertechnology developers, the system will be interrupted. So, an important concern was thereservation and/or clearance of frequency in Europe, more precisely the EU, for digitalphone services. The limitations of frequencies were noticed in Europe in the late 70swhen the EU reserved a frequency band twice 25 MHz at around 900 MHz for wirelesscommunications.

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7.1.1.3 Networks

How to start developing products is a business decision and strategy which actors mustmake: whether to follow standards or to create something of their own. This is a part ofbusiness strategy and infrastructure, and though it does not create any business directly, itis a “key building-block” of networking (P30, 242–245). The challenge for actors in thefirst Stage is to know what the business model of the object of standardization will be.This may create a couple of years’ uncertainty for actors (P30). Furthermore, the startingpoint for SMEs’ participation in standardization is as a way to create a better competitionsituation (P30, 346). Some other SMEs think that, in the long run, standardization has aclear effect on product creation, in architecture, hardware and software solutions develop-ment (P31). Another SME wanted to follow standardization to gain information earlyenough for the products they developed, but also in order to affect standards, if they weresuitable for their products (P38, 345–349).

We have found several points which reshape the wireless standardization organizationenvironment. From the actors’ point of view, technology standards are more competitivethan previously, because of more detailed standardization. The advantage of moredetailed technology standardization is lower component prices. On the negative side is theincreasing number of working themes in the technology environment. This creates morecomplexity in the government of the standardization environment. It also requires morecooperation between actors and standardization organizations. The advantage of relativelysmall numbers of meeting attendees is that the information flow between organizations issmooth and flexible, because the same actors participate in several meetings. This alsoensures that the content of proposed technology standards or themes remains the same.Also, this may create legitimacy for the process.

Standardization enables actors to enter the mass market, or develop more general prod-ucts. For example, GSM standardization enables global markets for service developmentfor over a billion customers. Regarding the global wireless markets, the SMEs see thatthere will not be one single standard, but many technological solutions and systems,which are under one umbrella (P31), e.g., IMT2000 or UMTS. This enables differenttechnological solutions in different regions. However, the target is to create productswhich are required by businesses or final end users; or, even more so, to meet each actor’sown objectives. However, currently, from the perspective of large actors (P35), the glo-balization policy is neutralizing the situation. The target is to create a product with aslightly worse spec together, rather than create a hard competition situation. From themarketing point of view, for instance, it is more beneficial to have access to markets of100 million customers in total, of which one can have, perhaps, a 20% share, than to haveaccess to a market of 10 million potential customers and have a 50% share.

Networking is important in the early Stages of the standardization process. One stan-dardization expert from large manufacturer stated when asked about cooperation withcompetitors:

“Well, generally it’s all-precompetitive cooperation, so it can be research, collaborative orcooperative research programs. We also work to promote our common interest in govern-ment and commission government policy. We work on spectrum issues at industry at levelrather than individual level. In the sort of open standards environment, the biggest problemis normally the length of time it takes to develop a standard.” (P48, 4775-4782, MAN)

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7.1.1.4 The Institutional perspective on Stage I

The Interest Stage is characterized with regulative, normative and cognitive elements asdescribed in Table 11 in Chapter 5. This shows that it is difficult to identify the most char-acteristic element of the Stage. Addressing the general institutional theory this shows theambiguity and uncertainty of the Interest Stage. Frequency and IPR are the key issues todescribe regulative element (4 hits). From the actors’ point of view these elements pro-vide formal building blocks in product development. It is important for manufacturers toknow about frequency allocation, for example, when developing wireless products. Oper-ators require the frequency allocation to do business. The uncertainty in frequency alloca-tion and technology adoption increases technology risk and investment costs. Regula-tors’ cooperation in WRC conferences has enabled common frequencies for certain ser-vices. In terms of normative elements (4 hits), we found networking among actors andtrust between various actors in the standardization process to be important. One way ofcreating conformity among actors is through discussions. The big actors find the net-works important especially in the situation of tough competition. The cognitive element(4 hits) describes several elements which construct the standardization environment andorganizations. In the global wireless standardization environment there are various orga-nizations which have their own objectives in forming standards. Not all of them are for-mal organizations – they may include industrial consortia, for example, which create defacto standards.

7.1.1.5 Summary of Stage I

To summarize Stage I, there are various reasons for actors to participate from the veryearly Stages of the standardization process. The actions which push the process forwardare common interests, in terms of both technology and markets. Furthermore, networksare motive forces. The right timing to begin the process is important. Timing is importantfrom the market and process points of view. The right product launching time is impor-tant for manufacturers. Also, it is important that the standardization process is sufficient-ly lengthy to recognize the main aspects of technology development.

We found two new issues in the first Stage: IPR issues and the research effect on thestandardization process (Table 16). IPR came up in the empirical material, and it wasexpected to exist in the later Stages of the process. Research came up in the interviewmaterial, especially from the large actors’ point of view. If the research group has enoughmass, they may propose or create standards. One group of actors may have a more signifi-cant role in the process: regulators. They have role in harmonization of frequencies. Also,in Europe the European Commission has a role in creating directives for the environ-ment.

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Table 16. Description of Stage I based on empirical data.

During the first Stage, expectations are high concerning markets and technology. Toenable smooth standardization from the very beginning requires that in the beginning ofthe process actors are able to create legitimacy for the process. One way to create legiti-macy is to create organizational procedures which are commonly created and agreed. It isa challenge in the global standardization environment to form common procedures,because of regional and cultural differences. Also, the trust among actors is important.This means that wireless standardization is not automatic, but requires a push to start andcomplete.

7.1.2 Trigger A. Business interests

We describe this Trigger in terms of actors’ interests, which consist of business interestsand environmental issues. One of the pushing factors for market and standardizationdevelopment is openness and market liberalization (P41, 47–51). If the markets are notopen, the competing actor may have difficulties entering the market.

We found 37 quotations for this Trigger in the data. These quotations are characterizedby discussion of user requirements and expectations. However, such requirements andexpectations are difficult to predict. All actors have some role in this Trigger. For exam-ple, standardization organizations recognize regulator requirements, such as the require-ments of emergency calls in the US (P31, 0434-444, SME). Standardization organiza-tions provide technological knowledge. Manufacturers develop the required device andoperators provide the service.

The standardization environment is more market-driven and competitive than in thepast (P25). For example, if an SME wants to create products which do not follow stan-dards, the products might have more functions but the sales and marketing would be morechallenging (P29, 51–55). Furthermore, one SME thinks that standardization is part of thecompetition, market analysis and road map processes. The marketing department carriesout this work. They think that it is a part of marketing information to know what issueswill be standardized and according to what timetable, and hence when we can expect cer-tain issues to become relevant. However, from the institutional perspective it would bebeneficial for the SME to legitimize the product and services among the other actors.Thus it is important to recognize all errors in the development.

The product development staff should provide notification of errors or bugs in thestandards (P29, 188–203). And on the product content side:

I. Interest Stage Characteristics New characteristicsOrganizational rules various actors

changes in the processagreements

IPR

Standards frequencies researchNetworks strategy

environment

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“UMTS is going to depend for its success very much on content providers – people don’tbuy technology, they don’t buy standards, people don’t buy 2Mbit bandwidth; they buy ser-vices, they buy content.” (P48, standardization expert, 5645–5648)

“People don’t buy computers or DOS operating systems, they don’t buy Windows 98 – theybuy the programming content.” (P48, standardization expert, 6074–6076)

We describe this Trigger in terms of institutional cultures (4 hits) and structures (4 hits)carriers. From the cultures perspective we can discuss this from the actors’ point of view,relies on widely held beliefs and understandings, i.e., the created rules of standardizationorganizations. However, there can be various ways for actors to dominate and control thebeginning of the process. Small and large actors and organizations have their own inter-ests in pushing certain issues forward. This is enabled by the openness of the standardiza-tion environment. Market liberalization in Europe has created common markets for Euro-pean actors to enter. Furthermore, the standardization work done in ETSI has stabilizedthe standardization environment and coordinated the actual standardization process at theglobal level. From the structure point of view, actors are expected to make choices con-cerning both activities and structural forms so as to efficiently pursue their interests. Thenew characteristics of Business Interests are shown in Table 17.

Table 17. Description of Trigger A based on empirical data.

7.1.3 Stage II: Networking for standardization

This Stage consists of emergence and number of new actors, ascendance of new actors,institutional entrepreneurship, possibility of institutional change, and injection of newinnovation (Table 18). The emergence and number of new actors and ascendance of newactors consist of small/large actors/organizations. Institutional entrepreneurship can beseen to describe the structure which is more likely to become fully institutionalized thanother structures. Possibility of institutional change describes procedures and cooperationamong actors. Injection of innovations describes the different technologies.

In Stage II, Networking, there are a number of new actors, institutional change springsup, trust and objectives plays an important part among actors, and networking with otheractors. Complaints have been made that the standardization process is too slow in manyrespects. There are pros and cons to this kind of system. However, the environment haschanged drastically over the wireless generations. The standardization environment hasbeen geographically expanded and integrated with other media, and the number of actorshas increased exponentially. There are fewer experts who have knowledge of the wholetechnology environment, but more of those who know a certain technology environmentin depth. This requires more push activities and speed, and the updating of standardiza-tion procedures (P48, 2281–2291, representative of operator).

A. Business Interest New characteristicsBusiness interests opennessEnvironmental issues market liberalization

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Table 18. Networking for standardization Stage characterizing issues.

We found 26 quotations concerning this Stage in the data. Generally the quotations wereto do with a pre-competitive situation such as product development or research, but notproductization. Cooperation has a significant role among actors and the role of the stan-dardization organization was visible, e.g., in the 3GPP. The standardization organizationshave 6 quotations altogether within the Stage. This demonstrates the importance of therole of standardization organizations. Also, the role of manufacturers and operators wasclear: both have three quotations. These form the largest groups in 3G development, andthey attempt to reach a common agreement (P48, 0303-0309, manufacturer representa-tive).

At this Stage the timing aspect has a role in cooperation within 3GPP. When actorscooperate in the same organization, it may speed up standardization. They cooperatetogether and provide a solution that is market driven. Actors create the required technicalsolution within a commonly-agreed time limit. (P48, 7365-7370, representative of stan-dardization organization).

7.1.3.1 Emergence and number of new actors

Next we will discuss emergence and number of new actors and ascendance of new actorssimultaneously as these have the same characteristics. Networks are required for variousreasons, e.g., the growth in the number of actors. For example, in ETSI, from the opera-tor point of view, flexibility in forming new groups of members to develop, e.g., techni-cal features has increased. In previous years, there was more political play concerningtechnical features – whether they fit in with timetables, etc. Interested members can forma group and interested parties can join, if they see the work as beneficial for their work.On the other hand, they can also participate in the work if they see it as a threat to theirbusiness. However, to push forward large and important proposals requires large net-works and lobbying (P48, 2011–2025). A critical mass is required behind the proposal(P48).

For the actors in the standardization process, it is not only the adaptation of technologystandards, but the economical and political effects for product development which need tobe recognized. In actors which create their own products, standards are followed carefullyto enable combinability with other products. Subcontracting companies are expected toknow standards as well, at least when the contract is agreed. Thus, for example for theSMEs it is important to participate, to get access to documents and to follow the process.

II. Networking for standardization CharacteristicsEmergence and number of new actors small/large actors/organizationsAscendance of new actors small/large actors/organizationsInstitutional entrepreneurship fully institutionalized structurePossibility of institutional change procedure, cooperationInjection of new innovation different technologies

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It might be difficult to follow the process from the outside (P29, P37). The creation ofstandards can be sped up or slowed down according to actors’ decisions (P35).

Actors calculate during the development process, e.g., in which business quartile tolaunch the product. However, the large actors in particular can affect this. For SMEs itmight be difficult to launch new innovations without networking with larger actors. Thelarger actor can have power and affect the timing of the process (P35, 359–369). Forexample, operators can force the development of standardization, which is targeted moreat data than at voice connection (45, 1813–1820). This is especially true in the case of 3G,because it is expected to transmit more data than voice in the future.

This function is made up of large entities, which it is difficult for SMEs to affect, atleast alone. In Europe, the organization which guides power systems is the EuropeanCommission, by setting directives. One such issue is the liberalization of the Europeantelecommunications market, which has enabled and opened bigger markets for SMEs aswell. Worldwide telecommunication is governed by the ITU, and commercial issues bythe WTO.

7.1.3.2 Ascendance of new actors

These characterizing issues have already been discussed above as we found that emer-gence and number of new actors and ascendance of new actors have similarities.

7.1.3.3 Institutional entrepreneurship

This can be seen to describe the structure which is more likely to become fully institu-tionalized than other structures. This issue was in the original (Greenwood 2002) model.Greenwood et al. refers, for example, to (Lawrence 1999), which discusses institutionalstrategy. Lawrence has proposed two strategies: membership and standardization strate-gies in the accounting sector. In his article, standardization strategy means that the largeaccounting firms have worked to establish internal training and standards of practice.However, we could not find this kind of characteristics in our material. Large standardiza-tion organizations may provide this kind of training.

7.1.3.4 Possibility of institutional change

The target is to get all people who have an interest in a certain technical feature to worktogether and then provide a solution that is market-driven. The different actors have dif-ferent timetables concerning, for example, product development, and this must be recog-nized in the process (P29). The group sets a timetable for completion of the work, for

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example according to certain assumptions like UTRA and GSM-UMTS network (P7,7365–7370).

Wireless standardization has become global over the years. The 3rd generation globalwireless standardization process requires decision-making in an open atmosphere. Anopen atmosphere means that anyone who wishes to participate, collaborate or contributeto the global standardization must be allowed to join. Recognizing a standard as globalmeans also that it has been agreed by all actors (P7). The diverse background of actorsmust be managed in the global standardization process. The actors cannot easily createnew standards if one actor attempts to dominate the standard process. The challenge forstandardization organizations is to recognize the different needs and speeds of actors, inorder to fulfil their requirements.

Furthermore, from the regulators’ point of view it is important to cooperate with theindustry. Open discussion benefits all, even though it may be more or less informal (P42).In previous generations, many standardization proposals were created as “official/bureau-cratic work”. Equally, the manufacturers hold discussions with operators on different lev-els; with some actors very detailed level or with others as larger systems (P43). Lookingat the more voluntary-based standardization organizations, such as IETF, on the otherhand, in previous years these maintained their own organizational culture, because theparticipants were mainly individuals, such as researchers, who have their own interest indeveloping Internet-based systems, not necessarily thinking first of corporate issues.When large actors have entered this environment, some resistance to change has beencaused (P43).

7.1.3.5 Injection of new innovations

The main objective of 3G standardization is to enhance combinability between differenttechnologies. Technology standardization from the SME’s point of view has moved in amore competitive direction. They note that standardization actors want to standardize theinterfaces inside the products. These interfaces enable competition, because when theinterfaces inside the product are opened, this enables the entrance of other componentsuppliers, which compete with each other and thus lower the price of the component (31,645–652).

IPR policy also guides the actors’ networking and cooperation (P43, 497–500). In spiteof this the actors – even competing actors – have formed cooperating groups (P48, 2395–2402). One solution to overcome the problem is to form “industry agreements” or more orless “anticipatory standards”. These small groups, which know each other, may createtechnologically-advanced products. The outsiders find it difficult to get into groups,which mean that they start to create their own competing technology. After a while thereare two products, which are not compatible, which leads to discussions and technologyagreements. This is one example of how new standards are created (P35). It is importantfor SMEs to follow a standard, but the difficulty is to figure out which standard to adopt,follow and put in the product (P37).

IPR issues must be recognized at the early Stage of product and standardization devel-opment. Actors own IPRs used in standardization, which means that the number of other

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actors are dependent on each other. The ideal situation in the industry is to make cross-licensing agreements, and these are being made. A lot of cross-licensing agreements existbecause everybody knows, and is dependent on this certain patent. Everybody wants thesystem to work. Furthermore, generally,

“in the case of manufacturer, let’s say, has an IPR in how to do it, that manufacturer stopother manufacturer to do the same thing. If he does not gives the license. If he does not givethe property right. So there is always a conflict in standardization and intellectual propertyrights. Then it is always in conflict policy.” (P42, 672–676)

On the other hand: “If you are manufacturer, if you have a portfolio of patents, what you interested in, you arenot necessary interested in selling your portfolio, you are interested in having a system fly,because the more, it is manufactured the more you earn money, you don’t earn money onpatterns on your money, on the system flying and you yourself producing the equipmentselling. (P48, 1002–1003)

Over the wireless generations the standardization-related patenting policy has changedradically. The first two generations were virgin territory for patenting, and the culture wasdifferent. Cultural issues have arisen between the US and Europe, and these even becamepolitical issues during 3rd generation wireless standardization. The patenting environ-ment is more competitive in the US than in Europe. What has been accepted in the USmay not be valid in Europe. However, the patents expert sees the situation from the stan-dardization point of view as follows:

“In a patent you put in the technical documents what you think the others should not know.So it is quite a different, so I am a little bit shocked in this change.” (P25, 398–401)

Between the nations there are different kinds of interest, concerning patenting. The regu-lator sees the differences as follows:

“And the case of US and Japan is different. If it is not disclosed in other previous documentand if it is new, I think they don’t insist very much about it, if it is inventive, it is different.The only is that it is new, I mean that nobody knows about it, it is the first time. And inven-tive is that of course it is not trivial. You can do a lot of things that are new. You can invent acar with five wheels but it is not an invention. It is new but it is not inventive. So this kind ofthings we are quite restrict with, in Europe the patents are granted only if they are reallyinventive, I think. At least. But in Japan and US it is not like that.”(P25, 757–768)

The standardization environment has been reshaped over the years, becoming more open.This has led standardization organizations to change their organizational structures andworking processes. This has many benefits: more actors can join in the process, docu-mentation is more open, and the standardization process is open. From the technical envi-ronment perspective, this may also reward actors’ effective and efficient control of theirproduct development by stabilizing it.

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7.1.3.6 The Institutional perspective on Stage II

This Stage is characterized with normative (6 hits) and cognitive (6 hits) elements. Fromthe normative element point of view the specialized formal systems, i.e., formal standard-ization organizations or regulators, describe the control mechanisms. This is importantwhen there are larger numbers of diverse participants, forming e.g. networks. We consid-er networks among actors the building blocks of the standardization process. Moreover,cooperation and conformity in networks and product and service development amongactors is not possible without some degree of trust and legitimacy. The gained legitimacycreates long-term effectiveness and stability for the process.

The normative and cognitive perspectives provide strength and staying power, e.g., fora behaviour or process. One important topic is IPR. The congruency of standardizationprocedures such as IPR issues is fundamental for the process. We have discussed net-works and trust as expectations of the process, but we need to recognize the opposite side– the sanctions if one does not follow the agreed procedures. In the case of IPR, if onedoes not agree IPR procedure, e.g., in ETSI, one may not have right to apply standards.From the cognitive elements we can highlight the objectives. In the standardization pro-cess the objective, or goal, is the approved standard, and actors are decisive in determin-ing what the issues are and what the price of attaining the goal is.

7.1.3.7 Summary of Stage II

As a summary of the structure of Stage II we included the ascendance of new actors withemergence and number of new actors, because it also describes the role of small/largeactors/organizations (Table 19).

Table 19. Description of Stage II based on empirical data.

From the perspective of the actors, there are various issues which need to be recognizedand which reshape the process. Two new issues have emerged from the data: open atmo-sphere and globalization. At this Stage the large actors’ role gives the process its charac-ter. The global market environment destabilizes the process, because it widens the busi-ness environment. The standardization created enables compatibility between technolo-gies and thus allows market expansion to worldwide markets. Also, the number of new

II. Networking Characteristics New characteristicsEmergence and number of new actors

small/large actors/organizationsascendance of some actors

Ascendance of new actors small/large actors/organizationsInstitutional entrepreneurship fully institutionalized structurePossibility of institutional change procedures

successful practicescooperation

open atmosphereglobalization

Injection of new innovations compatibility

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actors and their behaviour may add to current structures. On the other hand, the openatmosphere and cooperation among actors stabilizes the standardization environment.From the technology creation point of view, IPR issues also came up at this Stage.

7.1.4 Trigger B. Cooperation

The Trigger shows the cooperation between Stages I and II. A structure of cooperation iscooperative relationships among standardization actors. The Trigger from Stage II toStage III is the committees, in which actors can participate, or whose work actors can fol-low. These informal committees, consortia or working groups may push to start standard-ization on a larger scale. We describe this using the term actors’ cooperation. Marketexpectations also push the cooperation forward.

We found 12 quotations concerning this Trigger in the data. Based on the data, theTrigger can be described in terms of discussions and preparing standardization. These dis-cussions, which can be continual, are mainly carried out among large actors. The discus-sions can be very detailed or general, and are important in finding the critical mass behindfor the further discussion in the process (P48, 3353-3366, representative of operator).Based on the data the main actors are manufacturers (3 combined hits) and standardiza-tion organizations (2 combined hits).

This Trigger is characterized structures from the carriers. The common target of coop-eration is to develop compatibility between technologies, devices and interfaces (Table20).

Table 20. Description of Trigger B based on empirical data.

The compatibility of different technologies is created by various standardization organi-zations. Moreover, this enables the usage of wireless devices globally. From the institu-tional perspective this can be seen in the ways in which actors choose among structures inlight of their known or presumed effects.

7.1.5 Stage III: Precompetition

This Stage consists of technical viability, new solutions and ideas, and successful practic-es (Table 21). Technical viability describes technology compromises. New solutions andideas characterize the open standardization process and different technologies. In suc-cessful practices the target is to find new, innovative answers that meet the actors’ needsin the standardization process. This may require the recognition of actors’ successfulpractices, within the standardization process.

B. Cooperation New characteristicsCooperation compatibility

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Table 21. Precompetition Stage characterizing issues.

From the data we could find various kinds of standardization competition: patenting, vari-ous levels of competition, commercial issues, and standard promotion. We have alreadyrecognized the central role of patenting or IPRs, and it seems that this will continue. Theactors, which hold own IPRs, play a central role in the process. Competition can exist notonly between manufacturers but also between networks. Competition between networksmeans, for manufacturers, the cooperation with operators and product marketing. Stan-dardization also has commercial characteristics, meaning, for example, the right standard-ization release time and technology product marketing. For example, the products sold tooperators are highly standardized services, which may require technology marketing instandardization organizations. Moreover, this is related to standard promotion, which ispart of the precompetition of standards. These issues and other related examples will bediscussed in detail below.

The main actors at this Stage are standardization organizations (3 hits) and manufac-turers (6 hits). SMEs also have 3 hits, but their quotations are of a commentary nature;they are not related to actual participation in the standardization process. This reflects fur-ther the role of large actors in the process. They have sufficient resources to participate.

7.1.5.1 Technical viability

The number of actors has led to a situation in which a technological solution will containvarious technology compromises. For example, in the case of the 3G radio interfaceselection, there was a complex situation concerning technical problems in ITU-T. Therewere two groups of manufacturers, so Ericsson and Nokia were on one side and Alcateland Siemens on the other. Hence it was decided to propose various technological alterna-tives, so that participants did not choose only one of these manufacturers. This is the kindof political threat that may produce problems in UMTS (P47). Technological alternativesform the “technology umbrella” of IMT-2000. An SME representative describes the situa-tion as follows:

“I am really sorry about how in 3GPP has done, it is so much multiplexed and it is like itshould has seven corners and you could do that it like a simple square…It is sure, that it hascompromises from different manufacturers, …but still it is unbelievable…”(P37, 327-338)

The expert from the large operator has a similar opinion:“And before it was, well the delegation took time to reach the agreement and to be allagreed, today it is more violent, you have some groups that make agreement before and thatpush the decision to do that. So I think that it was a big change and today’s operators now,well most operators at least the small ones, and some of the bigger operators now only go to

III. Precompetition CharacteristicsTechnical viability technology compromisesNew solutions and ideas open standardization process, different technologiesSuccessful practices actors’ needs

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the standardization bodies only to be aware of what is coming and not really to participateand make contribution to try to push some direction or another one.”(P47, 260–267).

One expert stated that the standard becomes more popular if it does not contain difficultcopyright and/or licensing issues. For example, in broadcasting there are various stan-dards, which are very well standardized, but which contain a “patent jungle underneath”,which may mean the presence of different owners, and if you want to apply the standardyou have to agree with all the patent owners. One example is the MP3 encoding format;this has been patented in a complicated way that makes it difficult to put into use, at leastfor small companies (P30).

Another example, from the image-encoding field, is the JPEG standard, and the newJPEG 2000 standard. This standard has been ready for years, but it is rarely used, eventhough it is technologically more advanced than the first version. In spite of this, the firstversion is more widely used, because it is good enough and simpler. In this case we canask whether the more advanced standard is too complicated or too expensive for applica-tion in products. Or is the licensing too expensive? (P38)

When discussing standards on the whole one representative of an SME stated thattechnological applicability is only one factor in the decision when choosing a standard.The other factors include how the other actors are interested, and support for the standard(P30). During this Stage the standardization is developed more or less according to thetechnology. The developers should be ahead of critical mass requirements, e.g., videoclips, multimedia messages or packet data services. The actors should recognize the ser-vices that end users may possibly need. At this Stage the actors are in the DevelopmentStage and are pushing technology to the market to see what will happen. Moreover, theywant to see what the end users start using, and who may become dependent on the ser-vices provided (P31). On the other hand this continuous development may lead to a com-petitive situation within the company, in the form of intrafirm diffusion. For example, inGSM vs. 3rd generation development, a company may notice that 3G is “eating” theirbusiness. The same situation took place in the past when NMT technology was leadingthe industry and GSM was developed. The issues under discussion at that time werewhether the new technology was too futuristic, technologically complex or uneconomical(P45, 774–783). According to an expert, when 3G development was taking place, themain target was as follows:

“At the very beginning it was, before I started working, it was before 1994 and at that timethe market was not that much deregulated, so I think the main motivation was a worldwidesystem, mobile system, with more, how do you say, more capability, stronger. Best radiointerface and that works everywhere. I think we saw the first motivation”. (P47, 56–61)

Or, as another example, the fax machine:

“There is a market pool, but it takes a long time for people to understand what can be doneand then develop services around it make it essential. Take the fax machine; fax machine isvery old concept, 30 years old. In business terms it’s relatively new, 10 years or less. Origi-nally, the fax was seen electronic post-box and it was alternative to posting a letter. Today itis email, today you can set up contracts very quickly, you can get committee approvals in away you could never do by post, because things change. Times go around.” (P48, 5516–5526)

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7.1.5.2 New solutions and ideas

The main objective of 3G standardization is to enhance combinability between differenttechnologies. Technology standardization from the SME’s point of view has moved in amore competitive direction. They note that standardization actors want to standardize theinterfaces inside the products. These interfaces enable competition, because when theinterfaces inside the product are opened, this enables the entrance of other componentsuppliers, which compete with each other and thus lower the price of the component (31,645–652).

IPR policy also guides the actors’ networking and cooperation (P43, 497–500). In spiteof this the actors – even competing actors – have formed cooperating groups (P48, 2395–2402). One solution to overcome the problem is to form “industry agreements” or more orless “anticipatory standards”. These small groups, which know each other, may createtechnologically-advanced products. The outsiders find it difficult to get into groups,which mean that they start to create their own competing technology. After a while thereare two products, which are not compatible, which leads to discussions and technologyagreements. This is one example of how new standards are created (P35). It is importantfor SMEs to follow a standard, but the difficulty is to figure out which standard to adopt,follow and put in the product (P37).

IPR issues must be recognized at the early Stage of product and standardization devel-opment. Actors own IPRs used in standardization, which means that the number of otheractors are dependent on each other. The ideal situation in the industry is to make cross-licensing agreements, and these are being made. A lot of cross-licensing agreements existbecause everybody knows, and is dependent on this certain patent. Everybody wants thesystem to work. Furthermore, generally,

“in the case of manufacturer, let’s say, has an IPR in how to do it, that manufacturer stopother manufacturer to do the same thing. If he does not gives the license. If he does not givethe property right. So there is always a conflict in standardization and intellectual propertyrights. Then it is always in conflict policy.” (P42, 672–676)

On the other hand: “If you are manufacturer, if you have a portfolio of patents, what you interested in, you arenot necessary interested in selling your portfolio, you are interested in having a system fly,because the more, it is manufactured the more you earn money, you don’t earn money onpatterns on your money, on the system flying and you yourself producing the equipmentselling. (P48, 1002–1003)

Over the wireless generations the standardization-related patenting policy has changedradically. The first two generations were virgin territory for patenting, and the culture wasdifferent. Cultural issues have arisen between the US and Europe, and these even becamepolitical issues during 3rd generation wireless standardization. The patenting environ-ment is more competitive in the US than in Europe. What has been accepted in the USmay not be valid in Europe. However, the patents expert sees the situation from the stan-dardization point of view as follows:

“In a patent you put in the technical documents what you think the others should not know.So it is quite a different, so I am a little bit shocked in this change.” (P25, 398–401)

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Between the nations there are different kinds of interest, concerning patenting. The regu-lator sees the differences as follows:

“And the case of US and Japan is different. If it is not disclosed in other previous documentand if it is new, I think they don’t insist very much about it, if it is inventive, it is different.The only is that it is new, I mean that nobody knows about it, it is the first time. And inven-tive is that of course it is not trivial. You can do a lot of things that are new. You can invent acar with five wheels but it is not an invention. It is new but it is not inventive. So this kind ofthings we are quite restrict with, in Europe the patents are granted only if they are reallyinventive, I think. At least. But in Japan and US it is not like that.”(P25, 757–768)

The Europeans have been leaders in adopting wireless terminals in previous generations(P41). One reason for this is the liberalization of the markets in 1998 (Green Paper),which has enabled new products to enter the market. The second reason is telecommuni-cations regulation which gave independence to regulators. This also includes theresearchers (P41). In Great Britain the liberalization was started earlier and the EU wasaffected by this. During the end of the second generation the Japanese started to reach thesame position as Europe. The 3rd generation technology systems brought auctions toEurope. This set the operators in different positions in different regions. In addition tothat, in Japan they do not have this kind of regulator (P41). In Europe, the regulatorsbelieve that the competition creates different options, from which end users select themost appropriate. The regulator’s role is to form the framework for the competition(P41). The target of European regulation is to form rules which enable a nearly equalcompetition environment in different nations. If this is not the case, operators may faceproblems concerning licensing or regulation concerning different networks. The actors inUSA have seen the situation in Europe the way that it favours UMTS standardization, andit does not follow WTO compatible requirements. However, the EU is neutral concerning3G systems (P41). The regulator sees the change of European standardization organiza-tions as follows:

“…at least that is my opinion, we have to move to a regulatory and standards model, inwhich we have to agreed what needs to be regulated. What is their minimum number ofparameters that you need to regulate. Which leaves you flexible to play with all the, and alsouse the opportunity to invest …. On top of this of course you need to have watch dog. Ifpeople are free to play the things, then you need some watch dog to look over that. And youneed to make some mechanisms, let’s say, it is like road traffic.”(P40, 122–132)

The regulator discussed the global wireless standardization situation in 2000 as follows:“3G…It is almost global. So, the frames for standardization. That is the only way to havethe global market, is to restandardize the solution, which is accepted by the operators andthey need to procure to buy equipment they have to go through a standardization solution,otherwise they cannot survive. Now, then you asked question, what about 3GPP2? So, in mymind it does not make sense. Because it fragments the market. So it is a idea, how can …the global market, if you have different standards. And this problem is going to come upquite soon, I think. For example in places where, in countries where they have two differentstandards in operation. Japan is one case, Korea is other case, the US will be anothercase.”(P42, 280–291)

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Another regulator found out the situation as follows:“I know that you are coming from European Community, you way to see things you point,but I don’t blame for that. But you see, for the time being this can change on months andhalf. There are two ways of seeing this family concept and how UMTS can be come part ofthat. You have a, let’s say IMT2000 model, can be very simply describing by the what iscalled mobile terminal, the radio access network and core network, this is the network part.The core network is made basically by IMT2000 network and other pre-IMT networks. thatwould be interworking among of them. So, what to and ..For instance could be GSM mark,this could be IS-41, northern American network and this IMT2000. That’s we consider asfamily of system.”(P48, 6820–6832)

7.1.5.3 Successful practices

This description was added in Figure 5, in addition to technical viability, with new solu-tions. This may require the recognition of actors’ successful practices, within the stan-dardization process, thus creating new possibilities for actors and their roles within theorganizational field. When the networking becomes deeper, it requires cooperationamong actors. However, in the further discussion we have included successful practicesin new solutions and ideas. This is because of its similarity to new solutions and ideas,and because we could not find appropriate support from the material concerning success-ful practices.

7.1.5.4 The Institutional perspective on Stage III

From the institutional point of view, this Stage can be described in terms of cognitive ele-ments (5 hits). The cognitive element deals, for example, with the structure of role com-plexities, with the differentiation of the different roles, and in terms of selectivity such asperformance or quality issues. The complexity of roles can be recognized, for example, inthe role of manufacturers. They must produce devices which are operable in the opera-tors’ networks. This requires cooperation with the operators and recognition of theirrequirements. Moreover, the manufacturers have a role in standardization organizations,in which they need to market technical solutions to other actors in the standardizationorganizations. Another important detail is the social order of a shared concept of the situ-ation or determination of one’s role within it, e.g., standard promotion or patenting issues.The shared rules or concepts are viewed as controlling or sanction mechanisms by otheractors. The shared concept of the situation can be seen as the cognitive exercises controlapart from and in the absence of normative constraints. A further differentiation of theorganization of action occurs when the time dimension is taken into account. Action maybe focused on the achievement of a goal, which is expected to require more actions. Theattainment, in the standardization process, of the agreed standard, is felt to promise grati-fication, a state of affairs which will not come about without the intervention of theactors, through new technological ideas or patenting decisions, for example.

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7.1.5.5 Summary of Stage III

Table 22 summarizes the Precompetition Stage. From the actors’ point of view, in thePrecompetition Stage, in addition to manufacturers and standardization organizations, theregulators have a significant role. This has been highlighted by the descriptions of otheractors, because they have an important role in licensing policy. There are various meansof competition at Stage III, such as technical marketing, technology promotion and pat-enting. The technical viability consists of technology compatibility and licensing issues.New solutions and ideas issues were described with ‘licensing issues’ and ‘technicalcompromises’. ‘Successful practices’ was combined with ‘new solutions and ideas’, asthey were both characterizing similar kinds of issues in the data. This may reduce deci-sion uncertainty, when applying decisions and choices made by others. Licensing was thenew point to arise in this Stage. To find compatibility at the various levels of the stan-dardization process is a demanding process for all actors.

Table 22. Description of Stage III based on empirical data.

From the process point of view we find that there are strong similarities between the sec-ond and third Stages. The findings from the interviews led to our suggestion of combin-ing the second and third Stages together. The Stage has been named “Networking”. Wewill discuss these issues further in Chapter 8.

7.1.6 Trigger C. Discussion

We found 26 quotations in the data concerning the Discussion trigger. This Trigger ischaracterized by detailed development discussions, such as technical development, as theprocess moves forward. The majority of the quotations suggest that the standard shouldbe developed such that is not too complex – so that it is easy to put into use. It is alsoimportant to read working papers to find out in which direction the development of thestandard is moving. One way to access such papers is through email mailing lists. Again,patenting issues were discussed, but from the point of view that they create openness forthe process, because, at least in formal standardization organizations’ procedures, suchissues must be visible for all actors. Thus we renamed the Trigger ‘technical develop-ment’.

The main actors in the Stage are the manufacturers (5 hits) and standardization organi-zations (5 hits). This shows who this Stage is important to from the product developmentperspective.

Timing was quoted twice in relation to IPR issues. For example, in informal standard-ization organizations such as the IETF, IPR issues do not, for the most part, have a role inthe standardization process, and thus the purely technical standardization process may be

III. Precompetition Characteristics New characteristicsTechnical viability technology compromises licensing issuesNew solutions and ideas regulators role successful practices

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faster. From the telecommunications system point of view, the time element is influential,because it consists of various layers. The layers are governed by different actors, whichhave different technology cycles. This creates complexity within the process.

However, the pushing issue is technical development (Table 23). The technical issues,especially IPR issues, have become enablers and/or restrictive issues of the process. TheIPR policy reshapes the standardization environment constantly, even though there is anagreed IPR policy in most standardization organizations. As one regulator commented:

“…not in competitive elements, but when you have identified the area of cooperation, thisreal cooperation, people will discuss about what should be the technical standard, theyspend a lot of resources, discussions. This is a normal cooperation. Here in the patent worldit is a bit different. You cooperate never. That is,.. you just try to, how I would say to iden-tify how different is you technical solution, how different from the others. How much meritdoes your technical solution in order that this merit has to be guarded with a patent.” (P25,0382-0391)

In terms of institutional model we describe this Trigger with culture (5 hits) carriers asfounded from data. Social systems, such as standardization, are said to be dependent uponcultural systems, which provide symbols, values, and norms, and personal systems. Thisprovides integration and stability for the social system, i.e., the standardization process.Moreover, if we take a broader perspective, culture includes the institutional models ofsociety itself.

Table 23. Description of Trigger C based on empirical data.

The actors in the standardization process create the structure of these models and inte-grate it to the framework of society, i.e., network. Thus the actors in the process that havelegitimate status (jurisdiction) and the patterns of activity lead to collective goods, in thiscase an agreed standard.

7.1.7 Stage IV: Preparation

The fourth Stage we have named ‘Preparing’ and it characterizes the institutional devel-opment of the standardization more clearly. Development, specification of abstract cate-gories describes the power structures, regional differences and SMEs role. Technologicalsolution selection is characterized as timing, competing technology and different creationtimes issues. Depth of standardization discusses such as open standardization, and differ-ent roles of organizations.

C. Discussion New characteristicsDiscussion Technical development

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Table 24. Preparationg Stage characterizing issues.

We found 29 quotations in the data. Mainly these describe the challenge of system andproduct compatibility, the complexity of technology and market or technology policy dis-cussions. One factor to discuss is the features of the device, what are users’ require-ments. From the developers point of view it would be beneficial that do not over stan-dardize the products, which creates costs. Also, the discussions of the role of patentingcontinued. These are summarized in the above Table 24 and discussed in the below moredetailed. The main actors at this Stage are manufacturers (5 hits) and operators (4 hits),but also standardization organizations and regulators have roles.

7.1.7.1 Development, specification of abstract categories.

In most standardization organizations there are various types of members. The largeactors receive the core of the knowledge, based on their membership fees, and mediumfees offer the opportunity to participate in most of the meetings, with voting rights. TheSMEs pay the least in many cases, which offers them a “hanging around” membership,and access to official documents/publications. (P37). The authority systems may alsorestrict the SMEs’ role in formal standardization organizations such as ETSI. The ETSIorganization consists of various member levels and fees and thus the number of votesdepends on the actor’s turnover. Thus, the SMEs may consider formal organizations’membership fees not to offer sufficient value for money.

The power structures have changed over the generations. In the first generations theregulators had the power, but since then operators have had a significant role in the envi-ronment. Especially when they join forces:

“… because you are competing in the network level and in the manufacturer level, every-body against everybody and you cannot, you are connected to a certain operators of course,more or less, but you need to sell your product to different operators that are coming to themarket, because otherwise you cannot survive as a manufacturer.” (P25, 218–225)

One way for an actor to interact is to take a visible coordinator role. This may requiretime, but also knowledge from the actor. In this way the actor can gain more power andauthority, and organize issues (P30). The leader of the standardization organization con-firms this:

“People should realize that the only way to get influence is contribute. Not by any formalposition, you must contribute in substance or contribute by serving community, by chairingcommittees what ever. Then you get influence…”(P48, 9720–9724)

IV. Preparation Stage CharacteristicsDevelopment, specification of abstract categories

power structures, regional differences, SMEs role

Technological solution selection timing, competing technology, different creation timesDepth of standardization open standardization, different roles of organizations

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This role can also, in theory, be taken by an SME representative, but because of their lim-ited resources, this rarely happens. In practice the large actors consider that it is requiredwhen creating large standards that a large actor must be in the leading position (P35). TheSMEs can cooperate with large actors and push their ideas into the standardization pro-cess that way. The SME representative commented on this as follows:

”we follow what’s happening in standardization there and when needed, we comment onsome proposals and we do that mainly through some Finnish large representative ” (P38,10–12)

“..big companies start to govern the issues, and then we have tried to act that way, that likefor example Mpeg-standardization, so we have not tried to involved in it. When we havedone business with ‘X-computer company’ we learn to know their Mpeg-representative.”(P30, 177–182)

However, based on SMEs’ experiences in the standardization environment, the otherexpert considers the situation differently. He states that:

”But however, it does not depend on that, what kind of company is or what kind of marketshare company has and etc., but it depends on what kind of representatives company has instandardization meetings” .”(P29, 337–241)

The SMEs face the challenge of pushing their own proposals through in standardizationorganizations. Even if the technological idea is significant and it is a new standard pro-posal and they have done business with it, the large actors have the power to squash theproposal. It rarely goes through the standardization process successfully. In most situa-tions the SME has made an agreement with the main actor, which pushes it forward. Ifthe SME decides to propose it alone, it might face problems, such as slowing down or“tackling” (P35).

Between the different standardization organizations in different regions there are dif-ferences. For example, some organizations are more marketing oriented and operator sup-ported than others. This also means a more visible role in the standardization process foroperators in that region. This may favour larger actors in the standardization process,because they may have better contacts with operators than SMEs, and concentrate on cen-tral issues (P43). Patenting cultures also vary in different regions. For example, in the US,the patenting culture has a larger role in the industry than in Europe or in the Far East.The regional standardization organizations face the challenge of forming a global stan-dardization environment and creating global standards, e.g., in 3GPP. Interestingly,according to DiMaggio and Powell (1983) the primary institutional control mechanism iscoercion. In wireless standardization, we can regard the markets as one coercion mecha-nism. The manufacturers and operators are forced to follow the end users’ needs andexpectations. Furthermore, they are forced to follow competitors’ decisions. The usersexpect technology and service compatibility, but also legitimacy. These can be achievedby standardization.

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7.1.7.2 Technical solution selection

The 3G standardization had a strict timing target at the beginning of the process; theactors were optimistic concerning the development – even though the very first target wasto create a completely new technology. However, the target changed along the way, and itwas decided to create the new wireless technology based on the current, functioningGSM technology. In any case, the timetable was very difficult to follow in differentregions. The original target was to have 3G wireless standardization ready in 1999, and incommercial production at the beginning of 2002. The 3GPP strategy was to fulfil thestandardization in time, but not completely. They decided to publish releases, as havebeen published in GSM development. Currently, Release 6 is under discussion. This hasallowed all actors in the process to start implementation and system testing earlier (P48,7193–7202).

In the past there were monopoly systems, or regulators regulating the telecommunica-tions sector in many countries. Now the market situation is different; there are variouscompeting technologies and standards available such as WCDMA, UMTS, IP or 3G.IP.The manufacturer pointed out that the role of operators has changed. The new operatorswant to push their own requirements into standardization. The new aspect in the opera-tors’ environment is that of global operators, with businesses around the globe. Theseoperators have the power to push through their own proposals (P43). One reason for theexpansion of the GSM system was the cooperation created by the GSM Association, inwhich members from outside Europe participated. In the USA, by comparison, there arevarious wireless standards, which compete with each other. In Europe the situation is dif-ferent, based partly on historical developments.

The SME finds the situation of the formal regulatory body difficult when discussingpower issues. For example, in ETSI, the actor’s power depends how much turnover theactor has and this also dictates voting right for the actor. This means that the more votingrights you have, the more power you have to guide standardization in your desired direc-tion. On the other hand, one can participate in workshops (P31, 338–345). Here, the SMEfinds that the more power the actor has, the greater the benefits for all participants (P37,588–591).

Furthermore, in earlier times there was enough time to create specs, because of longproduct life spans for instance. Now, the situation has changed. The function, which is onupper layers and have services, applications, enablers, connectivity and hard disc capabil-ities, is allocated on various layers. The layers above of these live Internet time. These aregoverned by software companies, who do not wait years for certain standards to appear,but instead create them themselves. The lower layer lives on a slow cycle. This creates acollision between layers and actors. The lower-level large actors are participating in theupper-level standardization process alongside the upper-level actors, such as operators,which are used to fast decision processes. This creates challenges for the whole standard-ization process (P38, 487–516). After the standard is frozen, the SME representativestated that it will take manufacturers and software companies approximately a year toimplement it in the product (P37).

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7.1.7.3 Depth of standardization.

The networks between regions have been constructed over time. The end users want com-patible products. From this perspective it is required that standards are open, otherwise itis difficult to gain market growth. If standardization is closed, it attempts to lock-in theend user to a product and hence make it difficult to change product. As a result this mayreduce growth (P41).

The standardization process moves forward through continuous discussions, network-ing and solution-finding. One important topic among many others is the depth of stan-dardization. Another is viewpoint to marketing issue, i.e., the need for the technologydeveloped. The actors are eager for technology which requires high-technology solu-tions, but which is, on the other hand, “over”-technological and has standardized func-tionalities. There has been a big change in technology, from routing to packet-switchingtechnology, allowing smoother Internet connections. Currently, not all actors have thecapabilities to employ both technologies, because their basic ideas are different. The chal-lenge is to decide how fast a connection is to be provided and when and where, as well aswhat benefits will be gained by it and how it will fit into the existing infrastructure. Com-patibility is required between the different technologies, which may require time. In thestandardization process the Stages in technology development can be acknowledged byreleasing different Releases, e.g., Release-99, Release 4. (P45, 1498–1516).

From the point of view of a global actor which has joined a regional organization, thecreation of wireless global standardization occurred as follows:

“The 1st and 2nd generations were not designed to be global and international systems; itwas designed to be national or regional systems. So, the modest system, that was GSMdeveloped, become regional system, used the European standardization structure to do that.When the industry considers that it would be time to unify the system and go towards, glo-bal mobile communication system, they came to the ITU. Because they recognized that theITU would be the place, to develop international, global, communication system, not out-side ITU. And they have not come here 1st and 2nd generation, because there were notneeded to do that as the industry came to ITU.” (P48, 6435–6447)

The different organizations, in the case of 3G standardization, had different targets con-cerning the renewing of wireless system. According to one expert, the Japanese organiza-tion tried to slow down the system, because it wanted a whole new system for their pur-poses and markets. On the other hand, European manufacturers and operators tried topush the 3G system, which was based on GSM system, and Japanese manufacturers andoperators did not (P47). So they had to find a compromise. The European delegates weresuspicious of such a powerful attitude. One European operator commented:

“Well, because the Japanese delegates were coming with specifications they put them on thetable and say, so this is the new contribution, 200 pages. So the system would nearly specifyI think in some Japanese companies and you can understand that when the delegates see thatother delegates are coming with this contribution they think, they are suspicious. They pre-fer to wait to have time to read the paper.” (P47, 134–140)

The expert from the operator side thought that standardization is in the slow lane, becausethe environment is much wider in 2000 than a decade before. On the other hand, theworking procedures are more flexible than earlier, which has enabled the speeding up of

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the process. There are a significant number of working themes concerning GSM andUMTS. The number of working themes requires that they must be discussed in a numberof working groups. This creates more work for all, and makes it more difficult for oneindividual to govern. This has meant that a small number of actors, with a deeper knowl-edge of smaller themes, govern certain working themes. This requires efficiency fromactors in a different way than earlier (P48, 2281–2291).

At the beginning of the creation of 3G standardization, the different regional bodieshad different targets. Japan wanted to push a whole new system, Europe wanted to basestandardization on GSM technology, and the US was nearly out of the picture. What wasthe authority system that would collect all the different views together? One solution wasto establish a whole new consortium, called 3GPP, and to find a common vision throughthat. This can be seen as a result of a mechanism, mimetic isomorphism, in which reducesactors reduce decision ambiguity and uncertainty by copying decisions and choices madeby others.

7.1.7.4 The Institutional perspective on Stage IV

Stage IV, Preparation, can be described in institutional terms with normative elements.We found 4 hits in the data. The adaptation of normative elements will be more stable ifthe norms themselves become ends, i.e., the actors want to obey the rules, concerning pat-enting, for instance. This means that the action of the participants is regulated by normsthat actors have come to have a personal/corporate interest in obeying. In a stable socialsystem, i.e., mainly in formal standardization organizations, norms become attached toends or even become ends in themselves. The process by which this comes about is calledinstitutionalization. Institutionalization is expected to increase towards the end of the pro-cess, to create stability and legitimacy.

The above was discussed in relation to issues of trust. In the standardization processthere are various roles of actors and these can have different influences on actors and theprocess. However, the influence can be seen as a special case of a common interest. Theinfluential actor is believed because one accepts him or her as sharing a common aim.Standardization organizations are hence formed on a kind of credit. The continuous stan-dardization process by which actors change ideas and ask for each other’s trust throughthe exercise of influence is the process whereby standardization organizations are formedand sustained. The further the standardization process moves, the more important trustamong the actors is, because the stakes increase.

7.1.7.5 Summary of Stage IV

In summary, an open atmosphere in standardization organizations enables an efficientworking environment (Table 25). This means that there are various kinds of organiza-tions, such as voluntary and formal organizations, which have created new working cul-tures in organizations. The standardization carried out by formal actors is slow, but is

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more stable and legitimate than informal standardization. The importance of openness inthe standardization process was also discussed at Stage II.

Table 25. Description of Stage IV based on empirical data.

The challenge is to fulfil different actors’ objectives in a multi-cultural environment.However, for all actors, it is important to network with other actors at not only thenational but the international level too. The important new working procedure of flexibleworking procedures came up at this Stage. The change is required because of the numberof working issues, the number of actors, and timing limitations.

7.1.8 Trigger D. Proposal discussions

The Trigger from Stage IV to Stage V is considered to be proposal discussions. The pro-posal discussions are organized by actors in the standardization process in order to find acommon view to put forward in the process. The discussions concern mainly technologi-cal and commercial issues. We have renamed this Trigger, following its characterizingissues, technological and commercial discussions (Table 26). One expert commented onthe situation as follows:

“Because if you don’t, if you specify interface, suppliers and manufacturers they are free tocreate new solutions inside the box, how they implement something inside the box. So yougive face to creativity, to the development, new development. So I would say that, yes, thatshould be the realistic approach to the standardization.” (P42, 0403-0408)

We found 17 quotations in the data. These describe the depth of standardization, the prep-aration of propositions and possible voting. The main actors at this Stage are manufactur-ers and standardization organizations, which form the community of discussions. Themanufacturers may have invested the most at this point of the process, so it is expectedthat they will have a visible role in distributing the information through networks.

From the process point of view, the standardization organization procedures mayrequire time, because of the requirements of common agreement and document exchangeprocedures with other standardization organizations. One example is the Liaison State-ment document procedure, which the ITU-T work group sends to ETSI Service Group 13.The cycle of these meetings can be up to half a year. So, in the worst case the process cantake a year before a response is received (P48). The more detailed the standard, the more

IV. Preparation Characteristics New characteristicsDevelopment of standardization

open standarddifferent organizational roles

flexible working procedures

Technological solution selection

timingcompeting technologies

Depth of standards power structuresregional differencesSMEs role

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time is required to reach a common agreement. The new standard proposal procedure maytake years, and a single update can take several months.

Table 26. Description of Trigger D based on empirical data.

In terms of institutional theory this Trigger is driven by routines carriers. It describeswhich procedure the actors adopt to meet the objectives. In the standardization processthe procedures created may include, for example, compatibility testing systems andChange Request Procedures. These ensure technology compatibility and better usabilityfor end users.

7.1.9 Stage V: Standardization

The development of wireless standardization has resulted in the diffusion of technology.After the standardization process, the diffusion of the technology is expected to takeplace. Hence, this is the most important Stage and it consists of increased objectification,pragmatic legitimacy, and organizational efficiency and innovation (Table 27). Byincreased objectification we mean issues such as openness and cooperation. Pragmaticlegitimacy refers to the actors’ openness and applied acceptance of standards. Organiza-tional efficiency and innovation describes small and large actors and organizations, andchanges and networks within standardization organizations. Organizational innovationdescribes how actively they are interest to adopt changes for their working procedures.

Table 27. Standardization Stage characterizing issues.

We found 46 quotations concerning this Stage in the data. The quotations were con-cerned with the quality of the standard, the role of cooperation, commercial interests, andthe number of meetings. Commercial interests can involve, for example, the require-ments of service routing (P35, 0694-0702, manufacturer). The number of meetingsdescribes how many various kinds of meetings are necessary for the proposed standard toproceed. The meetings can also be simultaneous.

The main actors at this Stage are standardization organizations (6 hits) and manufac-turers (6 hits). The standardization organizations have the main role, because standardapproval is decided in one of the formal or informal standardization organizations.

B. Proposal discussions New characteristicsCooperation Technological and commercial discussion

V. Standardization CharacteristicsIncreased objectification openness, cooperationPragmatic legitimacy actors’ openness, applied acceptance of standards

Organizational efficiency and innovation

small and large actors and organizations, changes, networks

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7.1.9.1 Increased objectification

De facto standardization has formed and changed the standardization process. Actorsform coalitions, even between small and large actors and across different regions. Theactors have a common target: the creation of a good standard that makes conversationbetween SMEs and corporations possible. Openness and de facto standardization opensup many possibilities for the actors. On the other hand, the challenge in cooperation is thelong term commitment required (P29, 756–758) to create benefits for all participants.

Actors who have similar interests can form an industrial consortium. The product ofthe consortium might be, for instance, an internal standard, which can be published whenthe consortium sees it as beneficial. This can take years. However, by acting this way theconsortium secures its markets (P30).

There are some issues which may restrict objectification. One is patenting. If one ownsthe key patents of the technology, the other actors in the market cannot automaticallymanufacture the prototypes according to these standards. It is not automatic, even if youhave published the standard. However, in order to manufacture this piece of equipment,protocol, or piece of software, you have to get a license from the owner. If an actor putssomething in a standard which is subject to a patent and then do not want to license it tothe others, actor have the monopoly – have the patent. A patent means a monopoly. Youhave control of this technology (P43, 413–424, P38, 178).

The restriction on diffusion might be the technology itself. The actors perform variouskinds of tests during the standardization process. One expert presented a testing situation,in which when delivering a connection to a hundred end users, the system works, but ifwe take a million end users the system may not have a large enough capacity. This leadsto technology remodification. However, the expert presented the question: does a compre-hensive standard exist? (P35, 659–665)

There is an example of a good technological standard: WLAN. It has formed a de factostandard, which is technologically matured in principal, but the price of adapting and inte-grating the technology into wireless products is too high. In addition the production andother costs are too high, so the integration to wireless phones, for example, is delayed(P35, 914–920). These de facto standards are formed and created by informal actorswhich have formed alliances and forums. De facto standards are not formal, but enablethe creation of compatible products. The latest development in wireless de facto standardsis the Symbian OS standard operating system. Symbian itself is a software licensing com-pany that develops and supplies the advanced, open, standard operating system – Sym-bian OS.

In some cases the standard develops faster than it can be applied in products. Earlierwe discussed the case of the JPEG and JPEG-2000 standards. However, the difficultydoes not come from the actual timing, but from the compatibility requirement, forwardand backwards (P30, 199–204). Furthermore, in some cases standards are developed butnot put into use immediately, because it does not suit the actor’s product strategy (P35,P37). The standard can be included in the next generation of the product, dependent onproduct profitability (P35). We can state that the standardization environmental patternsthat drive organizing work through linkages and effects go beyond simple direct control,such as in this case manufacturers.

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7.1.9.2 Pragmatic legitimacy

The standardization process creates standards, but the actors can redevelop them. Theactors want to differentiate themselves from competitors or for their own benefit. Oneway to stand out is through their implementation techniques and prototypes of products.They want to make changes to products. They can create their own features for standard-ized products (P29, 264–265). Furthermore, the adoptation of standards among actorsdepends on how high the quality of the standard is. The standard created should enableone interpretation of the document. This creates stability for standardization. If there are“holes” in the standard or it is too “loose”, the adaptation may be delayed. This may leadto various interpretations of the standard. If all actors interpret it in a similar way, thestandard will be adopted faster (P29, P30). However, the SME expert thought that some-times organizations leave “holes” – intentionally or unintentionally – which enable manu-facturers to implement their own solutions and protect their own interfaces, even thoughthey follow standards (P31, 512–520, P37).

There are also different ways of defining standards in standardization organizations.Actors can decide to develop a strict standard, in which are no “holes” to avoid. On theother hand, actors can develop very loose standards, for many reasons. One reason mightbe bad preparation, or it might be done on purpose. This strategy enables actors to createtheir own interpretations of the standard. The important factor is the level at which thestandard should be specified – according to markets or to technical applicability (P48).The SME’s representative commented on the situation as follows:

“…if the standard is loose, we need to decode it, but in many cases the standard becomesunambiguous when taken together with the application. And when a standard is loose, it canbe the result of either a badly developed standard, or it could be left as a loose standard onpurpose. In that case there’s the opportunity for occasional gaming.” (P30, 188–192)

The interesting situation in Europe is that actors are free to choose which standard to fol-low. However, all of them have ended up choosing the same one. From the regulator’spoint of view:

“But it is a similar situation in Europe: the operators are free to choose which standard theywant. But until now all of them has chosen the same one. And that makes sense from thecommercial point of view.”(P42, 331–334)

Global standards create more structural challenges and acceptance requirements for theorganization. This is because:

“That’s the thing what I am saying, when you looking at the worldwide scale, things becomemore difficult, more factors, more countries means more possibilities, differences and it’s achallenge for everyone to come up with and design something that will in the end work glo-bally standard.” (P48, 4259–4263)

Organizational openness has pros and cons from actors’ point of view. Openness in thecreation of standards may lead to loose standardization, but may also, on the other hand,create industry coalitions, which create de facto standardization. Industry coalitions cre-ate networks among different actors. The primary actors in the wireless standardizationenvironment are not the only ones who have expectations concerning 3G markets. Theinteresting issue in standardization is what kind of approach the actor takes when devel-

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oping technology and providing it for use by other actors, mainly in the form of de factostandards. One example of this is the Sony-Nintendo game development case. In contrastto the earlier opinion of the large actor:

“And my definition of proprietary standard is that it is one that has certain characteristicswhich rewards the owner of that standard to large extend. Where open standard does to seekto benefit to anyone company. It means that the open standard can develop in the futuremuch faster than proprietary standard. If you got certain trade secrets, in your proprietarystandard and someone wants using something else. You probably end, you can’t adapt thatstandard without losing your benefits. It does not tend to move so quickly. Where open stan-dard you just adapt to meet the market requirement. Winners and losers. But with propri-etary standards losers”(P48, 5107–5116).

The above describes how uncertainty appears in the standardization process. The exter-nal influences, such as how actors can redevelop or define standards, have an importantimpact on how standards are adopted. The new institutionalism provides a solution forthe problem, mimetic isomorphism. This reduces the actors’ uncertainty and ambiguity inmaking decisions, as they can copy decisions made by others.

7.1.9.3 Organizational efficiency and innovation

There are various organizations in the standardization process, and some of them are atdifferent Stages. They are also formed differently. Some organizations have long histo-ries; some organizations are formed around some common interest on an ad hoc basis orare regulative. One example of organizing an organization formed on the basis of com-mon interest is OMA. Organizations have their own representatives, and have meetingsregularly and agree actions – who will do what and when (P29). It is not a so-called for-mal organization, like ETSI. An important feature for an actor when participating in astandardization meeting, in addition to networks, is technological knowledge. The smallerthe actor, as in the case of SMEs, the more important is this feature and knowledge ofmeeting procedures (P29). SMEs in particular are in some cases more interested in fol-lowing the development of standardization than in interacting. As one expert from anSME commented:

“…the SIP, is not the issue, for what we want to interact with, but the issue from we want tolearn more. We read once in a while what is happening there.” (P29, 594–597)

In wireless standardization, 3GPP focuses on novel forms of cooperation, because it hasto face the question of a wider organizational base and large diversity in standardizationpractices. It contains actors with different commercial interests. For example an operatorcan operate on a GSM network in Europe, and on a CDMA network in Asia (P48). Thismakes the decision-making process more complex. The situation also creates challengesfor standardization organizations, which have to cooperate in a competitive environmentand engage in different types of processes. In this context we must recognize that person-al networks across these networks play an invisible but important role in the complexnegotiation processes. The making of such “weak ties” is currently amplified by theavailability of email, faxes and other communication technologies.

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From the technology conformity or compatibility point of view, large actors’ decisionsare significant. When the first “phones with picture messaging” were launched, compati-bility between Nokia’s and Ericsson’s models, for example, was not possible. The enduser could not send a picture from an Ericsson model to a Nokia model or vice versa. Ittook about a year and a half to enable compatibility (P37). From the small actors’ point ofview, this creates more difficulties in developing technology, if large actors want to cre-ate market boundaries or make standardization policy. Hence more choices – especiallychoices that are not mutually exclusive – mean more uncertainty about finding the appro-priate strategy (Calhoun 1988).

Forums can be organized according to the needs of actors. Some forums grow andsome will fade away. The formal standardization organization benefits from their historyand experience, because the standardization is more project-oriented and focused onupdating/ revision of standards. The standardization process is continuous; standards arecreated year after year. This creates a huge knowledge base for formal standardizationorganizations. However, these different kinds of possibilities serve various actors, but alsolead to a competition situation between standardization organizations In addition to all thepossibilities to choose appropriate standard, the regulators no longer dictate which stan-dards should be applied. Moreover, in the critical networks, the regulator does not rule asto which standard an operator should use, but this leads to the creation of de facto stan-dards, for example in the US, which are adopted by the actors. As a result, this has ledstandardization organizations to create more effective procedures (P48).

The organizational changes have positive and negative effects. Three generations intothe wireless standardization, new actors are entering the environment, who are not awareof the whole history. Other actors may find this threatening. On the other hand, this alsocreates positive effects. Actors coming from Internet environments in particular have usedfast decision-making processes. In the wireless sector, too, it does not benefit anyone ifstandards are launched two years too late. Among the new entrants there are companiessuch as Cisco, which started as an SME and has grown exponentially in the wireless mar-ket (P48, 7711–7720). From a historical point of view, the foundations for networkingcongruency and habits were laid down when developing earlier wireless phone systems.Their foundations were already laid down in the NMT system in Scandinavia (P48), i.e.,the ability to use a wireless phone across borders – roaming. This continued in GSMdevelopment.

The development process also created a GSM community in Europe (P48). The mem-bers of the community, as actors, recognized that they were members of a successfulmovement. This action created synergies. The community started to work as a “self-steer-ing” movement and invited other stakeholders to participate in the work in common inter-faces (P48). The aim was to create one wireless telecommunications standard platform forEurope. They succeeded, and GSM was adopted globally. A UMTS Forum participant,when asked the question (P48):

“What makes a forum that is quite unique?” replied “we answered that the forum manufac-turers, when compared with the GSM Association, discuss future services with cellularoperators, fixed operators, and regulators together.”

Networking and finding congruence in wireless standardization is challenging. From theSME’s point of view, even though the general target is to create a common standard

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among actors, all the participants seem to think about how it will benefit their own prod-uct and business (P37). SMEs view networking as follows:

“Standardization organization is a general… can I say an ‘association of the public utility’ –it acts for the public good and everyone tries to direct it according to their own purposes.But there are other actors, like the market leader or some others, who are heading to themarket in a certain field, so the purpose is to create standards in that field and everyone mustunderstand that you can’t dictate. So you need to invite competitors and others to form agroup …’.” (P30, 26–36)

They continue:“it is ‘mixing’ with many actors at the same time and must be in a way reliable, but in spiteof that, you can not share all knowledge with all actors.” (P30, 77–80)

On the other hand, the large operator sees the situation differently (P48) and thinks thatthe harder the competition, the more important it is to participate in cooperation. Howev-er, generally, a critical mass is required behind the standardization for an issue to moveforward. This requires constant discussion among actors, which leads to natural network-ing between operators and manufacturers. When large actors seek new technical solu-tions and/or details, they see that it is more or less normal to use networks and test ideas.This process creates unofficial discussion outside of standardization bodies. On the otherhand, in the case of altercations, the personal networks may relieve the situation. Further-more, one expert is of the opinion that:

“You probably can’t do that without having built up a network, but the network itself is notactually critical. It just one goes the other, you can’t understand standardization processwithout having met a lot of people in standards.” (P48, 5050–5054)

The networks are needed to create standardization compatibility and congruence. Forexample, the ITU today still has its objective of achieving a single family of standards(P48). But this may

“require a political recognition, if everyone can agree one solution then that is perhaps bestway of going. So there is a political recognition, if we can all decide to drive same side ofroad, all our cars using same frequencies round the world, there’s obvious benefits. That isone solution. Now in terms of 3rd generation for global roaming, if global roaming is a pri-ority, I believe it is, that can be done, will have to be done to multimode anyway. Becausewe are gonna have not just 3rd gen. but 2nd gen. ,we going to have mixtures, so we got mul-timode solution for global roaming. Economic of scale arguments are...” (P48, 5158–5870)

The regulators, such as the EU, have a role in networking and harmonizing services. TheEU creates directives. By creating directives one target is reducing costs and creatingminimum of regulation (P41). This regulation is required, for example, for secure Inter-net shopping, digital signatures, or copyright issues in the networks. The expectations arealso high concerning social benefits and how to create new values. All these actionsrequire networks not only in EU offices, but also with various enterprises, organizationsand regulators.

During the wireless standardization process, changes have occurred in the develop-ment process concerning technological and organizational construction. The regulatorsees the situation as follows:

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“And it is because the interests were different. In the beginning the big companies wanted tohave a whole long unified approach to mobility but the others did not want because theycompeted, there were a strong competition and then they wanted to have their own systemsso there was nothing… result now, several groups and so.” (P25, 65–71)

´The regulator continues:“But the threat does not come from outside, the other companies they are not longer inter-ested in standardization some times, they prefer to make close groups… They are not inter-ested in many cases… to have private agreements with other companies, they cannot affordto share the technology with other people they don’t trust.” (P25, 856–862)

The standardization organization representative sees the situation as follows:“Networking is recognized earlier a important in standardization process, but it is becomingmore accentuated, because you must have a good level of interaction and build your ownand their opinion, because standardization is consensus process.” (P48, 7548–7552)

Various standardization organizations’ roles were analyzed above. These organizationsare new sources of institutionalization of new action. Institutional elements, structures,action and roles can infect other elements of new action. The new action can be main-tained over long periods of time without further justifications or elaboration. This increas-es stability and effectiveness when it is linked to the goals of the organization creating the“routines”.

7.1.9.4 The Institutional perspective on Stage V

In institutional terms we can describe this Stage with normative elements. These, alongwith cognitive elements, provide stability and meaning to social life, i.e., standardizationnetworks. Roles, routines and scripts are conceptions of appropriate actions. Some normsare quite general and others are quite specific. Normative elements include the moreexplicit rulings of legislatures, custom or knowledge. We can consider these using theexample of the European Commission, which creates directives for European actors. Theformal structure signals rationality and thereby increases the legitimacy of the process inthe view of many different internal and external parties. We can discuss the role of infor-mal standardization organizations’ effectivity which may not have very high legitimacystatus, especially among external parties. Their standardization procedures may be char-acterized by openness, for example, but we can question whether procedures are of a suf-ficiently high level and stable enough. The key issue is how actors will act, but also howthey should act. Some normative rules, such as voting, and some widely shared beliefs,such as how to act in meetings, are implicit.

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7.1.9.5 Summary of Stage V

We can summarize the “Standardization” Stage (Table 28) as follows. The object is tocreate commonly agreed standards. However, the standards may vary. The new issuescame up; procedure among actors, interpretation of standards; loosely created standardsand ‘holes’ in standards. Loosely created standards can lead to flexibility of implementa-tion of products, but can also create difficulties for actors.

In this Stage the large actors have a significant role. Small actors do not participate andact by oneself during this Stage. In general, they are interested in following discussionsand decision-making, but for the most part they do not have opportunities to participate.However, it would benefit their business if they had access to standardization documentsearly enough and applied the agreed standards in their products.

Based on the data we have found a new issue: ‘global interest’. It is characterized byfactors such as new organizations, technological issues, markets and networks. We willdiscuss and describe ‘global interest’ in more detail in Chapter 8.

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Table 28. Description of Stage V based on empirical data.

During this Stage the final decisions on standards are made. Difficulties in the processmay occur in patenting and technology testing. The decided quality level of the patent isalso a significant feature of the process, which may affect actors’ adoption of the stan-dard. The legitimacy of standardization from the actors’ perspective comes from the orga-nizational rules and policies, the roles of actors and organizations, and their efficiencyand innovation activities. Also, the number of actors in the process creates legitimacy,because they see that it is an important procedure to follow.

7.1.9.6 Trigger E. Life cycle revisions

The Trigger pushing actions from Stage V to Stage VI is proposal discussions towardsfinal standards. This means that actors reformulate roles and procedures towards com-mon objectives, at some level, for example on technological and commercial issues. Thuswe have renamed the Stage Procedures. However, this may require various discussionsamong actors. The timing of this Trigger depends on various issues, such as the actor’smarket situation, and on technology maturity and competition issues.

We could not find any quotations concerning this Stage in the data. The reason for thismight be the vague situation after the actual standardization approval process. The actorsmight no longer be that interested in the standards revisioning procedure. There might benot that interested issues on standardization updating to complete. The simultaneousStages are “Fads and fashions” and “Maintenance”.

7.1.10 Stage VI: Fads and fashions

This Stage describes standardization trends. We found 26 quotations concerning thisStage in the material. We can attribute two quotations to structures carriers. Thisdescribes the roles of small and large actors, and their coordination in the standardizationprocess when discussing fads and fashions in the standardization environment. As dis-cussed above we can refer to globalization, IPR issues, openness of standardization orga-nizations, the increased number of standardization organizations, testing, and standardiza-tion interfaces as fads. As a representative of the EU stated concerning the growth oforganizations:

V. Standardization Characteristics New characteristicsIncreased objectification openness

cooperationglobal interest

Pragmatic legitimacy interpretation of standardsOrganizational efficiency and innovation forums

networking

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“I think, over time, by the late 90s, there was a strong trend towards the establish-ment of forums. Hundreds of forums started appearing for one thing and another.”(P7, 0136-0138)

Also, if we look back at the past in terms of the timing, user trends have changed drasti-cally:

“If you look at the phenomenon of 2nd generation mobile communications, when we started,back at the end of the 60s, the big boss of the company would have his analogue phone inhis car – it was a big box, a status symbol, and nobody really thought that it would become amass product. If you look at the situation today, my daughter wants to have her own GSM,to be able to talk with her girlfriends. So it’s a mass product. Something has obviously hap-pened there. It’s a phenomenon, which certainly was, maybe not predictable, at the timewhen the first mobile communication came about, but which I think was rather consciouslypersuaded once the decision was taken on GSM.” (P7, 1039-1040, EU)

The globalization of wireless standards has enabled roaming and thus increased businessopportunities for actors. The representative of the standardization organization (not ETSI)sees wireless standardization trends as follows:

“The trend of globalization is very apparent. Over the last year it’s been necessary for ETSIto make key contacts with key bodies. Secondly, to do its work for global markets, you doneed to have a global framework. We talked about 3GPP, now being initiated. Thirdly, theprocesses involve a lot more people, some of the technical committee meetings GSM isstandardized and UMTS, is called SGM meeting, they have 150-200 people now, whereas inthe early days it was typically 40-50 people. So there are more people involved, more ideas,and more creativity… more sensitivity issues to deal with, it’s a more public environment.Also, it has to be very transparent. The other thing is that the industry is moving very veryquickly, so ETSI needs to continue to speed up its work to respond to market needs.” (P48,5807-5823, ORG)

This Stage does not lead any further; moreover it describes as a final result the trends ofstandard creation. These trends are important for actors in recognizing the direction inwhich the process is progressing. The short-term actions and ideas which became emptyand disconnected from the facts of efficiency, considerations or power politics becomeephemeral and short-lived as fads and fashions. One example was the WAP Forum. TheMaintenance Stage describes the way in which thee process is continuing.

7.1.11 Stage VII: Maintenance

After the creation of a standard, it is frozen, and updated or revised according to technol-ogy development and other proposals. We have named this Stage ‘Maintenance’ and itconsists of procedure and document management issues. By ‘Maintenance’ we mean theconstant revision or updating of standards to ensure that they are competitive and usableby actors. However, this depends on the standardization organization’s structural proce-dures and activity in the environment. ETSI and 3GPP, at least, have a Change Requestprocedure.

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We found 29 quotations in the data. These described, for example, the ease with whichstandards can be obtained through the Internet, compared to earlier times, when papercopies had to be ordered from the standardization organization. Also, the revisions pro-vide actors with the opportunity to implement standards into their products earlier, and tomake suggestions to develop standards further. The main actors are the standardizationorganizations, which are mostly responsible for managing revision updates.

From the releases the actors can figure out the future directions of the standard. Theseare more or less yearly published standard, in which a course of action is agreed concern-ing prioritization and stabilization of the release. Previously, the standards had phases,e.g., GSM 2, or 2+ (P44, 1050–1055). Some releases are decided further than two yearsahead. However, it is difficult to forecast product development further than one to twoyears ahead. 3GPP releases 4, 5, 6, are an example of this. One would expect them tocover the years 2004, 2005, etc. However, the numbering does not follow the years. Thereleases are published in numerical order (P31, 67–82). This procedure was created in theearly phases of GSM, and is described as follows:

“Perhaps the final reason is important, is the fact that the European countries GSM at thebeginning create the good way of maintaining the standard, improving the standard. Thestandard was not only delivered to the industry for them to implement it, no it was main-tained. It was improved by standardization organizations, ETSI that case, not only develop,but created a structure, the SMG.” (P48, 6401–6408)

7.1.11.1 Procedure and document management

A significant structural change has come about in the standardization process due to elec-tronic document management, through the Internet. It has sped up actors’ (includingSMEs’) access to releases, specs and other documents. Over ten years ago actors werecarrying stack of papers to and from meetings and their offices. The papers or books hadto be ordered if the actor did not attend the meeting, causing weeks of waiting. Now thespeed with which you can access documents depends only on how fast your computer candownload the files (P31, 180–188).

In the past it was thought that standardization would end when GSM was launched andfunctioning in the commercial network. Nevertheless, standardization continued intophases 2 and “2+ services” etc. In UMTS a similar process has happened: first voice traf-fic was made to function and then other functionalities were found. Hence, it is expectedthat wireless standardization will continue for an indefinite time period (P48, 8147,–8153).

Experience creates possibilities for SMEs and others to develop standards. The open-ness of standards makes them loose, and makes it difficult for business customers tounderstand that products must be tested in different combinations (P30). Furthermore,from the SME’s point of view, it slows down the process (P29, 617). Experience of stan-dardization organization working processes such as IETF or formal organizations enablesefficient use of standards in products. Standards releases create more reliability than roadmaps, according to one SME representative (P31, 214–222). Changes in standardizationcreate business for others; the products must be updated according to the new require-

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ments (P31). Hence, this may lead to the reading and following of standards, not their cre-ation (P38).

3G standardization had a strict timing target at the beginning of the process; the actorswere optimistic concerning the development – even though the very first target was tocreate a completely new technology. However, the target changed along the way, and itwas decided to create the new wireless technology based on the current, functioning GSMtechnology. In any case, the timetable was very difficult to follow in different regions.The original target was to have 3G wireless standardization ready in 1999, and in com-mercial production at the beginning of 2002. The 3GPP strategy was to fulfil the stan-dardization on time, but not completely. They decided to publish releases, as had beenpublished in GSM development. Currently, Release 6 is under discussion. This hasallowed all actors in the process to start implementation and system testing earlier (P48,7193–7202).

Expectations for wireless or 3G markets were and still are huge. This creates pressuresfor standardization as well. The regulator commented on the situation as follows:

“It is the market. The potential market for the 3rd generation is huge. I don’t know how longit is going to take to fulfil this potential, but in principle it is huge. It is almost global. So,frames for standardization. That is the only way to have a global market – to restandardizethe solution, which is accepted by the operators, and they need to buy equipment they haveto go through a standardization solution, otherwise they cannot survive.” (P42, 278–284)

7.1.11.2 The Institutional perspective on Stage VII and summary

In institutional terms we can describe this Stage with cognitive elements. Institutions,such as standardization organizations, are seen as affecting and shaping social action bycreating classification systems, i.e., revision of standards, specifying what is consideredsimilar and what different. The control mechanisms are not dependent on explicit rules,but on shared beliefs. Thus we can share the idea of institutional theorists that the great-est triumph of institutional thinking is to make institutions invisible. From the standard-ization point of view, for example, this would mean that standardization was a normalpart of technology development and business, which did carry high commercial risks orinvolve political discussions among actors.

In conclusion, the more experience the actors have of the standardization process, themore benefits the actors gains. These benefits include the openness of the standard orworking procedures in the standardization organization. The new issue here was theimportance of document management, especially on-line document service. This Stagecreates legitimacy for the whole process by ensuring the continuity of the process.

7.1.12 Trigger F. Reimplementation

The Trigger from Stage V to Stage I consists of new requirements concerning technologyupdates and new proposals. This Trigger was added to the model to create continuity for

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the process, to reflect the fact that the standardization process is a cycle. We can expectthe main actors to be manufacturers and operators, who create the proposals for the stan-dardization organizations. To describe the Trigger in terms of institutional carriers, wecan suggest cultures carriers. These carriers describe describes the variety of standardiza-tion organizations, which operate at a variety of levels, providing actors with updatedstandards. The standardization organizations have a more or less jurisdictional role in therevision of standards. The role is given by the other actors in the standardization process.

7.2 Final dynamic standardization model

Next we will discuss the empirically validated model from the actor’s point of view. Gen-erally, the benefits of standardization lie essentially in the integration of market require-ments and the reduction of costs. The reductions in costs are a result of the lowering oftransaction costs, the achievement of economies of scale, and the reduction of externaleffects (environmental impact).

The model (Figure 7) describes all actors’ roles in the wireless standardization process.From the model we can recognize that there are some issues which overlap and are dis-cussed at many Stages. These issues are networking, standardization process openness,cooperation, and actors’ roles.

Fig. 7. Final wireless standardization model.

I: Interest stage

B.

Cooperation

III: Preparation

IV: Standardization

D. Procedures

VI: Fads and fashions

E. New requirements

• Networks • strategy • environment

• Organizational rules • various actors • changes in the

process • agreements • IPR

• Standards • research

A. Business interets

• Emergence and number of new actors• small/large

actors/organizations • ascendance of some actors

• Possibility of institutional change • procedures • successful practices • cooperation • open atmosphere • globalization

• New solutions and ideas • successful practices • regulators’ role • technology compromises • licensing issues • compatibility

II: Networking

C. Technological and commercial Discussions

• Technological solution selection• timing • competing technologies

• Development of standardization • open standard • different organizational

roles • flexible working procedures

• Successful practices • depth of standardization • power structures • regional differences • SMEs role

• Increased objectification • openness • cooperation

• Global interest • networks • new organizations

• Pragmatic legitimacy • interpretation of standards

• Organizational efficiency and innovation • forums • networking

V: Maintenance • cognitive legitimacy • maintenance of

standards

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The new issues, based on the data, are IPR, research, open atmosphere, globalization,licensing issues, flexible working procedure, interpretation of standards and documentmanagement issues. IPR issues overlap nearly all Stages and thus are important points inthe standardization process. The research aspect came up at the first Stage in describinghow standardization can start. Globalization overlaps at various Stages in different formstoo. Licensing was discussed from Stage II onwards. A flexible working procedure in thedevelopment of standards was an important point in Stage V. The interpretation of stan-dards also came up clearly in Stage IV. This creates opportunities as well as weaknessesin the process. At the final Stage, document management was an important point for themaintenance of the standardization process.

The changes in the model are discussed more thoroughly in Chapter 8. Also, theactors’ roles are described in more detail in Section 8.2.

7.3 Summary

In this chapter we analyzed the empirical material using the a priori model. Standardiza-tion offers choice, flexibility, and opportunities for actors to expand technology and net-works in wireless markets. These are a remarkable technology framework for actors todevelop further in the business environment.

From the institutional theory point of view, the power systems in standardization orga-nizations are efficient, because all actors have their own objectives to fulfil. Rules andlaws have significant roles in wireless standardization due to, for example, frequencyrequirements and patenting policy. Also, we can recognize that institutionalizationincreases as standardization processes move forward. Actors in these organizations arenew sources of institutionalization of new action. Institutional elements, structures, actionand roles can infect other elements of new action. The new action can be maintained overlong periods of time without further justifications or elaboration when it is linked to thegoals of the organization creating the “routines”. This enhances process effectiveness andcreates stability for the standardization process.

The developed a priori dynamic process model shows the complexity and length of thewireless standardization process. From the process point of view the important points arethe openness of the process, networking, cooperation, technological points and changes inthe process. The new points which came up from the material are IPR, research, openatmosphere, globalization, licensing issues, flexible working procedure and interpretationof standards and document management issues. The number of new issues in the stand-ardization process has forced actors in standardization organizations to change. Simulta-neously, the standardization environment has been reshaped over the years, becomingmore open. This is a result of changes in standardization organizations in their organiza-tional structures and working processes. This has many benefits: more actors can join inthe process, documentation is more open, and the standardization process is open. Fromthe environment perspective, this may also reward actors’ effective and efficient controlof their product development by stabilizing it. From the business perspective this mayreduce the possibility of errors in product development and thus create more credible

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products for end users. This may enhance the legitimacy of the standardized products,which will enhance the business opportunities of the actors.

Timing is one aspect in creating dynamism for the adopted non-isomorphic institu-tional model (Greenwood 2002). Timing affects the standardization process in variousways. The actors can speed up the standardization process by forming industry coalitionsand creating de facto standards. On the other hand, forming formal de jure standards takestime, because the standardization procedures are formal, but creates stability in the stan-dardization environment. The cooperation between various standardization organizationsrequires time, because meeting cycles, procedures, and cultures are different. Moreover,external influences such as how actors can redevelop or define standards have an impor-tant impact on how standards are adopted. The more widely standards are adopted, thebetter technology is diffused, and thus the more business is created for actors. The newinstitutionalism provides a solution for the problem: mimetic isomorphism. This reducesthe uncertainty of companies and the ambiguity in making decisions as they can copydecisions made by others. An example of the unique solution to solve the challenges in3rd generation standardization was to create a whole new consortium, called 3GPP, and tofind a common vision through that. This can be seen as a result of the mechanism ofmimetic isomorphism.

Generally, from the actors’ point of view the most beneficial issue in the wirelessstandardization process is networking (P30). We can state that networks among actors arethe building blocks of the standardization process. These networks are important forumsfor making changes, sharing technology knowledge and testing ideas. Large actors needto network with other large actors if they want to propose changes, a new proposal, or therejection of another proposal. The larger actors, namely manufacturers, are the mainactors in the standardization process. They are active throughout the process. Moreover,cooperation and conformity in networks and product and service development amongactors is not possible without some degree of trust and legitimacy. Gaining legitimacyleads to long-term effectiveness and stability for the process.

The reliability of the analysis presented in this chapter can be discussed from severalviewpoints. The central issue of reliability is how well the researcher has conducted andinterpreted the interviews for evaluation of the model. As stated above, the data was ana-lyzed several times in order to avoid misinterpretations. The number of interviewees (35altogether) also helped the analysis work. However, dividing these interviews again overa model which consists of different functions makes the number of interviews smaller foreach function. On the other hand, cross-classifications can be found, due to the close rela-tions between the functions. The researcher must of course be cautious when drawingconclusions based on these groupings or typifications. But as the above analysis of themodel and process activities is supported with other relevant parts of the empirical mate-rial, the overall reliability of the analysis is improved.

8 Empirically validated wireless standardization model

In this chapter we present and discuss the empirically validated wireless standardizationprocess model. The model describes the wireless standardization process based on theanalyzed empirical data. Also we describe the roles of actors in the process. Finally, weapply the empirically validated model to institutional elements and carriers to find out thevalidity of using the institutional theory.

8.1 Description of the final model stages and triggers

The standardization environment is under constant change; however, standards as suchshould remain stable. Understanding standardization processes has become importantbecause new technologies, new forms of business organizations, new trade issues andnew institutions are emerging. We have de facto, de jure and formal standards, but alsosponsored and unsponsored standards, as discussed in Chapter 3. All actors in the stan-dardization process should more thoroughly understand their role in the process, and rec-ognize the important relations between the Stages.

We will next discuss the changes which arose from the data (see Figure 7). In Stage I:Interest Stage, we have added two new issues: IPR issues and the effect of research on thestandardization process. IPR-related issues seem to inspire mixed opinions among actorsdepending upon who is asked. Some actors state that in formal standardization organiza-tions it is clear how to handle IPRs, i.e., by following the change request policy. Othersthink that IPRs create a competitive and unstable situation for other actors. Standard cre-ation may start as a result of research. If a research group has enough mass, they may pro-pose or create standards.

Stage II: Networking. This Stage joins together Stage II and Stage III from the originalmodel. As discussed in Chapter 7, from the process development point of view we canfind similarities in Stages II and III, based on the descriptions in Sections 7.2.3.7 and7.2.5.5. The findings from the data led us to combine these two Stages. Thus, we haverenamed the Stage ‘Networking’, and it consists of emergence and number of new actors,possibility of institutional change, and new solutions and ideas. The element emergence

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and number of new actors consists of small/large actors/organizations and ascendance ofsome actors. The possibility of institutional change describes the procedures (includingprocedures, successful practices and cooperation), open atmosphere and globalization. Wecould not find appropriate findings in relation to successful practices. New solutions andideas (combined with injection of new innovations and technical viability) describe theregulator’s role, technology compromises, licensing issues and compatibility issues. Wecould not find references to institutional entrepreneurship in the material, and we have leftit out of the process description. We also included the ascendance of new actors intoemergence and number of new actors, because it also describes the role of small/largeactors/organizations.

Three new issues came up: open atmosphere, globalization and licensing. Thesedescribe how the standardization environment has changed in comparison to earlier stan-dardization generations. The openness of standardization enables even smaller actors, forexample, to access documents and proposals concerning standard specifications, via theInternet, for example. This is important for the distribution and adoption of technology.Some examples of globalization are GSM technology and later WCDMA technology, i.e.,3rd generation technology. For example, GSM technology enabled roaming throughnational borders, firstly in Europe and later globally, where a network is available. Theregulators organize licensing, for example allocating frequencies, which guides manufac-turers’ production and operators’ service development.

We will also combine the descriptions of Triggers. The pushing factors to the nextStage were originally Trigger B – Coordination and Trigger C – Discussions. Thesedescribe, in particular, the actors’ cooperation. We have renamed Trigger B “Coopera-tion”. Cooperation is required in order to organize and put into use new solutions andideas. Thus we can suggest it has structures characteristics.

In Stage IV: Preparing, we have found one new issue to describe the development ofstandardization more thoroughly: flexible working procedures. These include documentmanagement on the Internet. The new working procedures are required because of thenumber of working issues, the number of actors, and timing limitations. Flexible workingprocedures such as the establishment of ad hoc working groups enable the recognition ofthe previously-mentioned issues.

The pushing force to the next Stage, Trigger C, is Technological and commercial dis-cussion, which concerns technological and commercial interests. At this point the hugestakes placed on standardization can be recognized. Historical examples include the GSMand WCDMA core technology selection competitions.

In Stage IV: Standardization, we have added a new characterizing issue, global inter-est, to describe the standardization environment. Global interest is described more specifi-cally in terms of networks and new organizations. The changing standardization environ-ment enables new actors to enter the field. The global technology and business environ-ment also often requires networking with other actors. It may be difficult for one actor togovern the whole world.

Global interest. The market competition is tough. Wireless standardization is a globalprocess. National borders do not restrict organizational structures and documentation. Amore important factor is the market share of the actor (P35). The exception is China,which is more or less planning to create its own national standards and mobile system(P37).

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The networks between regions have been important since the time of GSM. The Japa-nese, for example, recognize the importance of networking among leading Europeanmanufacturers during the early phases of GSM. The US recognizes the development andsees how they were left out. During the networking between Europe and Japan, the UShad made two opposing decisions: they auctioned already-agreed frequencies and optedout of the testing networks. This was partly responsible for the US being out of the rest ofthe world’s mobile networks for a long time (P44). The situation has since changed.

In the case of 3G or UMTS standardization, there has been a new process in standard-ization, in the formation of 3GPP and 3GPP2 in the US. This has enabled the creation ofglobal standardization and compatibility between different technologies. In differentregions the technology “umbrella” provides different solutions. For example, in the USand in some parts of the Far East the preferred technology is CDMA2000, whereas inEurope and Japan it is WCDMA. However, the problem when forming a global standardamong different standardization organizations is that minor differences to the contentarise in the meetings (P43, 0008–0014, Manufacturer).

We have renamed Trigger D, Life cycle revisions, as “Procedures”, to describe thepushing factor more clearly from the actor point of view.

In Chapter 5 we renamed Stage V and added an action arrow to make the standardiza-tion process a continuous process. We renamed ‘Reinstitutionalization’ as the “Mainte-nance” Stage, which consists of cognitive legitimacy and maintenance of standards,meaning the updating of standards. Trigger E consists of reimplementation of standardsand points back to Stage I. We have added Stage VI as a description of how standardshave become accepted or how they are recognized as inappropriate. One technologicalexample of this kind of result was WAP standardization. The system ended up too com-plicated from the technology and user perspective to be acceptable for mass productionuse. However, WAP technology is in use, but not to the extent that was originallyexpected. We do not discuss the Stage any further, because it dos not improve the createdmodel.

In Figure 8, a final developed model is presented. Compared to the model presented inFigure 5, the original idea has remained the same. When analyzing the data to create themodel we used the original models (static and dynamic) to find the quotations. This hasshaped developed model. However, there are some changes: we have named the Triggersand described the Stages in more detail, and the model is now a cycle. The model hasresulted in some interesting findings, and based on the data and theory the model seems tofunctioning appropriately. One finding was the uncertainty of the future directions duringStage I. Even though we describe the model as separate Stages and Triggers, at manypoints of the data the quotations overlapped each other. This shows that Stages may pro-ceed simultaneously. Moreover, as discussed on many occasions, we have various stan-dardization processes and actors, which affect the standardization process in variousways. We propose to use the model developed as a general standardization process model.

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8.2 Actors’ perspective on the standardization process

In the first Stage’s events and actions, there are various reasons for actors to participatefrom the very early Stages of the standardization process. The actions which push theprocess forward are common interests, both technology- and market-based. In Stage II,from the actors’ perspective, there are various issues which need to be recognized: trustamong actors, various targets which shape the standardization process, and the number ofnew actors in the environment. In Stage III, finding compatibility between the variouslevels of the standardization process is a demanding process for all actors. The recog-nized issues are bigger than one alone can affect, including IPR, technology conver-gence, timing and the variety of organizations and standards. Hence it was difficult tofind the SME’s role in the material. As discussed earlier, the SMEs think that the actualstandardization is carried out by large actors. At the diffusion Stage, too, the small actorsdo not participate alone. In general, they are interested in following the discussions anddecision, but for the most part they do not have the opportunity to participate. At thisStage the final decision on standards is made.

The timing aspect describes the dynamism of the process. Generally speaking, stan-dardization is a lengthy process – formal standardization in particular, but also informalstandardization, in some cases, where conflicts arise. For the actors, the right timing andsmooth standardization development would be beneficial, even if they cannot or will notparticipate in all Stages in the standardization process as shown in the previous chapters.

Manufacturers have a role throughout the wireless standardization process. Only inStage II do they have a less visible role. This shows the large actors’ importance in theprocess, because manufacturers are mainly large corporations. They have the power tonegotiate, for example, IPR, licensing and working procedure issues for global markets.They act in cooperation with other actors and competitors. As the regulator commentedon earlier times:

“When I started to work in, I think, 1994, the market was not that regulated so itwas world for standards. So it was driven by operators, much more than today.Operators that maybe didn’t listen to the customers that much, but to the higheroperators – while today it is much more driven by manufacturers.” (P47, 0255-0260)

However, sometimes the technology decisions may restrict the cooperation among manu-facturers. Cooperation is needed, for example, when developing multiterminals and dis-cussing patenting issues. All large manufacturers have heavy IPR portfolios. Cooperationbetween large and small manufacturers is needed when pushing standards proposals for-ward, because one manufacturer alone may not have enough power. As one representa-tive of the manufacturer stated in two comments:

“Most people seem to think that patents are bad, but in fact it’s because of patentsthey you can have open standardization. Without patent protection you could notget competitors discussing common specifications either.” (P48, 5079-5082,MAN)

Operators have a significant role in Stages I and IV, and a minor role in Stage II. At thebeginning of the standardization generations the operators had a significant role, becausethey were mainly made up of state-owned companies. However, as the business environ-

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ment developed, operators have become private and global corporations. Their role in theprocess is to ensure that the services and networks they provide for customers are opera-ble and compatible with the devices and networks created. One operator describes theircooperation with other actors as follows:

“I would say that in standardization bodies, as I said before, you have some discus-sions in the coffee break, and lobbying and some common contributions. But it isnot the same manufacturer or the same operators, some time you have to change.But in parallel I think we have some – we’re trying to prepare, at least in x-country(changed) – some experiments for Europe with another operator (changed), so wehave some argumentation with some manufacturers in some countries.” (P47,0424-0431, OPR)

Standardization organizations have a significant role after the beginning of Stage I:Interest Stage, and this continues throughout the process. They do not have a significantrole at the beginning of the process, when manufacturers and operators depict and identifytheir interest in certain standardization issues. Standardization organizations’ role is tocooperate with all interested actors, to create openness for the process, to create flexibleworking procedures such as CPR, to legitimize the process and to approve the standards.The manufacturer describes the cooperation with other regional standardization organiza-tions as follows:

“It’s not formed, it’s complex, but last week ETSI agreed in principle to establish3GPP, a 3rd generation partnership project in collaboration with other regionalstandards bodies, like ARIB in Japan, TTC, who look after the core network inJapan, TTI in Korea, and T1P1 or whatever in the US. It’s now being explored atan international level whether all the conditions are right to get people to agree todo this. The overall aim is to create an environment where specifications could bedeveloped very, very quickly.” (P48, 5295-5303, MAN)

Regulators have a significant role in Stage II. Their role is more to enhance the stan-dardization process by agreements, frequency allocation, and regulation. For example,without commonly agreed frequency allocation among the national and regional regula-tors the wireless system would not operate globally.

“Now, of course, the ITU today still has its objective of achieving a single familyof standards. So there is still political recognition – if everyone can agree on onesolution then that is perhaps the best way of going. So there is political recognition– if we can all decide to drive on the same side of road, all our cars using the samefrequencies round the world, there’s obvious benefits. That is one solution. Now interms of 3rd generation for global roaming, if global roaming is a priority, and Ibelieve it is, then that can be done – will have to be done to multimode anyway.Because we are going to have not just 3rd gen. but 2nd gen., we’re going to havemixtures, so we’ve got to find a multimode solution for global roaming.” (P48,5158-5170, MAN)

The important finding based on the empirical data concerning the institutional theory apriori model is that we can find SMEs acting as early and late actors in a standardizationenvironment. The early SME actors tend to exhibit different characteristics from the lateones. The early actors in standards tend to participate in Stage I to get information and tonetwork with other actors. SMEs would benefit from gaining information about possible

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future standardization, marketing and technology views, and networking with otheractors. Late actors or followers of the standardization process gain the information whenit is published, mainly in Stages IV and V. They gain the information mainly through theInternet. In some cases the information comes too late, unlike in standardization meet-ings, where actors can discuss and exchange experiences with each other. Based on theempirical material, we found that most of the SMEs interviewed are followers and, tosome extent, participants during the first Stage, when they act as early actors, but thatthey are standardization followers in the later Stages. In summary, we can state that SMEsshould change their business strategy and move towards becoming early actors in stan-dards.

We can state that acting in the wireless standardization process is both an opportunityand a challenge for SMEs. But as we have discussed above, the large actors have the mainrole in many Stages of the process. Interestingly, from the SME’s point of view, their par-ticipation is mainly at the beginning of the process. They are interested in industry con-sortia, which mainly form de facto standards. Opportunities for them to follow the wholeprocess thoroughly may vary, because standardization organizations have different prac-tices as to how to provide information about the standardization process which is under-way. However, small actors such as SMEs are expected to participate in standardizationorganizations equally, to discuss and create standards, but alone these SMEs can hardlyinstigate any standard improvements. SMEs alone may not have enough credibility andlegitimacy, but when they form a coalition with other SMEs or large companies then theseactors may put forward new proposals and ideas. The Internet provides a vast amount ofdata, which the SMEs rely on. However, we can question this, because in some cases itwould be beneficial for SMEs to go meetings and meet the actors.Through the Internet itis difficult to create legitimacy among actors. In the data we found that networking amongsmall and large actors – between competitors and other actors – is also important in stan-dardization. This enables the diffusion of the technology created. They share variouskinds of information during the standardization process. The other Stage in which SMEsare active is the Standardization Stage, from which they can gain already accepted stan-dards. However, waiting for this Stage may take too long, especially from the technologystrategy point of view.

The institutional theory explanation for the legitimization of new ideas through theprocess of mimicry is that ideas achieve legitimacy if, and when, they are adopted by oth-ers and are thought to have economic benefits (Scott 1995b). Organizations mimic eachother because they anticipate similar benefits, and thus legitimacy is mainly gained inStage IV. Similar benefits, commonly accepted standards and possible visible economicbenefits are gained during Stage IV. If the SMEs have followed the standardization pro-cess thoroughly, they too may start getting economical benefits at this Stage. Finally, inChapter 7 we suggested that significant organizational change may occur in Stages I–II,less change will take place in Stages III–IV, and the process stabilizes in Stage V. Thismeans that the creation of standards is a time-consuming process. However, the agility ofthe actors in the process depends on political, technological, financial and organizationalinterests in the field. Stages I–III enable the adoption of new ideas, and allow new actorsand values to enter the environment.

The model clearly shows that the standardization process involves different organiza-tions and actors, which might be nonisomorphic. However, in creating an efficient wire-

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less technology standardization process, the more isomorphic different organizations are,the more efficient the theorization, legitimization, and diffusion of various standards. Fur-thermore, the model validates Greenwood et al.’s (2002) proposition that institutional the-ory neither denies nor is inconsistent with change. We can further discuss the need forchange in the institutional model. We can expect that as a modern theory it requireschange in line with social and global changes. In the wireless standardization environ-ment change is expected, because there are various issues which motivate the change.However, there are features which shape the change in institutional theory: legitimacy,various power systems, and isomorphism. Next, we will discuss each actor’s role in sepa-rate sections.

8.3 The institutional theory in the context of the dynamic model

In this section we are interested to analyze the validity of using the institutional theory byapplying the empirically validated model to applied institutional elements and carriers. Inthis section we apply Table 7, standardization elements and carriers using institutionaltheory (refined terms), to the created empirically validated model. We also attempt todescribe the model in terms of elements and carriers.

According to Greenwood et al. (2002), Stage I occurs when events, or “jolts”, destabi-lize established practices. These may be caused by social upheaval (see, e.g., Zucker1987), technological disruptions, competitive discontinuities or regulatory change (see,e.g., Powell 1991). We suggest that the “jolts” can be described in refined terms fromthese three different perspectives; regulative, cognitive and normative elements. Therefined terms development or enforcement of rules, change structures and target strate-gies, trust, and action describe the first “jolts”, because they indicate the issues of thestarting point of the change.

The characterizing element pushing “jolts” forward is structures, because it character-izes the issues from the organizational relations point of view: institutions’ informal struc-tures rather than formal structures, and focuses on the immediate environment of organi-zations rather than on more general cultural rules or characteristics of wider organiza-tional fields (see DiMaggio 1991). As (Greenwood 2002, p. 60) discuss, the effect ofactors “is to disturb socially constructed field-level consensus by introducing new ideasand thus possibility of change”. The new actors in the field might present and seek newinnovations and role systems and thus reshape the existing organizational structures androle systems. The pushing factor can be the organizational culture carriers, such as envi-ronment change. As an environment change can be for example business change.

Stage II: Networking. These changes push the organization into Stage II. Tolbert andZucker (1996) and Greenwood et al. (2002) raise interesting issues regarding deinstitu-tionalization. Greenwood et al. (2002) refers to deinstitutionalization as organizationswhich legitimate change by hosting a process of discourse through which change isdebated and endorsed. In this research we have partly approached this field, by expandingour organizational framework to include firms, and both informal and formal organiza-tions. Tolbert and Zucker’s (1996, p. 185) analysis, based on DiMaggio (1983), Flingstein(1985) and Davis (1991), suggests that the identification of the determinants of changes at

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the level of institutionalization of structures represents an important and promising ave-nue for both theoretical and empirical work: “A number of studies have shown that whenlarge and more centrally linked organizations are innovators and early adopters of agiven structure, the structure is more likely to become fully institutionalized than otherstructures.” “Networking” is the process in which new actors enter the field, existingactors ascend, or local entrepreneurship takes place (Suddaby 1999). The effect of this isto disturb the socially constructed field-level consensus by introducing new ideas and thusthe possibility of change. In terms of the institutional model it is characterized by norma-tive and cognitive elements. Using the refined terms we can describe this Stage using theelements trust, construction of organizations, interactive systems, actor and action. Thesedescribe who the dominant actors are and what practices govern the change. In “Network-ing”, organizations innovate independently, seeking technically viable solutions to locallyperceived problems.

We propose that the Trigger that pushes the Stage forward in institutional terms isstructures. This describes the actions using the refined terms role systems, change struc-tures, target strategies and new organizations.

Stage III, known as “Preparation”, reflects this development. Strang and Meyer (1993)have suggested that for new practices to become widely adopted they have to be “theo-rized”. Such theoretical accounts simplify and distil the properties of new practices andexplain the outcomes they produce. According to scholars, this “theorization” consists ofthree points: specification of general organizational failing, justification of abstract possi-ble solution and gaining of moral and/or pragmatic legitimacy. Tolbert and Zucker (1996,p. 183) suggest that it involves “two major tasks”: the specification of a general “organi-zational failing” for which a local innovation is “a solution or treatment”, and the justifi-cation of the innovation. According to Strang and Meyer (1993, p. 495), “models mustmake the transition from theoretical formulation to social movement to institutionalimperative”. This transition is achieved either by nesting and aligning new ideas withinprevailing normative prescriptions, thus giving “moral” legitimacy (Suchman 1995), and/or by asserting their functional superiority, or “pragmatic” legitimacy (ibid.). Using theinstitutional model we discuss this Stage in terms of normative (expectations, regimes,and conformity) and cognitive (categories, structural isomorphism, and scripts) elements.This Stage we describe in refined terms such as trust, construction of organizations, andinteractive systems.

We argue that the move from Preparation to Standardization is driven by cultures carri-ers. Cultures carriers promote the rational viewpoint. Rational choice theorists claim that“it is in an actor’s self-interest to construct and maintain institutional structures that willgovern not only others but one’s own behaviour” (Scott 2001, p. 67). We can also refer inrelation to this to economic historians that state: “individuals will be motivated to under-take socially desirable activities only if they provide private benefits that exceed privatecosts” (Scott 2001, p. 67). However, this situation requires property rights to be estab-lished and enforced. This requires the establishment of costly regulative institutions, butdoes not guarantee their development (ibid.).

Successful theorization is followed by diffusion, in Stage IV: Standardization. Davis(1991) has explored the patterns and mechanism by which ideas are transported withinorganizational communities. As innovations diffuse, they become “objectified”, gainingsocial consensus concerning their pragmatic value; thus, they diffuse even further. We can

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describe this with the institutional model terms regulative and normative elements. Inrefined terms we define this Stage in terms of performance policy, structures, institutions,following rules, experience, rules and interactive systems.

From the Standardization Stage the movement has two directions: maintenance andfads and fashions. We suggest that Trigger E consists of routines carriers, because it isexpected that rules and laws will be developed and stabilized. Routines carriers in refinedterms are behaviour, organizational routines, and document performance programs. Theactions of our own interests create a demand for controlling rules and norms. However,the development of a regulative structure depends on the nature of the social relation-ships among those whose interests are affected (Scott 2001, p. 68). Hence, the interests ofactors may lead to the fads and fashions Stage.

Finally, Stage V, known as “Maintenance”, is characterized by full institutionalizationand occurs as the density of adaptation provides ideas with cognitive legitimacy (Such-man 1995), and the ideas themselves become taken for granted as the natural and appro-priate arrangement. We propose that this Stage consists of cognitive elements. In refinedterms we can describe this Stage using the terms actor, knowledge systems, and structuredsimilarity.

Figure 8 describes the elements and carriers in the empirically validated wireless stan-dardization model, which describes how the actors act and reshape the standardizationprocess.

Fig. 8. Elements and carriers in the institutional model.

The first Stage is formed, because actors have a need, to create commonly accepted, com-patible standards. This can be through informal discussions among actors. In the secondStage, the organization stage is more formal and the organizational guidance can comefrom the standardization organization, which means more management. The further the

I: Interest Stage: regulative,

normative and cognitive elements

II: Networking: normative and cognitive

elements

III: Preparation: cognitive and

normative elements

IV: Standardization:

regulative and normative elements

VI: Maintenance: cognitive elements

Fads and fashions

A. cultures, structures carriers carriers

B. structures carriers

C. cultures carriers

D. cultures carriers

E. cultures carriers

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process progresses, the more clarity there is for the actors. This can, in part, be the resultof the entry of standardization organizations, formal and informal, which organize thecooperation and organizational issues in the process. The organizations create two impor-tant issues for the process: stability and legitimacy. At the fifth Stage the process hasformed the understanding of the created standard and will maintain the standard’s revi-sions. Because there are various actors in the process, it is beneficial for there to be stan-dardization organizations which maintain the standards, create the rules and govern theprocess.

We can describe this development in three Stages. We propose that the first Stage,“Structural evolution”, consists of Stages I and II and Triggers A and B. We can describethe beginning of the process in terms of structural carriers, which expresses the way theknowledge is in pieces scattered around the environment and requires actors to join themtogether. We can describe the central part of the development, Precompetition, Standard-ization and Trigger C, as “routine evolution”. It consists of the work procedures and howthe procedures can be changed to enable the process to develop further. We can describethe last part of the development, Maintenance and Triggers E and F, in terms of culturalcarriers. It is expected that at the end of the development process this will create stability.It is important to create stability for the process as the development period for wirelessstandards is approximately ten years, and maintenance time is approximately twentyyears.

We have presented the model from a neutral perspective, without applying it to a spe-cial context. By applying the model to different types of environments such as nationalregulatory bodies or the telecommunications industry, the main features of the model maychange. The environment field offers an interesting opportunity for further theory formu-lation. Also, when we broaden our original institutional perspective we may reformulatethe Stages and pushing carriers. Thus, we expand the term ‘institutions’ following Aldrich(1999) to consist also of firms, and informal and formal organizations. Previously, institu-tions functioned in a stable system (Meyer 1977, p. 351); however, the world haschanged. The unstable environment also supplies institutional carriers – structures, cul-tures, and routines – by various means. However, the full institutionalization of a struc-ture is likely to depend on the combined effects of relatively low resistance by opposinggroups, continued cultural support and promotion by advocacy groups and positive corre-lation with desired outcomes (Tolbert 1996, p. 184). Environmental issues also affect ele-ments, such as cognitive systems.

8.4 Conclusions

In summary, we reformulated the a priori model based on the results of analyzing theempirical material. We joined Stages II and III together and added a new Stage V andTrigger E. This meant that the model consisted of five Stages, which form a cycle, andseparate Fads and Fashions Stage, and four Triggers, which push the process forward.The Stages are Interest Stage, Networking, Preparation, Standardization and Mainte-nance. The Triggers are Business interest, Cooperation, Technological and commercialdiscussions, Procedures, and Reimplementation.

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The model describes all the actors’ roles in the wireless standardization process. Fromthe model we can recognize that there are some issues which overlap and are discussed atseveral Stages. These issues are networking, standardization process openness, coopera-tion, and actors’ roles. The new issues based on the data are IPR, research, open atmo-sphere, globalization, licensing, flexible working procedure, interpretation of standardsand document management issues. IPR issues overlap nearly all Stages and thus areimportant points in the standardization process. The research aspect came up at the firstStage to describe how the standardization can start. Globalization overlaps at variousStages and in different forms. Licensing was discussed from Stage II onward. A flexibleworking procedure in the development of standards was an important point in Stage V.The interpretation of standards also clearly arose during Stage V. This creates possibilitiesfor and weaknesses in the process. At the final Stage, document management was animportant point for the maintenance of the standardization process.

In conclusion we can state that SMEs should participate more in the standardizationprocess in order to develop their businesses and strategies, but that there are organiza-tional barriers which may restrict action. Based on the empirical material, these barriersinclude power structures among actors, large vs. small actors, IPR issues, and resources.However, the more experience the SME has of the standardization process, the more ben-efits it gains. These benefits include the openness of the standard or working proceduresin the standardization organization. From the SME’s point of view the most importantStage, based on the material, was the first Stage, the “Interest Stage”. This Stage consistsof networks, organizational rules and standards. However, we can question whether thislevel is sufficient for the further development of the SME.

Tolbert and Zucker argue that institutional theorists have paid very little attention toconceptualizing and specifying the processes that move innovations beyond preinstitu-tionalization into “full institutionalization”. In the standardization process model created,the increase of institutionalization as the process progresses can be recognized in the formof trust among actors, legitimization, commonly agreed rules and mimicry of standardiza-tion organizations, i.e., similarity of standardization organizations. In this chapter we usethe literature-based static model and a dynamic a priori model to analyze the benefits foractors of adopting wireless standardization in their business. It is argued that the accep-tance of a new standard or innovation is affected by the complexity of the interactionsbetween the actors and technology. The proposed model can be used at the moment toprovide an improved understanding of the way in which wireless standardization pro-ceeds within a technology-oriented industry.

9 Theoretical, empirical and managerial implications

In this chapter we will discuss the findings of the research, and sum up its significanceand relevance. We will close the chapter by summarizing the main empirical, researchand managerial implications of the standardization process study.

The original objective of the research was to investigate what a standardization processis from the viewpoint of actors. We developed a static standardization process model. Wealso wanted to research how the wireless systems standardization process affects thedevelopment of an actor’s business. Our approach was to analyze the process by analyz-ing the actors, standards, actors’ relations by using institutional theory. We wanted to con-sider institutional theory from two perspectives, to have a broad perspective on theorybuilding. Moreover, this enabled a broader perspective on the standardization environ-ment in the subsequent chapter. We were successful in finding answers to the originalresearch questions. We presented, in Chapter 2, the main actors in the standardization pro-cess. The development of the wireless process model was started in Chapter 4 by present-ing the institutional theory, static model and process model. In Chapter 5 we applied thetheory to wireless standardization, and in Chapter 7, to empirical data. In these chapterswe analyzed the process, the actors, and the actors’ relations. The final results andanswers to the research questions are presented in Chapter 8.

The answers to the research questions are multifarious. Governing the standardizationprocess is a challenging task for all actors, because the process has numerous factorswhich must be recognized, and overlapping tasks. Furthermore, the business require-ments, timing and environments set their own requirements for the process. We analyzedthe process mainly from the de facto standardization point of view, not in terms of alltypes of standards, as the original research question stated. This would require even fur-ther research, and will be discussed in Chapter 10. In the sections that follow, we will dis-cuss these issues to answer more thoroughly the research questions and evaluate the staticinstitutional model and dynamic model from the theoretical viewpoint.

The wireless standardization environment is complex and varied; the institutional the-ory approach overtook the constructive one during the research project. While they arenot an artefact, construction, method, tool or process description, the results provide manyimplications for both practitioners and researchers. In the following sections, these impli-cations of the research are summarized.

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9.1 Factors affecting the development of the wireless standardization environment

There are several factors which influence and shape wireless product development. Overthe decades, the standardization environment has changed drastically. The number ofactors and organizations has increased and they each have a different history and are atdifferent organizational Stages. Standardization activity no longer takes place at thenational or regional level, but at the global level. This has led to wireless technology dif-fusion and to global markets and standards, which enable global markets for products.From the end-user point of view, this enables better product compatibility. However, aswell as the diffusion of technology and market expansion, there are other issues whichshape the standardization process. IPR and licensing issues are under constant discussionamong actors, even though standardization organizations have formal procedures as tohow to treat these issues. We can state that the process of standardization has the charac-teristics of uncertainty and ambiguity: the standardization is done before the markets areformed or the product is launched. The attempt to find a unified solution for the technolo-gy has led to complexity of standards, for example, in the case of 3G standardization inorganizations such as ITU (IMT-2000) and ETSI (3GPP). In addition to these formalstandards and standardization bodies, the amount of de facto standardization hasincreased. These standards are created in informal organizations and industry consortia.The objective of these organizations is to create standards “on demand” and within a rea-sonable time. Formal standardization has been accused of lasting too long. However, for-mal (de jure) standards are more stable than de facto ones. Furthermore, not only do theactors compete with each other, but standardization organizations also compete to satisfytheir participants’ needs.

9.2 Theoretical implications

We wanted to carry out research from a more cross-disciplinary perspective by combiningwireless technology standardization and institutional theory, which represents a broadapproach to the organizational world and its structures. By using a cross-disciplinaryapproach, we hoped to find concepts and principles which we could apply to our researchand possibly to our problems. Moreover, we also hoped to enrich our own thinking. Byapplying institutional theory we wanted to outline a picture of the wireless standardiza-tion environment.

In this study, two different models were presented. Firstly, the more static institutionalmodel was discussed generally and then applied to the wireless standardization environ-ment. Secondly, the enhanced dynamic process model was developed, and applied tostandardization, wireless standardization and the empirical data to create the a priorimodel. In the section that follows, the adequacy and relevance of these models is com-mented on and analyzed against the functionality and results of the previous researchanalysis and findings.

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9.3 Institutional theory

The purpose of creating a static standardization model through the application of institu-tional theory was to cover the environment and structures as extensively as possible, andto use it as a tool to analyze the standardization environment. The wireless standardiza-tion environment has expanded radically, and changes have occurred. The objective ofcreating an developed dynamic theoretical standardization process model was to improvethe understanding of the standardization environment and its structural relations. In par-ticular, we wanted to identify the actors’ roles in the process. Our interest was not toresearch institutionalization of standardization or organizations.

The institutional model adapted from Scott and Christensen (1995 p. 614) as a morestatic institutional model was employed in constructing the baseline for further develop-ment of the wireless standardization process model, an a priori dynamic standardizationmodel following Greenwood et al. (2002 p. 704). Scott’s model provided an extensivetaxonomy and the connections to the relevant institutional context.

Applying institutional theory to wireless standardization to was a challenging aim,because institutions are regarded as stable and bureaucratic organizations. This is the“older direction of institutional theory” when following, e.g., DiMaggio and Powell (1983p. 615), and Zucker (1977 p. 627). However, as wireless standardization is nowadaysunder constant development, many professional organizations are flexible and even infor-mal. As presented in Chapter 4, there are examples in similar research in which theresearch target has been more informal organizations such as international alliances orcompanies. However, issues or functions that were researched using the institutional staticmodel were entities which we applied to constructed dynamic models. This model wasalso able to reflect reality in a detailed manner.

9.3.1 The description of stages to create the models

In Chapter 4 we presented three theoretical approaches to apply to our research focus inorder to select a theory base for the research and institutional theory was selected. Institu-tional theory concentrates on how organizations work and makes us aware of the impor-tance of the wider social and cultural context surrounding and supporting organizationalforms as the foundations in which organizations are rooted.

We attempted institutional theory because researching wireless standardization andinstitutional theory together was expected to produce interesting research results. Institu-tional theory discusses issues relevant to standardization, such as environment, organiza-tions, action, elements, carriers, isomorphism and legitimacy. Institutional theorists haverealized that viewing organizations as confronting either a technical or institutional envi-ronment at any given time produces a false dichotomy. This is a relevant issue in the stan-dardization environment, where it would be difficult to produce a complete picture of theenvironment if wireless standardization was viewed only from one side. However, com-plex technological standardization can be seen to consist of two main elements: organiza-tions and technology (Garud 1995b). If technical and institutional environments or

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dimensions are cross-classified, they offer a topology in which certain organizations maybe subject simultaneously to strong technical and institutional pressures (ibid.).

The environment field offers an interesting perspective for further theory formulation,especially because wireless standardization offers an unstable environment. The wirelessstandardization field is under constant change, involving both environment, and institu-tions. We expand the term ‘institutions’, following Aldrich (1999, p. 718), to include alsofirms, and informal and formal organizations. Previously, institutions functioned in stablesystems (Meyer 1977); however, the world has changed. The unstable environment is alsomediated by institutional carriers: structures, cultures, and routines, by various means.Carriers make the organizations more efficient, for example, by using technology to pro-duce outputs. However, the full institutionalization of a structure is likely to depend onthe combined effects of relatively low resistance by opposing groups, continued culturalsupport and promotion by advocacy groups, and positive correlation with desired out-comes (Tolbert 1996, p. 184). Environmental issues also affect elements, such as cogni-tive systems. Knowledge systems are an important part of organizations, and it is a chal-lenge to maintain such a system in the standardization environment as a whole. One partof standardization is related to how efficiently knowledge systems are created. The legiti-macy of the system is enhanced by open knowledge systems, which can be regarded instandardization as an open standardization process. The process includes both formal andinformal standardization.

Historically, standardization was more or less the actors’ “playing ground”. However,there are various external influences which have shaped the standardization environment.Firstly, market expansion, globalization, technology development, regulation, and num-bers of interested actors and end users shape the standardization environment. Secondly,the normative element or aspects attempt to emphasize moral beliefs and one’s role insocial situations to reduce uncertainty. Thirdly, standardization organizations were previ-ously regarded as institutions, boundary objects or “Iron Cages”, because of their author-ity status. Nowadays, these organizations are also forced to change their organizationalstructures and working produces. Thus, due to this development we can regard standardsas semi-institutionalized.

However, compared to network externality and organizational theory, institutional the-ory has some weaknesses. The institutional organization is expected to be stable; aspectsmay change with a time lag, even though the environment and technology move forward.Furthermore, a strict focus purely on institutional issues of organizations may miss practi-cal issues. Generally, the organizational environment has changed in standardization overthe decades. In the first generation the main actors were regulators such as governmentaltelecommunication organizations, which can be regarded as pure institutional organiza-tions. During the second generation of telecommunications development the regulators’role diminished and the role of manufacturers and operators became more visible. Now,when developing third generation telecommunications standardization, there are variouskinds of organizations participating in the standardization process.

In the next stage of model creation, in Chapter 5, we applied it to the wireless stan-dardization environment by describing the model with terms suitable for the wirelessstandardization environment. When developing the terminology of the research we didnot use any formal procedure. We could not find any relevant new carriers or elements toadd or take way from the model. The important factor based on the model appeared to be

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the legitimacy of the process. The cooperation and networking between companies andstandardization organizations also has a significant role at the regional or global level.This enhaces the diffusion of created standards and thus product adoption. The changes inthe wireless standardization environment have created impetus for the reorganization ofstandardization organizations and working methods, to become more open and flexibleand to meet the actors’ requirements – to be more isomorphic. It follows that the moreisomorphic organizations are, the more efficient the process will be.

In Chapter 7 we applied the theoretical static model created to the empirical data aspresented in Chapter 6in Fig. 5. Empirical data was gathered by interviewing 35 expertsin 25 interviews, in 1998, 2000 and 2004. The interviews were organized and coded byusing the ATLAS.ti application for qualitative analysis. In Chapter 7 we took an institu-tional theory perspective and looked standardization from the actor’s and practical pointof view. There is hardly any scholarly publication available in the ICT field, to which wecould compare our results.

9.3.2 Institutional elements and carriers

Generally, from the regulative elements point of view, the central issue is how standard-ization organizations use their power and meet actors’ various expectations. The actors’role in the regulative element function as a whole is more based on absorbing alreadyagreed IPRs, rules, and licensing agreements made by the main actors and regulators.Actors may find the regulative role of their businesses confusing due to the increasednumber of standards and agreements. But these elements provide formal building blocksin product development.

The normative elements offer important opportunities for networking among actors,and trust between various actors in the standardization process. From the SME’s point ofview, the challenge is networking with large actors, which seems to be one way of inter-acting in and contributing to the standardization process. Another important element isnetworking among actors, and trust between various actors in the standardization pro-cess. One way of creating conformity among actors is through discussions.

From the cognitive element we found several elements which make up the standardiza-tion environment and organizations. In the global wireless standardization environmentthere are a few main organizations, which have their own objectives in forming standards.Not all of them are formal organizations; they may be, for example, industrial consortiawhich create de facto standards. Even though the object is to create commonly agreedstandards, the standards may vary. Loosely-created standards create both opportunitiesand difficulties for actors in adopting them in their products. The smaller actors can gainbusiness benefits from standardization by joining an industry consortium, in which all theactors have similar targets. The consortium can launch the de facto standards createdwhen the timing is beneficial from the technology and business points of view. However,this sets a task for actors: the task of following various standardization organizations’work simultaneously. This has led to many of them following organizations’ workthrough the Internet, for example. We can state that the companies who want to be leadersin their own field should be on the front line of the standardization process.

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The carriers of cultures of the static model identify the important issues to take intoaccount when developing products for an actor’s business. The challenge for actors is tofind the right standard to apply to their product, on the one hand considering IPR issuesand on the other hand from the business point of view. The patenting policy creates possi-bilities, but also may reduce the standard’s adoptability. If the standard has complicatedpatenting policy from the owner’s side, or is technologically too complicated, the actorsmay not apply it in their products. It is important for actors to research a patent’s costsbefore applying it. Nevertheless, the target is to provide standards for all parties with rea-sonable costs. The markets are no longer national or regional, but worldwide. However,entering the markets requires investment by the actors.

We have found several issues from among the carriers of structures of the static modelwhich modify the wireless standardization organization environment. From the actors’point of view, technology standards are more competitive than earlier because of the moredetailed standardization. The advantage of more detailed technology standardization isthe lower component prices. On the negative side is the increasing number of technologyworking themes. This creates more complexity in managing the standardization environ-ment or portfolio. This also requires increased cooperation between actors and standard-ization organizations. The advantage of relatively small numbers of meeting-“goers” isthat information flow between organizations is smooth and flexible, because the sameactors participate in several meetings. This also ensures that the content of exchangedtechnology themes remains similar. The open atmosphere in standardization organizationsenables an efficient working environment. This has led to the existence of various kindsof organizations, such as voluntary and formal organizations, which has created newworking cultures in organizations. The challenge is to fulfil different actors’ objectives ina colourful cultural environment. Moreover, this leads to more isomorphism betweenorganizations.

We can outline issues such as standardization organization openness, customer andmarket expectations, data management, and various company strategies concerning tech-nology diffusion in the carriers of routines. De facto standardization has reshaped thewireless standardization environment so that it is more open, which creates more opportu-nities for different actors to participate in the standardization process. In the past, whenwireless standardization was more regulatory driven, there were no SMEs participating.However, organization openness has pros and cons from an actors’ point of view. Open-ness in standardization creation may lead to loose standardization, but on the other handmay create industry coalitions which create de facto standardization. Openness may alsoincrease isomorphism between organizations, and thus create more legitimacy for the pro-cess. The primary actors in the wireless standardization environment are not the only oneswho have expectations concerning 3G markets. The end users expect interesting services,and actors expect huge market potential for products.

We can state that institutional theory is an applicable and appropriate theoretical per-spective for the analysis of technology development, evaluation and selection, because itexplicitly addresses uncertainty and ambiguity, characteristics that are salient during theselection and evaluation of technology. We can present three perspectives for this. Firstly,the application of institutional theory has been suggested to deny contradictions and toimprove the quality of information systems theory development (Robey 1999). Hence, theregulative element should reduce conflicts and differences by creating rules and laws.

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Secondly, recent institutional theory emphasizes the importance of external influencesand provides a mechanism, mimetic isomorphism, by which companies can reduce deci-sion ambiguity and uncertainty by copying decision choices made by others (Meyer 1977,DiMaggio 1983). Thirdly, the legitimacy of the whole standardization process is depen-dent on actors’ roles and actions, and on the openness of structures. Thus we can state thatwireless standardization can be partly institutionalized based on the static institutionalmodel.

From the actors’ point of view the standardization process was expected to have moreregulative characteristics based on the data, but in fact it had more hits for normative,cognitive and structural characteristics. This describes the actors in the standardizationprocess in refined terms; small and large actors/organizations, global interest, coordina-tion, and common objectives. These describe the main elements of the standardizationprocess.

After summarizing the static institutional wireless standardization model, we will con-sider a dynamic institutional model.

9.3.3 A Priori dynamic model – the stages in institutional change

Understanding standardization processes has become important because new technolo-gies, new forms of business organizations, trade issues and new institutions are emerg-ing. We have de facto, de jure and formal standards, but also sponsored and unsponsoredstandards. These all imply different standardization processes. All participants in the stan-dardization process should more thoroughly understand their role in the process, and rec-ognize the important relations between the Stages. We attempt to explain process throughinstitutional theory by creating an a priori dynamic institutional wireless standardizationmodel. By understanding the wireless technology standardization process as a techno-social variable institutional/organizational change, we will gain a deeper understanding ofsuch issues as structures and cultures of organizations, the role of R&D, technology andmarket strategies, and the importance of networks and boundaries, and define more clear-ly the type and the depth of specifications and standards.

The model created was discussed thoroughly in Chapter 8. The model describesactors’ roles in the wireless standardization process (Figure 8). The model consists of fiveStages and five Triggers which push the process forward. In many cases it is a time-con-suming process in the multi-organizational global environment. From the model we canrecognize that there are some issues which overlap and are discussed at several Stages.These issues are networking, standardization process openness, cooperation, and actors’roles. The new issues based on the data are IPR, research, open atmosphere, globalization,licensing, flexible working procedure, interpretation of standards and document manage-ment issues. IPR issues overlap nearly all stages and thus are important points in stan-dardization process. The research aspect came up at the first Stage, to describe how thestandardization can start. Globalization overlaps at various Stages and in different forms.Licensing was discussed from Stage II onward. A flexible working procedure in thedevelopment of standards was an important point in Stage V. The interpretation of stan-dards also clearly arose during Stage V. This creates possibilities for and weaknesses in

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the process. At the final Stage, document management was an important point for themaintenance of the standardization process.

9.4 Managerial implications

From the management point of view we can ask the philosophical question: why do weneed all this information? Do we need it for academic or business purposes? In thisresearch we need the information for both. The academic purposes were explained in theprevious section, and in this section we attempt to find the managerial implications. Theinformation is needed to carry out different organizational functions among standardiza-tion actors in the business environment. Moreover, to understand these issues better itimproves actors’ business opportunities in the global wireless technology markets.

For business management within the context of the wireless standardization process,one important contribution of this research is that it provides a deeper view of the variousstandardization actors, their roles and their roles in the global wireless standardizationprocess. We have applied institutional theory, and two different institutional models, staticand dynamic, by which we aimed to have as broad a perspective as possible of theresearch environment. We were successful.

The research provides insights into the factors which affect wireless standardizationactors’ adoption of standards in their business strategies. Especially SMEs interviewedindicated clearly that there are different Stages and ways of adapting standardization intheir businesses. However, we must remember that the SMEs’ abilities to participate ineverything that would be interesting – and possibly beneficial – are limited. They mustprioritize their activities. On the other hand, standardization offers various possibilitiesother than pure standardization, such as networking, and market and technology insights.These were quite often forgotten. Furthermore, old cultural habits such as regulative andbureaucratic roles, and time-consuming beliefs are still alive among the interviewees.These are, perhaps, partly still true, albeit in different forms.

How actors develop a product and enters the market is a strategic decision. There aretwo ways for actors start developing products: according to standards or by creatingsomething of their own. Both approaches have pros and cons. A product which is createdaccording to standards has economy of scale benefits, easier combinability to other prod-ucts and possibly lower production costs. Standardization creates mimicry – organizationsmimic because they anticipate similar benefits – and it is easier to market to end users.The more risky approach is to develop their own product. The actor creates their own pro-prietary or de facto standards which may or may not be open to other actors to apply. Theactor needs more effort to convince potential users of the product’s compatibility, i.e., net-work externality effects, and to break into the market. A good example of this kind ofcase, as mentioned in Chapter 7, is Sony PlayStation vs. Nintendo.

The actors should have a clear focus in standardization. As discussed, there are variouskinds of standards. A proprietary standard (Nintendo consoles or CDMA technology) isone that has certain characteristics which rewards the owner of that standard to a largeextent. An open standard (PlayStation or WCDMA technology) benefits a larger mass ofcompanies. This means that the open standard can be developed in the future much more

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quickly than the proprietary standard. The proprietary standard can include complexpatent issues, which may reduce its wider adoptability. It is essential for actors to researchproprietary standard requirements, if applying such technology in their products, to avoidsurprises concerning patent conflicts and monetary compensation. On the other hand, ifan actor adopts the open standard, to meet the market requirements is easier and faster.

From the previous analysis and discussions it should now be obvious that there is aneed for and an advantage to wireless actors and especially SMEs’ having a defined andplanned standardization strategy in their business plan, though during the interviews withthe SMEs’ representatives it was also apparent that other issues related to business strat-egy were still in an immature development state.

In conclusion we can state that the standardization process is a tool which creates“market-required” standards and legitimacy, and isomorphism for the process and actors.The value of the standard is determined by the market. However, there must be a structureand a form for the creation of standards. Thus, actors should follow the standardizationprocess, because otherwise they will not be up to date with technology development’scurrent and future directions. The products they develop might be incompatible and tooold for the market.

9.5 Actors’ managerial perspective

The new standards can be a source of enormous wealth. Hence, standardization should bean essential part of business strategy among actors and particularly SMEs. However,there are various ways to adopt standardization, as we have highlighted.

It is important at the beginning of the process to position oneself and find the bestpaths to the target. No one can carry out standardization and act in the environment alone,except in a monopolistic situation. Thus standardization requires networking and discus-sions among actors. The actors may have huge stakes in the standardization process, interms of both investments and technology, which leads them to resolve their conflicts.According to some estimates, the big corporations spend over 20 billion dollars per yearand may have 700 employees in standardization groups. The more interesting standard-ization becomes when discussing stakes concerning the feature of a standard; it does nothave intrinsic worth, unless it is applied to product and networks.

All the actors in the environment have their own focus, the business target of standard-ization, but on the other hand the common focus is to create widely accepted standards.Furthermore, it is important and beneficial to maintain the legitimacy of the process,because otherwise the whole system would be more expensive for all actors. Though inthis research our focus is on the role actors, the main actors in the standardization envi-ronment are still the multinational corporations, which have the main influence in interna-tional cooperation. Networking and cooperation play a vital role in the standardizationprocess. Actors should recognize this possibility in the standardization process. In partic-ular, it would be valuable to cooperate with larger corporations, to learn the paths and pro-cesses – how they do business in global markets, for instance – and possibly to get knowtheir technology plans or road maps.

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There are new opportunities in the standardization environment, and these come withchallenges. Wireless systems are complex and diverse and their commercial success ishighly dependent on interoperability that guarantees the quality and reliability of theinformation exchanged. Interoperability is ultimately what standardization is about. Agood example of the future of cooperation and interoperability, the central issues in thewireless world of the future, is “device independence”. In other words, for example thecall will follow the end user intelligently to different places. The movement will be seam-less. Enabling this kind of device usage in the future requires cooperation between stan-dardization organizations in order to create congruent standards. However, this willrequire time, because standards are at the development Stage and the growth of applica-tions becomes from that sector.

In the wireless standardization environment, the market development and strategicalcapabilities can vary and thus require actors carefully planning the entrance strategy.Strategy development depends on various factors such as IPR, market and product devel-opment issues. If IPR or licensing issues are not agreed at an early enough Stage of thestandardization process, this may cause additional costs for actors applying certain stan-dards. Furthermore, if standards are created to be too complex or loose, their applicabil-ity may diminish. The market issues are a fuzzy area, because if we ask the end userswhat they want, they will say they want all the solutions and services possible, but inpractice they use only a limited amount of the device’s capacity. One minor issue is thefrequency policy in different regions. These issues are organized by regulators and thusdo not affect the manufacturers’ or operators’ business directly. However, if frequenciesare not harmonized, the interoperability of networks and devices in global markets dimin-ishes.

Entry timing and positioning is important in standardization. The challenge for manu-facturers is to find the right timing for the application of the standard in the product.Should the new version of the standard be applied in the current quarter or even nextyear? And in which area or region should the product be launched? Cultural differencesand preferences may restrict some product launches. The wireless markets are global andfor the actors’ they are challenging to enter. Thus it is important to find the right entrancestrategy to the markets: as a subcontractor, in coalition with others or as a partner with alarger actor from the standardization process point of view, one reason to establish infor-mal standardization organizations such as OMA or Wi-Max is to speed up the standard-ization process and thus the application of technology to products, and the launch on themarket. In GSM and now in 3G standardization, to speed up standardization the organiza-tions publish releases. This enables the publication as a standard of something that hasalready been agreed to a certain point, rather than the whole standardization entity. Whenstarting to develop a new standard or family of standards, one risk is that one tries to cre-ate too complete a standard, which requires time and is expensive. It also slows down thefinal product’s market entrance, and actors may miss the technology “time-window”.Thus, to reduce the actors risk in the environment it would be beneficial to follow andspecialize in certain product standardization process(es) at as early a Stage as possible.One must remember that despite the success of earlier generations in wireless telecommu-nications standardization, the actors should look to the future, not the past.

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9.6 Summary

In conclusion we can state that wireless standardization affects the business strategies ofwireless actors, but in different ways. This is because they are at different stages of busi-ness development, use different technologies and are in different positions, e.g., as sub-contractors. Actors apply standards to their own products and subcontracting projects.Standardization creates opportunities for actors such as market and technology insights,internationalization, and networking. In many cases, they do not participate to the extentthat they should. The process model created showed that actors have made strategic deci-sions (whether deliberately or not) concerning how they participate in the wireless stan-dardization process. The fact is that the large actors still have the main power in standard-ization organizations.

We can state that there is no “correct way” to standardize or participate in the standard-ization process, which is based on voluntary work. However, participation may createbusiness benefits for the participants, such as cost reductions, cooperation agreements, abetter market situation and improved visibility. The technology is created for the endusers, but users do not buy standards, value chains or processes. They buy products whichfulfil their needs.

10 Conclusions

In this chapter the findings and the significance and relevance of the research are summedup. The limitations of the study are discussed and further ideas are presented.

10.1 Research results and contributions

In this research we wanted to discover how actors participate in the wireless standardiza-tion process. No previous studies were found that combined standardization, institutionaltheory, and the roles of actors. We began the research by presenting the standardizationenvironment: wireless technology, organizations and various kinds of standards. The keyactors in the standardization process were also presented: manufacturers, operators, regu-lators and various standardization organizations, both formal and informal. The factorswhich shape wireless standardization were presented: globalization, the evolution ofwireless technology, organizations and timing issues. We wanted to consider wirelessstandardization through institutional theory, to gain a broad approach to the standardiza-tion environment. We applied wireless standardization issues to a static standardizationmodel, which we based on Scott and Christensen’s (Scott 1995) institutional theory mod-el. The model consists of elements – regulative, normative and cognitive – and carriers –cultures, structures and routines. Altogether, we had 18 perspectives on wireless standard-ization based on institutional theory. Institutional theory is based on various backgroundssuch as sociology, economics and politics, so we could apply standardization issues andterminology to it.

The static standardization model shows us how institutional theory can be applied tothe wireless standardization environment. The regulative elements in the standardizationenvironment are the key issues of IPR and frequency policy, how the standardizationorganizations use their power, and the various expectations of actors. These give formalconstruction elements in product development. The normative elements offer importantnetworking opportunities among actors, and trust between various actors in the standard-ization process. We found several elements in the cognitive element which contribute tothe standardization environment and organizations. In the global wireless standardization

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environment there are a few main organizations, which have their own objectives in form-ing standards. Not all of them are formal organizations, and they can include, for exam-ple, industrial consortia, which create de facto standards. The carriers of cultures helpidentify the important issues to be taken into account when developing products for anactor’s business. The challenge for actors is to find the right standard to apply to theirproduct, on the one hand considering IPR issues and on the other hand from the businesspoint of view. The structures carriers reshape the wireless standardization organizationenvironment. From the actors’ point of view, technology standards are more competitivethan before, because of more detailed standardization. The advantage of more detailedtechnology standardization is lower component prices. On the negative side is the increas-ing number of technology working themes. This makes managing the standardizationenvironment or portfolio more complicated. We can outline issues such as standardizationorganization openness, customer and market expectations, data management and variouscompany strategies concerning technology diffusion in the routines of carriers.

By reviewing wireless standardization through a static model at the same time, we cre-ated an a priori dynamic standardization model. This model is based on Greenwood etal.’s model, “Stages of institutional change”. We discussed the model first in the contextof institutional theory, then when applied to the wireless standardization environment andfinally when applied to the empirical data. By applying it to the empirical data, whichconsisted of a total of 25 interviews coded using the ATLAS.ti qualitative analysis pro-gram, we could find answers to our research questions.

The dynamic standardization model developed gives insights into how actors find theirrole in the wireless standardization process. Based on the empirical findings, wirelessstandardization affects the wireless actors’ business strategies, but in different ways foreach of them. We could not find a general way of following or participating in the stan-dardization process from the actors’ viewpoint. This is because actors at different stagesof business development, use different wireless technologies and are in different businesspositions, for example as subcontractors. Standardization creates opportunities for actorssuch as market and technology insights, internationalizing, and networking.

In general, in many technology development processes, the development and the usageare organized in different organizations, and the same is true in standardization. The tech-nology is developed by manufacturers and operators and formal standardization created instandardization organizations. Informal, de facto standardization can be created in indus-try consortia. Although there is flexibility of usage and interpretation in technology devel-opment, it is not unlimited. The flexibility is restricted by the technology’s tangible char-acteristics, the institutional context (i.e., legitimating and governance structures), whichaffect actors when developing and using technology.

The dynamic process model created showed that actors have made strategic decisions(whether deliberately or not) concerning how they will participate in the wireless stan-dardization process. Nearly all actors participated in and followed Stage I (“PushingEvents”), where the whole standardization process starts. At this Stage the first discus-sions about technology and market issues are organized. Possible cooperation and consor-tia are also established. The problem is that SMEs do not participate in the entire stan-dardization process. One reason for this is that they do not believe that they can affect theproposals. This is partly true; alone they cannot, but as a partner in an industry consor-tium they have a much better chance. The fact is that the large actors still have the main

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power in standardization organizations. In Stage IV (Diffusion), SMEs are active again,when the final standardization proposals are published. However, this would be too late toapply a developed standard to their product.

In conclusion, we state that standardization should be a management tool for business.Standardization should mirror business conventions and needs. Technology developmentis an ongoing process and the fourth generation wireless technology plans are on thetable. Alongside technology and market developments there might also be changes in thestandardization process according to the requirements of the wireless environment. Stan-dardization and its process have previously been more or less institutionalized in the wire-less technology environment, which has maintained the legitimacy of the process and fol-lowed the needs of actors.

10.2 Limitations of the study

As in any study of this nature, it is important to recognize its limitations in theory, meth-od and findings. Sometimes this recognition may be more valuable than the study itself. Itis hoped that such is not the case with this study. But the limitations clearly identifyopportunities for gaining further knowledge and understanding of an important yet con-tentious topic.

What has been presented in this study is a way of thinking about standards. It providesan understanding of the meaning of the wireless standardization process, standards,actors, environment and technology, framed by the terms and content of institutional the-ory. This provided a framework for the setting of research questions that guided theresearch and analysis. A different framework could have been chosen that would haveyielded different research questions and different results – perhaps even a different way ofthinking about standards.

The selected framework, the institutional theory in both static and dynamic models,provided opportunities and created barriers for theory development and analysis. Theinstitutional theory provides a broad perspective on theory building, which was the reasonto apply it to this research. We have stated that the institutional framework is valid for thisresearch. It considers other issues than just the market perspective, such as networking orlegitimacy. These are valid for the creation of a standardization environment. However,there are some limitations. The framework may lead to falsification and tie up our focustoo tightly when analyzing the research material. The framework may mean that someinformal or “silent knowledge” is left out of the analysis. Also, the framework focused on18 issues in the wireless standardization process, which provided a compact and broadview, but straightforward approach to the analysis of material. This detailed way of ana-lyzing standardization in this framework may have left out important topics. One topic isother wireless technologies such as the role of short range wireless technology standard-ization organizations. These applied technologies and organizations have a role in thewireless standardization process, but in a different environment than the focus of thisresearch. This would be of interest in further research.

We have researched the actors’ role in the wireless standardization process applyinginstitutional theory. We have analyzed each selected actor group separately and this may

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not lead to a conceptualized standardization process model. The selected frameworkdefines how we have conceptualized the standardization process. It is not possible for theselected framework to describe all of their roles in the standardization process, only fromthe perspective of the 18 functions. The framework provides a very detailed way of ana-lyzing the research material, but on the contrary does not allow us to take liberties, e.g. tobroaden the discussion issues. However, in the described wireless process the role ofactors is more visible and we can analyze the mimicry in the process, for example.

There are about 60 pages of analysis of institutional elements and carriers. However,we can point out that there is hardly any description or detailed analysis of major influen-tial interactions between different institutional systems and carriers and how these interactunder standardization contingencies. This would require analysis of how elements interactamong each other, for example, and thus advanced analysis. This would be of interest infurther research.

Two specific limitations are suggested by the choice of research questions, one ofscope and the other of direction. Another limitation of this study is the limited and some-what anecdotal nature of its sample. Certainly, much more discourse is available for thestudy, and more is being developed every day. However, it was necessary to choose docu-ments and discourses that were available and representative of certain general arguments.The researcher relied on personal knowledge of the practice and the discourse. If otherpublications and interviews had been chosen, other meanings or interpretations may havebeen found and other issues may have been identified. Furthermore, other practices mighthave been encountered. However, we can always organize more interviews, but we canquestion their value in broadening current knowledge and making generalizations. Infuture research we can take this into account.

In this research we discuss wireless telecommunication systems, which integrate dif-ferent services and technologies and function in suburban environments, which applywireless cellular networks (e.g. GSM, UMTS). The creation of a telecommunication sys-tem requires the application of various technologies. All these technologies have theirown standardization processes and organizations or workgroups. We have limited our dis-cussion, focusing on wireless 3rd. generation telecommunication technology. Nor did weattempt to analyze the potential technological impacts such as complexity and architec-ture issues in shaping standardization processes or focus on differences between mobileand Internet standardization processes, even though there are significant differences in thescale and nature of the architecture. With the applied framework we could not focus ontechnological issues any more than the 60 pages already included, because the appliedframework is not flexible enough to analyze the technological phenomena more thor-oughly. Currently the ongoing process is one of long-term evolution in the wireless stan-dardization process, i.e., UTRA development. Many other wireless technologies are cer-tainly worthy of research. For example, systems such as WLAN65, Wi-Fi66, WiMax67 or

65. Wireless LANs can effectively be used to share Internet access from a broadband connection over 100 met-res, although they are also being used increasingly as methods of providing broadband access over longerdistances in rural areas. http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced 23.1.2007

66. Of WLAN technologies, the most popular and widely known is IEEE 802.11b, commonly referred to as“Wi-Fi” http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced23.1.2007

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Zigbee68 are being developed for wireless short range communication. These single tech-nologies are one part of the wireless telecommunication system environment, which com-pletes the whole system.

An additional limitation is the perspective of the researcher. As a non-involved partici-pant in the standardization process, misunderstandings may occur. However, theresearcher has followed standardization earlier in her career. Furthermore, a non-involvedparticipant may be more open-minded, and does not have their own objectives to pursue.

As has been discussed, standardization involves IPR and licensing issues. These top-ics have become among the most significant issues in standardization environment overthe past decade. They consists of legal and policy problems and could provide rich andimportant opportunities for further research. We have not covered all the possible technol-ogies, organizations and standards, but limited our study to wireless technology standard-ization and only a few of the organizations involved. The adoption of other technologystandardization would result in other conclusions and is a possibility for further research.

10.3 Recommendations for the future research

The focus of this research was to analyze actors’ roles in the wireless standardization pro-cess by applying institutional theory. The perspective was chosen deliberately as theresearcher’s interest is in the roles of actors and wireless standardization. Research fromthis perspective had not widely been carried out, whereas research literature is availableseparately on wireless standardization, the standardization process, actors and SMEs. Theresults of this thesis suggest that further research would be useful on standardization ingeneral, and especially on wireless standardization.

We developed a general and integrated model of standardization behaviours in thelight of institutional analysis that covers interactions between different actors that affectthe wireless standardization outcome. For further research it would be interesting todevelop a detailed understanding of major influential interactions between different insti-tutional systems and carriers such as normative carriers. This research would be valuablein understanding the interactions under standardization contingencies. However, thiswould require the application of a different theoretical framework, which would allowmore flexibility in recognizing technological phenomena as well.

The created standards are created for global use, i.e., for adoption on different conti-nents. However, sometimes there appear barriers between continents. For example, these

67. The IEEE also recently standardized 802.16, commonly known as WiMAX, as a new fixed-wireless stan-dard that uses a point-to-multipoint architecture. The initial version (802.16) was developed to meet therequirements of broadband wireless access systems operating between 10 and 66 GHz. A recent amend-ment (802.16a) does the same for systems operating between 2 and 11 GHz. WiMAX equipment should beable to transmit between 32-56 km with maximum data rates close to 70 Mbit/s. http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced 23.1.2007

68. ZigBee-compliant products take full advantage of a powerful IEEE 802.15.4 physical radio standard andoperate in unlicensed bands worldwide at 2.4 GHz (global), 915 Mhz (Americas) and 868 Mhz (Europe).Transmission distances range from 10 to 100 metres, depending on power output and environmental cha-racteristics. http://www.zigbee.org/en/about/faq.asp#6. Referenced 23.1.2007

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barriers may be related to regulatory issues or frequency allocation. In future it would beinteresting to research what kind of impacts these barriers have on standardized technol-ogy adoption or on actors who cannot adopt the best available technology. For academicresearchers these kinds of barriers are difficult, which means that researchers from otherareas can lead the way.

The most valuable result of applying institutional theory for actors is mimicry. How-ever, when discussing a single technology development in a reduced process institutionaltheory provides more perspective for smaller actors’ participation in the standardizationprocess. It would be an interesting future research case to research Wi-Fi standardizationorganizations and processes, for example.

Our initial attempts were not to analyze the potential impacts of technologies, in termsof their complexity and architecture, in shaping standardization processes, nor to focus ondifferences between mobile and Internet standardization processes, even though there aresignificant differences in the scale and nature of the architecture. With the applied frame-work we could not focus on technological issues any more than the 60 pages alreadyincluded, because the applied framework is not flexible enough to analyze the technologi-cal phenomena more thoroughly. The ongoing process is one of long-term evolution inthe wireless standardization process, e.g. UTRA development. Many other wireless tech-nologies are certainly worthy of research. For example, systems such as WLAN69, Wi-Fi70, WiMax71 or Zigbee72 are being developed for wireless short range communication.These single technologies are one part of the wireless telecommunication system environ-ment, which completes the whole system. This follows, to research thoroughly the com-plete wireless standardization process, because it is multifarious process, we slowly createthe bridges between the gaps in the standardization context. Moreover, we should applyvarious theories to contextualize the wireless standardization process as phenomena thor-oughly. One example of contextualizing a process could be the software standardizationprocess. This would be of interest to a large research group. It would also answer Tolbertand Zucker, who argue that institutional theorists have paid very little attention to concep-tualizing and specifying the processes that move innovations beyond preinstitutionaliza-tion into “full institutionalization”.

69. Wireless LANs can effectively be used to share Internet access from a broadband connection over 100 met-res, although they are also being used increasingly as methods of providing broadband access over longerdistances in rural areas. http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced 23.1.2007

70. Of WLAN technologies, the most popular and widely known is IEEE 802.11b, commonly referred to as“Wi-Fi” http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced23.1.2007

71. The IEEE also recently standardized 802.16, commonly known as WiMAX, as a new fixed-wireless stan-dard that uses a point-to-multipoint architecture. The initial version (802.16) was developed to meet therequirements of broadband wireless access systems operating between 10 and 66 GHz. A recent amend-ment (802.16a) does the same for systems operating between 2 and 11 GHz. WiMAX equipment should beable to transmit between 32-56 km with maximum data rates close to 70 Mbit/s. http://www.itu.int/osg/spu/ip/itu-and-activities-related-to-ip-networks-version-1.pdf. Referenced 23.1.2007

72. ZigBee-compliant products take full advantage of a powerful IEEE 802.15.4 physical radio standard andoperate in unlicensed bands worldwide at 2.4 GHz (global), 915 Mhz (Americas) and 868 Mhz (Europe).Transmission distances range from 10 to 100 metres, depending on power output and environmental cha-racteristics. http://www.zigbee.org/en/about/faq.asp#6. Referenced 23.1.2007

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The field of standards research is rich in subject matter for theoretical and practicalstudies in the standardization process and environment. However, when discussing a sin-gle technology development in a reduced process studies would provide more perspec-tive for smaller actors’ participation in standardization process. To create a more accurateoverall view of the SME’s role in the standardization process, the research should be con-tinued, and it should take the entire standardization process into its scope while seeking tofind possibilities as to how SMEs can participate in the whole standardization process.Moving from late actors to earlier adopters of standards would bring great benefits forSMEs’ business strategies. This would improve SMEs’ position in the standardizationprocess and give a better understanding of the whole process. It would also be interestingto carry out a case study over a longer period, following an SME which is developing aproduct, finding out how and why it applies certain standards, and following how it startsnetworking with other actors in the standardization field. From the business and strategypoint of view it would be interesting to consider whether a company gains more profit if itparticipates in the standardization process.

For the actors in the standardization process, it is not only the adoption of technologystandards, but the economic and political effects on product development which need tobe recognized. In SMEs which create their own products, standards are followed carefullyto enable combinability with other products. Thus, for the SMEs it is important to partici-pate, to get access to documents and to follow the process. It might be difficult to followthe process from the outside (P29, P37). However, the creation of standards can be spedup or slowed down according to actors’ decisions. Therefore, it would be interesting tocarry out further research on the economic and political effects which affect standardiza-tion.

We discussed globalization issues in Section 3.5, and the same issues are a challengefor SMEs. If the enterprise and the entrepreneur have a dynamic strategy, after fulfillingthe local and national markets they may start to observe the international markets. Thechallenge is how to approach the markets; the key issues include strategic and financialdecisions. In many cases, the single entrepreneur is too small to conquer the marketsalone, thus some kind of cooperation is needed. Reliable partners are often the key to glo-bal markets. Therefore, it would be beneficial to research SMEs’ adoption of wirelessstandards as a part of their business strategy when entering global markets.

During the research, as well as the analysis process, several other ideas arose whichcould be interesting and worthwhile to investigate more thoroughly. As discussed severaltimes during the research, standardization organizations are under constant change. In thiscontext we can refer to post-modern organizations, which are under continuous develop-ment, diffusion, restructuring and evolution. These organizations do not have strictboundaries, they learn and accept changes as norms, and too much regularity may damagetheir adaptability and chances of surviving in global, competitive markets (Baskerville1992). This study would illustrate the opposite theory to institutionalism, and the resultswould be different.

The central and important research issue is how the product value chain and standard-ization can be tied together. There is already some research in this field, but not in wire-less technology. The challenge is to find results as to whether the wireless value chainchanges and what the requirements for the standardization process are. This would bebeneficial research to help all participants in the standardization process recognize at what

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stage of the value chain standards affect and benefit business in the wireless technologyenvironment.

Our main approach has been de jure standards, but other standards have also been dis-cussed. However, it would be beneficial to analyze more thoroughly the other standardsand processes. For example, open source technology has enabled fast technology adop-tion in products. However, there are benefits and risks in adopting technology in products.Hence, it would be beneficial to organize comparative research on the actual benefits ofde facto standard-based technology/products and products based on open source technol-ogy, from the business benefits and strategy points of view.

After researching wireless SMEs it would be beneficial to carry out comparativeresearch on other industry fields concerning SMEs’ adaptation of standards. It would alsobe interesting to apply the dynamic standardization model created here to other industryfields, in order to consider their position in standardization process. Earlier we mentionedthe Normapme-project in the EU, in which SMEs can gain knowledge on various stan-dards in selected fields. The information gained from this would be beneficial. It wouldalso be interesting to carry out comparative research between different nations or regions,to find similarities or differences in SMEs’ behaviour.

In this research we have discussed wireless telecommunication standardization, as onepart of wireless cellular system. However, standardization as such is a multifarious phe-nomenon and provides various possibilities for further research. To gain a better under-standing of the phenomenon we should apply various theories and research the topic fur-ther, so that we could conceptualize it. Furthermore, it would be valuable to research asingle developed technology such as WLAN, Wi-Fi, WiMax or Zigbee. These standard-ized technologies are inexpensive, provide better mobility and connectivity, and offereasy installation. It would be beneficial to research the interoperability of these technolo-gies with other wireless technologies. It would also be interesting to research whetherthey have adopted working methods from the formal standardization organization in theirprocess, to create a single common standard.

To gain a comparative understanding of standardization from the viewpoint of soft-ware SMEs it would be interesting in the future to analyze how wireless companies usestandards in their business development. This would be valuable, because software will inthe future be embedded, in some way, in nearly all products.

After discussing wireless standardization widely we can ask the question: will stan-dards be lost in the future? Obviously not, but their role may change. It is expected thatthere will be multiple standards in the world; for example, in Japan there are three mark-up languages for content creation. However, the number of standard committees mayreduce the mess. We can also ask whether, if standards worked efficiently, we would needthis many standardization organizations globally.

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Appendices

218

Appendix 1 Mobile subscribers in total for OECD

Source: OECD Communications Outlook 2005.

219

Appendix 2 Telecommunications sector: Mobile revenue (USD millions)

Source: OECD Communications Outlook 2005

220

Appendix 3 Telecommunication standardization research interview 5.8.1998

Rules of Interview

The interview material will be used only for the research purpose of STAMINA-group and after the interviewall material will be handled anonymously. The recorded tape will belong to STAMINA-group and used only asresearch material. All material can be given for checking for the interviewee before publication when required.

Position:

Organization (manufacturer, regulation etc.):

Working background and years:

Standardization bodies, which work You have participated?

In which way and how long time?

What is Your role in you organization standardization process?

/Does Your organization do co-operation concerning standardization with others? Competitors?

(NMT=>GSM=>UMTS (FPLMTS) Experiences?/How 3rd generation standardization differs from the earlierstandardization process? Experiences?

What trends can be found in standardization process?

221

Appendix 4 Interview Questions in year 2000

At the beginning could you explain your standardization background and how many years you have been in thisfield?

What were the reasons that experts, operators, manufacturers started to develop the future mobile system fromyour point of view. What was the motivation behind of the development?

• In the beginning of organisation?

How do you see that the Europe and global standardization organizations have been developed from 80s tilltoday.

• Has the UMTS timing been successful?

What are the issues which drive 3rd generations standardization process forward? In which way affect 3GPPPand 3GPP2?

How the market situation has affected to standardization process, meaning form the monopolistic competition tomarket liberalization?

• From wireline to wireless?

How do you define standardization process?

Also the licensing policy will not support the fourth proposal of 1998, ensuring coverage of less populated are-as. The target of UMTS system is to cover rural areas, but for these areas cannot guarantee providing all avai-lable services. How EU decides that it not take part in discussion concerning UMTS auctions and pricing? Andsee the situation when different countries face the unequal situation concerning spectrum licensing and servicesproviding. For example in Japan it is planned that there will be no auctions.

In rural areas all UMTS services or fast connections cannot be provided. This does not provide equal possibili-ties to citizens of EU.

In decision 128/1999/EC it is stated that “regulation should be technology neutral” how this is possible in tele-communication standardization. Is here a sort of conflict situation?

In which purposes do you think it is needed mandatory standards in telecommunication?

In article 6 in document 399D0128 (Decision No 128/1999/EC of the European Parliament and of the Councilof 14 December 1998 on the coordinated introduction of a third-generation mobile and wireless communica-tions system (UMTS) in the Community) it mentioned co-operation with ETSI. What kind of cooperation EU oryour directorate do with ETSI?/ and ITU in IMT-2000 issues?

How do you co-operate with member states?

Into telecommunication field has entered many and all the time coming more different kind of associations,forums etc. They are quite young and their working procedures may not be matured. How do you keep contactand follow these organizations work?

EU has significantly supported and supporting 3G telecommunication development, e.g., RACE, ESPRIT,ECTS etc. 5th program has started 1999. How do you see in which way these programs have affected 3G deve-lopment?

Are there any regulative or political threats or boundaries in UMTS standardization from the point of view EU?Or is it so that when we consider standardization as trade issue, then we politize the issue?

The one target of EU’s is to develop “Wireless information society or eEurope”. How do you see what is Eu rolein UMTS development?

About GSM. How do you see that along the path towards 3G standardization the standardization has changed?How these milestones, I mean GPRS and EDGE, between GSM 2.5 affect to the process?

How do you co-operate with operators´?

And manufacturers?

222

The internet connection will be one feature in the future integrated terminal. What kind of issues must be recog-nise from the EU point of view in this development and especially in standardization?

About timing issue. Are these current technology development and standardization issues in line with time fromyour point of view?

What are the competing standards? DigiTV?

In WRC’00 it was also discussed that additional spectrum is needed. How do EU will react to this issue?

223

Appendix 5 Kysymyksiä haastateltaville:

Yleisiä kysymyksiä

Kuinka yritys osallistuu tällä hetkellä standardointiin?

Millaisissa eri toimintatilanteissa standardit tulevat vastaan? Ympäristö?- elements

Millaiset toimijat tekevät std. yhteistyötä? ja mitä? tavoitteet?- structures/cognitive(identities/structural isimorphism)

Onko standardointi-organisaatioiden välillä erilaisia toimintakulttuureja?Miten vaikuttavat teidän toimintaan?- cultures /cognitive(categories/typifications)

Mitkä asiat/toimintatavat edistävät std. tiedon kulkua?- Routines/cognitive(scripts, performance programs)

Kuinka järjestäytynyttä teidän mielestä pitäisi olla std. toiminta?- structures/regulative (governance systems, power systems)

Miten lait tai formaalit standardit vaikuttavat teidän tuotekehitykseen?

Mahdollisia konfliktejä? Kontrolloidaanko std. noudattamista?regulative/cultures (rules, laws)

Onko teillä ollut odotuksia standardointi-organisaatioiden suhteen?Millaisia esteitä/haasteita itse organisaatio-prosessiin osallistuminen yrityksellenne asettaa?Votteko luottaa muihin std.prosessiin osallistuviin toimijoihin?- Normative/cultures (values, expectations)

Onko nähtävissä teidän näkökulmasta standardointia hallitsevia toimijoita? Toimivatko he toisten osallistujientai teidän toiveiden mukaisesti?- Structures/Normative (authority systems)

Kuinka hyvin noudatetaan tuotteissa/kehityksessä sovittuja stad.?Miten nämä kehitettävät std. vastaavat yritysten/markkinoiden tarpeita?- Routines/regulative (obedience)

Voiko yksittäinen henkilö vaikuttaa std.prosessissa? Yksittäinen yritys?- Routines/Normative: conformity/performance of duty

Yritystä koskevia kysymyksiä, jos eivät vielä ole tulleet ilmi:

Kenen kanssa osallistutte std?- periaatteet miksi osallistutaan?- budjetti?- vaikutus liiketoimintaan?

Mitä std.organisaatioita seuraatte/osallistutte?

Mitä yleispiirteitä näette std. organisaatioissa olevan tällä hetkellä? Onko standardeja tulevaisuudessa?

224

Appendix 6 List of organizations interviewed

Used com-pany code

AT LAS.ti-code

Line of busi-ness

Employees Foun-ded

Locati-on

Time No of interviews/intervie-wed per-sons

Level of ex-pertise

01 P7/ 1,2,4,6, P35, P43

Telecom-mu-nication

51000 1896 Helsin-ki, Fin-land

August 1998, 2, 4,6; September 1998, Ja nuary 2004, Decem ber 2000

6/6 Managers, Vice President, Senior Vice President

02 P29 SME-mobile telecommuni-cation softwa-re solutions

75 2002 Oulu, Fin-land

January 2004 1/1 Manager

03 P38 SME-mobile telecommuni-cation softwa-re solutions

70 1992 Oulu, Fin-land

January 2004 1/1 Vice President

04 P36 SME Mobile and Intranet/Internet solu-tions

25 1989 Oulu, Fin-land

January 2004 1/1 CEO/owner

05 P30 SME innovati-ve solutions for managing me-dia assets

55 1984 Oulu, Fin-land

January 2004 1/2 CEO/owner

06 P37 SME advan-ced solutions: wi-reless commu-nication,

70 1991 Oulu, Fin-land

January 2004 1/2 CEO/Owner

07 P31 SME manu-facturers of analyzers and simulators for mobile net-works

220 1985 Oulu, Fin-land

January 2004 1/2 Technology manager

08 P47 operator servi-ces

France December 2000 1/1 Technology manager

09 P7/ 10,11

standardizati-on body

700 mem-bers

1988 France October 1998 2/2 Standardisa-tion experts

10 P7/7 UMTS UK October 1998 1/1 Consultant11 P7/3,

P45, P46

operator 6670 2000 Fin-land

September 1998, P45-46; February 2001,

2/5 Vice presi-dent

12 P44 operator 1918 Fin-land

October 2000 1/1 Vice presi-dent

13 P7/12 operator 5489 1877 Fin-land

October 1998 1/1

225

The interviews started on September 1998 and ended on February 2004.Each Interview duration approx. 1,5-2 h. Total interview time was appr. 60 hours.Total transcribed pages 343.

14 P7/8,9

International Telecommuni-cation Union

UN mem-bers and 650 priva-te mem-bers

1865 Swit-zer land

October 1998 2/2 High level experts

15 P7/15, P41, 42

European Commission

15 mem-ber states

1950 Bel-gium

November 2000, December 2000

4/5 High level officials

16 P7/5 European Ra-dio Office

45 CEPT countries

1991 Den-mark

October 1998 1/1 High level official

17 P7/14 GSM operator 650 opera-tors

1982 UK October 1998 1/1 High level manager

18 P7/13 regional aut-hority

237 1988 Fin-land

October 1998 1/1 Manager

19 P47 Patent office 5421 1973 Ger-many, Bel-gium, Austria

December 2000 1/1 High level official

30/28

226

Appendix 7 List of reference documents used in constructing process model and questionnaires:

– Standards, meeting reports and documents;– European Telecommunication Standards Institute: www.etsi.org– 3GPP: http://www.3gpp.org– ITU: http://www.itu.int– ISO: www.iso.org– NIST: http://nii.nist.gov/• Market and Technology reports:– GSM Association: www.gsmworld.com– UMTS Forum:www.umts-forum.org– Open Mobile Alliance: www.openmobilealliance.org• Participation on conference: Regulation and Liberalization of European Telcos, 30 November-1st Decem-

ber, Bruxelles- handout material• Participation on Workshop: Working notes for the –Seamless Mobility Workshop, September 15-16, 2001,

Stockholm, Sweden, www.dsv.su.se/seamless• UMTS Task Force Report, The Road to UMTS “in constact anytime, anywhere, with any one”, Brussels,

1st March 1996• Seminar: Kolmannen sukupolven matkapuhelinjärjestelmät, Tekes, 1998• Software Business Models, Technology Review 108/201• OECD Communications Outlook 2005: www.oecd.org/document• Financial Times: www.ft.com• European Directives: http://europa.eu.int• United Nations: http://www.un.int• ERO: http://www.ero.dk• ARIB: http://www.arib.or.jp/english/index.html• Metcalfe’s Law: http://en.wikipedia.org/wiki/Metcalfe's_law• email correspondence with interviewees• ATLAS.ti data analysing program: www.atlasti.de• Total Telecom: www.totaltele.com

227

Appendix 8 The ATLAS.ti snapshot

228

Appendix 9 Summary of ATLAS.ti data collection

Actor No of hits Founded Static model combinations Other findingsMAN 6 struc-norm timing 6REG 3 rout-regORG 7 norm-culOPR 4 struc-cogREG 1 cog-strucSME reg-cul

cul-cogstruc-regstruc-regstruc-normstruc-cogrout-normcog-cul

Trigger AMAN 3 cog-rouREG 5 cog-culORG 2 cul-regOPR 1 struc-norREG struc-norSME strug-reg

strug-regrou-reg

Stage IIMAN 3 cog-cul timing 2REG cul-cogORG 6 norm-culOPR 3 struc-normREG cul-normSME cul-norm

cog-strucstruc-normnorm-strucstruc-reg

229

Actor No of hits Founded Static model combinations Other findingsTrigger B

MAN 2 nor-rouREG 3 struc-regORG struc-regOPR reg-stucREG nor-culSME

Stage IIIMAN 6 struc-norREG 1 struc-regORG 3 cog-culOPR 1 cog-strucREG nor-strucSME 3 reg-rou

struc-regnor-strucrou-cogcog-culcul-norreg-struccognor 4reg 4cog 5

Trigger CMAN 5 cul-reg timing 2REG rou-cogORG 3 rou-cogOPR cog-culREG reg-culSME reg-struc

reg-culreg-culcul 5struc 1

rou2Stage IV

MAN 5 rou-reg timing 4REG 2 rou-norORG 3 nor-rouOPR 4 rou-regREG struc-reg

230

Actor No of hits Founded Static model combinations Other findingsreg 3 nor 4

Trigger DMAN 3 rou-cog timing 3REG rou-cogORG 3 struc-regOPR reg-strucREG struc-cogSME reg-rou

rou 3struc 3

Stage VMAN 6 cog-cul timing 2REG 1 cog-culORG 6 cul-norOPR 2 cul-norREG nor-strucSME 1 struc-nor

cog-struccul-regstruc-norcul-cogstruc-norreg-struccul-regrou-cogcog-culreg-culreg-rounor-culreg-strucreg 6nor 7cog 6

231

Actor No of hits Founded Static model combinations Other findingsREGORGOPRREGSME

Stage VIMAN cog-cul timing 6REG rou-cogORG 6 struc-norOPR 1 rou-cogREGSME

Trigger F. ORG struc-cog

struc-regcul-reg

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470. Ojala, Pasi (2006) Implementing a value-based approach to software assessmentand improvement

471. Saarenketo, Timo (2006) Electrical properties of road materials and subgradesoils and the use of Ground Penetrating Radar in traffic infrastructure surveys

472. Jokikokko, Erkki (2006) Atlantic salmon (Salmo salar L.) stocking in the Simojokiriver as a management practice

473. Tapio, Miika (2006) Origin and maintenance of genetic diversity in northernEuropean sheep

474. Miinalainen, Ilkka (2006) Enoyl thioester reductases—enzymes of fatty acidsynthesis and degradation in mitochondria

475. Klaavuniemi, Tuula (2006) PDZ-LIM domain proteins and α-actinin at the muscleZ-disk

476. Reini, Kaarina (2006) Characterisation of the human DNA damage response andreplication protein Topoisomerase IIβ Binding Protein 1 (TopBP1)

477. Pudas, Regina (2006) Structural and interaction studies on the carboxy-terminusof filamin, an actin-binding protein

478. Hillukkala, Tomi (2006) Roles of DNA polymerase epsilon and TopBP1 in DNAreplication and damage response

479. Mäki-Petäys, Hannaleena (2007) Conservation and management of populations ina fragmented forest landscape. Behavioural ecology meets population genetics

480. Kärkkäinen, Johanna (2007) Preparation and characterization of some ionic liquidsand their use in the dimerization reaction of 2-methylpropene

481. Junttila, Juho (2007) Clay minerals in response to Mid-Pliocene glacial history andclimate in the polar regions (ODP, Site 1165, Prydz Bay, Antarctica and Site 911,Yermak Plateau, Arctic Ocean)

482. Sipilä, Laura (2007) Expression of lysyl hydroxylases and functions of lysylhydroxylase 3 in mice

A483etukansi.kesken.fm Page 2 Wednesday, April 18, 2007 11:30 AM

U N I V E R S I TAT I S O U L U E N S I SACTAA

SCIENTIAE RERUMNATURALIUM

OULU 2007

A 483

Anri Kivimäki

WIRELESS TELECOMMUNICATION STANDARDIZATION PROCESSES—ACTORS' VIEWPOINT

FACULTY OF SCIENCE, DEPARTMENT OF INFORMATION PROCESSING SCIENCE,UNIVERSITY OF OULU

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UNIVERS ITY OF OULU P.O. Box 7500 F I -90014 UNIVERS ITY OF OULU F INLAND

A C T A U N I V E R S I T A T I S O U L U E N S I S

S E R I E S E D I T O R S

SCIENTIAE RERUM NATURALIUM

HUMANIORA

TECHNICA

MEDICA

SCIENTIAE RERUM SOCIALIUM

SCRIPTA ACADEMICA

OECONOMICA

EDITOR IN CHIEF

EDITORIAL SECRETARY

Professor Mikko Siponen

Professor Harri Mantila

Professor Juha Kostamovaara

Professor Olli Vuolteenaho

Senior Assistant Timo Latomaa

Communications Officer Elna Stjerna

Senior Lecturer Seppo Eriksson

Professor Olli Vuolteenaho

Publications Editor Kirsti Nurkkala

ISBN 978-951-42-8412-0 (Paperback)ISBN 978-951-42-8413-7 (PDF)ISSN 0355-3191 (Print)ISSN 1796-220X (Online)

A 483

ACTA

Anri K

ivimäki

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