Organizing Value Creation in the On-line Age

An intensified relation between producers and consumers characterizes the on-line age. The essence of this relation is a two directional information flow running from B2C and C2B. This paper raises the question how the on-line based organization is affected by this relationship. It investigates organizational processes in a “best practice example” from the computer games industry and finds that two centrifugal forces drive the firm toward vertical integration. This process stem from; 1) a need of matching activities of R&D for product development, advertising, and distribution, and 2) the absence of a market to supply in-puts and services underpinning these activities.