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Top1. Introduction
A digital market is a contemporary version of an old phenomenon; local markets, bazaars and shopping malls, which have connected consumers with sellers for centuries (Fichman, Dos Santos, and Zheng 2014; Tan, Pan, Xianghua, and Lihua 2015). It operates as a micro-economy (Halckenhaeusser, Foerderer, and Heinzl 2020). A digital market host firm, referred as ‘Host’ here on, facilitates and orchestrates participants’ interactions (Brown and Grant 2005; Tiwana 2014), aiming for value creation on all sides (Wiener, Mähring, Remus, Saunders, and Cram 2019). The host organization (such as Alibaba, Amazon, Flipkart or Rakuten) provides the platform on which goods and services are ordered and oversees its governance. The 2020 coronavirus pandemic accelerated a shift from traditional brick-and-mortar to online shopping. In November 2020 analysts predicted US online sales would reach $839 billion -- 21% of total retail sales, versus 14.3% in 20181. US online holiday sales were about $171 B, up 32.4% from the same period in 20192. In India, analysts predicted online sales during the “festive” season (leading up to Diwali) would reach $6.5 billion3 and that annual online sales would increase from $30 billion in 2019 to nearly $100 billion by 20244. Rapid growth can intensify strategic, operational, and ethical challenges. In 2019 a Wall Street Journal investigation identified on Amazon products sold by third-party sellers, which did not comply with US product safety requirements (including children’s toys). That article concluded: “Amazon’s struggle to police its site adds to the mounting evidence that America’s tech giants have lost control of their massive platforms – or decline to control them”5. Regardless of laws governing traditional retailers versus digital markets, many consumers hold Amazon for products sold on its platform – including third-party products sold by 2.5 million merchants -- about 60% of the physical merchandise sold on Amazon’s platform. Though the hosts acts as a matchmaker, it is accountable for successful completion of the interactions and is held responsible for the opportunistic behaviour, if any, of its participants. Hence, it is essential for the hosts to control the interactions conducted. Thus, the digital market host’s effectiveness in attracting large number of sellers and consumers is a key success factor (de Reuver, Sørensen, and Basole 2018), so is their ability to control participants’ processes and interactions (Shafiei Gol, Stein, and Avital 2019).
Control, as defined by organizational and information systems research is, attempts to align individual behaviour with organizational objectives (Ouchi, 1979; Wiener et al., 2019). While control research thus far has explained control dynamics in dyadic control relationships such as manger-subordinate (Eisenhardt, 1985; Ouchi, 1979), outsourcing partnerships (Gregory and Keil, 2014; Kirsch, 1997) etc., research on loosely connected participant environment such as digital market ecosystem is still in nascent stage (Danani, 2021). Having said that, we also observe growing interest in the field with research on effects of technology-assisted control on controlee privacy (Goldstein, 2014), controlee stress and work overload and controlee resistance due to continuous monitoring and power asymmetries (Rosenblat, 2016). But there is lack of granular level discussion on control configuration in digital market. It is not clear if the control configurations identified in the past studies can capture control characteristics of digital market participant control. Questions like, how digital markets structure their informal control portfolios to inculcate shared norms in their sellers who are scattered across wide geographic region, or, how formal controls like process control and outcome control be enacted by these marketplaces to ensure successful completion of interactions being conducted outside the control boundaries of the platform, may not be fully explained by existing control configurations set in other contexts. This demands a fresh, in-depth study of control portfolios implemented by digital market hosts. Thus we pose our research question: ‘How do digital market platform hosts exercise control over sellers?’