Recently, a paper by Prof. Rong Ke's team from Tsinghua University, in collaboration with Wan Feng from Zhejiang University, Shi Xianwei from Shanghai Jiao Tong University, and Shahzad (Shaz) Ansari from the University of Cambridge, titled "Scaling high and wide: How firms leverage AI and organizational design to overcome the scale-scope trade-off", was published in the top-tier journal Strategic Management Journal.
Paper Overview
Firms face a strategic dilemma of the "scale-scope trade-off": On the one hand, they need to deepen their engagement in a single domain to achieve scale expansion; on the other hand, they must expand across domains to reap economies of scale. In the digital age, while digital technologies such as data and algorithms enable firms to achieve hyper-scale growth in a single domain, such growth often demands high specialization in this specific domain, thereby further intensifying the tension between scale expansion and scope expansion.
Against this backdrop, the paper focuses on a core strategic question: How can firms in the digital age overcome the "scale-scope trade-off" dilemma to scale high and wide at the same time?
The paper addresses the above research question through a longitudinal case study of ByteDance. It reveals how firms can transform the originally conflicting scale growth and scope expansion into a mutually reinforcing cumulative process through self-learning driven cross-fertilization combined with an adaptive organization design.
This paper makes theoretical contributions primarily in the following three areas:
First, this paper extends the resource-based view by identifying AI as a strategic resource whose value continues to rise in cross-domain deployment - one that can not only be reused across domains, but also constantly learn and improve through use and transfer.
Second, this paper further expands the logic of "resource accumulation preceding diversification" in the conventional resource-based view, demonstrating that diversification is not only the result of resource advantages but also, in turn, enhances the AI resource itself.
Finally, the paper further argues that only when AI, with its "cross-fertilization" effect, is embedded in an adaptive organizational design can firms truly overcome the scale-scope trade-off and achieve simultaneous scale and scope expansion.
Process model of AI-driven scale and scope expansion
(Original figure from the paper)
