Theories in Practice: Part 2

This post aims to refresh your knowledge of Cultural Historical Activity (CHAT), a theoretical perspective that can be leveraged to sustain the design of products and services. CHAT was first introduced by Engeström (1987).

This theory offers a practical framework for mapping a field of activity:


According to CHAT, subjects represent their intentions as objects (i.e., objectives). To achieve these, they use instruments (tools). Subject, object, and instruments form activities that are embedded into a given community. This is regulated by rules and a division of labour.

For example: the object of the lecturer (subject) is to provide a positive learning experience for students. To this end, they use instruments (e.g., paper, pens, post-its, slides, whiteboards, Virtual Learning Environment). They follow the rules of the University (e.g., timetables) and its division of labor (e.g., among administrators, colleagues, and students). They are embedded in a larger community, such as the UK Higher Education system.

As we have discussed in class, activity systems are ridden with contradictions. These can emerge at any point along the triangle of activity. Designers should embrace contradictions, as they provide opportunities for creative action. By addressing contradictions through the design of innovative products or services, we can generate value for the community.


Identification of contradictions: In-class workshop on Activity Theory

As we are moving on to designing our business models, it is helpful to further leverage our knowledge of activity theory. Zott and Amit noted (2009; p. 5):

“Viewed as an activity system, the business model encompasses the set of activities a firm performs, how it performs them, and when it performs them. Key activities might include training, development, manufacturing, budgeting, planning, sales, and service”

Zott and Amit (2009) suggest themes that can assist in the design of the business model (or activity system). These design themes are value-creation drivers:

Novelty: The design of new activities (content), new ways of linking such activities (structure) and new ways of governing the activities (governance).

Lock In: Activities can be designed also for lock-in – i.e., to keep the users ‘attracted’ to the business model. Lock-ins are, for examples, switching costs.

Complementarity: This is achieved when activities are combined in a bundle that provides more value (as compared to each single activity).

Efficiency: an efficient activity system is designed to reduce transaction costs (e.g., by standardizing the interfaces between activities, or by integrating vertically in order to expand activities).

To stay with the Apple examples (see Theory in Practice: Part 1), ask yourself: How does Apple achieve novelty, lock-in, complementarity and efficiency through its activities?

And how can you design NICE (novel, locking-in, complementary, efficient) business models?

If you are curious about business models as activity system, read: Designing your Future Business Model: An Activity System Perspective by Zott & Amit (2009).

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