How does open innovation contribute to the firm's dynamic capabilities?

Hutton, Steven and Demir, Robert and Eldridge, Stephen (2021) How does open innovation contribute to the firm's dynamic capabilities? Technovation, 106: 102288. ISSN 0166-4972

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A pressing management issue exists to understand how firms can develop dynamic capabilities (DC) through processes such as open innovation (OI). Our study aims to expand knowledge in this area by explicating the underlying mechanisms of OI that contribute to a firm's DC. Adopting a microfoundations perspective, we examined three separate new product development projects in a UK manufacturer over a period of two years. Our findings demonstrate that manufacturing firms can exploit technological and market-based knowledge resources during OI activities and we have developed a process model to reflect these findings. We were able to identify three underlying mechanisms of OI: realization, engagement, and appropriation, that contribute to the creation of firm resources and the firm's DC. Our study reveals that each mechanism links the process of OI to a firm's DC by sequentially and reciprocally altering the firm's abilities for sensing and seizing opportunities. This improved understanding of the microfoundations of OI enables us to explain how external knowledge search and the ensuing knowledge appropriation can correct misalignment between a firm's current capabilities and its future market opportunities, and, thus, enhance the firm's DC.

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Journal Article
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This is the author’s version of a work that was accepted for publication in Technovation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Technovation, 106, 2021 DOI: 10.1016/j.technovation.2021.102288
Uncontrolled Keywords:
?? open innovationmicrofoundationsdynamic capabilitiescapability developmentnew knowledge creationengineering(all)management of technology and innovation ??
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Deposited On:
14 May 2021 16:20
Last Modified:
12 Feb 2024 00:40