How does the relationship between different open innovation activities influence innovation outcomes?

Abstract

To sustain competitive advantage and ensure organizational growth, organizations must be able to secure a sustained flow of innovation. As the environment becomes more global and increasingly interconnected, organizational boundaries are becoming more permeable. As a result, strategic partnerships play an important role in organizational efforts to leverage innovation. Consequently, open innovation has been widely adopted by various organizations as a cost-effective and profitable method to deliver successful innovation outcomes. However, organizations are often not aware of the relationship between open innovation activities and the effect they have on the innovation outcome. This gap in open innovation understanding remains largely unexplored. The implication being that organizations are unknowingly diminishing the effectiveness of their open innovation investments. As more organizations embrace and implement various complex open innovation activities, a better understanding of the intra-organizational effects that different open innovation activities collectively have on the innovation outcome is needed. This paper is motivated by the desire to clarify how the relationship between open innovation activities affects the innovation outcome. To address the current research gap, this paper develops a conceptual framework capturing the intra-organizational relationship factors of open innovation activities and the effect on the innovation outcome. The framework is supported by the results of a case study analysis using a sample of one multi-national pharmaceutical organization. The paper has two contributions. First, it becomes evident that the relationship between open innovation activities has a largely positive effect on the innovation outcome, notwithstanding the implication that allowing too much autonomy may have a negative effect on the innovation outcome. Secondly, this paper extends the understanding of innovation management by conceptualizing open innovation activities in an inter-organizational context. The implications of the findings support a broader perception of the existing relationship between open innovation activities and their corresponding impact on the innovation outcome. Additionally, the framework provides practical suggestions to illustrate the benefits of the positive relationship factors as well as create an awareness about the impact of the negative relationship factors. These findings enable managers to be able to make better decisions about their innovation practices and to be able to build a competitive advantage in open innovation management.