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Irrefutable evidence shows that greater openness toward external partners enhances a firm's ability to solve innovation-related problems. To manage open innovation (OI) projects, firms use a variety of governance modes, including market-based contracts, platform intermediaries, and equity and non-equity partnerships. While innovation projects can be very diverse and characterized by various attributes, such as complexity and knowledge hiddenness, only a few conceptual studies have hitherto considered project attributes as drivers of OI governance mode selection. Using a sample of 85 OI projects and a set of illustrative cases, this article explores empirically how project attributes influence OI governance mode selection. This empirical study advances previous conceptual work on OI governance. By accounting for project-level heterogeneity, we explore the microfoundations of OI and provide more stable and fundamental insights into OI governance than previous industry- and firm-level analyses did. In addition, we suggest that effective OI management depends on matching project attributes with the benefits and costs of specific governance modes. Finally, we argue that this study enhances understanding and conceptualization of the relationship between project complexity and decomposability in the context of OI.

PurposeThis study aims to investigate the effects of project-level external knowledge search breadth and search depth on the innovation performance of open innovation (OI) projects in large firms; it further considers these effects mediated by two forms of control mechanisms (process and outcome control) when the level of project complexity and the two stages of a project – early (problem definition) and late (solution development) – are taken into account.Design/methodology/approachBased on a survey of 187 managers responsible for an OI project, the authors use theory on behavioral-based control mechanisms to explore whether the effect of external knowledge search breadth and depth on OI performance is contingent on having the right levels of control mechanisms in place.FindingsThe results showed that the control mechanism mediates the relationship between external knowledge search breadth and depth and OI project performance. Furthermore, project complexity is an important moderator of these effects, especially for outcome control.Originality/valueA better OI project’s performance is not achieved by external knowledge search breadth and depth alone, but by building process and outcome control mechanism on it to balance knowledge sharing and protecting tension. Furthermore, Outcome control is only helpful with less complex OI projects.

The literature on transparency in participatory policy making is flourishing. With the increased digitization of our world, recent work suggests that the digitally-enabled relationships of how policy makers and citizens observe each other may transform policy making in a fundamental way. In this paper, we use complexity theory to examine how digitally-enabled transparency affects the effectiveness of policy making in aligning citizens with the policy goal to improve collective human welfare. We map Kauffman's NKC fitness landscape model, a generalizable theory of co-evolutionary complexity, to the phenomenon of transparent policy making in order to explain how transparency as an enabling generative mechanism encourages citizens to align with the policy goal without exercising central control. In our framework, citizens are agents who co-evolve by adapting to information available in their citizen landscapes. These landscapes represent the citizens' decision context, which policy makers observe and modify throughout an iterative policy cycle. In our study we identify three types of transparencies that relate to three properties of the citizens' decision context: (1) individual decision interdependence; (2) decision bias; and (3) collective decision interdependence. Using conceptual modeling, a form of inquiry combining formal representation with empirical sense making in three policy domains (e-health, smart transportation, and smart energy), we articulate and empirically validate two generative mechanisms that explain transparency effects for each of the three transparencies: (1) orchestration via iterative landscape “tuning” to reduce ambiguity and simplify citizens' alignment with the policy goal; and (2) social learning via information sharing, a co-evolutionary social “nudge” that encourages citizens to be more open to behavioral changes. Our findings have implications for the literature on transparency in participatory policy making as well as the literature on complexity in public policy and public administration.

This paper provides an overview of the main perspectives and themes emerging in research on open innovation (OI). The paper is the result of a collaborative process among several OI scholars – having a common basis in the recurrent Professional Development Workshop on ‘Researching Open Innovation’ at the Annual Meeting of the Academy of Management. In this paper, we present opportunities for future research on OI, organised at different levels of analysis. We discuss some of the contingencies at these different levels, and argue that future research needs to study OI – originally an organisational-level phenomenon – across multiple levels of analysis. While our integrative framework allows comparing, contrasting and integrating various perspectives at different levels of analysis, further theorising will be needed to advance OI research. On this basis, we propose some new research categories as well as questions for future research – particularly those that span across research domains that have so far developed in isolation. © 2016 Informa UK Limited, trading as Taylor & Francis Group

To increase the incentive for external sources to form interactive relationships, some firms selectively reveal their internally developed knowledge for free. However, ‘selective revealing' is in conflict with the firm's interest in control over IP and challenges the governance of knowledge flows in open innovation. Taking a behavioral perspective, this paper proposes a complementary role of ‘selective revealing' and ‘behavioral control' and its relationship with a firm's source choice. We draw upon a sample of 125 large firms in the United States and Europe to statistically support the proposed complementarity. Results suggest that in value chain-centric and competitor relationships, firms may opt for guided revealing. In contrast, firms primarily engaged with universities are unable to establish guided revealing as a governance mechanism.

In this paper we explore how small and medium-sized enterprises (SMEs) engage in external knowledge sourcing, a form of inbound open innovation. We draw upon a sample of 1,411 SMEs and empirically conceptualize a typology of strategic types of external knowledge sourcing, namely minimal, supply-chain, technology-oriented, application-oriented, and full-scope sourcing. Each strategy reflects the nature of external interactions and is linked to a distinct mixture of four internal practices for managing innovation. Both full-scope and application-oriented sourcing offer performance benefits and are associated with a stronger focus on managing innovation. However, they differ in their managerial focus on strategic and operational aspects.

The various project characteristics that may influence how firms should govern their external knowledge sharing to achieve and higher open innovation project performance is an important research ar...

In open collaboration, an economically important form of organizing technology development in online communities, both producers and users, either firm or independent users, invest their resources to develop and share technological problems as well as solutions freely accessible to the public. Existing literature draws ambivalent conclusions about whether and how the different actors engage in joint problem solving. Given potential conflicts of interest and variance in problem types, in terms of who shares the problem and how much generative efforts a problem demands, we know little about the role and nature of joint problem solving in open collaboration. Taking a dynamic view towards knowledge collaboration, this paper uses granular data about problem solving in OpenStack, a large and successful open source software development community, to examine joint problem solving in open collaboration. We show that not all problem types channel participation in the same way. Both producers and users prefer firm user problems. Secondarily, they also focus more on generative problems unless they are independent users. Our findings contribute to the theoretical puzzle about whether and when open collaboration is actually about “collaboration” and informs managers about opportunities for greater joint problem solving.

This paper examines reuse patterns in transparent multi-staged contests, in which a crowd of developers can reuse others’ designs when developing a novel digital application. They compete for the best application, one that is of high quality in both code and feature. Transparency, defined as collective information access to (1) the design solution, and (2) and the quality of it, triggers variability in reuse choices. Depending on the relative performance, developers adapt their risk preference along a continuum of exploitative to explorative reuse. However, variability in reuse behavior is also shaped by an individuals’ design preference: to focus on either code or feature. To explore patterns of reuse and performance emerging from this micro-level heterogeneity, we develop an agent-based simulation model, informed by theory of reuse and variable risk preferences, as well as emerging empirical data. Our results reveal unexpected discontinuous performance patterns. Design preferences, a bias towards code or feature, lowers the collective performance of the crowd. However, transparency insulates those at the top from such negative effects. It produces high performing designs even if there is bias. Further, while transparency reduces variability and smooths the patterns among those at the top, it also creates unique opportunities for ‘newcomers’ to submit high-quality applications.

"Open innovation" and "external search" for new ideas are central topics in the recent discourse in innovation research. External search helps firms to identify new opportunities for innovation and alleviates the risks of local search. It is widely acknowledged that novel ideas regularly emerge from the combination of distant pieces of knowledge and interaction with "idea suppliers" from distant knowledge domains. However, the current discussion on open innovation has hardly touched upon the question of how firms can systematically search for cross-industry innovation inputs in the fuzzy front-end of the innovation process. This paper links relevant concepts of cognitive psychology and management theory — such as analogical problem solving and the principle of isomorphism — with open innovation in the front-end. It discusses relevant dimensions of systematic search for innovation across industries. A piloted framework is presented that assists firms in systematically and interactively searching for external innovation inputs in distant industries. This framework supports external innovation search in distant industries for a fuzzy customer problem. The results of this participatory action research indicate that a systematic and interactive search process is of practical value to innovation managers. It also points out contingencies of cross-industry innovation search.

In an age of unprecedented virtual, mediated, and distributed collaboration, information transparency and its effects on social interaction, knowledge sharing, and decision making has attracted tremendous scholarly interest in various disciplines, with mixed and often contradicting results. We argue that the current discourse – often implicitly – builds upon the assumption that transparency relates to static structures, which provide information that is perceived to be relevant, i.e. datasets from public entities. This is a simplistic view of a very dynamic concept. Following a conceptual overview of how static transparency is being defined, theoretically operationalized, and applied in current research and practice, we identify the shortcomings of adopting such a view and identify new research avenues for exploring dynamic transparency. Transparency, we find, is better applicable and related to (1) the processes, actions, and patterns of how communication and social relations evolve, (2) the dynamics of information, such as interactions between individuals when engaging in social networking, and (3) the process of how internal organizational data are collected, prepared before revealed, and what aspects of a design, or the evolution of decisions, are revealed to the public. Thus, by adopting a processual and dynamic transparency view, we believe that scholars and practitioners gain a more nuanced approach to the provision of information and the effects of dynamic transparency on social interaction, knowledge sharing, and decision making, which can be adopted in future practice and exploration of an emerging research paradigm.

This paper provides an overview of the main perspectives and themes emerging in research on open innovation. The paper is the result of a collaborative process among several open innovation scholars — having a common basis in the recurrent Professional Development Workshop (PDW) on “Researching Open Innovation” at the Annual Meeting of the Academy of Management. In this paper, we present opportunities for future research on open innovation, organized at different levels of analysis. We discuss some of the contingencies at these different levels, and argue that future research needs to study open innovation — originally an organizational-level phenomenon — across multiple levels of analysis. While our integrative framework allows comparing, contrasting, and integrating different perspectives at different levels of analysis, further theorizing will be needed to advance open innovation research. On this basis, we propose some new research categories as well as questions for future research — particularly those that span across research domains that have so far developed in isolation.

In a broad sense, a social medium is an online interaction space. Most commonly known online interaction spaces are infrastructures that allow members to interact around one or more nexuses of interaction using one or more modes of interaction. Success or failure of an online interaction space depends on how effectively the nexuses and modes meet the needs of the intended community of users. nanoHUB.org is described as an online interaction space that was designed largely by considering how members of the intended community could satisfy the “needs of the one” through chosen nexuses and modes. Based on satisfying several acute needs of individuals, the nanoHUB online interaction space grew into a large community that is beginning to behave more as a social unit than as a group of individuals. The primary nexus of interaction, a simulation tool, was chosen as an active rather than passive nexus (i.e. consuming from the nexus creates new information in the process). The active nexus more easily facilitates the design of features where the social medium itself can consume from the nexus and produce novel information useful to its community of users. In effect, it can become more than an infrastructural platform. It can become a member of its own community.

This paper examines reuse patterns in transparent multi-staged contests, in which a crowd of developers can reuse others’ designs when developing a novel digital application. They compete for the b...

Contemporary service organizations create value through multiple inter-organizational relationships. The relationships between the service organization and its customer have been the dominating focus in literature on value co-creation in large service organizations. This paper introduces the novel phenomenon of value co-creation emerging around interpersonal and digital customer-to-customer (C2C) connections. With the advent of the Internet, social media, “digital native” customers, and the availability of big data and new analytical tools, service organizations are afforded to tap into existing social relationships among their customer base or even to ‘engineer’ novel connections. We present a theory-led model to explain how firms can create new sources of service value through “C2C connected value co-creation”. By extending Teece’s concept of complementary asset in the service context, this model subsumes two major building blocks: a firm’s potential for C2C connections and complementary service assets, namely the network capital, mirroring service resources, and advancing services resources of the connected customer. We present three strategies for C2C connected service value co-creation describing combinations of these building blocks: (1) embedding, (2) substituting, and (3) expanding. Multiple case examples illustrate our propositions. Our novel form of theorizing has implications for future research on management of information systems in service organizations.

Recently, ‘business model’ and ‘business model innovation’ have gained substantial attention in management literature and practice. However, many firms lack the capability to develop a novel business model to capture the value from new technologies. Existing literature on business model innovation highlights the central role of 'customer value'. Further, it suggests that firms need to experiment with different business models and engage in 'trail-and-error' learning when participating in business model innovation. Trial-and error processes and prototyping with tangible artifacts are a fundamental characteristic of design. This research explores the role of design-led innovation in facilitating firms to conceive and prototype novel and meaningful business models. It provides a brief review of the conceptual discussion on business model innovation and highlights the opportunities for linking it with the research stream of design-led innovation.

In this paper we explore how SMEs engage in external knowledge sourcing, a form of inbound open innovation. We draw upon a sample of 1,411 SMEs and empirically conceptualize a typology of strategic types of external knowledge sourcing, namely minimal, supply-chain, technology-oriented, application-oriented, and full scope sourcing. Each strategy reflects the nature of external interactions and is linked to a distinct mixture of four internal practices for managing innovation. Both full-scope and application-oriented sourcing offer performance benefits and are associated with a stronger focus on managing innovation. However, they differ in their managerial focus on strategic and operational aspects.

The concept of open innovation lies at the heart of the current research debate on innovation and strategy. Existing literature indicates that firms vitalize their interest in opening their innovation processes and business models to commercialize not only their own ideas but also external ones. However, existing work mostly concentrates on large firms and does not study open innovation in SMEs. This paper investigates the organizational capabilities for managing open innovation in SMEs. Our single case study analysis highlights that SMEs require new internal managerial capabilities for open innovation. It discusses six dimensions of a managerial system for open innovation: strategy, culture, corporate structure, cross-company network structure, process and IT-support. Further, it presents the transformation process of the CAS software AG and reveals the evolutionary character of the change process from closed to open innovation with different maturity levels.

The existing literature on open innovation mostly concentrates on large firms. Little is known about the role of open innovation in small and medium-sized enterprises (SMEs). In this paper we explore how SMEs engage in open innovation search. We draw upon a new survey of 1,489 SMEs. Results highlight that SMEs purposively open up to external innovation inputs. We identify variations in how SMEs search for external innovation inputs and empirically classify five strategic types of open innovation search. While these five strategies can be found in different industries, size and age classes, results suggest that a SME’s open innovation search strategy is conditioned by its organizational context. We also find that these strategies significantly differ in their ability to improve innovation performance as well as their internal organizational requirements for managing innovation. Our study indicates that both a demand-driven and a widely diversified search strategy can improve the success of SMEs in launching innovations. The latter can even enhance their ability to capture financial value from innovation; however, value capture requires a higher proficiency in managing innovation internally.

Recent open innovation literature highlights the need for interactive relationships with external knowledge sources. To improve opportunities for innovation along these relationships, some firms wa...

The burgeoning discussion in open and collaborative innovation has revitalised fi rms' interest in purposive infl ows and outfl ows of knowledge. This questions our understanding of 'explorative innovation' and the role of technologies in explorative innovation search. This paper aims to enhance our conceptual understanding of 'explorative' innovation strategies. On the basis of a systematic literature review, we synthesise the existing literature on explorative innovation. We identify six groups of conceptualisations that refl ect the diverse perspective towards explorative innovation. These groups differ in terms of the level of analysis, the dominating theoretical perspectives, the underlying dimensions describing how fi rms explore and search, and the relevance of external and internal conditioning factors. Overall, we found that the role of technology in explorative search varies, and has slightly changed over time. We propose a multidimensional perspective towards exploration. We highlight that technologies may serve a range of functions in the fi rm's business model.