Open innovation and organizational alignment : a contingency analysis of external search strategies for innovation performance

• Open Innovation und organisationale Anpassung : eine Kontingenzanalyse externer Suchstrategien für Innovations-Performance

Wagner, Philipp; Piller, Frank Thomas (Thesis advisor)

Aachen : Publikationsserver der RWTH Aachen University (2013)
Dissertation / PhD Thesis

Aachen, Techn. Hochsch., Diss., 2013

Abstract

The systematic utilization of external knowledge for innovation purposes, hence open innovation, has received great attention in research and management practice in recent years. Extant research has shown that firms can attain great benefits from searching for innovation relevant knowledge and ideas outside their organizational boundaries. A recent conceptualization of open innovation has differentiated firms’ external search activities with regard to the breadth and depth of the respective external search strategies applied. Previous research found that innovation performance increases with more openness, i.e. broader or deeper external search activities. Yet, these positive effects are limited following an inverted U-shaped effect between openness and innovation performance (Deeds and Hill, 1996; Duysters and Lokshin, 2011; Katila and Ahuja, 2002; Knoben and Oerlemans, 2010; Laursen and Salter, 2006; Rothaermel and Deeds, 2006). Firms improve their innovation performance by searching among a greater amount of external sources, yet this positive effect suffers from diminishing marginal returns with the increase of utilization levels, and even decreases from a certain degree of openness onwards (Laursen and Salter, 2006). Previous studies have suggested that firms need to fully absorb and integrate the knowledge they acquire to fully realize the potential of this external knowledge (Cohen and Levinthal, 1990). Thus, the performance effects firms can realize through the use of external knowledge search also hinge on firms’ internal conditions to process acquired knowledge resources (Lichtenthaler, 2011:88). Research has provided evidence on the importance of structures and process design, cultural context, and the implementation of certain technologies or tools for the successful implementation of open innovation (Chesbrough and Crowther, 2006; Dodgson et al., 2006; Sakkab, 2002). However, overall evidence is limited, and recent research has continued to encourage the investigation of the application prerequisites and conditions of open innovation (Bianchi et al., 2011; Dahlander and Gann, 2010; Lichtenthaler, 2011; Van de Vrande et al., 2010). My research takes up this deficit and investigates how organizations can support their external search activities to improve the respective performance effects. Adopting a contingency theory perspective, I investigate how firms have to align their organizations’ structure, culture, and innovation strategy to their respective openness level and search strategy (i.e. search breadth and depth). My research therefore contributes to theory in innovation management and organization by investigating possible moderators for the relationship between openness and innovation performance. Building on a survey conducted in the German manufacturing industry and a data set of 370 firms, I investigate several hypotheses regarding the performance impact of external search and the moderation effects of firms’ organizational structural design, their organizational culture, as well as their pursued innovation strategies. The results indicate that firms have substantial leeway to improve the performance they derive from external knowledge search through the appropriate alignment of their organizations. In particular it is shown that guidance for search efforts through formalization of procedures and processes, the integration of search functions with other innovation activities as opposed to their separation, and the support of firms external knowledge utilization through a communication oriented culture facilitate open innovation performance effects.

Institutions

• Chair of Technology and Innovation Management (TIM) [812710]