IDEAS home Printed from https://ideas.repec.org/a/eee/techno/v106y2021ics0166497221000699.html
   My bibliography  Save this article

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

Author

Listed:
  • Hutton, Steven
  • Demir, Robert
  • Eldridge, Stephen

Abstract

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.

Suggested Citation

  • Hutton, Steven & Demir, Robert & Eldridge, Stephen, 2021. "How does open innovation contribute to the firm's dynamic capabilities?," Technovation, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:techno:v:106:y:2021:i:c:s0166497221000699
    DOI: 10.1016/j.technovation.2021.102288
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166497221000699
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.technovation.2021.102288?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Saouré Kouamé & Ann Langley, 2018. "Relating microprocesses to macro‐outcomes in qualitative strategy process and practice research," Strategic Management Journal, Wiley Blackwell, vol. 39(3), pages 559-581, March.
    2. Marcel Bogers & Ann-Kristin Zobel & Allan Afuah & Esteve Almirall & Sabine Brunswicker & Linus Dahlander & Lars Frederiksen & Annabelle Gawer & Marc Gruber & Stefan Haefliger & John Hagedoorn & Dennis, 2017. "The open innovation research landscape: established perspectives and emerging themes across different levels of analysis," Industry and Innovation, Taylor & Francis Journals, vol. 24(1), pages 8-40, January.
    3. Demir, Robert & Angwin, Duncan, 2021. "Multidexterity: Combining Competing Business Models in Transforming Economies," Management and Organization Review, Cambridge University Press, vol. 17(2), pages 282-313, May.
    4. Sidney G. Winter, 2003. "Understanding dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 991-995, October.
    5. Arie Y. Lewin & Silvia Massini & Carine Peeters, 2011. "Microfoundations of Internal and External Absorptive Capacity Routines," Organization Science, INFORMS, vol. 22(1), pages 81-98, February.
    6. Dahlander, Linus & Gann, David M., 2010. "How open is innovation?," Research Policy, Elsevier, vol. 39(6), pages 699-709, July.
    7. Dahlander, Linus & Gann, David M. & Wallin, Martin W., 2021. "How open is innovation? A retrospective and ideas forward," Research Policy, Elsevier, vol. 50(4).
    8. repec:cup:maorev:v:15:y:2019:i:01:p:177-199_00 is not listed on IDEAS
    9. Du, Jingshu & Leten, Bart & Vanhaverbeke, Wim, 2014. "Managing open innovation projects with science-based and market-based partners," Research Policy, Elsevier, vol. 43(5), pages 828-840.
    10. Lopez-Vega, Henry & Tell, Fredrik & Vanhaverbeke, Wim, 2016. "Where and how to search? Search paths in open innovation," Research Policy, Elsevier, vol. 45(1), pages 125-136.
    11. Linus Dahlander & Siobhan O'Mahony & David M. Gann, 2016. "One foot in, one foot out: how does individuals' external search breadth affect innovation outcomes?," Strategic Management Journal, Wiley Blackwell, vol. 37(2), pages 280-302, February.
    12. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    13. Herman Aguinis & Angelo M. Solarino, 2019. "Transparency and replicability in qualitative research: The case of interviews with elite informants," Strategic Management Journal, Wiley Blackwell, vol. 40(8), pages 1291-1315, August.
    14. Joon Mo Ahn & Letizia Mortara & Tim Minshall, 2018. "Dynamic capabilities and economic crises: has openness enhanced a firm's performance in an economic downturn?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 49-63.
    15. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    16. Aija Leiponen & Constance E. Helfat, 2010. "Innovation objectives, knowledge sources, and the benefits of breadth," Strategic Management Journal, Wiley Blackwell, vol. 31(2), pages 224-236, February.
    17. Teece, David J., 2019. "China and the Reshaping of the Auto Industry: A Dynamic Capabilities Perspective," Management and Organization Review, Cambridge University Press, vol. 15(1), pages 177-199, March.
    18. Bogers, Marcel & Foss, Nicolai J. & Lyngsie, Jacob, 2018. "The “human side” of open innovation: The role of employee diversity in firm-level openness," Research Policy, Elsevier, vol. 47(1), pages 218-231.
    19. Constance E. Helfat & Margaret A. Peteraf, 2003. "The dynamic resource‐based view: capability lifecycles," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 997-1010, October.
    20. Naqshbandi, M. Muzamil & Jasimuddin, Sajjad M., 2018. "Knowledge-oriented leadership and open innovation: Role of knowledge management capability in France-based multinationals," International Business Review, Elsevier, vol. 27(3), pages 701-713.
    21. Frank T. Rothaermel & Andrew M. Hess, 2007. "Building Dynamic Capabilities: Innovation Driven by Individual-, Firm-, and Network-Level Effects," Organization Science, INFORMS, vol. 18(6), pages 898-921, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soluk, Jonas & Decker-Lange, Carolin & Hack, Andreas, 2023. "Small steps for the big hit: A dynamic capabilities perspective on business networks and non-disruptive digital technologies in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    2. Zahoor, Nadia & Adomako, Samuel, 2023. "Be open to failure: Open innovation failure in dynamic environments," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    3. Chukiat Siriwong & Siwarit Pongsakornrungsilp & Pimlapas Pongsakornrungsilp & Vikas Kumar, 2024. "Mapping the Terrain of Open Innovation in Consumer Research: Insights and Directions from Bibliometrics," Sustainability, MDPI, vol. 16(15), pages 1-22, July.
    4. Na Zhang & Lu Cheng & Chao Sun & Julie Callaert & Bart Looy, 2023. "The role of inter- and intra-organisational networks in innovation: towards requisite variety," Scientometrics, Springer;Akadémiai Kiadó, vol. 128(7), pages 4117-4136, July.
    5. Hegeman, Puck D. & Sørheim, Roger & Landström, Hans & Saether, Erik Andreas, 2024. "Corporate angels: A new breed of investors in the funding landscape for technology-based start-ups," Technovation, Elsevier, vol. 134(C).
    6. Vasi, Melissa & Sansone, Giuliano & English, Vincent, 2024. "Exogenous crises and SMEs resilience: The Dynamic Open Innovation Funnel," Technovation, Elsevier, vol. 129(C).
    7. Rhaiem, Khalil & Doloreux, David, 2024. "Inbound open innovation in SMEs: A microfoundations perspective of dynamic capabilities," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    8. Dwivedi, Yogesh K. & Balakrishnan, Janarthanan & Das, Ronnie & Dutot, Vincent, 2023. "Resistance to innovation: A dynamic capability model based enquiry into retailers’ resistance to blockchain adaptation," Journal of Business Research, Elsevier, vol. 157(C).
    9. Purdy, Lauren & Eslami, Hadi & Eshghi, Kamran & Rod, Michel, 2023. "Technology sourcing and the dark side of open innovation: Evidence from the biopharmaceutical sector," Technovation, Elsevier, vol. 119(C).
    10. Lucia Vigoroso & Roberto Sorrenti & Eugenio Cavallo & Federica Caffaro, 2023. "Non-Profit Organizations as Facilitators of the Sustainable Social Innovation of Firms: An Italian Case Study," Sustainability, MDPI, vol. 15(10), pages 1-20, May.
    11. Wang, Xuemei & Han, Xu & Li, Huimin, 2023. "The impact of innovation openness on innovation performance of manufacturing corporates –Moderating effect based on knowledge reorganization," Finance Research Letters, Elsevier, vol. 55(PA).
    12. Ogink, Ruben H.A.J. & Goossen, Martin C. & Romme, A. Georges L. & Akkermans, Henk, 2023. "Mechanisms in open innovation: A review and synthesis of the literature," Technovation, Elsevier, vol. 119(C).
    13. Wang, Nan & Wan, Jiahao & Ma, Zhenzhong & Zhou, Yan & Chen, Jin, 2023. "How digital platform capabilities improve sustainable innovation performance of firms: The mediating role of open innovation," Journal of Business Research, Elsevier, vol. 167(C).
    14. Tikas, Gaurav Dilip, 2023. "Team innovation capability: Scale development and validation," Technovation, Elsevier, vol. 126(C).
    15. Eltigani Mohamed Ahmed, 2022. "Predicting the mediating effect of resource orchestration on the relationship between leadership strategy and the resilience of Kenyan Listed Banks," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 56-73, September.
    16. Nieto, María Jesús & Santamaria, Luis & Bammens, Yannick, 2023. "Digitalization as a facilitator of open innovation: Are family firms different?," Technovation, Elsevier, vol. 128(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schäper, Thomas & Jung, Christopher & Foege, Johann Nils & Bogers, Marcel L.A.M. & Fainshmidt, Stav & Nüesch, Stephan, 2023. "The S-shaped relationship between open innovation and financial performance: A longitudinal perspective using a novel text-based measure," Research Policy, Elsevier, vol. 52(6).
    2. Barrett, Gillian & Dooley, Lawrence & Bogue, Joe, 2021. "Open innovation within high-tech SMEs: A study of the entrepreneurial founder's influence on open innovation practices," Technovation, Elsevier, vol. 103(C).
    3. Barrett, Gillian & Tsekouras, George, 2022. "A tango with a gorilla: An exploration of the microfoundations of open innovation partnerships between young innovative companies and multi-national enterprises," Technovation, Elsevier, vol. 117(C).
    4. Dahlander, Linus & Gann, David M. & Wallin, Martin W., 2021. "How open is innovation? A retrospective and ideas forward," Research Policy, Elsevier, vol. 50(4).
    5. Marlenne G. Velazquez-Cazares & Anna M. Gil-Lafuente & Ernesto Leon-Castro & Fabio Blanco-Mesa, 2021. "Innovation capabilities measurement using fuzzy methodologies: a Colombian SMEs case," Computational and Mathematical Organization Theory, Springer, vol. 27(4), pages 384-413, December.
    6. Carlo Salvato & Roberto Vassolo, 2018. "The sources of dynamism in dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1728-1752, June.
    7. Marullo, Cristina & Ahn, Joon Mo & Martelli, Irene & Di Minin, Alberto, 2022. "Open for innovation: An improved measurement approach using item response theory," Technovation, Elsevier, vol. 109(C).
    8. Ovuakporie, Oghogho Destina & Pillai, Kishore Gopalakrishna & Wang, Chengang & Wei, Yingqi, 2021. "Differential moderating effects of strategic and operational reconfiguration on the relationship between open innovation practices and innovation performance," Research Policy, Elsevier, vol. 50(1).
    9. Eriksson, Taina, 2014. "Processes, antecedents and outcomes of dynamic capabilities," Scandinavian Journal of Management, Elsevier, vol. 30(1), pages 65-82.
    10. Björn Michaelis & Shalini Rogbeer & Lars Schweizer & Zafer Özleblebici, 2021. "Clarifying the boundary conditions of value creation within dynamic capabilities framework: a grafting approach," Review of Managerial Science, Springer, vol. 15(6), pages 1797-1820, August.
    11. Ferreira, Jorge & Coelho, Arnaldo & Moutinho, Luiz, 2020. "Dynamic capabilities, creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation," Technovation, Elsevier, vol. 92.
    12. André de Abreu Saraiva Monteiro Alves & Fernando Manuel Pereira de Oliveira Carvalho, 2022. "How Dynamic Managerial Capabilities, Entrepreneurial Orientation, and Operational Capabilities Impact Microenterprises’ Global Performance," Sustainability, MDPI, vol. 15(1), pages 1-23, December.
    13. van Uden, Annelies & Knoben, Joris & Vermeulen, P.A.M., 2015. "Making Sense of Industry Characteristics as Drivers of Dynamic Capabilites," Other publications TiSEM fbb2a35d-c957-489b-b170-d, Tilburg University, School of Economics and Management.
    14. Quan Anh Nguyen & Gillian Sullivan Mort, 0. "Conceptualising organisational-level and microfoundational capabilities: an integrated view of born-globals’ internationalisation," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-23.
    15. Garcia Martinez, Marian & Zouaghi, Ferdaous & Garcia Marco, Teresa & Robinson, Catherine, 2019. "What drives business failure? Exploring the role of internal and external knowledge capabilities during the global financial crisis," Journal of Business Research, Elsevier, vol. 98(C), pages 441-449.
    16. Insu Cho & Young Hoon Kwak & Jaehyeon Jun, 2019. "Sustainable Idea Development Mechanism in University Technology Commercialization (UTC): Perspectives from Dynamic Capabilities Framework," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    17. Verreynne, Martie-Louise & Hine, Damian & Coote, Len & Parker, Rachel, 2016. "Building a scale for dynamic learning capabilities: The role of resources, learning, competitive intent and routine patterning," Journal of Business Research, Elsevier, vol. 69(10), pages 4287-4303.
    18. Pantic-Dragisic, Svjetlana & Söderlund, Jonas, 2020. "Swift transition and knowledge cycling: Key capabilities for successful technical and engineering consulting?," Research Policy, Elsevier, vol. 49(1).
    19. Schriber, Svante & Löwstedt, Jan, 2015. "Tangible resources and the development of organizational capabilities," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 54-68.
    20. Huy-Cuong Vo-Thai & Shihmin Lo & My-Linh Tran, 2021. "How Capability Reconfiguration in Coping With External Dynamism Can Shape the Performance of the Vietnamese Enterprises," SAGE Open, , vol. 11(3), pages 21582440211, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:techno:v:106:y:2021:i:c:s0166497221000699. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/01664972 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.