Managing Open-Innovation between Competitors: A Project-Level Approach

Past research on Business-to-Business (B2B) Open innovation is mainly on firm decisions to open their boundaries to allow knowledge to flow in and out at the firm level. An emerging group of studies seeks to switch the unit of analysis from the firm level to the project level, stressing a deeper understanding of how knowledge is purposely managed. This paper contributes to this latter group by investigating how knowledge is purposely managed in one of the most "high-risk" B2B open-innovation projects: Open Innovation between competitors. Our analysis reveals that (1) knowledge flow is a dynamic process that can gradually involve additional stakeholders; (2) knowledge flow is not purposely managed only outside and inside external boundaries to create value through a project; it must also continue to be managed outside and inside internal boundaries to capture value from the project; and (3) there are two types of knowledge flow that enable middle managers to ensure that their business units capture value from Open Innovation projects (i.e., a shopping list that brings the new innovation from the project to the business unit and a wish list that influences the direction of the innovation toward a firm's business unit needs).