Open innovation and firm performance: the role of organizational mechanisms

Abstract

Purpose The purpose of this paper is to examine the relationship between the use of open innovation (OI) practices and firm performance, and the role of organizational mechanisms (OMs) (formalization and decentralization) as moderator variables. Design/methodology/approach The authors build a theoretical framework to define a set of hypotheses that are then verified in an empirical study. These theoretical propositions are tested by using the data gathered from a survey addressed to 244 firms in Spanish low- and medium-technology industries. Findings With regard to inbound practices, the practices oriented to cooperate with partners in a R&D context have a positive influence. The results show that outbound practices, either by direct generation of revenues from licensing payments or, more indirectly, through the indirect marketing and technical benefits that can stem from revealing have a positive effect on firm performance. Coupled practices, which are related to participation in clusters and innovation networks, have the highest impact on firm performance. In the industrial context examined, decentralization exerts a positive effect which enhances the effect of outbound practices meanwhile formalization reduces their positive effect. Practical implications This study helps practitioners in low- and medium-technology firms to determine which OI practices are most beneficial to firm performance and how formalization and decentralization can influence the relationship between OI and firm performance. Originality/value This study helps determine the influence of OI practices in terms of inbound, outbound and coupled types through an analysis of low- and medium-technology firms. The OI literature is enriched by the types herein of the role of OMs, which includes an analysis of how formalization and decentralization moderate the influence of OI practices on firm performance.

The influence of open innovation on firm performance

“…Oltra et al 84 analyse 244 low and medium technology Spanish companies, revealing that incoming OI activities, which involve cooperation with partners in an R&D environment, have an encouraging influence on firm performance. Even the outbound activities, either through the revenues of licence payments or through indirect marketing, have a positive influence on firm performance.…”

When agility meets open innovation: two approaches to manage inbound projects

“…Bringing together outbound and inbound processes, organizations need to develop relational capabilities to build and manage relationships with external partners in order to develop strategic alliances (Gassmann & Enkel, 2004). In other words, coupled practices are linked with the participation in cluster and innovation networks and are considered to have the highest impact on firm performance (Oltra, Flor, & Alfaro, 2018) and with the radicalness of the resulting products (Greco, Grimaldi, & Cricelli, 2016).…”

Entrepreneurial orientation, marketing capability, dan firm performance: Literature review

“…Firm performance dapat dicapai dengan perilaku manajer yang memiliki sifat inovatif (Kocak, Carsrud, & Oflazoglu, 2017). Partisipasi dalam suatu kelompok yang dapat menghasilkan inovasi dengan baik akan bedampak tinggi terhadap firm performance dalam konteks industri (Oltra, Flor, & Alfaro, 2018). Lingkungan perusahaan yang kondusif akan mendorong inovasi yang lebih besar sehingga firm performance juga akan menjadi lebih baik (Chadee & Roxas, 2013).…”