Organizing for Inbound Open Innovation: How External Consultants and a Dedicated R&D Unit Influence Product Innovation Performance

TLDR: In this article, the authors focus on a relevant yet overlooked category of moderating factors: organization of research and development (R&D), and explore two organizational mechanisms: one informal and externaloriented (involvement of external consultants in R&D activities) and one formalized and internal-oriented (existence of a dedicated research unit), in the acquisition of technological knowledge through outsourcing, a particular contractual form for inbound open innovation.

About: This article is published in Journal of Product Innovation Management.The article was published on 2016-07-01 and is currently open access. It has received 105 citations till now. The article focuses on the topics: Open innovation & Product innovation.

Figures

Table 5: Moderating Effects

Table 1: A summary of the critical capabilities for managing IOI that are influenced by each R&D organizational mechanism.

Figure 2: Moderating Effects by the R&D organizational mechanisms.

Table 2: Sample overview

Table 6: Overview of the empirical results for the moderation effects

Table 3: Means, standard deviations and correlations

Frequently asked questions

Q1. What contributions have the authors mentioned in the paper "Organizing for inbound open innovation: how external consultants and a dedicated r&d unit influence product innovation performance" ?

This article focuses on a relevant yet overlooked category of moderating factors: organization of R & D. Drawing on a capabilities perspective and using a longitudinal dataset of 841 Spanish manufacturing firms observed over the period 1999-2007, this article provides a fine-grained analysis of the moderation effects of the two organizational mechanisms. The study provides guidance on how to improve the benefits of inbound open innovation using two different mechanisms: external R & D consultants or a dedicated R & D unit. 

Q2. What are the future works in "Organizing for inbound open innovation: how external consultants and a dedicated r&d unit influence product innovation performance" ?

This study has several limitations, which suggest future research efforts. Future research is encouraged to study the micro-dynamics through which R & D organizational mechanisms influence the firm ’ s capabilities for managing IOI, not only at the firm level of analysis but also at the project and individual levels. Going beyond the findings of this study, future research should adopt a contingency perspective to scrutinize under what contextual factors managers should apply each of the two organizational mechanisms. Future studies should also broaden the scope of the analysis, including service sectors, other contractual forms for acquiring external technological knowledge, as well as other managerial and organizational levers that can be used to support IOI ( e. g., types of incentives given to R & D employees ). 

Q3. What is the effect of a dedicated R&D unit on the ability to integrate external technology?

By leveraging complementarities between heterogeneous knowledge bases and generating novel combinations, a dedicated R&D unit improves the firm’s capability to combine and integrate external technology with its internal knowledge basis. 

Q4. What is the effect of the use of external consultants on the IOI-performance relationship?

the results of the empirical analysis suggest that by combining the use of external consultants with the presence of a dedicated R&D unit, their moderation effects on the IOI-performance relationship may cancel out. 

Q5. What is his role at Politecnico di Milano?

He is Director of the MBA & Executive MBA Division and of the ICT & Digital Learning Division of MIP, the Graduate School of Business of Politecnico di Milano. 

Q6. How does the involvement of external consultants affect the optimal level of R&D outsourcing?

By leveraging the thick extended social networks of the external consultants, firms can access the most suitable partners whose R&D services contribute to higher product innovation performance. 

Q7. What are some of the common opportunistic behaviors that occur when the technological knowledge?

In particular, shirking and other opportunistic behaviors typically arise when the technological knowledge is transferred from the contractor to the focal firm. 

Q8. Why is the article based on an unbalanced panel of 841 firms?

Because some firms stopped providing information during the sample period for several reasons and because only firms whose data were available for at least three consecutive years are included, the article is based on an unbalanced panel of 841 firms, consisting of 6,161 firm-year observations. 

Q9. What is the effect of external consultants on the IOI-performance relationship?

Hypothesis H1 predicts that the involvement of external consultants in R&D activitiespositively moderates the IOI-performance relationship. 

Q10. What is the significance of the coefficients in Equation 3?

Because the sign and the significance of the coefficients 𝛽4 and 𝛽5 only indicate how and whether each moderating variable influences the IOI-performance relationship, a test is conducted on a combination of parameters in Equation [3] that allow estimation of both the linear and the squared terms of R&D outsourcing in the presence of the moderating factor 𝑀𝑖𝑡, as follows:{ 𝐿𝑖𝑛𝑒𝑎𝑟 𝑡𝑒𝑟𝑚 𝑜𝑓 𝑅&𝐷_𝑂𝑢𝑡𝑠𝑜𝑢𝑟𝑐𝑖𝑛𝑔𝑖𝑡 = 𝛽1 + 𝛽4𝑆𝑞𝑢𝑎𝑟𝑒𝑑 𝑡𝑒𝑟𝑚 𝑜𝑓 𝑅&𝐷_𝑂𝑢𝑡𝑠𝑜𝑢𝑟𝑐𝑖𝑛𝑔𝑖𝑡 = 𝛽2 + 𝛽5 [4]