THE ROLE OF ABSORPTIVE CAPACITY IN FACILITATING “OPEN INNOVATION” OUTCOMES: A STUDY OF AUSTRALIAN SMEs IN THE MANUFACTURING SECTOR
01 Jan 2017-pp 477-500
TL;DR: In this article, the authors test for the significance of interaction effects between open innovation strategies and absorptive capacity, finding support for the idea that effective knowledge absorption capabilities are of vital importance in the facilitation of innovation effectiveness.
Abstract: The open innovation approach emphasizes porous knowledge boundaries between firms and upstream suppliers, but tends to ignore questions of transformative efficiency and effectiveness once the knowledge reaches the focal organization. In this paper, we test for the significance of interaction effects between open innovation strategies and absorptive capacity, finding support for the idea that effective knowledge absorption capabilities are of vital importance in the facilitation of innovation effectiveness.
TL;DR: In this article, the PSP (Prospective Strategique Participative) is defined as a situation of management empirique representee par un Cercle de reflexions prospectives, where acteurs ont une relation marchande and decident d'explorer des opportunites de collaboration sur un mode communautaire.
Abstract: Notre these a pour point de depart une situation de management empirique representee par un Cercle de reflexions prospectives, que nous appelons PSP (Prospective Strategique Participative), menee par BASF Agro sur une periode de plus de dix ans avec l’ensemble des acteurs de la filiere agro-alimentaire. Les acteurs du Cercle ont une relation marchande et decident d’explorer des opportunites de collaboration sur un mode communautaire. Ils expandent ensemble un espace de conception ou interagissent les savoirs et les relations dans un processus d’innovation. Nous aboutissons a l’hypothese que la PSP joue le role d’une plateforme ouverte de fabrique de la strategie (open strategizing platform) et de fonctionnement des affaires entre les acteurs qui sert a reflechir et concevoir ensemble des strategies nouvelles. La PSP est un dispositif de gestion dont la vision simplifiee de l’organisation (la configuration de reference implicite) est un ecosysteme d’affaires, et pas seulement une organisation classique. Notre analyse est basee sur une etude de cas longitudinale de dix-sept ans
01 Jan 2017
TL;DR: In this paper, the influence of open innovation activities and government support in determining firms' innovative performances was investigated based on random sampling surveys of 880 furniture manufacturing SMEs in Johor Bahru, Malaysia.
Abstract: Open innovation is a viable source to leverage economic viability and success of firms amidst contemporarily global, highly competitive, and transformative postindustrial society. To date, most open innovation research focused exclusively on large companies, while neglecting the specific competitive challenges and strategies of small and medium-sized enterprises (SMEs), in particular of developing countries. This study aimed to fill this gap by investigating open innovation landscape of furniture manufacturing SMEs (FMSMEs) due to their significant roles in Malaysia’s economic development. Based on open innovation model and resource-based view theory, this study investigated the influence of open innovation activities and government support in determining firms’ innovative performances. Data were collected based on random sampling surveys of 880 FMSMEs in Johor Bahru, Malaysia. Data analysis of useable 210 questionnaires were done using hierarchical multiple regression analyses. Results revealed a statistical significance of open innovation activities in determining FMSMEs firms’ innovative performances. Moreover, it is found that government support is a strong moderator of firms’ innovative performances. Findings derived from this study contributed to better understanding of the open innovation activities and practices of FMSMEs in Malaysia. Finally, this study suggests more future research to explore open innovation, innovative performance and government support in the service sector as well as in industries of different nature.
01 Jan 2017
TL;DR: In this article, the authors investigated the relationship between external knowledge inflows from specific external actors, absorptive capacity, innovation and SME performance, focusing on market and science-based knowledge flows.
Abstract: Small to medium-sized enterprises (SMEs) are increasingly opening up their innovation processes in order to improve innovation outcomes. Exactly how openness influences enterprises’ ability to innovate and benefit from external sources of innovation is not well understood. Despite theoretical models explicating knowledge inflows as the antecedent and innovation as the consequence of absorptive capacity, to date, the relationships between external knowledge inflows from specific external actors, absorptive capacity, innovation and SME performance remain underexplored. We address this gap, focussing on market- and science-based knowledge flows, absorptive capacity, innovation and SME performance. Using structural equation modelling on a sample of 838 Australians SMEs, we find evidence indicating that the mechanisms by which external knowledge inflows from market- and science-based actors affect innovation differ: external knowledge inflows from market-based actors influence innovation directly or “serendipitously”, while external knowledge inflows from science-based actors influence innovation indirectly via absorptive capacity. We also find that their effect on innovation differ, with external knowledge inflows from market-based actors exerting a positive direct effect on innovation vis-a-vis external knowledge inflows from science-based actors where there is no significant direct effect. In contrast, external knowledge inflows from science-based actors influence innovation through absorptive capacity. In addition to this mediation effect, absorptive capacity has a positive direct effect on innovation, and an effect on firm performance through innovation. This research contributes to our understanding of how, and the extent to which, external knowledge inflows from specific external actors influence absorptive capacity, innovation and firm performance in SMEs.
01 Jan 2017
TL;DR: In this article, the authors identify the management practices of innovation that managers of micro and small companies have used to capture and absorb knowledge from external sources and evaluate the need to organize these practices in order to increase competitiveness.
Abstract: Most of the studies on open innovation are focused on large companies and especially those dedicated to high technology. The same cannot be said about the practices of open innovation in micro, small and medium-sized enterprises, which also use strategic partners for their innovation processes, but still need more studies that guide both the theoretical and the business field for better understanding of this paradigm of innovation. This article aimed to identify the management practices of innovation that managers of micro and small companies have used to capture and absorb knowledge from external sources and to evaluate the need to organize these practices in order to increase competitiveness. The study has an exploratory approach, consisting of a broad review of the literature, followed by a field survey to collect data. In-depth interviews were conducted with managers and people involved in the process of company innovation and the data collected were qualitatively analyzed using content analysis. As main results, it was highlighted the need to establish relationships of trust between company managers and external sources of knowledge. The search for external sources already occurs among the companies studied, but does not follow a management standard that has been established so that the benefits resulting from the open innovation process can be reached more effectively.
TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
TL;DR: In this paper, the authors identify key dimensions of absorptive capacity and offer a reconceptualization of this construct, and distinguish between a firm's potential and realized capacity, and then advance a model outlining the conditions when the firm's realized capacities can differentially influence the creation and sustenance of its competitive advantage.
Abstract: Researchers have used the absorptive capacity construct to explain various organizational phenomena. In this article we review the literature to identify key dimensions of absorptive capacity and offer a reconceptualization of this construct. Building upon the dynamic capabilities view of the firm, we distinguish between a firm's potential and realized capacity. We then advance a model outlining the conditions when the firm's potential and realized capacities can differentially influence the creation and sustenance of its competitive advantage.
TL;DR: Powell et al. as mentioned in this paper developed a network approach to organizational learning and derive firm-level, longitudinal hypotheses that link research and development alliances, experience with managing interfirm relationships, network position, rates of growth, and portfolios of collaborative activities.
Abstract: This research was supported by grants provided to the first author by the Social and Behavioral Sciences Research Institute, University of Arizona, and the Aspen Institute Nonprofit Sector Research Fund and by grants to the second author by the College of Business and Public Administration, University of Arizona. We have benefited from productive exchanges with numerous audiences to whom portions of this paper have been presented: a session at the 1994 Academy of Management meetings, the Social Organization workshop at the University of Arizona, the Work, Organizations, and Markets workshop at the Harvard Sociology Department, the 1994 SCOR Winter Conference at Stanford University, and colloquia at the business schools at the University of Alberta, UC-Berkeley, Duke, and Emory, and the JFK School at Harvard. For detailed comments on an earlier draft, we are extremely grateful to Victoria Alexander, Ashish Arora, Maryellen Kelley, Peter Marsden, Charles Kadushin, Dick Nelson, Christine Oliver, Lori Rosenkopf, Michael Sobel, Bill Starbuck, Art Stinchcombe, and anonymous reviewers at ASQ. We thank Dina Okamoto for research assistance and Linda Pike for editorial guidance. Address correspondence to Walter W. Powell, Department of Sociology, University of Arizona, Tucson, AZ 85721. We argue in this paper that when the knowledge base of an industry is both complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning, rather than in individual firms. The large-scale reliance on interorganizational collaborations in the biotechnology industry reflects a fundamental and pervasive concern with access to knowledge. We develop a network approach to organizational learning and derive firm-level, longitudinal hypotheses that link research and development alliances, experience with managing interfirm relationships, network position, rates of growth, and portfolios of collaborative activities. We test these hypotheses on a sample of dedicated biotechnology firms in the years 1990-1994. Results from pooled, within-firm, time series analyses support a learning view and have broad implications for future theoretical and empirical research on organizational networks and strategic alliances.*
TL;DR: In this paper, the authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs).
Abstract: The authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs). This argument suggests that the ease of learning within an industry will both affect R&D spending, and condition the influence of appropriability and technological opportunity conditions on R&D. For example, they show that, contrary to the traditional result, intraindustry spillovers may encourage equilibrium industry R&D investment. Regression results confirm that the impact of appropriability and technological opportunity conditions on R&D is influenced by the ease and character of learning. Copyright 1989 by Royal Economic Society.
TL;DR: Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance.
Abstract: A central part of the innovation process concerns the way firms go about organizing search for new ideas that have commercial potential. New models of innovation have suggested that many innovative firms have changed the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve and sustain innovation. Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance. Copyright © 2005 John Wiley & Sons, Ltd.