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Open Innovation in the French Automotive Industry: the case of a purchasing function detecting external knowledge and triggering its absorption
Abstract
This paper investigates the mechanisms that trigger a sequence of external knowledge absorption in an innovative automotive firm.
The data was collected through an ethnographic-inspired methodology conducted as an embedded scholar within the Innovation Purchasing Direction of this firm, a dawning and rare function.
The results of our investigations show that the trigger of absorptive capacity is made up of two sequences of activation of the same knowledge related mechanisms linked by one people-related mechanism. First, the external knowledge is selected, adopted, contextualized and preserved by Innovation Purchasing actors that will enroll Research and Development actors to become the internal holder of the external knowledge.
Second, together with these holders, the knowledge-related mechanisms are activated leading to the recognition of the value of the external knowledge by the recipient firm.
... To ensure access to fresh innovations, purchasing should scan potential suppliers outside the current networks, and this is likely to require a new set of skills and methods for locating potential suppliers and evaluating their abilities for product development. To find new suppliers, purchasing managers may, for example, attend to trade fairs to seek new technologies (Bathelt and Gibson 2015;Servajean-Hilst 2014), organize open innovation competitions (Langner and Seidel 2009), or work with innovation intermediaries that help locate and evaluate new suppliers (Billington and Davidson 2013;Tran et al. 2011). Getting to know new ventures or start-ups can also provide an access to new products and the skills of highly innovative teams (Zaremba et al. 2017). ...
In this chapter our objective is twofold. First we try to present a comprehensive vision of the evolutionary role of the purchasing function in regard of the Offer Creation Process (OCP) of firms. We
present 3 alternative organizational solutions enabling to effectively connect the purchasing actors to the OCP. Thereby, among the new roles emerging for the purchasing function, one is particularly
specific to situations where top management is expecting a real contribution in innovation process: the role of Innovation scouting. Therefore the second objective of the paper is a conceptual
contribution in order to shape what should be the specific content of scouting innovation from external resources. Our presentation takes into account two contingency factors: the degree of innovation maturity and the status of the target partners in the supply base (existing or new). As a synthesis we propose a framework for choosing suitable organizing model for purchasing functions
urged to increase their contribution to the OCP.
... The importance of these practices for firm's Open Innovation capacity is theorised through the concept of firms' absorptive capacity which is the "ability of a firm to recognise the value of new, external information, assimilate it, and apply it to commercial ends" (Cohen and Levinthal, 1990). Nevertheless, the involvement of Purchasing entities in such practices receives little attention (Servajean-Hilst, 2014). Furthermore, if cross-functional integration is recognised as important for successful Open Innovation (West and Bogers, 2014), the studied functions are mainly Marketing and Research & Development. ...
This paper seeks to instigate a new area of research in the Early Purchasing Involvement (EPI) literature around the question: How should a Purchasing function evolve in order to identify and capture innovation in the supplier market? Particularly, we attempt to characterise the specificities of the Innovation-Purchasing function, an emerging function acting in the fuzzy-front-end of projects. The contribution of this paper is a reification of the role of this function in an Open Innovation context, through the description of Early Purchasing Involvement in the Innovation (EPI²) agenda. For that, we collected data through an internal benchmarking study within a multinational/multidivisional firm of the automotive sector. Our study reveals similarities and differences between the observed practices of what we call EPI² and the more classical EPI activities in a New Product Development (NPD) context. This study provides a model that can help practitioners and raises some propositions to test in new research.
Over the past few decades, innovation collaborations have significantly expanded across all sectors of activity. Vertical innovation collaboration, specifically between clients and suppliers, is the most prevalent form. However, despite this growth, practitioners face difficulties in managing these collaborations, and academic literature emphasizes the need for further knowledge in this field. In this context, our research has focused on two areas: the management of innovation collaborations from a relational perspective and the emerging role and impact of the Purchasing-Innovation function.
By employing a diverse range of qualitative and quantitative methodological approaches with a praxeological orientation, these studies have yielded several conceptual and practical contributions. Firstly, they enhance our understanding of the dynamics within vertical innovation collaborations by providing a conceptual model and identifying critical operating modes for their success. Additionally, they have enabled the characterization of the novel role of the ambidextrous intermediary in collaborative innovation, namely the innovation-oriented buyer, and shed light on how they establish their legitimacy.
Clients et fournisseurs ne se posent plus la question de savoir s’ils doivent coopérer en innovation mais plutôt comment réussir cette coopération. Dans ces relations, les problématiques liées à l’innovation sont couplées avec celles liées à la relation client-fournisseur, alors qu’elles sont traditionnellement gérées séparément.
L'objectif de la thèse est de comprendre comment se construit, au cours du temps, la performance d’une coopération verticale d’innovation, en considérant aussi bien les interactions inter-entreprises qu'intra-entreprise. Pour cela, nous avons mêlé recherches qualitatives et quantitatives, en nous référant aux courants théoriques orientés ressources, à la théorie des coûts de transaction et au marketing relationnel.
A partir de la littérature et d’entretiens, nous avons élaboré un modèle conceptuel constitué de quatre éléments interconnectés : la configuration de la dyade, l’atmosphère de la relation, le projet d’innovation et la performance de la relation. Auprès de 160 fournisseurs coopérant en innovation avec un client, ce modèle a été testé et validé statistiquement. Une participation-observante au sein d’une Direction Achats-Innovation a permis d’observer une coopération d’innovation de 20 mois avec un fournisseur. Cette coopération a été narrée et analysée à l’aide du modèle conceptuel.
La première contribution de la thèse est donc le modèle qui permet (1) de caractériser une coopération verticale d’innovation à partir de variables appropriées et (2) d’expliquer par itération sa dynamique. Il est complété par une proposition de mesure de la performance de cette relation. Une autre contribution est la démonstration de la complémentarité entre confiance et mécanismes de contrôle inter-entreprises.
Cette thèse a permis d’étendre le champ de la gouvernance des coopérations verticales d’innovation au-delà de l'analyse du projet d’innovation, et de caractériser une fonction en développement, décisive dans ces contextes : les Achats-Innovation. La thèse donne ainsi quelques clefs pour mieux appréhender la gestion des coopérations d’innovation client-fournisseur, en considérant les enjeux liés à la relation comme à l’innovation.
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The question now is no longer whether clients and suppliers need to cooperate in innovation; it is: how to make such vertical cooperation relationships successful? The challenge is that the issues related to innovation are coupled with those linked to the client-supplier relationship – whereas traditionally they are managed separately.
The objective of the thesis is to understand the dynamics of vertical innovation cooperation performance, considering inter-firms and intra-firms interactions. In order to do so, we mobilized a theoretical framework based on resource-based views, transaction cost theory and relationship marketing, and mixed qualitative and quantitative methods.
Using literature and data gleaned from interviews with practitioners, we first built a conceptual model made up of four intertwined elements: the dyad configuration, the relationship atmosphere, the innovation project and the relationship performance. Thanks to a survey with 160 answering suppliers describing a cooperation with one of their clients, we tested this model and validated it statistically. We then took part, in a twenty-month participating-observation, of a vertical innovation cooperation, embedded within the Innovation-Purchasing Direction of the client-firm. This cooperation was narrated and analyzed using our conceptual model.
The first contribution of the thesis is the conceptual model that (1) characterizes a vertical innovation cooperation based on appropriate variables, and (2) iteratively explains its dynamic. It is completed by a proposal of relationship performance measurement. Another contribution is to have demonstrated the complementarity between trust and interfirm control mechanisms.
This thesis extends the realm of vertical innovation cooperation governance beyond the analysis of the innovation project. It also characterizes Innovation-Purchasing as a new developing function which is found to be important in such contexts. Therefore, this thesis provides some keys to better understand the management of innovation cooperations between clients and suppliers, taking into account both innovation and relationships stakes.
Dans ce rapport qui s’appuie sur une revue de travaux récents portant sur l’Open Innovation (articles scientifiques, livres publiés et articles de conférences), nous cherchons à expliquer les grands principes de l’Open Innovation tels qu’ils sont analysés et décrits par le monde de la recherche académique. Aussi, nous commençons par présenter les trois grands piliers de cette littérature et ce qu’ils apportent de nouveau : le livre fondateur d’Henri Chesbrough et sa représentation de ce qu’est l’Open Innovation, la notion de capacité d’absorption d’une entreprise et la notion de lead-user. Puis, nous présentons les résultats de l’étude des entreprises qui se sont engagées dans des démarches d’ouverture de leur innovation et la majeure difficulté rencontrée par celles-ci : la barrière culturelle à franchir. Enfin, nous terminons par balayer les grandes familles de pratiques rencontrées dans l’Open Innovation en action : la recherche de savoirs externes, leur intégration en interne puis leur commercialisation.
http://institutopeninnovation.fr/etudes/etude-s-engager-dans-l-open-innovation/
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Absorptive capacity is a firm's ability to identify, assimilate, transform, and apply valuable external knowledge. It is considered an imperative for business success. Modern information technologies perform a critical role in the development and maintenance of a firm's absorptive capacity. We provide an assessment of absorptive capacity in the information systems literature. IS scholars have used the absorptive capacity construct in diverse and often contradictory ways. Confusion surrounds how absorptive capacity should be conceptualized, its appropriate level of analysis, and how it can be measured. Our aim in reviewing this construct is to reduce such confusion by improving our understanding of absorptive capacity and guiding its effective use in IS research. We trace the evolution of the absorptive capacity construct in the broader organizational literature and pay special attention to its conceptualization, assumptions, and relationship to organizational learning. Following this, we investigate how absorptive capacity has been conceptualized, measured, and used in IS research. We also examine how absorptive capacity fits into distinct IS themes and facilitates understanding of various IS phenomena. Based on our analysis, we provide a framework through which IS researchers can more fully leverage the rich aspects of absorptive capacity when investigating the role of information technology in organizations.
This paper advances the understanding of absorptive capacity for assimilating new knowledge as a mediating variable of organization adaptation. Many scholars suggest a firm's absorptive capacity plays a key role in the process of coevolution (Lewin et al., this issue). So far, most publications, in following Cohen and Levinthal (1990), have considered the level of prior related knowledge as the determinant of absorptive capacity. We suggest, however, that two specific organizational determinants of absorptive capacity should also be considered: organization forms and combinative capabilities. We will show how these organizational determinants influence the level of absorptive capacity, ceteris paribus the level of prior related knowledge. Subsequently, we will develop a framework in which absorptive capacity is related to both micro- and macrocoevolutionary effects. This framework offers an explanation of how knowledge environments coevolve with the emergence of organization forms and combinative capabilities that are suitable for absorbing knowledge. We will illustrate the framework by discussing two longitudinal case studies of traditional publishing firms moving into the turbulent knowledge environment of an emerging multimedia industrial complex.(
We all know of innovations which either made their creators a fortune or which led to their downfall. It is easy to retrospectively explain success as a stroke of genius or failure as a blatant mistake. Easy in retrospect…but what about innovation in the making? How does the innovator navigate the pitfalls which threaten him?
Zahra and George (2002) suggested a reconceptualization of the absorptive capacity construct in order to reduce ambiguity in empirical studies. A rereading of the seminal Cohen and Levinthal (1990) article in light of current research on learning and innovation directs our attention to serious ambiguities and omissions in Zahra and George's reconceptualization. We suggest a reintroduction of "recognizing the value," an alternative understanding of "transformation," a clarification of "potential absorptive capacity," an elaboration of the impact of socialization mechanisms, an investigation of the role of "power relationships," and an inclusion of feedback loops in a dynamic model of absorptive capacity.
Based on a longitudinal case study of four interorganizational product development collaborations, this paper identifies a lure to cross-functional integration that has hereto been neglected. In particular, findings suggest that when the buyer firm separates the Research and Development (R&D) Department from the Procurement Department, the two departments play a good cop–bad cop strategy toward the supplier. Thereby, they are able to foster a high level of goodwill trust between R&D personnel of the collaborating firms, while procurement personnel maintain a high level of formal control. Using an intricate sample design with polar cases, the study shows that cross-functional integration of the two departments hampers interorganizational goodwill trust at the benefit of formal control. The findings offer a way forward for managers seeking to reap the benefits of collaboration, while limiting their exposure to the associated risks.
This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations.
Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation.
This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.