Barriers In Profiting From Inbound Open Innovation: A Contingency Approach of Organizational Design

Abstract

Open innovation represents a crucial concept for a firm’s innovation and overall success. However, some firms are severely struggling in managing open innovation processes. Up to now, research has not sufficiently addressed the topic why some firms are managing open innovation more successfully than others. Currently, scholars call for more quantitative empirical analyses and emphasize the need for detailed contingency studies. We respond to this call and provide insights of a multi-informant survey of 95 firms from the Western-European automotive industry. Based on contingency theory, we examine as to how organizational design influences the effectiveness of inbound open innovation on new product development (NPD). In doing so, we first conducted a literature review to clarify that the following five variables belong to organizational design: formalization, centralization, specialization, monetary, and non-monetary reward. Second, based on hierarchical multiple regression analyses with robust standard errors, the results show that organizational design (in particular formalization, specialization, and non-monetary rewards) acts as barriers for firms who strive to profit from inbound open innovation. These findings significantly contribute to innovation as well as organization research and practice.