Is “Open” Always Better? An Exploration of Open Innovation Projects
Advances in information technologies (IT) have made organizational boundaries so porous that knowledge can be easily transferred between firms. There is an increasing trend towards leveraging on external knowledge for innovation, which is termed open innovation. Open innovation benefits firms from the recombination of distant knowledge by stimulating innovative behavior and breakthrough inventions. However, many adopting firms have experienced significant obstacles in collaborating with external partners from different technological domains and with distinct organizational backgrounds. In this study, we aim to disentangle both the value-enhancing and value-diminishing effects of search openness on open innovation project performance by drawing on the notion of organizational absorptive capacity, the literatures on IT business value, and extant open innovation literature. Our model also investigates the role of IT in augmenting the beneficial impacts and in mitigating the harmful impacts of search openness on open innovation project performance. The research model, tested with field survey data from 258 firms, provides evidence of both positive and negative impacts of search openness and the moderating role of IT to these impacts. This study contributes to the existing literature by uncovering the two-sided effects of openness and building an IT-enabled knowledge capability theory in the open innovation context. Practically, it offers managers strategies to successfully conduct open innovation projects.