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Is ‘Open’ Always Better? 

An Exploration of Open Innovation Projects
Jungpil Hahn!
!
w/ Tingru Cui,Yu Tong and Hock Hai Teo
open innovation
open innovation
credits: LucasArts
own!
technology
collaborator
technology+
=
innovative!
product
collaborator
technology
own!
technology +
=
innovative!
product
collaborator
working style
own!
working style +
=
complex!
collaboration
own!
working style
collaborator
working style+
=
complex!
collaboration
with whom to collaborate?
is “open” always better?
is “open” always better?
search openness ⇒ open innovation project performance
how can firms successfully implement
open innovation projects?
how can firms successfully implement
open innovation projects?
role of IT ⇒ open innovation project performance
<theory>
is “open” always better?
search openness ⇒ open innovation project performance
product !
effectiveness
process !
efficiency
product !
effectiveness
process !
efficiency
inter-firm!
distance
product !
effectiveness
process !
efficiency
inter-firm!
distance
product !
effectiveness
process !
efficiency
inter-firm!
distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
distance
- technological distance!
- social distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distanceH1a(+)
H1b(+)
H2(+)
H3a(+)
H3b(+)
H4b(-)
H4a(-)
how can firms successfully implement
open innovation projects?
role of IT ⇒ open innovation project performance
IT tools
IT-enabled!
absorptive capacity
IT-enabled!
absorptive capacity
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
IT-enabled!
absorptive capacity
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
CAD/CAM, visualization, !
simulation, ...
online platforms, search !
engines, BA, ...
email, messaging, !
conferencing, ...
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
H5a(+)
H5b(+)
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
H6a(+) H6b(+)
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
H7b(+) H7a(+)
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
H1a(+)
H1b(+)
H2(+)
H3a(+)
H3b(+)
H4b(-)
H4a(-)
H5a(+)
H5b(+) H6a(+) H6b(+)
H7b(+) H7a(+)
</theory>
<data & methods>
multi-method approach
phase 1: !
multiple case studies
phase 2: !
survey
phase 3: !
matching surveys
multi-method approach
phase 1: !
multiple case studies
phase 2:
survey
phase 3: !
matching surveys
data
• sampling frame:!
• high-tech firm directory provided by China Science and Technology
Commission !
• Chinese firms in four industries (chemical and pharmaceutical, electronic and other
electrical equipment, industrial and commercial machinery equipment, fabricated metal and other
material)!
• key informants: !
• managers of R&D department!
• identify a recent completed open innovation project
</data & methods>
<results>
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
H1a(+)
H1b(+)
H2(+)
H3a(+)
H3b(+)
H4b(-)
H4a(-)
H5a(+)
H5b(+) H6a(+) H6b(+)
H7b(+) H7a(+)
unobserved heterogeneity?
A
B
C
A
B
C
0.1
0.1
0.7
0.7
A
B
C
A
B
C
A
B
C
0.1
0.1
0.7
0.7
0.4
0.4
A
B
C
A
B
C
A
B
C
0.1
0.1
0.7
0.7
0.4
0.4
A
B
C
A
B
C
A
B
C
0.1
0.1
0.7
0.7
0.4
0.4
2 segment mixture solution
• 19.7% of sample!
• predominantly!
• large (3.5x)!
• electronic and other electrical
equipment
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
search!
openness
product !
effectiveness
process !
efficiency
inter-firm!
social distance
inter-firm!
tech. distance
IT-enabled!
exploitative learning
IT-enabled!
explorative learning
IT-enabled!
social integration
segment 1!
(N=206, small/medium size firms)
segment 2!
(N=52, large firms)
</results>
contributions
• theory!
• uncovering both positive and negative impacts of search openness!
• building an IT-enabled absorptive capacity theory in the open
innovation context!
• practice!
• 2-sided effects of openness!
• effective control of inter-firm distance!
• deploying different types IT to reap benefits & alleviate challenges
of open innovation

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Presentation at AoM 2014