Closed or open innovation? Problem solving and the governance choice

By Teppo Felin, Todd R. Zenger. 2014

559 citations recorded by the source corpus.

Scholars have recently highlighted the promise of open innovation. In this paper, we treat open innovation—in it's different forms and manifestations—as well as internal or closed innovation, as unique governance forms with different benefits and costs. We discuss how each governance form, whether open or closed, is composed of a set of instruments that access (a) different types of communication channels for knowledge sharing, (b) different types of incentives, and (c) different types of property rights for appropriating value from innovation. We focus on the innovation “problem” as the central unit of analysis, arguing for a match between problem types and governance forms, which vary from open to closed and which support alternative forms of solution search. In all, the goal of this paper is to provide a comparative framework for managing innovation, where we delineate and discuss four categories of open innovation governance forms (markets, partnerships, contests and tournaments and user or community innovation) and compare them with each other and with two internal or closed forms of innovation governance (authority and consensus-based hierarchy).

Subfields: Computer Science Applications, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/815b68740ce9be20f5ba3f4f34381570f462310d

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In Computer Science Applications

In Management Science and Operations Research

In Strategy and Management

Citations in the corpus

How open is innovation? A retrospective and ideas forward (2021, background): “We concur with the call to connect OI to other general management theories (Randhawa, Wilden and Hohberger, 2016; Alexy et al., 2019; Felin and Zenger, 2014; Laursen and Salter, 2020).”
The Adoption of Open Innovation in Large Firms (2018, methodology): “Formalizing the Management of Open Innovation Open innovation requires project teams to accomplish a complex task: they must manage the typical difficulties associated with any kind of innovation along with the added complications introduced by flows of knowledge across organizational boundaries (Fe”
The Theory-Based View: Economic Actors as Theorists (2017, unknown): “Organizations may often exist to efficiently form theories of value, specifically enabling the efficient aggregation and recombination of knowledge (Kogut and Zander, 1996) that is particularly critical to framing and solving complex problems (Nickerson and Zenger, 2004; Felin and Zenger, 2014).”