The role of Sequential Coherence in Open Innovation: A qualitative inquiry

Abstract

Open innovation is a popular strategy among business firms to accelerate innovations. However, open innovation does not always increase innovation performance. Extant literature provides inconsistent and inconclusive arguments in respect of the relationship between open innovation practices and innovation performance. Existing theories mostly have an internal focus and fall short of explaining why some firms succeed in open innovation initiatives and why others fail. Open innovation is about knowledge flows. To understand how boundary conditions influence knowledge flows we made a qualitative inquiry by studying open innovation initiatives of five Sri Lankan firms. Under open coding, we reviewed data collected from lengthy discussions with key people in those firms to identify few general categories of information. Further analysis on this using axial coding revealed three factors that influence knowledge flows. We bundle those factors and describe as sequential coherence which can explain why some succeed while others fail in open innovation. Sequential coherence is measured through the push and the pull effects by willingness and ability of the participants of teacher firm and the preparedness and ability of the participants from the student firm respectively. We trust that our findings bridge a gap in open innovation literature. These initial findings could be generalized through a quantitative study with larger samples. Managerial implications of the finding is that ability to scan the entire chain of knowledge flow across boundaries and taking corrective measures for any bottlenecks or hindrances observed can bring better results from open innovation initiatives. Further, sequential coherence leads to multiple research opportunities in furthering our knowledge in open innovation.