Essays on Implications of an Open-Innovation Model in Organisations Case Study

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The paper "Implications of an Open-Innovation Model in Organisations" Is a great example of a Management Case Study. The intensive study of open innovation as an organizational or management theory is a relatively recent trend, beginning in earnest with the work in 2003 and 2006 by Harvard University’ s Henry Chesbrough. It developed first in the open-source software sector but is quickly spreading to other business sectors as well. It does, however, present a number of challenges. First, how exactly is “ open innovation” defined? Second, are there prescriptive models of how open innovation organizations should be structured?

And finally, what is the nature of networked relationships in open innovation? In this paper, these three aspects of open innovation will be examined, with the objective to develop a set of common characteristics for open innovation organizations.   Open vs. Closed Innovation Innovation is sometimes defined in the research literature and sometimes taken for granted; since it is the common term between two very different process modes, closed or open, it is helpful to settle on a clear definition before discussing those modes. In a general sense, innovation is the introduction or application of new processes or products to the task, group, or set of ideas in order to achieve a positive benefit.

In the context of business organizations, innovation “ ... refers to any new or significantly improved change resulting from research and development, ” and can include intellectual property – ideas – actual products, and processes related to production. “ Closed Innovation” is the more conventional of the two modes, and is consequently easier to define. That is the old-fashioned way of doing things, with research and development leading to the production of new products or concepts all contained in a linear fashion within a single organization.

The organization controls and protects its intellectual property, and there is essentially just one pathway for the organization to profit from it, by applying it to their own products and services. Closed innovation begins with pure or theoretical science, moves on to applied science, then is followed by product development, and finally production and sales. Without moving through the whole chain, the original idea that started off as pure science, which is the core of the intellectual property created, has no real value to the organization. “ Open Innovation” is a non-linear process, and is not limited to what is done within the organization.

The same steps in the process – pure science, applied science, product development and experimentation, and production and sales – still exist, but innovation is not necessarily created by passing through all those steps, and not necessarily created internally within the organization. Ideas at various stages of development can enter the pathway at any step and can come from outside the organization.

In like manner, innovations which do not reach their full potential by reaching the production and sales steps can become an intellectual property with value for the organization, because they can be passed outside to others. Thus, the open innovation organization is most often described as having a “ porous” boundary. Henry Chesbrough, who is perhaps the foremost proponent of open innovation, describes the differences between closed and open innovation as contrasting principles, summed up in the following table:

References

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Chesbrough, Henry W. (2003) “The Era of Open Innovation”. MIT Sloan Management Review, Spring 2003: 35-41.

Chesbrough, Henry. (2006) Open Innovation. Boston: Harvard Business School Publishing.

Collins, Luke. (2006) “Opening Up the Innovation Process”. IEE Engineering Management, February/March 2006: 14-17.

Elmquist, M., Fredberg, T., and Ollila, S. (2009) “Exploring the Field of Open Innovation”. European Journal of Innovation Management, 12(3): 326-345. Available from Emerald: .

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Munsch, Kenneth. (2009) “Open Model Innovation”. Research & Technology Management, May-June 2009: 48-52. Arlington, Virginia: Industrial Research Institute.

Rohrbeck, R., Hölzle, K., and Gemünden, H.G. (2009) “Opening up for Competitive Advantage – How Deutsche Telekom Creates an Open Innovation Ecosystem”. R&D Management, (39)4: 420-430. Available from SSRN: .

Ulhøi, John P. (2004) “Open source Development- a Hybrid in Innovation and Management Theory”. Management Decision, 42(9): 1095-1114. Available from Emerald: .

West, Joel, and Bogers, Marcel. (2010) “Contrasting Innovation Creation and Commercialization within Open, User and Cumulative Innovation”. 14 January 2010. Presentation for the Academy of Management, Montreal (forthcoming) August 2010.

West, J., and Gallagher, S. (2006), “Challenges of Open Innovation: The Paradox of Firm Investment in Open-source Software”. R & D Management, 36(3): 319-31.

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