open innovation

Question 1

innovation funnel

Answer 1

idea generation (ideas fly around freely without limits)
conceptualization (actual concepts are created)
development (concepts are developed into actual products)
commercialization (when the product or service is released to the market)

Question 2

open innovation

Answer 2

about including outsiders in the innovation process

Question 3

open innovation in the idea generation and conceptualization

Answer 3

passively screening the environment for new ideas and actively inviting new ideas from partners, entrepreneurs, or freelance investors

Question 4

open innovation in the development phase

Answer 4

licensing-in technologies from external partners, which later can be jointly developed to serve the specific needs of the company)

Question 5

open innovation in the commercialization phase

Answer 5

Licensing-out developed products and technologies to external partners with commercialization capabilities

Question 6

potential partners for open innovation

Answer 6

universities (can provide state-of-the-art scientific input for R&D)
suppliers (can integrate their innovation processes with those of the companies to make innovation more efficient)
technology entrepreneurs (can provide ready solutions that could take long to develop internally)
competitors (can help overcome mutual R&D problems)

Question 7

limitation of using only internal r&d

Answer 7

Only internal R&D for innovation -old ways of thinking (inertia) & efforts spent on solutions that exist elsewhere -ineffective innovation -lower competitiveness

Question 8

open innovation can be useful to:

Answer 8

reduce the negative effects of organizational inertia
enlarge the pool of ideas and solutions for innovation
shorten the time to market for new products

Question 9

advantages of open innovation

Answer 9

enables access to new product and business model ideas, new technological solutions, and new commercialization capabilities, leading to more efficient innovation and a faster time-to-market

Question 10

Knowledge based view (KBV)

Answer 10

a firm’s competitiveness is determined by its ability to uniquely recombine internal and external knowledge elements in unique ways

Question 11

internal innovation according to KBV

Answer 11

Internal innovation activities (R&D) - innovation know-how - combinative capabilities (ability to re-combine knowledge elements in unique ways) -enhanced competitiveness

Question 12

know-how

Answer 12

a deep understanding of how and why something works

Question 13

characteristics of know-how

Answer 13

resides in the organization
cannot be bough from the market

Question 14

combinative capabilities

Answer 14

the ability to recombine knowledge elements in unique ways to produce competitive products

Question 15

external innovation according to KBV

Answer 15

more open innovation -> greater absorptive capacity -> competitive advantage

Question 16

factors affecting the management of internal and external R&D

Answer 16

Absorptive capacity
not invented here syndrome
need for coordination

Question 17

absorptive capacity

Answer 17

the ability to locate valuable external knowledge, evaluate its usefulness, and utilize it for commercial purposes
Strong internal R&D –> Greater absorptive capacity –> Greater ability to evaluate outside knowledge and to benefit from it

Question 18

not invented here syndrome

Answer 18

resistance to knowledge, ideas, and technology that are developed outside of the company
Strong internal R&D –> Overconfidence in internal innovation capabilities –> suspicion towards the value of ideas and knowledge from external sources

Question 19

need for coordination

Answer 19

benefiting from external knowledge requires effort to identify potential partners with valuable knowledge, allocate tasks between the focal firm partners, exchange knowledge, monitor progress of collaboration
if the r&d system is overburdened with these activities, the cost of coordination with new external knowledge sources may exceed the benefits

Question 20

relationship between internal and external R&D

Answer 20

low share of external innovation (low innovation performance due to not invented here syndrome)
very strong share of external innovation (low absorptive capacity leading to excessive coordination burden leading to low innovation performance)
moderately strong share of external innovation (healthy balance between absorptive capacity, NIH, and coordination costs, thus high innovation performance)

Question 21

determinants of complementary of internal and external R&D

Answer 21

balance between absorptive capacity, NIH, and coordination costs, due to efficiency in organizational processes, and openness of organizational culture

Question 22

Paradox of openness

Answer 22

While sharing knowledge with partners is vital for joint value creation, it also allows partners to capture some of the value created with the shared knowledge (knowledge leakage)

Question 23

knowledge protection mechanisms

Answer 23

patent
secrecy
complexity

Question 24

patent

Answer 24

A form of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time

Question 25

secrecy

Answer 25

efforts to keep knowledge secret Secrecy measures are sets of rules that limit the transfer of knowledge to specified others, social interactions with them or restrictions on physical access to certain locations

Question 26

when secrecy is most useful

Answer 26

Secrecy is particularly effective for protecting knowledge that is easier to keep invisible from potential imitators e.g. innovations based on complex or tacit knowledge that is difficult to codify and replicate

Question 27

complexity

Answer 27

encouraging the development of know-how through internal informal interactions

Question 28

appropriability strategy

Answer 28

a firms approach to protecting their knowledge against being copied and to appropriating the returns from their innovative activities

Question 29

formal innovation

Answer 29

enables more sustained exchanges between the focal firm and its external environment, but it requires greater managerial effort to find suitable partners, agree on contracts and coordinate joint efforts

Question 30

selective revealing

Answer 30

firms rely on a strategy that involves partial disclosure of some central part of the traded knowledge while controlling access to other parts of the knowledge

Question 31

Openness-appropriability tradeoff

Answer 31

there is a concave relationship between the strength of a firm's knowledge protection strategy and the number of collaborations it has, which is stronger for hard openness (formal collaborations) and firms that collaborate with competitors

Question 32

effect of weak knowledge protection strategy

Answer 32

signals to potential partners that there is no knowledge worth protecting, leading to low number of external collaborators

Question 33

effects of strong knowledge protection strategy

Answer 33

signals to potential partners that there is knowledge worth protecting but little willingness to share it. could signal a potential difficult collaboration and thus lead to low number of external colllaborations

Question 34

effects of moderately strong knowledge protections strategy

Answer 34

Signals to potential partners that there is knowledge worth protecting but also a willingness to share it, thus High number of external collaborations

Question 35

two levels of engagement of open innovation

Answer 35

soft form of openness hard form of openness

Question 36

soft form of openness

Answer 36

drawing knowledge from external parties without entering into legally binding agreements

Question 37

effect of strong secrecy on soft form of openness

Answer 37

strong secrecy mechanisms may discourage informal collaborators

Question 38

hard form of openness

Answer 38

formal collaborations to jointly develop innovations

Question 39

effect of strong knowledge protection strategy on hard form of openness

Answer 39

scares of hard collaborators more than soft collaborators because soft collaborators may have other incentives to collaborate than accessing a focal firm's knowledge

Question 40

impact of collaboration with competitors

Answer 40

Firms who cooperate with competitors are “forgiven” by potential innovation partners for having a strong knowledge protection strategy, this is not perceived as a lack of willingness to share knowledge

Question 41

relying excessively on external input for r&d can lead to

Answer 41

excessive coordination burden, resistance from internal r&d department, lower absorptive capacity in the future