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changing business strategically > open innovation > Flashcards

open innovation Flashcards

1
Q

innovation funnel

A

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)

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2
Q

open innovation

A

about including outsiders in the innovation process

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3
Q

open innovation in the idea generation and conceptualization

A

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

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4
Q

open innovation in the development phase

A

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

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5
Q

open innovation in the commercialization phase

A

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

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6
Q

potential partners for open innovation

A

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)

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7
Q

limitation of using only internal r&d

A

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

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8
Q

open innovation can be useful to:

A

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

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9
Q

advantages of open innovation

A

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

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10
Q

Knowledge based view (KBV)

A

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

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11
Q

internal innovation according to KBV

A

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

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12
Q

know-how

A

a deep understanding of how and why something works

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13
Q

characteristics of know-how

A

resides in the organization
cannot be bough from the market

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14
Q

combinative capabilities

A

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

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15
Q

external innovation according to KBV

A

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

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16
Q

factors affecting the management of internal and external R&D

A

Absorptive capacity
not invented here syndrome
need for coordination

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17
Q

absorptive capacity

A

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

18
Q

not invented here syndrome

A

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

19
Q

need for coordination

A

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

20
Q

relationship between internal and external R&D

A

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)

21
Q

determinants of complementary of internal and external R&D

A

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

22
Q

Paradox of openness

A

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)

23
Q

knowledge protection mechanisms

A

patent
secrecy
complexity

24
Q

patent

A

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

25
Q

secrecy

A

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

26
Q

when secrecy is most useful

A

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

27
Q

complexity

A

encouraging the development of know-how through internal informal interactions

28
Q

appropriability strategy

A

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

29
Q

formal innovation

A

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

30
Q

selective revealing

A

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

31
Q

Openness-appropriability tradeoff

A

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

32
Q

effect of weak knowledge protection strategy

A

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

33
Q

effects of strong knowledge protection strategy

A

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

34
Q

effects of moderately strong knowledge protections strategy

A

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

35
Q

two levels of engagement of open innovation

A

soft form of openness
hard form of openness

36
Q

soft form of openness

A

drawing knowledge from external parties without entering into legally binding agreements

37
Q

effect of strong secrecy on soft form of openness

A

strong secrecy mechanisms may discourage informal collaborators

38
Q

hard form of openness

A

formal collaborations to jointly develop innovations

39
Q

effect of strong knowledge protection strategy on hard form of openness

A

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

40
Q

impact of collaboration with competitors

A

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

41
Q

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

A

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

changing business strategically (6 decks)

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