Open Innovation? It Is a Question of Knowledge Governance
Discussing about the users and customers involvement in improving a firm's innovativeness is one thing, addressing the role of organizational practices is another thing. Until some time ago, in much of the open innovation literature the focus was on the relation between the firm and the external knowledge sources, at the risk of ending up with an incomplete account of how customer and user knowledge might be leveraged in the context of innovation.
Nicolai Foss, Torben Pedersen (Department of Management and Technology) and Keld Laursen were the first to introduce the role of internal organizational design to the open innovation literature. They have developed and tested six hypotheses on a data set of 169 firms collected in a 2001 survey of the 1,000 largest firms in Denmark. The key result is described in their paper Linking Customer Interaction and Innovation: The Mediating Role of New Organizational Practices. "The main theme here is to understand how companies can support innovation processes by means of their organizational design", says Foss, Professor of Organization Theory and Human Resource Management at Bocconi. "Specifically, how firms allocate rights to make decisions matter (very centralized firms will have difficulties accessing external knowledge); how they communicate internally will matter to how they share knowledge that has been absorbed from the outside environment; it may matter if organizational members are incentivized to actually share such knowledge; and so on".
Foss's interest in open innovation is relatively recent, but it has grown from some research perspectives he has nurtured for more than two decades. "I have always had an interest in how formal organization (i.e., the designed aspects of organizational structure and control) influence the creation, sharing, use of knowledge. This is what my colleague, Anna Grandori, calls knowledge governance. About 10 years ago I got interested in applying the knowledge governance perspective to open innovation. The company's organization design truly matters for how well it makes use of external knowledge".
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