How do institutional effects shape open innovation adoption?

Abstract

ABSTRACT Open innovation (OI) application has gradually expanded to traditional and institutionalised industries, which have their own institutional logic. Organisations in such industries are subject to strict regulations designed to mitigate risk and build organisational legitimacy. Despite its various advantages, OI adoption and implementation is challenging. Yet, institutional effects could play a critical role in facilitating organisations’ change, especially when uncertainty exists. This study focuses on the analytical investigation of the three main institutional effects, i.e. coercive, mimetic and normative forces, on the implementation of OI. A case study approach was used to analyse the issue concerned. A total of four case studies were conducted. The research outcome highlights the role of institutional effects in the implementation of OI. It suggests that institutional effects are an effective means of stimulating the adoption of OI and can guide the organisational innovation process. Moreover, the results highlight the relationship between organisational characteristics and institutional effects. Coercive forces are more important for organisations that are government owned and controlled, while mimetic forces are more crucial for organisations with limited resources. Normative forces have a particular impact on the actions of organisations having direct or indirect ties with the professional networks.