Abstract

PurposeThis study aims to delve into the relationship between open innovation and organizational effectiveness, expanding upon previous research that primarily focused on the impact of open innovation on firm performance.Design/methodology/approachBased on data collected from top- and middle-level managers across diverse sectors in India, the authors examined the intricate dynamics of open innovation and its effects on organizational effectiveness. The authors took two approaches to examine the data; using structural equation modeling and using the fuzzy set qualitative comparative analysis (fsQCA) approach.FindingsThis empirical evidence underscores the potential advantages of adopting open innovation practices within organizations. The contribution extends to both theoretical and practical domains.Research limitations/implicationsTheoretically, this research enriches the literature on open innovation and organizational effectiveness by providing empirical substantiation for their interconnection.Practical implicationsFrom a practical perspective, the findings offer actionable insights for practitioners and organizational leaders, suggesting that embracing open innovation can significantly enhance organizational effectiveness, ultimately fostering improved performance and competitiveness. The findings also have implications for external stakeholders aiming to engage with innovation-driven organizations for purposes of commercialization and knowledge exchange.Originality/valueThis study advocates for incorporating inbound and outbound open innovation practices within strategic decision-making processes to achieve organizational effectiveness.

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