Knowledge-oriented leadership and open innovation: Role of knowledge management capability in France-based multinationals

Abstract

This paper discusses the links between knowledge-oriented leadership, open innovation and knowledge management in the international business context. Open innovation has become crucial for an increasing number of multinational enterprises (MNEs) to gain and maintain competitive advantage and become a market leader. Despite the recent proliferation of papers dealing with open innovation practices of MNEs, there is limited work investigating the role of knowledge management (KM) capability on the relationship between knowledge-oriented leadership and open innovation. Given MNEs’ growing interest in open innovation, the lack of research on knowledge-oriented leadership and KM capability in the open innovation context is a significant research gap in our knowledge. In response, we conducted a study on the mediating role of KM capability in the linkage between knowledge-oriented leadership and open innovation (inbound and outbound), using data collected from 172 subsidiaries of MNEs based in France. A structural equation modelling approach is employed to study the impact of the latent variables associated with knowledge-oriented leadership and KM capability on open innovation. The results indicate that higher levels of knowledge-oriented leadership can lead to enhanced KM capability and improved open innovation outcomes. That is, knowledge-oriented leadership has a direct, positive impact on KM capability and open innovation. Also, KM capability is found to mediate the linkage between knowledge-oriented leadership and open innovation. This study provides useful insights for managers who wish to enhance open innovation activities in MNEs, and offers useful guidance to international business scholars, encouraging further research in this area.