Meta-organizing for open innovation under environmental and social pressures in the oil industry

Abstract

Scholars have yet to address why and how open innovation model can be applied effectively within industries while diminishing its potential cost and challenges. In this paper, we extend open innovation model both theoretically and practically by identifying a) the boundary conditions that motivate firms within resource-based industries to apply the model and b) the approaches that have been implemented in practice in applying the model. In this multiple-case study, we explore why and how firms within the upstream Canadian oil industry have evolved to apply open innovation model over time to deal with the industry's challenges. First, our findings show that institutional forces, both normative and coercive—such as social and environmental pressures, were the primary drivers for adopting open innovation. Second, by building on the taxonomy of meta-organizations, we demonstrate that an industry-founded and not-for-profit innovation intermediary, as a meta-organization, is a necessary tool to address problems of adopting open innovation. We argue that the experiments of the upstream oil industry to develop a suitable organizational design for such innovation intermediaries suggest that a moderate level of stratification accompanying either close or open membership is the most suitable design. The findings from this study can be helpful to other industries, particularly other resource- based industries, which seek to effectively employ the open innovation model through innovation intermediaries.