Performance management and open innovation: evidence from Brazilian startups

Abstract

PurposeThe purpose of this paper is to examine the effects of performance management (PM) practices on in-bound open innovation (OI) and out-bound OI. To do this, the authors examine the organizational effectiveness as well as the non-financial and financial performance of Brazilian startups that have had recent OI relationships with larger companies.Design/methodology/approachUsing data collected from 103 Brazilian startups, the hypotheses were tested via partial least squares–structural equation modeling (PLS-SEM). An additional analysis was performed using fuzzy-set qualitative comparative analysis (fsQCA).FindingsThe findings show that PM practices orchestrate in-bound OI and out-bound OI; however, only in-bound OI promotes organizational effectiveness in Brazilian startups. Organizational effectiveness results in good non-financial performance, which in turn improves financial performance. PM practices have an indirect effect on financial performance from the serial mediation of in-bound OI, organizational effectiveness and non-financial performance. Moreover, several combinations of conditions lead to high levels of organizational effectiveness, non-financial performance and financial performance.Originality/valueThis study provides new evidence and insights from an emerging market on the antecedents and consequences of startups' OI adoption.