Implications of open innovation for organizational boundaries and the governance of contractual relations

Item Type Journal paper
Abstract To create value in an open innovation context, firms need to increase the permeability of their organizational boundaries to enable knowledge exchange with a broad set of partners. Yet, in order to capture value, firms also need to consider how to govern their cooperative efforts and prevent unintended knowledge leakage. This paper develops a novel framework for researching this “paradox of openness”, which combines an organizational boundary with a relational contract design perspective. First, we extend prior literature by arguing that value is not only created by optimizing resource bundles through external search processes (i.e. competence boundaries). Instead, value can be created by managing interdependencies with external parties (i.e. power boundaries), aligning OI activities with the organization’s identity (i.e. identity boundaries), and coordinating diverse transactions in an OI portfolio (i.e. efficiency boundaries). Second, we propose that relational contract design is an important alternative to formal appropriation regimes and discuss how contractual mechanisms derived from a relational perspective can enable value capture in an OI context. Finally, we discuss how firms can strategically manage configurations of firm boundaries and contract design via a set of dynamic capabilities.
Authors Zobel, Ann-Kristin & Hagedoorn, John
Journal or Publication Title Academy of Management Perspectives
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 2020
Publisher Academy of Management Perspectives
Volume 34
Number 3
ISSN 1558-9080
ISSN-Digital 1943-4529
Publisher DOI
Depositing User Prof. Ph.D Ann-Kristin Zobel
Date Deposited 23 Mar 2020 16:27
Last Modified 14 Dec 2020 12:08


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Zobel, Ann-Kristin & Hagedoorn, John (2020) Implications of open innovation for organizational boundaries and the governance of contractual relations. Academy of Management Perspectives, 34 (3). ISSN 1558-9080

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