Empirical essays on open innovation

Fisher, Gregory

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Description

Title

Empirical essays on open innovation

Author(s)

Fisher, Gregory

Issue Date

2014-09-16

Director of Research (if dissertation) or Advisor (if thesis)

Qualls, William J.

Doctoral Committee Chair(s)

Qualls, William J.

Committee Member(s)

• Rindfleisch, Aric
• Echambadi, Rajagopal
• Fang, Eric

Department of Study

Business Administration

Discipline

Business Administration

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Open innovation
• Marketing capabilities
• Social production
• Nonmarket
• 3D printing
• Web scraping
• New product development
• Market learning
• Partial least squares
• Designer reputation
• 3-D printing
• Thingiverse
• Dynamic capabilities
• Innovation
• External knowledge
• Community selection
• Adaptive marketing capabilities

Abstract

This dissertation offers an integrative conceptual framework and research studies that provide theoretical and empirical explanations for important mechanisms that enable new product outcomes from different approaches to open innovation. The literature review classifies various forms of open innovation along the two key dimensions of the organizer of open innovation activities and the intended consumer of the open innovation output. This unique perspective of open innovation enables this dissertation to investigate open innovation from the supply-side, in terms of the firms and individuals who collaborate to create new products. Additionally, this unique approach enables this dissertation to explore the demand-side perspective, in terms of the consumers who use the new products that are created via open innovation. One chapter of this dissertation explores a specific, supply-side form of open innovation that is termed “open contribution.” With open contribution, a firm allows external organizations and individuals to actively participate in its development of new products. While the firm permits external contributions to its new product development (NPD) process, it retains internal control over the resulting innovation output. This chapter advances the emerging adaptive marketing capabilities theoretical perspective that includes vigilant market learning, adaptive market experimentation, and open marketing as important mechanisms that firms leverage to create and commercialize innovations. This study bridges adaptive marketing capabilities to the open innovation literature to delineate how open contribution, through external knowledge search and diverse external stakeholder involvement, influences NPD outcomes. This research builds a dynamic marketing capabilities conceptual framework that hypothesizes the effects of open contribution on adaptive marketing capabilities and innovation performance. The study empirically tests the hypotheses with partial least squares using primary survey data from 203 respondents. The results reveal that the ability to predict new product outcomes is substantially improved with the addition of adaptive marketing capabilities. Firms that focus on open contribution may search their environment effectively but fail to utilize the external knowledge to create innovations. Adaptive marketing capabilities are required internal dynamic firm mechanisms for interpreting and converting the external knowledge into innovations. The findings suggest how firms can develop specific capabilities that are needed to implement open innovation and leverage external knowledge during NPD. Another chapter of this dissertation considers the demand-side perspective to explore a completely different form of open innovation in which individuals independently innovate and build on other individuals’ creative ideas. This approach to open innovation is termed “nonmarket innovation” because it creates new products without any governance or oversight from a professional organization, and because it avoids firm-led marketplace exchanges as a means of diffusing new products. This chapter focuses on the “maker movement,” which is a rapidly emerging area of nonmarket innovation in which individuals create original product designs, and communities of users select designs and make products, instead of buying products from firms. This research expands social production theory to explicate the concept of community selection as a key mechanism that enables individuals to choose new product designs that are created via nonmarket innovation. Social production relies, in part, on the ability of products to be modified by subsequent innovators. This dissertation reveals that the social production concept of design modification also influences individuals’ decisions to select new products that are created through nonmarket innovation. Further, the community selection process evaluates the reputation of individual designers that share their original product designs. The designer’s reputation is an indicator of standing within the community that spills over onto the expected quality of the product designs. This research relies upon a rigorous multi-method approach that includes secondary data and behavioral lab data to test hypotheses in the budding nonmarket innovation context of three-dimensional (3D) printing communities. In particular, the results suggest that the social production concept of design modification influences individuals’ decisions to use new products that are created through nonmarket innovation. By investigating both the supply-side and demand-side aspects of open innovation, this dissertation seeks to accomplish numerous objectives. Theoretically, this dissertation extends several emerging conceptual perspectives to the open innovation literature. The research theoretically delineates open contribution as a specific form of firm-led open innovation and introduces the marketing capabilities literature into the open innovation domain. Additionally, this research conceptually builds upon the emerging view of adaptive marketing capabilities to show how these capabilities enable firms to accomplish specific objectives from open contribution. Moreover, this dissertation contributes to the development of theory in the open innovation domain by introducing social production theory to the marketing domain. This research extends the social production perspective to incorporate the nonmarket innovation mechanism of community selection. Further, the research suggests the relevance of social production theory for understanding how users select product designs that are created through nonmarket innovation. Empirically, this dissertation seeks to make contributions to open innovation through the measurement of several emerging constructs. This research develops original measurement scales to be among the first to operationalize open contribution and the adaptive marketing capabilities of vigilant market learning, adaptive market experimentation, and open marketing. This study empirically tests each of these constructs and links them to specific performance outcomes, which is an ongoing need in the growing literature on open innovation. Further, this research operationalizes several incipient ideas from the social production perspective, including design granularity, design modifiability, and community selection. These constructs are measured via multiple methods and empirically tested to further our knowledge of nonmarket innovation. Substantively, this dissertation offers numerous insights to practitioners of open innovation. Managers continue to seek guidance on more specific tactics that they should pursue in order to utilize the external knowledge that is increasingly available to their NPD efforts. This dissertation’s focus on adaptive marketing capabilities suggests specific capabilities that firms can cultivate and leverage to obtain favorable outcomes from open contribution. While firms are pursuing open contribution paradigms at an increasing rate, nonmarket innovation communities are new phenomena that are not well-understood and have been greeted with caution and concern by firms. Many incumbent firms view nonmarket innovation as a hazard that possesses the potential to erode the profitable businesses that they have built and protected through years of careful marketing and management effort. While not all firms are threatened by nonmarket innovation, few firms are actively participating in nonmarket innovation activities. However, such communities of individual innovators are cutting edge developers of emerging innovation processes, and they hold much knowledge that firms can learn from. This dissertation offers exploratory insight into the incipient area of nonmarket innovation and what factors affect individual decisions to use products that are created without the input of firms.

Graduation Semester

2014-08

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© Copyright 2014 Gregory John Fisher

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