Open Innovation in practice: closed NPD networks leading to high innovation performance for SME's.

A.J.J. Pullen, Petronella C. de Weerd-Nederhof, Arend J. Groen, O.A.M. Fisscher

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Abstract

Cooperation with other organizations increases the innovation performance of organization, especially for small and medium-sized enterprises (SMEs) as they encounter liabilities of “smallness” (e.g., limited financial resources, and manpower). In the medical devices sector, collaboration with external partners for NPD becomes increasingly important due to the complexity of the products and the development process. About 80% of companies in this sector are SMEs. These companies operate in a highly regulated sector, which affects the organization of the external network required for the new product development (NPD) process. SMEs are practicing extensively open innovation activities, but in practice face a number of barriers in trying to apply open innovation. This paper examines multiple network characteristics simultaneously in relation to innovation performance and thereby aligns with and builds further on configuration theory. Configuration theory posits that for each set of network characteristics, there exists an ideal set of organizational characteristics that yields superior performance. In this research, the systems approach to fit is used. Fit is high to the extent that an organization is similar to an ideal profile along multiple dimensions. This ideal profile represents the network profile that the 15% highest performing companies use. It is argued that the smaller the distance between the ideal profile and the network profile that is used, the higher the performance. The objective of this research is (1) to examine the relation between the ideal profile and innovation performance and (2) to examine which organization of the network profile is related to high innovation performance. Quantitative survey data (n = 60, response rate 61.9%) form the core of this research. The quantitative results are clarified and have been triangulated with qualitative interview data (n = 50). Our findings suggest the presence of an “ideal” NPD network profile (in terms of goal complementarity, resource complementarity, fairness trust, reliability trust, and network position strength): the more a company's NPD network profile differs from this ideal profile, the lower the innovation performance. In addition, the results of our study indicate that the NPD network profiles of successful and less successful SMEs in the medical devices sector significantly differ in terms of “goal complementarity,” while this is less the case for trust and resource complementarity labeled distinctive by previous research. Finally, results show that a relatively closed, focused, and consistent “business-like” NPD networking approach, which is characterized by result orientation and professionalism, is related to high innovation performance. It is recommended that SMEs in the medical devices sector aiming to distinguish themselves from competitors in terms of innovation performance focus on goal complementarity while adopting such a business-like attitude toward their NPD network partners
Original languageEnglish
Title of host publicationProceedings of the 18th IPDM Conference
Place of PublicationDelft
PublisherEIASM, The European Institute for Advanced Studies in Management
Pages-
Number of pages18
Publication statusPublished - 5 Jun 2011
Event18th International Product Development Management Conference, IPDM 2011: Innovate Through Design - Delft, Netherlands
Duration: 5 Jun 20117 Jun 2011
Conference number: 18

Publication series

Name
PublisherEIASM, The European Institute for Advanced Studies in Management
ISSN (Print)0737-6782

Conference

Conference18th International Product Development Management Conference, IPDM 2011
Abbreviated titleIPDM 2011
CountryNetherlands
CityDelft
Period5/06/117/06/11

Keywords

  • METIS-279469
  • IR-80888

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