Organizational Practices’ Role in Managing Open Innovation and Business Performance

Abstract

Given the ever-changing world of technological advances, and due to the fact that business entities strive for efficiency and cost reduction, open innovation (OI) has become the focus of academic and scholarly discussions. Furthermore, to increase their competitiveness, small and medium enterprises (SMEs) have started implementing OI practices. This study aims to investigate the impact of SMEs’ internal organizational practices on OI and the impact of the latter on SMEs’ business performance. This quantitative study, which was based on gathering insights from SMEs, sought to answer two research questions related to the effects of organizational practices on the adoption and management of OI processes in SMEs and the role of OI in accelerating the business performance of SMEs. The findings revealed that not all SMEs’ internal organizational practices have a positive impact on both OI and SMEs’ business performance. This study is among the earliest studies in the UAE and GCC region to explore the impact of specific internal organizational practices on SME OI adoption and its business performance. The present study contributes theoretically and practically to OI literature and assists SME managers in evaluating their internal organizational practices’ suitability for OI adoption.

Keywords

• open innovation
• SMEs
• organizational practices
• business performance
• dynamic capabilities
• absorptive capacity