Overcoming organizational inertia to strengthen business model innovation

Abstract

Purpose – This study aims to examine how open innovation can be effective in changing organizational inertia to create business model innovation and improve firm performance. It also seeks to explore whether the existence of open innovation has a mediating effect and influence. Design/methodology/approach – This study constructs a theoretical model to explore the relationship between latent variables and uses a questionnaire to collect research data. In the conceptual framework, organizational inertia is a second-order latent variable and comprises three first-order latent variables: insight inertia, action inertia, and psychological inertia. Open innovation is also a second-order latent variable, and consists of two first-order latent variables: outbound and inbound open innovation. To clarify the relationship between these latent variables, structural equation modeling (SEM) is used to test the goodness of fit of the theoretical model and research hypotheses. This study uses 141 small to medium-sized manufacturing enterprises (SMEs) in Taiwan as the research subjects. Findings – The SEM analysis revealed that open innovation has a significant mediating effect on the relationship between organizational inertia and business model innovation, and the relationship between organizational inertia and firm performance; business model innovation also has a positive influence on firm performance. Originality/value – This study contributes the empirical analysis of SMEs to illustrate the role of open innovation on business model innovation processes.

A review of literature on open innovation in small and medium-sized enterprises

“…However, inter-firm organization has most significant positive impact on innovation performance of SMEs. Huang et al (2013) showed that open innovation has a significant mediating effect on the relationship between organizational inertia and business model innovation, and the relationship between organizational inertia and firm performance. Kim and Park (2010) found that, among Korean SMEs, external R&D has a positive and significant effect on innovation output, but external ideas have a negative effect and external knowledge has no impact.…”

How structural multi-platform newsroom features and innovative values alter journalistic cross-channel and cross-sectional working procedures

“…Although Domingo (2008) argues that newsrooms are prevented from innovation through inertia, this study comes to the conclusion that a multi-platform strategy leading to the implementation of a central news desk is connected to innovative values of journalists, which in turn changes working procedures. A multi-platform strategy, as well as other structural newsroom features, is effective in overcoming procedural inertia, which is essential for the news organization and its innovative capacities (Corstjens et al, 2011;Huang, Lai, Lin, & Chen, 2013). However, overcoming routine rigidity may not be sufficient for "real" innovation reporting.…”

Open business model innovation: Literature review and agenda for future research

“…Two publications in available literature on OBMI discussed how OI can be effective in creating BMI [13,33]. Both studies used a quantitative approach to explore the implications of external knowledge sourcing for BMI and firm performance [13] or firm growth "as a proxy for BMI success" [33], respectively.…”

“…and to reduce the time-to-market for new products [12][13][14]. By combining internal and external sources of innovation, firms gain access to new innovations, new customers, new ways of commercialization and additional markets [12,13].…”