Managing open innovation within supply networks in mature industries

Abstract

PurposeThe purpose of this paper is to investigate how focal firms in supply networks manage weak and strong ties for exploration and exploitation innovation in mature industries. In doing so, the paper extends the understanding of how focal firms manage open innovation (OI).Design/methodology/approachThe empirical base is a multiple case study conducted on three companies operating in mature industries in Europe.FindingsFindings of this study reveal, analyze and explain a diverse set of OI practices in the supply networks of mature industries in which the focal firms integrate strong and weak supply ties to enhance innovation outcomes. This study provides a fine-grained view of the benefits of the additive and interactive effects of strong and weak ties in OI. More specifically, the analysis reveals an enhancing role of strong supply ties in exploration, which previously was associated solely with weak ties. Moreover, this study sheds light on the dominant and orchestrating roles of focal firms.Practical implicationsThe findings provide insights to enhance OI practices beyond the limited role of the weak ties of the supply network and highlight the essential role of the strong supply ties in mature industries.Originality/valueWhile previous studies have associated exploration with weak ties, findings of this study reveal that exploration-oriented activities in mature industries also extend to strong ties. In the strong ties of mature industries, this study finds there is not only the exploitation of existing knowledge but also the reconfiguration and innovation of products.