Open innovation as mediation between reconstructionist blue ocean strategy and organizational performance, an empirical study using structural equation modeling

Abstract

There have been many researches on the competitive advantage of Blue Ocean Strategy and the benefits it provide to organizations, and there is growing quantitative research on the relationship of Blue Ocean Strategy and Organizational Performance. Furthermore, as innovation is the core element of competitive advantage and organizational performance, so open innovation strategy’s role is important in relationship of BOS and organizational performance. This paper presents the mediating role of inbound and outbound open innovation between the relationship of Blue Ocean Strategy and organizational performance. As there has been some discussion in past literature about the direct relationship of five constructs of BOS and organizational performance, therefore this paper focuses the mediating role of inbound and outbound open innovation between five constructs of BOS and organizational performance. It is a quantitative study. The unit of analysis is organization while a self-administered questionnaire was used for data collection from the senior managers of Malaysian manufacturing industries. Structural Equation modeling (SEM) was applied so PLS3 was used to analyze the data, collected from 116 manufacturing organizations. Results reveal that, in the Malaysian industries, inbound open innovation significantly mediates the relationship of three of the five constructs between BOS and organizational performance. While outbound open innovation does not mediate the relationship between BOS and organizational performance in the Malaysian manufacturing sector.