The Effects of Inbound Open Innovation Activities on Organisational Innovativeness: An Intra-Organisational Level Analysis

Abstract

This study aims to examine the impact of inbound open innovation activities (IOI activities; independent variables) on organisational innovativeness (OGI; dependent variable) with absorptive capacity (ABCAP) playing a moderating role. That is, a focus on the role and behaviour of individual members operating in the open innovation (OI) environment during technology in-flow. This investigation seeks to determine both the social and the dynamic capability perspective of gaining individual members readiness to innovate and thus improve technology implementation successes. This study adopted a sequential explanatory mixed-method design approach to achieve the goal of the study. Quantitative data was collected first using a survey instrument and questionnaire to collect data. A sample of 285 responses comprising senior staff members from 7 operational areas of the Ghana Revenue Authority was gathered. The qualitative data was obtained using a semi-structured interview guide to collect data from 5 individual employees. This study also integrated the social capital and dynamic capabilities theories to understand the individual-level behaviour of employees. This study also tested the hypothesised relationships using structural equation modelling among the various individual determinants. This study shows that inbound open innovation activities have a multi-dimensional impact on organisational innovativeness. Based on the study’s findings, the impact of inbound open innovation collaboration and employee involvement positively and significantly impact organisational innovativeness. Technology scouting, however, has a positive but insignificant impact on organisational innovativeness. In terms of originality and value, this study used social capital and dynamic capability theories as an alternative theoretical guidepost to individual-level open innovation studies, the use of individual-level absorptive capacity as moderators and studying the individual member’s behaviour in the open innovation environment in the public sector in Ghana, specifically the Ghana Revenue Authority. This study also revealed that both social capital and dynamic capabilities theories are critical determinants in the relationship between inbound open innovation activities and organisational innovativeness at the individual level. In addition, this study contributes to enhancing understanding of the individual-level capabilities perspective of open innovation. Therefore, inbound open innovation activities at the intra-organisational level are a crucial determinant in the individual member’s readiness, ability and capacity to innovate. This study’s findings highlight the critical role of individual employees (not only R&D and specialised departments) in the open innovation environment and individual absorptive capacity in public sector organisations, especially revenue administrations in developing countries.