Hand in Glove: Open Innovation and the Dynamic Capabilities Framework

Abstract

Open innovation involves some of the most strategic functions of the enterprise, and yet relatively little has been written about how it fits into a larger strategic management framework. This article fills that gap by relating open innovation to the dynamic capabilities framework and begins by briefly summarizing the two perspectives. It then reviews the modest theoretical and empirical literature that looks at open innovation from a capabilities perspective. It identifies where open innovation fits into the dynamic capabilities framework and explores how treating open innovation as a separate construct can enrich a dynamic capabilities approach to the management of the enterprise. A case study of China’s Haier then provides an example of these principles in practice.