Supply Network in Open Innovation From Perspective of Social Network

Purpose - As the locus of knowledge has been extended beyond firms' boundaries, firms need to search outside for new knowledge to sustain their competitive advantages. The purpose of this study is to examine how a firm can manage and govern supply ties to access new knowledge, from the perspective of social network. We examine the role of interorganizational interactions and network structure in enhancing knowledge flow in inbound open innovation with suppliers. Design/methodology/approach - First, A systematic literature review methodology was adopted. The research design, given that the study of open innovation is still at a nascent stage, consists of an exploratory case study to provide an in- depth analysis. We adopt semi- structured interviews to examine the role of social network in knowledge flow in supply network. Findings - The findings of this paper add to the understanding of the role of inter- organizational interaction and network structure in enhancing knowledge transfer in open innovation practices. We propose that the implementation of open innovation with suppliers requires specific supply networks based on the interactions between buyer and suppliers. Building from the SLR, we extend the idea of tie strength by Granovetter (1973), and introduce two forms of strong ties; " vital strong ties" and " overembedded strong ties", and two forms of weak ties; " potential weak ties" and " infant weak ties". We propose how overembeddedness and future interaction influence governance modes. Research limitations/implications - Although the main contribution of this paper is in extending the body of literature in open innovation research by looking at social network theories, the current propositions have to be validated by empirical analysis. A qualitative case study is currently in progress. Therefore, we cannot go forward until the results of this case study allow a general contribution to be made and increase the validity of results. Practical implications - First, the paper suggests how social network theory can enhance inflow of knowledge from suppliers in open innovation projects. Second, we extend inter- organizational relationships by adding vital strong and potential weak ties. This classification allows us to examine effective governance modes even at the early stage of innovation. We propose that the expectation of future business with weak ties constrains opportunistic behavior of suppliers and affects knowledge flow positively in open innovation. As for potential strong ties, they should not be excluded from open innovation projects since they can provide valuable knowledge to speed up the innovation process. Our argument also encourages practitioners to actively and dynamically make and maintain networks with suppliers in order to gain access to new knowledge. Originality/value - This study marks one of the first attempts to explain the role of structural and relational dimensions of social network in different inbound open innovation approaches with suppliers. Additionally, this study is also the first to extend the literature on strong and weak ties.