Organizational Practices’ Role in Managing Open Innovation and Business Performance

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Organizational Practices’ Role in Managing Open Innovation and Business Performance 1 2 3 * Adm. Sci. 2024 , 14 (5), 87; https://doi.org/10.3390/admsci14050087 (registering DOI) Abstract : 1. Introduction 2. Literature Review 2.1. Contribution of SMEs and Innovation to the UAE Economy 2.2. Contribution of Open Innovation to the UAE Economy 2.3. Open Innovation Practices 2.4. Effects of Open Innovation on SMEs’ Business Performance 2.5. Hypotheses Development H1. H2. H3. H4. H5. H6. H7. H8. H9. 3. Materials and Methods 3.1. Measures 3.2. Data Collection 3.3. Sample 3.4. Questionnaire 4. Results 4.1. Preliminary Data Analysis Structural Model Assessment and Hypothesis Testing 4.2. Hypotheses Testing 4.3. Mediation Tests 5. Discussion and Conclusions 6. Theoretical and Practical Contribution 7. Limitations and Future Research Author Contributions Funding Institutional Review Board Statement Informed Consent Statement Data Availability Statement Conflicts of Interest Appendix A Construct No. of Items Items Cronbach’s Alpha Source HRM 15 Item 1: “Our staff selection process is rigorous.” 0.91 (Ngo et al. 2008) Item 2: “Our performance appraisals emphasize outcomes.” Item 3: “Our compensation package is designed to be more competitive than other firms in the industry.” Item 4: “We provide a considerable amount of training.” Item 5: “We try to keep employee turnover to minimum.” Item 6: “In determining compensation, we emphasize the individual’s contributions more than job titles.” Item 7: “Our remuneration package is designed to reward long-term employees.” Item 8: “Employee behaviour is a key component in performance appraisal.” Item 9: “We primarily hire applicants who currently possess the necessary knowledge and skills.” Item 10: “On-the-job training is more important than formal education or experience with other organizations.” Item 11: “We emphasize external pay comparability in determining compensation.” Item 12: “Our remuneration package is intended to promote employee retention.” Item 13: “We intend to keep large salary differences between high and low performers in the same position.” Item 14: “Employees transfer to new functional areas, and/or new units are used as a development activity in our firm.” Item 15: “We have a sufficient training budget.” Organizational Culture 4 Item 1: “Our firm is a very dynamic and entrepreneurial place.” 0.74 (Lau and Ngo 2004) Item 2: “The head of our firm is generally considered to be an entrepreneur, an innovator, or a risk-taker.” Item 3: “The glue that holds our firm together is commitment to innovation and development.” Item 4: “Our firm emphasizes growth and acquiring new resources.” Knowledge Sharing 4 Item 1: “We share information and knowledge necessary for the tasks.” 0.75 (Chang Lee et al. 2005) Item 2: “We improve task efficiency by sharing information and knowledge.” Item 3: “We developed information systems, such as intranet and electronic bulletin boards, to share information and knowledge.” Item 4: “We promote sharing of information and knowledge with other teams.” Managerial Ties 6 Item 1: “Top managers at buyer firms.” 0.79 (Peng and Luo 2000) Item 2: “Top managers at supplier firms.” Item 3: “Top managers at competitor firms.” Item 4: “Governmental leaders.” Item 5: “Industry associations (e.g., chambers of commerce).” Item 6: “Regulatory and supporting organizations (e.g., Khalifa Fund, Dubai SME, RAK SME, incubators, tax bureaus, banks, etc.).” Inbound open innovation 4 Item 1: “External partners (ex: customers, competitors, research institutes, consultants, suppliers, government, or universities) are directly involved in all our innovation projects.” 0.75 (Cheng and Huizingh 2014) Item 2: “All our innovation projects are highly dependent upon the contribution of external partners (ex: customers, competitors, research institutes, consultants, suppliers, government, or universities).” Item 3: “Our firm often buys R&D-related services from external partners (ex: customers, competitors, research institutes, consultants, suppliers, government, or universities).” Item 4: “Our firm often buys intellectual property (ex. patents, copyrights, or trademarks) from external partners to be used in our innovation projects.” Outbound Open innovation 3 Item 1: “Our firm often sells licenses (ex. patents, copyrights, or trademarks) to other firms to better benefit from our innovation efforts.” 0.80 (Cheng and Huizingh 2014) Item 2: “Our firm often offers royalty agreements to other firms to better benefit from our innovation efforts.” Item 3: “Our firm strengthens every possible use of our own intellectual properties so as to better benefit from our firm.” Coupled open innovation 3 Item 1: “In innovation projects, our firm usually integrates all internal and external partners’ information.” 0.87 (Cheng and Huizingh 2014) Item 2: “In innovation projects, our firm co-ordinates the activities of exchange of information among partners.” Item 3: “In innovation projects, our firm keeps internal and external partners updated about new information.” Business performance 11 Item 1: “Replacement of products being phased out.” Innovation (0.79), Market (0.84) (Ritala 2012) Item 2: “Replacement of services being phased out.” Item 3: “Extension of product/service range within the main market.” Item 4: “Extension of product/service range outside the main market.” Item 5: “Development of environment-friendly products/services.” Item 6: “Opening of new markets abroad.” Item 7: “Opening of new domestic target groups.” Item 8: “Growth in sales.” Item 9: “Profitability.” Item 10: “Market share.” Item 11: “Market growth.” References Ahmad, Sabri, Fatin Izzati Khairushalimi, and Nazleen Nur Ain Zulkurnain. 2016. 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[Google Scholar] [CrossRef] Sector Frequency Percent Service 162 60.9% Trading 68 25.6% Manufacturing 36 13.5% Years of Experience Frequency Percent 10 years 98 36.8% 5–9 years 93 35% 1–4 years 75 28.2% Geographical Distribution Frequency Percent Dubai 161 60.5% Abu Dhabi 66 24.8% RAK 21 7.9% Sharjah 14 5.3% Fujairah 2 0.8% Ajman 2 0.8% Umm Al Quwain 0 0% Component 1 2 3 4 5 6 7 8 OC1 0.725 OC2 0.742 OC3 0.570 OC4 0.565 HRM2 0.580 HRM3 0.475 HRM5 0.808 HRM6 0.714 HRM7 0.767 HRM9 0.699 HRM10 0.545 HRM12 0.788 HRM13 0.565 HRM14 0.666 KS1 0.777 KS2 0.860 KS4 0.709 MT3 0.695 MT4 0.919 MT5 0.979 MT6 0.796 OIP1 0.971 OIP2 0.968 OIP5 0.983 OIP6 0.983 OIP8 0.784 OIP9 0.824 OIP10 0.696 BP1 0.627 BP3 0.698 BP4 0.702 BP5 0.733 BP7 0.872 BP8 0.835 BP9 0.840 BP10 0.860 BP11 0.764 Variable Mean St. Deviation Cronbach’s Alpha Organizational culture 1.91 0.85 0.830 Human resource management 2.45 0.94 0.875 Knowledge sharing 1.97 0.96 0.821 Managerial ties 2.79 1.36 0.888 Inbound OI 2.50 1.39 0.989 Outbound OI 3.34 1.88 0.999 Coupled OI 2.56 1.23 0.873 Business performance 2.53 1.08 0.916 Loadings Cronbach’s Alpha rho_A CR AVE VIF HRM Compensation HRM3 0.872 0.744 0.744 0.854 0.661 1.18 HRM13 0.79 1.18 Appraisal HRM2 0.801 0.562 0.58 0.818 0.693 1.426 HRM7 0.827 1.589 HRM12 0.812 1.469 Training HRM4 0.828 0.616 0.656 0.79 0.558 1.195 HRM10 0.689 1.238 HRM14 0.715 1.233 Hiring HRM5 0.767 0.537 0.567 0.809 0.68 1.156 HRM9 0.878 1.156 OC OC1 0.868 0.833 0.84 0.889 0.667 2.166 OC2 0.811 1.861 OC3 0.812 1.752 OC4 0.772 1.606 KS KS1 0.88 0.823 0.829 0.894 0.738 2.103 KS2 0.877 1.938 KS4 0.82 1.668 MT MT3 0.772 0.887 0.888 0.923 0.75 1.574 MT4 0.894 5.761 MT5 0.924 7.173 MT6 0.868 2.444 OI Inbound OIP2 1 1 1 1 1 1 Outbound OIP6 1 1 1 1 1 1 Coupled OIP8 0.888 0.874 0.875 0.922 0.798 2.35 OIP9 0.901 2.528 OIP10 0.892 2.21 BP Innov BP1 0.823 0.868 0.878 0.904 0.654 1.935 BP3 0.852 2.266 BP4 0.808 1.963 BP5 0.741 1.717 BP7 0.815 1.992 Market BP8 0.864 0.892 0.893 0.925 0.755 2.397 BP9 0.889 2.959 BP10 0.869 2.572 BP11 0.854 2.111 Component 1 2 3 4 5 6 7 8 9 10 11 12 HRM5 0.767 0.518 0.590 0.284 0.387 0.332 0.142 0.100 0.096 0.209 0.121 0.116 HRM9 0.878 0.548 0.558 0.345 0.410 0.363 0.107 0.140 0.133 0.277 0.152 0.176 HRM4 0.506 0.828 0.552 0.481 0.504 0.431 0.196 0.275 0.336 0.517 0.360 0.327 HRM10 0.399 0.689 0.553 0.373 0.462 0.377 0.094 0.165 0.216 0.294 0.208 0.259 HRM14 0.541 0.715 0.563 0.478 0.452 0.420 0.298 0.248 0.271 0.278 0.358 0.289 HRM2 0.541 0.618 0.801 0.377 0.548 0.443 0.172 0.247 0.261 0.320 0.275 0.232 HRM7 0.571 0.586 0.827 0.510 0.530 0.434 0.187 0.135 0.185 0.402 0.308 0.296 HRM12 0.567 0.583 0.812 0.599 0.502 0.363 0.220 0.231 0.241 0.350 0.294 0.310 HRM3 0.368 0.584 0.604 0.872 0.465 0.382 0.261 0.382 0.347 0.444 0.448 0.438 HRM13 0.262 0.390 0.392 0.790 0.256 0.195 0.454 0.284 0.373 0.280 0.364 0.348 OC1 0.350 0.520 0.500 0.399 0.868 0.449 0.232 0.271 0.243 0.356 0.420 0.354 OC2 0.434 0.513 0.550 0.383 0.811 0.415 0.214 0.219 0.157 0.334 0.306 0.310 OC3 0.384 0.537 0.553 0.359 0.812 0.530 0.164 0.262 0.218 0.311 0.355 0.333 OC4 0.420 0.490 0.522 0.309 0.772 0.462 0.108 0.138 0.240 0.315 0.333 0.227 KS1 0.390 0.492 0.437 0.316 0.549 0.880 0.142 0.112 0.092 0.299 0.245 0.200 KS2 0.349 0.462 0.448 0.302 0.459 0.877 0.094 0.137 0.133 0.314 0.299 0.195 KS4 0.348 0.452 0.423 0.305 0.458 0.820 0.176 0.127 0.157 0.239 0.310 0.283 MT3 0.145 0.225 0.248 0.372 0.222 0.174 0.772 0.297 0.379 0.262 0.340 0.306 MT4 0.092 0.243 0.197 0.339 0.185 0.106 0.894 0.298 0.373 0.207 0.375 0.361 MT5 0.112 0.209 0.176 0.348 0.189 0.108 0.924 0.289 0.361 0.194 0.373 0.353 MT6 0.153 0.232 0.197 0.371 0.173 0.149 0.868 0.277 0.429 0.269 0.420 0.471 OIP2 0.148 0.314 0.253 0.405 0.277 0.146 0.336 1.000 0.428 0.464 0.419 0.402 OIP6 0.141 0.376 0.283 0.429 0.264 0.148 0.448 0.428 1.000 0.472 0.392 0.386 OIP8 0.293 0.466 0.414 0.356 0.389 0.332 0.189 0.395 0.411 0.888 0.375 0.404 OIP9 0.252 0.429 0.366 0.389 0.319 0.264 0.237 0.403 0.414 0.901 0.424 0.404 OIP10 0.255 0.473 0.395 0.442 0.373 0.295 0.297 0.443 0.440 0.892 0.445 0.418 BP1 0.182 0.348 0.290 0.415 0.355 0.247 0.345 0.386 0.327 0.435 0.823 0.532 BP3 0.137 0.366 0.311 0.421 0.330 0.273 0.415 0.395 0.309 0.413 0.852 0.597 BP4 0.119 0.364 0.278 0.474 0.322 0.271 0.438 0.350 0.393 0.299 0.808 0.588 BP5 0.214 0.324 0.358 0.296 0.427 0.343 0.261 0.209 0.235 0.322 0.741 0.520 BP7 0.040 0.304 0.239 0.362 0.355 0.232 0.294 0.321 0.310 0.395 0.815 0.644 BP8 0.107 0.297 0.251 0.392 0.270 0.210 0.403 0.319 0.285 0.424 0.608 0.864 BP9 0.195 0.352 0.311 0.397 0.337 0.231 0.364 0.345 0.286 0.402 0.607 0.889 BP10 0.184 0.360 0.320 0.389 0.367 0.228 0.338 0.368 0.375 0.346 0.635 0.869 BP11 0.142 0.354 0.311 0.470 0.338 0.232 0.400 0.363 0.389 0.417 0.622 0.854 1 2 3 4 5 6 7 8 9 10 11 12 1 0.813 2 0.610 0.832 3 0.439 0.445 0.893 4 0.688 0.384 0.298 0.825 5 0.253 0.405 0.464 0.148 1.000 6 0.360 0.491 0.466 0.167 0.419 0.809 7 0.508 0.357 0.332 0.421 0.146 0.331 0.859 8 0.238 0.415 0.272 0.147 0.336 0.438 0.157 0.866 9 0.344 0.476 0.458 0.181 0.402 0.712 0.259 0.434 0.869 10 0.648 0.445 0.403 0.482 0.277 0.436 0.567 0.223 0.378 0.816 11 0.283 0.429 0.472 0.141 0.428 0.392 0.148 0.448 0.386 0.264 1.000 12 0.733 0.596 0.511 0.644 0.314 0.422 0.545 0.263 0.393 0.630 0.376 0.747 HTMT 2.5% 97.5% Compensation -> Appraisal 0.923 0.762 1.133 Coupled -> Appraisal 0.545 0.383 0.710 Coupled -> Compensation 0.618 0.454 0.807 Hiring -> Appraisal 1.098 0.958 1.310 Hiring -> Compensation 0.681 0.430 1.001 Hiring -> Coupled 0.430 0.228 0.662 Inbound -> Appraisal 0.291 0.134 0.438 Inbound -> Compensation 0.533 0.340 0.695 Inbound -> Coupled 0.496 0.367 0.606 Inbound -> Hiring 0.198 0.055 0.414 Innovation -> Appraisal 0.454 0.298 0.618 Innovation -> Compensation 0.690 0.505 0.890 Innovation -> Coupled 0.528 0.379 0.670 Innovation -> Hiring 0.249 0.134 0.472 Innovation -> Inbound 0.441 0.310 0.572 KS -> Appraisal 0.649 0.495 0.808 KS -> Compensation 0.510 0.332 0.719 KS -> Coupled 0.510 0.254 0.535 KS -> Hiring 0.633 0.446 0.859 KS -> Inbound 0.161 0.043 0.305 KS -> Innovation 0.400 0.259 0.541 MT -> Appraisal 0.291 0.157 0.452 MT -> Compensation 0.606 0.430 0.789 MT -> Coupled 0.304 0.152 0.465 MT -> Hiring 0.216 0.084 0.423 MT -> Inbound 0.356 0.211 0.505 MT -> Innovation 0.492 0.350 0.626 MT -> KS 0.185 0.082 0.331 Market -> Appraisal 0.422 0.275 0.584 Market -> Compensation 0.663 0.518 0.825 Market -> Coupled 0.517 0.394 0.644 Market -> Hiring 0.255 0.099 0.473 Market -> Inbound 0.425 0.299 0.553 Market -> Innovation 0.809 0.722 0.885 Market -> KS 0.306 0.171 0.444 Market -> MT 0.483 0.350 0.608 OC -> Appraisal 0.827 0.720 0.931 OC -> Compensation 0.631 0.490 0.804 OC -> Coupled 0.472 0.311 0.632 OC -> Hiring 0.727 0.561 0.948 OC -> Inbound 0.299 0.178 0.444 OC -> Innovation 0.518 0.402 0.631 OC -> KS 0.688 0.570 0.804 OC -> MT 0.256 0.138 0.380 OC -> Market 0.434 0.312 0.558 Outbound -> Appraisal 0.327 0.193 0.455 Outbound -> Compensation 0.576 0.437 0.731 Outbound -> Coupled 0.504 0.397 0.602 Outbound -> Hiring 0.189 0.050 0.362 Outbound -> Inbound 0.428 0.284 0.524 Outbound -> Innovation 0.418 0.290 0.539 Outbound -> KS 0.163 0.049 0.288 Outbound -> MT 0.473 0.344 0.590 Outbound -> Market 0.406 0.272 0.531 Outbound -> OC 0.288 0.158 0.412 Training -> Appraisal 1.091 0.995 1.216 Training -> Compensation 0.988 0.799 1.240 Training -> Coupled 0.656 0.510 0.816 Training -> Hiring 1.114 0.963 1.369 Training -> Inbound 0.389 0.243 0.558 Training -> Innovation 0.563 0.418 0.717 Training -> KS 0.764 0.627 0.899 Training -> MT 0.351 0.230 0.499 Training -> Market 0.522 0.360 0.699 Training -> OC 0.879 0.779 0.992 Training -> Outbound 0.464 0.331 0.593 Construct VIF Compensation 1.765 Appraisal 2.968 Hiring 2.115 Training 2.592 Inbound 1.373 Outbound 1.387 Coupled 1.443 Innovation Performance 2.026 Market Performance 2.026 Beta Coefficient STDEV t-Statistics p Values Results H1: HRM -> OI 0.455 0.066 6.886 0.000 Supported H2: HRM -> BP 0.209 0.079 2.638 0.008 Supported H3: OC -> OI 0.118 0.081 1.463 0.144 Not Supported H4: OC -> BP 0.142 0.061 2.339 0.019 Supported H5: KS -> OI -0.040 0.074 0.535 0.593 Not Supported H6: KS -> BP 0.039 0.057 0.678 0.498 Not Supported H7: MT -> OI 0.237 0.079 2.992 0.003 Supported H8: MT -> BP 0.232 0.061 3.779 0.000 Supported H9: OI -> BP 0.278 0.082 3.379 0.001 Supported Coefficient STDEV t-Statistics 2.5% 97.5% p Values HRM -> OI -> BP 0.127 0.042 3.032 0.055 0.216 0.002 OC -> OI -> BP 0.033 0.028 1.194 −0.010 0.097 0.233 KS -> OI -> BP −0.011 0.022 0.499 −0.060 0.030 0.618 MT -> OI -> BP 0.066 0.029 2.281 0.018 0.129 0.023 P1 (IV->M) P2 (DV->M) P3 (IV->DV) Mediation Type HRM -> OI -> BP 0.000 0.001 0.008 Complementary (partial mediation) OC -> OI -> BP 0.144 0.001 0.019 Direct-only (no mediation) KS -> OI -> BP 0.593 0.001 0.498 No effect (no mediation) MT -> OI -> BP 0.003 0.001 0.000 Complementary (partial mediation) Relation Mediators Mediation Type HRM to BP OI Complementary (partial mediation) OC to BP OI Direct-only (no mediation) KS to BP OI No effect (no mediation) MT to BP OI Complementary (partial mediation) Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). 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Rabie, N.; Moustafa, A.; Ghaithi, F.A.
Organizational Practices’ Role in Managing Open Innovation and Business Performance. Adm. Sci. 2024 , 14 , 87.
https://doi.org/10.3390/admsci14050087
AMA Style
Rabie N, Moustafa A, Ghaithi FA.
Organizational Practices’ Role in Managing Open Innovation and Business Performance. Administrative Sciences . 2024; 14(5):87.
https://doi.org/10.3390/admsci14050087
Chicago/Turabian Style
Rabie, Nada, Ayman Moustafa, and Fatima Al Ghaithi.
2024. “Organizational Practices’ Role in Managing Open Innovation and Business Performance” Administrative Sciences 14, no. 5: 87.
https://doi.org/10.3390/admsci14050087