Openness as cultural shift: How employees react to open innovation initiatives

Business and academic scholars alike observe the increasing need for companies to collaborate with external stakeholders to pursue successful innovation (REF). Especially incumbents might have difficulties changing from closed to open, as it means to change entire working routines and the innovation culture itself. Literature has not particularly paid attention to the cultural shift that is needed to successfully move from a closed innovation system to a more open innovation system. Also, open innovation (OI) initiatives often originate at the strategic top management level, while middle managers need to carry out the implementation. Therefore, it is important to understand how middle managers react towards the strategic directive of openness and the resulting collaboration with stakeholders and how their activities enhance or impede the cultural shift towards openness. Therefore, the purpose of the paper is to explore the process of how individual managers accompany the cultural shift from closed to open innovation. Given the exploratory nature of our study, a longitudinal, grounded theory study is conducted, to investigate the journey of a large German investment company changing from a closed innovation to an open innovation process. It focuses on employees embracing or resisting this cultural change and discusses why they behave and react in certain ways. It is also examined why the attitude of the company’s employees is critical to the change process and how it affects the outcome of the change initiative