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MGMT223 Innovation Management

tag 0 Download 0 Pages / 0 Words tag 17-06-2022
  • Course Code: MGMT223
  • University: University Of Canterbury
    icon is not sponsored or endorsed by this college or university

  • Country: New Zealand



Open innovation has gained lot popularity because more and more companies are changing from closed to open innovation. This is a report, which depicts the innovation process for companies like Auckland University and Sistema. The Auckland University is a big scale organization while Sistema is a small-scale organization so there will be a difference in the application of the innovation process. The report throws insight on the process followed by each of the organization and the dissimilarity between the two. Globalization has led to the increase of the market competition all over the world and the life cycles of various products have diminished significantly. The organizations both large and small are gradually shifting from closed innovation to open innovation models so that they gain competitive advantage in the market.  

Innovation in Auckland University

Auckland University is among the big organizations who have adapted to the open innovation and have started centers for open innovation research and development. The University is very much focused on innovation and has a approach which is formal (Felin & Zenger, 2014). The university has developed documents, which includes all the strategies that will be used for applying open innovation. The university uses coupled innovation, which combines both the inbound and outbound innovation process. The organization is open about using the knowledge they have gained and shares it other organizations so that they gain outbound knowledge form other universities (West & Bogers, 2014). The organization consists of various programs that ensure that students can apply to these courses so that they can find new dimension in innovation and contribute to the society. The university consists of special team of representatives who encourage other people to join their special teams and provide a new dimension towards open innovation. The organizations have started programs in other, which will ensure that they receive outbound innovation form other parts of the world.

The organization believes that there are lots of people outside the organization who are smart and have innovative ideas that can be used as a way to improve the innovation process of the organization.  The research and development from external sources will add value to the innovation process that has been done by the company and will significantly help in improving the internal processes of the research. The organization thinks that the initiation of the research does not have to be an internal process and the organization can take the help of external sources to earn profits or improve the internal process of innovation (Chesbrough, Vanhaverbeke & West, 2014). The organization believes in developing a strategy and model which is better than the models of the other organizations. However, that does not mean the company will have to be first one to enter the market, market profit is not dependent on the entry in the market. The quality of the strategic model developed by the organization will provide more profit than being the organization who wants to enter the market as innovator (Du,  Leten & Vanhaverbeke, 2014). The meaning of innovation has changed rapidly and this only because of the implementation of the process of the open innovation. There is other important perspective the organization believes in which says that proper utilization of the external and the internal resources will provide the organization with competitive advantage. The organization believes in sharing of the intellectual property and they are willing to buy intellectual property of other organizations if it will help in improving the strategic paradigm. The facts clearly indicate that the organization is willing to share intellectual property with other organizations and focused on the long-term sustainability of the organization. However, the organization is skilled in understanding the importance of a business model and knows that a strong paradigm for the business will be the key to gaining competitive advantage in the market (Chesbrough, 2017).

The process of using open innovation is time consuming as it consists a hierarchy level and every decision has to be passed through various process phases. However, the organization being focused on open innovation is also very much careful about the risk in the market.

Innovation in Sistema

Sistema is a company, which deals in storage of food and is mainly focused on the process of closed innovation. The type of innovation process used by the company is totally different from the University of Auckland. The company has culture mainly focuses on closed innovation and has always been protective about their intellectual property (Markman, 2016). The company has issues with the companies they worked it regarding the use of their intellectual property. The company believes that the best of the smart minds works in their company and inbound innovation process. The company wants to develop their own technology and use for their own benefit. They patented the products before launching so that the intellectual rights of the product can be protected. They want to be the innovator in the market segment and want to be the first one to launch a technology in the market (Cassiman & Valentini, 2016).  They feel the innovators in the market will always gain competitive advantage and make most of the profits in the company. The organization also feels that the company who has the most advanced idea and more innovation will be the company gaining the competitive advantage in the market. The organization also believes in having full control over their intellectual property because this will stop their rivals from taking advantage of their innovations (Vanhaverbeke et al., 2017).

The innovation process of the company clearly shows that they are not ready to get in the process of open innovation. The company is very much conservative about the way they handle their development and research in the field of technology. They clearly do not want to lose their competitive advantage by sharing the technological processes they use. The small-scale industry does not have enough resources so they depend on their innovation process otherwise it will be quite tough for the company to maintain their sustainability (Bogers et al., 2017).

Difference in innovation process

The innovation process for both the companies is totally different and it is very much evident from the strategies they use. University of Auckland is totally focused on the process of the open innovation while Sistema has a more conventional approach towards the innovation system. Auckland university is trying to acquire more knowledge by using the outbound innovation procedure so that they can develop a business model which is better than the other competitors in the market (Stanko, Fisher & Bogers, 2017). However, Sistema wants to be the market innovator by launching their technology first in the market. They feel that they can gain competitive advantage only by ensuring that the company gets in to the market first. Auckland university believes in establishing a good relationship with the rival organizations so that they can trade their technological values to gain a better model. However, Sistema believes in creating patents of their products before launching into the market so that they can ensure that their technology remains safe. The organization being a small-scale organization believes in protecting their intellectual property.

Sistema had problems in the past about protecting their intellectual property and they want to make sure that the mistakes are not repeated. University of Auckland is very open about the innovation processes and they conduct seminars and are developing innovation centers in various parts of the world so that they can access all the brilliant minds of the world. The world is changing at a rapid rate and most of the companies in various sectors is changing their thought processes (Manzini, Lazzarotti & Pellegrini, 2017). The open innovation method has gain popularity in the market and the companies are switching to this process of innovation. However, the companies who are close rivals and stiff competition in the market prefer using the closed innovation process. The complexity in these processes is high and so technologies which are almost substitute for the company will have a risk of having impact which is negative for the innovation process of the company.

The innovation process which has matured and is certain to provide the company with market lead should be kept closed. This is the case for Sistema and the innovation process of the company has matured and that is why they have made efforts to protect their intellectual property. The innovation which is still in its process and has not matured will be are best suited for open innovation as both the parties can benefit from the result (Arbussã & llach, 2018). The companies involved in the process will have an impact which is positive for their innovation processes. Thus, it can be said that the open innovation process is complementary process for the closed innovation method. However, the companies who have a strong inbound innovation method will be able to execute and benefit from this process. Moreover, even though today’s business world is changing but there is still a need for closed innovation as they provide competitive advantage to the companies who have ground breaking innovation processes.


Felin, T., & Zenger, T. R. (2014). Closed or open innovation? Problem solving and the governance choice. Research Policy, 43(5), 914-925.

West, J., & Bogers, M. (2014). Leveraging external sources of innovation: a review of research on open innovation. Journal of Product Innovation Management, 31(4), 814-831.

Chesbrough, H., Vanhaverbeke, W., & West, J. (Eds.). (2014). New frontiers in open innovation. Oup Oxford.

Du, J., Leten, B., & Vanhaverbeke, W. (2014). Managing open innovation projects with science-based and market-based partners. Research Policy, 43(5), 828-840.

Chesbrough, H. (2017). The Future of Open Innovation: The future of open innovation is more extensive, more collaborative, and more engaged with a wider variety of participants. Research-Technology Management, 60(1), 35-38.

Markman, A. B. (Ed.). (2016). Open Innovation: Academic and Practical Perspectives on the Journey from Idea to Market. Oxford University Press.

Cassiman, B., & Valentini, G. (2016). Open innovation: Are inbound and outbound knowledge flows really complementary?. Strategic Management Journal, 37(6), 1034-1046.

Vanhaverbeke, W., Roijakkers, N., Lorenz, A., & Chesbrough, H. (2017). The Importance of Connecting Open Innovation to Strategy. In Strategy and Communication for Innovation (pp. 3-15). Springer International Publishing.

Bogers, M., Zobel, A. K., Afuah, A., Almirall, E., Brunswicker, S., Dahlander, L., ... & Hagedoorn, J. (2017). The open innovation research landscape: Established perspectives and emerging themes across different levels of analysis. Industry and Innovation, 24(1), 8-40.

Stanko, M. A., Fisher, G. J., & Bogers, M. (2017). Under the Wide Umbrella of Open Innovation. Journal of Product Innovation Management, 34(4), 543-558.

Manzini, R., Lazzarotti, V., & Pellegrini, L. (2017). How to remain as closed as possible in the open innovation era: the case of Lindt & Sprüngli. Long range planning, 50(2), 260-281.

Arbussã, a., & llach, j. (2018). Contextual effects in open innovation: a multi-country comparison. International journal of innovation management, 1850016.

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