Chapter | Handbook of Economic Organization: Integrating Economic and Organization Theory | 2013

Open Innovation and Organizational Boundaries: Task Decomposition, Knowledge Distribution and the Locus of Innovation

by Karim R. Lakhani, Hila Lifshitz - Assaf and Michael Tushman

Abstract

This chapter contrasts traditional, organization-centered models of innovation with more recent work on open innovation. These fundamentally different and inconsistent innovation logics are associated with contrasting organizational boundaries and organizational designs. We suggest that when critical tasks can be modularized and when problem-solving knowledge is widely distributed and available, open innovation complements traditional innovation logics. We induce these ideas from the literature and with extended examples from Apple, NASA, and LEGO. We suggest that task decomposition and problem-solving knowledge distribution are not deterministic but are strategic choices. If dynamic capabilities are associated with innovation streams, and if different innovation types are rooted in contrasting innovation logics, there are important implications for firm boundaries, design, and identity.

Keywords: innovation; organizational boundaries; Institutional Logics; modular innovation; open innovation; Knowledge Sharing; Innovation Strategy; Organizational Design; Boundaries; Collaborative Innovation and Invention;

Citation:

Lakhani, Karim R., Hila Lifshitz - Assaf, and Michael Tushman. "Open Innovation and Organizational Boundaries: Task Decomposition, Knowledge Distribution and the Locus of Innovation." Chap. 19 in Handbook of Economic Organization: Integrating Economic and Organization Theory, edited by Anna Grandori, 355–382. Northampton, MA: Edward Elgar Publishing, 2013.