The ups and downs of open innovation efficiency: the case of Procter & Gamble. Issue 5 (9th October 2019)

• Record Type: Journal Article
• Authors: Han, Chunjia; Thomas, Stephen; Yang, Mu; Cui, Yongmei
• Is Part Of: European journal of innovation management. Volume 22:Issue 5(2019)
• Page Start: 747
• Page End: 764
• Publication Date: 2019-10-09
• Subjects: Open innovation -- Performance evaluation -- Data envelopment analysis -- Proctor & Gamble; Technological innovations -- Periodicals; Technological innovations -- Europe -- Periodicals; Diffusion of innovations -- Periodicals; Research, Industrial -- Periodicals; 658.4062
• DOI: 10.1108/EJIM-04-2019-0108
• Languages: English
• ISSNs: 1460-1060

Abstract

Abstract : Purpose: Open innovation (OI) has become increasingly popular as an enterprise strategy in both industry and academia, and has been adopted, at least in part, by many companies. Despite this popularity, there is a dearth of evaluation of OI efficiency and a lack of suitable quantitative indices. The paper aims to discuss these issues. Design/methodology/approach: In this study, the authors used both data envelopment analysis (DEA) and Malmquist techniques to compare the pre- and post-transition levels of performance achievement of Procter & Gamble (P&G), a widely recognised and public early adopter of OI, with a group of its main competitors. Findings: Most detailed analysis of the time-course revealed that the innovation efficiency of P&G improved rapidly and substantially after its embracing of OI, an effect we term the "open rise". However, there is also a transient decline in R&D efficiency at the beginning of OI adoption ("open dip") and an unexpected and marked decline ("open drop") after the peak positive effect. Originality/value: The quantitative methods appear to meet the needs identified in the preceding literature for more quantitative approaches to the measurement of OI.