AN INTERACTIVE EFFECT OF OPEN INNOVATION SEARCH APPROACHES AND INTENSITY OF IT USE TO PREDICT ORGANIZATIONAL CAPABILITIES AND PERFORMANCE

Abstract

Considering the significance of Information and Communication Technology (IT) in the current digital era, its operational alignment with open innovation search approaches has been proposed in the context of developing countries. Using the moderation mediation model, this study also investigates the underlying mechanism of organizational capabilities. The current study collected 288 Indonesian Small and Medium-Sized Enterprises (SMEs) responses to examine the interaction between IT use intensity, centralized and decentralized open innovation search approaches, and organizational capabilities leading to innovative performance. To validate the postulated associations, the data were analyzed using SmartPLS v.4. The findings indicate that centralized and decentralized open innovation search approaches have distinct effects on the organizational capabilities that contribute to developing and selling new products and patents and attaining competitive advantage. The findings also revealed the significance of IT utilization intensity in contingently accelerating the positive impact of open innovation search approaches on developing and enhancing organizational capabilities to engage in innovative practices. In addition, the current study is a valuable addition to the existing literature on innovation and IT use intensity, as it presents their interactions and the resulting innovative organizational outcomes regarding new patents and product developments/sales.