A Pathway to Guiding, Stimulating, and Maintaining Open Innovation in Multinational Enterprise

Abstract

Agency Theory has attracted significant controversy by exposing both conflicts of interest within the firm based on the innate human need that is self-interest. A lack of self-interest leads to destructive behavior and incentives will make the work place more difficult to control. Open innovation has been an increasing trend with large companies, however, the cost savings and the structure of this integrative mechanism may still be unknown. To provide a more ontological view of agency theory in an open innovation environment, the author shows that organizational defenses can be overcome to promote mutual benefits for the firm. A case study is used that shows that a multinational enterprise can realize growth and be agile in spite of its size. The author adds to theory by establishing propositions for growth by leveraging relatedness and collaboration that enables open innovation throughout a federated organizational design.