Innovation in micro and small businesses: How inbound open innovation and dynamic capabilities work together to explain innovation performance

Yohana Jacob Sesabo, Mushumbusi Paul Kato, Chao James Emmanuel


Purpose: This study examined how inbound open innovation and dynamic capabilities (sensing, seizing, and transforming capacity) work together to explain innovation performance.

Methodology: The study used case study research, interviewing ten purposively selected managers of micro and small furniture industries in Tanzania. The research developed the relationships and validated their origin from the interviewees using illustrative and content analysis methods.

Originality: The research is novel in tracing relationships between inbound open innovation, dynamic capabilities, and innovation performance from actual firm processes.

Main results: This research showed that inbound open innovation explains innovation performance through systematic complementary processes of the dynamic capabilities, which in complex inbound open innovation ideas require coupled open innovation to manage.

Theoretical contributions: This paper has enriched the open innovation view, introducing complementary processes of sensing to seizing capacity, sensing to transforming capacity, and sensing to transforming and seizing capacity between inbound open innovation and innovation performance.

Practical contributions: The results offer guidelines to small business managers and their promoters in systemizing the development of dynamic capabilities for managing open innovation.


capacity; dynamic capabilities; innovation; open innovation; micro and small businesses


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