Open Innovation as a Mechanism for Managing Small Firms Transition to Growth: a Firm Level Perspective

Abstract

The purpose of the study is to investigate how small firms could use open innovation as mechanism for managing their transition to growth from firm level perspective. This is premised that growth is one of the major objectives of entrepreneurship, but managing its transition is becoming complex to entrepreneurs due to certain internal shortcomings. This can be evident from many entrepreneurship researches that most small firms fail at transition to growth only few make it. The study focuses to find how small firms could overcome their internal shortcomings at transition to growth using open innovation framework. The results from the case study BBY Aluminum Investment Limited indicated that the firm overcomes its internal shortcomings using open innovation framework when it was at transition to be converted from importer to manufacturer of aluminum roofing sheets in 2012. The results further revealed that the firm conducted feasibility study and found the only way to overcome its internal shortcomings and succeed in its transition is through partnership. The firm eventually developed partnership with its major foreign supplier and successfully transitioned the company by accessing constant raw materials supplies, technical know-how and accessing 50% equity funding.