IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i11p4379-d363427.html
   My bibliography  Save this article

Sustainability Condition of Open Innovation: Dynamic Growth of Alibaba from SME to Large Enterprise

Author

Listed:
  • Jinhyo Joseph Yun

    (Department of Open Innovation and Business Model, Open Innovation Academy of SOI, and DGIST, Daegu 42988, Korea)

  • Xiaofei Zhao

    (Department of Open Innovation and Business Model, Open Innovation Academy of SOI, and DGIST, Daegu 42988, Korea)

  • KyungBae Park

    (Department of Business Administration, Sangji University, Wonju 26339, Korea)

  • Lei Shi

    (Department of Environmental Planning and Management, Tsinghua University, Bejing 100084, China)

Abstract

Research Question: Open innovation and the open business model exaggerate complexity (a transaction cost) in addition to the realization of emergence and its lock-in. Within a short period, Alibaba has become one of the global top e-commerce companies with several open innovation business models. Our research question was: “How could Alibaba become a global top e-commerce company in China in such a short time?” Research Method: We chose a deep interview method, participatory observation, and meta-analysis to answer this research question. Research Result: Alibaba has applied global, creative e-commerce business models through open innovation in a short time. In addition, it has overcome complexity—i.e., the cost of open innovation and the force that breaks down a company—through an open innovation-friendly culture. This is a “Jack-Ma style consumer confidence and new Guanxi culture”, a new and strong Chinese corporate culture. Alibaba has also undergone the expansion of its open business model feedback loop platform. This study investigated the expanded open business model feedback loop platform, the continuously strengthened open-innovation-friendly culture, and complexity, with the latter being the cost of open innovation, which was controlled by an open-innovation-friendly culture and open business model feedback loop.

Suggested Citation

  • Jinhyo Joseph Yun & Xiaofei Zhao & KyungBae Park & Lei Shi, 2020. "Sustainability Condition of Open Innovation: Dynamic Growth of Alibaba from SME to Large Enterprise," Sustainability, MDPI, vol. 12(11), pages 1-24, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4379-:d:363427
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/11/4379/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/11/4379/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Belussi, Fiorenza & Sammarra, Alessia & Sedita, Silvia Rita, 2010. "Learning at the boundaries in an "Open Regional Innovation System": A focus on firms' innovation strategies in the Emilia Romagna life science industry," Research Policy, Elsevier, vol. 39(6), pages 710-721, July.
    2. Simon, Herbert A, 1993. "Altruism and Economics," American Economic Review, American Economic Association, vol. 83(2), pages 156-161, May.
    3. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    4. Giuliani, Elisa & Morrison, Andrea & Pietrobelli, Carlo & Rabellotti, Roberta, 2010. "Who are the researchers that are collaborating with industry? An analysis of the wine sectors in Chile, South Africa and Italy," Research Policy, Elsevier, vol. 39(6), pages 748-761, July.
    5. Jinhyo Joseph Yun & MinHwa Lee & KyungBae Park & Xiaofei Zhao, 2019. "Open Innovation and Serial Entrepreneurs," Sustainability, MDPI, vol. 11(18), pages 1-31, September.
    6. Henkel, Joachim & Schöberl, Simone & Alexy, Oliver, 2014. "The emergence of openness: How and why firms adopt selective revealing in open innovation," Research Policy, Elsevier, vol. 43(5), pages 879-890.
    7. Rajagopal, 2014. "Organizations and Innovation," Palgrave Macmillan Books, in: Architecting Enterprise, chapter 3, pages 58-86, Palgrave Macmillan.
    8. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    9. JinHyo Joseph Yun & Philip Cooke & JiYoung Park, 2017. "Evolution and variety in complex geographies and enterprise policies," European Planning Studies, Taylor & Francis Journals, vol. 25(5), pages 729-738, May.
    10. Dahlander, Linus & Gann, David M., 2010. "How open is innovation?," Research Policy, Elsevier, vol. 39(6), pages 699-709, July.
    11. Yun, JinHyo Joseph & Won, DongKyu & Jeong, EuiSeob & Park, KyungBae & Yang, JeongHo & Park, JiYoung, 2016. "The relationship between technology, business model, and market in autonomous car and intelligent robot industries," Technological Forecasting and Social Change, Elsevier, vol. 103(C), pages 142-155.
    12. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    13. Kevin Boudreau, 2010. "Open Platform Strategies and Innovation: Granting Access vs. Devolving Control," Management Science, INFORMS, vol. 56(10), pages 1849-1872, October.
    14. Christensen, Jens Froslev & Olesen, Michael Holm & Kjaer, Jonas Sorth, 2005. "The industrial dynamics of Open Innovation--Evidence from the transformation of consumer electronics," Research Policy, Elsevier, vol. 34(10), pages 1533-1549, December.
    15. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    16. Kobarg, Sebastian & Stumpf-Wollersheim, Jutta & Welpe, Isabell M., 2019. "More is not always better: Effects of collaboration breadth and depth on radical and incremental innovation performance at the project level," Research Policy, Elsevier, vol. 48(1), pages 1-10.
    17. Hyytinen, Ari & Pajarinen, Mika & Rouvinen, Petri, 2015. "Does innovativeness reduce startup survival rates?," Journal of Business Venturing, Elsevier, vol. 30(4), pages 564-581.
    18. André Spithoven & Wim Vanhaverbeke & Nadine Roijakkers, 2013. "Open innovation practices in SMEs and large enterprises," Small Business Economics, Springer, vol. 41(3), pages 537-562, October.
    19. Annabelle Gawer & Rebecca Henderson, 2007. "Platform Owner Entry and Innovation in Complementary Markets: Evidence from Intel," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 1-34, March.
    20. Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
    21. Herbert A. Simon, 1991. "Bounded Rationality and Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 125-134, February.
    22. JinHyo Joseph Yun & DongKyu Won & ByungYong Hwang & JinWon Kang & DongHwan Kim, 2015. "Analysing and simulating the effects of open innovation policies: Application of the results to Cambodia," Science and Public Policy, Oxford University Press, vol. 42(6), pages 743-760.
    23. Laursen, Keld & Salter, Ammon J., 2014. "The paradox of openness: Appropriability, external search and collaboration," Research Policy, Elsevier, vol. 43(5), pages 867-878.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. JinHyo Joseph Yun & Xiaofei Zhao & KwangHo Jung & Tan Yigitcanlar, 2020. "The Culture for Open Innovation Dynamics," Sustainability, MDPI, vol. 12(12), pages 1-21, June.
    2. I Nyoman Normal & Made Setini, 2022. "Absorption Capacity and Development of Photocatalyst Green Ceramic Products with Moderation of Green Environment for Sustainability Performance of Developing Industries," Sustainability, MDPI, vol. 14(17), pages 1-18, August.
    3. Eleni N. Arvaniti & Agapi Dima & Chrysostomos D. Stylios & Vagelis G. Papadakis, 2022. "A New Step-by-Step Model for Implementing Open Innovation," Sustainability, MDPI, vol. 14(10), pages 1-17, May.
    4. Belén Payán-Sánchez & Luis Jesús Belmonte-Ureña & José Antonio Plaza-Úbeda & Diego Vazquez-Brust & Natalia Yakovleva & Miguel Pérez-Valls, 2021. "Open Innovation for Sustainability or Not: Literature Reviews of Global Research Trends," Sustainability, MDPI, vol. 13(3), pages 1-29, January.
    5. Chang Liu & Yueli Xu, 2021. "Consumer Sentiment Involvement in Big Data Analytics and Its Impact on Product Design Innovation," Sustainability, MDPI, vol. 13(21), pages 1-12, October.
    6. Mingwei Sun & Katarzyna Grondys & Nazim Hajiyev & Pavel Zhukov, 2021. "Improving the E-Commerce Business Model in a Sustainable Environment," Sustainability, MDPI, vol. 13(22), pages 1-22, November.
    7. Bingqin Dai & Wenquan Liang, 2022. "The Impact of Big Data Technical Skills on Novel Business Model Innovation Based on the Role of Resource Integration and Environmental Uncertainty," Sustainability, MDPI, vol. 14(5), pages 1-16, February.
    8. Jose Alejandro Cano & Abraham Londoño-Pineda & Maria Fanny Castro & Hugo Bécquer Paz & Carolina Rodas & Tatiana Arias, 2022. "A Bibliometric Analysis and Systematic Review on E-Marketplaces, Open Innovation, and Sustainability," Sustainability, MDPI, vol. 14(9), pages 1-42, May.
    9. Tzu-Fei Hsiung & Yueh-Hsiu Cheng & Zi-Xun Han, 2021. "Sustainable Partnership: Operational Condition Analysis for Brand Value Co-Creation," Sustainability, MDPI, vol. 13(12), pages 1-23, June.
    10. Joana Costa & João C.O. Matias, 2020. "Open Innovation 4.0 as an Enhancer of Sustainable Innovation Ecosystems," Sustainability, MDPI, vol. 12(19), pages 1-19, October.
    11. Zhang, Jingjing & Groen, Aard, 2021. "Informal and formal open activities: Innovation protection methods as antecedents and innovation outputs as consequences," Technological Forecasting and Social Change, Elsevier, vol. 167(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Torres de Oliveira, Rui & Verreynne, Martie-Louise & Steen, John & Indulska, Marta, 2021. "Creating value by giving away: A typology of different innovation revealing strategies," Journal of Business Research, Elsevier, vol. 127(C), pages 137-150.
    2. Belén Payán-Sánchez & Luis Jesús Belmonte-Ureña & José Antonio Plaza-Úbeda & Diego Vazquez-Brust & Natalia Yakovleva & Miguel Pérez-Valls, 2021. "Open Innovation for Sustainability or Not: Literature Reviews of Global Research Trends," Sustainability, MDPI, vol. 13(3), pages 1-29, January.
    3. Hallberg, Niklas L. & Brattström, Anna, 2019. "Concealing or revealing? Alternative paths to profiting from innovation," European Management Journal, Elsevier, vol. 37(2), pages 165-174.
    4. Yun, JinHyo Joseph & Ahn, Heung Ju & Lee, Doo Seok & Park, Kyung Bae & Zhao, Xiaofei, 2022. "Inter-rationality; Modeling of bounded rationality in open innovation dynamics," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    5. Zeng, Jing & Khan, Zaheer & De Silva, Muthu, 2019. "The emergence of multi-sided platform MNEs: Internalization theory and networks," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    6. Shi, Xianwei & Liang, Xingkun & Luo, Yining, 2023. "Unpacking the intellectual structure of ecosystem research in innovation studies," Research Policy, Elsevier, vol. 52(6).
    7. Cenamor, Javier & Frishammar, Johan, 2021. "Openness in platform ecosystems: Innovation strategies for complementary products," Research Policy, Elsevier, vol. 50(1).
    8. Martin Poniatowski & Hedda Lüttenberg & Daniel Beverungen & Dennis Kundisch, 2022. "Three layers of abstraction: a conceptual framework for theorizing digital multi-sided platforms," Information Systems and e-Business Management, Springer, vol. 20(2), pages 257-283, June.
    9. Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
    10. Alessio Cozzolino & Gianmario Verona & Frank T. Rothaermel, 2018. "Unpacking the Disruption Process: New Technology, Business Models, and Incumbent Adaptation," Journal of Management Studies, Wiley Blackwell, vol. 55(7), pages 1166-1202, November.
    11. Elizabeth J. Altman & Frank Nagle & Michael L. Tushman, 2013. "Innovating Without Information Constraints: Organizations, Communities, and Innovation When Information Costs Approach Zero," Harvard Business School Working Papers 14-043, Harvard Business School, revised Sep 2014.
    12. Grimaldi, Michele & Greco, Marco & Cricelli, Livio, 2021. "A framework of intellectual property protection strategies and open innovation," Journal of Business Research, Elsevier, vol. 123(C), pages 156-164.
    13. Grama-Vigouroux, Simona & Saidi, Sana & Berthinier-Poncet, Anne & Vanhaverbeke, Wim & Madanamoothoo, Allane, 2020. "From closed to open: A comparative stakeholder approach for developing open innovation activities in SMEs," Journal of Business Research, Elsevier, vol. 119(C), pages 230-244.
    14. Tommy Pan Fang & Andy Wu & David R. Clough, 2021. "Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 233-272, February.
    15. Mi Hyun Lee & Sang Pil Han & Sungho Park & Wonseok Oh, 2023. "Positive Demand Spillover of Popular App Adoption: Implications for Platform Owners’ Management of Complements," Information Systems Research, INFORMS, vol. 34(3), pages 961-995, September.
    16. Jingtao Yi & Jinqiu He & Lihong Yang, 2019. "Platform heterogeneity, platform governance and complementors’ product performance: an empirical study of the mobile application industry," Frontiers of Business Research in China, Springer, vol. 13(1), pages 1-20, December.
    17. Idika Awa Uduma & Andy Fred Wali & Len Tiu Wright, 2015. "A quantitative study on the influence of breadth of open innovation on SMEs product-service performance: The moderating effect of type of innovation," Cogent Business & Management, Taylor & Francis Journals, vol. 2(1), pages 1120421-112, December.
    18. Kimmo Karhu & Robin Gustafsson & Kalle Lyytinen, 2018. "Exploiting and Defending Open Digital Platforms with Boundary Resources: Android’s Five Platform Forks," Information Systems Research, INFORMS, vol. 29(2), pages 479-497, June.
    19. Elizabeth J. Altman & Mary Tripsas, 2013. "Product to Platform Transitions: Organizational Identity Implications," Harvard Business School Working Papers 14-045, Harvard Business School, revised Sep 2014.
    20. Jens Foerderer, 2020. "Interfirm Exchange and Innovation in Platform Ecosystems: Evidence from Apple’s Worldwide Developers Conference," Management Science, INFORMS, vol. 66(10), pages 4772-4787, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4379-:d:363427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.