Assignement introduction Leadership Experiences of Organization Open Innovation

Chapter 1: Introduction to the Study

Open innovation is the purposive flow of information from in-house capabilities

to potentially outsourcing to create new ideas, processes, and products (Chesbrough et al.,

2006). Open innovation involves the generation of ideas to include stages from invention

to commercialization by capturing value from ideas, technology, and joint effort that may

be internal or external to the organization (Chesbrough & Brunswicker, 2013;

Chesbrough et al., 2006). Inbound open innovation involves soliciting and engaging ideas

from an external source to the organization (Chesbrough & Bogers, 2014; Hochleitner et

al., 2017). Outbound open innovation involves ideas generated from within the

organization to create innovation external to the organization (Bogers et al., 2017;

Chesbrough & Bogers, 2014). Open innovation is using external ideas and technology

within the organization while making internal unused ideas and technologies available for

other businesses (Chesbrough & Bogers, 2014). Open innovation in small and medium

enterprises (SMEs) has opened the boundaries for innovation to move from the traditional

closed approach to an open approach by using external information to create innovative

products and processes (Usman et al., 2018; Vanhaverbeke, 2017). Both inbound and

outbound open innovation can generate new ideas, products, and processes within an

organization.

Research on open innovation in SMEs and their organizations’ performance has

focused on developed economies with a lack of attention on developing economies,

including their environmental context variables and the role of leadership (Ahn et al.,

2015; Hossain, 2015; Slavec Gomezel & Rangus, 2019; Usman et al., 2018). However,

innovative performance of SMEs supports both firm sustenance and economic growth in

developing economies. Mohan et al. (2017) and Alleyne et al. (2017) identified barriers

to Caribbean SME innovation, and they included a lack of market knowledge and a need

for technology. Having a fuller understanding of the factors that drive SMEs’ innovative

performance is critical to the economic survival and growth of developing economies.

SMEs contribute to developing countries’ economic development and job creation

(Ayyagari et al., 2014; World Bank, 2019). SMEs represent 90% of businesses and 50%

of jobs worldwide, while in the Caribbean SMEs represent 95% of Caribbean businesses

and contribute 40% to the region’s gross domestic product (McLean & Charles, 2020;

World Bank, 2019). SMEs in developing economies including the Caribbean are not

engaged in innovation even though they have the potential (Mohan et al., 2017). SMEs

ranked lowest at 4% for organization innovation, and some of the islands included in that

study were St. Vincent, St. Lucia, Grenada, and St. Kitts (Mohan et al., 2017). SMEs’

engagement in organization innovation can increase the firm’s innovative performance,

increase economic growth, and create more jobs in developing economies.

Leadership in SMEs influences the strategic direction of the organization in many

ways. For example, research has found that leadership affects SMEs’ performance by (a)

developing a trusting organizational culture due to the openness of the leader, (b)

establishing relationship-based employee approaches, and (c) creating more dynamic

capabilities within an organization (Ahmed et al., 2018; Hernández-Linares et al., 2021;

Özer & Tınaztepe, 2014). Furthermore, a CEO’s leadership style affects the potential for

open innovation; a leader who foster openness may stimulate open innovation in the

organization (Ahn, 2020; Ahn et al., 2017a; Slavec Gomezel & Rangus, 2019). Due to

the promise of open innovation and the potential it has in stimulating SMEs and

economic growth in developing countries, having a better understanding of SMEs

leadership as it impacts the open innovation strategy of an organization can be critical for

future economic development, poverty reduction, and job creation.

In this chapter, I provide the background to the study and the research problem,

which was founded and developed from the literature. Gaps in previous research on open

innovation and leadership in SMEs in developing economies are described, and I address

the significance to the field of SME open innovation and leadership, paying attention to

both theory and practice. The study’s conceptual framework, dynamic capability view

framework, is identified based on the relevance to studies on open innovation and

leadership in the literature. Additionally, the nature of the study, relevant definitions,

assumptions, scope, delimitations, and limitations are also addressed.

Background of the Study

SMEs account for 95% of the Caribbean region’s businesses and contribute 40%

to their gross domestic product (McLean & Charles, 2020). Crespi et al. (2017) and

Mohan et al. (2017) argued that many Caribbean SMEs have the potential for innovation

and do not engage in innovation. Companies’ investment in process innovation increases

both labor productivity and the organization’s innovation (Crespi et al., 2017; Wadho &

Chaudhry, 2018). Organization innovation may increase the product and process

innovation of the organization, while improving the economic development of

developing countries.

There is a need to better understand SMEs leadership as it impacts the

organization’s open innovation strategy, which can be critical for future economic

development, reduction in poverty, and job creation in a developing country context.

There is abundant research confirming the relationship between leadership and SME

performance. Additionally, there is scattered research on the leadership and open

innovation relationship with some research focusing on (a) open innovation and firm

performance, (b) leadership knowledge and firm performance, (c) leadership style within

an organizational context, and (d) the flow of knowledge through outbound and inbound

open innovation (Ahn et al., 2015; Chesbrough & Brunswicker, 2013; Hossain, 2015).

Furthermore, some organizations engage in open innovation through knowledge flows

from affiliations with other organizations, and through knowledge from external sources

with the organization’s ability to use the external knowledge through its absorptive

capacity (Greco et al., 2017; OECD, 2018). Measuring the knowledge flows is critical to

organization open innovation at a firm level. Product and process innovation, staff

training, technology used by the organization, and the access to finances can measure an

organization’s innovation (Cirera & Muzi, 2020; Grazzi & Pietrobelli, 2016).

Additionally, the Oslo Manual, an international reference for collecting data on open

innovation, has defined open innovation and data sources of open innovation (OECD,

2018). Innovation at a firm level can be measured using innovation outputs and

knowledge utilization driving the process of organization open innovation.

In developing economies, the role of organization open innovation and leadership

impacts performance of SMEs and economic growth for these economies. Leaders of

SMEs influence the strategic transfer of knowledge through their leadership style and the

organization’s absorptive capacity (Ahmed et al., 2018; Hernández-Linares et al., 2021;

Özer & Tınaztepe, 2014). Open innovation, organization culture, and leadership impact

the SME performance relationship (Mohan et al., 2017; Morris, 2018; Slavec Gomezel &

Rangus, 2019; Srisathan et al., 2020). Leadership can positively affect an organization’s

innovation and can impact organizational performance (Chen et al., 2019; Kesting et al.,

2015; Xiao et al., 2018). Many studies have identified the positive relationship that exists

between SME leadership and innovation. Leadership approaches affect the management

of organization innovation.

Researchers have use the case study methodology to study leadership in

developed Caribbean economies. A case study using a case analysis method has been

used to understand the effect of leadership on prosperity. Many factors impact prosperity,

including internal factors such as strategic leadership and external factors such as

branding and the market (Williams & Ramdani, 2018). Additionally, the sectors most

important in generating process and product innovation in a developing country context

were manufacturing and the service sectors. Morris (2018) identified the sectors most

important for innovation were service and manufacturing based on a multisector study of

40,577 small, medium, and large enterprises. Using a case study methodology helped

Morris understand the factors that contribute to prosperous SMEs, with evidence

supporting the use of innovation within the service and manufacturing sectors.

Caribbean economies’ SMEs lack competitiveness; they have a weak capacity for

innovation and a lack of strategic leadership (Acevedo et al., 2013; Hurley, 2018; Minto-

Coy et al., 2018; Williams & Ramdani, 2018). The role of leadership in driving and

managing open innovation is needed to understand how leadership drives and manages

open innovation and the applicability in developing economies (Mohan et al., 2017;

Slavec Gomezel & Rangus, 2019; Usman et al., 2018). The current study addressed how

SME leadership drives organization open innovation in developing economies and

contributed to the SME leadership and the strategic management literature (see Crespi et

al., 2017; Slavec Gomezel & Rangus, 2019; Usman et al., 2018). The results may impact

positive social changes through the policy changes at a developing economy level to

support open innovation pursuit. Also, knowledge sharing, and strategic leadership may

contribute to a firm’s open innovation performance, which may influence SMEs’

performance positively and contribute to the economic development of developing

countries.

Problem Statement

The problem addressed in this qualitative study was the challenges of developing

Caribbean economies’ SMEs, lack of competitiveness, weak capacity for innovation, and

a lack of strategic leadership (Acevedo et al., 2013; Hurley, 2018; Minto-Coy et al.,

2018; Williams & Ramdani, 2018). Caribbean SMEs represent 95% of the Caribbean

region’s businesses and contribute 40% to gross domestic product (McLean & Charles,

2020). SMEs in developing economies ranked lowest at 4% for organization innovation

and included: Grenada, Antigua, Barbuda, Dominica, and St. Kitts (Mohan et al., 2017, p.

16). A study on firm-level innovation among Caribbean small, medium, and large

businesses indicated that more businesses had the potential for innovation but were not

engaging in innovation (Mohan et al., 2017). In the firm-level innovation study, “the

results indicated that businesses in Grenada had 81 potential innovators, St. Vincent had

69 potential innovators, Dominica had 75 potential innovators, and St. Lucia had 80

potential innovators” (Mohan et al., 2017, p. 16).

The general problem was that leaders of SMEs of the Windward Islands in the

Caribbean do not have a system to lead and promote strategic knowledge sharing to

increase open innovation (see Hurley, 2018; Mohan et al., 2017; Morris, 2018; Slavec

Gomezel & Rangus, 2019). The specific problem was that leaders of Caribbean SMEs

have not fully understood the contribution of leadership on the firm’s leaders’ abilities to

drive their organization’s open innovation (see Ahmed et al., 2018; Crespi et al., 2017;

McLean & Charles, 2020; Slavec Gomezel & Rangus, 2019; West & Bogers, 2017). A

gap in the leadership and strategic management literature existed regarding how SME

leaders’ knowledge and ability drive their organization’s open innovation in a developing

economy context (see Radziwon & Bogers, 2018; Slavec Gomezel & Rangus, 2019;

Usman et al., 2018; West & Bogers, 2017).

Purpose of the Study

The purpose of this qualitative study was to explore how SME leaders in the

Windward Islands manage and lead their organizations to drive open innovation in the

context of developing economies. To address the leadership and strategic management

gap in the literature, I used the qualitative research method and a multiple case study

design. Data were collected from SMEs in Grenada and St. Lucia, the largest of the

Windward Islands, which consisted of four developing economies: Dominica, St. Lucia,

St. Vincent, and Grenada. The data collection for the multiple case study design included

four SMEs and 15 semi-structured interviews with SME owners and managers (see

Halkias & Neubert, 2020; Stake, 2006; Yin, 2018). The SMEs were those engaged in

product or process innovations within the last three years. The concept of open

innovation was explored using leaders in the Windward Islands to understand how they

managed and led their organizations to drive open innovation in the context of

developing economies. The findings may provide valuable insight to improve the

performance of SMEs in developing economies (see Radziwon & Bogers, 2018; Slavec-

Gomezel, 2019; Usman et al., 2018).

Research Question

The overarching research question was the following: How do SME leaders in the

Windward Islands lead and manage their organizations to drive open innovation? I

explored how leadership within organizations influences and drives open innovation

according to SMEs who engaged in product exportation and had generated process and

product innovation within the last three years.

Conceptual Framework

The conceptual framework for this study was the dynamic capability view

framework. This framework links the concepts of leadership and open innovation with

the dynamic capability view framework associated with an organization’s strategic

performance (Chen et al., 2019; Donate & Sánchez de Pablo, 2015; Slavec Gomezel &

Rangus, 2019; Srisathan et al., 2020). The dynamic capability view framework consists

of (a) sensing environmental opportunities and threats; (b) seizing the opportunities; and

when necessary, reconﬁguring the business enterprise’s intangible and tangible assets

(Teece, 2007). Figure 1 depicts the dynamic capability view framework indicating the

three stages of sensing, seizing, and managing threats or transformation and the

associated organizational activities.

Figure 1

Dynamic Capability View Framework

Note. Adapted from “Explicating dynamic capabilities: The nature and microfoundations

of (sustainable) enterprise performance” by D. J. Teece, 2007, Strategic Management

Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640

The role of the leader is critical in this framework because sensing involves identifying

opportunities; seizing includes designing and refining the business models of the firm,

and maintaining competitiveness involves realigning the structure and culture of the firm.

This framework’s three organizational and managerial processes are core processes for

understanding the dynamic capability view framework.

The dynamic capability view framework is a concept associated with open

innovation and is used to assess the firm’s knowledge capacity. This framework’s three

stages represent the dynamic capability of a firm, which can be used to assess the open

innovation in SMEs. In a case study on Smith Corona, managers made strategic decisions

based on the erroneous judgment of the environment (Danneels, 2010). Fainshmidt et al.

(2016) and Ferreira et al. (2020) confirmed that dynamic capability positively influences

firm performance and can vary based on the economic context. Sudarmaji et al. (2020)

argued that SMEs must explore knowledge and exploit knowledge simultaneously to

increase their organization’s dynamic capability. A manager’s ability to use the elements

of dynamic capability can improve the strategic performance of a firm. The

heterogeneous nature of organizations and their environment can impact the effect that

the dynamic capability framework can have on performance.

The process of the dynamic capability view framework involves the constant flow

of information from external sources into the organization and the continuous processing

of that strategic information. Hermawati (2020) argued that a firm’s dynamic capability is

a constant process. Many researchers identified the benefits of sensing, seizing, and

reconfiguring as part of the dynamic capability framework within SMEs that engaged in

open innovation (Fainshmidt & Frazier, 2017; Ferreira et al., 2020; Grimaldi et al., 2013).

SMEs’ performance can benefit from the dynamic capability model and the strategic

inflow of knowledge and the resulting innovation in the context of developing

economies.

Nature of the Study

I used a qualitative method with a case study design to study how SME leaders in

the Windward Islands manage and lead their organizations through open innovation. This

study was conducted using multiple data sources in the context of developing economies

in the Windward Islands, while was a real-life setting (see Yin, 2018). The data collection

was from St. Lucia and Grenada, the largest of the Windward Islands, which consist of

four developing economies: Dominica, St. Lucia, St. Vincent, and Grenada. The SMEs

were in existence for a minimum of five years, with 250 or fewer employees for medium

enterprises and 50 or fewer for small enterprises (see Berisha & Pula, 2015; Cooper,

2016). The target population was approximately 30 owners and managers representing

four SMEs that engaged in product exportation, product innovation, and process

innovations. The sample consisted of 15 people who held leadership positions in the

capacity of manager or owner in any of these SMEs. I explored how they led and

managed their organization to drive open innovation (see Halkias & Neubert, 2020;

Stake, 2006; Yin, 2018). The industries represented included agro-processing, pool

supplies, and rum processing industries, which are major Windward Island industries (see

Cooper, 2016).

Cases were studied using an instrumental approach, which focused on an issue

with a multiple case analysis (see Hayes et al., 2015; Stake, 2006; Yin, 2018). The four

SMEs represented owners and managers who led their organizations through innovation

outputs (see Hancock & Algozzine, 2017; Stake, 2006). The criterion-based sampling

technique used to select organizations focused on exportation and innovation outputs

within the last three years, excluding other innovations such as staff training and research

and development associated with larger organizations (see Cirera & Muzi, 2020; Morris,

2018; Slavec Gomezel & Rangus, 2019).

A data triangulation approach included data from various data sources including

interviews and document analysis (see Halkias & Neubert, 2020; Stake, 2006). SMEs’

data were analyzed using a thematic approach based on common themes identified from

the literature and compared with the interview transcripts (see Hancock & Algozzine,

2017; Yin, 2018). The multiple case study included a within-case analysis to assess the

common themes (see Halkias & Neubert, 2020; Stake, 2006).

Definitions

Leadership: The collaboration between two or more members of a group that

often includes the structuring or restructuring of the situation, the perception, and the

members’ expectations (Bass, 1985).

Open innovation: The purposive inflows and outflows of knowledge to increase

internal innovation and external innovation and extend the markets for the external use of

innovation respectively (Chesbrough et al., 2006).

SMEs: Small and medium enterprises that employ fewer than 250 people

(medium) and fewer than 50 people (small; European Union Law, 2003).

Assumptions

The purpose of this study was to understand how SME leaders drive organization

open innovation. Data were collected from semi-structured interviews from owners and

managers of SMEs. I assumed that the information provided was accurate and

represented the participants’ best judgment. I assumed the managers’ and owners’

decisions were accurate and based on their data collection experiences.

Scope and Delimitations

The qualitative method was an appropriate choice for this study to understand

how leaders drive open innovation. I included three SMEs to thematically analyze their

approaches using a within-case analysis (see Stake, 2006). Cases should show different

perspectives on the problem, process, or event (Halkias & Neubert, 2020; Stake, 2006).

Data were collected from St. Lucia and Grenada, the largest of the Windward Islands,

which consisted of four developing economies: Dominica, St. Lucia, St. Vincent, and

Grenada. The criterion-based sampling technique was used to select organizations

engaged in exportation, product, and process innovation outputs within the last three

years (see Cirera & Muzi, 2020; Morris, 2018; Slavec Gomezel & Rangus, 2019). The

target population was approximately 30 owners and managers representing three SMEs

that engaged in open innovation (see Halkias & Neubert, 2020; Stake, 2006; Yin, 2018).

The sample consisted of 15 people who held leadership positions in the capacity of

manager or owner in any of these SMEs.

Limitations

Limitations of this study were potential participant dropout and the sample not

representing the population. These were addressed by inviting more people than the

required sample size. Biases on the subject area were addressed with a reflexive journal

before, during, and after the data were collected and analyzed. The data collection and

analysis guided the answering of the research question. The study transferability was

limited based on the small sample of cases, but this limitation was mitigated through the

use of a multiple case study including four cases to increase transferability to a larger

population.

Issues of dependability were addressed using codes from the data based on the

research question and representing the literature on the subject. At the same time, some

were codes emerged from the data. Data analysis involved the use of a hierarchical

coding structure with the major codes derived from the literature and the emerging codes

based on the data analysis software, ATLAS.ti.

Significance of the Study

The findings from this study may contribute to the understanding of how SME

leaders in developing countries manage and lead their organizations to drive open

innovation. This was an underresearched area in the leadership and strategic management

literature with minimal research on SME leaders’ ability to drive open innovation in a

developing economy context (see Minto-Coy et al., 2018; Usman et al., 2018). SMEs in

the Caribbean are a major business sector and depend on innovation to reduce

unemployment and improve sustainability (Ayyagari et al., 2014; World Bank, 2019).

The current study may guide future leaders of SMEs in understanding the factors that

drive open innovation and the resulting impact on organizational performance.

Additionally, leaders in developing economies may understand how to manage their

organizations to drive open innovation while understanding the role of the leader in the

process (see Slavec Gomezel & Rangus, 2019; Srisathan et al., 2020).

Significance to Practice

The results of this study may be significant to practice because they may explain

how to drive open innovation within SMEs in the context of developing economies. The

study findings may provide SME owners and managers with knowledge regarding the

process of open innovation and the role of leaders in driving open innovation (see Ahmed

et al., 2018; Minto-Coy et al., 2018; Slavec Gomezel & Rangus, 2019; Srisathan et al.,

2020). SMEs provide employment for the Windward Island economies, and the findings

from the current study may contribute to SME sustainability (see Government of

Grenada, 2021; Government of St. Lucia, 2021; McLean & Charles, 2020; Williams &

Ramdani, 2018). Economic development and a reduction in unemployment may be social

benefits from this study on open innovation.

SMEs in developing economies lack strategic leadership and an organizational

approach to driving and managing open innovation. The future economic growth of

Caribbean developing economies is dependent on a refocus on innovation, strategic

leadership, and competitiveness (McLean & Charles, 2020; Minto-Coy et al., 2018;

Williams & Ramdani, 2018). Many Caribbean developing economy SMEs have the

potential for innovation but do not engage in organization innovation (Mohan et al.,

2017; Yang, 2016). There is a lack of knowledge on open innovation and how leadership

drives innovation among SMEs in developing economies (Minto-Coy et al., 2018; Usman

et al., 2018). The current study’s findings may benefit SMEs and add value to the

knowledge on the factors that drive SMEs’ open innovation. The knowledge from this

research may be of value to owners and provide educators with the understanding to help

students studying strategic management and leadership to develop open innovation

strategies for their SMEs.

Significance to Theory

This study may be significant to theory because it may offer in-depth qualitative

data on the experiences of innovative SME leaders and their approach to driving open

innovation in developing economies. Open innovation and understanding the leadership

role in driving open innovation may contribute to the performance of SMEs. Researchers

identified an empirical relationship between a firm’s open innovation and (a) the

openness of the leader, (b) the organization culture, and (c) the performance of SMEs

(Mohan et al., 2017; Morris, 2018; Slavec Gomezel & Rangus, 2019; Srisathan et al.,

2020). Many scholars established a relationship between leaderships styles and

organization innovation (Chen et al., 2019; McDowell et al., 2018; Xiao et al., 2018).

However, there was a need for more research on how leaders drive and manage open

innovation within SMEs in the context of developing countries.

Significance to Social Change

This study has implications for Caribbean islands’ economic development

because SMEs can provide opportunities for job creation and economic growth.

Developing Caribbean economies depend on SMEs’ financial contributions to their

economic development and in the provision of jobs. SMEs are a major business sector

and contribute to the economic growth of small developing economies (Ahlstrom, 2010;

Williams & Ramdani, 2018; Ng & Kee, 2018). The current unemployment rate of 20% in

developing economies offered an opportunity for research to improve this situation for

Caribbean developing economies (Government of Grenada, 2021; Government of St.

Lucia, 2021; McLean & Charles, 2020). The private sector provides an opportunity to

reduce unemployment for developing economies. The private sector offers a solution to

unemployment by providing 9 out of 10 jobs in developing economies (Ayyagari et al.,

2014; World Bank Group, 2013). The role of SMEs is significant in creating

employment, stimulating economic activities, and reducing poverty in developing

economies while driving positive social change.

Summary and Transition

This chapter provide an overview of the problem identified, an indication of the

purpose of the study, the research question, the data analysis, and the limitations of the

study. A review of the literature on leadership and the influence on innovation and

strategic performance, Caribbean SME innovation, and SME organization open

innovation guided this study. In Chapter 2, I review the existing literature on SME

leadership and organization innovation and provide a description of the conceptual

framework that anchored the study. The aim of this literature review was to illustrate the

gap in the strategic and management literature that influenced the research question. The

theories and current research on leadership, strategic performance, Caribbean SME

innovation, and SME organization open innovation guided the current study.

Chapter 2: Literature Review

The specific problem addressed was leaders of Caribbean SMEs have not fully

understood the contribution of the leader’s ability to drive organizations’ open innovation

in a developing country context (see Ahmed et al., 2018; Crespi et al., 2017; Slavec

Gomezel & Rangus, 2019; Usman et al., 2018). The purpose of this qualitative study was

to explore how SME leaders in the Windward Islands manage and lead their

organizations to drive open innovation in the context of developing economies. SMEs

account for 95% of the Caribbean region’s businesses and contribute 40% to gross

domestic product (McLean & Charles, 2020). A study on firm-level innovation among

Caribbean small, medium, and large businesses indicated that there were more businesses

with the potential for innovation than those that were engaging in it (Mohan et al., 2017).

Investment in innovation has been shown to increase labor productivity and efficiency

(Crespi et al., 2017; Wadho & Chaudhry, 2018). The heterogeneous nature of SME open

innovation and the context variable of developing economies presented an opportunity to

contribute to the strategic and management literature.

Open innovation in SMEs refers to the inbound and outbound flow of purposeful

knowledge across organizational boundaries. There is a need to understand the dynamics

of organizational leadership regarding open innovation (Ahn et al., 2017; Hossain, 2015;

Usman et al., 2018; West & Bogers, 2017). The leadership role in SMEs is critical in

driving and managing open innovation in organizations.

This chapter contains several sections. The first section includes the strategy

adopted for the literature search. In the second section, I discuss the conceptual

framework for the study. In the third section, I discuss the literature on innovation in

Caribbean developing economies. In the fourth section, I discuss the literature on

leadership and organization innovation. In the fifth section, I discuss the literature on

SME organization innovation. In the sixth section, I discuss the literature on the

management of open innovation in SMEs. Finally, I discuss the literature on the drivers

of open innovation in SMEs.

Literature Search Strategy

The strategy for the literature review in this study was to search for peer-reviewed

journal articles on the study’s research concepts and methodology. I searched for articles

and seminal works published in 2014 or later that could help to answer the research

question. The keywords I used to search scholarly databases were as follows: leadership,

SMEs, organization innovation, and SME open innovation. I used multidisciplinary

databases such as Science Direct Academic Search Complete, Taylor and Francis, and

Thoreau accessed through the Walden Library as well as Google Scholar to retrieve

seminal peer-reviewed articles on leadership and open innovation, which I read and

analyzed. I used Ulrich’s database to confirm that journals obtained through Google

Scholar were peer reviewed.

My literature search encompassed critical leadership, management, and

innovation journal articles published between 2014 and 2021 to ensure that no important

current article was left out. Journals reviewed were Entrepreneurship & Regional

Development, Journal of Technology Management and Innovation, International Journal

of Management Reviews, Technovation, Strategic Management Journal, Leadership &

Organization Development Journal, Journal of Technology, Journal of Innovation and

Knowledge, Innovation and Management, Global Business Review, The Leadership

Quarterly, and Academy of Management Journal.

The methodology was a qualitative multiple case study, and I found literature on

qualitative research methodology in books and edited book chapters. Some of the

authorities I consulted on case study methodology were Stake (2006) and Yin (2018). I

also reviewed journal articles on the qualitative case study approach (see Halkias &

Neubert, 2020; Hancock & Algozzine, 2017; Hayes et al., 2015).

Conceptual Framework

The dynamic capability view framework was the conceptual framework guiding

this study. This framework represented a broad view of how organizations can identify

strategic information in their internal and external firm environment. The research

question was identified based on a review of the leadership, open innovation, and SME

performance literature (see Chen et al., 2019; Groves, 2020; Slavec Gomezel & Rangus,

2019; West & Bogers, 2017). Many studies addressed the impact of transformational

leadership and transactional leadership on innovation and organizational outcomes (Chen

et al., 2019; Kesting et al., 2015; McDowell et al., 2018). Leadership and open innovation

impact the strategic position of an organization, with leadership influencing the

interaction of people and open innovation influencing the inflow and outflow of

information used to generate internal innovation.

The research question was crafted using the dynamic capability view framework.

This framework represents how knowledge within organizations can be transformed

while benefitting from innovation outputs (Teece, 2007). This conceptual framework has

represented both a deductive approach in empirical studies and an inductive reasoning

tool used by many qualitative studies, while providing a holistic approach in the

examination of management strategies and organization open innovation (Slavec

Gomezel & Rangus, 2019; Srisathan et al., 2020, Vogel & Güttel, 2013). The framework

“highlights the facets that an organization can use to assess its open innovation and the

leadership role in the process” (Teece, 2007, p. 1319). The dynamic capability view

framework informs the management strategies that can be applied in leading and

managing organization open innovation. Organizations can use the dynamic capability

view framework to inform a continuous process that creates a system of innovations.

The dynamic capability view framework is an iterative process involving three

stages: sensing, seizing, and managing threats or transforming products and processes

(Teece, 2007). The elements of each of the stages are as follows: (a) Sensing involves the

analytical systems embraced by organizations to analyze both the internal and external

information from its environment, (b) seizing involves putting structures and systems in

place to benefit from the information, and (c) managing threats/transforming involves the

process of ensuring that the organization’s intangible and tangible assets use knowledge

continuously (Teece, 2007). Each element of the framework involves the process of open

innovation, which is influenced by organizational leadership (Helfat & Peteraf, 2009;

Teece, 2014). Each element of the framework contributes to the organization’s strategic

ability to use knowledge and the leadership’s ability to guide the process.

The dynamic capability framework represents a model that interprets an

organization’s strategic response to technical, market, and customer changes occurring in

the environment. Capability can be operational or dynamic, with operational influencing

the ability of the organization to thrive and dynamic referring to a change that is

purposeful to create, modify, or extend the resource base of the organization (Helfat &

Peteraf, 2009; Teece, 2007; Teece et al., 1997). Eisenhardt and Martin (2007) argued that

dynamic capabilities are specific processes that represent best practice. Teece (2007), on

the contrary, argued that a dynamic capability gives an organization a competitive

advantage and should not be a best practice because the latter is imitable and common to

competitors. The framework allows the organization to respond to the dynamic changes

in its environment with a systematic strategic response.

An organization’s dynamic capabilities drive the entrepreneurial leaders who

strategically add value within the organization and among other enterprises and

institutions. Kurtmollaiev et al. (2018) argued that organization training increased sensing

of strategic information in an organization and seizing through organizational systems

directed by leaders. Organization leaders can provide a supportive organizational culture

that increases positive behaviors, attitudes, and interpersonal relationships among

organization members (Fainshmidt & Frazier, 2017). Ferreira et al. (2020) found that

dynamic capability, innovative capacity, and the entrepreneurial orientation of the leader

positively impacted the firm’s performance. The organization’s leader influences the

internal organizational culture and dynamic capabilities and can have an impact on the

strategic direction and capability of the organization.

A SME’s dynamic capability is its strategic response mechanism to the dynamism

in the external environment. Karna et al. (2016) and Schilke (2014) found that dynamic

capabilities were more relevant in low dynamic environment than in a high dynamic

business environment. For example, in a case study of SMEs engaged in open innovation,

businesses benefited from the dynamic capability framework in scanning the business

environment through sensing, creating organization systems through seizing, and

reconfiguring the organizational systems (Grimaldi et al., 2013). Additionally, the

utilization of current knowledge and ongoing learning increases a SME’s dynamic

capabilities (Hermawati, 2020). Sudarmaji et al. (2020) argued that SMEs benefit from

the ambidexterity approach of exploring and exploiting knowledge simultaneously. The

dynamic capabilities of SMEs and their flexibility are advantageous for increasing their

environmental adaptability (Hernandez-Linares et al., 2021; Wang & Wang, 2017). The

performance of SMEs in developing countries can benefit from understanding the

dynamic capability model with the strategic inflow of knowledge and the resulting

innovation.

Literature Review

The objective of this literature review was to understand the existing knowledge

relevant to the current study. Open innovation was addressed with a focus on SMEs and

organizational factors that drive open innovation and factors that affect the management

of open innovation within SMEs. The sections covered in this literature review include

the Caribbean and developing economies innovation; SMEs’ organization innovation,

leadership, and organization innovation; driving factors of open innovation; the

management of open innovation; and open innovation’s effect on organizational

performances.

Caribbean and Developing Economies Innovation

Caribbean developing economies have experienced slow economic growth in the

past decade due to an extensive lack of innovation and productivity in the private sector.

Ruprah et al. (2014) and Ruprah and Sierra (2016) found that some of the factors for slow

growth in Caribbean economies were a decreasing labor force relative to population,

inferior technology, and a lack of innovation at the private sector level, which contributed

to a decrease in their total factor production. Management literature established the

critical role of innovation regarding economic development in developing economies

(Crespi et al., 2017; Garone et al., 2020; Ruprah et al., 2014). The productivity of the

private sector and the stimulation of growth is critical for developing economies.

Economists considered the private sector as the engine of growth in small, open

developed, and developing economies (Ng & Kee, 2018; Williams & Ramdani, 2018),

with the private sector innovation impacting the growth and productivity of those

economies. Innovation at a firm level can increase the efficiency of firm resources used

in the creation of new products and processes.

Many factors have contributed to the Caribbean SMEs’ lack of innovation. In a

study of 14 Caribbean countries with a sample size of 1,966 respondents, firm-level

innovations were assessed among small, medium, and micro enterprises (Crespi et al.,

2017). Factors hindering innovation were “a lack of financial resources, a lack of

available technologies and new market trends, a lack of flexibility and openness for

business collaborations, organization culture, and a lack of openness and flexibility in

creating new products and services” (Mohan et al., 2017, p. 20). The firms surveyed

represented many sectors, with the manufacturing industry engaging the most in

innovation compared to the service sector. The strategy and innovation of firms impact

the productivity level of developing economies (Garone et al. 2020; Williams &

Ramdani, 2018). A fuller understanding of the factors that impact SMEs’ innovative

performance is critical to the economic survival and growth of developing economies.

Additionally, strategy, technology, and the leadership of SMEs can influence the ability

of firms to engage in open innovation.

SMEs are essential to economic development and are a focal point in the

developing economy literature for the contribution made to employment and economic

development. SMEs create innovation through value-added products and process

improvements (OECD, 2018). Additionally, innovative SMEs drive technological

progress while increasing employment opportunities (Chege & Wang, 2020). The

management of relationships outside of the organization increases the organization’s

innovation capabilities. Furthermore, the ability of SMEs to build networks and develop

organizational capability and managerial capability increases their innovative ability (Lin

& Lin, 2016; Salishu & Julienti, 2019). Nevertheless, SMEs limited resources to innovate

constraints many SMEs ability to innovate (Saunila, 2016; Sok et al., 2017). SMEs in

developing economies can improve their organization innovation by networking and

increasing their organizational capabilities.

Organization innovations are restricted to limited technology and inadequate

application of research and development. Standard innovation strategies used by

developing countries are strategic alliances, process, product, marketing, management

innovations, and standardization (Maldonado-Guzman et al. 2019; Salisu & Abu-Bakar,

2019; Zoo et al. 2017). Some SMEs’ innovation approaches include no information

technology with products created based on affordability. SMEs lack a formal research

and development unit, which creates the opportunity for the generation of knowledge

from within the firm, the flexibility to change their strategy, and the creation of new

products and processes (Aminullah et al., 2018; Barasa et al. 2014; Guo et al., 2017).

Additionally, many firms struggle with financial limitations, with an increasing

occurrence of products made at a lower cost and done on an as-needed basis, which are

then sold cheaply (Tiwari et al., 2017; Zanello et al., 2016). Some researchers have

indicated that SMEs in the manufacturing sector’s use of information, communication,

and technology have increased their innovation, market access, jobs, and performance

(Asunka, 2016; Chege & Wang, 2020; Makanyeza & Dzvuke, 2015). Innovation in

developing economies is hindered by a lack of information technology and a lack of

financial resources to pursue organization innovation.

Caribbean SME Profile

The profile of Caribbean private sector business includes a large percentage of

SMEs. SMEs represent 90% of companies worldwide and represent 95% of the

Caribbean region’s business enterprises (McLean & Charles, 2020; World Bank, 2019).

SMEs contribute to developing countries’ economic development and job creation

(Ayyagari et al., 2014; World Bank, 2019). SMEs account for 95% of the Caribbean

region’s businesses and contribute 40% to gross domestic product (McLean & Charles,

2020). Despite this fact, SMEs in developing economies ranked lowest at 4% for

innovation and included: Grenada, Antigua, Barbuda, Dominica, and St. Kitts (Mohan et

al., 2017). Equally important, a study on firm-level innovation among Caribbean small,

medium, and large businesses indicated more companies had the potential for innovation

than those that were engaging in innovation (Mohan et al., 2017). In the firm-level

innovation study, “the results indicated that businesses in Grenada had 81 potential

innovators, St. Vincent had 69 potential innovators, Dominica had 75 potential

innovators, and St. Lucia had 80 potential innovators” (Mohan et al., 2017, p. 16).

Caribbean SMEs are a major part of the business landscape of developing economies, and

there is a critical need to understand innovation at the organizational level.

Leadership and Organization Innovation

Organization innovation is a renewal approach to create something new in the

form of product innovation or refine its offerings through process innovation with trial

and error impacting the organization’s learning (Bessant et al., 2005). Innovation include

changes in an organization’s position and paradigm using radical or incremental

approaches (Baregheh et al., 2009; Bessant & Tidd, 2015; Kesting et al., 2015).

Additionally, organizations remain competitive by the creation and renewal of products

and processes to outperform their competitors in highly competitive industries

(Schumpeter, 1934). Schumpeter’s Theory of economic development advocates for

creating and destroying the created products and processes while changing through

business innovation (1983). In many cases, a firms’ leadership continually renews the

organization’s processes and products to remain competitive while reshaping the

organization’s strategy.

Leaders can influence followers by their personality, the environmental

conditions, and the leadership approach used. Bass (1990) identified leaders as agents of

change that affect people while Freud (1920) identified leaders as persons guided by

egotism. The trait leadership theory advocates that leader have common traits that can

influence followers’ changes (Robbins and Judge, 2018). Additionally, Bass (1997) and

House and Shamir (1993) identified charismatic leadership and transformational

leadership approaches that influenced a leader’s commitment to their followers. Common

cause theory focused on the social causes of influence similarly the situational leadership

theories and procedural justice theories identified the environmental-based factors on a

leaders’ ability (Gardner, 1995; Robbins & Judge, 2018; Tyler & Lind 1992). For this

reason, leaders can influence change by the interaction between the leaders and followers,

and the structuring or restructuring of the situation to bring about change. During, the

process of change leaders can influence the innovation process within an organization.

Leadership theories most frequently associated with innovation included

transformational and transactional leadership. Transformational and transactional

leadership have focused on leadership studies focusing on organization innovation and

employees’ behaviors (Chen et al., 2019; Kesting et al., 2015; McDowell et al., 2018).

Incidentally, Burns (1979) argued that transformational leadership was a leadership style

that inspired followers to transcend their values to that of the leader’s values and goals,

while transactional leadership represented rewards and punishment in exchange for

compliance with the leader’s request. Additionally, Bass (1985) purported that

transformational leadership was a further development of charismatic leadership. The

four elements of transformational leadership were emphasized and included “idealized

(charismatic) influence, inspirational motivation, intellectual stimulation, and

individualized consideration” were the most critical elements (Avolio et al., 1991, p. 22).

Furthermore, interaction and encouragement influence innovation and are integral

elements of interactive leadership (Kesting et al., 2015). Leaders bring about innovation

by their leadership style, which influences the people, the means, effects, and

organizational goals.

The entrepreneurial orientation of leaders impacts the organization’s ability to

pursue innovations. Entrepreneurial orientation comprises innovativeness, risk-taking,

pro-activeness, and distinct entrepreneurial postures that can enhance strategic survival

(Wales, 2016; Linton & Kask, 2017). Teece (2007) argued that organizations need

entrepreneurial leadership to dynamically drive the organization’s internal and external

changes to maintain a competitive advantage. Further, managers who possessed an

entrepreneurial orientation attitude, openness, and positive awareness of customers can

impact the organization’s open innovation (Ahn et al., 2014; Direction, 2020; Najar &

Dhaouadi, 2020). Therefore, the entrepreneurial orientation of leaders influences the

openness of the organization to engage in innovation while creating a climate for open

innovation.

Leadership and Open Innovation

Leadership drives open innovation through the creativity generated from within

the organization which influences the organization’s culture. Amabile (1997) argues that

a person’s intrinsic motivation and an innovation-oriented organization environment

increases creativity. Open innovation within organizations can be generated from the

creativity of teams and individuals’ ideas to problem solutions within the organization

(Boly et al., 2014; Obradovic et al., 2021; Wang et al., 2017; Zhang & Jiang, 2015).

Collectively there is a positive relationship between the leaders’ encouragement and

interaction and the increase in employee ideas which supports open innovation (Wang et

al., 2017; Zhang & Jiang, 2015). Leaders can support open innovation by the interaction

they have with employees within the organization. Additionally, relationship-based

approaches to leading employees were positively associated with authentic, democratic,

and paternalistic leadership styles. Transformational leadership increased employees’

internal motivation, and transactional leadership increased the employee’s external

motivation to engage in innovation (Ahmed et al., 2018; Kang et al., 2015). Knowing

this, managers have the task of bringing about new ways of thinking and changing the

organizational culture (Barham et al., 2020). In contrast, Kratzer et al., (2017) found that

manufacturing companies engaged more in closed innovation than open innovation

because of a lack of a supportive culture and attitude to open innovation. Accordingly,

the role of a supportive leadership style increases creativity from within the organization

and can drive open innovation at an organizational level.

SMEs’ Organization Innovation

Organization innovation is an approach used to create or reform an existing

product or process which can positively impact an organization’s performance.

Innovation is an organization’s approach to creating product innovation or refining the

delivery of its offerings through process innovation with the input of organizational

members, in response to competitors and environmental changes (Bessant et al., 2005;

Bessant & Tidd, 2015; Utterback & Abernathy, 1975). Additionally, Knight (1967)

argued that innovation is doing something different, and it does not necessarily have to be

new. In contrast, Schumpeter (1983) identified the importance of new products replacing

old ones through innovation in his creative destruction theory. Furthermore, organization

innovation involves searching and making strategic choices, implementing, and gaining

value from the innovations (Bessant & Tidd, 2015). Organizational approaches to

innovation determine the strategic direction provided by leaders of organizations. Among

the organizational factors associated with innovation, managerial capabilities have

impacted both the speed and efficiency of the innovation process (Rothwell, 1994; Tidd

& Thuriaux-Aleman, 2016). Organizational characteristics and leadership had a more

decisive influence on organization innovation than the environment itself (Damanpour et

al., 2018: Damanpour & Schneider, 2006; Santoro et al., 2020). The leaders of an

organization influence the adoption of innovation by organizations while the innovation

process shapes the leader’s influence, on the organizational input, and strategic choices.

The innovation capability of an organization influences the continuity of

innovation within an organization. Innovation capability is an organization’s ability to

provide innovative services and products continuously through the organizational

capabilities, capacities, and competencies (Momeni & Balslev Nielsen, 2016; Saunila et

al., 2014). Furthermore, Momeni & Balslev Nielsen (2016) argued that innovation

capability is the internal knowledge of staff and organizational members. While

innovation capability is described as a process involving idea creation and its contribution

to process innovation (Saunila, 2019). An organization’s innovation capacity includes

organizational systems, market competency, technological competency, leadership, and

employee creativity (Boly et al., 2014; Saunila, 2017; Saunila & Ukko, 2014). SME’s

innovation capability includes their internal processes which creates the source of their

innovation and can impact their competitive advantage.

Management of Open Innovation in SMEs

Open innovation management in SMEs is needed to understand organizational

open innovation but research has focused primarily on technology-based firms, in

addition, measuring the open innovation and firm performance relationship using

quantitative approaches. Dereli (2015) purported that innovation management involves

controlling technology innovation, management innovation, and organization innovation,

and all are essential elements to increase global competitiveness for firms and nations.

Many studies have focused on technological innovation within high and medium-

technology-based firms using a quantitative approach (Cui et al., 2018; Henttonen &

Lehtim€aki, 2017; Parida & Örtqvist, 2015). The use of qualitative methods in

understanding the management of open innovation is recent and, there is an urgent need

to explore the heterogeneous nature of organization open innovation in SMEs in

developing economies (Albats et al., 2020; Crupi et al., 2020; Hermawati, 2020; Usman

et al., 2018). To this end, SMEs engaging in high and medium technology systems are

dependent on organizational open innovation to increase their competitive advantage. As

a result, the implementation of open innovation within SMEs is increasingly crucial for

their competitiveness.

Many studies on open innovation occurred using large organizations. In the last

decade, its relevance in SMEs has increased due to SMEs organizational flexibility, the

effect on firm performances, and the need to remain competitive (Albats et al., 2020;

Crupi et al., 2020; Hermawati, 2020; Usman et al., 2018). Equally important, open

innovation is the strategic use of internal and external information to include the ideation

stage to production to capture value from ideas, technology, and joint effort (Chesbrough

& Brunswicker, 2013; Chesbrough et al., 2006). The open innovation concept in large

organizations is not transferrable to SMEs’ (Brunswicker & Van de Vrande, 2014). Open

innovation was first researched in SMEs as a successful strategy utilizing both internal

and external knowledge on incremental and radical innovation (Batterink, 2009). The

strategic knowledge gained by SMEs was purposive, with the flow of information from

within the organization resulting in increased market access (Chesbrough & Bogers,

2014; Van de Vrande et al., 2009). Knowing this, open innovation extends the

organizational boundaries for SMEs with opportunities to increase their competitiveness

(Vanhaverbeke, 2017). Altogether, the type of open innovation used is based on the flow

of knowledge from external of the organization, internal of the organization, or both

internal and external sources.

The knowledge creation and the characteristics of the CEO in organizations

impact an organization’s ability to pursue open innovation. The value of knowledge

creation is critical for SMEs, which affects a firm’s open innovation and performances

(Block et al., 2017; Singh et al., 2019). Additionally, the various leadership styles used to

influence the organizational climate in SMEs and their engagement in open innovation

(Ahmed et al., 2018; Hoang et al., 2020; Kang et al., 2015). Both the personal networking

abilities and the cognitive characteristic of the CEO influences the open innovation of

SMEs (Ahn et al., 2017a: Slavec-Gomezel & Rangus, 2019; Zhang et al. 2017). To this

end, the leadership style, the organizational climate, and the networking abilities of top

managers determine the knowledge generated from within an organization. The

leadership’s approach to seeking knowledge internal and external of the organization can

strategically benefit SMEs.

Open innovation and the flow of knowledge represent the innovation diffusion of

the organization. The movement of knowledge that underpins a product or business

process can impact the organization’s innovation process (OECD, 2018; Teece, 1986).

Firms are engaged in knowledge acquisition through knowledge networks internal and

external of the organization to increase their strategic position (Grigoriou & Rathaermel,

2017; Phelps et al., 2012). Moreover, the increased absorptive capacity of firms occurs

with the use of external knowledge for organization innovation (Presenza et al., 2017).

Additionally, leaders’ creation of a knowledge-sharing culture supports the internal and

external knowledge networks (Nestle et al., 2019). Management support of organizational

teams and a knowledge-sharing culture impact tacit knowledge while positively affecting

explicit knowledge in organizations (Florén et al., 2018; Yao et al., 2020). As a result, the

knowledge networks support the transfer of strategic information throughout the

organization.

Open innovation knowledge flow can be outbound, inbound, or coupling.

Outbound open innovation (outward flow of knowledge) is the use of knowledge by an

external organization for that organization’s innovative purposes while inbound open

innovation (inward flow of knowledge) is the acquisition of external knowledge for

internal innovations and coupling open innovation representing a combination of both

(Chesbrough & Crowther, 2006; OECD, 2018). Outbound open innovation can include

licensing out, selling, and open sourcing while inbound open innovation can include

knowledge from customers, employees, research and development sources, and other

strategic alliances (Glassman et al., 2009; Van de Vrande et al., 2009; Abulrub & Lee,

2012). The choice of outbound, inbound, and coupling open innovation requires an

assessment of the organization’s strategic need. Open innovation can influence the

strategic choice of an organization.

SMEs engage in both inbound open innovation and outbound innovation with

common indications through alliances, information technology, and the influence of

management competencies. SMEs inbound open innovation entailed enterprise alliances

with research centers and private companies, and they were associated with positive firm

performances and marketing advantages (Ahn et al., 2015; D’Angelo & Baronceili, 2020;

Hochleitner et al., 2017). Park (2018) argued that external search activities improved

innovation activities. SMEs engaging in open innovation had an improved innovation

efficiency because of stakeholder engagement and management competencies (Grama-

Vigouroux et al., 2019; Wynarczyk et al., 2013). In contrast, some SMEs had challenges

selecting appropriate partners and risk information leaks from within the network

(Colombo et al., 2012; Zhang & Chen, 2014). Therefore, the use of inbound and

outbound open innovation had positive effects on the innovation efficiency of SMEs.

Despite this, there was the risk for SMEs to manage their external relationship with

partners.

Many SMEs engage in inbound open innovation more than outbound open

innovation and coupling. Scholars have presented many approaches to inbound open

innovation based on the open innovation literature (Hochleitner et al., 2017; Park, 2018;

Yoon et al., 2016). Park (2018) advocated two approaches: searching activities to

increase innovation efficiency while collaboration decreased efficiency. Similarly,

Hochleitner et al. (2017) advocated two approaches, including pioneers who are first to

introduce activities to the market and the imitators’ followers, most inbound open

innovation centers around the pioneers. Table 1 highlights five (5) clusters identified by

Hochleitner et al., (2020) where he argued that there are five clusters of inbound open

innovations with the respective inbound open innovation activities (Table 1).

Table 1.

Inbound Open Innovation Clusters

Cluster

Inbound open innovation profile

Closed innovators

Firms that use internal information and internal R&D to

carry out their innovation activities

Absorbers of knowledge

Firms that use mainly specialized sources of information

to carry out their innovation activities: universities,

government, consultants, and associations

Acquirers

Firms characterized by the acquisition of machinery and

external knowledge and external sources of information

Co-operators

Firms that seek specialized collaboration with customers,

suppliers, consultants, competitors, and, to a lesser extent,

with universities and the government

Absorbers of industry

knowledge

Firms that use sector-specific information to carry out

innovation activities: information from customers,

suppliers, trade fairs, competitors, journals, and

associations

Note. This table demonstrates the five different clusters representing inbound open

innovation arrangements in SMEs. From “Evolution of inbound openness profiles in the

innovation practices of small and medium-sized enterprises in Spain and Portugal” by F.

Hochleitner, A. Arbussi, & G. Coenders (2020). International Journal of

Entrepreneurship and Innovation Management, 24(1), 73–96.

https://doi.org/10.1504/IJEIM.2020.105281

Open Innovation and Managerial Competency

SMEs implementation of open innovation was heterogeneous in nature.

Accordingly, the literature’s categorization of implementation of open innovation were as

follows: (a) technology, (b) managerial competencies, and (c) organizational practices

(Greco et al., 2016; Greco et al., 2017; Gentile-Ludecke et al., 2020). Organization

innovation practices typically involved the use of business models, adaptive innovation

approaches to create as needed innovative products, and corporate culture, which all had

a positive influence on the open innovation process (Oliviera et al., 2018, Fainshmidt &

Frazier, 2017; Pranciulytė-Bagdžiūnienė & Petraitė, 2019). The managerial competencies

relationship with open innovation was positive in firms, and the middle-level leadership

positively affected knowledge sharing (Baden-Fuller & Teece, 2020; Lambrechts et al.,

2017; Yao et al., 2020). Additionally, West and Bogers (2017) argued that empowering

leadership influenced the implementation of open innovation in organizations. Naturally,

the value of technology, organization processes, and managerial competency is critical

for SME’s open innovation.

Managerial competency affects the knowledge sharing ability of organizational

members. Managerial competencies involve the decision-making ability, management

style, and general approach to people development (Ali et al., 2019; Baden-Fuller &

Teece, 2020). In SMEs the individuals within the organization contribute to the

organization’s innovation through cooperation and knowledge sharing (Sudarmaj et al.,

2020). Knowledge sharing is a continuous process within the organization and determines

organization’s competency for innovation (Ali et al., 2017). Therefore, the ability of

managers to recognize the right knowledge and to share that knowledge with the right

persons within the organization can determine the effectiveness of the organization’s

innovation (Crupi et al., 2020; Greco et al., 2017; Hernández-Linares et al., 2021).

Altogether, the ability to share knowledge with organizational members when needed and

the managerial approach used can stimulate knowledge sharing within the organization.

Organization strategy is determined by the management competency which

impacts the sustained competitive advantage of the firm. Top management spends much

of their time involve in strategic decision-making and the implementation of the strategic

decisions impacts a firm’s performances (Wasike et al., 2016). As a result, in a study of

Spanish manufacturing SMEs in diverse sectors, the management capability was the

primary distinguishing factor which contributed both to their productivity and

sustainability (Garces-Galdeano et al., 2016). Additionally, Hervas-Oliver et al. (2016)

argued that management capability influences a firm’s success in the market by the high

managerial capability coupled with the technology adopted. The ability of the

management within an organization to use their knowledge strategically is vital for

sustainability, which affects the strategy used and the resulting organization innovation.

Managerial competency enables the sensing of new information and seizing that

information through organizational systems. Additionally. continuous learning from the

environment through inbound open innovation can contribute to an organization’s

dynamic responses to environmental changes (Hermawati, 2020; Hernandez-Linares et

al., 2020). Heider et al. (2020) argued that value creation is created through sensing and

seizing outside opportunities while value capture occurs from the transformation of that

external knowledge. Incidentally in a study using German Mittelstand SMEs, operating in

similar business environments the information processing within the organization

increased their inbound open innovation (Heider et al., 2020). Hence in many cases,

management knowledge generation and development create an opportunity for strategic

learning and increased organization innovation (Vargas-Hernandez & Mauratella-

Bautista, 2017). As a result, the management competencies influence the organization’s

use of external knowledge. The organization’s open innovation ability increases with

sensing, seizing and transformation of the external knowledge.

Open Innovation and Organization Culture

Organization culture can influence the organization’s innovation capability by the

climate created by management. Organization culture involves the beliefs and

assumptions held by organizational members and those represents pre-requisites for

organization innovation (Martin de Castro et al., 2013). The importance of organization

culture on an organization’s open innovation ability in high technology environments

firms occurred amongst Malaysian firms (Naqshbandi & Tabche, 2018). Additionally, the

impact of an organization cultures on open innovation affected both employees learning

and inbound open innovation and had less of an effect on outbound open innovation

(Naqshbandi & Tabche, 2018; Nestle et al., 2019; Soto-Acosta et al., 2017). Soto-Acosta

et al. (2017) argued that a commitment-based climate encourages employees to act in line

with the company’s goals. Naturally, the organization’s culture can induce organization

innovation through the creation of an innovative climate.

There are some organization cultures that induces organization open innovation

while others inhibit organization open innovation. In the operationalizing of dynamic

capabilities within organizations and its determination of open innovation, organization

actions, and employees’ experiences contributed most to how an organization’s dynamic

capability was measured (Laaksonen & Peltoniemi, 2018). Highly integrative cultures

encourage inbound open innovation while a hierarchical culture inhibits both inbound

and outbound open innovation (Naqshbandi & Tabche, 2018). Equally important, Yao et

al. (2020) argued that a knowledge sharing culture involving management tacit and

implicit knowledge across all levels in the organization increases organization innovation

capabilities of SMEs. Bogers et al. (2019) argued that external knowledge is worthless if

the actors involve are unable to recognize and implement that knowledge within the

organization. The organization internally becomes a conduit for knowledge processing

and use while the organization’s culture becomes the medium for knowledge to be

utilized by their members.

Drivers of Open Innovation in SMEs

Innovation in SMEs is a complex task that involves many obstacles, and to

successfully achieve open innovation it involves various driving forces. Drivers of open

innovation include: (a) cooperation with external entities which includes exporting

activities, (b) management of innovation, (c) technology, and (d) human potential which

includes competent leadership (Radziwon & Bogers, 2018; Strobel & Kratzer, 2017).

Accordingly, exporting SMEs are drivers of organization open innovation by going

beyond domestic market borders to compete globally (Love & Roper, 2015).

Additionally, the SMEs ability to create external relationships, while integrating

technology can capitalize on the open innovation potential. Furthermore, the driving

forces of competent leadership within SMEs can positively influence open innovation

and the organization’s performances.

Open Innovation and Absorptive Capacity

Organizations must develop and recognize the value of external knowledge and

the ability to commercialize that knowledge through organization innovation. In their

seminal work on absorptive capacity, Cohen & Levinthal (1990) identified the need for

firms to recognize the value of external knowledge and use it for commercial purposes

through the absorptive capacity of the organization. To benefit from external knowledge

firms must increase their absorptive capacity. The absorptive capacity allows for the use

of external knowledge in creating inbound open innovation (Cohen & Levinthal, 1990).

In contrast, Henttonen and Lehtim€aki (2017) argued that SMEs use their technology

knowledge for commercialization instead of for research to develop their outbound,

inbound, and coupling open innovation activities. The adoption of absorptive capacity

requires managing external knowledge and the ability to use external knowledge to

improve their open innovation.

Leadership can influence an organization’s absorptive capacity through the

leadership style adopted. An empowering leadership style through an organization

learning culture can increase the absorptive capacity (Naqshbandi & Tabche, 2018). Day

(2020) argued that leadership should assess the market needs by stepping outside of the

organizational boundaries and constraints. The leadership role is directly related to the

relationships formed external of the organization (Ahn et al., 2017). Absorptive capacity

begins with the leadership of SMEs recognizing key stakeholder relationships. As a

result, the leadership can direct the relationship and the open innovation strategy used by

the organization.

The organizational strategy and the research and development approach used

depends on the organization’s absorptive capacity. Limaj and Bernroider (2019) argued

that the realized absorptive capacity impact innovation more than the potential absorptive

capacity. While research and development played a critical role in the realized absorptive

capacity. Research and development played a dual role in exploitative and explorative

innovation (Brinkerink, 2018). Kapetaniou and Lee (2019) provided counter arguments

on the value of research and development not being relevant for domestic open

innovation but relevant for international open innovation. Furthermore, the ability of

firms to use slack resources and strategically position the organization can increase the

benefits from absorptive capacity (Chaudhary & Batra, 2018; Wang et al., 2017). In

summary, research and development involving external sources can increase organization

open innovation via the firm’s absorptive capacity.

Networking through external relationships can increase outbound open innovation

through SMEs absorptive capacity. SMEs can use external partnerships to engage in open

innovation while overcoming their limited financial resources challenge (Mei et al., 2019;

Presenza et al., 2017). Additionally, knowledge from science-based actors, learning from

knowledge of customers’ needs and networking with local firms in international markets,

contributes positively to the firm’s absorptive capacity (Ali et al., 2020; De Zubielqui et

al., 2016; Schweisfurth & Raasch, 2018). Additionally, SMEs networking with both

domestic and international partners can increase their absorptive capacity. The absorptive

capacity can influence the strategic use of external knowledge to drive open innovation.

Open Innovation and Product Exportation in SMEs

SMEs who engage in exportation of products increases their innovative capacity

and their competitive advantage. Slater et al. (2014) argued that radical innovation can

increase export behaviors in firms. In contrast, Love & Roper (2016) found process

innovation did not affect export behaviors in firms. SMEs meet their export demand by

creating new products, which increases their organization’s innovation. Additionally,

SMEs creation of products for global markets increases their product innovation,

generating an increase in sales and increases their sustainability to engage in innovation

while increasing their competitiveness (Tavassoli, 2018). The export ability of SMEs is a

positive link to their innovation capability. Exporting creates new markets and demand

while improving the financial performances of SMEs.

Technology adoption and the human capital in organizations can influence

innovation in SMEs. Based on an extensive quantitative study conducted in twenty-eight

(28) EU member states to assess the impact of technology on exporting behavior in

SMEs, the results indicated that technology positively affected SMEs exporting behaviors

(Radicic & Djalilov, 2019). At the same time, human competencies driven by innovation

affected the propensity to engage in product exportation (Mansion & Bausch, 2020). Both

human competencies and the ability to engage in export behavior positively influences

SMEs innovation and increases the firm’s performances.

Stakeholder relationships in SMEs facilitate the engagement in open innovation.

Hameed and Naveed (2019) advocated that SMEs can engage in ‘coopetition’ a term

coined to reflect collaboration with their competitors to increase their open innovation

capabilities. Furthermore, SMEs limited resources creates an opportunity to extend their

partnership relationship while engaging in open innovation. Ahn et al., (2018) purported

in a study of manufacturing SMEs that open innovation was a better strategy to closed

innovation during an economic downturn. Additionally, the results on firm performances

were favorable to the firms who engage in open innovation and negative to those who

engage in closed innovation (Ahn et al., 2018). The innovation capability of SMEs can

benefit from positive stakeholder relationships, and the absence of stakeholder

relationships can significantly increase the cost of innovation for these SMEs.

Open Innovation in Low Technology and High Technology SMEs

High technology SMEs benefit from open innovation because of their

organization’s networks. Social media as a marketing platform can positively improve

innovation in SMEs (Hassan et al., 2018). Networking involving collaboration, sharing of

information, computer and technology capability increase SMEs innovations (Huber et

al., 2020; Parida & Örtqvist, 2015; Pustovrh et al., 2017). The generation of ideas to

create open innovation opportunities in SMEs can be realized through technology.

Technology positively impacted inactive problem solving by identifying customers’

behavior towards a product and making the innovation for matching these behaviors

(Prabowo et al., 2020). Information technology is a valuable medium for customer

complaints and creates marketable products and processes to respond to open innovation,

In low-technology-based firms the lack of access to technology can impact the

organization’s capability. Scholars have researched how non-technology affects the

business environment of SMEs and their firm’s performance (Hervas-Oliver et al., 2014;

Hervas-Oliver et al., 2016; Moilanen, 2014). SMEs innovate differently based on their

knowledge environment and can benefit from both research and development, as well as

non-research and development. In a study of German SMEs both non-research and

research and development SMEs, were categorized according to “DUI” (doing using

innovation) indicating organizations who created systems using innovation, the groups

were: supplier dependent DUI, customer dependent DUI and science and technology

innovation (Thoma & Zimmerman, 2019). Non-research and development innovation in

SMEs, described as the use of interactive learning approaches, had a comparable strong

effect on performances in SMEs (Thoma & Zimmerman, 2020). Altogether, some SMEs

use non research and development approaches to innovate, and the use of that approach

can benefit SMEs because of the organizational flexibility of SMEs.

Open Innovation and SMEs’ Organizational Performance

Open Innovation in SMEs positively impacts organization performance with the

mediating factor of leadership style and the firm’s absorptive capacity. The engagement

in open innovation in SMEs created benefits for both the organization and its partners

(Amer et al., 2016; Ho et al., 2016). Bessant & Tidd (2015) argued that SME’s lack of

competitiveness is due to the failure of recognizing the need for change. A SME must

have a system to manage organizational transitions (Bessant & Tidd, 2015). SMEs have

benefitted from both outbound and inbound open innovation, while the absorptive

capacity is the ability to use external knowledge to increase the innovation ability of the

organization (Pilav-Velic et al., 2020; Presenza et al., 2017). Large firms may be early

adopters of open innovation, but SMEs tend to benefit the most from open innovation

because of the organization’s flexibility to adopt to the flow of internal and external

knowledge (Jørgensen & Ulhøi, 2010; Love & Roper, 2015). Additionally, the leadership

impact within an organization pursuing open innovation influences the firm’s

performances with the transformation leadership style and openness of the leader

positively associated with open innovation (Slavec-Gomezel, 2019; Srisathan et al.,

2020). Open innovation is relevant for SMEs in responding and adapting to changes in

the business environment. Open innovation in SMEs is impacted by the leadership’s

characteristics and the absorptive capacity to benefit from that new knowledge.

Open innovation implementation in SMEs is associated with challenges such as

limited budgets for idea exploration and exploitation, networking opportunities, low

investment in information technology, and a lack of managerial competency to drive the

open innovation processes. Networking challenges were identified as a major impediment

(Ho et al., 2016; Hyslop, 2015). The limited resources of SMEs mean the engagement in

adaptive innovation and not creative innovation with the latter positively impacting the

organization’s performances (Lowitt et al., 2010; Hosseini & Narayanan, 2014). Bigliardi

and Galati (2018) argued that SMEs must pursue their information technology and

knowledge capability to be effective in knowledge exploration and exploitation. The need

for managerial competencies to be able to lead the organization during dynamic

environments (Baden-Fuller & Teece, 2020; Wynarczyk, 2013; Yao et al., 2020). The

challenges encountered by SMEs impact the benefits of open innovation. In summary,

SME’s challenges can be overcome with further research on the organizational factors

that drive open innovation.

Open innovation challenges can be categorized based on internal challenges and

external challenges. SMEs tend to be affected by the external challenges relating to a lack

of resources and partnerships, while larger organizations are affected by the internal

challenges due to lack of organization flexibility to respond to changes (De Marco, 2017;

De Marco et al., 2020). Other challenges include a general lack of human resources and

financial resources for research and development to bring about changes (Faranita et al.,

2017). SMEs innovation is impacted by the internal and external challenges. Therefore,

overcoming these challenges require resources and finding creative innovation

approaches.

Open innovation can impact both firm and national economies through product,

process innovation, and increased market access for products. A lack of research in

developing economies pose a problem for governments understanding their role in

driving a national open innovation policy for SMEs (Usman et al., 2018). Factors

negatively affecting innovation included unclear roles, and government bureaucracy

(Strobel & Kratzer, 2017). Traplov et al. (2019) argued that the adoption rate varies for

the various open innovation activities to include collaboration, scanning of the

environment for ideas, and selling unused technology and crowdsourcing. In the final

analysis, open innovation requires the support of developing economies government to

implement the knowledge to create national policies to help SMEs survive and sustain

their performances.

Many studies have considered the impact of open innovation on organization

performances, there are studies on the role of leadership, some have identified

organizational characteristics associated with open innovation, with none exploring the

micro-level understanding of open innovation and how leadership drives and manages the

process in a developing country context. Additionally, there are geographic limitations to

studies completed with many open innovation studies conducted in Asian countries,

Europe, and other developed countries in both high technology, moderate technology

industries, and manufacturing SMEs (Pilav-Velic et al., 2020; Oliveira et al., 2019; Yao

et al., 2020). Furthermore, methodology commonly used by many studies were

quantitative methods, mixed methods, and the use of panel data with fewer studies using

an exploratory qualitative case study methodology to understand the heterogeneous

context of open innovation (Obradovic et al., 2021; Mohan et al., 2017; Morris, 2018).

There are limited studies using a qualitative methodology and many are based in high

technology industries within developed economies (Santoro et al., 2020; Zajkowska,

2017). There is a deficiency in the open innovation literature for qualitative studies

addressing the heterogeneous context of developing economies SMEs, who are already

challenged by limited financial and technological resources as compared to SMEs in

developed economies.

Open innovation implementation is heterogeneous and requires understanding the

environment and context of the SME utilization of that strategy (Santoro et al., 2018;

Slavec-Gomezel & Rangus, 2019). There is a need for contextual meaning, which creates

the need for data exploration to understand open innovation from the perspective of

managers and their ability to drive their organization’s open innovation (Oliveira et al.,

2019; Pilav-Velic et al., 2020; Yao et al., 2020). Obradovic et al. (2021) based on a

review of the literature, argued that with covid 19 economic impact on organizations, that

managerial competencies are even more important to understand how managers adopt

open innovation strategies in the manufacturing sector. Areas for further exploration

include the organizational issues that connect open innovation and entrepreneurship

(Bogers et al., 2017). Furthermore, case studies adopting the open innovation dynamic

framework and the process of open innovation in an organizational context (Oliveira et

al., 2019; Slavec-Gomezel & Rangus, 2019). Studies were already completed in

developed countries with established collaboration networks and technology systems.

More studies are needed based on developing economies and the need to know how best

to stimulate open innovation in local SMEs (Bigliardi et al., 2020; Usman et al., 2018).

Caribbean innovation plays a critical role in SME performances, with many barriers

already identified for firms not engaging in innovation (Mohan et al., 2017). Many of the

barriers to innovation identified by Caribbean SMEs were factors synonymous with open

innovation in organizations, factors including lack of information technology systems,

new market trends, flexibility, and openness to collaborations with other businesses, and

research institutions, managerial and organization culture (Mohan et al., 2017, Ruprah &

Sierra, 2016). Indeed, having a fuller understanding of the factors that impact SMEs’

innovative performance is critical to the economic survival and growth of developing

economies. There is a need for more research on open innovation in developing

economies to understand their unique environmental context and how leaders drive and

manage their organizations to benefit from open innovation.

Summary and Conclusions

Chapter 2 examined the existing resources regarding the key concepts which are:

leadership, Caribbean firm innovation, SMEs open innovation, and firm performances

and their relationship guided by the conceptual framework of dynamic capability

(Fainshmidt & Frazier, 2017; Ferreira et al., 2020; Grimaldi et al., 2013). The studies that

were reviewed considered Caribbean innovation, the relationship between leadership and

innovation, the relationship between open innovation and organization performances in

SMEs. Open innovation implementation is heterogeneous and requires the understanding

of the environment and context of the SMEs’ utilization of that strategy (Chesbrough &

Bogers, 2014; Santoro et al., 2018; Slavec-Gomezel & Rangus, 2019). The unique nature

of the business environment of SMEs and the dynamic nature of open innovation requires

research in the context of developing economies.

In a developing economy context, there is a lack of research on open innovation

and the role of leaders in driving and managing organizations to increase their open

innovation. Using the Caribbean context, innovation plays a critical role in firm

performances with many barriers to innovation identified among Caribbean SMEs

(Mohan et al., 2017). Many of the barriers identified represented the need for further

research on open innovation utilization in the context of Caribbean SMEs (Mohan et al.,

2017; Ruprah & Sierra, 2016). There is a need for more qualitative case study research to

understand the context of SMEs’ open innovation, the influence of leaders, and the

organizational context that drives the open innovation process (Obradovic et al., 2021;

Santoro et al., 2018; Slavec-Gomezel & Rangus, 2019). This study aims to fill the gap for

further research on open innovation in SMEs in developing economies and how leaders

drive and manage their organization to benefit from open innovation (Radziwon &

Bogers, 2018; Slavec-Gomezel, 2019; Usman et al., 2018). In Chapter 3, I presented the

research method and included the role of the researcher, methodology and issues of

trustworthiness.

Chapter 3: Research Method

The purpose of this qualitative study was to explore how SME leaders in the

Windward Islands manage and lead their organizations to drive open innovation in the

context of developing economies. To address the leadership and strategic management

gap in the literature, I used the qualitative research method and a multiple case study

design. Data came from the Windward Islands, which consist of four developing

economies: Dominica, St. Lucia, St. Vincent, and Grenada. The data collection included

semi-structured interviews with owners and managers of SMEs that were engaged in

product or process innovations or product exportation within the last three years. The

concept of open innovation was explored using leaders from the Windward Islands to

explain how they manage and lead their organizations to drive open innovation.

Chapter 3 includes a discussion of the research approach and the methodology for

conducting the study. I describe my role as the researcher and explain how I mitigated

researcher bias. I provide a rationale for the design, with the reasons for adopting the case

study method over other qualitative methods for selecting and recruiting participants. I

describe the data collection instruments, methods, and data analysis procedures. I explain

how I ensured internal and external validity, trustworthiness, dependability, and

confirmability. Finally, I discuss the ethical strategies I followed to ensure confidentiality

and protection of the participants’ identities.

Research Design and Rationale

The concept explored was open innovation applied by leaders of SMEs in

developing economies. Leadership involves the collaboration between two or more

members of a group that often includes the structuring or restructuring of the situation

and the members’ perceptions and expectations (Bass, 1985). In addition, open

innovation is the purposive inflow and outflow of knowledge to increase internal

innovation and external innovation and extend the markets for the external use of

innovation (Chesbrough et al., 2006). The concepts of leadership and open innovation

align with the dynamic capability view framework associated with an organization’s

strategic performances (Chen et al., 2019; Donate & Sánchez de Pablo, 2015; Slavec

Gomezel & Rangers, 2019; Srisathan et al., 2020). The dynamic capability view

framework is a concept associated with open innovation and assesses the firm’s

leadership knowledge capacity. The dynamic capability view framework guided the

current study of SMEs’ open innovation in a developing economy context.

The dynamic capability view framework has three stages: sensing, seizing, and

managing threats or transforming products or processes. The elements of each of the

stages are as follows: (a) Sensing involves the analytical systems embraced by

organizations to analyze both the internal and external information from its environment,

(b) seizing involves putting structures and systems in place to benefit from the

information, and (c) managing threats/transforming involves the process of ensuring that

the organization’s intangible and tangible assets use knowledge continuously (Teece,

2007). These stages represent a firm’s dynamic capability, which can assess the open

innovation in SMEs. However, in a developing economy context, there is a lack of

research on open innovation and the role of leaders in driving and managing

organizations to increase their open innovation (Santoro et al., 2018; Slavec-Gomezel,

2019; Usman et al., 2018). I sought to fill the gap in research on open innovation in

SMEs in developing economies and how leaders drive and manage their organizations to

increase open innovation.

In qualitative inquiry, researchers illuminate meaning, study how things work,

capture stories, show how systems function, understand context, identify unanticipated

consequences, and make case comparisons (Patton, 2015). There are multiple approaches

to qualitative inquiry. These include ethnography, narrative inquiry, phenomenology,

grounded theory, and case study with variations in approaches to the five significant

forms of inquiry (Creswell & Poth, 2018). Ethnography is used to document the lived

experiences and the cultural perspectives of the research participants (Fusch et al., 2018).

Ethnography was not relevant to the current study because there was no cultural

perspective to be understood through someone’s lived experience. Narrative inquiry is the

story of a lived experience used to understand a social phenomenon (Hold, 2017; Rooney

et al., 2016). The narrative inquiry was inappropriate because there was no need to

understand a social phenomenon through a lived experience. Phenomenology is an

inquiry that is used to understand the structure and essence of a lived experience of a

phenomenon for a person or group (Korstjens & Moser, 2017). Phenomenology was not

appropriate because a lived experience was not the focus of the current study. Grounded

theory is a systematic approach through comparative analysis based on fieldwork to

explain what has been observed (Ali-Ismaili & Goran Orimi, 2021). Grounded theory

was not relevant because there was no need to develop a theory based on the research

question. The multiple case study approach includes various data sources to investigate a

contemporary phenomenon in a real-life context (Halkias & Neubert, 2020; Stake, 2006;

Yin, 2018). Therefore, a multiple case study was the most appropriate approach to

understand the concept of open innovation in SMEs using unique cases and emerging

themes to demonstrate the occurrence within a real-life context of developing economies.

The case study paradigm and methodological approach guided the study. Hancock

and Algozzine (2017) stated that in a case study, the researcher applies a constructivist

paradigm and recognizes the social construction of meaning through the collaboration

between the researcher and the participant. The framework of social constructivism holds

that there are multiple realities constructed through the lived experience (Creswell &

Creswell, 2018). The methodological approach was inductive and deductive, guided by

the literature and the emergence of themes from the data (see Creswell & Creswell, 2018;

Yin, 2018). Case study design can involve single or multiple cases. Cases can be

instrumental or intrinsic; the former focuses on an issue, and the latter focuses on a case

(Halkias & Neubert, 2020; Stake, 2006; Yin, 2018). Stake (2006) argued that a

preference for a multiple case study design exists when the interest is beyond the case,

which is instrumental, compared to when the interest is in the case itself, which is

intrinsic. The multiple case study is preferred to a single case study unless a justification

suggests that a single case study is more appropriate. In the current study, there was no

rationale for the existence of a critical case, an extreme case, or a representative or typical

case that would have justified the selection of a single case study using an intrinsic case

study design.

The case study approach affords a concentration of the data collected by

understanding the experiences of individuals or a phenomenon. However, Creswell and

Creswell (2018) argued that the criteria used to measure a quality case study are whether

there is a clear identification of the case and an understanding of the research issue. A

case study represents a holistic inquiry that addresses a phenomenon’s natural setting and

environment (Hancock & Algozzine, 2017; Yin, 2018). Open innovation implementation

is heterogeneous and requires the understanding of the environment and the natural

setting of SME utilization of that strategy (Chesbrough & Bogers, 2014; Santoro et al.,

2018; Slavec-Gomezel & Rangus, 2019). A multiple case study design was appropriate to

understand the context of open innovation in the environment of developing economies.

The overarching research question was the following: How do SME leaders in the

Windward Islands lead and manage their organizations to drive open innovation? I sought

to understand how leaders within organizations influence and drive open innovation. The

evidence of this innovation was SMEs engaging in product exportation and generating

process and product innovation within the last three years.

Role of the Researcher

In qualitative research, the researcher and the research participants become part of

the research process. The relationship between the researcher and the research

participants is interconnected as the researcher seeks to understand the social context and

experiences of the research participants (Haines, 2017). The nature of the case study

requires extensive observation and time in the field to capture the context and actions of

the research participants (Korstjens & Moser, 2017; Stake, 2006). The researcher’s

relationship involves an inside qualitative perspective engaging participants in their

business environments and observing their processes (Ross, 2017). The role of the

researcher is an integral part of the research process.

The researcher’s engagement in the research process involves keeping a reflective

journal to note biases and thoughts that can inhibit the data collection process. The

researcher is an instrument in the data collection and analysis process and must be honest

and authentic with themselves and keep a journal that reflects on any biases and

reflections (Janesick, 2015; Tracy, 2013). The constructivist nature of qualitative research

reflects a researcher’s intent to create rich and in-depth knowledge through social

interactions (Kim, 2014). The researcher aims to keep biases and historical experiences

with the research concept documented during the research process. The researcher uses a

reflexive journal to avoid negatively influencing the process of data collection and

interpretation.

The low innovation among SMEs generated a keen interest in the research topic.

As a former manager in a SME for 11 years, an interest developed to understand how

businesses remain competitive and sustain jobs. Working for a SME with low financial

performance and routine practices made the interest in innovation develop further into a

research topic. My interest in the research topic was developed further by my family

business experiences in a SME engaged in limited innovation processes. Conducting an

extensive literature review to develop the research question helped me understand the

concept of open innovation in SMEs. The literature indicated a clear gap in the strategic

and leadership management literature. My inquiry into the inconsistencies in innovation

among SMEs in developing economies was motivated by the need to help young

entrepreneurs and management students learn the strategies to engage in open innovation.

Tracy (2013) argued that critical self-examination offers context for qualitative research.

My collective experiences and intuition on open innovation inspired an interest in the

research topic.

The skill of a qualitative researcher contributes to the quality of the study. The

qualitative training of the researcher facilitated observation, interviewing, and taking field

notes. The researcher’s area of weakness was in the use of the responsive interviewing

technique to gain rich, in-depth data from participants (see Rubin & Rubin, 2012). To

guard against biases, I invited the interview participants to check the report findings

during the data collection and analysis period. I respected the need for internal and

external validity by using a debriefer to steer the study in an objective direction and

conducted member checking to ensure accuracy of interpretations (see Janesick, 2015;

Rubin & Rubin, 2012). Weaknesses in the responsive interviewing technique were

worked on while protecting the integrity of the data through member checking and the

use of a debriefer.

Methodology

The method most appropriate to achieve the purpose of the study was qualitative.

I used a case study design to study the current practices of how SME leaders in the

Windward Islands manage and lead their organizations through open innovation. The

study was situated in developing economies to investigate the concept of open innovation

in a real-life setting using multiple data sources (see Yin, 2018). The data collected came

from the Windward Islands, which consist of four developing economies: Dominica, St.

Lucia, St. Vincent, and Grenada. SMEs that were engaging in innovation within the last

three years were included (see Berisha & Pula, 2015; Cooper, 2016). I recruited an

across-industry sample including agro-processing, pool supplies, and rum processing

industries, which are major Windward Island industries.

A multiple case study sample size varies based on the requirements to achieve an

in-depth investigation. Stake (2006) recommended using three to five cases, while Patton

(2015) argued that five to 10 participants are sufficient for a qualitative study because

larger samples do not allow for an in-depth investigation of the phenomenon of interest.

Cases were studied using an instrumental approach focusing on an issue with multiple

case analyses (see Hayes et al., 2015; Stake, 2006; Yin, 2018). The three SME enterprises

represented owners and managers who had led their organizations through innovation

outputs (see Hancock & Algozzine, 2017; Stake, 2006). The criterion-based sampling

technique was used to select organizations engaged in exportation and innovation outputs

within the last three years, excluding other innovations such as staff training and research

and development, which are associated with larger organizations (see Cirera & Muzi,

2016; Morris, 2018; Slavec Gomezel & Rangus, 2019). I used criterion-based sampling

and the recommended four cases to investigate the concept of open innovation in SMEs.

Data saturation in qualitative research has been a debatable issue with many

scholars presenting different approaches to achieving data saturation. Fusch and Ness

(2016) argued that data saturation should be both rich and dense representing the quality

of the data, the quantity of the data, and the ability to duplicate the study. Guest et al.

(2020) argued that there is a lack of a consistent metrics to measure data saturation and

supported the use of a metric. Many scholars argued that data saturation in qualitative

research should be based on heterogenous factors unique to each methodological

approach (Guest et al., 2020; Malterud et al., 2016; Mason, 2010). Based on the

literature, case study data saturation using interviews requires 20 to 36 interviews

(Mason, 2010; Williams & Ramdani, 2018). Based on the heterogenous nature of open

innovation and the exploratory nature of the current study, data saturation was based on

the nature of this study, which involved purposeful sampling guided by the dynamic

capability framework as the theoretical lens, semi-structured interviews, and data

triangulation (Fusch & Ness, 2016; Malterud et al., 2016). The variety of external data

sources, the semi-structured interviews conducted with all participants, and the specific

knowledge and experience of the managers and leaders were used to identify the themes

through simultaneous data analysis indicating the absence of new themes and, therefore,

data saturation. Qualitative data saturation requires the need for data quality, data

quantity, and the ability for the study to be duplicated based on the methodology.

Data saturation for case studies is relevant to achieve a maximum amount of rich

data. Burkholder et al. (2016) argued that cases selected for multiple case studies can be

between three to four and must represent the phenomenon of interest that will provide

data to answer the research question. Data will come from cases representing

organizations currently engaging in innovation to understand how they drive and manage

the process of open innovation. The cases were based on purposive sampling to

illuminate the phenomenon of open innovation (Burkholder et al., 2016; Stake, 2006).

Many of the cases would be selected based on SMEs who have engaged in innovation

within the last three years, and interviews will come from managers and leaders who

drive the innovation process within the organization. Data sources will include semi-

structured interviews from leaders within the organizations, to provide rich data on each

case to understand the concept of open innovation (Burkholder et al., 2016; Korstjens &

Moser, 2017). Data saturation for case studies is not based on several cases but is

determined based on the point that new data does not add new meaning to the concept

studied (Korstjens & Moser, 2017). The data saturation will occur with the illumination

of open innovation within SMEs from the data sources. Altogether, the exploration of

various documents, and the interviewing data within SMEs will determine the saturation

point.

The quality of the data collection and analysis varies based on the data sources

and the analysis methods. A data triangulation approach utilizes various data sources,

including interviews and document analysis (Stake, 2006). SMEs’ data was analyzed

using a thematic approach based on common themes identified from the literature and

compared with the interview transcript (Hancock & Algozzine, 2017; Yin, 2018). At the

same time, the multiple case study data analysis will use a within-case analysis to assess

the common themes (Stake, 2006). Altogether the triangulation approach will add

validity and trustworthiness to the information collected.

Participant Selection Logic

In a multiple case study research, the unit of analysis can differ based on the

sample selection criteria. In case studies, the unit of analysis can be individuals, groups,

or organizations (Stake, 2006; Yin, 2018). Additionally, in qualitative case study

research, a case is considered a unit of analysis. In this study, a case was each SME that

had met the sample selection criteria. As determined by the literature, the sampling

strategy is purposeful sampling (Burkholder et al., 2016; Stake, 2006).

The research questions and the selection method for the cases influence the

sampling strategies. The purposeful sampling will select critical cases needed to

understand the concept of open innovation (Patton, 2015). Robinson (2014) purports that

the inclusion and exclusion delineate the parameters for the sample universe and that the

inclusion must specify the criteria for cases. The sample universe criterion is set by the

sample that meets the research question criteria for the study, while the exclusion is the

samples excluded based on not meeting the criterion for the sample universe. The

sampling was purposeful sampling focusing on critical case sampling to identify SMEs

who engage in innovation within the last three years. The samples would meet the

inclusion and exclusion criteria of two hundred and fifty or fewer employees.

The Windward islands differ based on gross domestic product and population.

The samples were chosen from St. Lucia and Grenada, representing the Windward

Island’s largest economies both in population and gross domestic product per capita

(World Bank, 2021). The current gross domestic product for these islands is: “St. Lucia

US1.865 billion, Grenada US 1.211 billion, St. Vincent US$8.24 million, and Dominica

US$5.7 million” (World Bank, 2021, p.1). SMEs included two rum processors, one agro-

processor, and a pool supplier in Grenada and St. Lucia. The proposed population was

approximately thirty owners, and managers representing four SMEs whose organization

presently engaged in innovation. The sample size consisted of fifteen persons that

currently hold leadership positions either in the capacity of a manager, supervisor, or an

owner in any of these SMEs to examine the issue of organization open innovation (Stake,

2006; Yin, 2018). Participants’ contacts for the study were via email and a telephone

conversation to follow up the email sent. The use of purposeful sampling using leaders

within the SMEs will explore the concept of open innovation to understand the role of

leaders in driving that concept within their organizations.

Instrumentation

Information obtained during an interview depends on question structure and the

relationship between the researcher and the participant. The quality can be largely

dependent on the interviewer’s technique (Patton, 2015). The interview style can be a

responsive interview approach that establishes a trusting relationship between the

interviewer and the interviewee (Rubin & Rubin, 2012). Patton (2015) argues that

interviews involve informal conversation interviews, the interview guide, and the

standard open-ended interview. McIntosh & Morse (2015) purports that the literature

should guide the interview protocol on the topic and the research questions for the study.

The literature guided the interview protocol for this case study in understanding the

phenomenon of open innovation in SMEs in the context of developing economies.

Semi-structured interview design allows participants to disclose information

freely, unlike structured interviews, limiting the flow of information and unstructured

interviews; the information obtained across participants is not uniform for analysis

purposes (McIntosh and Morse, 2016). Semi-structured interviews allow participants to

freely respond to these open-ended questions as they wish while providing more content

to explore the concept. The researcher probed these interview responses further and all

questions asked of participants were the same to enhanced systematic data analysis. The

development of the semi-structured interview protocol was guided by the literature

review based on the following considerations (a) revelations regarding the factors that

drive open innovation from existing studies on SMEs open innovation, (b) how SMEs

leaders manage open innovation based on the existing SMEs leadership and open

innovation studies, (c) ensuring that every interview question is aligned with the problem

statement, purpose of the study, and research questions, and (d) The Oslo manual

guidelines for collecting data on open innovation. The Oslo Manual is the international

reference guide to collecting data on open innovation and identifies the necessary data

that constitutes organization open innovation (OECD, 2018). The Interview Protocol is

listed in Appendix A.

This study utilized other forms of data including document analysis, and the

reflexive journal. The use of document analysis provided rich data on each case to

understand the concept of open innovation (Burkholder et al., 2016; Korstjens & Moser,

2017). The strategic leadership and innovation of firms impact the productivity level of

developing economies (Garone et al. 2020; Williams & Ramdani, 2018). A fuller

understanding of the factors that impact SMEs’ innovative performance is critical to

developing economies’ economic survival and growth.

To comply with the requirements for approval by the Institutional Review Board

(IRB), the data collection instrument was validated. The instrument consisting of the

proposed interview questions be sent to the Committee Chair to seek a review by a subject

expert from Walden Faculty. The feedback from the subject experts will allow for the

refinement of the interview questions to ensure that they are relevant and easily understood

(Rubin & Rubin, 2012; Stake, 2006). The research question influenced the interview

questions. The research question: How do SMEs’ leaders in the Windward Islands lead and

manage their organizations to drive open innovation? The research question seeks to

understand how leaders within organizations influence and drive open innovation. The

evidence of this innovation was using SMEs engaging in product exportation and who have

generated process and product innovation within the last three years.

The response to the first interview question: Describe how your organization

creates process design? This question determines whether this organization engages in

process innovation. Open innovation involves generating ideas to include invention to

commercialization by strategically capturing value from ideas, technology, and joint effort,

which may be internal or external to the organization (Chesbrough & Brunswicker, 2013;

Chesbrough et al., 2006). Companies’ high investment in the process of innovation has

increased both labor productivity and the organization’s innovation (Crespi et al., 2017;

Wadho & Chaudhry, 2018). An organization’s engagement in process innovation increases

knowledge in designing the improvements in process innovation.

The response to the second interview question: Describe how your organization

improves the attractiveness (aesthetics) or ease of use (functionality) of goods or

services? This question assesses whether the organization engages in product innovation.

Open innovation in SMEs has opened the boundaries for innovation to move from the

traditional closed approach to an open approach by using external information to create

innovative products and processes (Usman et al., 2018). Both inbound and outbound

open innovation can generate new ideas and products within an organization.

The response to the third interview question: Describe what technology activities

you engage in to create new products or processes? This question assesses the access and

use of any form of technology and research and development by the SMEs to engage in

open innovation. Innovation at a firm level can be measured using investment in

technology and research and development. (Maldonado-Guzman et al. 2019; Salisu &

Abu-Bakar, 2018; Zoo et al. 2017). Some SMEs’ innovation approaches include no

information technology with products created based on affordability. Incidentally, some

researchers have indicated that SMEs in the manufacturing sector’ use of information,

communication, and technology have increased their innovation, market access, jobs, and

performances (Asunka, 2016; Chege & Wang, 2020; Makanyeza & Dzvuke, 2015).

Altogether, the use of technology increases the company’s access to knowledge and

improves its open innovation.

The response to the fourth interview question: Describe how you use strategic

information from customers to improve products and processes within the organization?

This question assesses the use of information. The strategic leadership and innovation of

firms impact the productivity level of developing economies (Garone et al. 2020;

Williams & Ramdani, 2018). A fuller understanding of the factors that impact SMEs’

innovative performance is critical to developing economies’ economic survival and

growth.

The response to the fifth interview question: Describe how you use your

relationships with suppliers or other external agents to collaborate and improve your

products and processes? This question aims to understand the relationships between

SMEs stakeholder collaboration and the engagement in open innovation to improve their

products and processes. Stakeholder relationships in SMEs facilitate the engagement in

open innovation. Hameed and Naveed (2019) advocated that SMEs can engage in

‘coopetition’ a term coined to reflect collaboration with their competitors to increase their

open innovation capabilities. Furthermore, SMEs’ limited resources create an opportunity

to extend their partnership relationship while engaging in open innovation. In a study of

manufacturing SMEs, Ahn et al. (2018) purported that open innovation was a better

strategy than closed innovation during an economic downturn. SMEs’ limited resources

create opportunities to collaborate and increase the information access to engage in open

innovation.

The response to the sixth interview question: Describe your leadership approach

in your organization? This question aims to understand the leadership style used by

managers and leaders to impact an organization’s open innovation. Open innovation

within organizations can generate teams’ and individuals’ ideas to problems and solutions

(Ambile, 1997; Boly et al., 2014; Obradovic et al., 2021; Wang et al., 2017). Leaders can

support open innovation by the interaction they have with employees within the

organization.

The response to the seventh interview question: How do you get your employees

to resolve problems? This question aims to understand the access to opportunities given

to employees to take part in problem-solving. Collectively there is a positive relationship

between the leaders’ encouragement and interaction and the increase in employee ideas

which supports open innovation (Wang et al., 2017; Zhang & Jiang, 2015). The collective

input of employees to generate ideas for problems increase the information generated

from within the organization.

The response to the eighth interview question: Describe how you would get

employees to share ideas on new products or processes and how you encourage creativity

within your organization? Research has found that leadership affects SMEs’

performances by (a) developing a trusting organizational culture due to the openness of

the leader, (b) establishing relationship-based employee approaches, and (c) creating

more dynamic capabilities within an organization (Ahmed et al., 2018; Hernández-

Linares et al., 2021; Özer &Tınaztepe, 2014). Additionally, the impact of an

organization’s culture on open innovation affected both employees learning and inbound

open innovation and had less of an effect on outbound open innovation (Naqshbandi &

Tabche, 2018; Soto-Acosta et al., 2017). Soto-Acosta et al. (2017) argued that a

commitment-based climate encourages employees to act in line with the company’s

goals. A leader that fosters openness may stimulate innovation in the organization

(Slavec Gomezel & Rangus, 2019; Ahn et al., 2017a). Naturally, the organization’s

culture can induce organization innovation through the creation of an innovative climate.

Furthermore, a CEO’s leadership style affects the potential for open innovation with the

organization:

To ensure completeness and integrity of the interview data, a digital audio

recorder will record all interviews with the SME owners and managers. During each

interview session, the researcher would make handwritten field notes regarding the

interviewee’s attitudes, emotions, and body language to provide more insight into the

interviewee’s responses to the interview questions. At the end of each interview, the

researcher will transcribe the audio recordings and send the transcript to the interviewee

to solicit feedback regarding any discrepancies in the transcribed content of the interview

sessions. All participants’ identities were distinctly identified using a numerical

classification system to maintain the confidentiality of the participants (Patton, 2015).

The secure storage of the audio recording of each interview, the transcripts, and the

researcher’s handwritten field notes will allow for easy retrieval during data analysis and

interpretations.

Procedures for Recruitment, Participation, and Data Collection

The location for the study is in the Windward Islands, using two of the largest

islands for data collection. Grenada and St. Lucia were the two islands because they have

the largest population and gross domestic product (World Bank, 2021). The SMEs in the

Windward Islands account for 95% of the Caribbean region’s businesses and contribute

40% to gross domestic product (McLean & Charles, 2020). SMEs would include rum

processors, an agro-processor, and a pool supplier in Grenada and St. Lucia. SMEs will

include those with two hundred and fifty or fewer employees and in existence for a

minimum of five years (Berisha & Pula, 2015; Cooper, 2016). The industries represented

were an across-industry sample to include the agro-processing, pool supplies and rum

processing industries, which are major Windward Island industries.

In the Windward Islands, there is no comprehensive database listing SMEs within

these islands. The SMEs selected were based on those engaging in innovation and

innovation related activities to include product exportation and met the criteria of two

hundred and fifty or fewer employees. Accordingly, exporting SMEs are drivers of

organization open innovation by going beyond domestic market borders to compete

globally (Love & Roper, 2015). The cases selected were based on purposive sampling

with a specific criterion of SMEs engaged in product exportation, product, or process

innovation within the last three years and had two hundred and fifty or fewer employees

(Halkias & Neubert, 2020; Stake, 2006). Case studies for multiple case study research are

not selected based on a number, but those representing the phenomenon studied, in this

case, SMEs engaging in product or process innovation within the last three years (Stake,

2006; Yin, 2018). Altogether, in the Windward islands, both SMEs engaging in product

and process innovation within the last three years and product exportation, were the

specific criterion.

The case studies were the primary data collection approach, including interviews

and document analysis from the SMEs to investigate the concept of SME’s organization

open innovation. The case study approach will investigate the contemporary phenomenon

with a real-life context, using multiple data sources (Halkias & Neubert, 2020; Stake,

2006; Yin, 2018). The story of each SME was presented chronologically and based on

common themes using a within-case analysis. Rubin & Rubin (2012) purports that

interviewees can come through a personal connection to the interviewer, social networks,

and making unexpected contacts. The interview protocol elicits information from the

interviewee during the interview process (Halkias & Neubert, 2020). Interviewer abided

by the IRB standards for conducting interviews, including the correct wording for the

consent letter to participants (Walden University, 2017). The consent letter requires the

approval of both IRB and the participants before proceeding with the data collection

process (see Appendix B).

The process of obtaining data will start with an internet search to identify SMEs

engaging in innovation. I will then obtain the email addresses of the managers and

owners using a social media platform then email the managers and owners in St. Lucia

and Grenada to introduce myself and the purpose of my study with information about the

University that I represent. SMEs’ owners and managers were invited to an interview at a

time convenient to each participant via Zoom and each participant will have the interview

questions and consent form one week before the scheduled date of the interview.

Any participant wanting to exit the interview would be free to do so at any point

when I am interviewing the St. Lucian and Grenadian leaders. Over fourteen days, I will

arrange all the interviews for each of the fifteen to twenty participants. Data were

recorded using a digital recorder during the interview processes. I will facilitate spending

two weeks, so I can arrange any follow-up interviews if it is needed. The overall

fieldwork should take three months in total. Before providing the information, each

person will have an opportunity to read and return the Consent form as required by the

IRB of Walden University (see Appendix B). Additionally, note-taking will occur

simultaneously to get the critical points as they are shared (Rubin & Rubin, 2012). The

interview will involve a recorder with permission sought first from each participant

before use.

Data Analysis Plan

The qualitative data analysis process included the use of a thematic analysis to

attribute meaning to the data. This study seeks to understand how leaders within

organizations influence and drive open innovation. The evidence of this innovation was

using SMEs who engaged in product exportation and have generated process and product

innovation within the last three years.

This research study used a qualitative form of inquiry with a multiple case study

approach. Patton (2015), purports that a case study should focus first on capturing the

uniqueness of each case with construction of smaller units of analysis; the sources of data

should be multiple to include an interview, observations, and document analysis. The

case study approach will investigate the contemporary phenomenon with a real-life

context, using multiple data sources (Stake, 2006; Yin, 2018). The case study will utilize

primary data such as interviews, and document analysis on SMEs to investigate the

phenomenon of open innovation. Data collection were via audioconference, email, and

online. The use of multiple sources of data added to the richness and thickness in the data

collected.

The codes from the data on the research questions will represent the literature on

the subject area, while some were codes emerging from the data. The coding was a

hierarchical coding structure with the significant codes from the literature and the sub-

codes representing a concept constructed in a separate program that will guide the coding

using ATLAS.ti. The emerging codes were constructed based on recurring themes in the

data (Stake, 2006; Yin, 2018). The data was looked at many times using the ATLAS.ti to

code the themes and then develop a list of codes based on the interviews in reference to

the literature review analysis. Some of the codes will include SMEs leadership, SME,

Open innovation, inbound open innovation, outbound open innovation, product

exportation. Patterns in the data were observed and memos written on the side of the

documents, casual relationships were observed as the data is analyzed. Related themes

with any sequence in events in the data guided the answering of the research questions.

The reflective journal was part of the data analyzes with notes. Biases on the

various areas will involve note taking and reflections before starting to analyze the data.

The data guiding the answering of the research question will avoid any biases brought to

the analysis. A peer debriefer was part of the team while I go through the analysis stage

to obtain honest and critical feedback on the analysis made and its representation of the

data. Patton (2015) purported investigator triangulation, theory triangulation,

methodological triangulation, and data triangulation. The data triangulation will involve a

variety of data sources in a study. The investigator triangulation will include the

researcher, the peer debriefer, and member checking with the interviewee to ensure

accuracy in the transcribed information.

Issues of Trustworthiness

Trustworthiness is another aspect that impacts the quality of research.

Trustworthiness will occur through employing sound tape recordings from the interviews,

transcribing the data in its purest form, and accurate coding based on themes obtained

from the literature review. The data saturation will guide the emergent themes (Stake,

2006; Yin, 2018). Another element of trustworthiness is the researcher’s reflexivity notes

which can be determined by clearly disclosing any personal bias during the presentation

of the findings. A potential bias was the intolerance of poor organizational leadership in

SMEs and the need to erase those biases before beginning the interviewing of

participants.

Credibility

Credibility can be measured using ethical and substantive validation. Substantive

and ethical validations will occur during the research planning. According to Creswell

and Creswell (2018) an ethical validation entails questioning moral assumptions and the

representation of diverse voices (Korstjens & Moser, 2017). Additionally, substantive

validation entails understanding how SME leaders and managers drive and manage

organization open innovation through self-reflection, time spent in the field, triangulation

of the data, and knowledge of the literature review issues.

Credibility involves ensuring that the case study reflects reality with an accurate

account of the situation. Credibility will entail thick, rich descriptions of the data,

member reflections, and triangulation of the data (Tracy, 2010). A thick description was

obtained from the interview process during the responsive interview (Rubin & Rubin,

2012). The data emerging from the protocol questions was expanded by engaging the

participants using “How” and “What” to explain concepts and ideas they present. The

triangulation was based on a detailed thematic analysis to ensure that the study correctly

represents the phenomenon of SME’s organization open innovation. Multivocality will

involve using multiple cases with various interviews possible at a minimum of twenty

persons in total to ensure the data is rich and there is theoretical saturation in the data

obtained. The member check includes reviewing the transcription with the participants

after the data is collected to ensure the story represents what they shared.

Transferability

Transferability and external validity provide assurances that readers can establish

a relationship between the study and other similar studies in the literature (Patton, 2015;

Baillie, 2015; Korstjens & Moser, 2017). Lincoln and Guba (1985) advocated that

research can focus on different realities and that it guides the researcher’s truth. To

ensure the data attains transferability and external validity, included were the following:

(a) detailed and transparent description of all the strategies adopted in the process of

recruiting participants, (b) interactions with participants, (c) data collection, (d) data

recording, and (e) data analysis.

Dependability

Dependability allows for the researcher’s approach if used by another researcher

to obtain the same results. Dependability includes data transparency, which will entail the

level of detail obtained through the fieldwork (Baillie, 2015; Korstjens & Moser, 2017).

Using an expert in Caribbean SMEs as my mentor and my debriefer will help stay

objective with the data analysis. A data triangulation approach utilizes various data

sources, including interviews, and document analysis (Halkias & Neubert, 2020; Stake,

2006). SMEs’ data were analyzed using a thematic approach based on common themes

identified from the literature and compared with the interview transcript (Hancock &

Algozzine, 2017; Yin, 2018). The multiple case study analysis will use a within-case

analysis to assess the common themes (Halkias & Neubert, 2020; Stake, 2006).

Altogether the data, a debriefer, my mentor, and data triangulation will ensure the

dependability of the research conducted.

Confirmability

Confirmability is the use of a qualitative study method based on interpretation

using other people’s realities. The data should be a clear reflection of information and

free from the researcher’s biases. The case study approach will guide the process

throughout the data collection and analysis (Halkias & Neubert, 2020; Stake, 2006; Yin,

2018). The case story of each SME leaders’ approach to driving and managing their

organization’s open innovation were told chronologically and presented for

commonalities with a within-case analysis common with case study analysis (Baxter &

Jack, 2008). Altogether, confirmability of the data was maintained throughout the data

analysis process while keeping the data free from researchers’ biases.

Ethical Procedures

The approved IRB consent forms indicated to participants the choice to be a part

of the study or not. The purpose of the study was communicated to the managers and

owners of the SMEs. Several weeks were spent collecting data, with the researcher

checking with the participants to verify the information they provided to avoid

misinterpretation.

The ethical issues of participants’ information shared through the research process

were kept confidential. Participants through the consent forms were informed about a

confidentiality statement regarding the information obtained and its intended use, which

were for the study purpose only. Another form of assurance for participants were member

checking with the participants to ensure data was accurate and represented the

interpretation of data provided during the interview.

Summary

In chapter 3, I describe the research approach and the appropriate methodology

adopted for the study. I provide justifications for the choice of qualitative approach for

the conduct of this research. The study involved investigating the concept of open

innovation in SMEs in developing economies, research to date not done. I provide a

detailed description of the multiple-case study methodology in this chapter that will guide

the study and provide the rationale for choosing the case study design over other

qualitative methodologies like narrative inquiry, ethnography, phenomenology, and

grounded theory. I provide justification for adopting a multiple case study strategy over a

single-case study strategy in line with the study’s purpose, research questions, and

contextual nature. I describe the linkage between the semi-structured interview questions

and the research questions.

The disclosure of participants’ selection rationale, instrumentation, the procedures

for the recruitment of participants, and the techniques for data collection and data

analysis. I describe the steps to ensure the research study’s trustworthiness, credibility,

dependability, confirmability, and transferability. As the research study involved

interactions with human elements, I provide steps on dealing with ethical challenges

inherent in the study. Chapter 4 includes the results derived from the analysis of the

research data. A description of the sample, the data collection results, the data analysis

applied to the data, and the findings, presenting the codes, interview questions and the

resulting themes emerging from the research study.

Chapter 4: Results

The purpose of this qualitative study was to explore how SME leaders in the

Windward Islands managed and led their organizations to drive open innovation in the

context of developing economies. Leaders of Caribbean SMEs have not fully understood

how the leadership of an organization drives open innovation in a developing country

context (Ahmed et al., 2018; Crespi et al., 2017; Slavec Gomezel & Rangus, 2019;

Usman et al., 2018). There was limited research on how leaders of SMEs in developing

countries lead and manage their organizations to drive open innovation. Open innovation

implementation is heterogeneous and requires an understanding of the environment and

context of SME utilization of that strategy (Santoro et al., 2018; Slavec Gomezel &

Rangus, 2019). There is a need for contextual meaning, which creates the need for data

exploration to understand open innovation from the managers’ perspective and their

ability to drive their organization’s open innovation (Oliveira et al., 2019; Pilav-Velic et

al., 2020; Yao et al., 2020). In the current study, the owners and managers of SMEs

shared their lived experiences on how they led and managed their organizations to drive

open innovation within developing economies.

One research question guided this study: How do SME leaders in the Windward

Islands lead and manage their organizations to drive open innovation? I sought to

understand how leaders within organizations influence and drive open innovation. To

address the leadership and strategic management gap in the literature, I used the

qualitative research method and a multiple case study design. Data came from the

Windward Islands, which consisted of four developing economies: Dominica, St. Lucia,

St. Vincent, and Grenada. The participants were chosen from St. Lucia and Grenada,

representing Windward Island’s largest economies in population and gross domestic

product per capita (see World Bank, 2021). The SMEs were engaged in product or

process innovations or product exportation within the last three years. In addition, SMEs

with 250 or fewer employees had existed for a minimum of five years (see Berisha &

Pula, 2015; Cooper, 2016). The industries represented were an across-industry sample,

including the agro-processing, rum processing industries, and pool suppliers, which are

major Windward Island industries.

The interviews took place using the Zoom video conferencing platform. The

coding structure was hierarchical with a priori codes and subcodes from the literature,

while emerging codes came from ATLAS.ti. The emerging codes were constructed based

on recurring themes in the data (see Stake, 2006; Yin, 2018). Analysis occurred using a

multiple case study approach with results based on two methods: thematic analysis and

within-case analysis to understand the concept of open innovation. As recommended by

Yin (2018), the thematic analysis based on the data collection and data accuracy of the

study’s multiple sources included (a) the semi-structured interview protocol (see

Appendix A), (b) reflexive field notes, (c) member checking, and (d) peer debriefing. The

multiple sources of data and the hierarchical coding structure contributed to the in-depth

analysis.

In this chapter, I explain the research setting and describe the research participants

including their demographic information. Next, I describe the procedures for data

collection and data analysis. Also, I provide a summary of the codes identified from raw

data based on the within-case analysis of responses from each participant for the

interview questions and describe the themes that emerged from the categorization of the

codes. Finally, I provide a justification for the trustworthiness of the study.

Research Setting

The research sample included 15 knowledgeable and experienced leaders with an

average of 10 years of work experience leading a SME as either the CEO/owner or a

manager. I recruited participants using the social media platform LinkedIn as a member

of that network. As a member of the social media site, I recruited qualified participants

based on their leadership role in their organization and ensured the organization met the

criterion of 250 or fewer employees (see Berisha & Pula, 2015; Cooper, 2016). After

selecting potential members for the study, I sent each participant an invitation email to

their designated inbox on the social media platform. I sent interview scheduling emails

with the letter of consent via Walden University’s student email, which I used for

subsequent communications. I collected data via semi-structured interviews with

CEOs/owners and managers for the multiple case study. Robinson (2014) argued that the

inclusion and exclusion criteria delineate the parameters for the sample and that the

researcher must specify the criteria for cases. The current participants met the inclusion

criteria for SMEs of 250 or fewer employees. Additionally, the purposeful sampling

focused on critical case sampling to identify SMEs who had engaged in innovation within

the last three years.

The response rate was 15 out of the identified 22 candidates who agreed to

participate, resulting in a sample size within the desired recruitment range for a

qualitative case study. For a multiple case analysis, Stake (2006) recommended using

three to five cases, while Patton (2015) argued that five to 10 participants are sufficient

for a qualitative study because larger samples do not allow for an in-depth investigation

of the phenomenon of interest. Every participant in the current study responded via

Walden University’s email, giving their informed consent by sending the consent form to

my email address. Each interview took place using the Zoom meeting platform and was

recorded within the application and via the Otter.ai app. Additionally, all participants

received the interview protocol 1 week before their scheduled interview time. Participants

had an opportunity to ask any questions before I started the interview. Participants

received their transcript to review four days after the interview. Participants checked the

transcript and confirmed the accuracy of all the transcripts via Walden University’s

email.

Demographics

This qualitative exploratory multiple case study revealed the shared experiences

of how leaders within SMEs in developing economies led and managed to drive

organization open innovation. The recruitment technique led to a heterogeneous sample

of leaders within SMEs (see Table 2). The alphabetical pseudonym for organizations was

indicated by the letters A to J, the alphanumeric pseudonyms indicated participants (e.g.,

ABC 1 to HIJ 8), and the two-letter alphabetical pseudonym after the participant’s

number indicated small enterprises (SE) and medium enterprises (ME).

Table 2.

Demographics of Participants

Participant

Years of

experience

Leadership

position

Job title

Industry

ABC 1-SE

ABC 2-SE

CEO

Manager

Owner of ABC

Sales manager

Rum processing

ABC 3-SE

Manager

Production manager

Rum processing

ABC E-SE

CEO

Owner of ABC-E

Pool supplies

EFG 1-ME

EFG 2-ME

EFG 3-ME

HIJ 1-ME

HIJ 2-ME

HIJ 3-ME

HIJ 4-ME

HIJ 5-ME

HIJ 6-ME

HIJ 7-ME

HIJ 8-ME

CEO

Director

Manager

CEO

Manager

Owner of EFG

Junior owner

Human resource manager

CEO of HIJ

Info. tech. manager

Distillery manager

Production manager

Quality assur. manager

Human resource manager

Warehouse manager

Marketing manager

Agro-processing

Rum processing

Included in the demographic profile was the participants’ number of years of

experience as a leader in the SME. The job titles indicated the leadership role played by

each participant, and the industry represented the criterion sampling technique of

selecting industries that contributed to the economic development of these developing

economies. There were two small enterprises and two medium enterprises; the two small

enterprises were from Grenada, and the two medium enterprises were from St. Lucia. The

samples were chosen from St. Lucia and Grenada, representing Windward Island’s

largest economies both in population and gross domestic product per capita (see World

Bank, 2021). Additional demographic information collected included the number of

employees, the years the organizations were in existence, and the product and process

innovations participants engaged in within the last three years. The SMEs created new

products, exported products, and improved their processes within the last three years. All

of the organizations met the criteria of SMEs with 250 or fewer employees and had

existed for a minimum of five years (see Berisha & Pula, 2015; Cooper, 2016). The small

pool supply enterprises had 15 employees; the small rum processing company had 19

employees. The medium agro-processing enterprise had 100 employees, and the medium

rum processing enterprise had 123 employees. All the organizations were in existence for

a minimum of five years with the rum processing medium enterprise established in 1972,

the agro-processing medium enterprise established in 1981, the pool supply small

enterprise established in 2000, and the rum processing small enterprise established in

1966. To address the research question for this study, all the SMEs met the inclusion

criteria for this study.

Data Collection

I conducted the data collection for this multiple case study in Grenada and

St. Lucia using Zoom to access participants in both Grenada and St. Lucia. Data

collection began on February 28th, 2022, after receiving my IRB approval number 01-11-

22-0361750, and concluded May 7th, 2022, when the final transcript was approved from

the last participant, HIJ 8-ME. I used criterion-based sampling to select the cases for the

data collection. The organizations selected met the criterion-based sampling technique of

organizations engaged in product exportation, product innovation, and process innovation

outputs within the last three years (see Cirera & Muzi, 2020; Morris, 2018; Slavec

Gomezel & Rangus, 2019). The organizations selected for the cases provided an in-depth

understanding of how leaders led and managed their organizations to drive open

innovation. I collected data from three sources: (a) semi-structured interviews (see

Appendix A), (b) document reviews including the literature, and (c) researcher reflexive

notes.

Review of Interview Protocol

The interview protocol consisted of eight main interview questions, which were

reviewed by my committee chair, my second committee member, and a professor of

management. Recommendations shared by the professor of management were minor and

included changes to one of the main questions. Further feedback came from the Walden

IRB with corrections made to the requirements for participants to confirm their

participation via email with the words “I consent.” The modification included removing

the requirement for “I consent” because it was implied via a return email.

Selection of Participants

In Grenada and St. Lucia, there were no comprehensive and reliable databases on

SMEs. I made phone calls to each SME to ascertain whether they had engaged in

innovation and to determine the number of employees within the organization. I made

numerous searches on the organization’s website to decide on their recent innovation

activities. LinkedIn provided the names of the different managers and their email

addresses. Direct emails were sent to each participant, and a telephone phone call was

made to follow up and to book an interview appointment. The number of employees in

the organization was ascertained once the telephone contact was made with the

organization. I sent interview scheduling emails with the letter of consent via Walden

University’s student email, which I used for subsequent communications.

I asked each participant for their preference in the time for the scheduled Zoom

meeting for the interview. I collected data based on the semi-structured interview

protocol (see Appendix A). The interview requests went to 22 participants, but some

could not accommodate the time based on other organizational commitments and the

relevance of the questions to their area of employment. The average interview duration

was 45 minutes. The longest interview lasted 50 minutes, and the shortest was 35

minutes. I stored the recorded interview audio files in my personal password-protected

computer. Three participants had busy schedules, so I rescheduled their interviews.

Another challenge was the infrequent response to emails sent and the cost required to

make follow-up telephone calls to St. Lucia.

During the interviews, journaling and active listening skills helped me document

critical information and ask follow-up questions. I transcribed recorded interviews using

the otter.ai app and reviewed each transcript carefully. Many times, the transcription

software made errors based on the accent of the participant. All participants were given

an opportunity to ask questions after the purpose of the study was shared with them and

before the start of the interview. At the end of the interview, participants were told about

the confidentiality of the information shared and that a transcript would be sent for their

review and approval. One participant responded with a few grammatical corrections. This

data collection process conformed to the initially proposed data collection procedures

described in Chapter 3 without any deviations. I transferred the transcripts to ATLAS.ti

data analysis software, which was more cost-effective compared to NVivo, and I

achieved detailed reports based on the hierarchical and emerging codes from the data.

Reflective Field Notes

I reflected on my observations and interactions. Observations begun from

participants’ initial contact to participate until their agreement to be in the study. My

reflections were recorded in my reflexive field notes. I reflected on my observations and

recorded my reflections in the field notes. During the interviews and audio transcription

of data, I observed and reflected on the interviewee’s nonverbal cues in responding to the

questions, their tone, and their word emphasis. My reflections were all recorded in the

field notes.

Transcript Review

I completed the transcription of the audio-recorded interview for each participant

using Otter.ai app, I sent the transcript to the participant for review and comments. I sent

the transcripts by email to all participants. One participant identified some written errors

that were corrected and sent back for further review. Participants indicated their

acceptance of the transcript with a return email to my Walden University email address.

Data Analysis

The data analysis identified a common understanding of how leaders of SMEs

lead and manage their organization to drive innovation in the Windward Islands while

adding to the strategic and management literature from a developing economy

perspective. Data revealed the experiences of owners and managers of SMEs in two

developing countries. Participants from four SMEs included 15 owners and managers.

The four SMEs represented two SMEs each from St. Lucia and Grenada in the Windward

Islands. A criterion sampling technique facilitated an in-depth analysis of the concept of

open innovation in a developing economy context. A hierarchical coding structure using

codes from the literature allowed for a deductive analysis of the data.

The six-step thematic analysis proposed by Braun and Clarke (2019) helped

analyze the data in this study thematically. The Zoom platform allowed for accurately

recording the interview data from the 15 interviewees, and each interview was

transcribed using otter.ai. Each transcript was emailed to participants to verify the content

and context of the information captured with adherence to the qualitative validity process

of member checking. The first step of the data analysis process was familiarizing myself

with the collected data and the reflexivity notes taken during the interview. Braun and

Clarke (2019) found that the first approach knew the data and editing errors from the

transcription software’s interpretation. This in-depth process required replaying the audio

to ensure the context and meaning were correct. Secondly, the ATLAS.ti. data analysis

software required coding the transcript of the data following the hierarchical coding

structure created from the literature review process. Short phrases from the transcripts

were coded based on semantic and latent coding (Braun & Clarke, 2019). Based on the

semi-structured interview, different codes emerged, as summarized in Table 3. Codes

included words and phrases that all 15 participants similarly expressed when answering

the interview questions.

Table 3.

Emergent Themes From Coded Interview Data

Coded category

Theme

Interview question

Use of consultants,

Stakeholders-

competitor/customer

monitoring. Relationship

with customers/competitors.

Hi-tech SMEs, Low-tech

SMEs, Improvement in

systems, Product innovation,

Product exportation, Product

improvements and R&D.

Theme #1:

Absorptive

capacity and the

use of external

knowledge

Theme #2:

Approaches to

product and

process

innovation

Describe how you use strategic

information from customers to improve

products and processes within the

organization?

Describe how you use your relationships

with suppliers or other external agents to

collaborate to improve your products and

processes?

Describe how your organization creates

process design?

Describe how your organization improves

the attractiveness (aesthetics) or ease of

use (functionality) of goods or services?

Describe what technology activities you

engage in to create new products or

processes?

Autocratic, Democratic,

Visionary, Transformational,

Transactional.

Team’s knowledge,

Managerial experiences, and

knowledge,

Employee knowledge

sharing, Conflict avoidance,

Supportive conflict

resolution.

dynamic capability

framework: sensing

information, seizing

information, and

transformation/managing

threats

Theme #3:

Flexible

leadership styles

within SMEs

Theme #4:

Knowledge

sharing within

SMEs

Describe your leadership approach within

your organization?

How do you get your employees to

resolve problems? Describe how you

would get employees to share ideas on

new products or processes and how you

encourage creativity within your

organization?

The third approach was the iterative process of generating themes from the

created codes and codes from the literature. Several codes combined to form a single

theme as indicated in Table 3. Four themes representing SME’s approach to leading and

managing their organization to drive open innovation emerged from the data as follows:

(a) Theme #1 absorptive capacity and the use of external knowledge, (b) Theme #2

approaches to product and process innovation, (c) Theme #3 Flexible leadership styles

within SMEs, and (d) Theme #4 knowledge sharing within SMEs. The identification of

all the four themes was contingent upon the contributions from all the 15 participants to

the coded categories, which meant that every participant contributed to the data that led

to each emergent theme. Altogether, the four themes represented the grouping of the

codes associated with the data.

The fourth approach involved reviewing the codes and grouping them into

themes. This step entailed reviewing themes and confirming whether they were

representations of the data and that any major theme came from the contributions of all

the participants interview data. To achieve this, I examined data and compared them to

the themes identified and confirmed the importance. The reviewing and examination

ensured that the themes adequately reflected the collected interview data. I ensured that

the need for changes were made. However, the themes appeared to represent the main

insights shared by all the participants regarding the common understandings of how

managers lead and manage SMEs to drive open innovation. Additionally, the use of a

debriefer helped steer in an objective direction when the data was analyzed to ensure

accuracy, internal validity and provided feedback (Janesick, 2015; Rubin & Rubin,

2012). The fifth step was defining and naming themes. The process of defining themes

occurred to formulate the exact meaning of each theme and to determine how they

reflected the comprehension of collected data. The process of naming themes involved

creating an easily understandable and succinct name for each theme. Given that the

purpose of the study was to reveal an understanding of how leaders manage their

organization to drive open innovation, the emergent themes were those ideas that were

present across the dataset in all cases.

Any potential discrepant cases, to include missing information on some questions,

were given consideration throughout the coding and thematic analysis process. The

discrepant cases reflected variations in how organizations used external information to

engage in innovation, small enterprises used external information less within their

organizations. Finally, the last step involved writing up the obtained results and

iteratively examining themes in response to the research questions.

Evidence of Trustworthiness

Credibility

The qualitative research approach used was consistent with a multiple case study

approach. The credibility was enhanced with adherence to Walden University’s IRB

requirements on the data collection procedures. The adoption and adherence to the

multiple case study data analysis provided an appropriate strategy for collection and

analysis of data. The multiple case study analysis used a within-case analysis to assess

the common themes (Halkias & Neubert, 2020; Stake, 2006). The purposeful and

criterion selection of participants was based on the literature. SMEs’ data were analyzed

using a thematic approach based on common themes identified from the literature and

compared with the interview transcript (Hancock & Algozzine, 2017; Yin, 2018). The

SMEs leaders used were managers and owners who were experienced and knowledgeable

on innovation within their organization. The use of member checking enhanced

confidence in the study findings with participants confirming the accuracy in the data

collected. The data triangulation approach utilized included the semi-structured

interview, reflexive report, and analysis of transcript guided by the literature on SMEs

(Halkias & Neubert, 2020; Stake, 2006). Purposeful sampling, data triangulation,

member checking, and the multiple case study methodology enhanced the credibility of

this study.

Transferability

Transferability is transmitting meaningful contexts of a phenomenon that is useful

to a different group for appropriate judgment. Transferability and external validity

provided assurances that readers can establish a relationship between the study and other

similar studies in the literature (Patton, 2015; Baillie, 2015; Korstjens & Moser, 2017).

The use of rich data from participants indicated the authenticity and trustworthiness of

the research data, procedure, and results. Details about the sample size, inclusion,

exclusion criteria, the research steps, and findings provided other researchers with useful

information to evaluate and possibly apply the research approach to future studies and

populations.

Dependability

Dependability allows for the researcher’s approach if used by another researcher

to obtain the same results. Dependability includes data transparency, which will entail the

level of detail obtained through the fieldwork (Baillie, 2015; Korstjens & Moser, 2017).

Each participant had the same opportunity to answer all the questions with equal

opportunity to understand the nature of the study and decide whether they wanted to

participate. Questions answered represented the perspective of the managers and owners.

Some participants answered all the questions, while others did not answer based on the

relevance to their area of responsibility. Dependability came from aligning the data

collection process with interview protocol and established research methodology. Every

step and criterion for selecting participants was transparent, verifiable, and duplicable,

making it very easy for replication by future researchers. Listing dates and times in all

audio files, transcripts, reflexive notes, and other research documents will enable an audit

trail in the future. Altogether, the data collection, storage, and analysis process complied

with executed data congruent with qualitative research.

Confirmability

The process of confirmability involves the confirming of data with the

participants to ensure accuracy and veracity of the information. The case study approach

guided the process throughout the data collection and analysis (Halkias & Neubert, 2020;

Stake, 2006; Yin, 2018). Each participant received an email with the transcript to confirm

the contents based on the semi-structured interview. Participants provided feedback using

the Walden University email. Participants took an average of two weeks to review the

transcript and confirm the contents via a return email. Confirmability occurred with a

documented and comprehensive research process to established audit trails of the

research process. Participants’ accounts were noted through verbatim quotes in the

findings to enhance confirmability. Both the documented research process and

confirmation of the data collected ensured confirmability.

Study Results

The qualitative multiple case study provided an in-depth understanding of how

leaders of SMEs in the Windward Island lead and manage their organization to drive

open innovation. The owners and managers of SMEs shared their lived experiences

within the context of developing economies. The conceptual framework guiding this

study was the dynamic capability framework. This framework represents how knowledge

within organizations transforms while benefitting from innovation outputs (Teece, 2007).

Styles of leadership associated with innovation in the literature included transformation

and transactional leadership. The leadership styles of transformational leadership style

and transactional leadership style had a direct relationship to innovation and

organizational outcomes (Chen et al., 2019; Kesting et al., 2015; McDowell et al., 2018).

Both the leadership styles and the conceptual framework guided this study.

The current section includes an in-depth description of the results, which are the

four themes identified in the data, The Four themes representing SMEs’ approach to

leading and managing their organization to drive open innovation emerged from the data

as follows: (a) Theme #1 absorptive capacity and the use of external knowledge, (b)

Theme #2 approaches to product and process innovation, (c) Theme #3 Flexible

leadership styles within SMEs, and (d) Theme #4 knowledge sharing within SMEs.

Table 4.

Themes and Issues

Theme

Issue

Theme #1 absorptive capacity

and the use of external

knowledge

Reliance on consultant knowledge to innovate, align

with competitors to improve and market products,

monitoring customers’ complaints, providing private

labeling to customers.

Theme #2 approaches to

product and process innovation

Reliance on improved technology, reliance on new

equipment and minimal technology, manually

operated systems, informal research and development

approaches, new labeling, and rebranding to innovate

products.

Theme #3 Flexible leadership

styles within SMEs

Leadership styles based on situation moving from

democratic to autocratic, other styles were

transactional, transformational, visionary,

democratic, and autocratic

Theme #4 knowledge sharing

within SMEs

Managers knowledge and experience drives strategic

ideas, problem solving using teams, a knowledge

sharing culture, positive conflict resolution, employee

knowledge sharing, and managers avoidance view on

conflict.

Theme 1: Absorptive Capacity and the Use of External Knowledge

This theme showed that SME leaders depended on external sources of

information from consultants to engage in open innovation, they engaged in collaboration

with competitors to market their products and monitored customers’ complaints and

feedback to improve their products. SMEs monitored the activities of competitors

through systematic observations and recording. Stakeholder relationships in SMEs

facilitated the engagement in open innovation. Hameed and Naveed (2019) advocated

that SMEs engage in ‘coopetition’ a term coined to reflect collaboration with their

competitors to increase their open innovation capabilities. Furthermore, SMEs’ limited

resources created an opportunity to extend their partnership relationship while engaging

in open innovation. Some organizations engaged in open innovation through knowledge

flows from affiliations with other organizations, knowledge from external sources with

the organization’s ability to use the external knowledge through its absorptive capacity

(Greco et al., 2017; OECD, 2018). SMEs reliance on external knowledge was evident

through collaborations and consultations with external organizations and personnel.

These observations were evident during the interview response. For example, Participant

ABC-3-SE “there’s a lot of openness and consultants in terms of when we have been met

with a challenge, or we wish for improvement”. Participant EFG-3-ME further stated,

“we’re open to those contract packaging and private labeling as well”. Monitoring of

competitors’ products was an ongoing activity by SMEs as indicated by participant HIJ-

1-ME “So they may notice the competitor product is suddenly selling, they may notice

one of our products is not moving, they may notice somebody changed the label and

anything they observe, that could be of interest to us, they have to fill in the form and

submit it”. The participant HIJ-1-ME further stated that customer’s complaint was

constantly monitored. For example, “but it was only by the customer coming back with a

complaint on the sediments that we were able to respond and make that improvement”.

Collaboration with competitors involved bottling and marketing of competitors’ products

which benefitted SME’s production system. For example, participant ABC-1-SE

indicated “And we decided to get more involved in and invest in new equipment. We also

one of the things that we do is we do a lot of private labeling and private bottling. So

more recently, we were actually you know, doing the bottling for Company AB”.

Participant ABC-1-SE further stated “we see that as an opportunity for us to take up some

of that private bottling. Because what that does it just give you an ability to, work”.

Participant ABC-1-SE collaboration with a competitor was through distribution and

promotion of their products for example, “we actually going to be doing the distribution

locally for them as well”. Monitoring of external sources of information was common to

all SMEs.

Theme 2: Approaches to Product and Process Innovation

This theme showed that SMEs engaged in product and process innovation. SMEs

engagement in product and process innovation involves using technology, new

equipment, and research and development on a small scale. Open innovation in SMEs has

opened the boundaries for innovation to move from the traditional closed approach to an

open approach by using external information to create innovative products and processes

(Usman et al., 2018). Companies’ high investment in innovation has increased labor

productivity and the organization’s innovation (Crespi et al., 2017; Wadho & Chaudhry,

2018). Process innovation and product innovation were evident in all four SMEs. For

example, participant ABC-3-SE “the process, the traditional ways, because of our

industry, as we like to say it is a 16th century mentality and history, there are a lot of

processes that have been adapted and tailored and maintained throughout the process”. A

participant EFG-3-ME further stated “collectively with the management and our CEO,

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who is the main chemists behind the company, we all see where missing gaps in the

market is”. In addition, participant ABC-2-SE indicated “within a day, we have over

1000 bottles, which is run through the machine, it is really innovative, because of the fact

that it took out a lot of the processes that we usually had to do manually”. Product and

process innovation occurred through manager’s expertise informing new products, new

equipment and improving traditional production processes.

Open innovation involves generating ideas to include the invention of products to

commercialization by strategically capturing value from ideas, technology, and joint

effort, which may be internal or external to the organization (Chesbrough & Brunswicker,

2013; Chesbrough et al., 2006). Innovation at a firm level can be measured using

investment in technology and research and development. (Maldonado-Guzman et al.

2019; Salisu & Abu-Bakar, 2018; Zoo et al. 2017). SMEs reliance on technology both

low levels and high levels were evident. Low levels of technology involved the use of

computers to communicate and equipment with some level of automation while high

levels of technology included the automation of production processes, the use of

technology to monitor performances and generate constant reports. Small enterprises

were engaged in low technology as compared to the medium enterprises who engaged in

higher levels of technology. These observations were evident during the interview

responses. For example, Participant HIJ-1-ME, “I find the technology part, probably, it’s

more about meeting a requirement a need, or always aiming to read, improve efficiencies

and reduce costs as much as” possible”. Participant HIJ-4-ME “So, we do use technology

quite a bit, and had been doing so even before COVID”. Small enterprise used less

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technology in their processes as indicated by participant ABC-3-SE “For example, the

blending tanks, the pumps are mechanical and there is technology for that, but the filling

and measuring units for the metric work is all done by hand”. Additionally, reports used

monitor and track product performances. Participant HIJ-3-ME indicated “And that gives

you what you call a trend analysis, and that trend analysis gives you a lot of information

on where and how you can improve or if you need to change your processes”. research

and development occurred in some organizations as was indicated by participant HIJ-8-

ME “How do we entice consumers to buy our products? We do a lot of research online to

see the new innovative ways for promotions and advertising materials”. SMEs have

various approaches to researching and improving their products and processes.

Theme 3: Flexible Leadership Styles Within SMEs

This theme indicated that innovative SMEs engaged in different approaches to

leadership. Many leaders indicated a preference for one leadership style, others alluded to

using another style based on the situation. Transformational leadership increased

employees’ internal motivation, and transactional leadership increased the employee’s

external motivation to engage in innovation (Ahmed et al., 2018; Kang et al., 2015).

Burns (1979) argued that transformational leadership was a leadership style that inspired

followers to transcend their values to that of the leader’s values and goals, while

transactional leadership represented rewards and punishment in exchange for compliance

with the leader’s request. It was evident that one leader spoke about mentoring which

indicated a transformational leadership style, for example, participant HIJ-1-ME indicated

“then there is another approach I use, which is like a mentoring approach, you come there

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you do a one on one with the person and you ask them how what’s the issue, then you

listen to the answers”. The democratic leadership style was a dominate leadership style in

both small and medium enterprises, as was indicated by participant HIJ-4-ME “I prefer to

have a scenario where there’s more participation of the whole team, in what is happening

in the department”. Another participant ABC-3-SE “I always like the democratic

leadership style because you as a democratic it’s a collective view of opinions and

feedback”. Another leadership style observed was visionary leadership as was evident

with participant ABC-1-SE “two years away from retirement and yeah, so I’m trying to

pass on, you know, to develop systems that, you know, so the company could continue”.

The autocratic leadership style was observed for example, EFG-3-ME “autocratic,

meaning at the executive level, you have myself, Mr. EFG-1-ME and Mr. EFG-2-ME

senior who makes unilaterally decisions amongst ourselves”. Another participant HIJ-3-

ME used an autocratic style based on the situation, “when you have an emergency. well,

you have to go to the more what they call it autocratic style, where you actually have to

dictate to everyone what direction they need to go”. Many SME leaders used more than

one style of leadership and altered between a preferred style, and a style for a crisis. The

styles of leadership within innovative SMEs are indicated in Table 5.

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Table 5.

Styles of Leadership Within Innovative SMEs

Medium enterprises

Small enterprises

Transactional

Transformational

Democratic

Autocratic

Visionary

Theme 4: Knowledge Sharing Within SMEs

This theme showed that SME leaders engaged in knowledge sharing from within

the organization, creating a knowledge-sharing organization culture. Knowledge sharing

involved employee sharing ideas, management sharing ideas through managerial

competency, and teams sharing ideas. In SMEs, the individuals contribute to the

organization’s innovation through cooperation and knowledge sharing (Sudarmaj et al.,

2020). Knowledge sharing was a continuous process within the organization and

determined the organization’s competency for innovation (Ali et al., 2017). One leader

spoke about strategic meetings that involved planning for one year. Participant HIJ-1-ME

indicated “I was in France last year, October, where we did the planning for this year, all

our marketing for this year, what our strategy was going to be, what new products we’re

going to start looking at developing and that’s how we do everything”. “Additionally,

always somebody somewhere have the resources yes, which is amazing, I mean, first

time in my working life, suddenly, we have so many resources, on our hands”. Participant

HIJ-1-ME further stated “So while we don’t have a formal research department

everybody’s on board, in terms of gaining information or gathering information, which

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comes to management, and assists us in making decisions” Participant ABC-3-SE alluded

to “we do have information that was handed down from since the birth of ABC to ensure

that we’re following a specific procedure as it relates to making blends, because we

currently blend our rums”. Another participant HIJ-8-ME indicated “So, we certainly

drive our information and do our own research to put the company at the forefront in

anyway and in any form”. Participant EFG-3-ME indicated the importance of staff

inclusion in idea generation for new products. Evidence of idea-sharing included, “So

yeah, example like if we were coming up with a new product, the first set of internal

customers would be our staff of course. So, when the batch is created, after sampling it,

we pass it around, we probably do a little get together”. Altogether, SMEs engaged in a

constant internal system of idea-sharing within their organizations.

Dynamic Capability Framework

The SMEs engaged in the activities of the dynamic capability framework. SMEs

demonstrated evidence of sensing purposeful information from internal and external

sources within the organization, seizing information, and conversion into improved

products and processes while managing threats. All four themes addressed the stages of

the dynamic capability framework. The four themes were (a) Theme #1 absorptive

capacity and the use of external knowledge addressed the sensing and seizing of

purposeful knowledge from external of the organization, (b) Theme #2 approaches to

product and process innovation addressed the transformation of knowledge and

management of threats, (c) Theme #3 Flexible leadership styles within SMEs indicated

leadership styles that drive and supported organization knowledge sharing and

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transformation, and (d) Theme #4 knowledge sharing within SMEs represented the

sensing and seizing of purposeful knowledge within the organization. For example: The

elements of each of the stages are as follows: (a) sensing involved analytical systems by

organizations to analyze both the internal and external information from its environment.

For example, one participant HIJ-8-ME stated “Obviously, we do a lot of research online,

and we talk to other people in the industry, to give us an idea of what’s happening out

there throughout the Caribbean”. Another participant HIJ-3-ME, indicated “monthly

meetings are held where we talk to staff and then try to see, listen to the ideas that they

have for different issues”. Another participant ABC-2-SE shared that “most times, the

salesmen would do a good job, and the merchandisers as well, they would provide

information that we need from all outlets”. Participant HIJ-1-ME indicated “So while we

don’t have a formal research department everybody’s on board, in terms of gaining

information or gathering information, which comes to management, and assists us in

making decisions”, (b) seizing involves putting systems in place to benefit from the

purposeful knowledge. For example, HIJ-1-ME indicated “we respond, we have a

responsibility to respond and that’s what allows us to stay ahead in the markets”.

Participant EFG-1-ME indicated “At least every two to three years we try to come up

with something new”. While another participant ABC-E-SE indicated that “technology

may not be available now, but I know it’s coming out, I can plan for it and stuff like

that”, and (c) managing threats/transforming involves the transformation of the

organization’s assets using knowledge continuously (Teece, 2007a). Participant HIJ-8-

ME shared how information is transformed within the organization “depends on what the

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product is, and who it targets and then we plan exactly what time frame and what time of

the year should we launch the product”. Participant ABC-E-SE indicated how the

organization responds to competitive threats “I’m not worried about competition, it is

there, and they could if they wish can do exactly as I have done, you know, go out there,

get educated, learn about the different equipment, etc. So, you know, I’m always on my

toes with that”. Each element of the framework involved the process of strategic

knowledge, which influenced organizational leadership (Helfat & Peteraf, 2009; Teece,

2014). The dynamic capability framework represents a model that interprets an

organization strategic response to technical, market, and customer changes occurring in

the environment. Teece (2007), purported that a dynamic capability gives an organization

a competitive advantage and should not be a best practice because the latter is imitable

and common to competitors. Accordingly, the framework allowed the SMEs to respond

to the dynamic changes in their environment with a systematic strategic response (see

Figure 1).

Summary

The research sample included 15 knowledgeable and experienced leaders

managing SMEs in developing countries who provided data for this qualitative multiple

case study. Represented in this sample were leaders from four companies across two

windward island territories within the Caribbean. Four themes emerged from the data.

These four themes emerged from the data to answer the main research question of this

study. There is a common practice and understanding among SMEs in how they lead and

manage open innovation in a developing economy context which is: (a) using absorptive

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capacity by external knowledge, (b) product and process innovation, (c) flexible

leadership styles within SMEs, and (d) knowledge sharing within the organization.

Chapter 4 began with the reiteration of the purpose statement and research questions

foundational to this study. Central to this chapter were the descriptions of the research

setting, sample demographics, data collection, and data analysis, with a discussion of the

evidence of trustworthiness. The focus of the chapter was on the report of the results and

findings from the data. In this chapter, I explained in detail the data collection and

analysis process, the results, and how the themes that emerged from the data represented

answers to the research question. Data collection representing the lived experiences of 15

innovative SME leaders in two developing economies led to the generation of the themes

and patterns discussed in Chapter 5. The analysis of the textual data, derived from the

transcriptions of the interviews via otter.ai, using ATLAS.ti data analysis software that,

helped to organize, code data and led to the identification of four major themes guided by

the conceptual framework dynamic capability framework.

Chapter 5 included the discussion and interpretations of the findings. Addressed

in the chapter are the limitations of the research and recommendations based on the

results of the study. The research study implications and the final research conclusions

completed the chapter.

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Chapter 5: Discussion, Conclusions, and Recommendations

The purpose of this qualitative exploratory multiple case study was to understand

how leaders of SMEs in developing economies in the Caribbean managed and led their

organizations to drive open innovation. Open innovation involved purposeful internal and

external knowledge of SMEs to increase their organizational performance. The

qualitative method with a multiple case study design was appropriate because the goal of

the study was to answer the research question based on the experiences and meaning

from participants’ real-life in-depth perspectives. The use of four case studies enabled an

in-depth exploration of experiences through semi-structured interviews, which led to a

deeper understanding from good descriptions and richness of data. The participants

shared their experiences and provided insights into their use of purposeful external

knowledge and internal knowledge and how their flexible leadership styles and an idea-

sharing organization culture generated product and process innovation within the context

of developing economies. The participants shared the sources of external knowledge

through consultants, customer feedback, and competitor collaborations. The internal

sources of knowledge were from employee idea sharing, managerial experiences and

knowledge, knowledge from teams to create products, streamlined processes, and flexible

leadership styles. Purposeful external and internal knowledge of the organization

combined with leadership contributed to the product and process innovations within

developing economies’ SMEs.

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Interpretation of Findings

This qualitative exploratory multiple case study led to the understanding of how

SME leaders manage and lead their organizations to drive open innovation from the

perspectives of developing economies. Four themes emerged from analysis of the data

obtained from 15 interviews: (a) open innovation managed through flexible leadership

styles, (b) the purposeful flow of external knowledge from outside the boundaries of the

organization, (c) the purposeful flow of knowledge from within the organization, and (d)

the creation of product and process innovation. The results echoed the arguments of

Damanpour et al. (2018) and Santoro et al. (2020) on how organizational characteristics

and leadership impact organization innovation, with the decisive influence on

organization innovation more than the environment itself. The emerging themes and the

literature confirmed that organizational factors can have a major impact on organization

open innovation in SMEs.

SMEs in developing economies engaged in product and process innovation by

their investment in low technology and high technology, improvement in their

organization’s production systems (e.g., investment in new equipment), product

innovation including rebranding of products, and creation of new products using both

radical and incremental innovation. Crespi et al. (2017) and Wadho and Chaudhry (2018)

argued that companies’ high investment in the process of innovation had increased both

labor productivity and the organization’s innovation. According to the literature, open

innovation involves generating ideas, including invention to commercialization, by

strategically capturing value from ideas, technology, and joint effort, which may be

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internal or external to the organization (Chesbrough & Brunswicker, 2013; Chesbrough et

al., 2006). According to the current findings, there was no evidence of SMEs engaging in

commercialization to drive open innovation in developing economies. However, findings

confirmed that SMEs’ engagement in open innovation in developing economies included

the themes identified.

Current findings aligned with the dynamic capability framework on the flow of

strategic internal and external organization knowledge on the sensing, seizing, and

transforming and management of threats. The dynamic capability framework sensing

stage focuses on the use of technology, research and development, market segmentation,

and science and technology to analyze systems to learn, shape, and calibrate opportunities

(Teece, 2007). Current SMEs did not have access to science and technology with some

SMEs having simple mechanical processes and others having complex computerized

systems. The interviewed leaders of SMEs all used strategic external knowledge to

increase their absorptive capacity and their organization’s innovation activities. Presenza

et al. (2017) argued that an increased absorptive capacity of firms occurred with the use

of external knowledge for organization innovation. According to the dynamic capability

framework, seizing activities entail the enterprises’ structure, design, and incentives for

seizing opportunities; the resulting activities included delineating the customer’s solution,

identifying decision-making protocols, selecting the enterprise solution, and building

loyalty and commitment (Teece, 2007). In the current study, SMEs’ seizing activities

included increasing their marketability by offering private labeling to companies

interested in using the SMEs’ products but with the other company’s private label. One

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participant shared that it was important to explore private labeling to increase their

market access.

Based on the dynamic capability framework, transforming/managing threats

entails the continuous alignment and realignment of tangible and intangible assets; the

resulting activities included knowledge management, governance, and decentralization

(Teece, 2007). Current findings indicated that SMEs’ limited resources created an

opportunity to extend their partnership relationship while engaging in open innovation.

Hameed and Naveed (2019) advocated that SMEs can engage in ‘coopetition’, a term

coined to reflect collaboration with their competitors to increase their open innovation

capabilities. Current SMEs collaborated with competitors to package their products and

market their products. In addition, they managed threats with systems that monitored both

the internal quality of their products and the external complaints and feedback from

customers. The findings confirmed that SME leaders and the entire organization engaged

in activities of sensing, seizing, and transforming knowledge and managing threats based

on the dynamic capability framework.

The leadership literature indicated the leadership style conducive for SMEs

engaging in open innovation. According to the literature, there was a need to understand

the dynamics of organizational leadership regarding open innovation (Ahn et al., 2017;

Hossain, 2015; Usman et al., 2018; West & Bogers, 2017). The leadership role in SMEs

is critical in driving and managing open innovation in organizations. Current findings

indicated flexible leadership styles of innovative SMEs, which included democratic,

autocratic, transformational, transactional, and visionary. A democratic leadership style

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involves inviting suggestions and ideas from peers before taking a decision (Le & Nham,

2022). The autocratic leadership style refers to a leader whose performance is based on

productivity (Bhatti et al., 2012). In the current study, many interviewed participants

preferred the style of democratic leadership to facilitate communication and idea sharing

with employees. In contrast, the autocratic leadership style was used by some leaders in

emergencies or crises when employees needed to comply with information. The literature

on innovative SME leadership identified the transformation and transactional leadership

styles common to innovative SMEs. Transformational and transactional leaders have

been the focus of leadership studies based on organization innovation and employees’

behaviors (Chen et al., 2019; Kesting et al., 2015; McDowell et al., 2018). Malik et al.,

(2020) confirmed that transformational leadership positively impacts SMEs’

sustainability more than transactional leadership. Generally, the literature provided

empirical support that no perfect leadership style exists. Leaders should account for

concurrent situations related to enterprises and use a flexible leadership style (Le &

Nham, 2022). The current findings confirmed the need for a flexible leadership style in

innovative SMEs in developing economies.

Open innovation knowledge flow can be outbound, inbound, or coupling.

Outbound open innovation (outward flow of knowledge) is the use of knowledge by an

external organization for that organization’s innovative purposes, inbound open

innovation (inward flow of knowledge) is the acquisition of external knowledge for

internal innovations, and coupling open innovation represents a combination of both

(Chesbrough & Crowther, 2006; OECD, 2018). In the current study, many SMEs

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engaged in inbound open innovation rather than outbound open innovation and coupling.

The choice of outbound, inbound, and coupling open innovation requires an assessment

of the organization’s strategic need. Scholars have presented many approaches to inbound

open innovation based on the open innovation literature (Hochleitner et al., 2017; Park,

2018; Yoon et al., 2016). Hochleitner et al. (2020) argued that SMEs inbound open

innovation can be clustered into five profiles (see Table 1). Current findings indicated

that SMEs in developing economies engaged in two inbound open innovation profiles: (a)

acquirers and (b) co-operators. Acquirers are an openness profile characterized by

acquiring machinery, external knowledge, and external sources of information

(Hochleitner et al., 2020). Some SMEs indicated the acquisition of production equipment

and support from external knowledge, including associations that provided industry

knowledge on the Caribbean and international market trends. Co-operators are firms that

seek specialized collaboration with customers, suppliers, consultants, competitors, and to

a lesser extent universities and the government (Hochleitner et al., 2020). In the current

study, findings indicated some SMEs use consultants’ knowledge to improve their

products and processes. The constant monitoring of customers’ complaints and feedback

was evident in all SMEs. There were SMEs who collaborated with competitors to

increase their market access. Findings indicated that SMEs in developing economies

engaged in inbound open innovation and did not engage in outbound open innovation and

coupling open innovation.

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Limitations of the Study

The scope of the study included 15 participants from four Caribbean SME

organizations. Data were collected from semi-structured interviews due to the advantage

of flexibility during the interview process. The research had some barriers with the option

of engaging potential participants online and accessing their contacts through a social

media professional platform. Some of the professional members did not respond to the

study’s email invitation, and others were reluctant to accept research invitations because

of privacy and possible security concerns. These barriers delayed the recruitment of

participants and the collection of data. Social media as a means for recruitment may have

introduced some level of sampling bias, which was avoided because SMEs were based on

purposive sampling with criteria of SMEs engaged in product exportation, product

innovation, or process innovation within the last three years and had 250 or fewer

employees.

Another limitation was that most of the interview participants shared their

responses to knowledge sharing and conflict resolution surrounding the individual

participant’s role within the organization. The responses were individual interpretations

of experiences, and personal bias could have influenced the study’s outcome. The

answers to the research question involved a common understanding from participants’

experiences; thus, the results of the study were derived from a common understanding

and not based on a participant’s interpretation.

The interviews occurred using audio conferencing tools and were conducted using

Zoom. During the interviews, my setting was private and quiet, conducive to a

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confidential and professional research environment. I could not control each participant’s

environment during the interview sessions. During the interview sessions, managers had

to speak from offices, some from their vehicles, and others from their production plants.

One participant had to have his interview rescheduled twice due to family emergency and

busy work schedule. The interview occurred on another day. These events were potential

limitations to the thoroughness and depth of the data collected. It is unlikely that the

interruptions that occurred impacted the trustworthiness of the findings.

Recommendations

Recommendations for Further Research

My research provided insights into how leaders of Caribbean SMEs in developing

economies managed and led their organizations to drive open innovation. Findings from

this research indicated the implications of the dynamic capability framework and the use

of purposeful knowledge flow through sensing activities, seizing opportunities,

transformation, and managing threats (see Teece, 2007). Furthermore, findings showed

that Caribbean SME leaders do not follow a specific leadership style. Additionally,

Caribbean SMEs in developing economies drive open innovation through external

sources of knowledge, internal knowledge sharing, and engagement in product and

process innovation. Furthermore, Caribbean SMEs engaged in inbound open innovation

using the Hochleitner et al. (2020) five profiles (see Table 1). The findings indicated that

SMEs in developing economies engaged in two inbound open innovation profiles: (a)

acquirers and (b) co-operators. Acquirers constituted an openness profile characterized by

the acquisition of machinery and external sources of information (Hochleitner et al.,

116

2020). Additionally, co-operators were firms seeking specialized collaboration with

customers, suppliers, consultants, competitors, and to a lesser extent universities and the

government (Hochleitner et al., 2020). The current study was exploratory, and the

findings provided opportunities for quantitative validation in future research.

Methodological Recommendations: Quantitative Validations

The conceptual framework used in this study was the dynamic capability

framework, which comprised the sensing of purposeful knowledge, the seizing of

opportunities, and the transformation of knowledge while managing threats (see Teece

2007). Findings from my study indicated that SMEs engaged in both external and internal

knowledge with the transformation of external knowledge using inbound open

innovation. Although these findings are consistent with the literature, SMEs’ use of

external knowledge varied between consultants, customer monitoring systems, and

collaboration with competitors. There is the need to use a larger population of SME

leaders to examine the extent of their dependence on one form of external knowledge or

other forms and the resulting impact on SMEs’ organization open innovation.

Findings confirmed the impact of SME leadership on the innovation activities of

Caribbean developing economies. Transformational and transactional leaders have been

the focus of leadership studies based on organization innovation and the impact on

employees’ behaviors (Chen et al., 2019; Kesting et al., 2015; McDowell et al., 2018).

Additionally, the literature provided empirical support that SMEs do not use only one

leadership style, and leaders should embrace a flexible leadership style (Le & Nham,

2022). Current findings indicated flexible leadership styles of Caribbean innovative

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SMEs, which included democratic, autocratic, transformational, transactional, and

visionary. Although this finding is consistent with the literature on SMEs’ open

innovation in a Caribbean developing economy context, there is a need to use a larger

population of SME owners and managers to examine the extent of their dependence on

one form of leadership style and the resulting impact on SMEs’ organization open

innovation.

Findings from my study indicated that the SMEs engaged in inbound open

innovation. Hochleitner et al. (2020) advocated that SMEs inbound open innovation can

be clustered into five profiles see Table 1. While this finding is consistent with the

literature on SMEs engagement in inbound open innovation the interviewed SME owner-

managers leaned more towards two profiles acquirers and co-operators. The findings

indicated that SMEs in developing economies engaged in two inbound open innovation

profiles: (a) Acquirers and (b) Co-operators. While the use of two profiles is used in

Caribbean developing economies SMEs, there is a need to use a larger population of

SMEs to examine the extent of the relevance of other profiles identified by the literature

and the resulting impact on SMEs’ organization open innovation.

Implications

In my study, I have explored how SME leaders in the Windward Islands manage

and lead their organizations to drive open innovation in the context of developing

economies. Prior to my study there was a quantitative study on firm-level innovation

among Caribbean small, medium, and large businesses which indicated that there were

more businesses with the potential for innovation than were engaging in it (Mohan et al.,

118

2017). The leadership and strategic management literature did not address how SMEs’

leader’s knowledge and ability drive their organization’s open innovation in a developing

economy context (Radziwon & Bogers, 2018; Slavec Gomezel & Rangus, 2019; West &

Bogers, 2017; Usman et al., 2018). Organization open innovation and the leaders of

SMEs’ ability to drive the process in a developing economy was never explored.

Specifically, my study was intended to answer the research question: How do SMEs’ leaders

in the Windward Islands lead and manage their organizations to drive open innovation?

The outcome from my study have revealed that (a) SMEs’ leaders drive open innovation

through a systematic flow of external knowledge into the organization, (b) Internal

knowledge sharing within the organization, (c) Use of flexible leadership styles, and (d)

Different approaches to product and process innovation. These findings have implications

for positive social change at the individual level and organizational level, as well as

theoretical, methodological, and managerial implications.

Positive Social Change

Caribbean developing economies currently have high levels of unemployment,

Caribbean SMEs have low organization innovation, and is part of the largest business

sector. Many Caribbean SMEs have the potential for innovation but do not engage in

organization innovation (Mohan et al., 2017; Yang, 2016). Additionally, SMEs account

for 95% of the Caribbean region’s businesses and contribute 40% to gross domestic

product (McLean & Charles, 2020). SMEs can help reduce the current high

unemployment for the Windward Islands (Government of Grenada, 2021; Government of

St. Lucia, 2021; McLean & Charles, 2020; Williams & Ramdani, 2018). Economic

119

development and a reduction in unemployment can be social benefits from my research

on open innovation. SMEs’ owners and managers will acquire knowledge on the role of

the leader’s ability to strategically lead and manage their organization to drive open

innovation in the context of Caribbean developing economies.

Individual Level Implications

Findings from my study revealed that the interviewed SME leaders engaged in

internal knowledge sharing and conflict resolution. Some leaders decided on tangible

recognition programs to reward employee idea sharing while others recognized them

verbally. Managerial competency entailed the manager’s decision making, management

style and general approach to people development (Baden-Fuller & Teece, 2020). The

managerial competencies relationship with open innovation was positive in firms, and the

middle-level leadership positively affected knowledge sharing (Lambrechts et al., 2017;

Yao et al., 2020). Furthermore, West and Bogers (2017) argued that empowering

leadership influenced the implementation of open innovation in organizations. The

findings provided an opportunity for SME leaders to focus on developing their

managerial competency and adapting flexible leadership styles.

Organizational Level Implications

The findings from my study indicated that organizational practice among the

SMEs varied based on the level of technology used to engage in open innovation. SME’s

implementation of open innovation was heterogeneous in nature. Accordingly, the

literature’s categorized open innovation as follows: (a) technology, (b) managerial

competencies, and (c) organizational practices (Greco et al., 2016; Greco et al., 2017;

120

Gentile-Ludecke et al., 2020). SMEs using low technology included the introduction of

new equipment to high technology SMEs to include the development of Apps for product

purchases and tracking of product quality and performances. Both low technology and

high technology SMEs engaged in strategic external knowledge which included filling

out forms for low technology SMEs and using custom designed software programs for

high technology SMEs. Organization innovation practices typically involved the use of

business models, adaptive innovation approaches to create as needed innovative products,

and corporate culture, which all had a positive influence on the open innovation process

(Oliviera et al., 2018, Fainshmidt & Frazier, 2017; Pranciulytė-Bagdžiūnienė, Petraitė,

2019). The findings will benefit SMEs’ owners and managers in understanding the

varying levels of technology that can be implemented while simultaneously having a

positive effect on the organization’s open innovation.

Theoretical Implications

The findings from my study revealed that the interviewed SME leaders engaged

in open innovation with the strategic use of internal and external knowledge. In the last

decade, innovation and its relevance in SMEs have increased due to SMEs organizational

flexibility, the effect on firm performances, and the need to remain competitive (Albats et

al., 2020; Crupi et al., 2020; Hermawati, 2020; Usman et al., 2018). SMEs in developing

economies can benefit from engaging in open innovation. Caribbean economies’ SMEs

lack competitiveness; they have a weak capacity for innovation and a lack of strategic

leadership (Acevedo et al., 2013; Hurley, 2018; Minto-Coy et al., 2018; Williams &

Ramdani, 2018). Findings from my study indicated that Caribbean SMEs’ external

121

knowledge sources included consultants, competitor collaborations, monitoring of

customers’ complaints, and customer feedback to engage in product innovation. While

internal sources of knowledge included an idea sharing organization culture using

individuals and teams to increase SMEs product and process innovations. Additionally,

exportation increased both the innovation of SMEs and the general performances. The

findings of my study will add to the strategic and management literature on developing

economies SMEs and how leaders can drive open innovation from both the external

knowledge and internal knowledge of the organization.

Methodological Implications

The study methodology was a qualitative study with a multiple case study,

approach to exploring the understanding of open innovation in SMEs at an organizational

level. Many open innovation studies in the literature commonly used quantitative

methods, mixed methods, and the use of panel data with fewer studies using an

exploratory qualitative case study methodology to understand the heterogeneous context

of open innovation (Obradovic et al., 2021; Mohan et al., 2017; Morris, 2018). Limited

studies use a qualitative methodology, and many are based in high technology industries

within developed economies (Santoro et al., 2020; Zajkowska, 2017). Consequently,

there was a deficiency in the open innovation literature for qualitative studies addressing

open innovation in the context of developing economies. The findings will add

methodologically to the literature providing qualitative insight, with rich data to

understand the experiences of leaders of SMEs in developing economies and their

approaches to driving organization open innovation.

122

Managerial Implications

My study has provided evidence that SME owner-managers in the Caribbean have

limited knowledge regarding the leadership impact on organization open innovation and

the implications for organizational performances. Researchers have found that the

relationship between leadership and SME performances included primarily: (a) open

innovation and firm performances, (b) leadership knowledge and firm performances, (c)

leadership style within an organizational context, and (d) the flow of knowledge through

outbound and inbound open innovation (Ahn et al., 2015; Chesbrough & Brunswicker,

2013; Hossain, 2015). Specifically, leadership styles varied among SMEs engaging in

open innovation. Leaders of SMEs managed open innovation through internal knowledge

sharing, their flexible leadership styles and the different approaches to product and

process innovation. Specifically, SMEs engaged in the use of external knowledge using

consultants’ knowledge, competitor collaborations and customers’ feedback and

complaints. The literature confirmed that some organizations engaged in open innovation

through knowledge flows from affiliations with other organizations, knowledge from

external sources with the organization’s ability to use the external knowledge through its

absorptive capacity (Greco et al., 2017; OECD, 2018). The findings implied that SME

managers and owners should adopt a continuous system of knowledge flows internal and

external of the organization to increase their open innovation while leaders should

understand the implications of using a flexible leadership style based on the

organization’s context.

123

Conclusions

The purpose of this qualitative exploratory multiple case study was to reveal the

understanding on how leaders of SMEs in the Windward islands lead and manage their

organization to drive open innovation. The data analysis indicated four themes: (a)

Theme #1 absorptive capacity and the use of external knowledge, (b) Theme #2

approaches to product and process innovation, (c) Theme #3 Flexible leadership styles

within SMEs, and (d) Theme #4 knowledge sharing within SMEs. The identification of

all the four themes was contingent upon the contributions from all the 15 participants to

the coded categories, which meant that every participant contributed to the data that led

to each emergent theme. The conceptual framework for the study encompassed the

dynamic capability framework consisting of four dimensions: sensing of purposeful

information, seizing opportunities, transforming, and managing threats (Teece, 2007a).

The research findings included the identification of five leadership approaches:

democratic, autocratic, transformational, transactional, and visionary leadership. The

findings confirmed that SMEs leaders in developing economies consistently engaged in

activities of sensing, seizing, and transforming knowledge. The flexible leadership style

used varied between transformation, transactional, autocratic, democratic, and visionary.

SMEs engagement in a continuous flow of internal and external knowledge, with a

flexible leadership approach impacted the ability to drive open innovation in the context

of developing economies.

124

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