Internal organization and absorptive capacity in open innovation contexts: the roles of gatekeeping, task specialization, and delegation

Firms increasingly face strategic choices in the innovation process concerning how and to what extent they should source knowledge from external parties. We offer new insight into the organizational design aspect of this process. Specifically, we build a model informed by organization theory and organizational economics to examine how firms' returns from absorbing knowledge vary as a function of their choices concerning the specialization of gatekeepers and the delegation of decision-making authority. We compare returns under different organizational configurations and contingencies and derive propositions about how firms should optimally organize to absorb external knowledge. We provide qualitative evidence of how firms organize their external knowledge absorption activities from four "real-life" cases that illustrate the propositions of our model.