The Effect of Inbound Open Innovation on Organizational Innovativeness: The Moderating Roles of Knowledge Recognition and Knowledge Acquisition

This paper investigated the impact of inbound open innovation (IOI) on organizational innovativeness, as well as how external knowledge recognition and acquisition moderate this baseline relationship. Thus, drawing on an intra-organizational perspective, the study sought to understand how employees' readiness and capacity to innovate influence how external knowledge inflows contribute to organizational innovativeness from a public sector institutional context. The study employed an explanatory research design with data collected from 285 senior staff members spanning various functional areas of the Ghana Revenue Authority, using survey questionnaires. The data collected were analyzed using structural equation modelling. The findings of the study reveal that inbound open innovation had a significant positive effect on organizational innovativeness. Additionally, it was found that external knowledge acquisition positively and significantly enhanced the direct relationship between inbound open innovation and organizational innovativeness. This finding implies that the ability of employees to acquire external knowledge, share such knowledge, and eventually internalize it significantly strengthens the efficiency of inbound open innovation activities in achieving organizational innovativeness. In contrast, although external knowledge recognition was found to have a positive moderating association on the relationship between inbound open innovation and organizational innovativeness, its impact was not significant. This study contributes to the open innovation literature by providing an intra-organizational individual-level perspective on how inbound external knowledge flows culminate in organizational innovativeness within a public sector institutional setting. The study further provides insights into the differential efficacy of the absorptive capacity dimensions in influencing innovation outcomes, thereby advancing our understanding of the micro-foundations of open innovation.