Surrendering control to gain advantage: when does it pay to be open?

Historically, firms sought to gain advantage by tightly controlling valuable resources. And yet today, many firms choose to be open by releasing control of such resources (e.g., when firms release their own software as open source).

Here, we summarise our recent paper in Strategic Management Journal, in which we show how such strategic openness may succeed at firms owning several resources: when executed well, strategic openness may not only help reduce the cost of producing the now-open resource (e.g., software), but also simultaneously increasing the value of a still-proprietary complement (e.g., services).

Oliver Alexy is professor of strategic entrepreneurship at the TUM School of Management, Technical University of Munich, where he also received his doctorate. His current research focuses on effective organization designs for high-uncertainty environments.

Joel West is a professor of innovation and entrepreneurship at the Keck Graduate Institute. His research focuses on innovation communities, consortia, ecosystems, platforms, and other network forms of open innovation. His most cited research has been published in Strategic Management Journal, Industry & Innovation, Journal of Product Innovation Management, R&D Management, and Research Policy, and also includes co‐editing Open Innovation: Researching a New Paradigm and Open Innovation: New Frontiers and Applications. He holds a PhD from UC Irvine and an SB from M.I.T.

Helge Klapper is an assistant professor at Rotterdam School of Management, Erasmus University. He joined RSM in 2017 after completing his PhD at the University of Vienna, Austria. His research interests include organizational decision making and novel forms of organizing and innovating. More specifically, his work examines information exchange in organizations as part of the strategic decision making process and how authority affects coordination and cooperation conflicts.

Markus Reitzig is Professor for Strategic Management at the University of Vienna, and he has served as Subject Area Chair since the group’s establishment in 2012. In 2014 and 2017, he was a Visiting Professor of Strategy at INSEAD and Keio University/Tokyo, respectively. Prior to his permanent appointment in Vienna, Dr. Reitzig worked as full-time faculty at Copenhagen Business School in Denmark (2002-2006) and London Business School in England (2006-2012). He studied chemistry, law and business economics in Germany, Italy, and the United States. Dr. Reitzig’s research has been centred on the strategic management of innovative business models and new technologies.