Development of Integrated Open Innovation Based Knowledge Management Framework in Telecommunication Organization

Development of Integrated Open Innovation Based Knowledge Management Framework in Telecommunication Organization

Amirthanathan Prashanthan

Business Administration, Cambridge College of Business Management

DOI: https://dx.doi.org/10.47772/IJRISS.2025.914MG0081

Received: 24 April 2025; Accepted: 28 April 2025; Published: 29 May 2025

ABSTRACT

Open innovation based knowledge management is important for the innovative performance of any organization. Yet the role of intellectual capital and absorptive capacity not considered into open innovation based knowledge management. Using an case study research methodology with a qualitative approach, the research found that firms need to implement open innovation based knowledge management process by considering the role of intellectual capital and absorptive capacity. With the support of the literature, open innovation process tightly coupled with the knowledge management process, intellectual capital mediates both process and absorptive capacity moderates both processes. It is believed that the integrated OIKM framework developed in this article can assist executives and researchers to better understand and evaluate the role of intellectual capital and absorptive capacity in open innovation based knowledge management process in the context of Sri Lanka Telecommunication.

Keywords: Open innovation processes, Knowledge Management process, Intellectual capital, Absorptive capacity, integrated OIKM framework

INTRODUCTION

The external environment for innovations has changed during the last decades because of the open innovation paradigm shift. Globalization, the complexity of product development, industry convergence, the advancement of information communication technology, and the marketability of intellectual property rights have increased the open innovation adoption among organizations in all kinds of industries. Open innovation based knowledge management is essential for an organization. In addition to that, identifying and incorporating intellectual capital and absorptive capacity will help the organization manage open innovation and knowledge flow across its boundaries.

The telecommunication industry is one of the fastest and most dynamic industries across the globe today. Traditionally telecommunication is referred to as telephone services, and the modern telecommunication industry encompasses any communication services over a distance such as internet, telephone, television, radio, wired network, wireless network, computer networks, video streaming, hardware, and software-based applications. The global telecommunication industry trend has been continuously transforming over three decades through innovation and technological developments, and telecommunication technologies touch every part of our lives. It has changed the way we do business, and it has changed our culture of human interaction and social interactions. Telecommunication is a dynamic industry with day-to-day innovation and new product or service or process launches that are happening in the world, advancement in telecommunication technologies leads to information availability and information reachability to all people and organizations, which creates more collaboration between organizations, vendors, distributors, suppliers, customers, universities, and industry experts.

Today telecommunication industry created momentum around some key trends such as video streaming, big-data analysis, cloud computing, Internet of Things (IoT), mobile payments, social media, smart devices, and 5G. The world has observed a digital revolution that guides into massive change at an accelerated rate. The worldwide advancement towards digitalization tends to continue to change the concepts of communicating, conducting business, socializing, healthcare, and educating people worldwide. This transformation seeps into how people plan, design, build, and integrate cities to support future smart cities. As a result, ICT is becoming the most comprehensive distribution platform to provide public and private services to billions of people in developed and developing countries. Due to the telecommunication industry revolution, market information, financial services, education, and health services are mainly available to urban and weak areas. Now the telecommunication platform is promoting new economic and social opportunities at all levels for the world population.

Initial cases of open innovation were within the ICT sector and companies such as Lucent, IBM and Intel (Chesbrough, 2003); Nokia/mobile telephony (Dittrich & Duysters, 2007); and Lucent/Cisco (Ferrary, 2011). Other studies on open innovation conducted across a range of industries and firms, such as P&G (Dodgson et al., 2006); Italcementi (Chiaroni et al., 2011); DSM (Kirschbaum, 2005); Bio-pharmaceutical industry (Bianchi et al., 2011).

Prominent traditional player British Telecommunications (BT) transformed with the adaptation of the open innovation concept and innovated through the value chain and moved to Next Generation Networks (NGN) standards of the International Telecommunication Union (ITU). Other incumbent European operators like Deutsche Telekom, and France Telecom applied the concept of Open Innovation and transformed after the bubble burst at the beginning of 2000 (Nesse, 2009). Another large operator Telenor focused on searching for a systemic approach to match innovation and collaboration; the information sharing and the collaborative approach were seen as a company’s technological asset, and it was successful because of the open innovation approach (Allee & Taug, 2006). Similarly, the adoption of the open innovation model by the mobile phone company Nokia changed the dynamics based on its network development (Dittrich & Duysters, 2007; Masucci et al., 2020). Deutsche Telekom has integrated this new system to develop a method for surveying building interiors with centimeter accuracy (it surveys building interiors by scanning them with lasers and simultaneously taking 360-degree panoramic photographs) and added within its product portfolio through the open innovation program called “TechBoost” (Deutsche Telekom, 2017).

Not only telecommunication operators, but also other organizations in the telecommunication industry such as telecommunication devices and subsystem manufacturers (Apple, Nokia, Huawei, Ericsson, ZTE); Mobile content and service providers (Beeweeb, Buongiorno, Zero9); Over the Top service providers (Google, Microsoft, Netflix, Facebook, Twitter); Telecommunication component manufacturer (Intel, Commscope, Corning, Qualcomm) engaged in various kinds of challenges due to the internet and globalization, but they managed with collaboration and innovation through opening themselves to the outside environment. By opening themselves to the outside environment and engaging in collaboration form, worldwide Telecommunications providers are experiencing similar, fundamental shifts in their businesses; however, they improved innovation performance and competitive advantage by convergence in open innovation paradigm.

During the collaboration with stakeholders and other employees, the researcher increasingly realized that many knowledge inflows and outflows are happening across the ABC Telecom boundary. As an employee of the organization researcher observed that (1) Knowledge inflows and outflows among stakeholders; (2) Utilization of knowledge sources and improper distribution of information among stakeholders, (3) Collaboration and knowledge sharing with outside partners but lack of innovation among employees too. However, the current period is crucial for ABC Telecom to adopt open innovation to lead the red-ocean market to compete with industry rivals in Sri Lanka. Regards of the recent expansion of researches dealing with open innovation, there are many studies linked to knowledge management processes (Mahdi et al., 2019), but there is no evidence for implementing open innovation processes and integration with the knowledge management process of ABC Telecom to improve innovative capability and organizational performance. There was considerable attention on open innovation and absorptive capacity (Zhang et al., 2018; Russo-Spena & Di Paola, 2019); but within ABC Telecom no evidence of proper use of absorptive capacity with open innovation. The relationship between knowledge management and intellectual capital is significant for organizations, as few studies related to knowledge and intellectual capital (Mehralto Filldeh, 2018). Hence significant problems exist with current open innovation and knowledge management implementation processes in ABC Telecom.

This study expects to implement open innovation processes and integration with the knowledge management process of ABC Telecom to improve innovative capability and organizational performance. Further, the following questions were the focus of this study: What are the current practices of open innovation, knowledge management, intellectual capital, and absorptive capacity within the telecommunication organization? How to develop an integrated framework for an open innovation based knowledge management process with intellectual capital and absorptive capacity? How to validate the usefulness of the integrated OIKM framework?

LITERATURE REVIEW

This research deals with implementing open innovation processes and integrating them with ABC Telecom’s knowledge management process to improve innovative capability and organizational performance. Accordingly, the researcher attempts to explore the theories and frameworks concerned with such concepts through a proper literature review to establish a conceptual framework for this study.

Open innovation processes

In organizational management, innovation refers to “the process of being creative and introducing new processes and methods”(Zia & Shafiq, 2017). Now researchers and academics acknowledge that innovation is a mandatory factor for any business environment, and “Successful innovation is the creation and implementation of new processes, products, services, and methods of delivery which result in significant improvements in outcomes, efficiency, effectiveness or quality” (Albury, 2005). An open innovation shifted the paradigm of innovation in the knowledge era the concept of open innovation contrasted with the traditional closed innovation concept that encourages research and development within an organizational boundary. Chesbrough (2003) introduced open innovation’s conceptualization and his first book: “Open Innovation as Purposeful Inflows and Outflows of Knowledge to Accelerate Innovation Internally while expanding the Markets for the External Use of Innovation”.

There are three core processes for open innovation such as (1) “Outside–in process (Acquiring external knowledge), which is enriching the company’s knowledge-base through the integration of suppliers, customers, and external knowledge sourcing can increase a company’s innovativeness (Gassmann et al., 2010); (2) “Inside-out process (Exploiting internal knowledge) which is earning profits by bringing ideas to market, selling IP and Multiplying technology by transferring ideas and knowledge to the outside environment” (Gassmann et al., 2010); (3) “Coupled process (Share knowledge) which is coupling the outside-in and inside-out processes by working in alliances with complementary partners in which give and take is crucial for success” (Gassmann et al., 2010).

Knowledge Management Process

In the contemporary knowledge era, managing knowledge is the greatest challenge faced by organizations. Globalization, growing technological complexity, advancements in information technology, and telecommunication adaptation have increased the urgency of managing knowledge, and knowledge is considered the world’s economic transformation center (Salunke et al., 2019). Knowledge and ideas are becoming the primary source for organizational growth, and knowledge and ideas are relevant sources of prosperity and keys for organizations to keep competitiveness in industry and a competitive environment (Di Vaio et al., 2021).

Efficient knowledge management gives a competitive advantage to organizations, and effective use of knowledge assets can focus on innovation and fulfill customer requirements. Presently knowledge management and knowledge classifications are popular in many fields, but initially, organizational knowledge classifications: 1) tacit knowledge; and 2) explicit knowledge, were introduced by Polanyi (1967). He defined that “Tacit knowledge is the best practices, hands-on skills, intuitions, special know-how, and heuristic. It is specific knowledge that is hard to formalize or articulate. The explicit knowledge can be codified and transmitted in recognized and systematic language”. Tacit knowledge cannot be abstract from the practice ( Ode & Ayavoo, 2020), and explicit knowledge can be expressed in the form of data, formulas, specifications, manuals, and procedures (Kogut & Zander, 1992).

Intellectual capital

Klein and Prusak (1994) defined “intellectual capital as the intellectual material that has been formalized, captured, and leveraged to produce a higher-valued asset.” Edvinsson and Malone (1997) have defined “intellectual capital as the possession of the knowledge, applied experience, organizational technology, customer relationships, and professional skills that provide a competitive advantage in the marketplace”. Vargas-Hernandez and Noruzi (2010) indicated that “the foundation of the intellectual capital theory mainly based on resource-based theory and knowledge-based theory (Alvino et al., 2020)”.

According to Stewart (1997), “intellectual capital is a package of useful knowledge”. Ulrich (1998) defines “intellectual capital as competence multiplied by commitment, meaning that intellectual capital equals the knowledge, skills, and attributes of each within an organization multiplied by the person’s willingness to work hard”. Edvinsson and Malone (1997) and Stewart (1997) mainly contributed to the theory of intellectual capital. They agreed that foundational components of intellectual capital are: (1) “human capital”, (2) “structural capital” and (3) “commercial capital (Relational capital)”, and they explained that when these three fundamental components of the organization are aligned and balanced, an organization can generate best financial capital or value capital (Nadeem et al., 2019).

Absorptive capacity

According to Cohen and Levinthal (1990), absorptive capacity (AC) is the capability to recognize, identify, integrate, and utilize new external information. It is thought to be essential for the creativity process. AC is a “set of organizational routines and processes,” according to Zahra and George (2002, p. 186). These include acquisition (finding and acquiring external knowledge), assimilation (interpreting and comprehending the information obtained), transformation (combining and integrating existing knowledge with newly acquired knowledge), and exploitation (using new knowledge for profit). In particular, it requires a learning process (Lane, Koka, & Pathak, 2006), but it also entails renewing routines, practices, and technical routes (McGrath, 2001).

Lis and Sudolska (2015) investigated the impact that AC plays in organizational growth and competitive advantage, whereas Engelen and colleagues (2014) found that AC strengthens the entrepreneurial orientation and a firm’s performance relationship. Numerous literature reviews with various objectives have been prompted by the abundance of theoretical and empirical publications that have addressed the AC construct over the past 30 years. These reviews include revalidating and reconceptualizing the construct (e.g., Lane et al., 2006; Zahra & George, 2002), identifying significant differences among AC’s theoretical perspectives (e.g., Volberda, Foss, & Lyles, 2010), and examining the complex aspects of AC literature (e.g., Apriliyanti & Alon, 2017).

The Knowledge-Based View (KBV) of the firm

Grant (1996) developed a theory for the “Knowledge-Based View (KBV) of the firm”. “Theory analyzed fundamental concerns of the theory of the firm, notably the nature of coordination within the firm, organizational structure, the role of management and the allocation of decision-making rights, determinants of firm boundaries, and the theory of innovation” (Grant, 1996). Grant (1996) explained that knowledge transferability is essential not only between the organizations but also critically within the organization. Further, he explained that knowledge’s capacity of aggregation depends on the efficiency of knowledge transfer, which depends on the organization’s knowledge receipt. Knowledge receipt of organizations or individuals analyzed in terms of absorptive capacity (Cohen & Levinthal, 1990) of the recipient can add new knowledge to existing knowledge at the individual or organizational level.

Initial OIKM framework

The firm’s knowledge-Based View (KBV) and the Open Innovation (OI) model are used to derive variables for the initial OIKM framework. The following table illustrates the variables used to develop the initial OIKM framework.

Table 2.6.1. Variables for OIKM Framework

The following figure illustrates the initial OIKM framework of the study. The initial OIKM framework illustrates that the organization has a porous boundary to absorb new valuable knowledge from the external environment, and the absorptive capacity is unique for each organization. Intellectual capital inside the organization has the storage of valuable knowledge used for the organization’s knowledge management and innovation management.

Figure  2.6.1. Initial OIKM framework

Knowledge and open innovation related to both the organization and external environment and inside the organization knowledge flow happens from (1) bidirectionally flow between knowledge to intellectual capital, (2) bidirectionally flow between intellectual capital to open innovation, and (3) bidirectionally flow between knowledge and open innovation.   Knowledge flow in the external environment happens (1) bidirectionally flow between open innovation and knowledge, and (2) knowledge flow across the organization’s boundary. These knowledge flows indicate that the open innovation based knowledge management process happening inside and outside the organization.

Model Development

The suggested research model for the study was developed through the literature review and developed utilizing  SMART PLS 3.0. Further, the following hypothetical assumptions were made based on the literature review. (1). Open innovation processes are positively associated with knowledge management processes. (2). Absorptive capacity moderates the relationship between the open innovation process and intellectual capital. (3). Intellectual capital mediates the relationship between the open innovation process and the knowledge management process. (4). Absorptive capacity moderates the relationship between the knowledge management process and intellectual capital.

Figure 2.7.1. The Model

This research model aims to analyze the measurement model to check the construct’s validity and reliability of measurement items.

METHODOLOGY

The case study research design is employed in this study. When the limitations between phenomenon and setting are not immediately obvious and there are multiple sources of data, Creswell (2008) defines the case study technique as a scientific study that examines a modern phenomenon inside its actual life environment. Furthermore, the current study comprised a descriptive research design employing the case study research approach. Descriptive research examines and designates a case about the existing situation of an event or in what way it has happened in the past (Mayer & Fantz, 2004). The following figure illustrates the steps of the research procedure.

Research Design and Setting

The current study comprised a descriptive research design employing the case study research approach. Descriptive research examines and designates a case about the existing situation of an event or in what way it has happened in the past (Mayer & Fantz, 2004). A cross-sectional study was conducted in ABC Telecom selecting decision-making level executive officers and the mixed research method was employed along with the case study approach.

The research framework explains each step of the end-to-end process of this study. The following figure illustrates the steps of the research framework such as initial observation before starting the research, pilot study to confirm the existing problem and redefine the problem, defining the problem, objective, and research questions, critical literature review, initial OIKM  framework, and case study.

Figure 3.1.1: Research Framework

The pilot study

The pilot study is a kind of feasibility study, which is “small scale version[s], or trial run[s], done in preparation for the major study” (Polit et al., 2001). A pilot study can also be the pre-testing or “trying out” of a particular research instrument (Baker, 1994). The pilot study gives the advantage of testing the research protocol and indicates where the main study could fail and test the proposed instruments, whether they are inappropriate or too complicated.  The primary purpose of this pilot study is not to test the hypothesis.

The Case Study

Understanding research philosophy is crucial, as it builds the basis for approaching research (Wilson, 2014). The philosophical paradigm selection emerges from the understanding of ontology, epistemology, and paradigm choice (Denzin & Lincoln, 2005). In this study case study research method was used to conduct the research; according to Yin (2018), the case study strategy has five components: the study’s questions, its propositions which reflect on a theoretical issue, unit(s) of analysis (the event, entity, or individuals noted in the research questions), the logic linking the data to the propositions, and the criteria for interpreting the findings. Yin (2018) provided an extremely comprehensive and systematic outline for undertaking a case study’s design and conduct. The study’s conduct included preparing for data collection, collecting evidence, analyzing the evidence, and composition of the case study report.

Sample Size

According to Connelly (2008), extant literature suggests that a pilot study sample should be 10% of the larger parent study sample project. Isaac and Michael (1995) suggested 10 – 30 participants; Hill (1998) suggested 10 to 30 participants for pilots in survey research; Treece and Treece (1982) suggested 10% of the project sample size. In this study, fifty samples were randomly selected for the pilot study from a population of 400 executive employees. This pilot study was only used to confirm the existing problem in the organization and was not relevant to the case study. For the qualitative study sample size is often small and purposefully selected from those individuals who have the most experience with the studied phenomenon” (Patton, 2002; Rotteau, Albert, Bhattacharyya, Berta, & Webster, 2021).

Data Collection

In a quantitative study, the researcher relies on numerical data to test the relationships among variables (Charles & Mertler, 2002). In quantitative studies, researchers test the hypothesis by collecting data using quantitative measures, and this kind of study looks for the cause and effect by testing the theories with real-world scenarios. In general, quantitative studies are experimental or descriptive. Researchers try to establish an association among variables in the descriptive study and establish probable causality in an experimental study; hence quantitative study associates with the variables or explains the trend (Migiro & Magangi, 2011). In this study, quantitative data was used for only a pilot study.

The questionnaire was used to collect quantitative data. A questionnaire is a reformulated written set of questions to which respondents record their answers. Personally administrative and closed-ended questionnaires were used to collect the data for the pilot study. ABC Telecom has executive employees’ presence island-wide, so mail and electronic questionnaires were used to collect data from a wide geographical area, 50 samples were selected from the executive employees, and data was collected for the pilot study (Sekaran & Bougie, 2017).

Data Analysis

The research model can be categorized into two models for the quantative analysis: the “measurement model” and the “structural model.” The measurement model’s variables linked to the questionnaire’s questions reflect one aspect of the latent variable. The structural model shows the latent variables and their interrelationship based on the theoretical model of the study. The validity and reliability of the measurement model and the validity of the structural model and the hypothesis will be tested using the PLS-SEM technique (Khan et al., 2019). The PLS-SEM technique was used to analyze the research model, and the SMART PLS 3.0 software package was used for analysis. Measurement model analysis and structural model analysis were carried out for quantitative analysis

According to Oliveira, Ens, Andrade, and Mussis (2003), “qualitative analysis is an: interpretative analysis tool is one of the oldest research techniques. Since hermeneutics, the art of interpreting sacred texts or mysterious, a man practiced interpretation as a way to put his point about a given phenomenon” (Oliveira et al., 2003). Qualitative data analysis techniques were used to organize and analyze this study’s data. Thematic analysis is a possibility as a research technique that uses a qualitative approach. It can be performed in various materials in text form from any source. Analysis of coding is a qualitative data analysis that uses different techniques to analyze assigned codes and categories.

Ethical Considerations

Before starting the interview, the researcher discussed the use of an informed consent form outlining the research, the known risk to participants, how data will be collected from participants, how the data will be analyzed, and how participants can withdraw from the research project at any point, and contact information of the researcher. Informed consent forms were shared with all the participants before the data collection process to ensure this study’s ethical aspect. Furthermore, in this study, the researcher reached ABC Telecom’s manager- ethical clearance committee, discussed the research’s consequences, provided verbal approval to conduct on ABC Telecom, and advised the researcher to safeguard its brand name by using the anonymous name” ABC Telecom.”

RESULTS

Results of the Pilot Study

When factor loadings have been examined as the initial stage in evaluating the quality criteria, the quality of the study’s constructs is appraised based on the measurement model’s evaluation, and construct validity and reliability are established.

Internal consistency

Internal consistency was examined using Cronbach’s alpha. Nunnally (1978) recommended using a criterion cut-off of 0.70. Where internal consistency is satisfactory when the value is >= 0.7, whereas a value < 0.60 indicates a lack of reliability of measures internal consistency measured by composite reliability in PLS (Chin, 1998). The following table indicates Cronbach’s alpha value of each construct, and its shows that construct and latent variables are reliable.

Table 3.8.1.1.1 Cronbach’s Alpha Values

Indicator Reliability

When a variable or set of variables are consistent with what they tend to measure (Urbach & Ahlemann, 2010), according to Chin (1998), indicator loading should be significant at 0.05 level and must be >=0.7. Above, Figure 4.5 illustrates the indicator reliability analysis result of measures, the below table indicates the instruments with indicator reliability.

Table 3.8.1.2.1. Indicator Reliability

Convergent Validity

Convergent variables are assessed with individual items that reflect a construct converging in measuring items with different constructs. In PLS, it evaluates by measuring the values of Average Variance Extracted (AVE) the convergent validity of the construct is achieved when the AVE is >=0.5 (Fornell & Larcker, 1981). The below table indicates the Average Variance Extracted (AVE) value of each construct. Both Outside-In Process (OIOI) and Coupled Process (OICP) have lower Average Variance Extracted (AVE).

Table 3.8.1.3.1. Convergent Validity

The Summary of the Pilot Study

The following table illustrates the summary of the pilot study which is the basis for the main study.

Table 3.8.1.4.1. Pilot Study’s Summary

Composite reliability indicators were higher than 0.7, internal consistency was assessed via Cronbach’s Alpha coefficient, and all values were above 0.8, indicating excellent (1.0–0.90) reliability for all the constructs. The average of variance extracted (AVE) was also examined for each construct. Values of open innovation processes, Knowledge management processes, and intellectual capital were substantially less than Chin’s (1998) suggested 0.5 thresholds. Still, Fornell and Larcker said that if AVE is less than 0.5, but composite reliability is higher than 0.6, the convergent validity of the construct is still adequate (Fornell & Larcker, 1981). This pilot study indicated that further investigation within ABC Telecom is feasible.

Results of the Case Study

This case study is based on a qualitative approach and the thematic analysis technique was employed to carry out the analysis of the study. Demographic data of interview participants were analyzed with SPSS 20.0, and  QDA Miner 5 with integrated Word stat 8 software used for manual coding, categorization, and code frequency analysis of data.

The following table depicts the highest participant’s response to the research questions extracted from the detailed thematic analysis, and to what extent ABC Telecom currently practices all intended processes implied by the research variables. The “% Codes” column shows the percentage of the total code frequencies in each code’s current report. The “% Cases” column shows the case frequency for each code as a percentage of the total number of cases in the whole study.

Table 3.8.2.1. Code Frequencies

It is observed from the above analysis, that the current practice of ABC Telecom: (1) the Knowledge management process is not standardized in ABC Telecom; (2) Open innovation processes are not implemented properly: Inside-out process not implemented, outside-in process in practice; (3) Integration between Open innovation processes and knowledge management process not defined, hence knowledge flow inside the organization not organized; (4) Role of intellectual capital not defined in the context of open innovation based knowledge management process.  relationship of intellectual capital with open innovation processes and knowledge management process not defined; (5) Role of absorptive capacity was not defined in the context of open innovation based knowledge management process. The relationship of absorptive capacity with open innovation processes and knowledge management processes is not defined.

DISCUSSION

As per the results obtained through the qualitative data analysis, it is to discuss the result of the analysis and to answer the research questions. Each research question discusses supporting literature against the result of the analysis.

Answer to the Research Question One

The research question which is “What are the current practices of open innovation, knowledge management, intellectual capital, and absorptive capacity within the telecommunication organization?” can be answered as follows.

Open Innovation Processes

In this study, from the qualitative data analysis, participants answered the question:  what are the current practices of open innovation processes within ABC Telecom?, and frequency analysis resulted in the “open innovation processes not in practice” within ABC Telecom. Open innovation contains three major processes: (1) “inside-out,” (2) “outside-in,” and (3) “coupled process,” and the result shows that “inside-out not practice,” an “outside-in process better within ABC Telecom” and “coupled process did not practice” because of lack of inside-out process. The analysis further indicates that ABC Telecom is still working with closed innovation, and sometimes open innovation is applied partially. The unexpected result shows that the organization’s culture is not supportive of open innovation processes inside ABC Telecom, and the culture had strong encouragement to better outside-in processes, bringing poor innovation outcomes into ABC Telecom. “Organizational culture is of great significance to closed innovation as well as open innovation. Different theories about organizational culture favor the advancement of a “community of practice” where employees’ social interplay cultivates a knowledge-sharing culture based on shared interests, thus motivating innovation and idea generation.

Knowledge Management Process

Participants answered the question:  what are the current practices of knowledge management within ABC Telecom? the frequency analysis explored that the “Knowledge management process is not standardized” within ABC Telecom, this is the most often answer by the participants, and the result indicated that the knowledge management process exists within ABC Telecom but is not properly practiced, which can be related to partially implemented or not managed well. Generally, the knowledge management process contains four steps; Knowledge acquisition, knowledge storage, knowledge distribution, and knowledge application. The result indicated that both knowledge acquisition and knowledge storage processes are positively implemented and in practice knowledge distribution and knowledge application were not implemented well, hence some results show that the effectiveness of the knowledge management process is questionable within ABC Telecom. The result showed that the “knowledge management process was not visible” indicating that the process is not transparent to contribute to the entire stakeholder within ABC Telecom.

Intellectual capital

From the qualitative data analysis, the response to the above research question: what are the current practices of intellectual capital within ABC Telecom? is “Intellectual capital role is subjective and debatable,” Some responses indicated no significant role for intellectual capital because participant responses as intellectual capital in ABC Telecom is not sustainable. Intellectual capital is categorized into three: human capital, structural capital, and customer capital, and responses indicated that a lack of customer capital impacts the intellectual capital of ABC Telecom. Specifically, intellectual capital was not applied across ABC Telecom is another reason for intellectual capital’s role is subjective and debatable within ABC Telecom.

The result showed poor or no association between open innovation processes and the knowledge management process. However, intellectual capital is associated with both processes association between intellectual capital and knowledge management better than the association between open innovation processes and intellectual capital.

Absorptive capacity

From the qualitative data analysis, the answer to the above research question: what are the current practices of absorptive capacity within ABC Telecom?  is “Not able to define the role” and some responses indicated no clear picture of the role of absorptive capacity between open innovation processes and knowledge management process because participant responds as absorptive capacity in ABC Telecom applies to certain extend. The result showed poor or no association between open innovation processes and knowledge management processes, but absorptive capacity is associated with both processes. The unexpected result shows that the organization’s culture is not supportive of the absorptive capacity role between open innovation processes and the knowledge management process, and results indicated that need improvement in the role of absorptive capacity within ABC Telecom. The association between absorptive capacity and knowledge management is better than the association between open innovation processes and absorptive capacity.

Answer to Research Question Two

The research question two which is “How to develop an integrated framework for open innovation based knowledge management process with intellectual capital and absorptive capacity?” is answered below.

Recent studies explored the relationship between open innovation processes (inbound, outbound, and coupled process) and knowledge management processes (knowledge acquisition, knowledge sharing/transfer, knowledge storage, and knowledge application) and the benefit of associating open innovation processes as well as the knowledge management in an organization. Open innovation processes are critical for knowledge sharing which helps to reach high-performance results (Enström et al., 2019); Control of knowledge input, distribution of knowledge input, absorptive capacity, and appropriation of knowledge output affect the effectiveness of open innovation within the organization(Castaneda & Cuellar, 2020).

Knowledge acquisition positively affects the open innovation based innovative performance of the organization (Mueller et al., 2018); at the same time, knowledge flow and knowledge transition are an essential source for the open innovation processes (Pohulak-Żołędowska et al., 2018). there are strong relationships among open innovation, knowledge exploration, and knowledge exploitation (Amponsah & Adams, 2017). The above set of literature explored how open innovation processes and knowledge management processes are interconnected and how organizations benefit from open innovation based knowledge management.

The outside-in process enhances the organization’s knowledge and competency base by integrating customers, suppliers, and external knowledge sourcing. This outside-in process can be expressed as “knowledge internalization,” which is mainly related to external knowledge acquisition, storage of proper knowledge, and application of internal innovation requirements.

The inside-out process refers to making profits by bringing ideas to market, selling intellectual property, and multiplying technology by transferring ideas to the outside environment. The inside-out process could be referred to as “knowledge externalization” via knowledge distribution and knowledge application to external innovation and knowledge requirements.

On the one hand, the open innovation paradigm centers attention on the knowledge flow directions (inward, outward); on the other hand, knowledge management research directions are focused on knowledge typology and openness. It is essential to provide an integrated knowledge acquisition framework to reduce knowledge decrease from initial input to its application for a particular context. Knowledge sources are essential for analyzing the open innovation context, and knowledge management is crucial for implementing the open innovation process.

There were many studies accomplished by researchers to investigate the relationship between intellectual capital and open innovation. Organizations must manage the intellectual capital to retain innovation capability when applying open innovation processes and emphasize external intellectual capital by opening the intellectual capital management boundary necessary to implement open innovation in an organization (Laursen & Salter, 2006a; Intellectual capital expansion happens when a firm changes its innovation strategy from closed innovation to open innovation.

Absorptive capacity is one of the essential factors for open innovation implementation in the organization, and many studies emphasize the importance of absorptive capacity in open innovation processes. “firms’ absorptive capacity plays a crucial role in filtering and integrating external knowledge stimuli from R&D collaborations in open innovation based organization (Gkypali et al., 2018; However, firms with collaboration with competitors and research institutions have a positive, innovative performance when absorptive capacity presence in the context of open innovation (Najafi-Tavani et al., 2018). When the firm lacks absorptive capacity forced to search for possible ways to take part in inbound (outside-in) open innovation (Spithoven et al., 2011).

From the knowledge management perspective, absorptive capacity is significantly associated with knowledge acquisition, knowledge distribution, and knowledge application processes (Cohen & Levinthal, 1990). The degree of integration and combination between absorptive capacity and knowledge management process decide the overall capacity of absorbing state-of-the-art knowledge, as an outcome, create the right circumstances for enlarging flexibility, and firm performance and innovative exercises (Lane et al., 2006). Additionally, absorptive capacity depends on a firm’s preceding corresponding knowledge (Lane et al., 2006).

From the above works of literature, “absorptive capacity is highly related to knowledge management process”; “potential absorptive capacity related to knowledge acquisition of knowledge management,” and “realized absorptive capacity related to knowledge distribution and application of knowledge management.” On the other hand, “potential absorptive capacity and realized absorptive capacity related to the outside-in process of open innovation” improve internal innovation and R&D of the organization. The absorptive capacity role is vital for the open innovation based knowledge management process, and the study recommends absorptive capacity integration with open innovation based knowledge management process.

The integrated OIKM framework’s general aim is to reinforce understanding of how the firm’s open innovation based knowledge management process works with the intellectual capital and absorptive capacity of the organization. It ought to be noted that this is a distinguished framework that underpins a broad understanding of the essence of an open innovation based knowledge management process in an organization. The numerous distinct activities that are related to knowledge management in firms, such as “knowledge inflow,” “knowledge outflow,” “knowledge acquisition,” “knowledge storage,” “knowledge distribution”, “knowledge application,” “knowledge asset,” “innovation management,” “intellectual property rights management” depend on the particular context and objectives of the organization. The following figure illustrates the integrated OlKM framework to apply to any organization to improve the open innovation based knowledge management process with the organization’s intellectual capital and absorptive capacity. The comprehensive integrated framework was developed to support open innovation based knowledge management at ABC Telecom. The framework holds up action in some of these more specific areas, such as knowledge flows, internal innovation, external innovation, absorptive capacity, and intellectual capital management.

Figure 4.2.1. Integrated OIKM Framework

Answer to Research Question Three

From here onwards, research Question three, “How to validate the usefulness of the integrated open innovation-based knowledge management (OIKM) framework?” is answered.

This study followed two lenses: 1) The Lens of the researcher – disconfirming evidence; 2) The Lens of study participants – Prolonged engagement in the field as a valid procedure to validate the usefulness of the integrated open innovation based knowledge management (OIKM) framework as defined by Creswell and Miller (2000)

This validity procedure is for the researcher to stay at the research site for a prolonged period. During repeated observation, the researchers build trust with participants, find gatekeepers to allow access to people and sites, establish rapport so that participants are comfortable disclosing information, and reciprocate by giving back to the studied people. This lens is focused on gaining a credible account by building a tight and holistic case.  In practice, prolonged engagement in the field has no set duration, but for this study, one of the participants has been working for more than a year, and he frequently discussed and critically analyzed this study and the knowledge area of this study.  This participant is named as an “expert participant” who is knowledgeable in current ABC Telecom’s processes and the history of innovation and knowledge management development of ABC Telecom over 30 years with a sound academic background. The expert participant engaged in discussions, interviews, data quality improvement, and data interpretation several months after the semi-structured interview.

CONCLUSION

In this research, the process started by making an initial statement about the conditions and factors associated with open innovation in ABC Telecom. ABC Telecom was analyzed as a case organization and investigated among selected employees and stakeholders with a pilot study and semi-structured interview. The study found that the open innovation processes are not in practice, and the knowledge management process is not standardized within ABC Telecom. Further, the study investigated the role of intellectual capital and absorptive capacity in the open innovation based knowledge management within ABC Telecom. Results showed that ABC Telecom does not define the roles of intellectual capital and absorptive capacity in the context of the open innovation based knowledge management process. By considering the current conditions of open innovation, knowledge management, intellectual capital, and absorptive capacity of ABC Telecom and from the support of previous researchers’ studies, the integrated framework for open innovation based knowledge management with intellectual capital absorptive capacity in ABC Telecom was developed. Below Table 6.1 illustrates the mapping among research objectives, research questions, problem statement, research gap, and contribution of the study.

The integrated OIKM framework was developed based on the open innovation process, knowledge management process, intellectual capital, and absorptive capacity. Open innovation processes and knowledge management processes coupled together to enhance the innovation capability and performance of the organization ( Ye & Kankanhalli, 2013); open innovation processes and knowledge management processes are associated (F Martínez-Velasco, & Dávila-Aragón, 2021). Finally, the integrated OIKM framework consists of  open innovation processes, knowledge management processes, absorptive capacity, and intellectual capital and is validated with triangulation, and expert participation, to confirm the integrated OIKM framework’s usefulness

RECOMMENDATIONS

The outcome of this study offers some valuable practical implications as well as theoretical implications. First, the open innovation processes are associated with the knowledge management process, intellectual capital, and absorptive capacity. Therefore, it is recomeded for the organizations emphasizing improving open innovation based knowledge management processes with intellectual capital and absorptive capacity enhance organizational efficiency through the application of the developed OIKM framework.  Further, the implementation of the OIKM framework for intellectual capital and absorptive capacity in open innovation based knowledge management processes helps ABC Telecom as a practical guide to the implementation of open innovation based knowledge management processes.

Secondly, this study underlines the significance of absorptive capacity and intellectual capital, particularly for an organization implementing open innovation based knowledge management processes. Intellectual capital benefits the firm by improving the open innovation processes and knowledge management process, both of which benefit the firm by enabling innovation capability. The results also highlight the significance of absorptive capacity in accomplishing an open innovation culture. This study specifies that absorptive capacity advancement may be more important than investments in open innovation based knowledge management processes. Absorptive capacity affects knowledge management, open innovation, and the intellectual capital of the organization. Altering absorptive capacity affects knowledge assets and the innovation of an organization. These activities would also incidentally facilitate open innovation, knowledge management, and intellectual capital.

Finally, this research recommends the integration of open innovation processes with the knowledge management process. However, this study is the first to investigate the role of both intellectual capital and absorptive capacity in the open innovation based knowledge management process.

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