The interplay among entrepreneur, employees, and firm level factors in explaining SMEs openness: A qualitative micro-foundational approach

This paper seeks to investigate the micro-foundations of engaging in open innovation (OI) in the context of small and medium enterprises (SMEs). More specifically, the study aims to understand the characteristics of entrepreneurs managing small companies and whether these influence the proclivity towards openness. A theory building approach is applied with an exploratory multiple case-study analysis consisting of eight Italian SMEs operating in knowledge intensive sectors. The information gathered through interviews indicate that several factors and variables related to the entrepreneur, employees and firm level have an impact on the propensity towards engaging in OI. Regarding the entrepreneur, delegation, trust in internal and external partners, individual ties and risk taking approach increase the approach towards OI. Moreover, it has emerged that several factors regarding employees contribute to establishing OI strategies. The interviews have also underlined that entrepreneur level factors have an impact on employee level factors in the sense that their joint effect leads to increased openness. These factors are also influenced by firm level factors. In terms of implications, this is one of the first studies on the micro-foundations of OI and, to the best of our knowledge, the first taking the entrepreneur perspective.