Business and Economics

Open innovation, digital ecosystems and managerial decision-making

Seminar Department Management by Krithika Randhawa

Date: 27 September 2022

Location: R-building - Annex

Time: 10u30-12

Biography and abstract

Dr. Krithika Randhawa

Discipline of Strategy, Innovation and Entrepreneurship

The University of Sydney Business School



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‘Open innovation, digital ecosystems and managerial decision-making’


How can organizations promote openness across innovation ecosystems? What role do digital technologies play in allowing such collaborative forms of organizing to emerge, in turn, transforming the practice of open innovation? How do managerial choices and actions shape organizations’ ability to develop such open innovation ecosystems? In this seminar, I explore these questions by drawing on my research at the interface of open innovation, digital ecosystems and managerial decision-making. 

My research examines how organizations can design, organize and manage innovation. I am particularly interested in open innovation, a novel way for organizations to innovate by collaborating with external stakeholders. I focus on contemporary forms of open innovation such as crowdsourcing, digital platforms and ecosystems, and how such organizational forms may be utilized to improve innovation outcomes, and ultimately create business and societal benefits.

I investigate open innovation at the organizational, ecosystem and individual levels. At the organizational level, I examine the capabilities and business models that enable the co-creation of innovation across ecosystems. At the ecosystem level, I study how (digital) innovation ecosystems emerge and evolve. At the individual level, I study the microfoundations of open innovation: how managers shape (digital) ecosystem legitimacy and make open innovation project decisions. In this stream, along with Wim Vanhaverbeke and Paavo Ritala, I am focusing on the role of middle managers in legitimizing digital technologies in emerging ecosystems, a project I will delve into in my talk.

How to legitimize radically new digital technologies?

The role of middle managers in digital ecosystem development

The digitalization of incumbent firms is leading previously unrelated actors to converge into a digital ecosystem. This represents a radical innovation for incumbents as it requires the adoption of new digital technologies, and incumbents often struggle to attain this transformation, due to loss of control and trust issues in co-creating with external actors. A critical yet underexplored question in this radical shift is how actors bring legitimacy to the ecosystem, which is often difficult given the uncertainty about the viability of the digital solutions.

Against this backdrop, we address two research gaps in this study. First, previous research, that has largely focused on B2C ecosystems, stresses the role of a central orchestrator as ecosystem leaders. However, in industrial B2B settings, powerful incumbent firms are forced to shift to digital ecosystems, but without a central orchestrator. Here it is unclear who drives the shift to digital ecosystems, and how the underlying digital technologies are legitimized. Second, from the perspective of technology firms, most existing research has focused on the role of TMT in, for example, digital strategy formulation and ecosystem development. Far less is known about the role of middle managers (within technology providers), although middle managers play a crucial part in shaping digital ecosystems, and they must first legitimize the underlying digital technologies that are often perceived as being complex and opaque by incumbent actors (customers).

To close these gaps, we ask: how do middle managers in technology providers legitimize digital technologies in emerging ecosystems without a central orchestrator? Using an inductive, multiple case study approach, we find that middle managers use co-creation with demand-side actors as a digital technology legitimation practice via two mechanisms: (1) co-creation for solution selling and (2) co-creation for issue selling. We develop a process model revealing that digital technology legitimation is a collective action process in an emerging ecosystem, with the two co-creation mechanisms deployed iteratively and at multiple actor levels, ultimately effectuating an ecosystem in an experimentative way.

We contribute to the radical innovation and ecosystem literatures by showing that legitimizing radically new digital technologies is central to the emergence of digital ecosystems. We also add to the strategic leadership literature by shedding light on the strategic role of middle managers in shaping new radical innovation pathways, acting as a conduit between multiple actors in the emergent (digital) ecosystem strategy process, especially in the absence of a central orchestrator as seen in industrial B2B settings.


Krithika Randhawa is an Associate Professor of Strategy, Innovation and Entrepreneurship in the Business School at the University of Sydney, Australia. Her research examines open innovation at the interface of strategy and digital technologies, with a special interest in digital platforms, ecosystems, crowdsourcing and business models. Krithika’s work appears in top journals such as the Journal of Product Innovation Management, Journal of Business Research, Technovation, Industrial Marketing Management, International Journal of Production Economics, Industrial and Corporate Change and California Management Review, and as industry reports, media articles and podcasts such as in R&D Today, The Mandarin and Government News, that translate her research for outreach to business and public sector leaders. Her work has delivered innovative solutions to important industry and policy challenges for private and public sector partners ranging from corporates such as Stryker (Fortune500 medical device manufacturer), start-ups such as Bang the Table (among the world’s largest digital civic engagement platform provider) and industry consortia such as IoT Alliance Australia (peak industry body representing IoT in Australia) to government departments (including Department of Industry and Science and NSW and Queensland Health). Krithika’s research has received multiple grants and has been recognized with the Research Impact Award by the University of Technology Sydney, and Best Paper Awards at the World Open Innovation Conference and Australia and New Zealand Academy of Management. Her paper was the finalist for the 2022 Best Paper Award in the California Management Review. Krithika is Associate Editor of the R&D Management journal, Associate Program Chair of the World Open Innovation Conference, and serves on the Editorial Review Board of the Journal of Product Innovation Management. She is a member of the Academy of Management, DRUID Society, European Group for Organizational Studies and Strategic Management Society, has chaired workshops and sessions in conferences, and has been invited as a speaker at research seminars, nationally and internationally. Krithika has designed and delivers courses across the undergraduate, postgraduate, MBA and executive education programs in the areas of innovation, entrepreneurship, design thinking and strategy, and has won the 2021 Innovation Award by the University of Technology Sydney for her initiatives in integrating teaching and research with real-world practice. Prior to joining academia, she gained management experience in the global hospitality industry with a track record of launching luxury hotels and driving strategic innovation projects.