Open innovation and the management of intra-firm conflict
Pitelis, Christos N.
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We analyse the hitherto unexplored relationship between intra-firm conflict between the research and development (R&D) department and central management, conflict a lleviation and the choice of ‘open’ versus ‘closed’ innovation, in the context of a simple formal model. We find that in the presence of (intentional or unintentional) divergence of preferred (R&D) output between the R&D department and central management, the decision by central m anagement to adopt an ‘open’ (versus ‘closed’) innovation approach, may help serve the twin purpose of shifting constraints to growth and increasing firm profitability, by all eviating intra-firm conflict.