Strategic change and innovation reputation: Opening up the innovation process

As more firms begin to co-create new products with customers, a key question is, “Will opening the innovation process to customers always be beneficial?” This research examines how strategic change (e.g., closed to open innovation strategy) impacts the attitudes of the periphery of customers (i.e., customers not involved in the innovation process); and it further explores how a firm's innovation reputation can affect strategic change efforts. The results of two studies show that attitudes toward the firm improve when it moves from a closed to more open innovation strategy. This relationship is contingent on a firm's innovation reputation. When a firm has a high reputation for innovation, it should continue with its current strategy, whether open or closed. Conversely, having a low reputation for innovation indicates that any change of strategy is good in order to try to overcome negative perceptions of the firm's reputation.