The Impact of Open Innovation Preparation on Organizational Performance: A Systematic Literature Review

Open innovation involves external parties of the organization in innovation activities within the organization, resulting in the flow of knowledge and information internally and externally (inbound and outbound). Given the advantages of having external support in the internal innovation process, organizations are starting to adopt the open innovation model to help them achieve and sustain innovation. The parties involved in open innovation are suppliers, consumers, competitors, and society. Such involvement will increase the organization’s ability to achieve better performance. This study aims to provide a more updated, comprehensive, and clearer picture of the importance of organizational readiness to innovate, especially through open innovation. This study also seeks to present a more comprehensive identification of the impact of open innovation on company performance by using a systematic literature study. The systematic literature review conducted in this study can serve as a basis for future research that discusses policy strategies to improve organizational performance through the implementation of open innovation. Based on a systematic literature review, 33 main articles were obtained in accordance with the research objectives including different types of open innovation manifestations and specific open innovation practices implemented by organizations.


I. INTRODUCTION
Open innovation (OI) is seen as a paradigm shift that appears in many innovative organizations where the process of creating innovation occurs not only from internal but also from accessing and integrating external knowledge [1], [2]. Effective open innovation involves quality innovation resources that come from outside the organization (inbound) as well as those generated by the organization (outbound) to accelerate internal innovation, expanding market and generate innovation external to other organizations [3], [4]. The development of the current innovation process has changed from close innovation to open innovation [5], [6], which is an innovation originating not only from internal but also external parties regardless of the company scale [9]. The concept of open innovation is based on inter-organizational studies in which The associate editor coordinating the review of this manuscript and approving it for publication was Shih-Wei Lin . the whole stakeholers are involved [10], [11]. In open innovation, there is an element of collaboration, collective creativity, and an attainment of new knowledge and its management within an organization [12]. Open innovation can also be utilized to develop an organization and a community consisting of several organizations [12].
Open innovation practices become possible as the result of the rapid development of technology such as internet and smart devices that cause the amount of knowledge and the speed of its dissemination to increase rapidly [13], [14]. The open innovation paradigm has attracted the attention of both managers and scholars and has become increasingly popular [4]. Numerous researchers put their interest in open innovation phenomenon and simultaneously, many organizations are now adopting open innovation models to help them achieve and sustain innovation [12], [15]. There are several factors that promote the growth of this phenomenon, such as the reduction of the product life cycle, the intensification of global competition and the high costs of research and development [15]. However, to adopt open innovation, an organization needs to open up its boundaries. It is important to enable the valuable knowledge to flow in from the outside to make opportunities of cooperative innovation processes together with external parties, as well as to flow out for commercial exploitation purpose [15]. On a practical note, to participate in open innovation practice, the parties involved should consider enabling integrated policies, information sharing, alignments of incentive and appropriate the measure of performance [15].
The effect of open innovation on organizational performance is not easily investigated although in practice and theory an open innovation approach seems to be beneficial for organizations [13], [16]. This is probably because the empirical studies have not been conducted in a rather holistic and comprehensive manner. Several studies have found that there are positive effects of open innovation on company performance while several other studies discuss the inverse U-shaped relationship or even negative effects [16], [17]. Through open innovation, organizations can reduce or even eliminate the cost of innovation altogether [1], [2]. In addition, open innovation is believed to have the ability to reduce the length of new product or process development, and increase the speed of entry into new markets [18]. By opening up its boundaries, a firm can leverage the complementary assets of its partners, maximize revenue by selling unused intellectual property (IP) assets, save time and cost to develop innovation, attract potential customers by engaging them in the production process, and set new technology standards by forming partnerships [6]. On the other hand, an increase in open innovation in organizations can pose a risk of losing innovation skills, incurring higher coordination costs, and uncertainty of profit generation [19]. Open innovation carries other consequences in the organization, including aspects of organizational performance. Therefore, the impact of open innovation towards organizational performance is still quite ambivalent and requires further investigation.
This research aims to make a more comprehensive identification of the various impacts of open innovation on company performance using a systematic literature protocol developed by Kitchenham and Charters [20]. The objective that achieved of this research is to be able to provide more clear and complete description of the readiness organization in preparing open innovation that will support organizational performance. The result of this study is expected to provide insights about the relationship between open innovation and organization performance. This research is constructed in four parts. In the first section, the background and the objectives of this study are provided. In section 2, the methodology used in this study is explained. In section 3, the results and discussion of the systematic literature review process carried out in this study are presented. Finally, in section 4, the conclusions of this study are presented.
Previous studies, to the best of the authors' exploration, have not conducted an identification and investigation process on how open innovation could be essential in influencing organizational performance. The contribution from this paper is reflected through a clearer depiction and update on the importance of paying attention to the organization's readiness in conducting an open innovation in its effort to increase its performance.
This systematic literature review contributes to the efforts to increase organizational performance through a more comprehensive understanding regarding the preparation vis-à-vis open innovation, which will lead to a better exploration in finding excellent sources for open innovation (particularly from external organization). With the complexity of such a preparation, especially for SMEs, this updated understanding would also help in facilitating an organization to implement policy strategies to optimize the organizational performance.
In this systematic literature review, data is gathered regarding type of organization, industry, organization scale, including the various practices of open innovation in each organization. With the compilation of all open innovation practices, the aim is for fellow researchers and practitioners to take context-specific practices to help more SMEs that are struggling to implement open innovation practices.

II. RESEARCH METHODOLOGY
The purpose of this study is to identify the relationship between open innovation preparation and organizational performance by methodically identifying and assessing the published primary studies used to investigate a certain research question. This research adopts a systematic literature review (SLR) protocol to gather data, i.e., previous studies, in a systematic manner; is defined as a method of identifying, assessing, and interpreting all available research on a specific research question, topic area, or phenomenon that is being studied [20]. Systematic literature review is still a popular means for researcher. It can be seen in Google scholar that the number of published articles containing systematic literature review has significantly increased year by year. SLR protocols have been used by many researchers in a variety of domains. For example, the study by Anwar et al. [21] used SLR protocol to review the knowledge sharing barriers and facilitators to global software development by using three stages SLR, i.e., planning, conducting, and reporting.
Knott et al. [22] used seven-stages SLR protocol in the health domain to explore determinants of fitness in order to drive performance among shift workers with insufficient sleep. The seven stages include formulating the problem, locating and selecting studies, collecting data, appraising critically, analyzing and presenting data, interpreting result, and information dissemination [22]. The study from Kurniawati et al. [23] used SLR protocol developed by Kitchenham to identify the relationship among knowledge management, innovation, and performance. It contains five steps i.e., identification of research, primary study selection, study quality assessment, data extraction, and data synthesis.
The research by Ali et al. [24] similarly uses the SLR protocol from Kitchenham to identify success factors in managing the partnership in software outsourcing. Meanwhile, the research by Ali et al. [25] uses the SLR protocol to identify barriers to the formation of software outsourcing partnership. This protocol includes 6 stages, i.e., identifying a problem that needs to be reviewed, formulating research question, defining the search strategy, listing research venues and deriving a search string, outlining inclusion/exclusion and quality checklist, conduction data extraction, and synthesizing the extracted data [24], [25].

A. SYSTEMATIC LITERATURE REVIEW (SLR) PROTOCOL
Similar with the studies from [23]- [25], the literature review process in this study adopted the SLR protocol developed in the Kitchenham and Charters' study [20]. The SLR protocol in this study consists of identifying potential studies, study selection, quality assessment, data extraction, and data analysis. The process of getting the main article can be seen in Figure 1. The study adopted relevant studies, published from 2006-2020 in several journals and proceedings.
Step 1 Identify review needs and problem formulation The systematic literature review is usually needed to summarize the existing information of some phenomena in a comprehensive and unbiased manner [20]. In this step, the problem is formulated, and the research question is developed.
Step 2 Potential Literature Identification This step aimed to obtain the potential literatures that were relevant to the research question. The potential literatures were obtained from electronic database. This research used two electronic databases i.e., Scopus and Web of Science. Since the two electronic databases contain thousands of articles with various topic, this study developed search strategy to both databases so they could bring out only research that are relevant to the research objective. Search strategies are produced only to get certain problems from open innovation and performance. The search was carried out by using Boolean AND with keywords ''Open innovation'' AND ''Performance'' to the title, abstract, and keywords.
Step 3 Study Selection In this step, the literature originating from the previous step is reviewed according to specific criteria. There are four criteria used in this step. First, all articles must be written in English and the full text is available. Second, all articles must provide model that present direct relationship between open innovation and performance. Third, the unit of analysis is an organization. Fourth, there is empirical data that supports the relationship between open innovation and performance.
Step 4 Quality Assessment In the fourth step, articles that pass in step 3 will be reviewed further to check their quality. In this step, it is possible to provide more inclusion and exclusion criteria, check whether the articles conduct the systematic step, analyze and compare the result of each article, etc. Step

Data Extraction
The fifth step relates to the selection of primary studies. This step is aimed to accurately record the information obtained from the primary studies. In this step, researcher will establish the data extraction form. Data extraction step is useful to identify the multiple publication that use the same data and identify the quality of the data used in the study. There are several data to be extracted in this research that was adapted from the study of Ali et al. [24] with several adjustments regarding this research context. The Data Extraction form is presented in Table 1. Step 6 Data Analysis and Synthesis Finally, in step 6, all the articles that is selected from the previous step are analyzed and synthesize to obtain the findings and answer the research question. In this step researcher will summarize the results of the included primary studies.

III. RESULTS AND DISCUSSION
This section presents the result of SLR and the analysis of SLR result to achieve the research objective. This section is presented in several sub-sections including SLR result, degree of open innovation, type of organization, type of open innovation, and open innovation and performance.

A. SLR RESULT
There were in total 287 articles obtained in the first step where 165 articles were obtained from Scopus and 122 other articles were obtained from the Web of Science. From those articles obtained from both databases, there are 60 duplicate articles. In the second step, out of 165 articles from Scopus, 120 articles were excluded because they did not fit the criteria used in this study. Meanwhile, 108 articles from the Web of Science were also issued for the same reason. Next, the remaining 59 articles would be examined and extracted. This process would produce the 33 final articles that are used as primary articles for further discussion. Table 2 and Figure 2 present a list of publishers of the research used as a reference. As can be seen in Figure 2, articles used in this study mostly come from  International Journal Technology Management and European Journal of Innovation Management. Moreover, the articles obtain are mostly come from the management domain journal. Also, in Figure 3 we can see the year of the selected article published. The articles that match with the aforementioned criteria that also described at study selection step are mostly published in 2015 and 2021. Furthermore, between 2006 and 2021, the topic about open innovation and organizational performance still gained interest from researchers. Finally, from the last step, 33 articles were selected as the main articles to be analyzed in this study. The summary of the SLR result is presented in Figure 4. Meanwhile, the summary of the 33 articles can be seen in Table 3.
From the 33 articles obtained through the SLR, 11 articles use Small and Medium Enterprises (SME) as the research object, while 22 articles use other organizations. The summary of the object of the articles is presented in Figure 5. Furthermore, there are various types of industry that become the object of the selected article i.e. manufacturing industry,     innovation has been implemented in various types of industries. The percentage of the type of industry is presented in Figure 6. According to the SLR, it can be concluded that most researchers choose manufacturing industry as the object for open innovation implementation.

B. DEGREE OF OPEN INNOVATION ADOPTION
According to the reviewed articles, the firm performance is influenced by the degree of open innovation adoption which can be associated with the terms ''breadth'' and ''depth'' [13], [17]. The term breadth can be measured by the number of OI modes that is implemented in organization.
The greater number of OI modes that are used in the organization the broader OI practiced in the organization. The term depth reflects the intensity of OI mode being practiced in an organization [13]. Intensity refers to the organization's readiness in implementing open innovation, either that occurs in the internal organization or involves 126960 VOLUME 9, 2021  external parties. The readiness of the organization can include several things, i.e., human resources, organizational systems, organizational policies, and management strategies implemented by the organization.

C. TYPE OF ORGANIZATION
The literature, which is the object of study in this research, explains how open innovation is applied to organizations both large, and small and medium scales. The character of open innovation is different for each organization depending on the scale of the company [31], [35]. Table 3 presents the information on implementation open innovation in large scale organizations or companies. In Table 4, information on the implementation of open innovation in small and mediumenterprises is presented. The implementation of open innovation in an organization both for large-scale companies or SMEs requires the involvement of various parties or stakeholders to consider various aspects. For example: integrated policies for all parties involved in the implementation of open innovation, availability of information internally, access of information (from and out of the organization), performance measurement and adjustment of compensation or additional incentives [29].

1) LARGE-SCALE COMPANIES
Several references analyzed in this study explain that open innovation is one of the policies carried out to improve firm performance and reflects the ability to compete against its competitors. Open innovation carried out by large-scale companies may facilitate these companies to improve their ability to use the latest technology in their production processes. Along with the increased ability to use the technology, the organization or company will improve the firm performance. The following in Table 4 presents data regarding the application of open innovation in large-scale companies. Based on the exploration and the data in Table 4, it can be explained that the implementation of open innovation in large-scale companies is generally supported by adequate financial capabilities and with better human resource competencies [15]. Through the R&D division, the company may conduct some research and technology development for innovation, either internally or through collaboration mechanisms with external parties. Relationships and networking with external parties are supporting factors in implementing open innovation [29], [32], [37].

2) SMALL AND MEDIUM ENTERPRISES
In this study, there are seven references that explain the implementation of open innovation in small and medium enterprises (SMEs). SMEs can implement inbound OI, outbound OI and Coupled OI. The difference in the application or implementation process depends on the type of business. SMEs that implement inbound OI, outbound OI and coupled OI are predominantly businesses that produce services and involve financial aspects in measuring company performance. Meanwhile, SMEs that implement inbound OI and outbound OI are predominantly businesses that produce products. Table 4

presents data regarding the application of open innovation on SMEs.
Based on the literature review in this study and data presented in Table 5, it can be explained that the implementation of open innovation in SMEs has its own challenges. SMEs need the involvement of stakeholders and other external parties in implementing open innovation, for example: funding assistance from the government, NGOs, training from educational institutions, among others.   Based on Table 6 until Table 8, it can be seen that Inbound Open Innovation, Coupled Open Innovation, and Outbound Open Innovation are ubiquitously mentioned by researchers as manifestations or dimensions of open innovation. The three dimensions of open innovation can be implemented in every organization, either large-scale companies or SMEs. However, in general, coupled open innovation is more likely to be applied in large-scale companies as will be explained below.

1) INBOUND OPEN INNOVATION
Inbound open innovation is defined as the innovation activities concerning how to obtain knowledge from external sources (e.g. suppliers, customers, competitors, and universities) for internal use to support internal innovation resource [13], [17]. Several aspects that are included are presented in Table 6.
There are differences in the implementation or activities of Inbound OI in those carried out at large-scale companies and SMEs. In large-scale companies, OI inbound can be in the form of cooperation through the R&D division, research collaboration between institutions, technology transfer, license purchases, patent purchases, copyright purchases, and involving the role of consultants [26], [31], [33]. OI inbound activities at SMEs can be carried out through government participation or assistance through regulations, voice of customers, NGO assistance, independent research institutes, CSR activities from larger companies, and assistance from suppliers [31], [34], [35].
The implementation of inbound open innovation in an organization either at large-scale companies or SMEs is influenced by the character of the organization, organizational culture, geographical/location/country and the type of business or product produced by the organization. Therefore, this research provides an overview in mapping the implementation of inbound open innovation in an organization [31].
The various practices listed in Table 6 by no means serve as an absolute manifestation of inbound OI -in other words, this is a non-exhaustive list that allows for further addition as new circumstances are explored. Despite the association of certain inbound OI practices with whether the entity is an established firm or an SME, the authors believe that these practices are not mutually exclusive. For instance, NGOs involvement is not exclusive to SME as large companies can also engage NGOs in their approach of OI.

2) OUTBOUND OPEN INNOVATION
Outbound open innovation is a process that aims to exploit internal knowledge in a variety of ways both in current market and in innovative new market [13]. Moreover, in a simple way, outbound open innovation can be defined as the external use of internal knowledge [17]. The example of outbound open innovation is presented in Table 7.
In large-scale companies, the outbound OI can be in the form of license, investment, new knowledge, new technology, and commercial products [26]. Outbound OI activities on SMEs can be through open sourcing, collaborative research [13], [31], [34], [35]. Outbound open innovation can be done by an organization if it has been able to implement inbound open innovation [31], [34]. Outbound open innovation generates and contributes to the birth of innovation for external organizations through several platforms, through licenses, copyrights, new technology and so on.

3) COUPLED OPEN INNOVATION
Coupled open innovation is a process where knowledge can flow both inwardly and outwardly through the active collaboration with partners in order to innovate [13] and [17]. Coupled OI requires greater resources, therefore in general can only be applied by large-scale companies. The application of coupled OI in large-scale companies occurs through the active involvement between companies in producing an innovation that is used simultaneously [24]. Aspects involved in coupled OI include co-patents, strategic alliances and joint ventures [26] -as presented in Table 8.

E. ORGANIZATIONAL PERFORMANCE
Every organization or company will try to achieve optimal performance in order to win the competition with its com-  petitors [31], [34]. Performance measurement is carried out in various ways or methods in line with the goals of the organization [34]. The performance of an organization or company can be determined by the magnitude of its ability to carry out an innovation, both innovation in the field of production or service [13], [15].

F. OPEN INNOVATION AND ORGANIZATIONAL PERFORMANCE
Through open innovation, companies can innovate by interacting with external parties [6]. Table 9 presents a list of previous studies that discussed the manifest of open innovation. Open innovation is believed as a strategy to improve company performance [4] as well as economic performance and innovation [6]. Many research show a significant relationship between disclosure and company performance [4], [6]. According to research from Liang, Chen, and Geok-Pee [35] higher levels of open innovation were found to lead to a higher organizational performance. Table 10 Table 9 presents a list of previous studies that discussed the relationship between open innovation and organizational performance. The relationship between open innovation and organizational performance discussed in previous studies is the relationship between innovation processes, open innovation, and performance organization. Therefore, organizations can consider adopting open innovation practices as a mean to improve their performance, which can be in the form of innovation or financial performance.    Table 2 and 3 also shows that the relationship between open innovation and organizational performance could also occur specifically within the organizational performance dimension itself, i.e., financial performance, operational performance, and technological performance. From Figure 2 to Figure 6, the total and mapping of research on the positive relationship between open innovation and organizational performance are presented including the organizational context such as scale and type within which the research was conducted. The mapping reflects an upward trend or interest for organizations to increase internal capabilities to improve performance. This serves as an indication that further research is necessary to help guide organizational leaders to maintain and improve organizational performance.
The systematic literature review conducted in this paper serves as a foundation for future research that discuss policy strategies to improve organizational performance through open innovation implementation. Additionally, the research outcome could also be used as a preliminary study for studies on improving internal innovation capabilities and external innovation exploration. In the present context, this paper could also be a reference for studies that aim to improve organizational performance within the context of the current pandemic as innovation is needed to overcome various limitation within this difficult time. The limitations include but not limited to interaction with consumers, suppliers, and other stakeholders. Such a limitation would be VOLUME 9, 2021 more detrimental for the SMEs in which digitalization of operational activities has not been maximized or even initiated. Therefore, an innovation that is sustainable like open innovation is needed to maintain the existing organizational performance, if not to improve it.
Based on the reference search process in the systematic literature review in this study, a more specific and detailed mapping will be obtained regarding This study provides an overview of the impact of the open innovation preparation process on organizational performance. The literature searched that has been carried out shows the manifestation or role of open innovation in organizational activities. Open innovation in various types, namely inbound OI, outbound OI or coupled OI is a manifestation of the organization to support the achievement of better performance. Each organization can apply different types of open innovation according to the needs and specifications of its business field. Furthermore, with the SLR generated in this study, leaders or top management in an organization can internalize their needs to further determine and implement the suitable type of open innovation in improving organizational performance.

IV. CONCLUSION AND RECOMMENDATION
This research contributes to providing a more updated, comprehensive, and clearer illustration on the importance of an organizational readiness to innovate, especially through open innovation. The involvement with both internal and external stakeholders is an essential component of open innovation, which is why organizations need to thoroughly understand each aspect or variable that could determine a successful open innovation. Open innovation needs to be done in an organization because it provides positive contributions to a betterment of organizational performance.
According to this systematic literature review, most organizational performance is determined by internal innovation factors. It can be concluded that in this study, a systematic literature review was carried out to gain more insight into the relationship between open innovation and organizational performance. There are fifteen studies that were selected as main articles for this review, in which three types of open innovation on organizational performance are identified, namely Inbound OI, Outbound OI and Coupled or Paired OI. This study also illustrates some of the proven organizational performance that is scientifically influenced by open innovation as well as the means by which different organizations implement open innovation -a benchmarking opportunity for organizations.
However, this paper also has some limitations that are worth mentioning. First, the literature review performed in this paper is derived from two well-established databases. In order to achieve an even more comprehensive result, other electronic databases can be included in the study. Second, this study did not differentiate the effect of OI towards organizational performance in different size of company. There might be differences between the OI practice in small and medium enterprise (SMEs) and big organization or companies. Third, the 33 main articles selected for this research did not elaborate the possible drawbacks that occur throughout the process of open innovation such as high coordination cost and uncertainty of profit generation [19]. Therefore, the effect of these phenomena may not be reflected in the relationship between OI and organizational performance. Nevertheless, there is an acknowledgment on how these drawbacks may reflect the nature of initiating and executing an open innovation process. For