In the last decades a consensus on the importance of innovation for business competitiveness and survival has been developed (Rasera & Balbinot, 2010). Historically, large enterprises performed research and development (R&D) activities internally, creating and managing large laboratories that would generate advantage over their competitors (Freeman, 1992). Although researchers sought knowledge from external sources, the risk of developing new technologies with partners led enterprises to focus their innovation activities internally on a model characterized as closed innovation (Chesbrough, 2012). For small enterprises, this was a difficult-to--compete scenario, given their limitations for investing in laboratories and R&D projects.

However, with rising competitiveness, speed and costs of developing new technologies, many enterprises lack the size, resources and skills to innovate (Hasnas, Lambertini, & Palestini, 2014). The need to complement internal resources and share the risks of technological development has led the innovation activity to a new level - from a closed model to the open innovation model (OI). Open Innovation is defined by the use of information and knowledge internal and external to the organization for the development of innovations, mainly through partnerships with other organizations (Chesbrough, 2012). With the OI model, SMEs may seek cooperation with other agents (mainly clients and suppliers, but also universities and applied research centers), boosting technological development and offering new products and services (Brunswicker & Vanhaverbeke, 2015).

Here, innovation emerges through an interactive process of creating and applying knowledge, involving both the business environment - customers, suppliers and competitors - and the academic field - universities, research centers and training centers (Tödtling, Lehner, & Kaufmann, 2009). Borini, Pereira, and Rosseto (2016), based on data from PINTEC (Instituto Brasileiro de Geografia e Estatística [IBGE], 2016), state that in Brazilian universities, training centers and competitors are the main partners of enterprises seeking to develop innovative projects1. Although innovation activities are limited in Brazil, this demonstrates that enterprises do pursue the complementation of their competence for technological development projects through partnerships.

Recent studies have examined the implementation of open innovation practices by enterprises (Vrande, Jong, Vanhaverbeke, & Rochemont, 2009; Dahlander & Gann, 2010; Chiaroni, Chiesa, & Frattini, 2011; Carvalho & Sugano, 2016), evaluating its impact on the performance of companies of different sizes (Spithoven, Vanhaverbeke, & Roijakkers, 2013), and the different strategies of knowledge acquisition and appropriation (Brunswicker & Vanhaverneke, 2015; Freel & Robson, 2016). However, it is not clear in these and other studies which are the mechanisms used in the coordination of collaborative R&D practices, especially in the context of SMEs. SMEs are important ventures for job and income generation (Barbosa & Musetti, 2012) and traditionally face limitations in resources to invest in R&D (Escrivão Filho, Albuquerque, Nagano, & Oliveira, 2017).

Based on such gap this paper aims to analyze how the coordination of collaborative innovation practices in the process of Open Innovation in SMEs occurs. The internal context of enterprises for the adoption of OI strategies is an aspect that still needs to be addressed (Huizingh, 2011). Simultaneously, a limited number of studies analyzes OI in SMEs (Wynarczyk, Piperopoulos, & McAdam, 2013), this being one of the trends of application of the Open Innovation concept (Gassmann, Enkel, & Chesbrough, 2010).

The paper is divided into six sections. After the introduction, the literature review is presented. The third section describes the methodological procedures, followed by results and discussion in the fifth section. In section six, the study’s contributions and conclusion are presented.

Collaboration between different organizations is defined as an interorganizational relationship, in which the objective is to improve partners’ competitiveness (Phillips, Lawrence, & Hardy, 2000). Collaboration comes through a series of ongoing relationships (Håkansson, 1990) and can emerge through sub-contracting, franchising, consortia, alliances, joint ventures, networks and associations (Hardy, Phillips, & Lawrence, 2003). However, enterprises have not always considered collaboration as a strategy for the development of innovations. The option was to develop research internally, thus protecting the new knowledge that was being generated. This model is known as Closed Innovation (Chesbrough, 2012).

In the last decades the closed innovation model has proved insufficient for the context of competitiveness and the need to accelerate technological development. Even large enterprises, with significant R&D budget, have sought opportunities in partnerships with universities and research centers to complement the development of new technologies (Pavitt, 1992), leading to the open innovation model. OI is characterized by the expansion of outsourced knowledge, accelerating the innovation process (Hasnas et al., 2014) and broadening the forms of interaction with the end consumer (Chesbrough, 2012). Open innovation offers access to a wide range of ideas and knowledge (Laursen & Salten, 2006), making it possible to use unprecedented solutions to current problems (Nuvolari, 2004).

Two processes can be identified by enterprises applying the OI concept: the process from inside-out and outside-in (Dahlander & Gann, 2010; Vanhaverbeke & Chesbrough, 2014). The inside-out process is characterized by trading the internal knowledge generated by an enterprise; that is not being used or out of line with its business model (Keupp & Gassman, 2009; Chiaroni et al., 2011). This process, more common among large enterprises with high investments in R&D, foresees the generation of profit for the enterprise through the licensing of patents and the creation of spin-off companies, among other initiatives (Christensen, 2001; Enkel, Gassman, & Chesbrough, 2009).

On the other hand, the outside-in process consists of acquiring knowledge and technology for the development of innovation internally (Keupp & Gassman, 2009). It is the practice of establishing relationships with external organizations to access their technical and scientific competence, complementing the enterprise’s internal assets (Chiaroni et al., 2011). In this model, the enterprise’s knowledge platform is expanded through the internalization of know-how, prototypes, patents or even startups with existing products in emerging markets (Jong, Vanhaverbeke, Kalvet, & Chesbrough, 2008; Enkel et al., 2009; Vanhaverbeke & Chesbrough, 2014; Brunswicker & Vanhaverbeke, 2015). The application of open innovation by SMEs is discussed by Vrande et al. (2009) and Rados and Bozic (2012), who state that the association with external partners can increase the efficiency of these enterprises in the development of innovation, as this partnership complements their internal competence.

However, the success of such cooperation depends on the coordination of collaborative activities between partners. Enterprises that engage in open innovation activities are subject to risks and barriers such as loss of knowledge, costs of coordinating external agents, and loss of control over patents (Enkel et al., 2009; Vanhaverbeke & Chesbrough, 2014). Therefore, the success of open innovation practices is directly linked to the coordination mechanisms of interorganizational relationships.

The research aimed to analyze how Brazilian SMEs perform coordination of collaborative R&D practices based on OI strategy. For this purpose, the definition of SMEs by Brazilian Service of Support to Micro and Small Enterprises (Sebrae) was used, which categorizes the size of an enterprise according to the number of employees. Industries with up to 19 employees are considered micro-companies; between 20 and 99 employees are considered small companies, and 100 to 499 employees are considered medium-sized companies (Serviço Brasileiro de Apoio às Micro e Pequenas Empresas [Sebrae], 2013).

We performed a multiple case study with qualitative approach to reach our goal. This type of method is recommended when it aims to analyze in depth a certain trend (Triviños, 1987). The selection of cases was based on the following criteria: 1. enterprises in the industry sector that have performed some collaborative R&D project in the two years prior to the research; 2. that have less than 499 employees, being configured as a small or medium-sized company. The first criteria aimed to select recent collaborative projects, favoring the description of the coordination mechanisms used.

Based on contacts with managers of technology parks in the metropolitan region of Porto Alegre (RS), three collaborative projects were indicated that met the criteria, resulting in 11 in-depth interviews (Figure 3.1).

Figure 3.1

Project and Objective	Partners	Sector of the market	Respondents job title
(P1): To manufacture supplies for burn wound dressings.	Enterprise 1A	Footwear, automotive, medical-hospital and security.	- Partner and Industrial Director
	Supplier 1B	Production of nano-technological inputs.	- Partner and Technical Director
(P2): To produce a chip with specific characteristics.	Enterprise 2A	Electronic, mechanical and software.	- Partner and Technology Director
	Enterprise Partner 2B	Technology, chip and semiconductor development.	- Chief Executive Officer- Technical director- Project Manager
(P3): To create solutions in educational products considering accessibility to impaired people.	Enterprise 3A	Industry	- Project coordinator- Social Innovation Lab Stakeholder
	University 3B	Education	- Advisor for Inclusive Actions
	University 3C	Education	- System User and disabled person
	Middle school 3D	Education	- Teacher of impaired students

Source: Elaborated by the authors.

Figure 3.1(Cont.)

The projects were organized in the order which interviews took place, being listed as P1 (project 1), P2, and P3. In each project, the enterprise leading open innovation practices was defined as 1A (project enterprise 1), 2A, and 3A. Also, the other participating organizations were identified by the project number followed by the subsequent letter in the alphabet (1B in project 1, 2B in project 2 etc.)

The results demonstrate that open innovation practices discussed in the projects studied are concentrated outwardly evidencing enterprises explore only part of the possibilities of broadening innovation process (Figure 5.1).

Figure 5.1

	Project 1	Project 2	Project 3
OI process	Outside - In	Outside - In	Outside - In
Type of knowledge	Know-HowPrototypes	Know-HowPatents	Know-How

Source: Elaborated by the authors, based on Vanhaverbeke and Chesbrough (2014) and Keupp and Gassman (2009).

As Figure 5.1 demonstrates, two distinct types of knowledge transfer were observed: 1. informal knowledge gained from partners’ experience (described by know-how); and 2. technologies already developed and tested (described by prototypes and patents). The transfer of know-how is inherent to partnerships, because in project alignment meetings, knowledge acquired from each partner is presented and discussed by both parties. Technologies, on the other hand, are characteristic of the types of project; therefore, described only in cases 1 and 2 that predicted the development of new products. The results confirm the findings of Jong et al. (2008), who affirm exchange of experiences is one of the motivations of SMEs to get involved in joint projects. Brunswicker and Vanhaverbeke (2015) complement that interactions of SMEs with partners focused on technology or knowledge utilization offer more benefits to the enterprise as they are more likely to become innovative.

However, knowledge transfer from inward-out was not observed, showing a limitation in the analyzed cases. Although the inward process is considered important by enterprises that want to strengthen their R&D activities, the reverse process was not perceived by these enterprises as advantageous or possible at this time. As Dahlander and Gann (2010) argue, enterprises can be extremely protectionist with internal knowledge, restricting the process from the inside out. In SMEs this process is even more limited (Vrande et al., 2009).

Describing the coordination mechanisms used by the cases analyzed, communication, decision making and negotiation; horizontal inter-unit integration; common staff team; control and planning systems; and public support and infrastructure were noticed (Figure 5.2).

Figure 5.2

Type of mechanism	Project 1	Project 2	Project 3
Decision making and negotiation	X	X	X
Social Coordination and Control	Not observed	Not observed	Not observed
Horizontal inter-unit integration	X	X	Not observed
Common staff team	Not observed	Not observed	X
Hierarchical and authority relations	Not observed	Not observed	Not observed
Control and planning systems	X	X	X
Incentive system	X	X	Not observed
Selection system	X	X	X
Information system	Not observed	Not observed	Not observed
Public support and infrastructure	X	X	Not observed

Source: Elaborated by the authors.

As seen in Figure 5.2, communication, decision making and negotiation mechanisms; control and planning systems, and selection systems were observed in all three cases, demonstrating their importance in OI projects. As reported by respondents, the mechanism of communication, decision making, and negotiation is paramount for the start and operation of the project. The more knowledge is shared between partners, the easier is the decision-making process. In addition, communication routines and negotiation, and decision-making processes favor project follow-up by the different partners, thus allowing differences in opinions over the progress of a project and partial goals, addressing individual objectives.

In turn, the Control and Planning Systems mechanism was operationalized through the definition of project schedule, enabling partial deliveries and, consequently, the finalization of the project. This mechanism is also inherent in project execution, being considered clearly important by the respondents. This result is in line with the findings of Nooshinfard and Nemati-Anaraki (2014), which point out the complexity of knowledge sharing between organizations, and consequently the importance of control and planning mechanisms. As mentioned in the results, control and planning mechanisms are influenced by the mechanisms of communication and decision, since the second will define a proper schedule for the first.

Regarding the other mechanisms adopted, the differences are related to project objectives: projects 1 and 2 have very clear objectives, focused on the development of a specific product. There are goals for partial results; transfer agreement and intellectual property, in addition to federal funding received due to their innovative character. So, incentive systems, horizontal integration, inter-units mechanisms, federal funding and infrastructure are relevant in these projects. As stated by Brass et al. (2004), the need for control among partners is related to their interdependence, which is fundamental in innovation projects. Similarly, Seran et al. (2016) refer to the importance of horizontal integration (another control mechanism) for decision-making in innovation projects. Finally, projects 1 and 2 are supported by federal funding mechanism and infrastructure, adding to the fact public development can foster cooperation, especially in innovation ecosystems such as technology parks and incubators (Etzkowitz, Solé, & Piqué, 2007).

The characteristic of project 3 favored the use of common staff team mechanism. Unlike the mechanism of horizontal integration inter-units, in this case there is a specific team, and not the integration between teams. These mechanisms emerge in Project 3 because of the particular characteristics of the collaboration, which aims an approach with partners to discuss possibilities and applications of new products in a specific market. This is in line with Manning’s (2017) findings, which underscore the importance of interorganizational teaming for knowledge sharing between partners.

Three coordination mechanisms originally proposed by Grandori and Soda (1995) were not observed in the projects: Social Coordination and Control, Hierarchical and Authority Relationships and Information Systems. In relation to the mechanism Social Coordination and Control, it is believed that short term projects do not develop rules and shared identity, which characterize the use of such mechanisms. In turn, a possible explanation for the absence of the Information Systems mechanism is the temporary nature of the projects, which would not justify the development or use of a dedicated information system or specific software for partner interaction. Communi­cation through traditional channels like telephone, email and whatsapp suited this type of project need. As for the mechanism Hierarchical and authority relations, such is used in contexts where there is a leader enterprise or with greater legitimacy to take control. In the three projects analyzed, horizontal and collaborative relations were observed without the predominance of one enterprise’s only authority.

Some difficulties in the execution and implementation of the projects emerged in the interviews, even though this aspect was not one of the objectives of this research. The main difficulty described by respondents was in royalty’s negotiation. This is a sensitive matter in negotiations between enterprises and universities, as enterprises usually understand they do not have to pay royalties for projects they are developing. Universities, in turn, make a point of collecting royalties since they contribute with their own know how in the project. Flexibility and, especially, clarity over intellectual property rules from both parties is the key to minimize deadlocks. Another difficulty mentioned in project 2 was the delay in the transfer of funds from FINEP, which led to delays in the project and the need for extra investment by the enterprise.

In Brazil, the development of innovation in product or process is limited to 36% of enterprises (IBGE, 2016). This number is even smaller in the context of SMEs, as such enterprises have very low R&D incentive schemes. In this sense, the results of this paper demonstrate possible manners to overcome these hardships by opening up the innovation process. The open innovation practices presented in this paper highlight the existing opportunities, both for knowledge sharing stimulated by projects funded with government resources, and for the information of potential clients as a source of product ideas. Even with a limited number of cases, the evidence demonstrates that SMEs can use open innovation practices as a complement to their new product development processes.

Analyzing the open innovation process, the cases show they are at different stages of OI implantation. Case 3 is the most initial, using only one channel to obtain information from clients and users, capturing ideas and testing prototypes through a group of discussions of new technologies - described here by the transfer of applied knowledge. In this case, there are no specific objectives, demanding more efforts from the enterprise to keep this group active, generating new and relevant information. This demonstrates that in the case studied, even without a large budget or a high level technological project, OI practices helped the enterprise benefited by case 3 in the development of new products. In turn, cases 1 and 2 are already somewhat more advanced in the implementation of OI ​​process, since they work with the transfer of prototypes and patents - activity widely described as a reference in OI strategies.

In relation to the main objective of the paper, it was verified that there are differences between projects regarding the use of coordination mechanisms. Projects 1 and 2 present common characteristics of formal research projects, supported by public development funds. They have a defined schedule, follow-up meetings, technology transfer contracts, work teams in each of the participating enterprises, and established communication tools. Project 3, because of its collaborative characteristic, although with well-defined monitoring and communication structures (“for the project not to die”, as one of the respondents said), fit a profile of generation of ideas and concepts, however not really technological development. The interorganizational relationship described by the case generated ideas and aided the prototype test, but development per se was done only within the enterprise. Project 3 demonstrates that, even with incipient open innovation practices, the enterprise applies coordination mechanisms adequate to context.

As a result, we conclude that mechanisms of coordination of interor­ganizational relations help in the implementation of open innovation practices. The mechanisms observed in the three projects are aligned with the strategy employed by the enterprises, demonstrating they are relevant to assist in the management of this type of relationship. Moreover, the results exhibit the flexibility of such mechanisms even in distinct projects, presenting the use of mechanisms in common among them. Thus, the model developed by Grandori and Soda (1995) indicates it can be useful for the coordination of partnerships characterized by open innovation strategy.

Considering the research suggestions of Wynarczyk et al. (2013), this paper contributes to the organizational theory about open innovation, describing how this strategy is used by SMEs. In addition, the identification of mechanisms used to coordinate collaborative projects contributes to the discussion on management of OI initiatives. The cases presented show that the use of OI practices can be supported by contracts, protecting partner enterprises from inherent risks related to this type of project.

Regarding managerial contributions, the research helped managers in the understanding of OI process in collaborative projects. The presented cases have different characteristics, demonstrating the wide range of innovative prospects for enterprises involved in collaborative practices. Even with limited resources for investments in new projects, meetings and specific teams aimed at generating new ideas and concepts favor not only the leading enterprise, but also the suppliers, clients and universities involved in these groups. Finally, open innovation gives enterprises a chance of developing new projects, be it in joint R&D activities, or approaching customers and suppliers.

A recommendation to entrepreneurs interested in applying the concept of open innovation is to consider both the internalization of external knowledge - as in the cases analyzed - and also the externalization of knowledge available within the enterprise. It is noticeable that enterprises usually seek to broaden data collection; however, the practice of outsourcing their technologies is less common. Rather than seeking qualification for in-house projects, enterprises can also market technologies underutilized internally, therefore increasing revenue sources through licensing or even partnerships with other enterprises that will commercially exploit such technologies.

The research came across restrictions on obtaining complementary sources of evidence for the analyzed cases, being limited to interviews with participants and secondary data collection. Another limitation refers to the data context analyzed which did not consider how previous relationships between partners might modify the use of coordination mechanisms in collaborative R&D projects. Future studies may include this perspective in the analysis to broaden the understanding of the impact of these factors on projects. Another suggestion is to conduct longitudinal studies, monitoring collaborative projects over a period of time to understand possible changes in the coordination mechanisms according to a project stage. Carrying out new studies is another proposal to compare results identified in this research with further ones, in order to identify similar and distinct aspects for the construction of a theoretical model. This study serves as an inspiration for other researches on these quoted issues, so not to exhaust the discussion about the question proposed for analyzes.