AI-Mediated Organizational Openness and Competitive Advantage: The Conditional Role of Dynamic Capabilities
RD Management Conference, Track 8.4 Rethinking Openness How AI is Rewriting the Rules of Collaborative Innovation, 2026.
Artificial intelligence is rapidly expanding firms' exposure to external knowledge, partners, and digital ecosystems. Yet greater openness has not produced uniform transformation. This paper asks: how does AI-mediated organizational openness reshape internal routines and capability reconfiguration in established firms, and why do similar levels of openness lead to divergent outcomes? Building on the dynamic capabilities paradigm (Teece, 2007), we draw on a qualitative multi-case study of established firms in an emerging economy to examine how openness is enacted and governed under conditions of intelligent systems. We show that organizational openness is not a linear pathway to capability change. Instead, it operates through an articulated system of decisions concerning strategic boundaries, openness architectures, situated learning, governance culture, and managerial judgment in the use of artificial intelligence. We identify a paradox of AI-mediated openness: exposure expands, but internal reconfiguration does not necessarily follow. While the institutionalization of openness architectures and adjustable boundaries expands firms' cognitive repertoires and enables experiential learning, artificial intelligence acts not as a structural transformer, but as an amplifier of existing capability configurations. It accelerates sensing processes but does not reorganize routines or guarantee capability reconfiguration without alignment with cultural norms, strategic priorities, and governance structures. Recent research suggests that AI may enhance, enable, or replace open innovation practices (Holgersson et al., 2024), yet our findings indicate that such substitution does not eliminate the need for deliberate organizational orchestration. By reframing openness as an internal organizational condition rather than a portfolio of innovation mechanisms, this study challenges prevailing assumptions in open innovation research and advances the dynamic capabilities paradigm in AI-intensive environments. The findings contribute to ongoing debates on how AI is rewriting the rules of collaborative innovation by showing that competitive advantage emerges not from openness alone, but from the disciplined governance of openness over time. Our results have implications for scholars and practitioners seeking to understand when and how organizational openness contributes to resilient innovation in technologically dynamic contexts.
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