Inside-out and outside-in orientations: A meta-analysis of orientation's effects on innovation and firm performance

The inside-out and outside-in orientations place differing levels of emphasis on internal versus external resources and capabilities as sources of competitive advantage. While the inside-out orientation primarily considers organizational resources, followed by competitors and customers (implicitly), the outside-in orientation appears to reverse the order by first examining customers and competitors and then the degree to which the firm responds to them, implicitly addressing organizational resources. Existing empirical evidence does not clarify the comparative effects of inside-out and out-side in orientations on innovation performance. This paper draws on 232 independent studies (N = 38,051) analyzed systematically through a quantitative meta-analytic synthesis in order to develop a detailed contextualized elaboration of the relationships between the inside-out and outside-in orientations and innovation performance. Going beyond the direct effects, we also extend the literature by investigating the moderating effects of industry type (high-tech vs. low-tech), economic development (developed vs. developing countries), and cultural context (collectivist vs. individualist cultures). Our findings shed light on the relative value of inside-out and outside-in orientation for innovation performance, the direct and indirect effects of the two orientations on firm performance, and the conditions under which the effectiveness of each is enhanced.