Extending the enterprise for improved innovation

Purpose – Complexity, turbulence, and unpredictability have driven the emergence of a new firm's model, namely the extended enterprise (EE). The EE is an emerging business framework, addressing the current challenges related to innovation and competition in complex scenarios. The purpose of this paper is to provide a clear and unambiguous description of the EE, and how it differentiates from the network firm. Moreover the paper discusses also how the EE is evolving and what are the key strategies enabling the EE to attain his goals. Design/methodology/approach – The paper reviews different literature, such as supply‐chain, manufacturing, marketing, innovation, and management with the aim to provide a clear definition of the EE. Findings – This article identifies the key characteristics of the EE, such as opening the innovation process to external innovators, acquiring and redistributing knowledge with different stakeholders, network coevolution, trust, and technologies. Increasingly, it discusses the importance of fostering tacit and explicit knowledge sharing and of aligning values to achieve the goals of the EE. Originality/value – There are very few papers discussing the characteristics of the EE and they are all outdated. This is one of the first papers that attempts also to identify the governance mechanisms that managers can adopt to achieve the goals of the EE.