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ABSTRACT The study aimed to identify the nature of the application of open innovation systems within Saudi organizations. The study also sought to determine the different factors that can positively or negatively affect the implementation of open innovation systems. Also, the thesis is going to discuss the different effects of open innovation systems on the organizational performance and the quality of final outputs. Finally, the researcher sought to explore the different challenges that hamper the application of these systems. To achieve the study objectives, the researcher used analytical descriptive method using questionnaires and interviews with (250) managers, executives and employees in some industrial and technological companies in the Kingdom of Saudi Arabia. The results of the study can be summarized as follows: (1) The First axis "Factors affecting the implementation of open innovation within organizations" came, from the perspective of the respondents, with a very high degree, as the general mean of the total score of the second axis came by (4.44) with a standard deviation of (.332). (2) The second axis "Effects of open innovation on the organizational performance" came with a (very high) degree from the perspective of the study respondents, as the general mean of the first axis came by (4.35) with a standard deviation of (.513). (3) The axis of "Challenges face the implementation of open innovation systems within organizations" came with a (very high) degree from the perspective of the study respondents, as the general mean of the third axis came by (4.38) with a standard deviation of (.547). (4) The study recommended enhancing the capability for innovation and creation as they are considered the key to distinction and excellence for small and large facilities and attracting creative people and experts to work in the organization. Taking into account the different open innovation factors, many organizations seek to look for other effective models to make full use of the innovation process within organizational contexts, this paves the way for the introduction of what is called open innovation. It has been proposed as a mechanism through which different organizations can expand their profit scales by depending on knowledge and technology. The effective implementation of open innovation requires more investment in research and development and employment of active employers who can develop innovative ideas. Here, Open innovation, as a model of innovation, has appeared as a strategic option for many companies nowadays especially while admitting the fact that, organizations can't depend only on their internal capabilities in order to achieve their goals, and thus the organizational orientation moves towards making full use of external knowledge and experiences that can be obtained from external players and stakeholders in an attempt to enhance their capacity and profitability and enable them to sustain and compete at the global markets. Nowadays, organizations are playing a pivotal role in the integration of sustainable environmental management activities into SCM practices. Therefore, the strict policy regulations from governments, environmental agencies, and pressure from other social groups force firms to implement a sustainable production process. Subsequently, companies are exploring new ways to reduce adverse environmental impacts. Recently, green innovation activities have emerged to be vital for SMEs incorporating green supply chain activities. However, the coordination and cooperation with business partners for green supply chain practices remain challenging because SMEs are resource-constrained and unwilling to accept changes required for green initiatives. Therefore, it is crucial to select feasible suppliers who are already implementing green innovation activities in their routine operations. This st