Open innovation (OI) offers new strategies for educational innovation and change. Whereas collective knowledge creation and external knowledge inputs are essential to OI, schools must embrace knowledge sourcing and exchange. Especially leadership and social interactions are key to OI. A microfoundational perspective on OI posits that micro-level organisational actions and interactions mediate macro-level associations. On this behalf, individuals’ negative attitudes toward external knowledge, such as the Not Invented Here Syndrome (NIH), can hinder knowledge exchange and disrupt OI. This study uses multilevel structural equation modelling to investigate the microfoundations of OI in schools. Following microfoundational research principles, Coleman’s bathtub model is employed to analyse the relationship between transformational leadership (TL), leader-member-exchange (LMX), teachers not invented here syndrome (NIH), and OI. Data from 1,178 Malaysian teachers and 54 school leaders is analysed. The results offer new insights into the underlying social mechanism influencing OI in schools and demonstrate the impact of micro-level interactions. Teachers’ NIH and positive teacher-principal relationships (LMX) are pivotal to fostering OI and mitigating NIH.