Evaluating the New: The Contingent Value of a Pro-Innovation Bias
AbstractIt is a central tenet in the literature on organizational change that firms need to explore novel courses of action in order to adapt and survive. Should firms thus exhibit a “pro-innovation bias” when evaluating novel decision alternatives? Or should firms rather assess new opportunities as objectively as possible? Our analysis of a simulation model suggests that a pro-innovation bias can have exploration-enhancing effects that increase long-run performance in complex and stable environments, but can also decrease performance substantially if the bias becomes too pronounced. However, under most other conditions, an unbiased, objective evaluation of novel opportunities is most effective. We also identify a set of contingency factors that strongly affect the value of a pro-innovation bias, which may explain why it is that we see so few firms with such a bias.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 63 (2011)
Issue (Month): 4 (October)
Innovation; Organizational Decision Making; Organizational Exploration and Adaptation; Organizational Search;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
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