Journal Articles (Peer-Reviewed)
(2023): Does familiarity with an idea bias its evaluation?, Plos one, 18 (7): .
Abstract: Although many organizations strive for radical or disruptive new ideas, many fall short of their goals. We propose that a primary reason for this failure is rooted in the individuals responsible for innovation: while they seek novel ideas, they prefer familiar ones. While prior research shows that individuals are biased against ideas with high objective novelty, it has overlooked the role of subjective novelty, i.e., the extent to which an idea is novel or unfamiliar to an individual idea evaluator. In this paper, we investigate how such subjective familiarity with an idea shapes idea evaluation in innovation. Drawing on research from psychology and marketing on the mere exposure effect, we argue that familiarity with an idea positively affects the evaluation’s outcome. We present two field studies and one laboratory study that support our hypothesis. This study contributes to the understanding of cognitive biases that affect innovation processes.
(2023): Distributed decision‐making in the shadow of hierarchy: How hierarchical similarity biases idea evaluation, Strategic Management Journal, 44 (9): 2255-2282.
Abstract: Research Summary Companies are increasingly opening up decision-making, involving employees on all levels in distributed—and purportedly “hierarchy-free”—decision processes. We examine how hierarchy reaches into such “democratized” systems, arguing that it is a source of homophily that biases idea evaluation decisions. Using a data set from internal crowdfunding at one of the world's largest industrial manufacturers, we show that idea evaluators overvalue hierarchically similar others' ideas. Competition in the form of lateral closeness dampens this bias, whereas uncertainty in the form of novelty amplifies this bias. We contribute to the literatures on decision biases in centralized versus distributed innovation and on structural similarity as a driver of employee behaviors. Managerial Summary Many companies are starting to involve employees on all levels in strategic decisions, so as to curb hierarchical rigidities and integrate multiple perspectives. However, such distributed decision-making opens the door to new biases and, ultimately, suboptimal strategic decisions. In the context of internal crowdfunding at a large industrial manufacturer, we show that employees evaluate hierarchically similar others' ideas overly favorably. Thus, hierarchy is not just a source of rivalry, but also of identification, leading to favoritism among hierarchical peers. Further, employees are particularly likely to assess ideas based on hierarchical similarity rather than content if the ideas are novel and therefore hard to evaluate. We provide suggestions for the design of distributed decision-making systems.
(2020): Caught between the users and the firm: how does identity conflict affect employees` innovative behavior?, Creativity and Innovation Management, 29 (3): 380-397.
Abstract: Absorbing external knowledge is crucial for innovation within the organization. One way of tapping external knowledge sources is to rely on employees who reach out across the firm's boundary to external stakeholders and address knowledge sets located beyond the organizational boundary. However, such employees are likely to identify with the stakeholders they reach out to which exposes them to potentially conflicting demands—with positive or negative effects for their employing organization. We investigate whether and how their dual identification with the organization and with users, and the potential identity conflicts this engenders, affects their job satisfaction and innovativeness. We study a sample of 243 employees in two industries, revealing that perceived conflict between organizational identification and user identification detracts from job satisfaction if and only if employees are strongly identified with both targets. We find also that identity conflict is indirectly and negatively related to innovative work behavior through job satisfaction. Our paper contributes to the literature on the benefits and risks of employee ties to external stakeholders. We contribute also to research on embedded users by elucidating under what conditions they are most valuable to their employing organizations.
(2020): Work process-related lead userness as an antecedent of innovative behavior and user innovation in organizations, Research Policy, 49 (6): 103986.
Abstract: Recent studies have identified that employees can be lead users of their employing firm's products, and valuable sources of product innovation, residing within organizational boundaries. We extend this line of thought by recognizing that employees can be lead users with regard to internal work processes. We define work process-related lead userness (WPLU) as the extent to which employees experience unsatisfied process-related needs ahead of others, and expect high benefits from solutions to these needs. We hypothesize a positive association with user innovation in the workplace, evidenced by the development of tools, equipment, materials and methods. We test a moderated mediation model delineating how and when WPLU is related to user innovation within organizational boundaries. Drawing on survey data from 104 employees and 13 supervisors in a forensic services organization, we find that WPLU contributes to user innovation via engagement in innovative work behavior, especially when employees have higher self-efficacy (perceived capability to overcome obstacles) and lower job autonomy (situational constraints on the job).
(2019): The Choice between Uniqueness and Conformity in Mass Customization, R&D Management, 49 (2): 204-221.
Abstract: Extant research emphasizes that consumers use mass customization toolkits to create products they consider to be unique, and that perceived uniqueness is an important part of customer value. This research investigates the conditions of the customer's quest for uniqueness. It is motivated by the observation that decisions are often driven by others’ choices and a desire to fit in, rather than to be distinct. We hypothesize that consumers are more inclined to choose uniqueness for hedonic product attributes but tend toward conformity in utilitarian attributes, and that consumers’ need for uniqueness and product involvement moderate the choice. In a series of experiments, we find support for most hypotheses. We introduce conformity as a driver of choice behavior in mass customization toolkits and suggest that mass customization can best be seen as enabling consumers’ preferred mix of uniqueness and conformity. Our results also inform managerial practice, highlighting that mass customization toolkits should consider customers’ uniqueness and conformity requirements. We suggest reducing the number of utilitarian options while increasing the variety for hedonic attributes.
(2018): Absorptive capacity for need knowledge: Antecedents and effects for employee innovativeness, Research Policy, 47 (4): 687-699.
Abstract: Abstract Innovation occurs when knowledge about unmet customer needs intersects with knowledge about technological solutions. Both knowledge types are often located outside the firm and need to be absorbed in order for innovation to occur. While there has been extensive research into absorptive capacity for solution knowledge, a necessary complement − absorptive capacity for new customer needs − has been neglected. In an individual-level study of 864 employees from a home appliance firm, we show that need absorptive capacity is theoretically and empirically distinct from solution absorptive capacity, and that both are positively associated with employee innovativeness. Interestingly, we find asymmetric extra-domain effects: prior solution knowledge is positively related to need absorptive capacity (cross-pollination effect), while prior need knowledge is negatively related to solution absorptive capacity (attenuation effect). We contrast the cognitive underpinnings of the two absorptive capacity types, contributing to emerging scholarly thinking on the domain-specificity and micro foundations of absorptive capacity.
(2017): The User Innovation Paradigm: Impacts on Markets and Welfare, Management Science, 63 (5): 1450-1468.
Abstract: Innovation has traditionally been seen as the province of producers. However, theoretical and empirical research now shows that individual users—consumers—are also a major and increasingly important source of new product and service designs. In this paper, we build a microeconomic model of a market that incorporates demand-side innovation and competition. We explain the conditions under which firms find it beneficial to invest in supporting and harvesting users’ innovations, and we show that social welfare rises when firms utilize this source of innovation. Our modeling also indicates reasons for policy interventions with respect to a mixed user and producer innovation economy. From the social welfare perspective, as the share of innovating users in a market increases, profit-maximizing firms tend to switch “too late” from a focus on internal research and development to a strategy of also supporting and harvesting user innovations. Underlying this inefficiency are externalities that the producer cannot capture. Overall, our results explain when and how the proliferation of innovating users leads to a superior division of innovative labor involving complementary investments by users and producers, both benefitting producers and increasing social welfare.
(2015): Market failure in the diffusion of consumer-developed innovations: Patterns in Finland, Research Policy, 44 (10): 1856-1865.
Abstract: Abstract Empirical studies have shown that millions of individual users develop new products and services to serve their own needs. The economic impact of this phenomenon increases if and as adopters in addition to the initial innovators also gain benefits from those user-developed innovations. It has been argued that the diffusion of user-developed innovations is negatively affected by a new type of market failure: value that others may gain from a user-developed product can often be an externality to consumer-developers. As a result, consumer innovators may not invest in supporting diffusion to the extent that would be socially optimal. In this paper, we utilize a broad sample of consumers in Finland to explore the extent to which innovations developed by individual users are deemed of potential value to others, and the extent to which they diffuse as a function of perceived general value. Our empirical analysis supports the hypothesis that a market failure is affecting the diffusion of user innovations developed by consumers for their own use. Implications and possible remedies are discussed.
(2015): Embedded lead users - The benefits of employing users for corporate innovation, Research Policy, 44 (1): 168-180.
Abstract: Abstract While most of the literature views users and producers as organizationally distinct, this paper studies users within producer firms. We define “embedded lead users” (ELUs) as employees who are lead users of their employing firm’s products or services. We argue that 5ELUs6 benefit from dual embeddedness in the user and producer domains; it shapes their cognitive structure and enables them to better absorb sticky need knowledge from the user domain. We hypothesize that 5ELUs6 are more active than regular employees in acquiring, disseminating, and utilizing market need information for corporate innovation. Using survey data from the mountaineering equipment industry (n = 149), we test and support our hypotheses. Additional robustness checks reveal that the observed effects are indeed due to lead userness rather than to affective product involvement or job satisfaction. We discuss theoretical and managerial implications, as well as directions for future research on this empirically important but hitherto under-researched phenomenon.
(2014): The Effect of Selective Openness on Value Creation in User Innovation Communities, Journal of Product Innovation Management, 31 (2): 392-407.
Abstract: Open innovation research and practice recognize the important role of external complementors in value creation. At the same time, firms need to retain exclusive control over some essential components to capture value from their product and/or service system. This paper contributes to the literature by analyzing some of the trade-offs between openness to external value creation and closedness for internal value capture. It focuses on selective openness as a key variable and investigates how it affects value creation by external complementors, specifically the members of user innovation communities. Openness, it is hypothesized, matters to community members: The more open a product design is, the higher their sense of involvement in the innovation project, and the larger the effort they devote to it. Unlike prior literature, different forms and loci of openness are distinguished, specifically the transparency, accessibility, and replicability of different components of the product being developed.Hypotheses are tested based on survey data (n = 309) from 20 online communities in the consumer electronics and information technology hardware industries. Multilevel regression analysis is used to account for clustering, and thus nonindependent data, at the community level. We find that openness indeed increases community members’ involvement in the innovation project and their contributions to it. Interestingly, however, some forms and loci of openness strongly affect community perceptions and behavior, while others have limited or no impact. This finding suggests that, at least in relation to user communities, the trade-off that firms face between external value creation and internal value capture is softer than hitherto understood. Contingency factors that may be able to explain these patterns are advanced. For example, users are expected to value the form of openness that they have the capabilities and incentives to exploit.The findings in this paper extend the literature on selective openness in innovation. They emphasize the need to study the demand for different forms of openness at the subsystem level and align supply-side strategies to it. In managerial practice, a careful assessment of the demand for openness enables firms to successfully use selective openness and to effectively appropriate value from selectively open systems.
(2013): The rise and fall of interdisciplinary research: The case of open source innovation, Research Policy, 42 (5): 1138-1151.
Abstract: A large, and purportedly increasing, number of research fields in modern science require scholars from more than one discipline to understand their puzzling phenomena. In response, many scholars argue that scientific work needs to become more interdisciplinary, and is indeed becoming so. This paper contributes to our understanding of the evolution of interdisciplinary research in new fields. We explore interdisciplinary co-authorship, co-citation and publication patterns in the recently emergent research field of open source innovation during the first ten years of its existence. Utilizing a database containing 306 core publications and over 10,000 associated reference documents, we find that inquiry shifts from interdisciplinary to multidisciplinary research, and from joint puzzle solving to parallel problem solving, within a very few years after the inception of the field. “High-involvement” forms of interdisciplinary exchange decline faster than “low-involvement” forms. The patterns we find in open source research, we argue, may be quite general. We propose that they are driven by changes in task uncertainty and the ability to modularize research, among other factors. Our findings have important implications for individual scholars, research organizations, and research policy.
(2013): Innovation process benefits: The journey as reward, Sloan Management Review, 55 (1): 33-39.
Abstract: When business executives and economists think about whether developing an innovation will be worthwhile, they tend to focus on the economic value of the outcome of the innovation process. However, the authors argue, that standard cost-benefit assessment is seriously incomplete when applied to individual innovators. These individuals can gain significant benefits from participation in a development process as well as or even instead of benefits from using or selling the innovation created. When innovation project sponsors can offer volunteer innovators such benefits, the net cost of those innovation projects can be much lower. The authors define innovation process benefits as all those benefits that innovators will get if they directly participate in the innovation development process and will not get if somebody just hands them the solution to an innovation challenge. Important examples of innovation process benefits include enjoyment and learning obtained from participation in the project, as well as reputational gains obtained from being known as having made high-quality contributions. Innovation process benefits are distinct from benefits associated with using or selling the innovation created. They are only available to participants in the development process. Together with other researchers, one of the authors studied the range of motivations experienced by consumer- innovators individuals creating or modifying consumer products to better fit their personal needs. Both a study of Finnish consumer-innovators and a study of consumer-innovators in whitewater kayaking found that motivations for these innovators included not only a desire to use or sell their innovations but also enjoyment and learning gained from the innovation process, as well as a desire to help others. The authors note that designing innovation projects with individual volunteers innovation process benefits in mind can amplify total investment in R&D and innovation in societies by making it attractive for some consumers to devote some fraction of their leisure time to that purpose. The net effect is to make innovation cheaper from the societal perspective and also from the perspective of an innovation project sponsor.
(2011): Warum Kunden in Online-Communities innovieren: Ergebnisse einer Motiveanalyse, Zeitschrift für Betriebswirtschaft, 81 (5): 47-81.
Abstract: For companies, online communities (OCs) have become a potent means of rapidly and easily identifying user needs as a result of the social and technological changes within the Web 2.0. Some OCs even are suited ideally for integration into NPD as they frequently have innovative members. Despite their growing relevance, however, user innovation activities within OCs still are underexplored. The members’ motivations to innovate and contribute to OCs in particular are part of a young line of research requiring further investigation. This research provides an in-depth netnographic analysis of innovative, privately operated OCs dedicated to tangible consumer products. Most fundamentally, we differentiate 1) motives to join OCs, 2) motives to innovate, and 3) motives to publish innovations in OCs. This is the first study to categorize the motives of innovative OC members depending on the stages of their membership as well as situational factors. Our results support companies in understanding and classifying the members’ motives in independent customer OCs. This is a precondition for the development of specific incentives that stimulate innovative user activities in OCs and contribute to customer integration.
(2011): The sticks and carrots of integrating users into product development, International Journal of Technology Management, 56 (1): 21-39.
Abstract: Users can be a prolific source of innovation. Nonetheless, many firms remain reluctant to integrate users into new product development. This is partly attributable to an insufficient understanding of ways in which firms can influence user activity to reap its benefits while reducing potentially adverse side-effects. This paper investigates by which instruments firms can affect the cost and benefit expectations that users attach to innovation activities and thereby influence user activity in terms of its level and focus. The analysis relies on prior empirical findings on purposive user guidance by manufacturers. We conclude that companies can indeed affect user activity and advance propositions on optimal strategies. Our findings can inform scholarly debate on the contingency factors of user innovation activity.
(2011): Free revealing in open innovation: a comparison of different models and their benefits for companies, International Journal of Product Development, 13 (2): 95-118.
Abstract: In open innovation processes, free-revealing of information has proliferated in the wake of distributed electronic communication systems. Many scholars have coined a multitude of concepts to explain this free-revealing phenomenon and to develop models of organising innovation based on it. These models are partly overlapping, partly exclusive, and partly encompassing. In an extensive literature review, we identify five such concepts and research streams: collective invention, user innovation networks, commons-based peer production, crowdsourcing and open-source innovation. We compare and contrast these models along several dimensions. We present an integrative perspective on the five models and derive implications for research and practice.
(2010): How Open is Open Source? – Software and Beyond, Creativity and Innovation Management, 19 (3): 248-256.
Abstract: Traditionally the protection of intellectual property is regarded as a precondition for value capture. The rise of open source (OS) software and OS tangible products, so-called open design, has challenged this understanding. Openness is often regarded as a dichotomous variable (open-source vs. closed-source) and it is assumed that online developer communities demand full opening of the product’s source. In this paper we will explore openness as a gradual and multi-dimensional concept. We carried out an Internet survey (N = 270) among participants of 20 open design communities in the domain of IT hardware and consumer electronics. We find that open design projects pursue complex strategies short of complete openness and that communities value openness of software more highly than openness of hardware. Our findings suggest that open design companies can successfully implement strategies of partial openness to safeguard value capture without alienating their developer community.
(2009): From open source in the digital to the physical world: a smooth transfer?, Management Decision, 47 (10): 1610-1632.
Abstract: Purpose – The purpose of this paper is to investigate the transferability of the open source principles of product development from the realm of software to the realm of physical products.Design/methodology/approach – Based on the inherent differences between software and physical products, a theoretical discussion of the challenges that face the implementation of open source principles in the physical world are provided. A multiple case study methodology is adopted to provide insights into the applicability of the open source concept in product development outside software.Findings – Many of the challenges identified theoretically are actually encountered in practice. To cope with these challenges effectively, hardware design activities can be translated into software development tasks, using programmable hardware. When dealing with open source projects in the physical realm, it is useful to distinguish between projects driven by commercial firms and those driven by individuals, as each project type can impose different conditions on successful implementation.Originality/value – Although much scholarly attention has been devoted to open source software, the issue of transferability of the identified principles to other industries has undergone little in‐depth research. This paper provides a solid foundation for further investigation of this topic based on theory and empirical case examples. It derives recommendations for industrial experts wishing to benefit from the open source model in new product development.
(2009): On the open design of tangible goods, R&D Management, 39 (4): 382-393.
Abstract: Open source software development has received considerable scholarly attention, much of which is based on the presumption that the ‘open source model’ holds some lessons of broader applicability. Nonetheless, our knowledge of its deployment outside the software industry is very limited. This paper focuses on the open source development of tangible objects, the so-called open design. We propose a generalised definition of open source development. Drawing on 27 exploratory interviews and six comparative case studies selected from a pool of more than 75 projects, we analyse the workings of open design. The analysis reveals that open design is already being implemented in a substantial variety of projects with different organisational and institutional structures.
(2008): The dynamics of user innovation: Drivers and impediments of innovation activities, International Journal of Innovation Management, 12 (3): 377-398.
Abstract: Users have proven to be a principal driving force of many innovations in different industries. Therefore, more and more firms try to identify avenues to systematically involve users into their new product development. Despite the growing interest in user-driven or user-centred innovation, both in academia and industry, the drivers and impediments affecting the evolvement of user innovation activities over time have only recently become a focus of analysis. This study aims to examine user innovation over time and contribute to the extension of the existing model of user-driven innovation to a more dynamic setting. For this purpose, we study the evolution of user innovation in a field of sports equipment, a high-performance sailboat called Moth. We analyse innovation activities over several decades based on secondary data, interviews and survey results. We find that the level of user activity does not follow a unidirectional trend, but rather develops depending on a number of contextual factors. This suggests that, given a stimulating setting, user innovation can be sustained over long periods of time.
Journal Articles (Professional)
(In Press): Opening the floodgates: How big companies can reap the benefits of internal crowdfunding, Business Horizons: .
(2017): Not macht erfinderisch: Wie Nutzer zu Innovatoren werden, Ökonomenstimme, November: .
Abstract: Viele Innovationen basieren auf der Initiative unzufriedener Nutzer. Die Messung und Modellierung dieser sogenannten User Innovation steckt allerdings noch in den Kinderschuhen, wie dieser Beitrag zeigt. Innovationen entstehen in den Forschungs- und Entwicklungsabteilungen großer Unternehmen oder in Start-ups. Etwas vereinfacht dargestellt, bestimmt dieses Verständnis bis heute das ökonomische, gesellschaftliche und politische Nachdenken darüber, wie unsere Volkswirtschaft innovativer, wachstumsstärker und wohlhabender werden kann. Komplementär zu diesem Verständnis etabliert sich zunehmend ein neues Paradigma, das jeden einzelnen Bürger als mögliche Quelle von Innovationen in den Fokus stellt. Das Forschungsfeld der User Innovation hat u.a. drei stilisierte Fakten zu Tage
(2007): So halten Sie Konkurrenten auf Distanz, Harvard Business Manager, Harvard Business Manager, November: 66-74.
Abstract: Unternehmen, die lange Zeit vor Konkurrenz geschützt waren - durch Patente oder staatliche Monopole -, sind oft schlecht auf den drohenden Wettbewerb vorbereitet. Drei Strategien helfen, Umsätze und Gewinne auch nach der Marktöffnung zu verteidigen.
(2006): Der Patentauslauf von Pharmazeutika als Herausforderung beim Management des Produktlebenszyklus, Gabler: Wiesbaden, 978-3-8349-2523-7..
Abstract: Der Patentauslauf ist ein einschneidendes Ereignis im Lebenszyklus pharmazeutischer Produkte. Durch den Markteintritt generischer Wettbewerber büßt das Originalpräparat meist innerhalb weniger Monate einen erheblichen Teil seines Umsatzes ein. Für die Höhe der nach dem Patentauslauf erzielbaren Umsätze sind neben dem Verhalten der Generikaanbieter die gewählte Patentauslaufstrategie und ihre Umsetzung in den Bereichen Marketing und Vertrieb bestimmend. Christina Raasch entwickelt eine umfassende Systematik der durch forschende pharmazeutische Anbieter einsetzbaren Patentauslaufstrategien und leitet die Erfolgsfaktoren der Strategieimplementierung ab. Die 2. Auflage wurde durchgesehen und korrigiert.
: Nutzer- und produzentenbasierte Logistik-Start-ups - Ressourcen, Strategien, Erfolge, in: Schwemmer, Martin and Patrick Seeßle (ed.): Logistik-Start-ups - Entstehung der "Neuen Logistik" aus Wissenschafts- und Unternehmenssicht, Springer.
: Individuals’ knowledge and their explorative and exploitative behaviors, in: Tiwari, Rajnish and Stephan Buse (ed.): Managing Innovation in a Global and Digital World: Meeting Societal Challenges and Enhancing Competitiveness, Springer Fachmedien: Wiesbaden, 183-203.
Abstract: A growing body of literature has been focusing on the question how individuals in organizations combine exploitation and exploration so as to help organizations become ambidextrous. We take a knowledge-based perspective to understand employees’ explorative and exploitative behaviors and conceptualize knowledge-based precursors to these behaviors along two dimensions: (1) focus on internal and external knowledge (level of existing knowledge vs. absorptive capacity) and (2) knowledge domain (need vs. solution knowledge). This focus addresses two significant gaps in the ambidexterity research (Lavie et al. 2010; Raisch et al. 2009): (1) the tensions of focusing on internal vs. external knowledge and (2) the interactions between different knowledge domains.
: Die Integration des Kunden in den Innovationsprozess – Eine Untersuchung zu Mass Customization von Produkt-Service Systemen, in: Vogel-Heuser, Birgit, Udo Lindemann and Gunther Reinhart (ed.): Innovationsprozesse zyklenorientiert managen: Verzahnte Entwicklung von Produkt-Service Systemen, Springer Berlin Heidelberg: Berlin, Heidelberg, 206-219.
: Nutzer und Hersteller im Lebenszyklus disruptiver Produkt- und Service- Innovationen, in: Vogel-Heuser, Birgit, Udo Lindemann and Gunther Reinhart (ed.): Innovationsprozesse zyklenorientiert managen: Verzahnte Entwicklung von Produkt-Service Systemen, Springer Berlin Heidelberg: Berlin, Heidelberg, 220-230.
: The Dynamics of User Innovation: Drivers and Impediments of Innovation Activities, in: Flowers, Stephen and Flis Henwood (ed.): Perspectives on user innovationv. 16, Imperial College Press: London.
: Management des Patentauslaufs, in: Schöffski, Oliver, Frank-Ulrich Fricke and Werner Guminski (ed.): Pharmabetriebslehre, Springer Berlin Heidelberg: Berlin, Heidelberg, 215-231.
Abstract: Der Patentschutz spielt in vielen Branchen eine zentrale Rolle als Schutz vor Imitationskonkurrenz118 und damit als Innovationsanreiz119. In der pharmazeutischen Industrie ist der Patentschutz besonders bedeutsam. Dieses liegt erstens in langen Forschungs- und Entwicklungszeiten und damit dem hohen Risiko einer Markteinführung des entdeckten Wirkstoffs durch einen Wettbewerber begründet. Zweitens besteht ein für Innovatoren besonders ungünstiges Verhältnis zwischen hohen Innovations- und geringen Imitationskosten. Und drittens ist der durch Patente gewährte Schutz in der pharmazeutischen Industrie besonders wirksam: Das Angebot desselben Moleküls durch einen Wettbewerber ist aufgrund der herrschenden Transparenz unmöglich; würde er aber ein außerhalb der Patentbreite liegendes abgeleitetes Molekül anbieten wollen, müssten zuvor zeit- und kostenintensive klinische Studien durchgeführt werden.
(2017): Hierarchical Similarity Biases in Idea Evaluation: A Study in Enterprise Crowdfunding, Kiel Working Paper 2095 ed.: IfW: Kiel.
Abstract: To be successful innovators, organizations must select the best ideas for implementation. Extant research shows that idea selection is distorted by a number of biases, but has failed to consider hierarchy, a key element of organizations. We examine how hierarchical distance between an idea’s creator and its evaluator affects evaluation outcomes and thus advance three competing theoretical predictions based on homophily, competition, and status. To test our predictions, we use a unique dataset from an enterprise crowdfunding initiative at Siemens where 265 employees evaluated 77 ideas by allocating corporate funds, resulting in 20,405 evaluation dyads. We find that idea evaluations are more favorable if the idea creator is hierarchically similar to the evaluator, thus supporting the homophily perspective. Idea novelty amplifies this bias, inducing more social evaluations. Our findings are robust to various specifications and tests, and are absent in a subsample where idea creators remained anonymous. We contribute to the idea evaluation research and inform organizational idea selection process designs.