Post on 11-Jan-2016
Opening the Black Box of “Not-Invented-Here”Attitudes, Decision Biases, and Behavioral Consequences
David Antons | Frank T. Piller | OUI Conference | 28 July 2014
School of Business and EconomicsTIME Research Area | Innovation, Strategy and Organisation Group (ISO)
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
2© David Antons
Not-Invented-HereA typical challenge to lead-user inventors
Bette Claire Nesmith Graham
Born in 1924 in Dallas
Chief executive secretary for W.W. Overton, Chairman
of the Board of the Texas Bank and Trust
Inventor of Mistake Out
Correction fluid calling it “Mistake Out”
Mixing tempera paint with her kitchen blender
IBM refused to buy the invention
Founder of the Liquid Paper Corporation
Founded in 1956, profitable in 1968
Sold to Gillette Corporation for $47.5 million in 1979
Source: http://www.women-inventors.com/Bette-Nesmith-Graham.asp
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
3© David Antons
Not-Invented-HereA typical challenge to lead-user inventors
Bette Claire Nesmith Graham
Born in 1924 in Dallas
Chief executive secretary for W.W. Overton, Chairman
of the Board of the Texas Bank and Trust
Inventor of Mistake Out
Correction fluid calling it “Mistake Out”
Mixing tempera paint with her kitchen blender
IBM refused to buy the invention
Founder of the Liquid Paper Corporation
Founded in 1956, profitable in 1968
Sold to Gillette Corporation for $47.5 million in 1979
Source: http://www.women-inventors.com/Bette-Nesmith-Graham.asp
A typical case of “not invented here” (NIH):
Why do focal firms reject promising solutions provided openly by the periphery in general and users in particular?
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
4© David Antons
Not Researched Yet?Not-Invented-Here in the literature
„Anecdotal evidence suggests that this phenomenon induces R&D workers to discount or ignore sources of knowledge external to their team or organization...“ (Agrawal et al., 2010)
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
5© David Antons
Towards a framework of Not-Invented-HereThe decision setting
Decision setting: different sources of knowledge externalities
Let‘s build a model of NIH
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
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Not-Invented-Here and external knowledgeWhen is knowledge perceived as external?
Externality with regard to… the (disciplinary) context of the knowledge itself
the source from which the knowledge originates Organizational boundaries: intra- and inter-functional (Bstieler & Hemmert 2010; Song & Swink
2009), as well as inter-organizational transfer (Cassiman & Veugelers 2006; Laursen & Salter 2006)
Spatial distance (Allen 1977; Salomo et al. 2010; Song et al . 2011)
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
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Towards a framework of Not-Invented-HereThe inner structure of Not-Invented-Here
Decision setting: different sources of knowledge externalities- contextual (disciplinary) externality- organizational externality- spatial externality
Inner structure of Not-Invented-Here
Let‘s build a model of NIH
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
8© David Antons
Not-Invented-HereDefining and explaining the bias
Five functions of an attitude (Ajzen 2001; Eagly & Chaiken 1993)
Ego-defensive function: maintaining self-worth and self-concept
Value-expressive function: expressing and affirming central values
Social-adjustive function: fostering social identity
Knowledge function: organizing and structuring ambiguous environments
Utilitarian function: supporting approach or avoidance decisions
We define NIH as a bias triggered by the negatively-shaped attitude of an individual towards knowledge that has to cross a contextual (disciplinary), spatial or organizational (functional) boundary, resulting in either its sub-optimal utilization or its rejection as behavioral consequences of this attitude bias.
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
9© David Antons
Not-Invented-HereBehavioral trajectories of attitudinal functions
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
10© David Antons
Towards a framework of Not-Invented-HereThe inner structure of Not-Invented-Here
Decision setting: different sources of knowledge externalities- contextual (disciplinary) externality- organizational externality- spatial externality
Attitude towards external knowledge- ego-defensive function- value-expressive function- social-adjustive function- knowledge function- utilitarian function
Possibly triggered heuristics, e.g.- psychological ownership- selective information processing- confirmation bias
Not-Invented-Here Bias- underestimation of utility- overestimation of costs
Inner structure of Not-Invented-Here
Let‘s build a model of NIH
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
11© David Antons
Towards a framework of Not-Invented-HereBehavioral trajectories of attitudinal functions
- organizational culture- incentives
Decision setting: different sources of knowledge externalities- contextual (disciplinary) externality- organizational externality- spatial externality
Attitude towards external knowledge- ego-defensive function- value-expressive function- social-adjustive function- knowledge function- utilitarian function
Possibly triggered heuristics, e.g.- psychological ownership- selective information processing- confirmation bias
Not-Invented-Here Bias- underestimation of utility- overestimation of costs
Behavioral responses regarding external knowledge- underutilization- rejection
Performance impact- knowledge exchange- innovation project- firm performance
Inner structure of Not-Invented-Here
Behavioral responses and outcomes
Contextual factors, e.g. - innovation process
- absorptive capacity- Industry- Strategic orientation
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
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Avenues for future researchApplying the NIH framework in different contexts
Measurement of Not-Invented-Here
Direct vs. indirect attitude measures
Consequences of Not-Invented-Here
Testing causal claims
Solving the empirical puzzle of complementarity (Dahlander & Gann 2010; Grimpe & Kaiser
2010) or substitution (Laursen & Salter 2006) of internal and external R&D
Contexts of Not-Invented-Here
Prior research focused on organizational and spatial boundaries neglecting the content
Countermeasures for Not-Invented-Here
De-biasing decision-making vs. inducing compliant behavior through incentives
Levels of analysis
Bottom-up or top-down evolution of Not-Invented-Here?
TIME Research Area | Innovation, Strategy and Organisation Group (ISO)
13© David Antons
David Antons | antons@time.rwth-aachen.de
QUESTIONS AND DISCUSSIONThank you for your attention