Opening the Black Box of “Not-Invented-Here”

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


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?


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)


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Towards a framework of Not-Invented-HereThe decision setting

Decision setting: different sources of knowledge externalities

Let‘s build a model of NIH


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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)


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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



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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.


10© David Antons

Towards a framework of Not-Invented-HereThe inner structure of Not-Invented-Here


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




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Towards a framework of Not-Invented-HereBehavioral trajectories of attitudinal functions

- organizational culture- incentives


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


Behavioral responses and outcomes

Contextual factors, e.g. - innovation process

- absorptive capacity- Industry- Strategic orientation


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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?

Opening the Black Box of “Not-Invented-Here”

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