Managerial Decision Making in Open Innovation: The Effect of Individual Hierarchy Level on the Evaluation of Customers’ and Employees’ Ideas

(1) Research Question
How does a manager’s individual hierarchy level affect the assessment of creativity and feasibility of innovation ideas from customers and employees?
(2) Method and Data used
We conducted an online-experiment with 113 managers. 34.5% of managers said to be part of the top management team (board members) of their company, whereas 65.5% were categorized as lower level managers (e.g. heads of a department, team managers or project managers).
(3) Key Contributions to the academy and the practice
The academic contribution of this research is threefold: First, our research extends current literature on managerial decision making within innovation processes. Secondly, we contribute to existing research on construal level theory (for a review: Wiesenfeld, Reyt, Brockner, & Trope, 2017) by manipulating psychological distance within an innovation scenario in two ways: the source of presented innovation ideas (an employee’s vs. a customer’s idea) and the individual hierarchy level of managers. Thirdly, we apply current theories on creativity as well as feasibility perception and evaluation to a management context (Mueller, Melwani, & Goncola., 2011; Mueller, Wakslak, & Krishnan, 2014). For practitioners, the present research identifies relevant patterns of managerial decision-making and respective biases of managers regarding the evaluation of ideas within open innovation and especially crowdsourcing initiatives. Furthermore, the current study is part of a set of investigations, striving for relevant insights how organizations can influence biases regarding managerial decision making and idea selection processes.
(4) Summary of Findings
Our study revealed that top-managers, processing information on higher construal levels, tend to distinct creativity ratings of an idea, depending on its source (customer’s vs. employee’s ideas). Lower-level managers showed no difference in their creativity evaluations, but differentiated their feasibility rating in respect to the idea provider (customer vs. employee) while top-managers did not. In addition, post hoc analysis showed that especially the evaluation of customers’ ideas benefit from this rating biases of top and lower level management.