Role of Novelty in Idea Selection Decisions by Managers and Employees

Master's Thesis from the year 2013 in the subject Economics - Innovation economics, grade: A, Vienna University of Economics and Business (Professional MBA of Innovation & Entrepreneurship), language: English, abstract: Selection amongst proposed innovation projects is crucial to invest and allocate resources§in the most beneficiary and profitable way. In early phases of an innovation process, ideas§or concepts are presented to decision-makers, who have to make investment decisions. In§order to evaluate those ideas, criteria such as novelty, feasibility or user benefit have been§used earlier to structure the idea evaluation process in order to substantiate idea selection§and investment decisions. Previous studies in the scientific environment have found a§systematic penalty for novelty during the idea evaluation process. This study investigates§whether such a negative bias against novel project proposals can be confirmed in the§context of an innovation team competition in the industry environment. The results,§however, indicated that novelty had a positive impact on the investment decision of both§the managers and the employees who evaluated the ideas. Therefore no negative novelty§bias could be confirmed within the current study. The idea evaluations in terms of§novelty, feasibility and user benefit were very consistent between manager and employees.§Several distinct interaction effects between novelty, feasibility and user benefit were§found. Furthermore, evaluators applied different evaluation patterns for different type of§ideas. When favorite ideas were chosen by managers, both novelty and feasibility§preferences of individual raters were observed. The study showed distinct idea evaluation§patterns in the industrial setting, demonstrating that contextual conditions matter.