Markus Reitzig and Olav Sorenson

In contrast to prior studies, which have generally argued that the failure of innovations to diffuse within an organization stems from informational or motivational difficulties, we propose that the failure to adopt an innovation can also arise from a form of organizational provincialism. Individuals identify with their subunits within the organization and therefore tend to have biased perceptions against ideas that emerge from other parts of the organization. To explore this idea, this study uses data on innovations inside a large, multinational consumer goods firm to analyze the effects of evaluator and innovator identities on the probability that the evaluator considered the idea of high potential. The results reveal that evaluators are biased in favor of ideas submitted by individuals that work in the same division and facility as they do. The strength of this bias, moreover, decreases with the size of the evaluator’s subunit and with the size and status of the submitter’s subunit.

Link to paper on SSRN

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