Choosing among alternative new product development projects: The role of heuristics

Abstract

The initial screening decision that marketing managers make is critical. It requires the selection of what innovation project to invest in, which is fundamental to marketing success. However, our knowledge of how managers make these decisions and how this impacts performance is limited. By drawing upon cognitive psychology and the managerial decision-making literature, we address two critical questions. The first question focuses on identifying specific decision-making types (e.g., specific heuristics, intuition) used when making an innovation screening decision. Based on this analysis and prior research, we develop specific decision-maker profiles about how an individual manager decides. The second research question is about connecting these profiles with performance. Specifically, it addresses what the consequences of different decision-maker profiles are on the perceived accuracy and speed of decision-making? Data were collected from 122 senior managers in these industries. We find that when heuristics are used alone, or concurrently with intuition, managers make decisions that are as accurate as when they rely on analytical decision-making. However, the process is significantly faster. The findings provide an important step toward a more comprehensive understanding of decisionmaking at the front-end of innovation.

Selecting Innovation Projects: Do Middle and Senior Managers Differ When It Comes to Radical Innovation?

“…Our findings show that middle and senior managers vary in how they distribute their attention towards innovation characteristics: middle managers put more emphasis on characteristics that are directly related to successful project implementation (e.g., social capital, internal knowledge resources) while senior managers are concerned about value capture (e.g., IP protection). Thus, we extend previous research by showing that middle and senior managers' attention is directed by a specific set of characteristics (i.e., simple rules) used in their innovation decision‐making (Eklund and Mannor, 2021; West et al, 2020). Specifically, we find that although managers on the two structural levels were provided with the same information, they attended to different sets of innovation characteristics and exhibited different decision‐making models.…”

How Does CEO Decision Style Influence Firm Performance? The Mediating Role of Speed and Innovativeness in New Product Development

“…Priority heuristics can evaluate the viability of new ideas as precisely as, but much faster than, complex analyses (Jetter and Albar, 2013), thus freeing up resources to search larger landscape areas. In contrast, more information‐intensive analyses reduce the resources available for further search and are unlikely to improve idea selection (West et al, 2020).…”

Intuition as Emergence: Bridging Psychology, Philosophy and Organizational Science

“…So the article has formed the basis of a number of subsequent influential literature reviews, conceptual contributions, and methodological and empirical works; drawing from it, scholars have differentiated intuition from related constructs (Hodgkinson et al, 2008(Hodgkinson et al, , 2009aSadler-Smith, 2010, 2015Salas et al, 2010;Blume and Covin, 2011;Akinci and Sadler-Smith, 2012, 2013, 2020Baldacchino, 2013Baldacchino, , 2019Baldacchino et al, 2015;Healey et al, 2015;Pratt and Crosina, 2016;Calabretta et al, 2017;Okoli et al, 2021;Sadler-Smith et al, 2021). In addition, the article has spread over psychology and neuroscience (Hodgkinson et al, 2008;Hogarth, 2010;Gore and Sadler-Smith, 2011;Hodgkinson and Healey, 2011;Ben-Soussan et al, 2020;Keck and Tang, 2020;Korteling and Toet, 2020;Li et al, 2020;Stephens et al, 2020;West et al, 2020;Muñoz-Cobos and Postigo-Zegarra, 2021;Reynolds et al, 2021;Yu et al, 2021;Zhang et al, 2021), as well as distant disciplinary domains, such as medicine and health sciences (Glatzer et al, 2020;Cameron and Singh, 2021;Chlupsa et al, 2021) or engineering and design (Cash and Maier, 2021;de Rooij et al, 2021;Paige et al, 2021;…”