Evaluating Innovation Capability in Banking Under Uncertainty

Abstract

The evaluation of innovation capability (IC) plays a key role in an age of keen competition driven by modern technologies, since it enables organizations to review their innovation management process and to adjust their corresponding innovation policies. Moreover, the IC evaluation is, in fact, a multicriteria process with high uncertainty, since the market environments and competitors' performance are both in a dynamic environment. Therefore, the evaluation of IC under uncertainty is vital to organizations. This study proposes a new integrated method for the evaluation of IC in banking organizations by combining the analytic hierarchy process (AHP) and the evidential reasoning (ER) approach in terms of the Dempster-Shafer theory of evidence. Three Vietnamese banks were used as a case study to demonstrate the applicability and validity of the proposed method. Experts in banking-related fields were invited to determine the relative importance weights of critical innovation management practices (CIMPs) and their sub-CIMPs using the AHP and to score the maturity levels of sub-CIMPs at the evaluated banks. The ER approach was then applied to generate aggregated assessments representing the ICs of banks that were finally used for their ranking in terms of IC.

Potential for Frugal Innovation in a Brazilian Regional System: A Study Based on a Multicriteria Approach

“…Khue Ngo et al [60] proposed a new combined method for assessing innovation capability in banks, using AHP and the evidential reasoning approach, based on the Dempster-Shafer theory of evidence. According to their research findings, their proposal can give bank managers a tool to obtain a complete view of critical innovation management practices in their institutions, allowing the systematic checking and assessment of these practices.…”

Identifying Key Assessment Factors for a Company’s Innovation Capability Based on Intellectual Capital: An Application of the Fuzzy Delphi Method

“…Innovation capability is also considered to be the capacity of a firm to generate new ideas, seize opportunities from various sources, and use all these potential aids to drive innovation [39]. From a similar perspective, Ngo et al [40] stated that innovation capability includes all the characteristics and assets of the company that can be used to facilitate and support the company's innovation strategy. All resources, potentials, and assets owned by the company can be referred to as the assessment factors for innovation [10].…”