Antecedents of Idea Management Capability: An Empirical Investigation of Idea Management Systems

Abstract

Idea management systems (IMS), or the tools aimed at collecting contributions for both internal improvements and new products and services, are an emerging area of interest to operations management. Yet little is known about the best practices to manage ideas in organizations. In this study we empirically examine how the idea management (IM) best practices of collaborative work environment (CWE), employees' participation (EP), communications networks (CN) and external sources of ideas (ESI) affect a firm’s capability for managing new ideas and, ultimately, its propensity to innovate (P2I). Additionally, we develop multi-item measurement scales that have sufficient psychometric properties of validity and reliability to be useful for theory building and testing in this area. We use structural equations modeling (SEM) and a sample of 120 companies that have IMS to empirically test the hypothesized model.

We have found that IM best practices can be conceptualized by four dimensions: CWE, EP, CN and ESI, which are key antecedents of IMC. In turn, IMC has a positive impact on P2I. In other words, the analysis of a sample of 120 companies has confirmed that the proposed organizational routines have an impact on the capability to manage ideas, which in turn has an impact on the propensity to develop innovative products and services and enhance existing ones. The metrics we propose in this work are a useful benchmarking tool for practitioners to monitor and improve their business’s idea management practices. To the best of our knowledge, we are the first to operationally define and measure IM best practices in the context of services firms.

Keywords: Idea management systems, Idea management best practices, Idea management capability, propensity to innovate

JEL Classification: O31