Agency Conflict in Internal Corporate Innovation Contests

37 Pages Posted: 20 Dec 2016

See all articles by Sam Ransbotham

Sam Ransbotham

Boston College - Carroll School of Management

George F. Westerman

MIT Sloan School of Management

Date Written: December 19, 2016

Abstract

Crowdsourcing innovation aims to solicit a large volume of diverse ideas but inherently increases demands on resources to assess those contributions. As a result, organizations may now crowdsource the assessment of the ideas as well. However, crowd assessment of crowd generated ideas may diverge from organizational objectives. We investigate crowd versus expert assessment in the context of a recurring innovation contest at a global technology company. Textual analysis of 14,697 submitted ideas reveals agency conflict between the two assessments. Experts focus on stated corporate objectives, while the preferences of the employee crowd negatively relate to corporate direction. Topic popularity and social concerns influence crowds of employees. While experts exhibit less agency conflict than employees relative to stated corporate objectives, they are far less numerous and potentially more expensive than employee resources. We identify hybrid mechanisms that balance use of constrained expert resources with the potential assessment biases of the crowd.

Keywords: innovation, crowdsourcing, contests, agency theory

Suggested Citation

Ransbotham, Sam and Westerman, George F., Agency Conflict in Internal Corporate Innovation Contests (December 19, 2016). Available at SSRN: https://ssrn.com/abstract=2887679 or http://dx.doi.org/10.2139/ssrn.2887679

Sam Ransbotham (Contact Author)

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

HOME PAGE: http://www.SamRansbotham.com

George F. Westerman

MIT Sloan School of Management ( email )

245 First Street, E94-1513
Cambridge, MA 02142
United States
617-253-2939 (Phone)

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