A Scientific Approach to Innovation Management: Theory and Evidence from Four Field Experiments
63 Pages Posted: 31 Mar 2021 Last revised: 23 Jun 2022
Date Written: March 2021
This paper studies the implications of an approach in which managers and entrepreneurs make decisions under uncertainty by formulating and testing theories such as scientists do. By combining the results of four Randomized Control Trials (RCTs) involving 754 start-ups and small-medium enterprises and 10,730 data points over time, we find that managers and entrepreneurs who adopt this approach terminate more projects, do not experiment with many new ideas, and perform better. We develop a model that explains these results.
Keywords: field experiments, Management Practices, Scientific entrepreneurship, strategic decision-making, uncertainty
JEL Classification: L21, L26, M13, M21
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