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Open innovation and de-escalation of commitment in underperforming new product development projects

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  • Yang, Miles M.
  • Yang, Feifei
  • Li, Xiaoxuan

Abstract

Escalation of commitment occurs when managers continue to devote efforts to underperforming new product development (NPD) projects, even though doing so carries a high risk of failure. This study investigates the role of open innovation as a de-escalation strategy to reduce managers' commitment to underperforming NPD projects. Two studies involving both qualitative and quantitative approaches were conducted. We began our investigation by interviewing 13 senior managers to provide an initial understanding of open innovation vis-à-vis the escalation of commitment phenomenon. A scenario-based experiment with a sample of 97 senior NPD managers from multiple international companies was further conducted to test the relationship between open innovation and NPD managers' escalation of commitment, as well as the mediation effect of managerial efficacy. We contribute to the field by proposing open innovation as a new de-escalation strategy, and by revealing the affect-based mechanism of open innovation that operates through managerial efficacy.

Suggested Citation

  • Yang, Miles M. & Yang, Feifei & Li, Xiaoxuan, 2023. "Open innovation and de-escalation of commitment in underperforming new product development projects," Journal of Business Research, Elsevier, vol. 164(C).
  • Handle: RePEc:eee:jbrese:v:164:y:2023:i:c:s0148296323003478
    DOI: 10.1016/j.jbusres.2023.113989
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    Cited by:

    1. Chang Lu & Yong Qi & Bo Yu, 2024. "Effects of Domestic and International External Collaboration on New Product Development Performance in SMEs: Evidence from China," Sustainability, MDPI, vol. 16(1), pages 1-19, January.

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