Factors Influencing Decision Process Innovation Psychological and Organizational Factors Influencing Decision Process Innovation: the Role of Perceived Threat to Managerial Power

Organizations often face complex choices involving uncertainty, trade-offs, and broad consequences, but responding to such situations in rational ways can be hampered by individual decision makers’ cognitive limitations. The framework of decision analysis (DA) provides a unified collection of analytical decisionmaking tools and procedures that are designed to help managers cope with difficult decisions, yet little is known about what influences the ability of firms to innovate with respect to decision-making practices. This paper investigates factors that facilitate and impede adoption of decision process innovations. Integrating individual-level theories of technology acceptance and managerial innovation with organization-level theories of innovation, we present the results of a multilevel empirical survey of 160 senior managers from a variety of organizations. Our survey incorporates measures of individual psychological perceptions, organization structure, and environmental context. We find support for many of the variables that have previously been found to predict innovation, namely attitudes toward the innovation, organizational culture, degree of centralization, and concerns for legitimacy in the institutional environment. Furthermore, we examine a previously unexplored individual-level issue in innovation research, perceived threat to managerial value and control, and find that a key barrier to decision process innovation is the tendency for managers to perceive such innovations as threats to their own value, discretion, and control. This impediment to innovation is mitigated by highly formalized organizational structures, presumably because such structures are characterized by strict rules and hierarchy that are perceived to preserve authority and power.