Microfoundations of Innovation in Organizations

This dissertation weaves together three distinct chapters that are unified in their focus on the microfoundations of innovation in organizations. Chapter 1 utilizes a unique NASA employee data set to investigate the effect of promotion reward incentives on knowledge worker innovation. This study is the first to empirically show a positive relationship of promotion incentives with individual innovation outcomes in a field setting while also revealing a decrease in collaboration. This result exposes promotion structure as a potentially powerful tool for affecting innovation. Chapter 2 develops a unique measure of R&D structure and finds that the incentives created by long-term institutional investors lead managers to create a more centralized R&D structure. This study is the first to empirically link ownership orientation, managerial incentives, and R&D structure. Lastly, Chapter 3 is an exploratory investigation of the innovation direction that CEOs with heterogeneous experience take their organization. The surprising results indicate that CEOs hired from outside the firm do not take the firm in a new innovation direction but rather have a lack of direction. Taken in aggregate, the results show that a focus on the microfoundations of innovation in organizations can provide novel and interesting questions for researchers together with managerially relevant answers to those questions