Problem‐solving effort and success in innovation contests: The role of national wealth and national culture

• Author: Jesse Bockstedt,Anant Mishra,Cheryl Druehl
• DOI: http://doi.org/10.1016/j.jom.2014.12.002
• Published date: 01 May 2015
• Date: 01 May 2015

Journal of Operations Management 36 (2015) 187–200

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

Problem-solving effort and success in innovation contests:

The role of national wealth and national culture

Jesse Bockstedta,1, Cheryl Druehl b,∗,1, Anant Mishrab,1

aEller College of Management, University of Arizona, United States

bSchool of Business, George Mason University, United States

article info

Article history:

Received 12 March 2014

Received in revised form

15 December 2014

Accepted 17 December 2014

Available online 26 December 2014

Accepted by Daniel R Guide

Keywords:

Innovation contests

Problem solving

National culture

Crowdsourcing

Econometric analysis

abstract

Innovation contests allow firms to harness specialized skills and services from globally dispersed partici-

pants for solutions to business problems. Such contests provide a rich setting for operations management

(OM) scholars to explore problem solving in global labor markets as firms continue to unbundle their

innovationvalue chains. In this study, we examine the implications of specific types of diversity in innova-

tion contests on problem-solving effort and success. First, we conceptualize diversity among contestants

in terms of national wealth (measured as gross domestic product per capita (GDPP) adjusted for pur-

chasing power parity) and national culture (measured using the culture dimensions of performance

orientation and uncertainty avoidance) and examine how such factors influence problem-solving effort.

Next, we examine how differences between contestants and contest holders in terms of the above factors

influence contest outcomes. Using data from a popular online innovation contest platform and country-

level archival data, we find that contestants from countries with lower levels of GDPP are more likely to

exert greater problem-solving effort compared to other contestants. With regard to national culture, we

find that performance orientation and uncertainty avoidance have positive and negative effects, respec-

tively, each of which weakens with increasing levels of GDPP. Finally, our analysis provides evidence of

homophily effects indicating that contestants who share greater similarities with the contest holder in

terms of national wealth and national culture are more likely to be successful in a contest. We discuss the

implications of the study’s findings for contest holders and platform owners who organize innovation

contests, and for emerging research on innovation contests.

© 2014 Elsevier B.V. All rights reserved.

1. Introduction

Rapid growth in social media and the global reach of the Internet

have fundamentally changed the way firms execute the vari-

ous activities of their innovation value chains (Chesbrough, 2007;

Billington and Davidson, 2013). Firms are seeking novel ways to

collaborate and develop new products and services to meet the

increasingly competitive pressures of the “flat world” (Friedman,

2005; Metters et al., 2010). To facilitate this, recent years have

seen an emergence of cost-effective “innovation contests” that

harness specialized skills and services from a crowd of globally dis-

tributed individuals to provide new creative ideas and solutions to

∗Corresponding author. Tel.: +1 7039939760.

E-mail addresses: bockstedt@arizona.edu (J. Bockstedt), cdruehl@gmu.edu

(C. Druehl), amishra6@gmu.edu (A. Mishra).

1Note: Authors are listed in alphabetical order.

challenging business problems (von Hippel, 2005; Terwiesch and

Ulrich, 2009).

While innovation contests, such as those conducted on

InnoCentive.com,99designs.com, and Logomyway.com, have seen

significant growth in recent years, the notion of such contests per

se is not new. A frequently cited historical example is the “Longi-

tude Prize” contest that was held by the British Parliament in the

18th century (Jeppesen and Lakhani, 2010). Open to the general

public and with a prize amount of up to £20,000, the goal of the

contest was to find a practical method for accurately determining

the longitude position of a ship in transoceanic voyages. As another

example, in 1795 Napoleon launched a competition with a prize

amount of 12,000 francs to invent a method of preserving food for

his army (Wagner, 2011). Interestingly, both contests are based on

important operational problems.

Notwithstanding their existence over centuries, innovation con-

tests today differ from traditional contests discussed above in a

fundamental way. Specifically, online platforms decentralize the

http://dx.doi.org/10.1016/j.jom.2014.12.002

0272-6963/© 2014 Elsevier B.V. All rights reserved.