Behavioral Biases and Cognitive Pitfalls: Navigating Resource Orchestration in Supplier-Partnered Innovation Projects

Abstract

Innovation projects play a crucial role in maintaining competitive advantage but often experience high failure rates. In this article, we examine how behavioral biases influence supplier resource management in failed innovation projects. Using resource orchestration theory as a lens, we analyze six failed projects, each involving two suppliers, to explore how cognitive biases disrupt critical resource management activities, including structuring, bundling, and leveraging. Key biases, such as overconfidence, optimism, and strategic misrepresentation, were found to skew decision making, prioritizing technical competencies over relational history during supplier selection. This misalignment impaired supplier interactions and knowledge-sharing practices, ultimately contributing to project failure. The findings offer a novel perspective on how cognitive biases undermine resource orchestration and highlight the importance of incorporating collaborative history into supplier selection frameworks. Addressing these biases can significantly improve decision-making processes and enhance the success of innovation projects.