Evaluating Innovation Capability in Banking Under Uncertainty

Abstract

The evaluation of innovation capability (IC) plays a key role in an age of keen competition driven by modern technologies, since it enables organizations to review their innovation management process and to adjust their corresponding innovation policies. Moreover, the IC evaluation is, in fact, a multicriteria process with high uncertainty, since the market environments and competitors' performance are both in a dynamic environment. Therefore, the evaluation of IC under uncertainty is vital to organizations. This study proposes a new integrated method for the evaluation of IC in banking organizations by combining the analytic hierarchy process (AHP) and the evidential reasoning (ER) approach in terms of the Dempster-Shafer theory of evidence. Three Vietnamese banks were used as a case study to demonstrate the applicability and validity of the proposed method. Experts in banking-related fields were invited to determine the relative importance weights of critical innovation management practices (CIMPs) and their sub-CIMPs using the AHP and to score the maturity levels of sub-CIMPs at the evaluated banks. The ER approach was then applied to generate aggregated assessments representing the ICs of banks that were finally used for their ranking in terms of IC.