Why Territorial Managers Stifle Innovation — and What to Do About It

Dilip has been working hard on a game-changing idea for a new product. But when he excitedly approaches his boss to share it and get approval for further development and testing, his proposal is quickly rejected. Instead of offering constructive feedback on how to make the idea workable, his boss vaguely refers to a lack of budget and discourages Dilip from pursuing any further ideas.

Sound familiar? Sadly, such scenarios are all too common in many organizations.

Employee creativity and innovation are critical to the success of organizations today. However, when employees do generate novel ideas, they often fail to receive encouragement or see their ideas materialize. Managers are a significant contributor to this phenomenon; even when they profess to value creativity, they routinely reject innovative ideas proposed by employees, preventing their implementation. Why do managers say no to ideas that could benefit their companies and even themselves?

Researchers have so far focused on personality factors, managers’ economic mindsets, or managers’ general aversion to uncertainty as explanations for this stifling of employee ideas. For example, one study has suggested that because managers are always focused on the financial consequences of their decisions, they reject novel ideas whose financial outcomes cannot be reliably forecast. However, as we discuss in our paper in Organization Science, there are deeper reasons for such rejection, rooted in managers’ self-interests, underlying fears, and insecurities.

Managers have typically ascended to their positions by honing their expertise and finding success within specific task domains. They may have pioneered successful new ideas that have contributed to their professional reputations. As a result, it is natural for them to feel a sense of ownership and attachment to these domains, viewing them as their own territories. Being identified with a domain — whether a field of expertise or an area of responsibility — is crucial within organizations, as it grants the individual credible access to resources, decision-making authority, and the final say in domain-related conflicts.

However, this strong attachment to one’s domain can manifest in territorial behavior as well. When subordinates propose ideas for new products or processes that can disrupt the status quo, it can trigger feelings of insecurity among managers who fear losing control or being overshadowed by their subordinates. This can prompt defensive territorial actions aimed at safeguarding what they perceive as rightfully theirs.