The Returns to Nonmarket Strategies During Institutional Transitions: Investor Reactions to Actor and Tie Characteristics

2023 | Organization Science | Citations: 0

Authors: Gatignon, Aline; Gama, Marina A. B.; DeMello, Rodrigo B.

Abstract: We explain how investor perceptions of nonmarket strategies’ legitimacy, and the ... Expand

Abstract: We explain how investor perceptions of nonmarket strategies’ legitimacy, and thereby value, change during institutional transitions toward greater legal compliance. Indirect influence strategies should be better aligned with the transition and therefore become more legitimate than those associated with direct co-optation and control. Moreover, investors should assess this alignment based on two defining characteristics of firms’ nonmarket strategies, namely, the nonmarket actors and the ties involved. We, therefore, expect investors to value firms’ ties to nongovernmental organizations (NGOs) more than to political actors and ties formed via donations more than board ties. We test our hypotheses in the context of seven police raids that took place in Brazil in 2014; these raids launched “Operation Car Wash,” an anticorruption probe that signaled to investors a shift toward greater legal compliance at that point in time. Ultimately, we find that firms benefited the most when both nonmarket actors and ties were aligned with the institutional transition (i.e., NGO donations), and they suffered the most when both characteristics were misaligned (i.e., political board ties). Our findings integrate nonmarket strategies’ political and social facets by showing how actor and tie characteristics jointly explain their success or failure. They also contribute to explaining which firms will be better positioned to weather institutional transitions between legal capture and legal compliance. Funding: This work was supported by Getúlio Vargas Pesquisa-Fundação Getúlio Vargas; Govil Family Faculty Scholar Award; Wharton School, University of Pennsylvania. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2022.1616. Collapse

Topics: database system corporate governance financial performance accounting corporate social responsibility

Methods: Wald test robustness check qualitative interview statistical hypothesis test theory development

Multi-tier Supply Chain Complexity and Buyer Performance in ICT Industry

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Li Liu, Kara; Ozpolat, Koray; Shin, Seung Kyoon

Abstract: The characteristics of suppliers in multi-tier supply chains have drawn more at ... Expand

Abstract: The characteristics of suppliers in multi-tier supply chains have drawn more attention recently in the postpandemic age. Due to the increasing reliance on suppliers, information-communication technology (ICT) buying firms expect to map out their upstream suppliers to identify the characteristics of those suppliers, which might affect their performance. In this paper, we utilize horizontal, vertical, and spatial complexities to examine how complex characteristics of the first-and second-tier suppliers affect the ICT buying firms' financial performance. Our empirical test shows that ICT buying firms' sales growth is affected by multitier suppliers from different industries. Our results bring insights into the role of multi-tier suppliers and their effects on ICT buying firms' financial performance. The research findings contribute to the literature on the complexity of multi-tier supply chains. We also provide practical implications for managers from ICT firms to improve their decision-making and collaboration with multi-tier suppliers. Collapse

Topics: financial performance supply chain management computer hardware decision making database system

Methods: Capital IQ network analysis

Theories: complexity theory

The Impact of Cloud Computing on Firm Performance through Operational Capability

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Mohammed, Niaz; Yoo, Chul Woo

Abstract: Previous literature has shown that the adoption of cloud computing improves the ... Expand

Abstract: Previous literature has shown that the adoption of cloud computing improves the firm performance. However, the path through which cloud computing creates firm performance is not adequately answered in the literature. Adopting the Resource-Based View (RBV), we propose that cloud computing adoption creates operational capability for the firm, which will drive superior firm performance. We will use a two-stage econometric model to test our chain hypothesis to understand better the impact of operational capability creation of cloud computing on the firm's performance. Moreover, we will investigate whether the presence of the Chief Information Officer (CIO) in the Top Management Team (TMT) moderates the operational capability of cloud computing. Collapse

Topics: cloud computing Chief Information Officer organizational productivity database system infrastructure as a service

Methods: econometric modeling Compustat statistical hypothesis test Capital IQ literature study

Theories: resource based view of the firm

Short-Selling Pressure and Workplace Safety: Curbing Short-Termism Through Stakeholder Interdependencies

2023 | Organization Science | Citations: 0

Authors: Qian, Cuili; Crilly, Donal; Lin, Yupeng; Zhang, Keyuan; Zhang, Rengong

Abstract: We advance a multistakeholder framework that highlights the influence of stakeho ... Expand

Abstract: We advance a multistakeholder framework that highlights the influence of stakeholders in tempering short-termist responses to capital market pressures. When firms face pressure from short sellers in the capital market, they sometimes shift attention to short-term stock performance and neglect critical investments that pay off in the long run. Relying on a quasi-natural experiment and establishment-level data on workplace injuries, we find that short-selling pressure causes an increase in employee injuries. Critically, however, the degree to which the response is short-termist depends on the salience of multiple stakeholders (analysts, shareholders, employees, and managers). We discuss the implications for understanding firms’ relations with their stakeholders and, particularly, how these stakeholders influence corporate responses to capital market pressures in ways that matter for long-term value creation. This study also contributes to strategy research by highlighting the downside of capital market deregulation. Funding: Rengong Zhang acknowledges the financial support from the CityU Strategic Research Grant. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1576. Collapse

Topics: IT personell turnover organizational productivity value creation innovation management website

Methods: descriptive statistic natural experiment autocorrelation analysis longitudinal research chi squared test

Are Sustainability Reports Informative About Firm Value and Performance? A Text Mining Approach

2023 | International Conference on Information Systems | Citations: 0

Authors: Srinivasan, Karthik; Rao, Sunita; juma, Norma

Abstract: ... Expand

Abstract: Collapse

Topics: organizational value organizational productivity logistics management personal computer programming language

Methods: sentiment analysis latent dirichlet allocation deep learning qualitative content analysis machine learning method

Theories: institutional theory

Businessperson or Technologist: Stock Market Reaction to the Alignment between CIO Background and Firm Strategy

2022 | Journal of Management Information Systems | Citations: 1

Authors: Banker, Rajiv D.; Feng, Cecilia; Pavlou, Paul A.

Abstract: Chief Information Officers (CIOs) influence their firm's strategy implementation ... Expand

Abstract: Chief Information Officers (CIOs) influence their firm's strategy implementation and facilitate improved firm performance by effectively managing information technology (IT) resources. However, it remains unclear how firms select CIOs and how the stock market perceives the selection. We posit that firms' preferences regarding CIO background (business acumen versus technical expertise) depend on their strategic positioning. Also, we argue that the stock market pays attention to the alignment between the appointed CIO's background and firm strategy. To empirically examine this, we employ factor analysis on a sample of 1,287 CIOs with detailed biographic information on education, work experience, and certification to identify the CIO's background. Utilizing these measures, we examine whether the appointed CIO's background depends on the appointing firm's strategic positioning in a normative model. Then, we use a predictive model to test the stock market reactions to CIO appointments. We document that cost-leadership-leaning firms are more likely to appoint a CIO with a stronger business-oriented background, while differentiation-leaning firms are more likely to appoint a CIO with a stronger technical-oriented background. Interestingly, firms with misaligned CIO appointments suffer a negative stock market reaction. We discuss theoretical and practical implications of selecting aligned versus misaligned CIOs. Collapse

Topics: Chief Information Officer accounting organizational productivity database system financial performance

Methods: Capital IQ descriptive statistic data transformation Compustat factor analysis

Theories: contingency theory

Estimating the impact of cloud computing on firm performance: An empirical investigation of listed firms

2022 | Information & Management | Citations: 17

Authors: Chen, Xi; Guo, Ming; Shangguan, Wuyue

Abstract: This study empirically investigates the economic impact of cloud service adoptio ... Expand

Abstract: This study empirically investigates the economic impact of cloud service adoption on firm performance. We exploit the difference-in-differences models coupled with propensity score-based matching to estimate the per­ formance effect of cloud computing on worldwide listed firms that adopted cloud service during 2010–2016. The results indicate that cloud computing has a significant and positive impact on the profitability and market value of listed firms with varying degrees in both short and long time periods. In addition, the magnitude of the performance effect varies with firm size and industry type. This research contributes to empirical examination on the economic values of IT investments. Collapse

Topics: cloud computing organizational productivity IT investment accounting software as a service

Methods: experimental group propensity score method longitudinal research autocorrelation analysis quasi experiment

Exploring firm strategy using financial reports: performance impact of inward and outward relatedness with digitisation

2022 | European Journal of Information Systems | Citations: 0

Authors: Jabr, Wael; Zheng, Zhiqiang (Eric)

Abstract: A firm’s success critically hinges on its strategies in selecting its portfolio ... Expand

Abstract: A firm’s success critically hinges on its strategies in selecting its portfolio of products and services. In this paper, we study how differentiation and market alignment at the offering level impact firm performance. To that end, we mine firms’ 10-K filings to characterise the portfolio of offerings through the lens of outward relatedness, inward relatedness, and digitisation. We define outward relatedness as a measure of alignment of firm offerings within its market space, inward relatedness as a measure of differentiation of firm offerings with its own past offerings, and digitisation as a measure of the firm’s focus on IT. We find that markets react positively to firms that operate with high levels of outward relatedness, low levels of inward relatedness and high levels of digitisation. However, we find that highly digitised firms do not have to conform to peers’ offerings. Digitisation enables these firms to differentiate by internally diversifying their offerings. Interestingly, our results show that only firms already highly digitised benefit from further digitisation. Collapse

Topics: organizational productivity innovation management research and development database system digital innovation

Methods: natural language processing Compustat descriptive statistic longitudinal research case study

Under Attack! CEO Implicit Motives and Firm Competitive Responses Following Short Seller Activism

2022 | Organization Science | Citations: 0

Authors: Shi, Wei; DesJardine, Mark R.

Abstract: We investigate how CEOs’ implicit motives can shape firms’ competitive intensity ... Expand

Abstract: We investigate how CEOs’ implicit motives can shape firms’ competitive intensity in response to external threats. We examine this phenomenon in the context of short seller activism, which occurs when an activist short seller publicly denounces a firm to drive down its stock price. Implicit motives are motivational dispositions that operate outside of an individual’s conscious awareness. We find that CEOs’ implicit needs for achievement and power are associated with a decrease in competitive intensity following short seller activism, implying that implicit motives can lead CEOs to avoid behaviors that they fear may result in failure or the exposure of weakness in the wake of an external threat. This study contributes to research on external threats and corporate governance by highlighting the role of CEOs’ implicit motives in shaping firms’ responses to activists. We emphasize the importance of integrating implicit motives into upper echelons research. Collapse

Topics: environmental uncertainty accounting financial performance strategic management corporate governance

Methods: probit regression propensity score method Poisson regression longitudinal research theory development

Theories: motivation theory lemon market theory

Demand Effects of the Internet-of-Things Sales Channel: Evidence from Automating the Purchase Process

2021 | Information Systems Research | Citations: 0

Authors: Adamopoulos, Panagiotis; Todri, Vilma; Ghose, Anindya

Abstract: The internet of things (IoT) is rapidly becoming one of the most popular emergin ... Expand

Abstract: The internet of things (IoT) is rapidly becoming one of the most popular emerging technologies in business and society. One of the major verticals that has recently begun to effectively use IoT technologies is the retail industry. Given the unprecedented opportunities IoT generates for brands and retailers, it is important to glean timely insights regarding the business value of IoT and understand whether the introduction of an IoT technology as an alternative purchase channel for consumers affects the sales of physical products. In this paper, using empirical data from a multinational online retailer that adopted an IoT technology that largely automates consumers’ purchases and a quasi-experimental framework, we study the effect of the introduction of IoT on product sales. Our analyses reveal a statistically and economically significant increase in sales as a result of adopting an IoT technology and demonstrate the business value of the IoT channel for retailers and brands. In addition, we conduct analyses of the IoT phenomenon to also delve into the effect heterogeneity and empirically validate the underlying mechanism by examining the impact of IoT for products in different price ranges, levels of substitutability, and product categories (e.g., search versus experience goods and hedonic versus utilitarian), drawing on mental accounting and automaticity theory. For instance, our analyses reveal that less expensive and more differentiated products as well as experience and utilitarian goods can accrue higher benefits leveraging more effectively novel IoT technologies. We validate the robustness of our findings using an extensive set of robustness checks and falsification tests. This is the first paper to study the impact of an IoT technology on product sales, drawing important theoretical and managerial implications and seeding new future research directions for devices and technologies largely automating the purchase process. Collapse

Topics: internet of things mobile system experience good accounting marketing management

Methods: robustness check econometric modeling longitudinal research quasi experiment propensity score method

Theories: transaction cost economics economic theory information processing theory