Flourish or Perish? The Impact of Technological Acquisitions on Contributions to Open-Source Software

2022 | Information Systems Research | Citations: 0

Authors: Chen, Wei; Jin, Fujie; Xue, Ling

Abstract: This study examines the impact of technological acquisitions on contributions to ... Expand

Abstract: This study examines the impact of technological acquisitions on contributions to firm-sponsored community-based open-source software (OSS). We distinguish between internal contributors affiliated with target firms and external contributors from the community, and examine how they respond to technological acquisitions differently. Theoretically, we examine how technological acquisition influences contributors’ uncertainty about project quality through a signaling effect and influences their uncertainty about project continuity through potential resource combination. We connect uncertainties with contributors’ motivations to theorize their responses to acquisitions. Empirically, we find that external contributors contribute more actively to both target firms’ sponsored projects and other projects in the OSS community after acquisitions, which contrast with the adverse effects of acquisitions observed in traditional corporate innovation. Although internal contributors reduce contributions to target firms’ sponsored projects after acquisitions, they increase contributions to other OSS projects in the community. We also find that the acquirer’s OSS experience and the project similarity between the acquirer and the target drive both external and internal contributors to shift their development efforts to the acquirer’s projects and other projects in the OSS community. By examining these effort shifts in OSS contributions, our study generates unique theoretical insights about the impacts of technological acquisitions in the OSS context and important practical implications for acquirers, target firms, and the general OSS community. Collapse

Topics: innovation management database system electronic mail absorptive capacity online community

Methods: experimental group robustness check instrumental variables estimation theory development longitudinal research

Theories: uncertainty reduction theory

Bottleneck Resources, Market Relatedness, and the Dynamics of Organizational Growth

2022 | Organization Science | Citations: 0

Authors: Chang, Sungyong; Eggers, J. P.; Keum, D. Daniel

Abstract: Entering a new product market requires assembling a bundle of resources. Because ... Expand

Abstract: Entering a new product market requires assembling a bundle of resources. Because missing a single resource can foil the entire entry effort, we argue that bottleneck resources—those most difficult to obtain or sell externally—anchor the direction of firm growth. We characterize market resources as bottlenecks to product market entry, because they are (on average) more challenging to obtain and sell than technological resources, and we articulate why the importance of market resources varies with the strength of external markets for technology. Using cross-industry data linking firms’ product portfolios with patents, we find resource dynamics whereby market resources drive the strategic decision to enter, and firms fill technological gaps using both internal research and development and external acquisitions (joint ventures and alliances). Our study underscores the importance of resources for firm growth dynamics and specifically highlights market resources as the bottleneck that constrains and directs the direction of product market entry. Collapse

Topics: research and development database system logistics management competitive advantage innovation management

Methods: descriptive statistic theory development robustness check statistical hypothesis test regression analysis method

Does IT Matter to Acquisitions? The Impacts of IT Distance on Post-Acquisition Performance

2022 | Management Information Systems Quarterly | Citations: 0

Authors: Lee, Kyunghee; Han, Kunsoo; Animesh, Animesh; Pinsonneault, Alain

Abstract: Although researchers have examined the role of dyadic dynamics (i.e., interactio ... Expand

Abstract: Although researchers have examined the role of dyadic dynamics (i.e., interactions between the acquirer and the target firm) in the success of acquisitions, little attention has been devoted to the role of information technology (IT). In this study, we extend this literature by examining how pre-acquisition IT distance (i.e., the difference between the enterprise IT systems of the two firms that reflects the system incompatibility and resulting costs of system integration) affects the acquirer’s post-acquisition performance. To measure IT distance, we used a word-embedding technique to map each firm’s IT systems portfolio to a low-dimensional embedding space and calculate the distance between the firms in that space. Using data on U.S. firms’ acquisition activities over seven years, we found that IT distance is negatively associated with the acquirer’s post-acquisition performance. Also, the adverse effect of IT distance is stronger for acquisitions motivated by operational synergies, compared to those seeking non-operational synergies. This finding supports our fundamental premise that IT distance disrupts post-acquisition synergy creation, and more so when the combined firm has a greater need for tight integration to create acquisition synergies. This research contributes to the merger and acquisition (M&A) literature in management and IS by introducing a novel concept of IT distance and by theorizing and empirically examining its performance implications in acquisitions. The findings of this study can inform practitioners on how to devise IT strategies in corporate acquisitions to mitigate IT risks and achieve greater post-acquisition performance. Collapse

Topics: system integration Oracle database enterprise information system value creation IT decentralization

Methods: survey word2vec descriptive statistic word embedding theory development

How Inductive and Deductive Generalization Shape the Guilt-by-Association Phenomenon Among Firms: Theory and Evidence

2022 | Organization Science | Citations: 0

Authors: Naumovska, Ivana; Zajac, Edward J.

Abstract: This study advances and tests the notion that the phenomenon of guilt by associa ... Expand

Abstract: This study advances and tests the notion that the phenomenon of guilt by association-- whereby innocent organizations are penalized due to their similarity to offending organizations-- is shaped by two distinct forms of generalization. We analyze how and why evaluators’ interpretative process following instances of corporate misconduct will likely include not only inductive generalization (rooted in similarity judgments and prototype-based categorization) but also deductive generalizing (rooted in evaluators’ theories and causal-based categorization). We highlight the role and relevance of this neglected distinction by extending guilt-by-association predictions to include two unique predictions based on deductive generalization. First, we posit a recipient effect: if an innocent organization falls under a negative stereotype that causally links the innocent firm with corporate misconduct, then that innocent firm will suffer a greater negative spillover effect, irrespective of its similarity to the offending firm. Second, we also posit a transmission effect: if the offending firm falls under the same negative stereotype, then the negative spillover effect to other similar firms will be lessened. We also analyze how media discourse can foster negative stereotypes, and thus amplify these two effects. We find support for our hypotheses in an analysis of stock market reactions to corporate misconduct for all U.S. and international firms using reverse mergers to gain publicly traded status in the United States. We discuss the implications of our theoretical perspective and empirical findings for research on corporate misconduct, guilt by association, and stock market prejudice. Collapse

Topics: accounting database system financial performance missing data website

Methods: design artifact descriptive statistic literature sample theory development statistical hypothesis test

Theories: lemon market theory

AI on Drugs: Can Artificial Intelligence Accelerate Drug Development? Evidence from a Large-Scale Examination of Bio-Pharma Firms

2021 | Management Information Systems Quarterly | Citations: 0

Authors: Lou, Bowen; Wu, Lynn

Abstract: Advances in artificial intelligence (AI) could potentially reduce the complexit ... Expand

Abstract: Advances in artificial intelligence (AI) could potentially reduce the complexities and costs in drug discovery. We conceptualize an AI innovation capability that gauges a firm's ability to develop, manage, and utilize AI resources for innovation. Using patents and job postings to measure AI innovation capability, we find that it can affect a firm's discovery of new drug-target pairs for preclinical studies. The effect is particularly pronounced for developing new drugs whose mechanism of impact on a disease is known and for drugs at the medium level of chemical novelty. However, AI is less helpful in developing drugs when there is no existing therapy. AI is also less helpful for drugs that are either entirely novel or those that are incremental "followon" drugs. Examining AI skills, a key component of AI innovation capability, we find that the main effect of AI innovation capability comes from employees possessing the combination of AI skills and domain expertise in drug discovery as opposed to employees possessing AI skills only. Having the combination is key because developing and improving AI tools is an iterative process requiring synthesizing inputs from both AI and domain experts during both the development and the operational stages of the tool. Taken together, our study sheds light on both the advantages and the limitations of using AI in drug discovery and how to effectively manage AI resources for drug development.Lynn Wu is an associate professor of operations, information and decisions at the Wharton School of Business, University of Pennsylvania. She researches and teaches how emerging information technologies, such as artificial intelligence and data analytics, affect innovation, business strategy, and productivity. She has won several best paper awards from top journals and flagship conferences in information systems and received two early career awards in information systems. Collapse

Topics: artificial intelligence innovation management online labor market database system research and development

Methods: machine learning instrumental variables estimation experiment propensity score matching scale validation

Theories: resource based view of the firm

Capturing Value in Platform Business Models That Rely on User-Generated Content

2021 | Organization Science | Citations: 0

Authors: Subramanian, Hemang; Mitra, Sabyasachi; Ransbotham, Sam

Abstract: Business models increasingly depend on inputs from outside traditional organizat ... Expand

Abstract: Business models increasingly depend on inputs from outside traditional organizational boundaries. For example, platforms that generate revenue from advertising, subscription, or referral fees often rely on user-generated content (UGC). But there is considerable uncertainty on how UGC creates value—and who benefits from it—because voluntary user contributions cannot be mandated or contracted or its quality assured through service-level agreements. In fact, high valuations of these platform firms have generated significant interest, debate, and even euphoria among investors and entrepreneurs. Network effects underlie these high valuations; the value of participation for an individual user increases exponentially as more users actively participate. Thus, many platform strategies initially focus on generating usage with the expectation of profits later. This premise is fraught with uncertainty because high current usage may not translate into future profits when switching costs are low. We argue that the type of user-generated content affects switching costs for the user and, thus, affects the value a platform can capture. Using data about the valuation, traffic, and other parameters from several sources, empirical results indicate greater value uncertainty in platforms with user-generated content than in platforms based on firm-generated content. Platform firms are unable to capture the entire value from network effects, but firms with interaction content can better capture value from network effects through higher switching costs than firms with user-contributed content. Thus, we clarify how switching costs enable value for the platform from network effects and UGC in the absence of formal contracts. Collapse

Topics: switching cost organizational value network effect website business model

Methods: cross sectional research robustness check computational algorithm ordinary least square Wald test

The Effects of Contract Detail and Prior Ties on Contract Change: A Learning Perspective

2021 | Organization Science | Citations: 0

Authors: Xing, Zhe (Adele); Mayer, Kyle J.; Xie, Xuanli; Reuer, Jeffrey J.; Klijn, Elko

Abstract: Despite the large literature on alliance contract design, we know little about h ... Expand

Abstract: Despite the large literature on alliance contract design, we know little about how transacting parties change and amend their underlying contracts during the execution of strategic alliances. Drawing on existing research in the alliance contracting literature, we develop the empirical question of how contract detail and prior ties influence the amount, direction, and type of change in such agreements during the collaboration. We generated a sample of 115 joint ventures (JVs) by distributing a survey to JV board members or top managers and found that the amount of contract change is negatively associated with the level of detail in the initial contract but is positively associated with the number of prior ties between alliance partners. In relation to the direction of contract change, we find that the level of detail of the initial agreements negatively correlates with the likelihood of removing or weakening existing provisions and that prior collaborative experience positively correlates with the likelihood of strengthening of existing provisions or adding of new ones. We also find that prior ties affect the type of change in that JV parents prefer to change enforcement provisions more so than the coordination provisions in the contract. Our paper generates new insights on the complementarities between relational governance and transaction cost economics perspectives on alliance contracting. Collapse

Topics: asset specificity environmental uncertainty organization learning Xing database system

Methods: survey data transformation regression analysis method chi squared test descriptive statistic

Theories: transaction cost economics

External Learning Strategies and Technological Search Output: Spinout Strategy and Corporate Invention Quality

2019 | Organization Science | Citations: 2

Authors: Cirillo, Bruno

Abstract: The strategic management of knowledge spillovers to employee ventures may provid ... Expand

Abstract: The strategic management of knowledge spillovers to employee ventures may provide firms with knowledge spill-ins or the potential to learn from the ventures that they have spun out. However, the mechanisms underlying knowledge spill-ins and their importance for external learning in uncertain technology environments have not been examined in detail. This article compares corporate venturing (CV) spinouts that are supported by parent firms with independent employee spinouts as well as other strategies for external learning, such as investments and alliances. An analysis of the patenting activities of leading corporations operating in the information and communication technology industry reveals that, ceteris paribus, when firms recombine unfamiliar knowledge components developed by their CV spinouts, their inventions are associated with higher quality than comparable firms’ inventions that recombine knowledge from the firm’s corporate venture capital portfolio ventures, allies, or employee spinouts. This effect is especially pronounced when CV spinout inventors hold parent-specific technological expertise. The results are robust across several econometric specifications that account for selection and intrinsic differences in external learning strategies. Furthermore, the results indicate that CV spinouts benefit their parent firms by reducing uncertainty relative to other strategic formats for external learning in unfamiliar technological areas. The detailed theoretical and practical implications derived from this research reflect perspectives on technology strategy and corporate renewal. Collapse

Topics: research and development innovation management information systems strategy database system human resource management

Methods: descriptive statistic robustness check econometric modeling statistical hypothesis test ordinary least square

Theories: lemon market theory

The Private Scope in Public–Private Collaborations: An Institutional and Capability-Based Perspective

2019 | Organization Science | Citations: 0

Authors: Quelin, Bertrand V.; Cabral, Sandro; Lazzarini, Sergio; Kivleniece, Ilze

Abstract: There has been a growing interest in the organization of business activities at ... Expand

Abstract: There has been a growing interest in the organization of business activities at the public interface as illustrated by the emergent phenomenon of public–private partnerships (PPPs). In this study, we analyze the determinants of private scope in partnering with public actors—that is, the extent to which private actors are involved in multiple, consecutive value-creating activities in the partnership. Based on a unique data set of public–private agreements worldwide over two decades, we find that institutional and capability-based determinants jointly affect the extent of private scope in public–private collaborations. Our results highlight the contingent role of the quality of the institutional environment. Institutions not only facilitate greater private scope directly but also, moderate the effect of public and private capabilities on private scope. We find that prior public experience in PPPs enhances private scope in settings with high-quality institutions while having an opposing effect in low-quality environments. Moreover, public governance capabilities accumulated via units designed to deal with PPPs seem to substitute for the lack of high-quality institutions, suggesting that, even under weak institutional settings, countries can foster high private scope with the creation of pockets of specialized public capabilities. In contrast, private capabilities in PPPs, expressed as firm engagement in recurring government cofunded projects, seem to have a complementary effect: they help to increase private scope in PPPs but only when domestic institutions are of high quality. By highlighting the determinants of private actor involvement in public sector activities, our study offers important implications for the theory and practice of hybrid (cross-sector) organizational forms. The e-companion is available at https://doi.org/10.1287/orsc.2018.1251. Collapse

Topics: database system legal context strategic management website organization learning

Methods: statistical hypothesis test descriptive statistic qualitative coding factor analysis data transformation

Theories: transaction cost economics

Knowledge Transfers in Alliances: Exploring the Facilitating Role of Information Technology

2019 | Information Systems Research | Citations: 24

Authors: Ravichandran, T.; Giura, Simona Ileana

Abstract: Strategic alliances have become popular organizational forms in the last two dec ... Expand

Abstract: Strategic alliances have become popular organizational forms in the last two decades. Prior research suggests alliances promote knowledge sharing between the partners. In this research, using patent data, we study the impact of information technology (IT) intensity on knowledge flows in alliances. Research has shown that prealliance knowledge stocks of the partners facilitate knowledge flows to the focal firm. We find that knowledge flows to the focal firm are enhanced when the focal firm and its partner have high IT intensity. We find support for our theorizing that IT is a necessary complementary resource that facilitates knowledge flows among partners in alliances. Collapse

Topics: research and development knowledge sharing IT investment database system innovation management

Methods: descriptive statistic theory development statistical hypothesis test Student's t-test survey