Results

Found 4 articles

Clear filters

Cultivating a Leadership Pipeline: Using a Real Options Lens to Understand Executives’ Strategic Staffing Decisions
PDF
2023 | Organization Science | Citations: 0
Authors: Campion, Michael C.; Campion, Emily D.; Campion, Michael A.; Bauer, Talya N.

Abstract: This paper adapts real options theory to explain how executives create and maint ... Expand

Abstract: This paper adapts real options theory to explain how executives create and maintain real options portfolios within leadership pipelines. Hypotheses flowing from our theorizing predict that executives often make seemingly risky staffing decisions for leaders who occupy stepping-stone positions. Focusing on their option (future potential) rather than project (current productivity) value, executives laterally transfer leaders in stepping-stone positions frequently, despite it resulting in lower short-term job performance, but often promote these leaders at lower levels of performance and sooner. Once leaders are promoted to destination positions where they may stay indefinitely, executives tend to transfer high-performing leaders more often but not when they are still improving the effectiveness of their current unit. We present evidence suggesting that executives make these decisions to improve other units and maintain a flexible system, possibly recapturing previous investments in developing those leaders. We provide empirical support for our hypotheses using eight years of data in a large retail organization (n = 25,004) where executives overseeing thousands of units made internal mobility decisions. These findings refine real options theory, show that it explains these phenomena better than existing theories, and provide important and immediately usable practical implications for executives. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1608. Collapse

Semantic filters: odds ratio options theory

Topics: task productivity real option IT career productivity human resource management

Methods: statistical hypothesis test descriptive statistic theory development logistic regression focus group

Theories: real options theory options theory
Unravelling the Business Value of Artificial Intelligence

2023 | Americas Conference on Information Systems | Citations: 0
Authors: Du, Kui; Li, Gaoyong; Li, Liang; Zhang, Wei

Abstract: This study aims to investigate how firms can prepare for artificial intelligenc ... Expand

Abstract: This study aims to investigate how firms can prepare for artificial intelligence (AI) adoption and how AI creates business values for adopting firms. We propose that, first, leveraging AI for value creation depends on the presence of an enabling resource foundation, consisting of a stack of technological and managerial resources. According to the real options theory, the stronger such a resource foundation is, the more valuable the option it creates for a firm to adopt AI, and consequently the firm is more likely to exercise the option to adopt. Second, we propose that, after adoption, the depth of AI use can have negative impacts on employee productivity, while the breadth of AI use can have positive impacts. We empirically validate these hypotheses based on a sample of 6,854 manufacturing firms in a coastal province in China. Collapse

Semantic filters: odds ratio options theory

Topics: artificial intelligence individual productivity organizational value value creation productivity

Methods: survey experiment regression analysis method

Theories: real options theory resource based view of the firm options theory
Artificial Intelligence in the Workplace: Implementation Challenges and Opportunities

2023 | Americas Conference on Information Systems | Citations: 0
Authors: Raftopoulos, Marigo; Hamari, Juho

Abstract: This study aims to investigate how firms can prepare for artificial intelligenc ... Expand

Abstract: This study aims to investigate how firms can prepare for artificial intelligence (AI) adoption and how AI creates business values for adopting firms. We propose that, first, leveraging AI for value creation depends on the presence of an enabling resource foundation, consisting of a stack of technological and managerial resources. According to the real options theory, the stronger such a resource foundation is, the more valuable the option it creates for a firm to adopt AI, and consequently the firm is more likely to exercise the option to adopt. Second, we propose that, after adoption, the depth of AI use can have negative impacts on employee productivity, while the breadth of AI use can have positive impacts. We empirically validate these hypotheses based on a sample of 6,854 manufacturing firms in a coastal province in China. Collapse

Semantic filters: odds ratio options theory

Topics: artificial intelligence individual productivity organizational value value creation productivity

Methods: survey experiment regression analysis method

Theories: real options theory resource based view of the firm options theory
Corporate Structure, Indirect Bankruptcy Costs, and the Advantage of De Novo Firms: The Case of Gene Therapy Research
PDF
2014 | Organization Science | Citations: 0
Authors: Sosa, M. Lourdes

Abstract: Current literature demonstrates that, at least initially, incumbents invest less ... Expand

Abstract: Current literature demonstrates that, at least initially, incumbents invest less in the in-house development of a new technology than do entrants, whether diversifying or de novo; this is because, for incumbents, new technology challenges managers’ mental models through changes in capabilities, revenue models, or product features. What has not been explored, despite its significance for strategic action, is whether (and if so, why) incumbent, diversifying, and de novo firms might invest differently across variants of a new technology through a discontinuity. This paper uses unique quantitative, archival, and interview data on the investment choices of incumbent, diversifying, and de novo firms around three variants of biotechnology—small-molecule, large-molecule and gene therapy drugs—to show there are differences in investment choices across groups of firms and to suggest that these can be explained through differences in volatility of outcomes across variants. When volatility in product performance generates volatility in firm-level outcomes, de novo firms can cap negative consequences through bankruptcy, an alternative that is extremely costly for established firms (whether incumbent or diversifying), given their complex corporate structure. By keeping indirect bankruptcy costs low, de novo firms’ simple corporate structure allows them to extract option value from volatility, making established versus de novo firms the key groups for analysis of investment choices, not incumbent versus entrant firms. This article thus identifies the interaction between a technological investment’s volatility and de novo firms’ simple corporate structure as the explanatory variable for the observed investment differences. I discuss implications for technology strategy and the competitive analysis of discontinuities. Collapse

Semantic filters: odds ratio options theory

Topics: research and development database system organization structure risk management information systems strategy

Methods: qualitative interview archival research case study experiment statistical hypothesis test

Theories: options theory

Page 1 of 1

AIS11

Journals

Conferences

Semantic Filter

Found 4 articles

Cultivating a Leadership Pipeline: Using a Real Options Lens to Understand Executives’ Strategic Staffing Decisions

Unravelling the Business Value of Artificial Intelligence

Artificial Intelligence in the Workplace: Implementation Challenges and Opportunities

Corporate Structure, Indirect Bankruptcy Costs, and the Advantage of De Novo Firms: The Case of Gene Therapy Research