Building an Equilibrium: Rules vs. Principles in Relational Contracts

2023 | Organization Science | Citations: 0

Authors: Gibbons, Robert; Grieder, Manuel; Herz, Holger; Zehnder, Christian

Abstract: Effective collaboration within and between organizations requires efficient adap ... Expand

Abstract: Effective collaboration within and between organizations requires efficient adaptation to unforeseen change. We study how parties build relational contracts that achieve this goal. We focus on the “clarity problem”—whether parties have a shared understanding of the promises they make to each other. Specifically, (a) a buyer and seller play a trading game in several periods; (b) they know their environment will change but do not know how; and (c) before any trading occurs, they can reach a nonbinding agreement about how to play the entire game. We hypothesize that pairs whose initial agreement defines a broad principle rather than a narrow rule are more successful in solving the clarity problem and in achieving efficient adaptation after unforeseen change. In our baseline condition, we indeed observe that pairs who articulate principles achieve significantly higher performance after change occurred. Underlying this correlation, we also find that pairs with principle-based agreements were more likely to both expect and take actions that were consistent with what their agreement prescribed. To investigate a causal link between principle-based agreements and performance, we implement a “nudge” intervention that induces more pairs to articulate principles. The intervention succeeds in coordinating more pairs on efficient quality immediately after the unforeseen change, but it fails to coordinate expectations on price, ultimately leading to conflicts and preventing an increase in long-run performance after the shock. Our results suggest that (1) principle-based agreements may improve organizational performance but (2) high-performing relational contracts may be difficult to build.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Funding: We gratefully acknowledge financial support from the Massachusetts Institute of Technology Sloan School's Program on Innovation in Markets and Organizations.Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1503. Collapse

Topics: competitive advantage organizational productivity organizational culture anonymity

Methods: experiment descriptive statistic survey laboratory experiment statistical power analysis

Theories: game theory organizational theory

Social Exchange and the Reciprocity Roller Coaster: Evidence from the Life and Death of Virtual Teams

2023 | Organization Science | Citations: 1

Authors: Hergueux, Jérôme; Henry, Emeric; Benkler, Yochai; Algan, Yann

Abstract: Organizations are riddled with cooperation problems, that is, instances in which ... Expand

Abstract: Organizations are riddled with cooperation problems, that is, instances in which workers need to voluntarily exert effort to achieve efficient collective outcomes. To sustain high levels of cooperation, the experimental literature demonstrates the centrality of reciprocal preferences but has also overlooked some of its negative consequences. In this paper, we ran lab-in-the-field experiments in the context of open-source software development teams to provide the first field evidence that highly reciprocating groups are not necessarily more successful in practice. Instead, the relationship between high reciprocity and performance can be more accurately described as U-shaped. Highly reciprocal teams are generally more likely to fail and only outperform other teams conditional on survival. We use the dynamic structure of our data on field contributions to demonstrate the underlying theoretical mechanism. Reciprocal preferences work as a catalyst at the team level: they reinforce the cooperative equilibrium in good times but also make it harder to recover from a negative signal (the project dies). Our results call into question the idea that strong reciprocity can shield organizations from cooperation breakdowns. Instead, cooperation needs to be dynamically managed through relational contracts.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Funding: This research was funded by the consolidator grant agreement [Grant 647870] from the European Research Council, European Union’s Horizon 2020 Research and Innovation Programme (Yann Algan).Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1515. Collapse

Topics: public good programming language open source virtual teamwork organizational success

Methods: experiment ordinary least square archival research descriptive statistic survey

Enhancing Perceived Fairness of AI-Based Personnel Selection Procedures: The Role of AI Certification

2023 | International Conference on Information Systems | Citations: 0

Authors: Kleiner, Romina; Hartwich, Nicole; Antons, David

Abstract: Organizations increasingly integrate artificial intelligence (AI) into their se ... Expand

Abstract: Organizations increasingly integrate artificial intelligence (AI) into their selection procedures, for example, to analyze selection interviews. However, prior research indicates that applicants react negatively to an AI as decision agent in selection interviews. Only few studies have addressed possible mechanisms to mitigate negative effects of AI usage on applicant reactions, calling for increased research attention. The present experimental study (N=180) is among the first to test whether AI certification has the potential to positively influence people's fairness perceptions of AI usage. Consistent with previous research, our results show that people are less attracted to an organization that conducts AI-based (compared to human-based) selection interviews, partially due to lower procedural fairness perceptions. With regards to AI certification, we highlight the crucial role of the certification label's perceived trustworthiness in shaping applicants' procedural fairness perceptions and organizational attraction. Future research should investigate factors that enhance the trustworthiness of an AI certification label. Collapse

Topics: artificial intelligence electronic commerce pandemic data quality anonymity

Methods: qualitative interview experiment mediation analysis statistical hypothesis test experimental design

Theories: signaling theory management theory procedural justice theory

Disentangling Emotional and Cognitive Factors of Escalation of Commitment: Evidence for a Psychophysiological Link

2023 | European Conference On Information Systems | Citations: 0

Authors: Marx, Carolin; Uebernickel, Falk

Abstract: Escalation of commitment -the tendency to persist with failing courses of actio ... Expand

Abstract: Escalation of commitment -the tendency to persist with failing courses of action -can determine whether a distressed Information Systems (IS) project can be turned around. To disentangle the emotional and cognitive factors that give rise to escalation we conducted a between-subject randomized controlled laboratory experiment with 75 Master, MBA, and Ph.D. students, including data triangulation between neurophysiological and behavioral measures. This study successfully replicates the bias in the context of IS project distress, provides evidence for a psychophysiological link, supports the predictions on the role of negative and complex emotional states of self-justification theory over coping theory, and adds to a better understanding of how escalation tendency changes over time due to learning effects. Our findings contribute to enhancing decision-making in uncertain environments by using cognitive and emotional markers and thereby provide the foundation for developing neuro-adaptive de-escalation strategies. Collapse

Topics: decision making IT project artificial intelligence cloud computing decision support

Methods: regression analysis method simulation biometric measurement experiment descriptive statistic

Theories: self justification theory cognitive dissonance theory cognitive theory

The impact of IT–business strategic alignment on firm performance: The evolving role of IT in industries

2023 | Information & Management | Citations: 0

Authors: Pesce, Danilo; Neirotti, Paolo

Abstract: This study proposes and validates a new industry taxonomy to understand the use ... Expand

Abstract: This study proposes and validates a new industry taxonomy to understand the use of IT that generates superior economic returns based on the specific economic and competitive characteristics of four different industry types and the strategic role of IT in each of these industry environments. Our findings extend the well-established industry taxonomy on the strategic role of IT (Automate, Informate, Transform) by considering how IT is changing the nature of the product/service in industries where transformational logics prevail. We found that in industries where the product/service is digital in nature, the firms that achieve higher economic returns are those where IT is used to support dual strategies based on the integration of cost leadership and differentiation. Conversely, in other industries – with the exception of those producing commodities – the firms that achieve superior returns are those that use IT to support differentiation. The results of this study can help managers make intelligent decisions about competitive strategies and IT investments, depending on the business environment of the sector in which the firm operates and the generative potential of emerging technologies to do new things. Collapse

Topics: productivity strategic management organizational productivity information systems strategy business model

Methods: longitudinal research cross sectional research econometric modeling regression analysis method descriptive statistic

Theories: theory of economic growth theory of economic cycles

A Tale of Two Hierarchies: Interactive Effects of Power Differentiation and Status Differentiation on Team Performance

2022 | Organization Science | Citations: 0

Authors: Hays, Nicholas A.; Li, Huisi (Jessica); Yang, Xue; Oh, Jo K.; Yu, Andrew; Chen, Ya-Ru; Hollenbeck, John R.; Jamieson, Bradley B.

Abstract: Scholars have long wrestled with whether hierarchical differentiation is functio ... Expand

Abstract: Scholars have long wrestled with whether hierarchical differentiation is functional or dysfunctional for teams. Building on emerging research that emphasizes the distinction between power (i.e., control over resources) and status (i.e., respect from others), we aim to help reconcile the functional and dysfunctional accounts of hierarchy by examining the effects of power differentiation on team performance, contingent on status differentiation. We theorize that power differentiation is dysfunctional for teams with high status differentiation by increasing knowledge hiding, which undermines team performance. In contrast, we predict that power differentiation is functional for teams with low status differentiation by decreasing knowledge hiding, which improves team performance. In a field study, we found that power differentiation harmed team performance via knowledge hiding in teams with high status differentiation, but power differentiation had no effect on knowledge hiding or performance in teams with low status differentiation. In an experiment, we again found that power differentiation harmed team performance by increasing knowledge hiding in teams with high status differentiation. However, power differentiation improved team performance by decreasing knowledge hiding in teams with status equality. Finally, in a third study, we confirm the role of status differentiation in making team climates more competitive and examine the effect of power-status alignment within teams, finding that misalignment exacerbates the dysfunctional effects of power differentiation in teams with high status differentiation. By examining how power and status hierarchies operate in tandem, this work underscores the need to take a more nuanced approach to studying hierarchy in teams. Funding: This research is partially supported by the National Natural Science Foundation of China [Grants 71572079 and 71872086]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1540. Collapse

Topics: team productivity decision making new product development idea generation marketing management

Methods: chi squared test theory development descriptive statistic simulation statistical hypothesis test

Rural smartness: Its determinants and impacts on rural economic welfare

2022 | Electronic Markets | Citations: 1

Authors: Mukti, Iqbal Yulizar; Henseler, Jörg; Aldea, Adina; Govindaraju, Rajesri; Iacob, Maria E.

Abstract: Solving urbanization problems, especially in developing countries, solely throug ... Expand

Abstract: Solving urbanization problems, especially in developing countries, solely through the adoption of smartness in urban areas is insufficient as urbanization is mostly driven by the wide urban-rural economic gap. To narrow this gap, the adoption of smartness needs to be extended into rural areas. However, studies in that direction are still lacking. Therefore, we developed a theoretical model that explains the determinants of rural smartness and its subsequent consequences on rural economic welfare. We validated the model with survey data from 179 villages in West Java Province, Indonesia. The results suggest that rural smartness is determined by the interplay of organizational, environmental, and technological readiness, and has a strong positive impact on innovativeness which, in turn, improves the competitiveness of the rural business ecosystem. This model can serve as a reference for further studies of rural smartness and as the foundation for the design of information platforms supporting it. Collapse

Topics: Java digital ecosystem business process improvement innovation management information technology infrastructure

Methods: survey partial least squares path modeling theory development structured literature research statistical power analysis

Theories: theory of everything theory of economic growth

Collaborating with Virtual Assistants in Organizations: Analyzing Social Loafing Tendencies and Responsibility Attribution

2022 | Information Systems Frontiers | Citations: 3

Authors: Stieglitz, Stefan; Mirbabaie, Milad; Möllmann, Nicholas R. J.; Rzyski, Jannik

Abstract: Organizations increasingly introduce collaborative technologies in form of virtu ... Expand

Abstract: Organizations increasingly introduce collaborative technologies in form of virtual assistants (VAs) to save valuable resources, especially when employees are assisted with work-related tasks. However, the effect of VAs on virtual teams and collaboration remains uncertain, particularly whether employees show social loafing (SL) tendencies, i.e., applying less effort for collective tasks compared to working alone. While extant research indicates that VAs collaboratively working in teams exert greater results, less is known about SL in virtual collaboration and how responsibility attribution alters. An online experiment with N = 102 was conducted in which participants were assisted by a VA in solving a task. The results indicate SL tendencies in virtual collaboration with VAs and that participants tend to cede responsibility to the VA. This study makes a first foray and extends the information systems (IS) literature by analyzing SL and responsibility attribution thus updates our knowledge on virtual collaboration with VAs. Collapse

Topics: virtual teamwork brainstorming personality team productivity IT enabled teamwork

Methods: descriptive statistic experiment survey survey design statistical power analysis

How does IT identity affect individuals’ use behaviors associated with personal health devices (PHDs)? An empirical study

2021 | Information & Management | Citations: 0

Authors: Esmaeilzadeh, Pouyan

Abstract: This study investigates the effects of information technology (IT) identity on t ... Expand

Abstract: This study investigates the effects of information technology (IT) identity on the use of personal health devices (PHDs). We conducted an online survey of individuals who used a PHD to achieve a health-related goal. The results confirm that IT identity is a multidimensional construct with three reflective dimensions. The results exhibit that the identity verification process (IT characterizes through IT experience) fosters IT identity, which, in turn, encourages individuals to engage in beneficial post-adoption behaviors such as feature use and enhanced use. The findings also reveal that perceived health status moderates the relationship between IT identity and positive use behaviors. Collapse

Topics: privacy smart device systems design mobile health health information system

Methods: survey data transformation structural equation modeling theory development principal component analysis

Theories: identity theory

Smartphone Addiction and Conflict: An Incentive-Sensitisation Perspective of Addiction for Information Systems

2021 | European Journal of Information Systems | Citations: 0

Authors: Kuem, Jungwon; Ray, Soumya; Hsu, Pei-Fang; Khansa, Lara

Abstract: This study seeks to develop and test a theory-driven model of technology addicti ... Expand

Abstract: This study seeks to develop and test a theory-driven model of technology addiction within the context of smartphone use. Drawing on incentive-sensitisation theory, we proposed a nomological network that centres on a second-order factor of smartphone addiction from a psychological perspective. We empirically evaluated the proposed model against longitudinal data collected from 441 smartphone users. Our analysis from structural equation modelling indicates that our two-factor measurement of smartphone addiction (heightened desire and mobile social interaction) is a parsimonious alternative to the four-factor model. In addition, our findings suggest that addiction and its negative consequences differ in their effects on subsequent perceptions, such as perceived usefulness and perceived enjoyment. We also found that personal innovativeness in information technology and a perception of loneliness explain a large amount of variation in smartphone addiction. Overall, the present study significantly contributes to the information systems literature by offering a refined model of smartphone addiction that effectively describes pathological smartphone use while correcting critical biases in existing models. Collapse

Topics: mobile system smartphone smartphone addiction perceived usefulness information technology addiction

Methods: survey chi squared test longitudinal research SEM tool digital trace data

Theories: self perception theory