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

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

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

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

A Qualitative Study on Acceptance Factors of Economic Approaches on IT Security Investment Decisions

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Niedzela, Laura; Kuehnel, Stephan; Nastjuk, Ilja; Matschak, Tizian; Sackmann, Stefan; Trang, Simon

Abstract: Cyber-attacks can cause severe economic damages to businesses today. Therefore, ... Expand

Abstract: Cyber-attacks can cause severe economic damages to businesses today. Therefore, every company needs to protect its IT systems from such attacks by implementing effective IT security measures. When it comes to deciding on an IT security measure, there is a variety of decision approaches that can offer support on choosing an economically reasonable one. In practice, however, such approaches are rarely applied and a company's security investment decisions are often based on intuitive factors. We therefore want to explore which factors drive the acceptance and application of economic approaches on IT security investment decisions. For this, we used semi-structured interviews and a moderated focus group to generate insights from both science and practice. Not only did our research yield new scientific knowledge about IT security investment decisions, but the results can also be useful in increasing the application of economic decision approaches. Collapse

Topics: IT security IT security defense decision making real option computer virus protection

Methods: qualitative interview personal interview literature study focus group cluster analysis

Theories: real 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

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

IT Project Selection and Organisational Agility – An Integrated Conceptual Framework

2023 | Americas Conference on Information Systems | Citations: 0

Authors: van Raay, Adrian; Duan, Sophia; Whiteside, Naomi

Abstract: Sustained competitive advantage is elusive to organisations, in a volatile cont ... Expand

Abstract: Sustained competitive advantage is elusive to organisations, in a volatile contemporary context. Organisational agility (OA), enabled by information technology, offers hope. However, organisations that pursue agility encounter incompatibility with IT project selection (ITPS) -as they select and fund projects, before implementation. Existing ITPS literature provides rich insights into methods, processes and people but is fragmented. Without integration, the incompatibility cannot be resolved. To address this problem, this study conducted a literature review of 159 articles to develop an integrated framework for understanding OA and ITPS. Findings show that methods, processes and people in ITPS can both enable and disable OA. Following conceptual-framework-analysis, ITPS is redefined as an enabler of agility. The resultant three-layered conceptual framework shows that firms can deploy ITPS methods, processes and people that enable sensing, deciding and responding, leading to OA. This study contributes by integrating literature to facilitate further research in this area. Collapse

Topics: decision making IT investment information technology capability competitive advantage IT project

Methods: literature sample literature study synthesis

A Multi-Criteria Approach to Decision Making in Broadband Technology Selection

2022 | Group Decision and Negotiation | Citations: 0

Authors: Araújo, Marco; Ekenberg, Love; Danielson, Mats; Confraria, João

Abstract: A new European Union regulatory framework for the telecom sector has been under ... Expand

Abstract: A new European Union regulatory framework for the telecom sector has been under a process of transposition to national laws by its member states that should have been completed by the end of 2020, notwithstanding some delays. A core purpose of the regulatory framework is to guarantee that most citizens will have access to very fast Internet connections, capable of 100 Mbps download link speed, regardless of where they live. According to this new framework, in areas where the market does not deliver, governments are to launch public tenders for the deployment, maintenance, and operations of network infrastructure as well as services, and public funds should be used to support the deployment of these broadband networks in less densely populated areas. Needless to say, public tenders of this nature are subject to different criteria when it comes to candidate evaluation. In this paper, we present a decision model for the selection of operators to deploy and maintain broadband networks in scarcely populated areas, taking into consideration infrastructure costs, the technical quality offered by the solutions, and the credibility of the candidates. We suggest an integrated multi-stakeholder multi-criteria approach and demonstrate how it can be used in this complex area and find that in the example provided, taking a relevant set of criteria into the analysis, optical fibre networks hold much higher chances to be used in these public tenders compared to networks based on the broadly favoured 5G technology. Collapse

Topics: procurement management communication service infrastructure real option technological change

Methods: simulation trade-off analysis method multiple criteria decision making stochastic model ELECTRE

Theories: options theory

Resource Redeployment and Divestiture as Strategic Alternatives

2022 | Organization Science | Citations: 0

Authors: Feldman, Emilie R.; Sakhartov, Arkadiy V.

Abstract: What should the managers of a multibusiness firm do when their company’s resourc ... Expand

Abstract: What should the managers of a multibusiness firm do when their company’s resources are not used profitably? Research on redeployment proposes that managers should withdraw those resources from the business where they are underutilized and switch them to a business where they can be used more profitably, whereas the literature on divestiture advocates that managers should divest the business containing those resources. In this study, we investigate the factors that lead managers to choose resource redeployment over divestiture as a mode of exit and vice versa. Using a formal model, we establish that the two exit modes act as intertemporal substitutes, whereby redeployment dominates for earlier exits but divestiture dominates for later exits. Although both redeployment and divestiture are inversely related to their implementation costs, redeployment costs amplify the effect of divestiture costs on the likelihood of exit, and divestiture costs amplify the effect of redeployment costs on the likelihood of exit. Finally, we derive a series of results that show that disregarding one of these two exit options as a strategic alternative to the other may lead to misspecifications of empirical models that seek to predict the likelihood of redeployment, divestiture, or exit. Overall, our work contributes to the corporate strategy literature by uniting two streams of research that have largely remained disparate, yet whose insights have significant implications for each other. Collapse

Topics: strategic management real option value creation Google+ decision making

Methods: literature study longitudinal research Monte Carlo simulation qualitative interview time series analysis

Artificial Intelligence as a Call for Retail Banking: Applying Digital Options Thinking to Artificial Intelligence Adoption

2022 | European Conference On Information Systems | Citations: 0

Authors: Fridgen, Gilbert; Hartwich, Eduard; Rägo, Vadim; Rieger, Alexander; Stohr, Alexander

Abstract: Technology-driven challenges, both existing and emerging, require banks to inve ... Expand

Abstract: Technology-driven challenges, both existing and emerging, require banks to invest in IT capabilities, especially in artificial intelligence (AI). Digital options theory presents a valuable guide rail for these investments. However, the nature of AI as a moving frontier of computing requires certain extensions to established digital option thinking. Based on interviews with 23 experts in the retail banking industry, we highlight the importance of thinking broadly when laying the foundation for AI options and being mindful of the dynamic effects of contextual factors. Drawing from digital options theory and the Technology-Organization-Environment framework as dual lens, our study adds a structured approach to consciously balance resources and AI-related capability investments with a broader consideration of the banking industry's complex environment. In this way, our study complements recent research on the interplay between incumbents' resources and digital opportunities. Collapse

Topics: artificial intelligence information technology capability real option technology adoption research and development

Methods: qualitative interview qualitative coding personal interview triangulation memoing

Theories: theory of everything options theory technology organization environment framework

How Property Rights Matter to Firm Resource Investment: Evidence from China’s Property Law Enactment

2022 | Organization Science | Citations: 0

Authors: He, Wenlong; Tong, Tony W.; Xu, Mingtao

Abstract: Although property-rights theory has long been used to explain firms’ ownership o ... Expand

Abstract: Although property-rights theory has long been used to explain firms’ ownership of resources, research on the channels through which property rights affect heterogeneous firms’ investment in building resources remains scarce. Leveraging a property-law enactment in China, we find that strengthening property-rights protection leads private firms to make greater intangible and tangible asset investment compared with state-owned firms and that these effects are mediated by external equity and debt financing. Further, we unpack resource heterogeneity by explicating key differences between intangible and tangible assets, and we document an alignment between asset intangibility and financing approaches such that for intangible asset investment, equity plays a larger mediation role, whereas for tangible asset investment, debt’s mediating effect is greater. We contribute to the strategy literature by using property-rights theory to link together asset intangibility and financing approaches and by showing that the strength of property-rights protection affects firms’ resource investment and shapes firm heterogeneity. Collapse

Topics: database system asset specificity accounting organizational productivity innovation management

Methods: experimental group longitudinal research statistical hypothesis test robustness check theory development

Theories: property rights theory resource based view of the firm real options theory transaction cost economics

CREATING VALUE IN ADDITIVE MANUFACTURING – MODELING OF ECOSYSTEM DETERMINANTS

2022 | European Conference On Information Systems | Citations: 0

Authors: Hiller, Simon; Morar, Dominik; Petrik, Dimitri

Abstract: Despite the increasing managerial awareness for ecosystems to organize complex ... Expand

Abstract: Despite the increasing managerial awareness for ecosystems to organize complex value propositions, little is known about how different roles can establish their business models (BM) in ecosystems. AM drives innovations in the product design and manufacturing fields predominantly across companies, indicating the eco-systemic organization of value creation without orchestrating and dominant keystone actors yet. This paper explores ecosystem determinants by analyzing the dynamic additive manufacturing (AM) paradigm. We conduct an empirical study with companies from the AM domain to visualize their value activities and define generic roles in the interdependent value creation process, adopting the e³-value methodology. By exploring these ecosystem determinants, our results aid practitioners in positioning their BMs in the AM domain and generate descriptive insights for the orchestrator BM design in a dynamic domain without orchestrating keystones. Collapse

Topics: value creation business model 3D printing production management business-to-business

Methods: qualitative interview literature study conceptual modelling qualitative content analysis qualitative coding