CIO Turnover and its Consequences for Competitors

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Jeong, Yeasung; Lee, Kang-Bok; Han, Sumin; Park, Young Woong; Park, Junyoung

Abstract: As information technology is considered a key driver of firm's innovation, the ... Expand

Abstract: As information technology is considered a key driver of firm's innovation, the role of a chief information officer (CIO) has been emphasized. However, firms face frequent CIO turnover. Thus, in this study, we argue that it is important to investigate the impact of CIO turnover on a firm's innovativeness, and the spillover effect of CIO turnover on competitors' innovativeness. We then propose a novel approach to testing these causal inferences of CIO turnover. We found that CIO turnover did not have a significant direct effect on its focal firm. However, the spillover effect is significant and positive, implying that firms produce more patents when their competitors experience CIO turnover than if CIOs at competing firms had not been dismissed. Since losing a CIO has ripple effects throughout the whole industry, firms should consider the unintended consequences of their decisions regarding CIO turnover. Collapse

Topics: Chief Information Officer innovation management database system IT leadership software patent

Methods: experimental group Compustat synthetic control method causality analysis

Theories: signaling theory

Soft but Strong: Software-Based Innovation and Product Differentiation in the IT Hardware Industry

2022 | Management Information Systems Quarterly | Citations: 0

Authors: Kim, Keongtae; Lee, Jeongsik “Jay”; Gopal, Anandasivam

Abstract: It has been argued in recent years that software is a significant value-creating ... Expand

Abstract: It has been argued in recent years that software is a significant value-creating factor within the manufacturing sector, leading to an increased interest in understanding the mechanisms by which firms may benefit from software-based innovation. Empirical work in evaluating these mechanisms, however, remains underdeveloped. In this paper, we examine one such process through which software-based innovation may provide value for information technology hardware firms in the U.S. Specifically, we examine the influence of software patents on the extent to which firms are able to benefit from product differentiation in their product markets. Using data on over 380,000 patent grants for innovations filed by 730 public IT hardware firms over the time period 1996-2015, we find that greater levels of software-based innovation within the firm are associated with higher levels of product differentiation in product markets: increases in the intensity of software patents within the firm’s patent stock, which we refer to as software intensity, are associated with lower total similarity of product offerings, relative to those offered by rivals, as well as fewer effective competitors in the market. Furthermore, using a different dataset consisting of 23,000 new IT hardware product announcements, we show that firms with greater software intensity subsequently launch a higher number of new products. Moreover, these firms are more likely to launch products that are not only differentiated from those of rivals but also distinct from their own product lines. Our research contributes to the emerging literature on software-based innovation by substantiating an important mechanism through which software helps transform industry sectors, specifically through product differentiation. Collapse

Topics: innovation management computer hardware product differentiation software patent digital innovation

Methods: topic model term frequency–inverse document frequency longitudinal research robustness check difference in differences

CEO Risk-Taking Incentives and IT Innovation: The Moderating Role of a CEO’s IT-Related Human Capital

2021 | Management Information Systems Quarterly | Citations: 0

Authors: Choi, Inmyung; Chung, Sunghun; Han, Kunsoo; Pinsonneault, Alain

Abstract: Despite the importance of information technology (IT) innovation in today’s digi ... Expand

Abstract: Despite the importance of information technology (IT) innovation in today’s digitalized world, little research attention has been paid to examining how firms can incentivize IT innovation. To fill this gap, the current study investigates the impact of managerial incentives provided to chief executive officers (CEOs) on IT innovation, measured by the number of IT patents. In particular, we examine the role of risk-taking incentives provided to CEOs, captured by the sensitivity of CEO wealth to stock return volatility (i.e., Vega). Vega can motivate CEOs to engage in risky IT innovation projects by aligning their wealth with firm-specific risk. In so doing, we focus on how CEOs’ IT-related human capital (i.e., IT education and IT experience) moderates the relationship between Vega and IT innovation. Our empirical analyses reveal that a higher Vega encourages CEOs to support more IT innovation; more importantly, the impact of Vega on the amount of IT patents is stronger for firms with CEOs who have higher levels of IT education and IT experience. Our study contributes to research and practice by conceptualizing a CEO’s IT-related human capital and validating its moderating role in the relationship between risk-taking incentives provided to the CEO and the amount of IT innovation. Collapse

Topics: digital innovation human resource management IS education IT career innovation management

Methods: descriptive statistic data transformation principal component analysis Compustat instrumental variables estimation

Theories: agency theory

How Does the Positioning of Information Technology Firms in Strategic Alliances Influence Returns to R&D Investments?

2021 | Journal of the Association for Information Systems | Citations: 0

Authors: Rahmati, Pouya; Tafti, Ali; Mithas, Sunil; Sachdev, Vishal

Abstract: Because software is fungible, has low marginal replication costs, and requires ... Expand

Abstract: Because software is fungible, has low marginal replication costs, and requires relatively high levels of initial investment to develop, understanding how IT-producing firms protect and leverage value from their research and development (R&D) investments is important. We examine how the positioning of IT-producing firms within their networks of strategic alliances moderates profits from R&D investments. We posit that alliances with IT-consuming firms generate relation-specific rents that, in turn, protect the value of R&D investments by making software innovations difficult for rivals to appropriate. Among IT-producing firms, we make a distinction between software consulting and services firms and software package-product firms. Our analyses of 464 IT-producing firms for the 14-year period 1996-2009 suggest that IT-producing firms' returns on R&D investments increase with alliance ties to IT-consuming firms. We also find that alliances with IT-consuming firms have a more beneficial effect on R&D investment returns for software consulting and services firms than for software package-product firms. Our findings yield nuanced insights into how IT-producing firms should position themselves within a network of alliances with IT-consuming firms. We discuss implications for research and practice. Arlington, and has taught IT strategy, analytics, visualization, artificial intelligence in business, digital marketing, digital fabrication, design thinking, fintech, system development, data modeling and SQL. He is also interested in new approaches to learning, including "learning by making" design thinking and experiential learning. Besides his interest in the Maker movement, he is researching the role of technology in enabling new approaches to teaching and learning. He is applying learning from this to structuring environments that enable students to learn in online/blended environments, with a focus on peerlearning that can scale. He has taught several thousand students in MOOCs on Coursera in digital marketing and 3D printing. Collapse

Topics: research and development digital innovation innovation management participatory design computer hardware

Methods: design methodology statistical hypothesis test Compustat regression analysis method robustness check

Theories: transaction cost economics

Software Patents and Firm Value: A Real Options Perspective on the Role of Innovation Orientation and Environmental Uncertainty

2019 | Information Systems Research | Citations: 49

Authors: Chung, Sunghun; Animesh, Animesh; Han, Kunsoo; Pinsonneault, Alain

Abstract: Although software patents have been growing steadily since 1996, when the restri ... Expand

Abstract: Although software patents have been growing steadily since 1996, when the restrictions on the patentability of software were eliminated, their value and impacts on the firm’s profits remain unclear and ambiguous. Drawing on the real options theory and the literature on exploration and exploitation, we develop a novel theoretical framework to assess the value of software patents. Moreover, we examine the impact of contextual factors related to the nature of innovation underlying firms’ patent portfolios (exploitative versus explorative) and the environmental uncertainty (competitiveness and dynamism) on the value of software patents. Specifically, we examine the interaction effect of a firm’s software patent stock and its innovation orientation on firm value in markets exhibiting different levels of environmental uncertainty. Based on a large-panel data set consisting of 602 U.S. firms, our results indicate that a software patent portfolio having higher levels of explorative orientation is associated with a higher firm value (as measured by Tobin’s q) in environments exhibiting low dynamism and high competitiveness. By contrast, a software patent portfolio with higher levels of exploitative orientation is associated with a higher firm value in environments with high dynamism and low competitiveness. We discuss the implications for research and practice. Collapse

Topics: software patent innovation management environmental uncertainty real option organizational value

Methods: longitudinal research autocorrelation analysis theory development statistical hypothesis test robustness check

Theories: real options theory

Sharing my way to success: A case study on developing entrepreneurial ventures using social capital in an OSS community

2019 | Information and Organization | Citations: 0

Authors: Yetis Larsson, Zeynep; Di Gangi, Paul M.; Teigland, Robin

Abstract: While Open Source Software (OSS) communities provide opportunities for knowledge ... Expand

Abstract: While Open Source Software (OSS) communities provide opportunities for knowledge creation, we have a limited understanding of how entrepreneurs leverage OSS communities for their entrepreneurial ventures. Using social capital theory in a mixed methods case study, we compare entrepreneur and non-entrepreneur behaviors to investigate how entrepreneurs build social capital within an OSS community. This study shows that entrepreneurs differentiate themselves from non-entrepreneurs by focusing on cognitive and relational capital building activities, which in return makes it possible for them to leverage their social capital to influence and shape the environment in which they are operating. Our findings suggest that entrepreneurs strategically select which activities within the community to expend their limited resources on (e.g., developing code over participating in email conversations) and build their social capital more through their actions than through their words (e.g., showing their commitment to the community through code commits, bug fixes, and documentation). Given the liabilities of newness and smallness as well as other challenges faced by entrepreneurs, applying an open innovation strategy in OSS communities could be one approach where entrepreneurs, by developing and freely revealing their intellectual property to the community, share their way to success via OSS-infused entrepreneurial business ventures. Collapse

Topics: social capital entrepreneurship intellectual property open innovation electronic mail

Methods: qualitative interview descriptive statistic Mann Whitney U test statistical hypothesis test case study

Theories: social capital theory

Managerial Incentives and IT Innovation: The Moderating Role of CEO's IT-Education and Career Experience

2018 | International Conference on Information Systems | Citations: 0

Authors: Choi, Inmyung; Chung, Sunghun; Han, Kunsoo; Pinsonneault, Alain

Abstract: Despite the importance of IT innovation in the digitalized world, little researc ... Expand

Abstract: Despite the importance of IT innovation in the digitalized world, little research attention has been paid to examining the antecedents of firms’ IT innovation, especially from a top management perspective. This study examines how managerial incentives, particularly risk-based ones, given to top managers motivate them to nurture IT innovation. We also consider how IT-related educational backgrounds and diversity of the career experiences of chief executive officers (CEOs) moderate the relationship between risk-based incentives and IT innovation. Our empirical analysis shows that risk-based incentives encourage top managers to support more IT innovation and to pursue more exploration in IT innovation by attenuating their risk-averse stance. In addition, our findings show that the impact of risk-based incentives on IT innovation and explorative IT innovation is stronger when the CEO has a stronger IT-related educational background and less diverse career experiences. Our results provide important theoretical and practical implications regarding the role of risk-based incentives and a CEO’s background in fostering IT innovation. Collapse

Topics: digital innovation IT career innovation management IS education research and development

Methods: principal component analysis data transformation factor analysis descriptive statistic generalized least square

Theories: agency theory

Soft but Strong: Software-Based Innovation, Product Market Competition, and Value Creation in the IT Hardware Industry

2018 | International Conference on Information Systems | Citations: 0

Authors: Kim, Keongtae; Lee, Jeongsik; Gopal, Anandasivam

Abstract: We study the impact of software-based innovation on the value of patented invent ... Expand

Abstract: We study the impact of software-based innovation on the value of patented inventions, firms’ competitive position in the product market, and the market value of the firms in the U.S. information and technology (IT) hardware industry. Our analysis of over 227,000 patents by 741 public IT hardware firms in the period of 1996-2006 reveals several novel findings. Patented inventions with greater software intensity are more frequently cited and more likely to be renewed for legal protection. This effect is stronger for software patents than non-software patents, though it varies across firms depending on business scope and patent value measures. Increases in software innovation are associated with greater software contents in the subsequent period’s business profile while those of nonsoftware innovation orient business away from software-based products and services, and this pattern is particularly strong for pure IT hardware firms. Greater software innovation also drives the shift toward more software-intensive business, allowing firms to differentiate themselves from rivals in product and service offerings. This differentiation benefit appears unique to pure IT hardware firms. Despite the advantages of pure firms in software-enabled technological value creation and competitive positioning, diversified firms are no less likely to create firm value from software-based innovation. We find evidence that firms optimize their innovation strategies along the dimension of exploitation and exploration subject to their business scope constraints. Our study offers one of the first evidence that software innovation helps mitigate product market competition and thus substantiates a mechanism through which software-based innovation creates economic value. Collapse

Topics: innovation management software patent computer hardware research and development digital innovation

Methods: qualitative content analysis regression analysis method ordinary least square longitudinal research SEC EDGAR

Theories: ambidexterity theory

On the Patent Claim Eligibility Prediction Using Text Mining Techniques

2018 | HICSS | Citations: 0

Authors: Lai, Chia-Yu; Hwang, San-Yih; Wei, Chih-Ping

Abstract: With the widespread of computer software in recent decades, software patent has ... Expand

Abstract: With the widespread of computer software in recent decades, software patent has become controversial for the patent system. Of the many patentability requirements, patentable subject matter serves as a gatekeeping function to prevent a patent from preempting future innovation. Software patents may easily fall into the gray area of abstract ideas, whose allowance may hinder future innovation. However, without a clear definition of abstract ideas, determining the patent claim subject matter eligibility is a challenging task for examiners and applicants. In this research, in order to solve the software patent eligibility issues, we propose an effective model to determine patent claim eligibility by text-mining and machine learning techniques. Drawing upon USPTO issued guidelines, we identify 66 patent cases to design domain knowledge features, including abstractness features and distinguishable word features, as well as other textual features, to develop the claim eligibility prediction model. The experiment results show our proposed model reaches the accuracy of more than 80%, and domain knowledge features play a crucial role in our prediction model. Collapse

Topics: software patent Python database system website online learning system

Methods: term frequency–inverse document frequency natural language processing gradient boosting machine learning computational algorithm

Competitive Impacts of IT Innovation: An Empirical Analysis of Software Patents in the IT Industry

2015 | International Conference on Information Systems | Citations: 1

Authors: Chung, Sunghun; Han, Kunsoo; Animesh, Animesh; Pinsonneault, Alain

Abstract: While prior research has examined the role of Information Technology (IT) invest ... Expand

Abstract: While prior research has examined the role of Information Technology (IT) investments in the process and performance of innovation, there is relatively little research on the business value of IT innovation itself. In particular, the impact of a firm’s IT innovation on the performance of the firm’s rivals remains unexplored. In order to advance our understanding of the competitive impact of IT innovation, we investigate the impact of a firm’s software patents on rivals’ market value using data from the US IT industries. Theoretically, there are two countervailing forces influencing the competitive impact of software patents: market-stealing and spillover. Therefore, the net impact of a firm’s software patents on rivals depends on the relative magnitude of these two forces, and is essentially an empirical question. We find that a focal firm’s software patent stock is negatively associated with its rivals’ market value. In addition, we find interesting moderating effects of two factors: hardware patent stock and competitive intensity. Our results indicate that the focal firm’s hardware patent stock amplifies the negative impact of its software patent stock on rivals’ market value. Furthermore, we find that the competitive intensity of the industry mitigates the competitive impact of software patent stock. We discuss the implications for research and practice. Collapse

Topics: software patent computer hardware research and development competitive advantage innovation management

Methods: hierarchical linear modeling autocorrelation analysis longitudinal research robustness check Compustat

Theories: resource based view of the firm