Yearly Archives: 2008

Management

Constrained Growth: How Experience, Legitimacy, and Age Influence Risk Taking in Organizations

Vinit M. Desai
ORGANIZATION SCIENCE Vol. 19: p. 594-608

Poor performance indicates that an organization’s routines are not well suited for its environment and prompts decision makers to search for solutions. However, results conflict regarding how this search process influences risk taking in organizations. Managers in some organizations facing actual or expected performance shortfalls tend to take risks, while managers in other poorly performing organizations avoid risky changes. This conflict is interesting because some level of risk taking appears necessary for organizations to remain competitive, adapt to their environment, and improve performance. This study examines several mechanisms that moderate risk taking following performance shortfalls. First, I draw from organizational learning theories to argue that organizations with limited operating experience are less buffered from failure, and hence that poor performance constrains risk taking at these organizations. Second, I argue that organizations with poor legitimacy are also less buffered, and hence that performance shortfalls also lead to risk aversion at these organizations. Third, I draw from structural inertia theory to suggest that older organizations are less able to support risk taking following performance shortfalls. A test of these hypotheses on the capacity expansion behavior of U.S. railroad companies generally supports these hypotheses, although the effect of age is weaker. The findings contribute to theories of organizational learning and to several perspectives in organization theory more broadly.

Entrepreneurship, Marketing

Managerial risk perceptions of international entry-mode strategies: The interaction effect of control and capability

David Forlani, Madhavan Parthasarathy, Susan M. Keaveney
International Marketing Review Vol. 25 Issue 3, p. 292-311

Purpose – The primary purpose of this paper is to investigate how opportunity for control and firm capability interact to moderate the amount of risk that managers associate with various international entry-mode strategies. A secondary goal is to investigate how managers perceive the need to retain control over three core functional areas (marketing, production, and R&D) when making entry-mode decisions.
Design/methodology/approach – A field experiment design was implemented in a sample of US business owner/executives. Using an online data collection method, the study asked a sample of small-business owners and managers to assess the amount of risk they associated with three modes of entering the Japanese market: non-ownership (export), equal partnership (50/50 joint-venture), and sole-ownership. They were also asked how much control they needed to retain over R&D, production, and marketing for the venture to be successful.
Findings – Ownership-provided control interacts with capability to influence managerial risk perceptions. Managers in lower-capability firms see the least risk in the non-ownership entry mode while those in higher-capability firms see the least risk in the equal-partnership entry mode. Managers believe that for a new venture in a foreign market to be successful, control should be retained over the R&D function, regardless of entry mode.
Research limitations/implications – The findings appear to reconcile some of the conflicting predictions of the transaction cost and resource-based theoretical perspectives, because it appears that international managers consider both control (internationalization theory) and capability (resource-based theory) when judging the perceived risk of an entry strategy.
Practical implications – For firms that are incapable of managing in an international context, a low-control no-ownership entry mode is perceived as the least risky approach; for firms that have some capability for international management, then a partial-ownership mode such as a 50/50 joint-venture is perceived as having lower risk than no-ownership. In non-ownership and joint-venture type entry modes, managers are more apt to outsource the marketing function to an agent/partner, but not R&D. In contrast, managers believe that marketing needs to be maintained in-house when utilizing a sole-ownership entry mode.
Originality/value – By illustrating the role of perceived risk in foreign-market entry-mode decisions and demonstrating how capabilities interact with ownership-provided control to moderate these perceptions, the paper’s findings suggest that managers’ risk perceptions may mediate the effects of firm-specific factors, and thus contributes significantly to both theory and practice.

Management

Staffing twenty-first-century organizations

Cascio, W. F, & Aguinis, H.
Academy of Management Annals, Vol. 2, p. 133-165

We highlight important differences between twenty-first-century organizations as compared with those of the previous century, and offer a critical review of the basic principles, typical applications, general effectiveness, and limitations of the current staffing model. That model focuses on identifying and measuring job-related individual characteristics to predict individual level job performance. We conclude that the current staffing model has reached a ceiling or plateau in terms of its ability to make accurate predictions about future performance. Evidence accumulated over more than 80 years of staffing research suggests that general mental abilities and other traditional staffing tools do a modest job of predicting performance across settings and
jobs considering that, even when combined and corrected for methodological and statistical artifacts, they rarely predict more than 50% of the variance in performance. Accordingly, we argue for a change in direction in staffing research and propose an expanded view of the staffing process, including the introduction of a new construct, in situperformance, and an expanded view of staffing tools to be used to predict future in situperformance that take into account time and context. Our critical review offers a novel perspective and research agenda with the goal of guiding future research that will result in more useful, applicable, relevant, and effective knowledge for practitioners to use in organizational settings.

Management

Forensic Implications of Metadata in Electronic Files

Ruhnka, John, and Bagby, John W.
CPA Journal; Vol. 78 Issue 6, p. 68-71.

In this article, the authors discuss the forensic implications of metadata in electronic files in the U.S. According to the authors, metadata in electronic files can play a potentially critical role in litigation outcomes because it reveals forensic information about the creation, authorship, history, and even intent of a document. They suggest that metadata may be removed in the ordinary course of business as necessary to preserve enterprise and client confidentiality.

Information Systems

Exploring Information Extraction Resilience

Gregg, Dawn
Journal of Universal Computer Science Vol. 14 Issue 11, p. 1911-1920

There are many challenges developers face when attempting to reliably extract data from the web. One of these challenges is the resilience of the extraction system to changes in the web pages information is being extracted from. This paper compares the resilience of information extraction systems that use position based extraction with an ontology based extraction system and a system that combines position based extraction with ontology based extraction. The findings demonstrate the advantages of using a system that combines multiple extraction techniques, especially in environments where websites change frequently and where data collection is conducted over an extended period of time.

Management

Moving beyond a legal-centric approach to managing workplace romances: Organizationally sensible recommendations for HR leaders

Pierce, C. A., & Aguinis, H.
Human Resource Management, In Press

The goal of this article is to encourage HR leaders to think more strategically about managing workplace romances. The traditional management approach is legal-centric in that it focuses on
minimizing risks of workplace romance. We advocate embedding the legal-centric approach within a broader and more strategic organizationally sensible approach that provides a balanced focus on minimizing risks and maximizing rewards of workplace romance. Drawing from the empirical workplace romance literature, we derive a set of organizationally sensible best-practice
recommendations that HR leaders can adopt to manage risks and rewards of romantic relationships in organizations. Implementing our more strategic recommendations should provide the added benefit of elevating HR professionals’ roles as organizational leaders.

Information Systems

Information technology innovation diffusion: an information requirements paradigm

Nigel Melville and Ronald Ramirez
Information Systems Journal, Vol. 18 Issue 3, p.247-273

Information technology (IT) innovation research examines the organizational and technological factors that determine IT adoption and diffusion, including firm size and scope, technological competency and expected benefits. We extend the literature by focusing on information requirements as a driver of IT innovation adoption and diffusion. Our framework of IT innovation diffusion incorporates three industry-level sources of information requirements: process complexity, clock speed and supply chain complexity. We apply the framework to US manufacturing industries using aggregate data of internet-based innovations and qualitative analysis of two industries: wood products and beverage manufacturing. Results show systematic patterns supporting the basic thesis of the information processing paradigm: higher IT innovation diffusion in industries with higher information processing requirements; the salience of downstream industry structure in the adoption of interorganizational systems; and the role of the location of information intensity in the supply chain in determining IT adoption and diffusion. Our study provides a new explanation for why certain industries were early and deep adopters of internet-based innovations while others were not: variation in information processing requirements.

Finance

Do Euro exchange rates follow a martingale? Some out-of-sample evidence

Yang, Jian, Su, Xiaojing, and Kolari, James
Journal of Banking & Finance; Vol. 32 Issue 5, p. 729-740

Traditional autocorrelation and variance ratio tests are based on serial uncorrelatedness rather than martingale difference. As such, they do not capture potential nonlinearity-in-mean, which could lead to misleading inferences in favor of the martingale hypothesis. This paper employs various parametric and nonparametric nonlinear models as well as several model comparison criteria to examine the potential martingale behavior of Euro exchange rates in the context of out-of-sample forecasts. The overall evidence indicates that, while martingale behavior cannot be rejected for Euro exchange rates with major currencies such as the Japanese yen, British pound, and US dollar, there is nonlinear predictability in terms of economic criteria with respect to several smaller currencies.

Marketing

Equines and their human companions

Keaveney, Susan M.
Journal of Business Research Vol 61, Issue 5, Pages 444-454

Previous research related to marketing describes deep emotional bonds that develop between humans and their pets (primarily cats and dogs). Another multi-billion-dollar international market that needs exploration flows from the highly-involving bonds between humans and their horses. Horses are not pets, but the study of equine relationships with humans generates insights into animal-companion interactions. This article reports results of an interpretive phenomenological investigation of the relationship between humans and their horses, using participant observations, in-depth interviews, and written open-ended questions including the critical-incident technique. Analysis of the data first addresses a priori themes from the animal-companionship literature and identifies themes found, themes with a twist, and themes not found. The article then discusses seven emergent themes unique to human–horse relationships — including physicality, partnership, bonding through adversity, flow experience, communitas, spirituality, and life lessons.

Entrepreneurship, Management

Perceived entrepreneurial success and social power

Aguinis, H., Ansari, M. A., Jayasingam, S., & Aafaqi, R.
Management Research, Vol. 6, P. 121-137.

Based on the leadership, entrepreneurship, and issue selling literature, we hypothesized that entrepreneurs who are perceived to be successful can be differentiated from unsuccessful entrepreneurs based on their degree and type of social power. We conducted a field experiment including 305 Malaysian managers with considerable experience in working with entrepreneurs and in entrepreneurial environments. Entrepreneurs perceived to be successful were ascribed greater referent, information, expert, connection, and reward power; less coercive power; and similar legitimate power than unsuccessful entrepreneurs. These results provide evidence in support of social power as a distinguishing individual characteristic of successful entrepreneurs and make a contribution to theories linking social capital with entrepreneurial success. Aspiring entrepreneurs need to be aware that their social power profile is associated with various degrees of perceived success. Our paper points to the need to investigate variables beyond personality and that are more directly relevant to social and interpersonal interactions that may differentiate entrepreneurs perceived to be successful from those who are not.

Information Systems

A Typology of Complaints about eBay Sellers

Gregg, Dawn G. & Scott, Judy
Communications of the ACM Vol. 51, Issue 4, p. 69-74

This research shows that reputation systems serve an important function in today’s online world. Results of this study indicate that more than 97% of complaints do allege serious problems with the seller. Comments often indicate that sellers lack business training and clear commerce standards, like proper communication skills (44.2%) and appropriate return policies (10.5%). However, a greater proportion of the complaints contain allegations of fraud. This study shows that 69.7% of negative comments posted in eBay’s feedback forum indicate that the seller may have defrauded the buyer by failing to deliver the item, misrepresenting the item in the product description, selling illegal goods, by adding charges after the close of the auction, or by shill bidding. This rate of fraud is twenty times higher than the rate quoted by eBay. This makes reputation systems important to both online auction houses and to law enforcement as they try to combat rising levels of online auction fraud.

Business Analytics

A new approach for modeling and solving set packing problems

Alidaee, Bahram, Kochenberger, Gary, Lewis, Karen, Lewis, Mark, and Wang, Haibo
European Journal of Operational Research Vol. 186, Issue 2, p. 504-512

In recent years the unconstrained quadratic binary program has emerged as a unified modeling and solution framework for a variety of combinatorial optimization problems. Experience reported in the literature with several problem classes has demonstrated that this unified approach works surprisingly well in terms of solution quality and computational times, often rivaling and sometimes surpassing special purpose methods. In this paper we report on the application of this unified framework to set packing problems with a variety of coefficient distributions. Computational experience is reported illustrating the attractiveness of the approach. In particular, our results highlight both the effectiveness and robustness of our approach across a wide array of test problems.

Business Analytics

Modeling and Solving Set Packing Problems via Unconstrained Quadratic Binary Programming

Alidaee, B., Kochenberger, G., Lewis, K., Lewis, M. and Wang, H.
European Journal of Operational Research Vol. 186, Issue 2, p. 504-512

In recent years the unconstrained quadratic binary program has emerged as a unified modeling and solution framework for a variety of combinatorial optimization problems. Experience reported in the literature with several problem classes has demonstrated that this unified approach works surprisingly well in terms of solution quality and computational times, often rivaling and sometimes surpassing special purpose methods. In this paper we report on the application of this unified framework to set packing problems with a variety of coefficient distributions. Computational experience is reported illustrating the attractiveness of the approach. In particular, our results highlight both the effectiveness and robustness of our approach across a wide array of test problems.

Management

The language of leaders

Holly H. Brower, C. Marlene Fiol, Cynthia G. Emrich
Journal of Leadership Studies, Vol. 1 Issue 3, p. 67-80

Information fatigue, analysis paralysis, communications gridlock: These and other terms entered the business lexicon with the rapid acceleration of information technology and globalization in the late 20th century. Taken together, these terms paint a picture of an increasingly complex workplace and hint at the challenges facing leaders in the 21st century. Today’s leaders cannot afford to focus solely on the inspirational rhetoric that their predecessors used to build commitment. In fact, we argue that there are four significant objectives that leaders must accomplish with their language: building and breaking down commitment and building and breaking down understanding. By focusing on all four objectives, leaders engage the hearts (through commitment) and minds (through understanding) of their followers. We draw from literature in communication, management, organizational behavior, and psychology to describe and illustrate techniques and objectives with contemporary examples of executives such as Steve Jobs of Apple Computer and Gary Kelly of Southwest Airlines. By providing a thoughtful analysis of the critical language objectives and techniques in a contemporary context, we not only highlight cutting-edge work on leader communication, but also provide actionable insights for leaders, researchers, and students who want to improve their understanding and execution of the language of leadership.

Management

Broadening international perspectives on the legal environment for personnel selection

Myors, B., Lievens, F., Schollaert, E., Van Hoye, G., Cronshaw, S. F., Mladinic, A., Rodríguez, V., Aguinis, H., Steiner, D. D., Rolland, F., Schuler, H., Frintrup, A., Nikolaou, I., Tomprou, M., Subramony, S., Raj, S. B., Tzafrir, S., Bamberger, P. Bertolino, M., Mariani, M., Fraccaroli, F., Sekiguchi, T., Onyura, B., Yang, H., Anderson, N., Evers, A., Chernyshenko, O., Englert, P., Kriek, H.J., Joubert, T., Salgado, J. F., König, C.J., Thommen, L. A., Chuang, A., Sinangil, H. K., Bayazit, M., Cook, M., Shen, W., & Sackett, P. R.
Industrial and Organizational Psychology: Perspectives on Science and Practice, Vol. 1, p. 266-270.

We are pleased that our article (Myors et al., 2008) prompted this most useful set of commentaries. The goal of our article was to highlight similarities and differences in the
legal environment for personnel selection across a broad range of countries. Whereas
some articles in this journal present a point of view that prompts considerable disagreement
and challenge from commentators, our article is largely descriptive, and thus, the role of commentators is to expand upon the perspectives offered in our article rather than to take issue with them. We believe that the commentators have accomplished just that and they offer a most useful supplement to our article.

Management

International perspectives on the legal environment for selection

Myors, B., Lievens, F., Schollaert, E., Van Hoye, G., Cronshaw, S. F., Mladinic, A., Rodríguez, V., Aguinis, H., Steiner, D. D., Rolland, F., Schuler, H., Frintrup, A., Nikolaou, I., Tomprou, M., Subramony, S., Raj, S. B., Tzafrir, S., Bamberger, P. Bertolino, M., Mariani, M., Fraccaroli, F., Sekiguchi, T., Onyura, B., Yang, H., Anderson, N., Evers, A., Chernyshenko, O., Englert, P., Kriek, H.J., Joubert, T., Salgado, J. F., König, C.J., Thommen, L. A., Chuang, A., Sinangil, H. K., Bayazit, M., Cook, M., Shen, W., & Sackett, P. R.
Industrial and Organizational Psychology: Perspectives on Science and Practice, Vol. 1, pp. 206-246.

Perspectives from 22 countries on aspects of the legal environment for selection are presented in this article. Issues addressed include (a) whether there are racial/ethnic/religious subgroups viewed as ‘‘disadvantaged,’’ (b) whether research documentsmean differences between groups on individual differencemeasures relevant to job performance, (c) whether there are laws prohibiting discrimination against specific groups, (d) the evidence required to make and refute a claim of discrimination, (e) the consequences of violation of the laws, (f) whether particular selection methods are limited or banned, (g) whether preferential treatment of members of disadvantaged groups is permitted, and (h) whether the practice of industrial and organizational psychology has been affected by the legal environment.

Information Systems

Efficiency evaluation of data warehouse operations

Mannino, Michael, Hong, Sa Neung and Choi, In Jun
Decision Support Systems Vol 44, Issue 4, Pages 883-898

We evaluate an efficiency model for data warehouse operations using data from USA and non-USA-based (mostly Korean) organizations. The analysis indicates wide dispersions in operational efficiency, industry and region differences, large differences in labor budgets between efficient and inefficient firms, few organizations efficient in both refresh processing and query production, and difficulty of providing some variables. Follow-up interviews provide insights about the value of efficiency comparisons of information technology organizations and suggestions to improve the model. Using this analysis, we propose a framework containing data warehouse characteristics and firm characteristics to explain IT operational efficiency at the subfirm level.

Business Analytics

A new modeling and solution approach for the set-partitioning problem

Lewis, Mark, Kochenberger, Gary, and Alidaee, Bahram
Computers & Operations Research Vol. 35, Issue 3, p. 807-813

The set-partitioning problem (SPP) is widely known for both its application potential and its computational challenge. This NP-hard problem is known to pose considerable difficulty for classical solution methods such as those based on LP technologies. In recent years, the unconstrained binary quadratic program has proven to perform well as a unified modeling and solution framework for a variety of IP problems. In this paper we illustrate how this unified framework can be applied to SPP. Computational experience is presented, illustrating the attractiveness of the approach.

Finance

Regulatory Regime Changes and Acquisition Attributes: The Case of Commercial Bank and Thrift Acquisitions of Thrifts

Fatma Cebenoyan,A. Sinan Cebenoyan, and Elizabeth S. Cooperman
Quarterly Journal of Finance and Accounting Vol. 47, Issue. 1, pp. 27-52

Significant changes in regulations affecting bank/thrift activities during the 1990s provide us with an opportunity to examine shifts in acquisition characteristics as deregulation leads to changes in behavior. Consistent with a regime change hypothesis, we find a structural change in acquisition attributes for pre-and post-deregulation periods. We also report significant differences in target attributes depending on acquirer identity. Our results demonstrate a higher likelihood in the deregulated period after 1994 for banks to acquire …

Management

From charm to harm: A content-analytic review of sexual harassment court cases involving workplace romance

Pierce, C. A., Muslin, I. S., Dudley, C. M., & Aguinis, H.
Management Research, Vol, 6, p. 27-45.

We reviewed U.S. federal and state sexual harassment court cases involving a prior workplace romance between the plaintiff and alleged harasser. Results of our content analysis show that, unlike employees’ decisions, judges’ decisions can be predicted from legal but not ethically salient extralegal case features. Hence, when compared to prior research, our study reveals the following discrepancy: judges follow a traditional legal model, whereas employees follow an ethical model when making decisions about romance-harassment cases. Our study also reveals that the mere presence (versus absence) of a prior romance reduces the likelihood of a plaintiff’s success in a harassment case. We discuss implications for management practice and research from the perspective of legal and ethical decision making.