M&A Negotiations: Role of Negotiation Process, Ownership and Advisors on Deal Completion

2023 | Group Decision and Negotiation | Citations: 0

Authors: Kumar, Deepak; Sengupta, Keya; Bhattacharya, Mousumi

Abstract: Mergers and acquisition deals are uncertain, with completion likelihood changing ... Expand

Abstract: Mergers and acquisition deals are uncertain, with completion likelihood changing throughout the negotiation process. During negotiations, the firms process new information to modify their choices. This study aims to examine the dynamic nature of the M&A negotiation process. The study uses a sample of 983 worldwide unsolicited deals from 1999 to 2019 and classifies M&A deal outcomes using logistic regression, decision tree, and random forest classifiers. Ownership considerations and advisors are essential elements of the negotiation. Ownership sought has the potential to impact the deal's complexity and exercisable control. Prior ownership may either help gain information or recover due diligence costs. The advisors may assist the firms in the available information's financial and legal due diligence. Prior research lacks the negotiation period’s dynamism and gives mixed results for the impact of ownership and the role of advisors. We uniquely identify a non-linear inverted U-shaped relationship between the negotiation period and completion likelihood. The results prove that prior ownership, over the negotiation period, serves the dual objective of assisting deal completion and acting as a substitute for the termination fee. The acquirer and target advisors help with the completion of the deal. The varying effects for ownership and advisors over the negotiation process help explain the conflicting results in previous studies. The evolving negotiating circumstances play an important role in affecting the outcome. Our work shows the importance of temporal characteristics and the dynamic nature of decision-making during the M&A negotiation process and encourages further studies exploring processual theories. Collapse

Topics: logistics management decision making database system mergers and acquisition missing data

Methods: logistic regression random forest classification decision tree classification statistical hypothesis test machine learning

Theories: lemon market theory

Effect of AI Decision Speed on User Adoption in Human-AI Collaboration: The Moderating Role of Historical Decision Quality

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Wang, Guoxin; Lu, Shouwang; Wang, Kanliang

Abstract: Artificial intelligence (AI) has been widely used in many products and services ... Expand

Abstract: Artificial intelligence (AI) has been widely used in many products and services and has become an important means to assist users in decision-making. In the context of human-AI collaboration, both the quality and speed of AI's decision-making are the two system features that users can readily identify. However, the existing research focuses on decision-making quality and pays little attention to the effect of AI's decision-making speed. Drawing from the theory of cue utilization, this research explored the effect of AI decision speed on user's adoption intention. The results of two experiments show that users have higher AI decision adoption intention at high AI decision speed than at low; the perceived intelligence and perceived risk in decision-making play a mediating role in the above effects. Additionally, historical decision quality moderates the impact of AI decision speed on users' adoption by weakening the above impact in the high-quality condition. The findings enrich the research on AI adoption and have some practical implications for AI service providers and developers. Collapse

Topics: artificial intelligence decision quality decision making user acceptance customer service

Methods: experiment parametric test one-way ANOVA mediation analysis survey

How IT carve-out project complexity influences divestor performance in M&As

2023 | European Journal of Information Systems | Citations: 0

Authors: Yetton, Philip W; Henningsson, Stefan; Böhm, Markus; Leimeister, Jan Marco; Krcmar, Helmut

Abstract: IT carve-out projects are complex and cost-intensive components of M&A transacti ... Expand

Abstract: IT carve-out projects are complex and cost-intensive components of M&A transactions. Existing research sheds little light on the determinants of IT carve-out project complexity and/or its effects on divestor performance. Instead, research has focused on the post-acquisition IT integration project and acquirer performance. This paper presents the first divestor-centric model of IT transactions from the divestor to the acquirer when a Business Unit in a Multi-Business Organization (MBO) is carved out and integrated into another MBO. The model explains how divestor business and IT alignment pre-conditions contribute to increased IT carve-out project complexity. Such complexity increases IT carve-out project time to physical IT separation and creates IT stranded assets, which decrease post-divestment business, IT alignment and divestor performance. The current recommended strategy of adopting transitional service agreements (TSAs) to handle IT carve-out complexity is compared with two new proactive strategies derived from the model. TSA-based strategies restrict the divestor from both decommissioning IT stranded assets and reconfiguring its IT assets to support its new post-divestment business strategy. The two new strategies address IT carve-out complexity without incurring the negative effects from adopting TSAs. Collapse

Topics: IT alignment system integration information systems strategy value creation organizational productivity

Methods: case study theory development literature study conceptual modelling meta analysis

Form Follows Function: Designing For Tensions Of Conversational Agents In Service Encounters

2022 | European Conference On Information Systems | Citations: 0

Authors: Bucher, Andreas; Staehelin, Dario; Dolata, Mateusz; Schwabe, Gerhard

Abstract: The proliferation of conversational agents (CAs) promises efficiency and qualit ... Expand

Abstract: The proliferation of conversational agents (CAs) promises efficiency and quality improvements while enabling a more seamless integration of technology into service encounters. However, it remains unclear how CAs should be designed to provide the optimal experience for the key users: clients and frontline employees. Based on qualitative research with those key users, this study delivers a vision of an adaptable CA. It proposes a differentiated approach toward the design of CA: there is no "one-sizefits-all" design regarding the level of social presence, autonomy, or agency. The analysis reveals three tensions in user expectations leading to inconsistent design requirements for CAs. To resolve those tensions, CAs should be adapted to the changing context of a service encounter considering the appropriate level of autonomy, task complexity, interpersonal intimacy, and social role of the CA. The study contributes three design principles emphasizing the importance of the context for which a CA is designed. Collapse

Topics: social presence video conference information technology capability human computer interaction usability

Methods: qualitative interview design artifact design principle survey chatbot

FinPathlight: Framework for an multiagent recommender system designed to increase consumer financial capability

2020 | Decision Support Systems | Citations: 0

Authors: Bunnell, Lawrence; Osei-Bryson, Kweku-Muata; Yoon, Victoria Y.

Abstract: In consideration of the general lack of trust in human professional financial ad ... Expand

Abstract: In consideration of the general lack of trust in human professional financial advisors due to conflicts of interest, and given inadequacies in terms of the utility of FinTech alternatives for financial goal recommendations, this study establishes a framework for an ontology-based, multiagent recommender system designed to improve financial capability through the recommendation of financial goals, called FinPathlight. The FinPathlight framework provides an architecture for a personal financial recommender system designed to identify and recommend specific, achievable financial goals appropriate to a wide range of financially situated users. This framework contributes principles of implementation for a novel financial technology (FinTech) application aimed at addressing a pervasive lack of trust surrounding traditional financial advisory services, as well as utility inadequacies within the current landscape for FinTech applications, providing a comprehensive set of practical and explicit financial goal recommendations. Considering the importance of users' adoption of an innovation, this study empirically tests its utility in terms of trust and perceived usefulness. The experimental evaluation results show that an application built using this framework would likely be perceived as trustworthy and useful to users for identification and selection of financial capability enhancing objectives. Collapse

Topics: recommender system electronic finance perceived usefulness knowledge representation mobile application

Methods: design artifact survey ontological modelling Wilcoxon signed-rank test nonparametric test

Theories: information systems theory action theory representation theory

Who Is the Next “Wolf of Wall Street”? Detection of Financial Intermediary Misconduct

2020 | Journal of the Association for Information Systems | Citations: 0

Authors: Lausen, Jens; Clapham, Benjamin; Siering, Michael; Gomber, Peter

Abstract: Financial intermediaries are essential for investors’ participation in financial ... Expand

Abstract: Financial intermediaries are essential for investors’ participation in financial markets. Because of their position within the financial system, intermediaries who commit misconduct not only harm investors but also undermine trust in the financial system, which ultimately has a significant negative impact on the economy as a whole. Building upon information manipulation theory and warranting theory and making use of self-disclosed data with different levels of external verification, we propose different classifiers to automatically detect financial intermediary misconduct. In particular, we focus on self-disclosed information by financial intermediaries on the business network LinkedIn. We match user profiles with regulator-disclosed information and use these data for classifier training and evaluation. We find that self-disclosed information provides valuable input for detecting financial intermediary misconduct. In terms of external verification, our classifiers achieve the best predictive performance when also taking regulator-confirmed information into account. These results are supported by an economic evaluation. Our findings are highly relevant for both investors and regulators seeking to identify financial intermediary misconduct and thus contribute to the societal challenge of building and ensuring trust in the financial system. Collapse

Topics: LinkedIn website data breach social network fraud detection

Methods: machine learning support vector machine sensitivity analysis classification method McNemar's test

Theories: information manipulation theory interpersonal deception theory

Do Financial Advisors Matter? Online Channels and Investors’ Gambling Preferences

2020 | International Conference on Information Systems | Citations: 0

Authors: Liu, CheWei; Hsieh, JJ Po-An; Mithas, Sunil; Pan, Yang

Abstract: Will financial advisors continue to be relevant as financial firms and investors ... Expand

Abstract: Will financial advisors continue to be relevant as financial firms and investors increasingly embrace newer technologies and channels for trading? This study examines this question; we ask if financial advisors can help to reduce investors’ gambling preference, and the role of online channel in attenuating or amplifying this effect. Our results of analyzing data on roughly 20,000 investors with more than 450,000 monthly observations suggest that investors who interact with financial advisors in a given month have 2.36% lower holdings of lottery-like securities. Importantly, we also find that interaction with financial advisors reduces investors’ gambling preference even more when investors heavily rely on Internet for transactions. These findings drawing on literature at the intersection of information systems and behavioral finance and a rare dataset provide useful insights for investors and financial services firms. Collapse

Topics: internet technology information system use human resource management missing data mobile application

Methods: propensity score method descriptive statistic longitudinal research regression analysis method instrumental variables estimation

Theories: behavioral economics

Pivoting Isn’t Enough? Managing Strategic Reorientation in New Ventures

2019 | Organization Science | Citations: 0

Authors: McDonald, Rory; Gao, Cheng

Abstract: New ventures often experience deviations from their plans that oblige them to re ... Expand

Abstract: New ventures often experience deviations from their plans that oblige them to reorient in pursuit of a better fit between their evolving products and their target customers. Yet, research is largely silent on how managers explain such changes and justify their ventures in the wake of fundamental redirections in strategy. Ventures initially attain legitimacy and amass resources on the strength of aims that audiences find compelling; later, those early claims can complicate course corrections. To shed light on how ventures manage strategic reorientations, we conducted an inductive, comparative case study of ventures in a nascent financial-technology sector. The ventures pursued parallel reorientations and produced comparable end products but diverged conspicuously in managing audiences during transitions. Our process model, inspired by these differences, proposes a sequence of stratagems that may enable entrepreneurs to alter strategy while portraying faithfulness to enduring aims. Our theoretical framework posits that, for ventures, reorientation without penalty may depend on how they anticipate, justify, and stage changes to various audiences. Collapse

Topics: blog entrepreneurship electronic finance website innovation management

Methods: qualitative interview qualitative content analysis business process modeling multiple case study archival research

Theories: organizational theory

Following the Robot? Investigating Users’ Utilization of Advice from Robo-Advisors

2019 | International Conference on Information Systems | Citations: 0

Authors: Tauchert, Christoph; Mesbah, Neda

Abstract: Companies are gradually creating new services such as robo-advisors (RA). Howeve ... Expand

Abstract: Companies are gradually creating new services such as robo-advisors (RA). However, little is known if users actually follow RA advice, how much the fit of RA to task requirements influences the utilization, how users perceive RA characteristics and if the perceived advisor’s expertise is influenced by the user’s expertise. Drawing on judgeadvisor systems (JAS) and task-technology fit (TTF), we conducted an experimental study to measure actual advice-taking behavior in the context of RA. While the perceived advisor’s expertise is the most influential factor on task-advisor fit for RA and human advisors, integrity is a significant factor only for human advisors. However, for RA the user’s perception of the ability to make decisions efficiently is significant. In our study, users followed RA more than human advisors. Overall, our study connects JAS and TTF to predict advice utilization and supports companies in service promotion. Collapse

Topics: robo advisor artificial intelligence task characteristic internet technology information system use

Methods: experiment parametric test Student's t-test partial least squares regression survey

Theories: theory of task technology fit

More Than Meets the Eye: A Case Study on the Role of IT Affordances in Supporting Compliance

2018 | Americas Conference on Information Systems | Citations: 0

Authors: Zasada, Andrea; Bui, Tung

Abstract: Meeting compliance requirements in highly regulated business environments is imp ... Expand

Abstract: Meeting compliance requirements in highly regulated business environments is imperative as companies face severe consequences if they fail. Compliance is particularly crucial in financial services as providers are frequently confronted with changes in regulations that financial advisors have to follow when providing investment advice. Deploying IT affordances is expected to assist in assuring compliance, and optimize the process of information management and retrieval. However, there is no research to date that substantiates this assumption from the employee perspective. We propose a conceptual model for assuring compliance derived from a case study conducted at a German savings bank. Our preliminary findings suggest that IT does indeed help employees in improving their compliance. More importantly, our research reveals compliance concerns such as the limited business intelligence of the current system, loss of flexibility in the advisory process, and uncovers the emerging conflict of interests between client, advisor and service provider. Collapse

Topics: affordance system support information system use information storage and retrieval system information overload

Methods: qualitative interview case study business process modeling conceptual modelling