“Dear CEO and Board”: How Activist Investors’ Confidence in Tone Influences Campaign Success

2023 | Organization Science | Citations: 0

Authors: Brauer, Matthias; Wiersema, Margarethe; Binder, Philipp

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet w ... Expand

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet we do not fully understand how these activist investors, despite holding only a small stake in target firms, are able to influence management and the board to acquiesce to their demands, especially given the large uncertainty that their demands will improve shareholder value. Building on impression management (IM) theory, we propose that activist investors who express their concerns and demands with high confidence in their letters to target firms are likely to be perceived as knowledgeable and competent by the firm’s other shareholders, thus influencing the response of the firm’s management and board. In support of this theoretical proposition, results of our empirical analysis of 475 U.S. activist campaigns against U.S. companies between 2007 and 2019 suggest that confidence in tone in an activist’s letter, as a form of self-promotion, is positively associated with campaign success. We also observe that the positive association between confidence in tone in activist letters and campaign success is less for activists with greater success in prior campaigns and in campaigns with multiple activists. Our paper contributes to financial activism research by showing that activists’ verbal impression management can serve as an effective influence tactic in their campaigns. Our study also contributes to the emerging research stream on verbal IM by introducing a language attribute, confidence in tone, that has not been studied in management research and is distinct from past constructs examined in verbal IM research. Collapse

Topics: corporate governance strategic management organizational productivity decision making database system

Methods: descriptive statistic qualitative content analysis theory development linguistic analysis regression analysis method

Theories: behavioral theory

Navigating the Paradox of IT Novelty and Strategic Conformity: The Moderating Role of Industry Dynamism

2023 | International Conference on Information Systems | Citations: 0

Authors: Chaturvedi, Devina; Kathuria, Abhishek; Andrade, Mariana; Saldanha, Terence

Abstract: Although achieving strategic distinctiveness is critical for firms in dynamic i ... Expand

Abstract: Although achieving strategic distinctiveness is critical for firms in dynamic industries, where the competitive landscape and market conditions frequently change, there is a paucity of research on the impact of information technology (IT) on a firm's strategic conformity (or distinctiveness). Motivated by the importance of strategic conformity and emergence of novel technologies, we draw on institutional theory and hypothesize that IT Novelty positively impacts strategic conformity. Second, drawing on resource-based view, we hypothesize that market dynamism and competitive dynamism negatively moderate the effect of IT Novelty on strategic conformity. Third, we hypothesize that the moderating impact is stronger for market dynamism than competitive dynamism. We find support for our hypotheses using a fifteen-year dataset from over 300 U.S. manufacturing firms. Our study contributes to theory and managerial practice by combining institutional and resource-based view perspectives to examine how IT Novelty shapes a firm's strategic conformity, particularly in dynamic industry conditions. Collapse

Topics: database system decision making artificial intelligence internet of things mobile system

Methods: longitudinal research autocorrelation analysis hierarchical linear modeling robustness check regression analysis method

Theories: resource based view of the firm institutional theory

External Interfaces or Internal Processes? Market Positioning and Divergent Professionalization Paths in Young Ventures

2023 | Organization Science | Citations: 0

Authors: DeSantola, Alicia; Gulati, Ranjay; Zhelyazkov, Pavel I.

Abstract: We explore how the initial market positioning of entrepreneurial ventures shapes ... Expand

Abstract: We explore how the initial market positioning of entrepreneurial ventures shapes how they professionalize over time, focusing specifically on the development of functional roles. In contrast to existing literature, which presumes a uniform march toward professionalization as ventures scale and complete developmental milestones, we advance a contingent perspective, distinguishing between the development of external interface functions (marketing & sales and customer development) and internal process functions (accounting, human resources, and finance). Specifically, we argue that positioning in an unconventional market space raises demand for external engagement that focuses ventures’ attention and resources toward developing external interface roles. At the same time, such unconventional ventures are less apt to elaborate their internal process roles relative to more conventional peers. We test these predictions using a novel longitudinal data set on the internal organizations of 3,748 U.S.-based entrepreneurial ventures. In contrast to common assumptions of convergent professionalization, our theory and findings advance the perspective that ventures pursue divergent professionalization paths based on their initial market positioning as they scale up. Funding: This research was generously funded in part by a Ewing Marion Kauffman Foundation Dissertation Fellowship awarded to the first author. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1561. Collapse

Topics: accounting marketing management human resource management database system entrepreneurship

Methods: qualitative interview robustness check longitudinal research statistical hypothesis test descriptive statistic

Theories: organizational theory contingency theory

To Stem the Tide: Organizational Climate and the Locus of Knowledge Transfer

2023 | Organization Science | Citations: 0

Authors: Di Stefano, Giada; Micheli, Maria Rita

Abstract: Prior work has maintained that organizations benefit from managing the transfer ... Expand

Abstract: Prior work has maintained that organizations benefit from managing the transfer of proprietary knowledge. Transfer is often advantageous within organizational boundaries but may be harmful across them, because it might erode competitive advantage. Hence, we ask: How can organizations affect the direction in which knowledge flows? We examine the role of organizational climate as a governing mechanism for knowledge transfer. Our empirical strategy consists of a mixed-methods approach leveraging qualitative and experimental data over two cycles of theory building and theory testing. We start with an extensive field study of the European Organization for Nuclear Research (CERN), leveraging the insights from desk research, field observations, 53 interviews, and a laboratory-in-the-field experiment involving 518 physicists. We then provide a causal test of the emerging framework by means of two laboratory experiments with 389 participants. Our findings suggest employees are more likely to transfer knowledge to their colleagues when they identify as an integral part of the organization, but they would rather transfer knowledge to outside competitors when their organization encourages them to outperform coworkers. In the presence of an organizational climate that is unfavorable to preventing knowledge spillovers, we argue, organizations can redirect the locus of knowledge transfer internally by acting upon an individual employee’s job design and socialization regime.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Funding: The authors acknowledge generous financial support from Bocconi University, the HEC Foundation of HEC Paris, and IESEG School of Management.Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2021.1551. Collapse

Topics: knowledge sharing electronic mail pandemic knowledge spillover strategic management

Methods: experiment qualitative interview field study theory development laboratory experiment

Theories: organizational theory

Variations in the Corporate Social Responsibility-Performance Relationship in Emerging Market Firms

2023 | Organization Science | Citations: 0

Authors: Cuervo-Cazurra, Alvaro; Purkayastha, Saptarshi; Ramaswamy, Kannan

Abstract: Corporate social responsibility (CSR) and its impact on performance have generat ... Expand

Abstract: Corporate social responsibility (CSR) and its impact on performance have generated a debate that has evolved across several perspectives (shareholder, stakeholder, resource-based, and contingency). Building on the resource-based and contingency perspectives, we shed new light on this debate by analyzing the impact of CSR on performance in emerging market firms, advancing the idea that CSR is a mechanism that helps address market and government failures. We first argue that CSR’s three constituent dimensions (environmental, social, and governance) vary in their impact on performance because each dimension has a different mitigating effect on contextual failures that hobble emerging market firms. Specifically, we contend that social CSR has a larger effect on performance than either governance CSR or environmental CSR for emerging market firms, because the former helps build capabilities that more directly reduce the negative consequences of government failures in the provision of public goods and services that firms need to operate efficiently. We then provide additional depth to this idea by arguing that other mechanisms used for mitigating market failures in an emerging market context, namely firm-level business group affiliation and country-level government policy nudges, strengthen this differential influence of each of the three dimensions of CSR on performance. Analyses of a sample of 89 publicly traded Indian firms from 2007 to 2017 support these arguments. Funding: A. Cuervo-Cazurra thanks the Lloyd Mullin fellowship at Northeastern University for financial support. S. Purkayastha thanks Indian Institute of Management, Calcutta for financial support. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1639. Collapse

Topics: organizational productivity database system public good legal context societal evaluation criteria

Methods: experimental group longitudinal research robustness check instrumental variables estimation difference in differences

Theories: resource based view of the firm

Should Doctors Open Online Consultation Services? An Empirical Investigation of Their Impact on Offline Appointments

2023 | Information Systems Research | Citations: 0

Authors: Fan, Wenjuan; Zhou, Qiqi; Qiu, Liangfei; Kumar, Subodha

Abstract: Online healthcare portals have become prevalent worldwide in recent years. One c ... Expand

Abstract: Online healthcare portals have become prevalent worldwide in recent years. One common form of a healthcare portal is the online consultation website, which provides a bridge between patients and doctors and reduces patients’ time and cost when seeking healthcare services. Another form is the healthcare service appointment website, which facilitates offline visits for patients. Although nominally separate, the behaviors of the users (including patients and doctors) on these two types of websites could be related to each other. In particular, how does opening online consultation services impact the offline appointments of doctors? Although this is an important question for healthcare portals, doctors, and policy makers, it has not been rigorously examined in the literature. In this paper, we attempt to bridge this important gap by examining the overall impact of offering online consultations on offline appointments. Our results show that the number of offline appointments for doctors increases after opening an online consultation service. Additionally, we examine how several factors, such as recommendation heat, hospital ranking, and doctor title, moderate the impact of opening online consultation services on doctors’ offline appointments. Given that online consultation is a new but important way to connect patients and doctors, our findings provide useful implications for all the stakeholders—doctors, patients, hospitals, and policy makers—regarding how to integrate online and offline channels in the healthcare context.History: Param Singh, Senior Editor; Yuliang (Oliver) Yao, Associate Editor.Funding: This work was supported by the National Natural Science Foundation of China [Grants 72071057, 71922009, 71871080, and 72188101].Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1145. Collapse

Topics: website electronic health price management online review telephone

Methods: robustness check regression analysis method instrumental variables estimation experimental group hierarchical linear modeling

Theories: signaling theory theory of economic development

An empirical study of content-based recommendation systems in mobile app markets

2023 | Decision Support Systems | Citations: 0

Authors: Jozani, Mohsen; Liu, Charles Zhechao; Choo, Kim-Kwang Raymond

Abstract: Recommendation systems are widely used to promote product visibility and sales. ... Expand

Abstract: Recommendation systems are widely used to promote product visibility and sales. However, past research suggests that they primarily benefit market superstars and therefore, can be detrimental to niche products. This is especially critical in superstar dominated markets such as the market of mobile apps. This study incorporates social network analysis and econometric models to empirically examine the impact of content-based filtering (CBF) recommendation systems on the distribution of demand in mobile app markets. The analysis results of two comprehensive panel datasets from App Store and Google Play suggest that CBF recommendations favor niche items and effectively boost the long tail of the market. Moreover, consistent with signaling theory, relative quality signals provided by recommendation systems can impact consumer decision making process, leading to a spillover of demand. Our findings provide important implications for developers and market operators to better promote their products in the highly competitive market of mobile apps. Collapse

Topics: mobile application mobile application market digital distribution recommender system Google+

Methods: computational algorithm robustness check instrumental variables estimation longitudinal research statistical hypothesis test

Theories: signaling theory

A Star Is Born: The Relationship Between Performance and Achieving Status Through Certification Contests in the Context of Equity Analysts

2023 | Organization Science | Citations: 0

Authors: Paik, Eugene Taeha; Pollock, Timothy G.; Boivie, Steven; Lange, Donald; Lee, Peggy M.

Abstract: We investigate how the relationship between status and performance decouples ove ... Expand

Abstract: We investigate how the relationship between status and performance decouples over time by addressing two questions: (1) how performance affects the likelihood that an actor achieves high status and (2) how achieving high status affects the actor’s subsequent performance. In doing so, we focus on the role repeated certification contests play, where evaluators assess actors’ performance along particular dimensions and confer high status on the contest winners. Using the context of sell-side (brokerage) equity analysts and the “All-Star” list from Institutional Investor magazine, we first investigate whether analysts who make the All-Star list are more likely to produce accurate and/or independent forecasts. Then, we investigate analyst performance after recent and multiple wins. Our results demonstrate the decoupling of status and performance over time and the roles played by both the high-status actor and the social evaluators conferring their status. Whereas analyst performance increases the likelihood of being designated an All-Star, recent and multiple All-Star designations differentially affect both how subsequent performance is assessed, and how the All-Star analysts subsequently perform. In the short term, achieving high status can increase performance and solidify an analyst’s status position; however, in the long term, it can lead to lower performance and eventually result in status loss, which further erodes performance. Collapse

Topics: accounting IT career database system

Methods: theory development descriptive statistic post-hoc analysis statistical hypothesis test hierarchical linear modeling

Blood and Water: Information Technology Investment and Control in Family-owned Businesses

2023 | Journal of Management Information Systems | Citations: 0

Authors: Kathuria, Abhishek; Karhade, Prasanna P.; Ning, Xue; Konsynski, Benn R.

Abstract: Family-owned businesses differ in their strategic intent and behavior as they se ... Expand

Abstract: Family-owned businesses differ in their strategic intent and behavior as they serve as a reservoir of wealth and social status for their family owners. Family-owned businesses demonstrate relatively conservative strategic decision making that aspires long-term wealth preservation and enhancement. For family owners, investments in information technology (IT) raise a predicament as they are risky, yet a long-term imperative. We propose three hypotheses that build upon the thesis that family owners combine a deep understanding of the business with a strong influence on stakeholders within and beyond the firm's boundaries to exert strategic control in the extended enterprise. First, family ownership negatively influences IT investment, because family owners are likely to avoid investments in IT that are frivolous, reduce information asymmetry, or leave auditable digital trails. Second, the negative influence of family ownership on IT investment is weakened when a career professional is appointed in the senior-most executive position of a family-owned business. This is because professional executives strive to utilize IT for control and performance benefits, and family owners desire to use IT to monitor and control the non-family professional executive. Third, family ownership weakens the negative influence of environmental hostility on the relationship between IT investment and firm performance, as family-owned businesses incur less dynamic adjustment costs and maintain better alignment between IT and business strategy. Empirical analysis, consisting of panel regression estimations, on archival data of publicly listed Indian firms in the years 2006 to 2018 provides support for our theory that highlights how IT for control acts as a noneconomic motivation for the strategic IT behavior of firms. In doing so, we bring family ownership into the theoretical foreground for future IS scholarship. We contribute to theory and practice by advancing the nature of ownership and executive management as sources of heterogeneity in IT investment and its business value. Collapse

Topics: IT investment organizational productivity information system use strategic management research and development

Methods: longitudinal research autocorrelation analysis cross sectional research statistical hypothesis test time series analysis

Theories: lemon market theory

Online-to-Offline Platforms: Examining the Effects of Demand-Side Usage on Supply-Side Decisions

2023 | Information & Management | Citations: 0

Authors: Wan, Xing; Jha, Ashish Kumar; Kazantsev, Nikolai; Boh, Wai Fong

Abstract: This study explores the impact of demand-side usage of digital platforms on oper ... Expand

Abstract: This study explores the impact of demand-side usage of digital platforms on operational decision-making by supply-side firms. The positive impact of digital platforms on product sales is established in the literature. However, this study focuses on the perspective of supply-side firms, examining the effect of increasing reliance on digital platforms on supply-side firms’ decisions. The study shows that greater demand-side usage of onlineto-offline (O2O) digital platforms is associated with more efficient operational decisions of supply-side firms. Benefits of leveraging O2O platforms include information transparency and resource pooling. The study further examines the extent to which benefits from participating in O2O digital platforms are affected by inter-firm relationships in which a supply-side firm is embedded. The study uses a panel data model to test hypotheses with data on China’s movie theaters that join O2O platforms. It found that movie theaters with greater demandside usage of O2O digital platforms see better resource utilization and product concentration. Furthermore, it shows that more vertically integrated firms can better reap the benefits from demand-side usage of digital platforms. In contrast, more horizontally integrated firms can less strategically leverage the benefits from demand-side usage of O2O platforms. Collapse

Topics: digital platform information system use decision making mobile application consumer behavior

Methods: qualitative interview robustness check personal interview statistical hypothesis test data modeling