Network Centralization and Collective Adaptability to a Shifting Environment

2023 | Organization Science | Citations: 1

Authors: Bernstein, Ethan S.; Shore, Jesse C.; Jang, Alice J.

Abstract: We study the connection between communication network structure and an organizat ... Expand

Abstract: We study the connection between communication network structure and an organization’s collective adaptability to a shifting environment. Research has shown that network centralization—the degree to which communication flows disproportionately through one or more members of the organization rather than being more equally distributed—interferes with collective problem-solving by obstructing the integration of existing ideas, information, and solutions in the network. We hypothesize that the mechanisms responsible for that poor integration of ideas, information, and solutions would nevertheless prove beneficial for problems requiring adaptation to a shifting environment. We conducted a 1,620-subject randomized online laboratory experiment, testing the effect of seven network structures on problem-solving success. To simulate a shifting environment, we designed a murder mystery task and manipulated when each piece of information could be found: early information encouraged an inferior consensus, requiring a collective shift of solution after more information emerged. We find that when the communication network within an organization is more centralized, it achieves the benefits of connectivity (spread of novel better solutions) without the costs (getting stuck on an existing inferior solution). We also find, however, that these benefits of centralization only materialize in networks with two-way flow of information and not when information only flows from the center of the network outward (as can occur in hierarchical structures or digitally mediated communication). We draw on these findings to reconceptualize theory on the impact of centralization—and how it affects conformity pressure (lock-in) and awareness of diverse ideas (learning)—on collective problem-solving that demands adaptation.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Funding: The authors acknowledge financial support from the Division of Research at the Harvard Business School for making this research possible. Collapse

Topics: social influence problem solving internet technology social network debugging

Methods: experiment machine learning simulation Poisson regression logistic regression

Theories: organizational theory

“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

Token Incentives in a Volatile Crypto Market: The Effects of Token Price Volatility on User Contribution

2023 | Journal of Management Information Systems | Citations: 0

Authors: Chen, Kun; Fan, Yifan; Liao, Shaoyi Stephen

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in bl ... Expand

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in blockchain systems to encourage user participation. Distinct from monetary incentives, token incentives are uncertain in reward magnitude due to the large swings in token prices on crypto markets. By focusing on token price volatility, this study investigates how the reward uncertainty affects user contribution in a tokenized digital platform. Our empirical setting is Steemit, a platform where bloggers write posts and share token rewards based on their posts' popularity. We find that while high token price volatility induces a large volume of blog posts, it diminishes post quality. The dichotomous effects are explained via two mechanisms: users' direct reactions to reward uncertainties and their indirect reactions, mediated by altered token preference amid volatility shocks. Deeply exploring this dynamic process, our results reveal that token price volatility facilitates a platform's network short-term effect but impairs long-term user creativity. Our empirical findings thus extend the literature on blockchain economics and cryptocurrencies and have practical implications for the design of incentive mechanisms on tokenized digital platforms. Collapse

Topics: blog blockchain digital platform cryptocurrency user behavior

Methods: longitudinal research instrumental variables estimation data transformation principal component analysis vector autoregression

Theories: motivation crowding theory

Collateral Damage: The Relationship Between High-Salience Events and Variation in Racial Discrimination

2023 | Organization Science | Citations: 0

Authors: Gorbatai, Andreea; Younkin, Peter; Burtch, Gordon

Abstract: To what extent are individual or organizational biases affected by racially sali ... Expand

Abstract: To what extent are individual or organizational biases affected by racially salient events? We propose that acts of discrimination and the individual biases that undergird them are sensitive to high-salience events and will oscillate with the salience of the focal attribute. In short, that the propensity to discriminate reflects both individual and environmental differences, and therefore a given person may become more prone to discriminate in the aftermath of a high-salience event. We test our hypothesis in three online experiments that examine how varying the salience of race affects the evaluation of in-group or out-group founders. We find that respondents evaluate their in-group members more favorably, and out-group members less favorably, when exposed to a high-salience event, which translates into a significant disadvantage for the minority (African American) group. We complement these studies with an assessment of how police shootings affect fundraising outcomes on Kickstarter to confirm the external validity of our findings. Together, these studies indicate that racially salient events depress the quality evaluations and success odds of African American entrepreneurs relative to others. Hence, discrimination levels can be affected by salient yet unrelated events, and such events are consequential for the economic fortunes of individuals belonging to minority and disadvantaged groups.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2021.1527. Collapse

Topics: crowdfunding crowdsourcing website criminality application programming interface

Methods: experiment parametric test statistical hypothesis test survey facial recognition system

Co-evolution of neural architectures and features for stock market forecasting: A multi-objective decision perspective

2023 | Decision Support Systems | Citations: 0

Authors: Hafiz, Faizal; Broekaert, Jan; La Torre, Davide; Swain, Akshya

Abstract: In a multi-objective setting, a portfolio manager’s highly consequential decisio ... Expand

Abstract: In a multi-objective setting, a portfolio manager’s highly consequential decisions can benefit from assessing alternative forecasting models of stock index movement. The present investigation proposes a new approach to identify a set of non-dominated neural network models for further selection by the decision-maker. A new coevolution approach is proposed to simultaneously select the features and topology of neural networks (collectively referred to as neural architecture), where the features are viewed from a topological perspective as input neurons. Further, the co-evolution is posed as a multi-criteria problem to evolve sparse and efficacious neural architectures. The well-known dominance and decomposition based multi-objective evolutionary algorithms are augmented with a non-geometric crossover operator to diversify and balance the search for neural architectures across conflicting criteria. Moreover, the co-evolution is augmented to accommodate the data-based implications of distinct market behaviors prior to and during the ongoing COVID-19 pandemic. A detailed comparative evaluation is carried out with the conventional sequential approach of feature selection followed by neural topology design, as well as a scalarized co-evolution approach. The results on three market indices (NASDAQ, NYSE, and S&P500) in pre- and peri-COVID time windows convincingly demonstrate that the proposed co-evolution approach can evolve a set of non-dominated neural forecasting models with better generalization capabilities. Collapse

Topics: covid 19 pandemic decision support system decision making

Methods: computational algorithm artificial neural network data transformation machine learning principal component analysis

Theories: co-evolution theory

Reassessing the Puzzle of Environmental Management Systems and Their Impact on Firm Performance: A Panel Data Analysis

2023 | International Conference on Information Systems | Citations: 0

Authors: Huber, Maria; Ixmeier, Anne; Kranz, Johann

Abstract: Companies have increasingly adopted environmental management systems (EMSs) in ... Expand

Abstract: Companies have increasingly adopted environmental management systems (EMSs) in response to the need for improving their environmental sustainability and accountability. EMSs enable companies managing their environmental activities, supposedly leading to improved environmental performance and cost savings. However, research findings regarding the effectiveness of EMSs on key environmental and financial performance measures are inconclusive. To address this puzzle, we collected data from various sources to analyze the relationships between EMS certification, environmental performance, and financial performance for the STOXX 600 using panel data regression covering six years. With this comprehensive, large-scale approach, we account for largely neglected indirect effects and widespread validity issues of prior research, such as cross-sectional designs, perception-based performance measures, and small sample sizes. Our results show that EMS certification has a significant positive effect on environmental performance, particularly on emission reduction. We did not find a significant effect of EMS certification and environmental performance on financial performance. Collapse

Topics: financial performance competitive advantage innovation management missing data communication service infrastructure

Methods: longitudinal research autocorrelation analysis robustness check descriptive statistic Wald test

Theories: resource based view of the firm

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

Understanding the Digital Resilience of Physicians during the COVID-19 Pandemic: An Empirical Study

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Liu, Yinghao; Xu, Xin; Jin, Yong; Deng, Honglin

Abstract: The COVID-19 pandemic has underscored the urgent need for healthcare entities t ... Expand

Abstract: The COVID-19 pandemic has underscored the urgent need for healthcare entities to develop resilient strategies to cope with disruptions caused by the pandemic. This study focuses on the digital resilience of certified physicians who adopted an online healthcare community (OHC) to acquire patients and conduct telemedicine services during the pandemic. We synthesize the resilience literature and identify two effects of digital resilience-the resistance effect and the recovery effect. We use a proprietary dataset that matches online and offline data sources to study the digital resilience of physicians. A difference-in-differences (DID) analysis shows that physicians who adopted an OHC had strong resistance and recovery effects during the pandemic. Remarkably, after the COVID-19 outbreak, these physicians had 35.0% less reduction in medical consultations in the immediate period and 31.0% more bounce-back in the subsequent period as compared to physicians who did not adopt the OHC. We further analyze the sources of physicians' digital resilience by distinguishing between new and existing patients from both online and offline channels. Our subgroup analysis shows that, in general, digital resilience is more pronounced when physicians have a higher online reputation rating or have more positive interactions with patients on the OHC platform, providing further support for the mechanisms underlying digital resilience. Our research has significant theoretical and managerial implications beyond the context of the pandemic. Collapse

Topics: pandemic electronic health business continuity planning disaster recovery information system use

Methods: longitudinal research experimental group longitudinal survey augmented Dickey–Fuller test time series analysis

Uncertainty Analysis in Group Decisions through Interval Ordinal Priority Approach

2023 | Group Decision and Negotiation | Citations: 0

Authors: Mahmoudi, Amin; Javed, Saad Ahmed

Abstract: In multiple criteria decision-making (MCDM) problems, ranking alternatives is us ... Expand

Abstract: In multiple criteria decision-making (MCDM) problems, ranking alternatives is usually the end. However, in real life, it is rarely an end in itself and serves as a means to an end. Further, in real-life problems, the selection of alternatives is usually made with the aid of unique experts, and thus minimizing the influence of the uncertainty of their subjective judgements on the optimality of the decisions is a critical issue. The current study proposes a novel Interval Ordinal Priority Approach to objectively solve these and other issues by allowing uncertainty analysis and quantification. The study argues that when the model’s input contains uncertainty (even if represented by crisp numbers), expecting the output to be free from uncertainty is an unrealistic conjecture. Therefore, unlike the conventional MCDM models producing crisp weights, the proposed approach yields interval weights with the length of the interval representing the uncertainty (inconsistency among the experts’ judgements). Also, instead of resorting to the subjective measurement of thresholds to qualify or disqualify a set of inputs based on the degree of uncertainty, a novel objective measure of threshold is put forward. The validity of the proposed method is demonstrated through illustrative examples and comparative analysis. Later, the study is concluded with the implications for real-world decision-making. Collapse

Topics: decision making decision support system

Methods: descriptive statistic cross sectional research statistical hypothesis test trade-off analysis method Grey relational analysis

Theories: mathematical theory

Are You What You Tweet? The Impact of Sentiment on Digital News Consumption and Social Media Sharing

2023 | Information Systems Research | Citations: 0

Authors: Oh, Hyelim; Goh, Khim-Yong; Phan, Tuan Q.

Abstract: Although social media has helped online newspapers by allowing users to organica ... Expand

Abstract: Although social media has helped online newspapers by allowing users to organically share articles, some have argued that it has cannibalized and hurt newspapers through reduced readership and diminished agenda-setting power. Motivated by these two opposing effects, it is critical to understand what affects the duality between sharing news articles on social media and reading the articles on news websites. Using rich clickstream data on online news readership obtained from an English-language newspaper in an Asian country and social media data collected from Twitter, we focus on article sentiment as a key news content attribute and find a differential effect of sentiment on readership and sharing behaviors across the news site and third-party social media platform. Our results show that people are likely to read news articles with negative sentiment on the news site, but they tend to share articles with positive sentiment on Twitter. Specifically, a one-unit increase in content sentiment is associated with a 10.86% or 273-unit decrease in news site page views but a 17.0% or 2.10-unit increase in Twitter sharing volume. Upon decomposition of news article sentiment, we also find a contrasting positive author sentiment effect and a negative news topic valence effect on news readership. To uncover the underlying mechanism of the findings, we test the key intuitions from prior self-presentation literature. We find that an increase in a Twitter user’s followers (i.e., audience size) leads to an increase in the Twitter user’s propensity to share positive-sentiment news articles. Our findings on the role of sentiment on content consumption and sharing affirm the coopetitive but complementary relationship between news websites and social media platforms. Our results also guide publishers to better craft their news content and manage social media presence to improve audience engagement and readership outcomes while preserving the agenda-setting ability of news media.History: Anindya Ghose, Senior Editor; Mingfeng Lin, Associate Editor.Funding: H. Oh was supported by the Ministry of Education, Singapore [Grant R-253-000-126-114] and the National Research Foundation of Korea [Grant NRF-2021S1A5A8070021]. T. Q. Phan was supported by the National University of Singapore [Grant T1-251RES1402] and the University of Hong Kong [Grant 201909185043].Supplemental Material: The online appendices are available at https://doi.org/10.1287/isre.2022.1112. Collapse

Topics: Twitter social media website personality Facebook

Methods: sentiment analysis CoreNLP natural language processing instrumental variables estimation econometric modeling