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Cultivating a Leadership Pipeline: Using a Real Options Lens to Understand Executives’ Strategic Staffing Decisions
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2023 | Organization Science | Citations: 0
Authors: Campion, Michael C.; Campion, Emily D.; Campion, Michael A.; Bauer, Talya N.

Abstract: This paper adapts real options theory to explain how executives create and maint ... Expand

Abstract: This paper adapts real options theory to explain how executives create and maintain real options portfolios within leadership pipelines. Hypotheses flowing from our theorizing predict that executives often make seemingly risky staffing decisions for leaders who occupy stepping-stone positions. Focusing on their option (future potential) rather than project (current productivity) value, executives laterally transfer leaders in stepping-stone positions frequently, despite it resulting in lower short-term job performance, but often promote these leaders at lower levels of performance and sooner. Once leaders are promoted to destination positions where they may stay indefinitely, executives tend to transfer high-performing leaders more often but not when they are still improving the effectiveness of their current unit. We present evidence suggesting that executives make these decisions to improve other units and maintain a flexible system, possibly recapturing previous investments in developing those leaders. We provide empirical support for our hypotheses using eight years of data in a large retail organization (n = 25,004) where executives overseeing thousands of units made internal mobility decisions. These findings refine real options theory, show that it explains these phenomena better than existing theories, and provide important and immediately usable practical implications for executives. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1608. Collapse

Semantic filters: options theory

Topics: task productivity real option IT career productivity human resource management

Methods: statistical hypothesis test descriptive statistic theory development logistic regression focus group

Theories: real options theory options theory
Unravelling the Business Value of Artificial Intelligence

2023 | Americas Conference on Information Systems | Citations: 0
Authors: Du, Kui; Li, Gaoyong; Li, Liang; Zhang, Wei

Abstract: This study aims to investigate how firms can prepare for artificial intelligenc ... Expand

Abstract: This study aims to investigate how firms can prepare for artificial intelligence (AI) adoption and how AI creates business values for adopting firms. We propose that, first, leveraging AI for value creation depends on the presence of an enabling resource foundation, consisting of a stack of technological and managerial resources. According to the real options theory, the stronger such a resource foundation is, the more valuable the option it creates for a firm to adopt AI, and consequently the firm is more likely to exercise the option to adopt. Second, we propose that, after adoption, the depth of AI use can have negative impacts on employee productivity, while the breadth of AI use can have positive impacts. We empirically validate these hypotheses based on a sample of 6,854 manufacturing firms in a coastal province in China. Collapse

Semantic filters: options theory

Topics: artificial intelligence individual productivity organizational value value creation productivity

Methods: survey experiment regression analysis method

Theories: real options theory resource based view of the firm options theory
Artificial Intelligence in the Workplace: Implementation Challenges and Opportunities

2023 | Americas Conference on Information Systems | Citations: 0
Authors: Raftopoulos, Marigo; Hamari, Juho

Abstract: This study aims to investigate how firms can prepare for artificial intelligenc ... Expand

Abstract: This study aims to investigate how firms can prepare for artificial intelligence (AI) adoption and how AI creates business values for adopting firms. We propose that, first, leveraging AI for value creation depends on the presence of an enabling resource foundation, consisting of a stack of technological and managerial resources. According to the real options theory, the stronger such a resource foundation is, the more valuable the option it creates for a firm to adopt AI, and consequently the firm is more likely to exercise the option to adopt. Second, we propose that, after adoption, the depth of AI use can have negative impacts on employee productivity, while the breadth of AI use can have positive impacts. We empirically validate these hypotheses based on a sample of 6,854 manufacturing firms in a coastal province in China. Collapse

Semantic filters: options theory

Topics: artificial intelligence individual productivity organizational value value creation productivity

Methods: survey experiment regression analysis method

Theories: real options theory resource based view of the firm options theory
A Multi-Criteria Approach to Decision Making in Broadband Technology Selection
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2022 | Group Decision and Negotiation | Citations: 0
Authors: Araújo, Marco; Ekenberg, Love; Danielson, Mats; Confraria, João

Abstract: A new European Union regulatory framework for the telecom sector has been under ... Expand

Abstract: A new European Union regulatory framework for the telecom sector has been under a process of transposition to national laws by its member states that should have been completed by the end of 2020, notwithstanding some delays. A core purpose of the regulatory framework is to guarantee that most citizens will have access to very fast Internet connections, capable of 100 Mbps download link speed, regardless of where they live. According to this new framework, in areas where the market does not deliver, governments are to launch public tenders for the deployment, maintenance, and operations of network infrastructure as well as services, and public funds should be used to support the deployment of these broadband networks in less densely populated areas. Needless to say, public tenders of this nature are subject to different criteria when it comes to candidate evaluation. In this paper, we present a decision model for the selection of operators to deploy and maintain broadband networks in scarcely populated areas, taking into consideration infrastructure costs, the technical quality offered by the solutions, and the credibility of the candidates. We suggest an integrated multi-stakeholder multi-criteria approach and demonstrate how it can be used in this complex area and find that in the example provided, taking a relevant set of criteria into the analysis, optical fibre networks hold much higher chances to be used in these public tenders compared to networks based on the broadly favoured 5G technology. Collapse

Semantic filters: options theory

Topics: procurement management communication service infrastructure real option technological change

Methods: simulation trade-off analysis method multiple criteria decision making stochastic model ELECTRE

Theories: options theory
Cascading Digital Options and the Evolution of Digital Infrastructures: The Case of IIoT

2022 | International Conference on Information Systems | Citations: 1
Authors: Drechsler, Katharina; Grisold, Thomas; Seidel, Stefan

Abstract: Digital infrastructures provide a space where possibilities for innovation cont ... Expand

Abstract: Digital infrastructures provide a space where possibilities for innovation continuously emerge. They are not stable entities but are evolving. Their boundaries are subject to constant negotiation among multiple organizational actors as well as changing connections of digital technologies, operations, and users. In this paper, we explore the evolution of an Industrial Internet of Things (IIoT) infrastructure in a leading manufacturing company. We find that the IIoT infrastructure provided actionable spaces upon which organizational actors discovered opportunities for improving process performance which, in turn, led to investment decisions. We explain this process through the lens of digital options theory and highlight how IIoT infrastructure provides the material foundation for the identification of digital options, how the realization of digital options leads to the emergence of more digital options, and how these "cascading" digital options are implicated in the evolution of IIoT infrastructure. We discuss theoretical and practical implications. Collapse

Semantic filters: options theory

Topics: information technology infrastructure mobile system internet of things cloud computing innovation management

Methods: qualitative interview case study theory development grounded theory computational algorithm

Theories: options theory
Artificial Intelligence as a Call for Retail Banking: Applying Digital Options Thinking to Artificial Intelligence Adoption

2022 | European Conference On Information Systems | Citations: 0
Authors: Fridgen, Gilbert; Hartwich, Eduard; Rägo, Vadim; Rieger, Alexander; Stohr, Alexander

Abstract: Technology-driven challenges, both existing and emerging, require banks to inve ... Expand

Abstract: Technology-driven challenges, both existing and emerging, require banks to invest in IT capabilities, especially in artificial intelligence (AI). Digital options theory presents a valuable guide rail for these investments. However, the nature of AI as a moving frontier of computing requires certain extensions to established digital option thinking. Based on interviews with 23 experts in the retail banking industry, we highlight the importance of thinking broadly when laying the foundation for AI options and being mindful of the dynamic effects of contextual factors. Drawing from digital options theory and the Technology-Organization-Environment framework as dual lens, our study adds a structured approach to consciously balance resources and AI-related capability investments with a broader consideration of the banking industry's complex environment. In this way, our study complements recent research on the interplay between incumbents' resources and digital opportunities. Collapse

Semantic filters: options theory

Topics: artificial intelligence information technology capability real option technology adoption research and development

Methods: qualitative interview qualitative coding personal interview triangulation memoing

Theories: theory of everything options theory technology organization environment framework
VALUE CREATION THROUGH STRATEGIC INVESTMENTS IN DIGITAL TECHNOLOGIES: THE ROLE OF ORGANIZATIONAL AGILITY

2021 | European Conference On Information Systems | Citations: 0
Authors: Eisele, Sebastian; Brettel, Malte

Abstract: ... Expand

Abstract: Collapse

Semantic filters: options theory

Topics: competitive advantage digital business electronic business business-to-business business-to-consumer

Methods: data transformation field study confirmatory factor analysis descriptive statistic robustness check

Theories: dynamic capabilities theory options theory
Exploring the relationships between IT competence, innovation capacity and organizational agility
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2018 | Journal of Strategic Information Systems | Citations: 0
Authors: Ravichandran, T.

Abstract: Business environments today are characterized as being very dynamic and hyper co ... Expand

Abstract: Business environments today are characterized as being very dynamic and hyper competitive. Organizations in these environments have to be agile in order to adapt their strategies and actions to be successful. While it is recognized that information technology can enable firms to be agile, there is a limited understanding of the mechanisms through and the contexts in which Information Technology (IT) enhances agility. This study examines two key antecedents of organizational agility, namely the IT competence of a firm and its innovation capacity and, examine their independent and joint effects on agility. We test our model using data collected from large firms in the US. The results provide strong support for our model. We found that firms with superior IS capabilities coupled with an aggressive IT investment orientation create digital platforms that enable them to be agile. We also found that the innovation capacity of the firm has a positive relationship with organizational agility and that firms with higher innovation capacity are better able to leverage their digital platforms to enhance agility. Our results indicate that organizational agility has a strong positive impact of firm performance. We interpret and discuss these results and their theoretical and practical implications. Collapse

Semantic filters: options theory

Topics: digital platform innovation management organizational productivity IT investment information technology capability

Methods: theory development survey design partial least squares regression experiment literature study

Theories: options theory
Information Technology Investments and Firm Risk Across Industries: Evidence from the Bond Market

2017 | Management Information Systems Quarterly | Citations: 22
Authors: Kim, Keongtae; Mithas, Sunil; Kimbrough, Michael

Abstract: This study documents variation across industries in creditors’ perceptions of th ... Expand

Abstract: This study documents variation across industries in creditors’ perceptions of the risk of information technology (IT) investments. The associations we document between IT investments and both initial bond ratings and yield spreads suggest that credit-rating agencies and bond investors consider IT investments in automate and informate industries less risky than those in transform industries. We document that IT investments are associated with more volatile future cash flows in transform industries than in automate or informate industries. The findings indicate that bond investors prefer IT investments in automate industries, where the cash flow payoffs to IT investment are smaller but more stable than in transform industries. Overall, these findings provide the important insight that bondholders’ perceptions of IT investments vary across industries based on bondholders’ aversion to the riskiness and the lack of collateralizability of IT investments. Senior managers should recognize that IT investments have implications for both operational performance and financing costs (e.g., costs of debt) of the firm, and they should consider the potential financial benefits of increased IT capabilities, such as the willingness of corporate bond investors to accept lower financing costs. Collapse

Semantic filters: options theory

Topics: IT investment research and development IS impact real option database system

Methods: Compustat ordered probit regression instrumental variables estimation descriptive statistic robustness check

Theories: real options theory options theory
Economic valuation for information security investment: a systematic literature review
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2017 | Information Systems Frontiers | Citations: 20
Authors: Schatz, Daniel; Bashroush, Rabih

Abstract: Research on technological aspects of information security risk is a well-establi ... Expand

Abstract: Research on technological aspects of information security risk is a well-established area and familiar territory for most information security professionals. The same cannot be said about the economic value of information security investments in organisations. While there is an emerging research base investigating suitable approaches measuring the value of investments in information security, it remains difficult for practitioners to identify key approaches in current research. To address this issue, we conducted a systematic literature review on approaches used to evaluate investments in information security. Following a defined review protocol, we searched several databases for relevant primary studies and extracted key details from the identified studies to answer our research questions. The contributions of this work include: a comparison framework and a catalogue of existing approaches and trends that would help researchers and practitioners navigate existing work; categorisation and mapping of approaches according to their key elements and components; and a summary of key challenges and benefits of existing work, which should help focus future research efforts. Collapse

Semantic filters: options theory

Topics: data security database system decision support system real option IT security

Methods: structured literature research literature sample mixed method analytic hierarchy process trade-off analysis method

Theories: game theory real options theory options theory

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Found 33 articles

Cultivating a Leadership Pipeline: Using a Real Options Lens to Understand Executives’ Strategic Staffing Decisions

Unravelling the Business Value of Artificial Intelligence

Artificial Intelligence in the Workplace: Implementation Challenges and Opportunities

A Multi-Criteria Approach to Decision Making in Broadband Technology Selection

Cascading Digital Options and the Evolution of Digital Infrastructures: The Case of IIoT

Artificial Intelligence as a Call for Retail Banking: Applying Digital Options Thinking to Artificial Intelligence Adoption

VALUE CREATION THROUGH STRATEGIC INVESTMENTS IN DIGITAL TECHNOLOGIES: THE ROLE OF ORGANIZATIONAL AGILITY

Exploring the relationships between IT competence, innovation capacity and organizational agility

Information Technology Investments and Firm Risk Across Industries: Evidence from the Bond Market

Economic valuation for information security investment: a systematic literature review