Knowledge that Transforms

We demonstrate that two intertwined activities of music piracy, unauthorized obtaining and unauthorized sharing, are differentially influenced by the same social learning environment. We develop a structural model and test it using survey data from a prime demographic set of respondents who engage in music piracy. Considering behavioral heterogeneity, we employ a factor mixture modeling technique to classify respondents into different groups that highlight distinct patterns of social learning influences. We find that the differential effects of social learning factors on obtaining and sharing persist across these groups. We further utilize demographic variables to profile members in each group for segmentation insights. From a theoretical perspective, our findings advance the understanding of music piracy and suggest the importance of separating obtaining from sharing activities when studying piracy. From a managerial perspective, our research provides new avenues for managers and policymakers to design targeted incentives to curtail music piracy.

This research examines the role of diversification on incumbent firms' response to the threat of new entry. When faced with threats posed by new technologies, incumbent firms in the information technology (IT) industry can either perform research and development (R&D), or acquire the new entrants who are successful at innovating. We use a two-stage game-theoretic framework to model the relation between diversification and the decision to acquire versus perform R&D. We also collect data on financial indicators for firms in the IT industry using the Compustat database to empirically test the propositions from the analytical model. Our results suggest that firms with a higher degree of diversification are more likely to innovate through acquisition than through R&D. Moreover, diversification has a positive effect on investment in acquisitions, as well as a negative effect on investment in R&D. Keywords: diversificationfirm acquisitiongame theoryinnovationR&D

This paper examines how information provided by online reviews influences firms' pricing strategy for repeat purchase products. It is commonly understood that online reviews can reduce consumer uncertainty about product characteristics and, therefore, have the potential to increase product demand and firm profits. However, when considering repeat purchase products, online reviews have an additional effect in that they can alter consumers' propensity to switch among products, which can intensify price competition and lead to lower profits. The strength of these potentially offsetting effects depends on the informativeness of consumer reviews, which is a function of both objective review accuracy and the ability of consumers to obtain information from reviews when their idiosyncratic preferences over product characteristics might differ from the preferences of reviewers. The interplay of these competing effects results in an S-shaped relationship between the quality of reviews and firm profits. There exists an optimal level of consumer informedness from the firms' perspective, and competing firms may have incentives to facilitate consumer reviews in some markets but not in others. Given firms' strategic pricing, consumers may also be worse off as review informativeness increases.

The tendency to remain silent about project-related issues can contribute to suboptimal project performance or project failure. Prior research in offshore outsourcing suggests that client managers should play a critical role to induce offshore vendors' employees not only to report project problems in a timely fashion but also to brainstorm and contribute ideas to a project. Also, the extant research on cross-cultural teams has emphasized the importance of cultural adaptation in the smooth functioning of these teams, but the role of cultural adaptation in silence mitigation has been largely underdeveloped in the literature. In this research, we bring these concepts of vendor silence and cultural adaptation in cross-cultural teams together and develop a process framework that illustrates how vendor silence may be mitigated in offshore outsourcing through various silence mitigation mechanisms. We then develop three propositions for organizational action toward mitigating vendor silence, which highlight the mediating role of cultural adaptation. Keywords: collaboration effectivenessIT outsourcingmum effectoffshore outsourcingoffshore project managementorganizational silencesilence mitigationvendor silence

In this paper, we build analytical models to examine the impact of network externalities on the competition between open source software (OSS) and proprietary software. We investigate the competing OSS and proprietary software products with comparable functionalities in four different scenarios depending on whether they are compatible with each other and whether the underlying market is fully covered (i.e., all consumers adopt one of the two products). Furthermore, we study which party has the most incentive to make its product compatible with its counterpart. When the market is fully covered, the installed base and the profit of proprietary software increase at the expense of a decreasing user base for OSS in the presence of network externalities. This competitive imbalance becomes more pronounced when OSS and proprietary software are incompatible and the market is partially covered. Finally, we find that in the presence of network externalities, being compatible with its rival is not desirable for the proprietary software, but highly beneficial to the OSS community.

Interactive decision aids (IDAs) typically use concrete, feature-based approaches to interact with consumers. Recently, however, interaction designs that focus on communicating abstract consumer needs have been suggested as a promising alternative. This paper investigates how temporal distance moderates the effectiveness of these two competing IDA communication designs by its effect on consumers' mental representation of the product decision problem. Temporal distance is inherently connected to IDAs in two ways. Congruency between consumption timing (immediate versus distant) and IDA communication design (concrete versus abstract, respectively) increases the likelihood to accept the IDA's advice. This effect is also achieved by congruency between IDA process timing (immediate versus delayed delivery of recommendations) and IDA communication design (concrete versus abstract, respectively). We further show that this process is mediated by the perceived transparency of the IDA process. Managers and researchers need to take into account the importance of congruency between the user and the interface through which companies interact with their users and can further optimize IDAs so that they better match consumers' mental representations.

Effective knowledge management has been increasingly cited as critical for businesses to compete successfully. Knowledge acquisition/capture, the first step in knowledge management, continues to be a bottleneck and is exacerbated when experts are geographically distributed. Furthermore, knowledge from multiple experts is likely to generate inconsistent knowledge for a given problem domain. There is thus a compelling need to generate consensus by resolving inconsistencies and conflicts that may occur among experts during the process of knowledge acquisition. This process is more challenging when dealing with virtual teams of experts. This study addresses task-based or cognitive conflicts among experts. A key objective of this study is to examine the effectiveness of two cognitive techniques—the repertory grid (or RepGrid) and Delphi—in generating consensus among experts during the knowledge capture process. A field experiment with geographically distributed real-world network experts involving multiple rounds of interaction over an extended period of time was conducted. Findings from this research indicate that, in the short run, Delphi works better than the RepGrid in reducing conflict and generating consensus. However, the RepGrid technique appears to perform better in the long run. We find similar results for satisfaction with the process and outcome. Our findings also indicate that experts using the RepGrid technique elicited more knowledge as well as higher-quality knowledge than experts using the Delphi technique. To sum up, our study indicates that RepGrid is superior to Delphi, and therefore managers should seriously consider the use of RepGrid in capturing knowledge from multiple and distributed experts when dealing with complex real-world issues. Keywords: cognitive conflictconflict resolutionconsensus generationDelphi techniqueknowledge captureknowledge managementrepertory grid techniquevirtual teams

We explore the issue of seller differentiation in competitive auction environments, where most sellers have a high percentage of positive feedback. Analyzing a set of eBay auction listings for identical products, we find evidence that the use of visibility-enhancing and quality-signaling discretionary auction attributes affects auction outcomes throughout the auction process (i.e., listing views, bids, and price premiums). We also find strong evidence that the number of reputable sellers in an auction marketplace moderates the effects of these discretionary attributes on auction outcomes. Specifically, as auction environments become more competitive, these attributes become more effective tools for differentiation, whereas seller feedback scores become less effective. Furthermore, sellers appear to select their strategies for employing these discretionary attributes based on both their prior experience and the number of experienced reputable sellers in the market. These findings suggest that in addition to relying on feedback scores, online sellers must take a more strategic approach in the selection of discretionary attributes in their auction listings.

This exploratory paper presents a conceptual model of the factors of governmental support and openness, business and technology investment, and socioeconomic level that are posited to influence technological utilization. The conceptual model and conjectures are developed inductively based on logic and prior research about the relationship among variables related to the factors. Structural equation modeling (SEM) is applied to operationalize and test the model. The SEM analysis tests five points of investigation on a large sample of country data from the World Bank and the World Economic Forum. Findings indicate a critical pathway of associations between the factors of government support and openness, investment in business and technology, socioeconomic level, and technology utilization. The paper presents two country case examples of the model and suggests policy steps for national governments of developed and developing countries to prioritize information and communications technology, create openness, strengthen research and development and technology investment, and enhance education and information technology training.

We empirically investigate whether business process reengineering (BPR), which requires substantial investment in information technology to integrate separate tasks into complete cross-functional processes, is associated with enhanced firm productivity and performance. We analyze firm-level panel data covering the period 1987-2008 using fixed effects and first differencing, standard methods that account for unobservable firm-level effects. We find that return on assets drops significantly during the project initiation year. According to fixed effects results, the performance and productivity measures improve in a decreasing manner after project initiation, suggesting that BPR indeed positively affects firm performance on average. We also find that enterprise-wide BPR projects are associated with more negative returns during project initiation than functionally focused projects. However, there is no clear evidence regarding their superiority over functionally focused BPR projects in terms of performance improvements after project initiation, perhaps because grand projects are risky and sometimes lead to grand failures.