Knowledge that Transforms

Despite increasing investments in Environmental, Social, and Governance (ESG) initiatives and practices, firms often fail to meet public expectations, causing ESG incidents. While firms often choose to remain silent after an incident, we argue that this is not attractive to firms anymore on social media platforms, where consumers and stakeholders can freely share information and concerns. That is, firms tend to use official social media accounts to increase communication frequency and communicate with stakeholders about the incidents (i.e., incident-related posts) after the occurrences. We are also interested in the extent to which firms would adjust their use of social media in terms of non-incident-related posts, as the current prevailing practical advice and studies offer contradicting predictions. Using data from different sources, we construct an event-based firm-day dataset and empirically show that firms significantly increase the number of social media posts after ESG incidents. The impact is more salient for firms in consumer-oriented industries and when the incident is more impactful. Using a semi-supervised, dictionary-based approach, we delve into the content of tweets and demonstrate that firms are inclined to increase both the number of incident-related and the number of non-incident-related tweets after an ESG incident. The follow-up analyses at the incident level indicate that firms that post more after an ESG incident experience a better reaction from the capital market, especially for customer-oriented firms or incidents that receive high attention from the traditional media.

Diversity, equity, and inclusion are at the core of present-day health and humanitarian logistics. Aid organizations advocate inclusive people-centered approaches to ensure that affected communities receive appropriate aid in an effective and equitable way. Tensions and even conflicts can arise if affected communities perceive the distribution of aid as inequitable. These perceptions are driven by people’s so-called distributional preferences. These preferences are shaped by culture, social bonds, and experiences, and they describe how an individual’s well-being and behavior are impacted by potential inequalities. Their importance is increasingly recognized by aid organizations, but research on equity in health and humanitarian logistics remains focused on equal access and prioritizing needs. Using current examples from the Syrian and Rohingya refugee crises, we show the importance of recognizing and managing distributional preferences. Based on these examples and in line with diversity, equity, and inclusion principles, we discuss several ways that we, as the operations community, can help conceptualize inclusive and people-centered approaches that account for distributional preferences.

The second-hand market (SM) trades used products from the reverse channel. In practice, manufacturers such as Apple Inc. collect used products and sell refurbished products in the SM. However, third-party firms (TPFs) such as Gazelle independently manage the SM. Alternatively, the manufacturer may delegate the responsibility of managing the SM to a TPF under a contract or choose to operate in the SM with a TPF serving as a competitor. The optimal strategy to manage the SM is an important operations issue for the manufacturer as well as the TPF. This decision becomes even more critical when the manufacturer plans to sell the upgraded version, markdown version, and remanufactured version of the product concurrently. In the presence of product competition, SM selling can affect the prices and sales of the markdown product as well as the upgraded product. Therefore, in this study, we analyze impacts of the manufacturer’s choice of delegation. Our analytical findings reveal that the SM selling strongly influences the equilibrium price and the demand for the markdown product offered by the manufacturer under all the mechanisms. However, demand cannibalization of the markdown product is most severe under the delegation mechanism. Additionally, we counter-intuitively reveal that the manufacturer is better-off under the delegation mechanism when the sales commission is low and remanufacturing cost is high. In fact, the delegation mechanism is found to be the most profitable arrangement for the manufacturer as well as the TPF. Interestingly, demand for the upgraded version product remains unaffected by SM sales under the independent TPF mechanism, allowing the manufacturer to launch the upgraded version product without any fear of demand cannibalization. Furthermore, we discover that consumers secure the maximum surplus under the competitive scenario owing to intense price competitiveness. For robustness checking, we further extend our model to consider the cases with variable remanufacturing cost, differential emission cost, environmental cost, and collection rate of used product.

Although risk management is widely regarded as an important topic within supply chain (SC) management, little research studies the contagious effect of risk factors along SC networks. By using stock price crashes as an indicator of risk factors, our study reveals that stock price crash risk can be transmitted from major customers to suppliers with a delay of up to two weeks. We show that the information opacity of suppliers is a factor that potentially contributes to the delayed crash contagion. We also find that the contagion effect becomes more pronounced as the importance of customers increases. Moreover, customer operational incidents have a more pronounced contagion effect on suppliers compared to customer financial incidents. Additionally, we find that suppliers tend to take strategic measures following the stock price crashes of their major customers, including diversifying their customer base, enhancing operational efficiency, and improving product quality. However, among these actions, only the improvement of operational efficiency effectively mitigates the adverse impact of customer stock price crashes on suppliers. Overall, our findings provide new insight into the distribution of risk factors across SC networks, highlighting the critical role of operational improvements in bolstering the resilience of firms to SC risks.

Competing firms may engage in group buying (GB) to benefit from a quantity discount from a common supplier. We study GB under different power structures (i.e., Nash and Stackelberg) and investigate how the power structures can be endogenized along with the resulting GB outcome. We employ a game-theoretic framework in which two firms under Cournot competition can group their purchases if it is beneficial compared to individual purchasing. We show that under exogenous power structures, when the two firms have highly asymmetric market bases, Nash GB is unattainable due to severe co-opetition conflict, and Stackelberg GB can better resolve the conflict. Our results suggest that power structures may fundamentally affect firms’ GB incentives, and no power structure is always superior to others. We then endogenize the power structures of the two firms based on a two-stage extended game. Using Pareto-risk dominance, we identify conditions under which one firm endogenously emerges as the Stackelberg leader with the rival as the follower, as well as the conditions under which both firms endogenously choose Nash GB or opt for independent purchasing. We demonstrate that the two firms can largely resolve the battle for GB leadership and achieve an efficient outcome in most cases. Our study is the first to compare different exogenous power structures and consider endogenous power structures in the context of GB.

Live streaming has emerged as an innovative means for content providers (broadcasters) to monetize their content in real time under pay-what-you-want pricing. In a typical live stream, consumers (viewers) watch the content and decide whether and how much to tip the broadcaster in the form of virtual gifts that have been purchased with real money. Unlike offline contexts where payment is often nontransparent, both payment activities and sender identities are transparent or publicly observable in live streams. Hence, understanding to what extent and how tipping influences broadcasters’ emotional reactions and peer viewers’ engagement activities becomes relevant and meaningful. In this study, we examine the social impact of viewer tipping activity by running a field experiment on a popular live-streaming platform in China. We deploy synthetic viewers to both treated and control streams. These synthetic viewers send random tip amounts at random times in only the treated and not the control streams, which then exogenously alters the tips that are observed by the audience. We find that broadcasters tend to provide an emotional and reciprocal reaction in response to additional viewer tips, which is measured by the broadcasters’ level of happiness as discerned from their facial expressions. Viewers tend to tip less, chat less, and leave the current stream sooner when seeing more tips from peers, suggesting a negative crowding-out effect on viewer engagement. Nevertheless, the crowding-out effect does not apply to the number of likes, which are displayed without viewer identities in a live stream. In addition, such crowding-out effects manifest mainly in those viewers who tipped heavily before the experiment, possibly because heavy tippers care more about social status than their counterparts. These results collectively suggest that the pursuit of social status is a plausible driver of the observed crowding-out effects.

As an emerging social technology, live streaming has facilitated a synchronous and interactive selling setting for e-commerce sellers and consumers. Despite growing operations management (OM) in e-commerce live streaming (ELS), the prior literature has largely neglected the directive social operations of ELS broadcasters, which are crucial to a company's business operations and marketing strategies. To mitigate this gap, we investigated the effects of social call-to-actions (SCTAs), an ELS-specific directive social operation, on consumer purchase outcomes in ELS. To explicate the mechanisms driving the purchase effect of SCTAs, we draw upon the notions of cognitive and affective marketing appeals to categorize SCTAs into two types: cognitive and affective SCTAs. We measure broadcasters’ SCTAs from ELS speech-to-text data using text-mining techniques and adopt econometric model estimations via an instrumental variables identification approach to quantify the relationships between ELS broadcasters’ SCTAs and consumer purchases. Our results uncover a significant positive purchase effect of affective SCTAs but an insignificant effect of cognitive SCTAs on product-level purchase orders in ELS. Specifically, a one-unit increase in affective SCTA-related words per minute is related to increased purchase orders of a product by 0.43%, i.e., averaging a 1.10% growth in demand per minute. Additionally, we find that the effects of cognitive and affective SCTAs are contingent on product and broadcaster types. Our session-level mediation effect analysis verifies the underlying mechanisms that drive the purchase effects of broadcasters’ SCTAs. Specifically, we find that cognitive SCTAs impede social engagements and thereby purchases, whereas affective SCTAs can boost social engagements, leading to increased session traffic and ultimately product sales in ELS. Our study provides novel empirical findings and important practical implications for ELS platforms and broadcasters.

Firms’ multilevel access to information plays a significant role in improving operating performance. Increasingly, firms are enhancing their operational integration through information technology (IT) as they grapple with intense competition. Competition networks are an essential but often overlooked source of information that, if leveraged correctly, can provide firms with significant competitive and operational advantages. In this study, we develop a multilevel research model of operating performance (firm level) that simultaneously considers the effects of IT for operational integration (ITOI, firm level) and competitive brokerage (competition network level). We explicate how ITOI and competitive brokerage afford firms’ synergy through complementarities and relatedness of competitive actions, information, and resources to improve their operating performance. We assess the model using a 7-year longitudinal secondary data set that includes firms from multiple industries and find support for our thesis that ITOI and competitive brokerage have a synergistic effect on operating performance. Our exploratory analysis uncovers innovation efficiency as a theoretical mechanism underlying the relationships between ITOI, competitive brokerage, and operating performance. Further exploratory analyses with disaggregated measures of ITOI highlight that synergies arise from IT-enabled coordination and integration across the supply chain and within functional areas of an organization. These findings are robust to concerns of endogeneity and alternative model specifications. We make three critical contributions to our collective understanding of the relationship between IT and operating performance—synergy as a means through which operating performance is realized, a multilevel model of relationships, and a nuanced understanding of the relationships between ITOI, competitive brokerage, and operating performance. Overall, we provide a summative view of the multilevel effects of IT on operating performance.

Conflict is common within global supply chains, especially where the buyer and supplier span different cultures. In such settings, formal contracts assume an important role in providing a common language that specifies each party's roles, responsibilities, and liabilities. However, the primacy, use, and interpretation of contracts is subject to the cultural norms of the two parties involved. We adopt a multi-method research design to understand how cultural context affects how suppliers interpret and respond to different contract functions (control vs. coordination) adopted by a buyer firm during conflict episodes. Study 1 involves multiple, in-depth case studies of conflict between three Indian suppliers and six of their international buyers from China, Germany, and the United States. Our findings highlight how the use of contractual control or coordination is interpreted differently depending on the supplier's cultural context. In particular, a mismatch in contract function use and the supplier's culturally derived expectations can lead to strong negative emotions and damage to the relationship. In Study 2, we propose and test a set of hypotheses via a scenario-based experiment of German and Chinese managers. We find support for our hypothesized conditional effects, showing that for suppliers from high-context cultures, the buyer's use of contractual control to address conflict has a significant negative, indirect effect on relationship commitment (via the emotion of anger). We conclude with a discussion of the implications of using contracts to manage conflict in cross-cultural supply chain relationships.

The recent refugee crises in Ukraine (2022) and Syria (2011) have created millions of refugees, 40% of whom are children. The education systems of countries hosting refugees struggle to integrate such large populations. In addition, language barriers and the stigma associated with refugees hamper inclusive and equitable education opportunities for these children. There is thus a risk of "lost generations" distanced from education, who may eventually depend on social security systems and monetary aid in the long term. This study considers the following research question: How can a host country improve the inclusion of refugee children in the education system without overburdening its infrastructure? First, we document the availability and accessibility challenges and opportunities that refugee children face during the Syrian refugee crisis. We then develop an inclusive planning strategy aligned with existing capacity and resources and formulate two adaptations of the maximum covering problem (MCP): cooperative capacitated MCP with heterogeneity constraints (CCMCP-HC) to improve the current schooling access in Türkiye and Modular CCMCP-HC to guide early planning in the case of a future crisis. Our computational analyses illustrate that the proposed approach yields higher schooling rates and capacity utilization than existing approaches. Our results emphasize the importance of having a planning strategy in the initial phases of a crisis that considers future integration possibilities. This study analyzes Türkiye's experience and lessons learned to provide a road map for other ongoing and future refugee crises.