Knowledge that Transforms

Task interdependence has received a great deal of attention as a critical driver of project dynamics. This study focuses on one of these key dynamics: helping among information technology (IT) implementation project team members. We uniquely distinguish between perceptions of receiving more help than one personally provides to other team members (positive inequity), vs. giving more than one receives (negative inequity). We argue, using an equity theory frame, that members have a tendency to resolve perceived inequity by adjusting subsequent levels of helping, but that the extent of adjustment is moderated by task interdependence. Results from an empirical evaluation of 591 members in 107 IT implementation teams, examined at several points throughout their project cycles, provide insight into these relationships. Extending and bounding equity theory, we find that lower interdependence augments the effect of positive inequity on subsequent helping, but leaves the effect of negative inequity unaffected. Further, we find support for an inverted U‐shaped relationship between the level of subsequent helping in a team and the final cost of implementation. This holds critical implications for project team design and ensuing dynamics.

We analyze not‐for‐profit Medical Surplus Recovery Organizations (MSROs) that manage the recovery of surplus (unused or donated) medical products to fulfill the needs of underserved healthcare facilities in the developing world. Our work is inspired by an award‐winning North American non‐governmental organization (NGO) that matches the uncertain supply of medical surplus with the receiving parties’ needs. In particular, this NGO adopts a recipient‐driven resource allocation model, which grants recipients access to an inventory database, and each recipient selects products of limited availability to fill a container based on its preferences. We first develop a game theoretic model to investigate the effectiveness of this approach. This analysis suggests that the recipient‐driven model may induce competition among recipients and lead to a loss in value provision through premature orders. Further, contrary to the common wisdom from traditional supply chains, full inventory visibility in our setting may accelerate premature orders and lead to loss of effectiveness. Accordingly, we identify operational mechanisms to help MSROs deal with this problem. These are: (i) appropriately selecting container capacities while limiting the inventory availability visible to recipients and increasing the acquisition volumes of supplies, (ii) eliminating recipient competition through exclusive single‐recipient access to MSRO inventory, and (iii) focusing on learning recipient needs as opposed to providing them with supply information, and switching to a provider‐driven resource allocation model. We use real data from the NGO by which the study was inspired and show that the proposed improvements can substantially increase the value provided to recipients.

We consider a make‐to‐stock, finite‐capacity production system with setup cost and delay‐sensitive customers. To balance the setup and inventory related costs, the production manager adopts a two‐critical‐number control policy, where the production starts when the number of waiting customers reaches a certain level and shuts down when a certain quantity of inventory has accumulated. Once the production is set up, the unit production time follows an exponential distribution. Potential customers arrive according to a Poisson process. Customers are strategic, i.e., they make decisions on whether to stay for the product or to leave without purchase based on their utility values, which depend on the production manager's control decisions. We formulate the problem as a Stackelberg game between the production manager and the customers, where the former is the game leader. We first derive the equilibrium customer purchasing strategy and system performance. We then formulate the expected cost rate function for the production system and present a search algorithm for obtaining the optimal values of the two control variables. We further analyze the characteristics of the optimal solution numerically and compare them with the situation where the customers are non‐strategic.

Based on the resource‐based view (RBV) and the transaction cost economics (TCE) theories, we study the impact of IT capability on the performance of port supply chain using an IT‐enabled transaction cost frontier model where the IT capability is modeled as a unique production input and as an endogenous transaction attribute as well. By examining the optimal levels of IT capability for different port systems from the viewpoint of production cost and transaction cost, we find theoretical evidence to explain why a port system with a horizontal competitive governance mode is less successful at integrating a port IT system in practice. Moreover, we find that the optimal IT capability of an individual port operator is lower than the IT capability in an integrated heterogeneous system. We further investigate how to improve IT capability to the desired system level through different forms of an incentive system that includes a subsidy offered by the port authority to coordinate the entire port system. The fixed subsidy is found to be the most cost‐effective and the easiest to implement. In addition, considering that information about effort cost for IT capability can be private under a market or hybrid governance mode, we study the performance of a direct revelation mechanism when revealing the port operator's private information and true cost to the port authority.

When network effects are important and technology is rapidly improved, this study explores the relative optimality of five product introduction strategies of a durable goods manufacturer: (1) replacement, (2) skipping, (3) a delayed line, (4) shelving, and (5) line‐extension. Using a two‐period analytical model, we show how the type of compatibility—either full or backward compatibility—and the magnitude of the network effect influence the manufacturer's preference for the above strategies. Our analysis reveals that only the strategies (1)–(3) above can be optimal; and the optimal strategy varies with network strength. Further, the type of compatibility can dramatically change the profitability under each optimal strategy; for instance, while backward compatibility can increase the profitability of replacement under certain conditions, it always reduces the profitability of a delayed line. We also illustrate that if compatibility were a choice, although backward compatibility may be observed widely in practice, the parametric region for its optimality is relatively more restricted than that of full compatibility.

Operations Management (OM) research on organizational culture has to change to be able to inform practice. Currently, organizational culture research in OM is largely confined to narrow topical and methodological niches and culture is most frequently used as an explanatory variable in quantitative, survey‐based research. We argue that the relegation of culture to this niche is due to self‐imposed methodological blinders that hobble the OM field. We then present four research imperatives to reinvigorate organizational culture research within our field. We urge OM scholars to view culture as a dynamic concept that can be influenced, to adopt alternative methods, to use non‐traditional data sources, and to rethink assumptions about dependent variables. We also identify gaps in the current knowledge and new research questions for the OM domain. We conclude that the field of OM could greatly expand its understanding of organizational culture and in so doing greatly improve business practice, but that to do so will require a change in the culture of the operations management research community.

This note analyzes the effects associated with reducing demand uncertainty in a decentralized supply chain comprising one manufacturer, one retailer, and a wholesale price contract that governs the transactions between them. The demand uncertainty level is parameterized through a mean‐preserving spread, and the manufacturer's and the retailer's equilibrium decisions are solved accordingly. We consider the case of an exogenous retail price as well as the case of an endogenous retail price, and we find in both cases that the manufacturer's and the retailer's expected profits in equilibrium are not necessarily monotone decreasing in the uncertainty level. Thus, we find that, even if the cost of reducing demand uncertainty is zero, uncertainty reduction can hurt rather than benefit either or both members of the supply chain.

In this article, we look at research published over a five‐year time span in the economics of information systems (IS) area in four premier journals, including Management Science, Information Systems Research, MIS Quarterly, and Production and Operations Management, to identify research themes that have implications for future research in the area of Management of Technology (MOT). Through our examination of the literature, we identify three emergent themes that can be used to form foundations for future MOT research from an economics of IS perspective: productivity, vertical relations, and platforms. Within each of these themes, we classify previous research into subthemes, summarize the major findings, and explore future research opportunities within the MOT domain that are relevant to these subthemes. Specifically, we examine how information technology has impacted firm productivity, their product design and development process, innovation capabilities, knowledge management capabilities, and supply chain integration.

Gray markets are created by unauthorized retailers selling manufacturer's branded products. Similar to international gray markets, domestic gray markets are a growing phenomenon whose impact on supply chains is not clear. We consider a supply chain with one manufacturer and several authorized retailers who face a newsvendor problem and a domestic gray market. While a gray market provides an opportunity for retailers to clear their excess inventory (inventory‐correction effect), it also can be a threat to their demand (demand‐cannibalization effect). We first characterize the emerging equilibrium by assuming an MSRP environment. Comparing a decentralized and centralized system, we show that a wholesale pricing contract is quite efficient in a gray market environment; we explain the underlying mechanism and note some of the operational decisions that could hurt that efficiency. We show that the gray market price determines the degree of both the negative effects of demand‐cannibalization and the positive effects of inventory correction, which in turn determines the net impact of gray markets on the retailer's stocking choice and, ultimately, the manufacturer's profit. We then study the authorized retailers' problem as a price‐setting newsvendor. We observe that the gray market creates price competition between the authorized and unauthorized retailers, causing a drop in the primary market price. However, this price competition can be counteracted by the authorized retailers' stocking decision. Finally, we extend our model to consider the cases where the demand can be correlated across retailers.