Myung-Soo Jo and Emine Sarigollu awarded 2018 McGill Sustainability Systems Initiative New Opportunities award
Congratulations to Myung-Soo Jo, and Emine Sarigollu, Professors in Marketing, on being awarded the 2018 McGill Sustainability Systems Initiative (MSSI) New Opportunities award “From a Throwaway Society into a Sustainable Society: A Consumer Perspective”.
Congratulations to Myung-Soo Jo, and Emine Sarigollu, Professors in Marketing, on being awarded the 2018 SSHRC Insight Grant “The Demand and Supply Sides of Corruption”.
Authors: Mohammad E. Nikoofal, Mehmet Gumus
Publication: Production and Operations Management, Forthcoming
This paper develops a dyadic supply chain model with one buyer who contracts the manufacturing of a new product to a supplier. Due to the lack of experience in manufacturing, the extent of supply risk is unknown to both the buyer and supplier before the time of contract. However, after the contract is accepted, the supplier may invest in a diagnostic test to acquire information about his true reliability, and use this information when deciding on a process improvement effort. Using this setting, we identify both operational and strategic benefits and costs of diagnostic test. Operationally, it helps the supplier to take the first-best level of improvement effort, which would increase efficiency of the total supply chain. Strategically, it enables the buyer to reduce the agency costs associated with implementing process improvement on the supplier. Besides these benefits, diagnostic test increases the degree of information asymmetry along the supply chain. This in turn provides the supplier with proprietary information, whose rent would be demanded from the buyer in equilibrium. Benefit-cost analysis reveals two key factors in determining the value of diagnostic test: (i) degree of endogenous information asymmetry between supply chain firms, and (ii) the relative cost of diagnostic test with respect to process improvement cost. Our results indicate that when both are high, the mere presence of diagnostic test can result in less reliable supply chain. This implies that when incentives are not properly aligned, information asymmetry amplified due to diagnostic test neutralizes all its benefits.
Determinants of Climate Change Mitigation Technology Portfolio: An Empirical Study of Major U.S. Firms
Authors: Derek D. Wang, Shanling Li, Toshiyuki Sueyoshi
Publication: Journal of Cleaner Production, Vol. 196, September 2018
Authors: Michelle Y. Lu , Jiwoong Shin
Publication: Marketing Science, Vol. 37, No. 3, May-June 2018
When a firm introduces a radical innovation, consumers are unaware of the product’s uses and benefits. Moreover, consumers are unsure of whether they even need the product. In this situation, we consider the role of marketing communication as generating consumers’ need recognition and thus market demand for a novel product. In particular, we model marketing communication as a two-sided process that involves both firms’ and consumers’ costly efforts to transmit and assimilate a novel product concept. When the marketing communication takes on a two-sided process, we study a firm’s different information disclosure strategies for its radical innovation. We find that sharing innovation, instead of extracting a higher rent by keeping the idea secret, can be optimal. A firm may benefit from the presence of a competitor and its communication effort. The innovator can share its innovation so that competitors can also benefit, which encourages rivals to enter the market. The presence of such competition guarantees a higher surplus for consumers, which can induce greater consumer effort in a two-sided communication process. Moreover, the increased consumer effort, in turn, prompts complementarity in the communication process and lessens the potential free-riding effect in communication between firms. Additionally, it encourages the rival firm to exert more effort, especially when the role of consumers becomes more important. Sharing innovation with a rival serves as a mechanism to induce more efforts in a two-sided communication process.
Authors: Eduard Calvo, Ruomeng Cui and Juan Camilo Serpa
Publication: Management Science, Forthcoming
In the U.S., four in ten public infrastructure projects report delays or cost overruns. To tackle this problem, regulators often scrutinize the project contractor’s operations. We investigate the causal effect of government oversight on project efficiency by gleaning 262,857 projects that span seventy-one U.S. federal agencies and 54,739 contractors. Our identification strategy exploits a regulatory bylaw: if a project’s anticipated budget exceeds a threshold value, the contractor’s operations are subject to surveillance from independent procurement officers; otherwise, these operational checks are waived. Using a regression discontinuity design, we find that oversight is obstructive to the project’s operations, especially when the contractor (i) has no prior experience in public projects, (ii) is paid with a fixed-price contract that includes performance-based incentives, and (iii) performs a labor-intensive task. In contrast, oversight is least obstructive — or beneficial — when the contractor (i) is experienced, (ii) is paid with a time-and-materials contract, and (iii) performs a machine-intensive task.
Karla Sayegh, PhD Student in Strategy & Organization, received the best student paper award for her thesis work at the 11th International Organizational Behaviour in Health Care (OBHC) Conference held in Montreal from May 13 –16, 2018.
Authors: Robert Bray, Juan Serpa and Ahmet Colak
Publication: Management Science, Forthcoming
We explore the effect of supply chain proximity on product quality by merging four independent data sources from the automotive industry, collecting: (i) auto component defect rates, (ii) upstream component factory locations, (iii) downstream assembly plant locations, and (iv) product-level links connecting the upstream and downstream factories. Combining these four datasets allows us to trace the flow of 27,807 products through 529 supplier factories and 275 assembly plants. We estimate that increasing the distance between an upstream component factory and a downstream plant by an order of magnitude increases the component’s expected defect rate by 3.9%. We also find that shorter inter-factory spans are associated with more rapid product quality improvements, and that supply chain distance is more detrimental to quality when automakers: (i) produce early generation models or (ii) high-end products, (iii) when they buy components with more complex configurations, or (iv) when they source from suppliers who invest relatively little in research and development
Authors: Adrianne R. Bischoff, André K. Portella, Catherine Paquet, Roberta Dalle Molle, Aida Faber, Narendra Arora, Robert D. Levitan, Patrícia P. Silveira and Laurette Dubé
Publication: British Journal of Nutrition, Vol. 119, No. 11, June 2018
The prediction of oil price turning points with log-periodic power law and multi-population genetic algorithm
Authors: Fangzheng Cheng, Tijun Fan, Dandan Fan and Shanling Li
Publication: Energy Economics, Vol. 72, May 2018
Cutting the Cord: Mutual Respect, Organizational Autonomy, and Independence in Organizational Separation Processes
Authors: Rene Wiedner and Saku Mantere
Publication: Administrative Science Quarterly, Forthcoming
Based on a longitudinal, qualitative analysis of developments in the English National Health Service, we develop a process model of how organizations divest or spin off units with the aim of establishing two or more autonomous organizational entities while simultaneously managing their continued interdependencies. We find that effective organizational separation depends on generating two types of respect—appraisal and recognition respect—between the divesting and divested units. Appraisal respect involves showing appreciation for competence or the effort to achieve it, while recognition respect requires considering what someone cares about—such as values or concerns—and acknowledging that they matter. The process model we develop shows that open communication is crucial to the development of both. We also find that certain attempts to gain organizational independence and respect may unintentionally undermine the development of autonomy. Counterintuitively, we find that increasing or maintaining interorganizational links via communication may facilitate organizational separation, while attempts by units to distance themselves from one another may unintentionally inhibit it. By linking organizational separation, autonomy, independence, and respect, this paper develops theory on organizational separation processes and more generally enhances our understanding of organizational autonomy and its relations with mutual respect.
Assistant Professor in Information Systems Kartik Ganju's paper "The Spillover Effects of Health IT Investments on Regional Healthcare Costs," with co-authors Hilal Atasoy and Pei-yu Chen was selected by the Managing Editor of Management Science as one of the Featured Articles for the June 2018 issue.
Professor Emmanuelle Vaast's paper published in the Academy of Management Annals, "Social Media and Their Affordances for Organizing: A Review and Agenda for Research," with Paul M. Leonardi were co-winners for the Best Paper Award for Volume 11 (2017).
The mission of Annals is to publish up-to-date, in-depth and integrative reviews of research advances in management.
Assistant Professor in Finance, Patrick Augustin, recently received the 2018 Arthur Warga Award for Best Paper in Fixed Income at the Society for Financial Studies (SFS) Calvalcade North America 2018 with co-authors Mikhail Chernov and Dongho Song.