Experts Matter. Find Yours.

Integrating knowledge in outsourced software development

Despite the prevalence of using outside vendors to handle a company’s software development, little is known about the best way to effectively share the knowledge critical to a project’s success among the client and vendor software team members. In research from Anandhi Bharadwaj, professor of information systems & operations management (ISOM) and Goizueta Term Chair in ISOM, and coauthor Nikhil Mehta (U of Northern Iowa), the duo determined that knowledge integration on outsourced projects is further complicated by the uncertainty often inherent in software development. Bharadwaj and Mehta analyzed 139 vendor development teams taken from sixteen Indian software companies for their research. The authors found that the manner in which software teams share and protect the information resources they have impacts the knowledge integration ability of the team. Since software teams operate under conditions of resource scarcity and dependence, team leaders need to ensure that their software development teams have not only the requisite technical skills but also the ability to import needed skills and knowledge from external sources and share it effectively within the team. An important implication of Bharadwaj and Mehta’s research is that organizations should develop holistic performance appraisal policies that assess software developers for both intergroup and within-group activities. Source:

Investor conferences and analyst advantage

In a research paper, T. Clifton Green, associate professor of finance and doctoral area coordinator, and coauthors Russell Jame 10PhD (U of Kentucky), Stanimir Markov (Southern Methodist U), and Musa Subasi (U of Maryland) focused their investigation on broker-hosted investor conferences to determine their impact on investor research. They studied 68,194 presentations by 4,394 companies at 2,749 investor conferences led by 107 brokerages for the period January 2004 to December 2010. According to the data, Green and his coauthors concluded that brokerage research analysts were more likely to provide better research for firms that participated at their conferences. Conference-hosting brokers were more likely to provide “more informative stock recommendations and more accurate earnings forecasts” than non-hosts. They discovered that firms participating in “broker-hosted investor conferences have a closer relation with the hosting analyst than with non-hosts, resulting in more private interactions (e.g., more company visits and meetings with management) and a continual flow of value-relevant information throughout the sample period.” Source:

Increased trading activity and declining returns

Improved trading technologies are changing the markets, facilitating the boom in algorithmic trading and the growth of hedge funds. Liquidity and trading volume continue to hit record levels. In a research study, Tarun Chordia, R. Howard Dobbs Professor of Finance, and coauthors Avanidhar Subrahmanyam (UCLA) and Tong Qing (Singapore Management U) analyzed whether or not increased liquidity and the trading activity of hedge funds has had an impact on financial market anomalies. Anomalies are return patterns that are inconsistent with the basic risk-return paradigm of finance. Increased arbitrage is a possible factor in attenuating the impact of anomalies, including momentum, reversals, accruals, etc. To find the link, Chordia and his coauthors studied proxies for arbitrage trading, including “the impact of the decline in the tick size due to decimalization and the impact of hedge fund assets under management, short interest, and share turnover.” The researchers referenced a wide sampling of equity market anomalies for more than three decades to show that increased liquidity and hedge fund trading activity did ultimately result in the decrease of the “economic and statistical significance of these anomalies.” Source:

Why negotiations fail

For business leaders engaged in negotiations, it’s essential to constantly analyze and revisit their negotiation strategy to avoid many of the errors typically made in the process. In the Handbook of Conflict Management Research, Erika Hall, assistant professor of organization & management, and coauthors Brian Lucas (U of Chicago) and Leigh Thompson (Northwestern U) offer a window into negotiation methods and some of the mistakes negotiators make along the way. The trio discovered and defined three specific errors that occur in negotiations, including what they label as domain myopia, the self-preoccupation effect, and the script hijack effect. Domain myopia is described as the “tendency for negotiators to fail to see meaningful parallels across negotiation situations that might appear different on the surface, but have meaningful underlying similarities.” Hall and her coauthors also describe the self-preoccupation effect, where negotiators let their emotions win the day and subsequently lose perspective. The third scenario that they define is the script hijack effect, which they describe as “the tendency for negotiators to feel compelled to follow a script, often based on stereotypes.” According to the authors, the problems they document apply across a variety of industries. Source:

Supply network structure and systemic risk

Demand uncertainty can present a serious challenge for any business, especially when it comes to managerial decisions on inventory. But when an economic downturn happens, the challenge becomes systemic. According to research by Nikolay Osadchiy, assistant professor of information systems & operations management, and coauthors Vishal Gaur (Cornell U) and Sridhar Seshadri (Indian School of Business), systemic risk is more greatly felt depending on where a company sits in the supply chain. The trio discovered that while an economic downturn presented a serious hurdle for retailers, wholesalers, and manufacturers alike, manufacturers were more prone to systemic risk given their placement upstream in the supply chain. Manufacturers had “a more dispersed customer base,” which the authors noted was more closely “associated with higher systematic risk.” Manufacturers also experienced greater systemic risk due to the effect of aggregation of orders over time. They wrote, “A market shock in one period may affect sales over several periods due to lead times and time lags in managerial decision making.” Source:

Understanding self-serving behavior in leaders

In a new research paper, Melissa Williams, assistant professor of organization & management, developed a framework to better understand when and why leaders use their power for personal gain. She discovered that a variety of traits, characteristics, and values, such as feeling less of a sense of guilt, made leaders more likely to exhibit self-interested behaviors. Individuals who were more narcissistic, less humble and honest, and generally less agreeable also had an increased chance of abusing their power. Leaders with an individualistic and competitive streak as well as those with a lower sense of morality were also more likely to act on self-interest. Threats to power especially increased self-serving behavior for those with a propensity for it. Williams added that “because positions of leadership are desirable and hedonically pleasurable, leaders facing threats to their power will prioritize self-interested actions that secure their own power over behaviors that serve shared goals.” Interestingly, for the individuals who did not have self-interested traits and values, power actually decreased the likelihood that they would become self-interested. Source:

The effect of multitasking on worker performance

Diwas KC, associate professor of information systems & operations management, completed an in-depth investigation of the impact of multitasking in a complex work environment by analyzing patient flow and clinical data of physicians in a large hospital ER. The study provides important findings for understanding multitasking and its “implications for a knowledge economy, where attention and focus are significant drivers of productivity and quality.” The research indicated that multitasking starts out as a positive influence on work, giving physicians the “ability to utilize idle time between tasks.” Additionally, lower levels of multitasking actually improved the quality of care, since “low levels of stress can aid cognitive function.” Once multitasking behavior became excessive, productivity declined dramatically due to a variety of factors, including work interruptions and coordination costs. A higher level of multitasking also led to a drop in detected diagnoses and an increased rate of revisits in a 24-hour period for patients initially treated in the emergency department. Physicians spent less time with patients and their overall focus suffered. Source:

The return on international investment products

Individual investors have access to an ever-increasing number of US-registered equity funds that invest in international assets, as well as institutional investment products focused on global assets. Despite the growing importance of global equity markets for US investors, there is little academic research devoted to their study. Jeffrey Busse, associate professor of finance, Amit Goyal (University of Lausanne), and Sunil Wahal (Arizona State U) advanced the research, tackling the common theory that less developed markets are less efficient and, consequently, “exploitable by active fund managers.” The trio analyzed a large sampling of active retail mutual funds and institutional products investing in global equity markets, concentrating their research on a sample period from 1991 to 2009. The authors used quarterly returns net of trading costs and gross of fees. They also collected information on annual fee schedules, portfolio turnover, and assets under management. On average and in the aggregate, the data showed a lack of “superior performance” for the sampling. The research paper won the Spangler IQAM Best Paper in Investments Prize at the 2014 European Finance Association Annual Meeting in Lugano, Switzerland. Source:

Consumer word-of-mouth and social media

Certainly, marketers are well aware of the value of the consumers’ word-of-mouth (WOM) endorsements of a product or service. But the ubiquitous nature of social media demands that advertisers find new ways to tap into how consumers interact and communicate to leverage the power of WOM online. Panagiotis Adamopoulos, assistant professor of information systems & operations management; Vilma Todri, assistant professor of information systems & operations management; and Anindya Ghose (NYU-Stern) take a close look at the role of hidden personality traits of online users and how they play into the effectiveness of product WOM on Twitter. The trio used big data, machine learning methods, and causal inference econometric techniques to study consumer purchases made through Twitter accounts. The research showed an increase in the likelihood of a purchase by 47.58% when there was exposure to WOM tweets from a sender who had similar personality traits to the recipient of the information. The trio found that introvert users were much more accepting of WOM versus extrovert users. They also noted agreeable, conscientious, and open social media users are more effective influencers. The combinations of personality traits of disseminators and recipients of WOM impacted the decision to buy a product, with the researchers noting that a “WOM message from an extrovert user to an introvert peer increases the likelihood of a subsequent purchase by 71.28%.” Source:

Understanding economic development and its environmental impact

While fears about the environmental impact of economic development remains under discussion, the number of proenvironmental international non-governmental organizations (INGOs) continues to grow. But little is known about their influence on countries to create more eco-friendly industrial processes and technologies. In new research from Wesley Longhofer, assistant professor of organization & management, and coauthor Andrew Jorgenson (Boston College), the pair determined which nations they believed were “more embedded in the proenvironmental world society,” determining the level of influence of INGOs, as well as global treaties and professionals, on the countries they studied. The data took into account GDP per capita to find the effect of economic development on carbon emissions. The research examined whether countries that were more likely to feel this global pressure to “enact pro-environmental policies or invest in cleaner technologies” subsequently experienced a drop in rates of carbon emissions. Longhofer and Jorgenson created a measure to analyze the effects of development over time on carbon emissions in 79 countries, using data from 1970 to 2009. They found that “nations that are the most embedded in the environmental world society experienced a moderate decrease” in the impact of economic development on carbon emissions. Essentially, larger and more developed nations were more likely to feel the influence of proenvironmental INGOs than less developed countries, ultimately showing a small drop in carbon emissions. Source: