Uncertainty and Industry Structure Effects on Managerial Intuition About Information Technology Real Options - Lankton, Nancy; Luft, Joan (Journal of Management Information Systems, 2008)
Real options analysis is an important but costly tool for valuing many information technology (IT) investments. As a low-cost substitute for real options--based methods, firms often depend on managerial intuition, which sometimes approximates real options--based valuations and sometimes does not. Making good choices about how to value IT investments requires an understanding of why, and therefore when, intuitive judgment is more or less likely to be consistent with real options--based valuations. Field and survey studies have provided ex post observations of systematic variations in consistency by option type, but ex ante hypotheses explaining this variation have been rare. This study uses two behavioral economic theories to predict option-type-specific differences between intuitive judgments and real options prescriptions. Regret theory posits that individuals will value decision outcomes based on both the expected utility of payoffs and on anticipated regret for not having made an alternative decision. As a consequence, intuitive IT investment decisions are less aggressive as uncertainty increases (higher valuation of deferral options, lower valuation of growth options), in contrast to higher normative values for both real option types with higher uncertainty. Consistent with competitive behavior theories that predict overaggressive behavior to contest market behavior, intuitive IT investment decisions are more aggressive in the presence of a potential competitor (lower valuation of deferral and higher valuation of growth options), holding constant the normative value of the options. We present experimental evidence consistent with these predictions. An important implication of our results is that future research should not test for general consistency between intuitive judgment and real options theory, but should identify and explain systematic variation in consistency across option types and settings. Such variation is important in practice because it determines when intuitive judgment is and is not likely to be an adequate substitute for costly formal real options valuation. It also determines when training in real options concepts needs to be more intensive to overcome inconsistency with intuitive judgment, and when the outputs of formal real options valuation are likely to be unintuitive and thus not readily acceptable to managers with limited option theory training.
Keywords: behavioral finance; IT investment; real options theory

Understanding the Value of Countermeasure Portfolios in Information Systems Security - Kumar, Ram L; Park, Sungjune; Subramaniam, Chandrasekar (Journal of Management Information Systems, 2008)
Organizations are faced with a variety of information security threats and implement several information system security countermeasures (ISSCs) to mitigate possible damage due to security attacks. These security countermeasures vary in their ability to deal with different types of security attacks and, hence, are implemented as a portfolio of ISSCs. A key challenge for organizations is to understand the economic consequences of security attacks relative to the ISSC portfolio implemented. This paper combines the risk analysis and disaster recovery perspectives to build an integrated simulation model of ISSC portfolio value. The model incorporates the characteristics of an ISSC portfolio relative to the threat and business environments and includes the type of attack, frequency of attacks, possible damage, and the extent and time of recovery from damage. The simulation experiments provide interesting insights into the interactions between ISSC portfolio components and characteristics of business and threat environments in determining portfolio value.
Keywords: business value of information technology; economics of IS security; information system security; IT asset valuation

Decision-Theoretic and Game-Theoretic Approaches to IT Security Investment - Cavusoglu, Huseyin; Raghunathan, Srinivasan; Yue, Wei T (Journal of Management Information Systems, 2008)
Firms have been increasing their information technology (IT) security budgets significantly to deal with increased security threats. An examination of current practices reveals that managers view security investment as any other and use traditional decision-theoretic risk management techniques to determine security investments. We argue in this paper that this method is incomplete because of the problem's strategic nature--hackers alter their hacking strategies in response to a firm's investment strategies. We propose game theory for determining IT security investment levels and compare game theory and decision theory approaches on several dimensions such as the investment levels, vulnerability, and payoff from investments. We show that the sequential game results in the maximum payoff to the firm, but requires that the firm move first before the hacker. Even if a simultaneous game is played, the firm enjoys a higher payoff than that in the decision theory approach, except when the firm's estimate of the hacker effort in the decision theory approach is sufficiently close to the actual hacker effort. We also show that if the firm learns from prior observations of hacker effort and uses these to estimate future hacker effort in the decision theory approach, then the gap between the results of decision theory and game theory approaches diminishes over time. The rate of convergence and the extent of loss the firm suffers before convergence depend on the learning model employed by the firm to estimate hacker effort.
Keywords: decision theory; game theory; IT security investments

Understanding Sustained Participation in Open Source Software Projects - Fang, Yulin; Neufeld, Derrick (Journal of Management Information Systems, 2009)
Prior research into open source software (OSS) developer participation has emphasized individuals' motivations for joining these volunteer communities, but it has failed to explain why people stay or leave in the long run. Building upon Lave and Wenger's theory of legitimate peripheral participation (LPP), this paper offers a longitudinal investigation of one OSS community in which sustained participation is hypothesized to be associated with the coevolution of two major elements of LPP theory: "situated learning" (the process of acting knowledgeably and purposefully in the world) and "identity construction" (the process of being identified within the community). To test this hypothesis, data were collected from multiple sources, including online public project documents, electronic mail messages, tracker messages, and log files. Results from qualitative analyses revealed that initial conditions to participate did not effectively predict long-term participation, but that situated learning and identity construction behaviors were positively linked to sustained participation. Furthermore, this study reveals that sustained participants distinguished themselves by consistently engaging in situated learning that both made conceptual (advising others) and practical contributions (improving the code). Implications and future research are discussed.
Keywords: communities of practice; legitimate peripheral participation; open source projects; open source software community; qualitative study

Competence of IT Professionals in E-Business Venture Teams: The Effect of Experience and Expertise on Preference Structure - Kollmann, Tobias; Häsel, Matthias; Breugst, Nicola (Journal of Management Information Systems, 2009)
The ascension of e-business has significantly changed competence requirements of information technology (IT) professionals. In this paper, we derive a competence set that addresses these changes and investigate individual preferences for specific competence components within e-business teams. We connect these preferences and competence valuation with personal characteristics of team members that were found to influence the perception of competence requirements in previous research. To empirically address this issue, we apply a Web-based questionnaire with adaptive conjoint measurement. By cluster analysis, we identify four competence profiles preferred by team members. Data from 176 respondents suggest that experience is related to the preferred profile, whereas expertise is related to overall competence valuation. Our research suggests that immature teams should consider that preferences regarding IT professionals may change with venture maturation, whereas interdisciplinary teams should discuss each member's value contribution. Considering our results, these suggestions could optimize the process of team composition.
Keywords: competence of IT professionals; competence profile; competence valuation; conjoint analysis; electronic business; team composition

How Knowledge Validation Processes Affect Knowledge Contribution - Durcikova, Alexandra; Gray, Peter H (Journal of Management Information Systems, 2009)
To ensure that knowledge repositories contain high-quality knowledge, knowledge management research recommends that contributions to a repository undergo stringent validation processes. To date, however, no research has studied the impact of such processes on contributors' repository-related perceptions or behaviors. To address this gap, we develop a model based on signaling theory and reinforcement theory to explain how individuals' perceptions of three primary validation process characteristics (duration, transparency, and restrictiveness) impact their perceptions of repository knowledge quality and their contribution behaviors. Our empirical results confirm the importance of implementing review processes that are transparent and developmentally oriented as a way of encouraging knowledge contribution. More broadly, this study underscores the need to develop integrated theoretical models that draw from a variety of reference theories when attempting to explain knowledge-related behaviors.
Keywords: knowledge contribution processes; knowledge management; knowledge repositories; knowledge sharing; knowledge sourcing; reinforcement theory; signaling theory; validation processes

Preserving User Preferences in Automated Document-Category Management: An Evolution-Based Approach - Wei, Chih-Ping; Hu, Paul Jen-Hwa; Lee, Yen-Hsien (Journal of Management Information Systems, 2009)
Analysis of prevalent document management practices shows the popular use of categories (e.g., folders) to organize documents for subsequent searches and retrievals. The coherence and distinction of an existing document category can diminish considerably as influxes of new documents arrive over time. The complexity of and effort requirements for document-category management favor an automated approach that can be supported by appropriate document-clustering techniques. A review of the extant literature shows a predominant focus on document content analysis in automated document-category management, which cannot preserve the user's document-grouping preferences. This research develops two advanced evolution-based techniques for preserving user preferences in their management of document categories. The first technique (CE2), which supports the automated evolution of a set of flat (i.e., nonhierarchical) document categories, extends a promising evolution-based technique (category evolution, CE) by addressing its fundamental limitations inherent to the use of holistic measures. The second technique, category hierarchy evolution (CHE), is developed on the basis of CE2 to support scenarios where document categories are organized with a hierarchical structure. Empirical evaluations of the effectiveness of each technique in various category evolution scenarios created using two different document corpora (i.e., news documents from Reuters and research articles from the ACM digital library), as compared with those of associated salient techniques for benchmark purposes, show that CE2 and CHE outperform their respective benchmark techniques. Their performance is reasonably robust and appears more effective when the quality (coherence) of the previously created categories does not deteriorate excessively. According to our results, the evolution-based approach is viable, appealing, and capable of preserving user preferences in automatic reorganizations of document categories.
Keywords: category evolution; category hierarchy evolution; document-category management; document clustering; hierarchical agglomerative clustering; text mining

Evaluating Anthropomorphic Product Recommendation Agents: A Social Relationship Perspective to Designing Information Systems - Qiu, Lingyun; Benbasat, Izak (Journal of Management Information Systems, 2009)
In online shopping environments, the product-advising function originally performed by salespeople is being increasingly taken over by software-based product recommendation agents (PRAs). However, the literature has mostly focused on the functionality design and utilitarian value of such decision support systems, mostly ignoring the potential social influence they could exert on their users. The objective of this study is to apply a social relationship perspective to the design of interfaces for PRAs. We investigate the effects of applying anthropomorphic interfaces--namely, humanoid embodiment and voice output--on users' perceived social relationship with a technological and software-based artifact designed for electronic commerce contexts. The findings from a laboratory experiment indicate that using humanoid embodiment and human voice--based communication significantly influences users' perceptions of social presence, which in turn enhances users' trusting beliefs, perceptions of enjoyment, and ultimately, their intentions to use the agent as a decision aid. These results extend the applicability of theories concerning traditional shopper--salesperson relationships to customers' interactions with technological artifacts residing on Web sites--that is, the recommendation agent software--and provide practitioners with guidelines on how to design Internet stores with the goal of building social relationships with online shoppers and enhancing their overall shopping experiences.
Keywords: avatar; decision support systems; electronic commerce; human voice; laboratory experiments; recommendation agents; social presence; text-to-speech (TTS); user acceptance of IT

Managerial Entrenchment with Strategic Information Technology: A Dynamic Perspective - Li, Xiaotong (Journal of Management Information Systems, 2009)
Some economic and informational problems associated with organizational information technology (IT) spending may be attributed to managerial rent-seeking. Because of the unavoidable incompleteness of labor contracts, managers with misaligned incentives and budgetary discretion could entrench themselves through their non-value-maximizing adoption decisions. In order to boost their bargaining power in future contract renegotiation, they invest excessively in technologies they manage more effectively than their potential rivals. In addition, they tend to adopt technologies that can create large information asymmetries giving them significant knowledge advantage over their potential rivals ex post. We study the implications and effects of their rent-seeking behavior within the context of organizational IT adoption and management. The efficacies and the limitations of formal incentive contracting are discussed to underscore the need for additional governance mechanisms. While knowledge management may mitigate some of the agency problems associated with entrenchment, managerial self-policing issue remains a challenge. We further explore the incentive provision potential of relational labor contracts in combating entrenchment.
Keywords: agency problems; bargaining; contract renegotiation; entrenchment; incomplete contracts; information technology adoption; knowledge management; organizational decision making; relational contracts; rent-seeking

Diversification and Firm Performance: Exploring the Moderating Effects of Information Technology Spending - Ravichandran, T; Liu, Yu; Han, Shu; Hasan, Iftekhar (Journal of Management Information Systems, 2009)
A large body of research has examined the performance effects of diversification. However, these results have been mixed, and scholars have called for examining contingencies under which the effects of different types (related, unrelated, geographic) and levels of diversification on performance vary. This study attempts to fill this gap in the literature by arguing that examining the performance effects of diversification is incomplete without taking into consideration the firm's information technology (IT) spending. We posit that IT, by enabling coordination and control in firms, is likely to moderate the relationship between diversification and performance. Combining arguments from both resource-based view and the organizational controls literature, we theorize about the moderating effects of IT spending under different types and levels of diversification. Using data from large U.S. manufacturing firms, we test our research hypotheses. Our results indicate that while IT spending interacts with related diversification to have a positive effect on firm performance, similar interactions with unrelated diversification do not have any effects on firm performance. Furthermore, the interaction between IT spending and geographic diversification is positively associated with performance only when the level of geographic diversification is low. We interpret and discuss these results and highlight the theoretical and practical implications of our findings.
Keywords: business synergy; coordination and control; firm diversification; information technology; business value of information technology

Optimal Digital Content Distribution Strategy in the Presence of the Consumer-to-Consumer Channel - Feng, Yunfang; Guo, Zhiling; Chiang, Wei-yu Kevin (Journal of Management Information Systems, 2009)
Although the online business-to-consumer (B2C) channel is the primary selling channel for digital content (e.g., videos, images, and music), modern digital technology has made possible the legal dissemination of such content over the consumer-to-consumer (C2C) channel through personal computing devices, such as PCs, mobile phones, and portable media players. This paper investigates the optimal channel structure and the corresponding pricing and service strategies for digital content distribution in order to understand the business value of introducing the C2C channel alongside the prevailing B2C channel. We identify conditions under which it is more profitable to use both B2C and C2C channels simultaneously (i.e., the dual-channel distribution). In such cases, the seller performs price discrimination among consumers but provides them with a higher level of service. Our analysis further characterizes the benefits of service provision. We show that service provision can increase the dual-channel pricing flexibility, reduce the seller's B2C channel dependence, and allow the seller to tolerate higher C2C channel redistribution costs. Finally, in examining the effect of a competitively determined B2C channel price on optimal channel strategy, we find that the seller prefers a dual-channel distribution under higher B2C channel prices.
Keywords: B2C; C2C; channel strategy; digital content; dual channel; pricing; service

Patterns of Transition: The Shift from Traditional to Object-Oriented Development - Nelson, H James; Armstrong, Deborah J; Nelson, Kay M (Journal of Management Information Systems, 2009)
While many of the changes that information systems professionals encounter are incremental requiring only modifications to an existing mind-set, others represent radical changes that require a fundamental shift in mind-set in order to fully benefit from the change. The goal of this study was to examine how software development concept thinking changes as individuals shift their mind-set to the object-oriented software development approach. The results indicate that the transition may not be as simple as a single "aha!" moment, but rather a series of cognitive shifts as constructs from the old mind-set are replaced by constructs in the new mind-set. In addition, this study identifies problems that may be encountered during the transition due to a lack of cognitive fit, confusion, and reverting to an inappropriate mind-set. The findings from this study may be used to decrease the learning curve and minimize the number of cognitive shifts experienced during the transition.
Keywords: learning models; object-oriented approach; organizational change; personnel IS; personnel training; software development

A Meta-Theory for Understanding Information Systems Within Sociotechnical Systems - Bostrom, Robert P; Gupta, Saurabh; Thomas, Dominic (Journal of Management Information Systems, 2009)
Information systems (IS) research often attempts to examine and explain how technology leads to outcomes through usage of IS. Although extensive research in this area has resulted in a significant number of theories, limited work has been done on integrating these theories. This paper presents adaptive structuration theory (AST) as a meta-theory for examining IS within an organizational context. The two main contributions of the paper are an understanding of meta-theory's role in IS and building a case for using AST as a meta-theory to (1) provide an overarching perspective for understanding and integrating existing literature and theories, (2) provide a template and set of guidelines for creating better context-specific IS models and theories, and (3) provide a deeper understanding of a theory. Along with discussion of the contributions, we provide examples to guide researchers in applying AST as a meta-theory.
Keywords: adaptive structuration theory; conceptual models; meta-theory; technology-mediated learning; virtual teams

Decentralization in Wikipedia Governance - Forte, Andrea; Larco, Vanesa; Bruckman, Amy (Journal of Management Information Systems, 2009)
How does "self-governance" happen in Wikipedia? Through in-depth interviews with 20 individuals who have held a variety of responsibilities in the English-language Wikipedia, we obtained rich descriptions of how various forces produce and regulate social structures on the site. Although Wikipedia is sometimes portrayed as lacking oversight, our analysis describes Wikipedia as an organization with highly refined policies, norms, and a technological architecture that supports organizational ideals of consensus building and discussion. We describe how governance on the site is becoming increasingly decentralized as the community grows and how this is predicted by theories of commons-based governance developed in offline contexts. We also briefly examine local governance structures called WikiProjects through the example of WikiProject Military History, one of the oldest and most prolific projects on the site.
Keywords: governance; online community; self-organizing systems; Wikipedia

Engaging Group E-Learning in Virtual Worlds - Franceschi, Katherine; Lee, Ronald M; Zanakis, Stelios H; Hinds, David (Journal of Management Information Systems, 2009)
E-learning has seen tremendous growth in recent years. More and more, university courses are now available online to a potentially global audience. However, a significant shortcoming of e-learning technologies has been poor support for group-oriented learning. We believe that virtual worlds offer a potential solution. Unlike videoconferencing (for instance), virtual worlds provide a shared visual space for students to meet and interact (via avatars). Not only do students share the quasi-realism of a 3D environment where participants can see and hear one another, they also have the capability to manipulate artifacts together. These factors provide a strong sense of group presence, which leads to engaging group learning interactions.
Keywords: business education; e-learning; massively multiplayer online game (MMOG); massively multiplayer online role-playing game; online learning; social presence; virtual engagement; virtual worlds

Chaos Theory as a Lens for Interpreting Blogging - Guo, Xitong; Vogel, Doug; Zhou, Zhongyun; Zhang, Xi; Chen, Huaping (Journal of Management Information Systems, 2009)
Blogging is becoming increasingly popular as a global phenomenon. Individual blog traffic and blogosphere structure are of interest to academia and practice. Although it is difficult to get a snapshot of the blogosphere with enough blogs over a long enough period to capture the real situation, chaos theory finds underlying order in this apparent random and complex phenomenon. This study provides an overall view of blogging from micro (individual blog traffic dynamics) and macro (blogosphere structure) levels through a chaos theory lens. Key concepts of chaos theory are used to construct an interpretive framework to illustrate blog system behavior dynamics. Blog systems tend to be nonlinear, dynamic, and deterministic, as well as sensitive to initial conditions. The study also demonstrates the feasibility of applying chaos theory thinking to areas such as knowledge management and the recent global financial crisis. Implications for practice and research opportunities are presented.
Keywords: blogging; blogosphere; blogosphere structure; blog traffic; chaos theory; global financial crisis; knowledge management

Managing Knowledge in Light of Its Evolution Process: An Empirical Study on Citation Network--Based Patent Classification - Li, Xin; Chen, Hsinchun; Zhang, Zhu; Li, Jiexun; Nunamaker Jr, Jay F (Journal of Management Information Systems, 2009)
Knowledge management is essential to modern organizations. Due to the information overload problem, managers are facing critical challenges in utilizing the data in organizations. Although several automated tools have been applied, previous applications often deem knowledge items independent and use solely contents, which may limit their analysis abilities. This study focuses on the process of knowledge evolution and proposes to incorporate this perspective into knowledge management tasks. Using a patent classification task as an example, we represent knowledge evolution processes with patent citations and introduce a labeled citation graph kernel to classify patents under a kernel-based machine learning framework. In the experimental study, our proposed approach shows more than 30 percent improvement in classification accuracy compared to traditional content-based methods. The approach can potentially affect the existing patent management procedures. Moreover, this research lends strong support to considering knowledge evolution processes in other knowledge management tasks.
Keywords: citation analysis; classification; kernel-based method; knowledge management; machine learning; patent management

The CMC Interactivity Model: How Interactivity Enhances Communication Quality and Process Satisfaction in Lean-Media Groups - Lowry, Paul Benjamin; Romano Jr, Nicholas C; Jenkins, Jeffrey L; Guthrie, Randy W (Journal of Management Information Systems, 2009)
Process satisfaction is one important determinant of work group collaborative system adoption, continuance, and performance. We explicate the computer-mediated communication (CMC) interactivity model (CMCIM) to explain and predict how interactivity enhances communication quality that results in increased process satisfaction in CMC-supported work groups. We operationalize this model in the challenging context of very large groups using extremely lean CMC. We tested it with a rigorous field experiment and analyzed the results with the latest structural equation modeling techniques. Interactivity and communication quality dramatically improved for very large groups using highly lean CMC (audience response systems) over face-to- face groups. Moreover, CMC groups had fewer negative status effects and higher process satisfaction than face-to-face groups. The practical applications of lean CMC rival theoretical applications in importance because lean CMC is relatively inexpensive and requires minimal training and support compared to other media. The results may aid large global work group continuance, satisfaction, and performance in systems, product and strategy development, and other processes in which status effects and communication issues regularly have negative influences on outcomes.
Keywords: audience response systems; CMC interactivity model; collaboration; human-computer interaction; interactivity; large groups; ultra-lean interactive media; ultra-lean interactivity

Leveraging Crowdsourcing: Activation-Supporting Components for IT-Based Ideas Competition - Leimeister, Jan Marco; Huber, Michael; Bretschneider, Ulrich; Krcmar, Helmut (Journal of Management Information Systems, 2009)
Ideas competitions appear to be a promising tool for crowdsourcing and open innovation processes, especially for business-to-business software companies. Active participation of potential lead users is the key to success. Yet a look at existing ideas competitions in the software field leads to the conclusion that many information technology (IT)--based ideas competitions fail to meet requirements upon which active participation is established. The paper describes how activation-enabling functionalities can be systematically designed and implemented in an IT-based ideas competition for enterprise resource planning software. We proceeded to evaluate the outcomes of these design measures and found that participation can be supported using a two-step model. The components of the model support incentives and motives of users. Incentives and motives of the users then support the process of activation and consequently participation throughout the ideas competition. This contributes to the successful implementation and maintenance of the ideas competition, thereby providing support for the development of promising innovative ideas. The paper concludes with a discussion of further activation-supporting components yet to be implemented and points to rich possibilities for future research in these areas.
Keywords: activation; crowdsourcing; Enterprise Resource Planning software; ideas competition; incentives; motivation; open innovation; theory-driven design

A Design Approach for Collaboration Processes: A Multimethod Design Science Study in Collaboration Engineering - Kolfschoten, Gwendolyn L; De Vreede, Gert-Jan (Journal of Management Information Systems, 2009)
Collaboration engineering is an approach for the design and deployment of repeatable collaboration processes that can be executed by practitioners without the support of collaboration professionals such as facilitators. A critical challenge in collaboration engineering concerns how the design activities have to be executed and which design choices have to be made to create a process design. We report on a four-year design science study in which we developed a design approach for collaboration engineering that incorporates existing process design methods, pattern-based design principles, and insights from expert facilitators regarding design challenges and choices. The resulting approach was evaluated and continuously improved in four trials with 37 students. Our findings suggest that this approach is useful to support the design of repeatable collaboration processes. Our study further serves as an example of how a design approach can be developed and improved following a multimethod design science approach.
Keywords: collaboration engineering; design science; facilitation; group support systems; pattern language

Organizational Assimilation of Electronic Procurement Innovations - Rai, Arun; Brown, Paul; Tang, Xinlin (Journal of Management Information Systems, 2009)
We investigate the assimilation of electronic procurement innovations (EPIs) and its impact on procurement productivity in buyer organizations. We identify online reverse auctions, electronic catalog management, electronic order fulfillment, and electronic payment and settlement as moderate complements for the performance of the procurement process. We develop a theoretical model that is informed by the literature on innovation assimilation and by structuration theory to explain the aggregated assimilation of EPIs. Our empirical study is based on survey data collected about EPIs from 166 buyer firms. Based on our analysis, we isolate the organizational, technological, and interorganizational factors that shape the meta-structures for the aggregated assimilation of EPIs. Our results also provide evidence of a substantial impact of the assimilation of these innovations on procurement productivity. Our post hoc analysis provides insights on differences across stages and across EPIs on the factors and meta-structures that enable assimilation.
Keywords: electronic procurement innovations; information technology assimilation; productivity; structuration theory

Differential Effects of the Two Types of Information Systems: A Hospital-Based Study - Menon, Nirup M; Yaylacicegi, Ulku; Cezar, Asunur (Journal of Management Information Systems, 2009)
A new empirical model for the production function of the hospital incorporating two types of information systems (IS) is developed. One type of IS is representative of information technology (IT) used in primary, clinical, value-chain activities, and the other is representative of the IT used in support (administrative) value-chain activities. The model innovation is that it accommodates up to a seven-year lag for each type of IS. The output variables for the production function are hospital output and medical labor productivity. Using data spanning from 1979 to 2006 from several hospitals, it was found that clinical IS improve hospital output in the short run (of two years). Administrative IS were found to be negatively associated with organizational performance in the short run, but positively associated with these performance measures over the long run (over four years). These results highlight the importance of timing IT investments and the sequencing chosen for the implementation of IS presenting various value-chain activities, and the resulting pattern of business value over time. Differential lag length of the types of IS is to be considered in estimating the rate of return of new IT projects.
Keywords: health-care informatics; information technology productivity; value-chain model

Business Models for Monetizing Internet Applications and Web Sites: Experience, Theory, and Predictions - Clemons, Eric K (Journal of Management Information Systems, 2009)
Almost all attempts to date to monetize Internet applications targeted at individuals have focused on natural extensions of traditional media or traditional retailing. Most are either some form of consumer-focused advertising or of consumer-focused e-commerce. And yet the Net is far more powerful than traditional media on one hand, and far more liberating and thus inappropriate as an alternative to traditional media on the other. There are numerous potential online business models that are not based on advertising. This paper explores several such areas and divides them into two basic categories, those that sell some product, experience, content, or service and earn revenues from the sale, and those that provide access to consumers and charge for access. It further divides each of these major categories into subcategories, and for each subcategory reviews current experience, places it in the context of the relevant literature in competitive strategy, and uses that theory to make predictions. The paper concludes with strategic recommendations for corporations as well as with suggestions for further research.
Keywords: business models for the Internet; future of online advertising; monetizing the Internet; strategic information systems

An Empirical Investigation of the Value of Integrating Enterprise Information Systems: The Case of Medical Imaging Informatics - Ayal, Moshe; Seidmann, Abraham (Journal of Management Information Systems, 2009)
This paper identifies and measures the various business value benefits that accrue as a result of implementing and integrating large-scale enterprise information systems. Specifically, we look at the integration of electronic medical records for all patients with the radiology information system and a picture archiving and communication system at a regional medical center. Our work is among the first to carefully study and analyze the impact of enterprise information systems at a large-scale service organization that produces intangible outputs--health. It extends the literature on information economics by quantifying the benefits in process dynamics as a source of ongoing firm-level performance improvements. The key dimensions of measurements include financial revenues, operating lead times, and subjective satisfaction levels by the clinical staff and by the referring physicians. Analyses of longitudinal data suggest that performance levels along a key metric--clinical process lead time--showed a significant improvement immediately after the deployment and integration of the systems. The evidence reveals that performance kept improving for the following 12 months at an impressive learning rate of 63 percent. Moreover, the reported satisfaction level after installation was higher among referring physicians who actively used the full spectrum of technological functionalities at their own clinics or at the hospital's site. Finally, we present a general framework for capturing the actual tangible and intangible benefits of enterprise information systems installation and integration in a clinical context.
Keywords: business value; electronic medical research; empirical regularities; empirical research; enterprise information systems; healthcare; radiology information systems; satisfaction; systems integration

Information Personalization in a Two-Dimensional Product Differentiation Model - Wattal, Sunil; Telang, Rahul; Mukhopadhyay, Tridas (Journal of Management Information Systems, 2009)
We use a game-theoretic model to examine how information personalization by firms interacts with different dimensions of product differentiation (namely, horizontal and vertical differentiation). We consider the possibility that consumers attach different importance to various types of product differentiation, and report the equilibrium in terms of the "quality--fit" ratio, which measures the relative strength of preference for quality compared to preference for product fit and is a function of the cost of quality and the cost of product misfit. We also consider how different market structures (whether firms are similar or differentiated on the horizontal dimension ex ante) lead to different equilibriums when firms adopt personalization. We show that personalization by one firm leads to higher profits for both firms if product quality and misfit costs are high and the firms offer similar products ex ante. On the other hand, if firms offer differentiated products, personalization is profitable only if the effectiveness of the personalization technology is high or if both product quality and misfit costs are low. We also highlight conditions under which investments in personalization and product quality can be complements or substitutes to each other. Finally, we show that a firm can respond to a competitor's personalization by either increasing (aggressive response) or decreasing (defensive response) investments in its own quality. Our results provide insights to managers on when to invest in personalization technologies and how to adjust their investments in product quality after the firm (or its competitor) adopts personalization.
Keywords: game theory; horizontal and vertical differentiation; market structure; personalization; quality-fit ratio

Information Security: Facilitating User Precautions Vis-Ã -Vis Enforcement Against Attackers - Png, Ivan P L; Wang, Qiu-Hong (Journal of Management Information Systems, 2009)
We compare alternative information security policies--facilitating end-user precautions and enforcement against attackers. The context is mass and targeted attacks, taking account of strategic interactions between end users and attackers. For both mass and targeted attacks, facilitating end-user precautions reduces the expected loss of end users. However, the impact of enforcement on expected loss depends on the balance between deterrence and slackening of end-user precautions. Facilitating end-user precautions is more effective than enforcement against attackers when the cost of precautions and the cost of attacks are lower. With targeted attacks, facilitating end-user precautions is more effective for users with relatively high valuation of information security, while enforcement against attackers is more effective for users with relatively low valuation of security.
Keywords: enforcement; facilitation; information security; mass attacks; targeted attacks

Effects of Organizational Learning and Knowledge Transfer on Investment Decisions Under Uncertainty - Geng, Xianjun; Lin, Lihui; Whinston, Andrew B (Journal of Management Information Systems, 2009)
Because uncertainties around innovative technologies resolve over time, investments in such technologies are often made in stages so that organizations can use the knowledge gained from earlier stages to decide the next step. Previous studies usually assume that once some uncertainty is resolved, it becomes common knowledge within the investing organization. We develop a game-theoretical model to study how different parties within an organization gain and transfer knowledge about new technologies while investing in these technologies, and how the learning process may affect the investment decisions. We show that managers with incentives misaligned with the organization may transfer their knowledge untruthfully and distort the learning process of decision makers. Such behavior may lead to inefficient investment decisions. We also study the effect of uncertainty on the misreporting problem and the investment decisions. Mechanisms to mitigate or prevent untruthful knowledge transfer are also proposed. In particular, powerful incentive schemes may alleviate, but not prevent, the misreporting problem; punishing managers who are caught misreporting may deter the misreporting behavior, but in practice such mechanisms are difficult to implement.
Keywords: economic analysis; game theory; investment under uncertainty; knowledge transfer; organizational learning; signal jamming

A Learning Model of Information Technology Outsourcing: Normative Implications - Cha, Hoon S; Pingry, David E; Thatcher, Matt E (Journal of Management Information Systems, 2009)
We use an economic learning model to examine how knowledge parameters characterizing a sourcing relationship between a vendor and a client interact with production costs and coordination costs to affect the business value of alternative outsourcing strategies. This information is then used to determine a firm's optimal rate of information technology (IT) outsourcing. We find that the optimal outsourcing rate is dependent on the ability of the outsourcing client to acquire production knowledge from its outsourcing vendor and to retain its internal coordination knowledge despite losses of fundamental production skills due to outsourcing. Specifically, when the client is unable to acquire sufficient production knowledge from the external vendor, the client's optimal outsourcing decision is to engage in either one of two extreme strategies--total insourcing or total outsourcing--depending on the rate at which the client's coordination knowledge depreciates. On the other hand, when the client is able to acquire a substantial amount of production knowledge from the external vendor, the firm's optimal decision is to outsource only a portion of its IT services, where the proportion depends on the rate at which the client's coordination knowledge depreciates.
Keywords: coordination; economic analysis; information technology outsourcing; knowledge; modeling; organizational learning; outsourcing; production costs; vendor-client relationship

The Unified Procurement Strategy for Enterprise Software: A Test of the "Move to the Middle" Hypothesis - Kauffman, Robert J; Tsai, Juliana Y (Journal of Management Information Systems, 2009)
To increase their firms' competitiveness, information technology (IT) managers are adopting a strategy that many deemed risky in the past. Recent IT advances combined with certain firm and industry characteristics are prompting firms to move toward a unified procurement strategy for enterprise software solutions. Unified procurement occurs when a firm elects to purchase all compatible products and services from a single vendor. Key benefits of unified procurement involve motivating managers to alter their procurement strategy. At the top of the list of benefits is transferred risk, which includes risks that can be transferred from one participating party to another during a transaction. In the case of unified procurement, they include technology risks and integration costs that are transferred from the procurement firm to its vendor. Firms have been shifting toward a unified procurement strategy for enterprise software solutions. We discuss the evolution of procurement practices in an industry that exemplifies a manifestation of Clemons et al.'s [10] "move to the middle" hypothesis predictions. The adoption of unified procurement is being driven by changes in IT, firm, and industry structure. We explore the "move to the middle," transaction cost economics, and industry clockspeed theory to explain this phenomenon. We present a series of propositions that extend the prior theory to the more specific setting of enterprise software procurement--an example of middle range theory development--and use mini-cases to validate the various perspectives that we offer.
Keywords: competitive strategy; enterprise software; industry structure; IT procurement; middle range theory development; move-to-the-middle hypothesis; opportunism risk; software stack; unified procurement

A Transaction Cost Perspective of the "Software as a Service" Business Model - Susarla, Anjana; Barua, Anitesh; Whinston, Andrew B (Journal of Management Information Systems, 2009)
Application service providers (ASP), which host and maintain information technology (IT) applications across the Internet, offer an alternative to traditional models of IT service for user firms. We build on prior literature in transaction cost economics (TCE) to argue that the contract design should address ex post transaction costs that result due to contractual incompleteness and opportunism. We argue that contract design is multidimensional, and that it is necessary to design governance structures that can protect user firms from shirking and monitoring costs, as well as provide for efficient adaptation when requirements are incompletely specified at the start of the initiative. Our empirical analysis suggests that factors such as uncertainty in specifying service requirements, interdependence between the ASP application and IT systems in the client organization, and the need for specific investments favor time and materials contracts, whereas fixed prices are desirable when strong incentives are needed for cost reduction. We also find that contracts that are aligned with transaction attributes in a transaction cost--economizing manner are significantly less likely to experience budget overruns and realize better ex post performance than those that are not. These results hold normative implications for both user and provider firms to assess the performance implications of choosing contracts in line with prescriptions of TCE.
Keywords: application service providers; contract choice; logit models; transaction cost economics

Individual Swift Trust and Knowledge-Based Trust in Face-to-Face and Virtual Team Members - Robert Jr, Lionel P; Dennis, Alan R; Hung, Yu-Ting Caisy (Journal of Management Information Systems, 2009)
Traditionally, trust has been seen as a result of personal knowledge of an individual's past behavior. In this view, trust develops gradually over time based on an individual's cognitive assessment of the other person's behavior. However, high levels of trust have been observed among members of virtual teams, who often have little prior history of working together and may never meet each other in person. To integrate these two seemingly contradictory views of trust, this study manipulated team member characteristics and team member behavior to empirically test a two-stage theoretical model of trust formation and the influence of information and communication technologies (ICT) on trust formation. The results indicate that category-based processing of team member characteristics and an individual's own disposition to trust dominated the initial formation of swift trust. Once individuals accumulated sufficient information to assess a team member's trustworthiness, the effects of swift trust declined and knowledge-based trust formed using team members' behaviors (perceived ability, integrity, and benevolence) became dominant. The use of ICT increased perceived risk of team failure, which reduced the likelihood that team members would engage in future trusting behaviors.
Keywords: cognitive trust; computer-mediated communication (CMC); initial trust; knowledge-based trust; presumptive trust; swift trust; trust; vignettes; virtual teams

Control in Internal and Outsourced Software Projects - Tiwana, Amrit; Keil, Mark (Journal of Management Information Systems, 2009)
Although the choice of control mechanisms in systems development projects has been extensively studied in prior research, differences in such choices across internal and outsourced projects and their effects on systems development performance have not received much attention. This study attempts to address this gap using data on 57 outsourced and 79 internal projects in 136 organizations. Our results reveal a paradoxical overarching pattern: controllers attempt greater use of control mechanisms in outsourced projects relative to internal projects, yet controls enhance systems development performance in internal projects but not in outsourced projects. We introduce a distinction between attempted control and realized control to explain this disconnect, and show how anticipated transaction hazards motivate the former but meeting specific informational and social prerequisites facilitate the latter. Our results contribute three new insights to the systems development control literature. First, controllers attempt to use controller-driven control mechanisms to a greater degree in outsourced projects but controllee-driven control mechanisms to a greater degree in internal projects. Second, we establish a hitherto-missing control--performance link. The nuanced differences in internal and outsourced projects simultaneously confirm and refute a pervasive assertion in the information systems controls literature that control enhances performance. Finally, we show how requirements volatility--which can be at odds with control--alters the control--performance relationships. Implications for theory and practice are also discussed.
Keywords: attempted control; control theory; information systems development; project controls; realized control; survey research

Design and Use of Preference Markets for Evaluation of Early Stage Technologies - Chen, Li; Goes, Paulo B; Marsden, James R; Zhang, Zhongju (Journal of Management Information Systems, 2009)
In the work presented here, we develop and apply preference markets in evaluating early stage technology. Partnering with a Fortune 5 company, we developed and implemented two internal preference markets (field experiments). In both cases, nonmonetary (play money) incentives were utilized, but one market provided additional nonmonetary (play money) incentives. Working with the partner company, our investigation started with seven emerging technologies and expanded to a total of 17 emerging technologies. Our results suggest that even a simple form of additional nonmonetary play money incentive yielded greater price convergence, increased spread across final market prices, and greater consistency with a costly expert panel that was set up by the partner company. Based on the outcomes of our analyses, the partner company is investing in developing extended applications of preference markets as a potentially scalable approach for dealing with its ongoing and expanding strategic identification of promising emerging technologies.
Keywords: convergence; incentives; information market; market performance; preference aggregation; preference ranking market; technology evaluation

Consumer Empowerment Through Internet-Based Co-creation - Füller, Johann; Mühlbacher, Hans; Matzler, Kurt; Jawecki, Gregor (Journal of Management Information Systems, 2009)
Cost-efficient and multimedia-rich interaction opportunities offered by the Internet and the existence of online communities have made virtual co-creation a suitable means of creating value and improving the overall success of new products. Information technology enables new forms of producer--consumer collaboration in new product development processes. However, little research exists on consumers' experiences during virtual co-creation tasks. Drawing on the literature on organizational behavior, we introduce the construct of consumer empowerment to describe consumers' perceived influence on product design and decision making. This paper presents the first large-scale empirical study investigating how consumers are empowered through Internet-based co-creation activities. To analyze the impact of applied interaction tools, 727 consumers having taken part in virtual co-creation projects were asked about their experienced tool support, their perceived empowerment, how much they enjoyed the task, and their readiness to participate in future co-creation opportunities. The results show that consumers engaging in co-creation feel more or less empowered. The level of experienced empowerment depends on the design of the applied virtual interaction tool, the related enjoyment of the virtual interaction, the participants' task and product involvement, as well as their creativity and lead-user characteristics. The design of the interaction tool determines to what extent consumers with varying capabilities are able to solve the assigned co-creation task. It determines the consumers' perceived empowerment and experienced enjoyment. Both the levels of perceived empowerment and enjoyment have a strong impact on the consumers' willingness to participate in future virtual new product development projects. These findings contribute to a better understanding of antecedents and consequences of successful consumer co-creation. They provide recommendations on how to design a compelling virtual new product co-creation experience.
Keywords: co-creation; empowerment; new product development; online community; open innovation; user innovation; virtual customer integration

Optimal Policy for Software Patents: Model and Comparative Implications - Thatcher, Matt E; Pingry, David E (Journal of Management Information Systems, 2009)
We use a duopoly model of quality--price competition between a software innovator and an imitator to determine the socially optimal software patent policy and to assess the social welfare implications of alternative patent policies. We find that the optimal patent policy is to grant patent protection for the entire life of the innovative software product (i.e., set infinite patent length) and to set the novelty and nonobviousness requirement for attaining a patent (i.e., patent height) and the scope of patent protection (i.e., patent width) such that both the innovator and imitator produce higher-quality products than they would in the free market. This policy not only maximizes social welfare but also makes the innovator, imitator, and consumers better off than in the free market. However, counter to intuition, we find that firms exhibit lower research and development intensity under the socially optimal patent policy than they do under free market competition. While highly stylized, the model offers a useful framework within which researchers and regulators can think about the economic trade-offs among three patent policy parameters (length, height, and width) simultaneously.
Keywords: patent height; patent length; patent policy; patent width; quality-price competition; R&D intensity; software patents; vertical product differentiation

The Role of Push--Pull Technology in Privacy Calculus: The Case of Location-Based Services - Xu, Heng; Teo, Hock-Hai; Tan, Bernard C Y; Agarwal, Ritu (Journal of Management Information Systems, 2009)
Location-based services (LBS) use positioning technologies to provide individual users with reachability and accessibility that would otherwise not be available in the conventional commercial realm. While LBS confer greater connectivity and personalization on consumers, they also threaten users' information privacy through granular tracking of their preferences, behaviors, and identity. To address privacy concerns in the LBS context, this study extends the privacy calculus model to explore the role of information delivery mechanisms (pull and push) in the efficacy of three privacy intervention approaches (compensation, industry self-regulation, and government regulation) in influencing individual privacy decision making. The research model was tested using data gathered from 528 respondents through a quasi-experimental survey method. Structural equations modeling using partial least squares validated the instrument and the proposed model. Results suggest that the effects of the three privacy intervention approaches on an individual's privacy calculus vary based on the type of information delivery mechanism (pull and push). Results suggest that providing financial compensation for push-based LBS is more important than it is for pull-based LBS. Moreover, this study shows that privacy advocates and government legislators should not treat all types of LBS as undifferentiated but could instead specifically target certain types of services.
Keywords: compensation; distributive justice; government regulation; industry self-regulation; information delivery mechanisms; location-based services; privacy calculus; procedural justice

Trust-Assuring Arguments in B2C E-commerce: Impact of Content, Source, and Price on Trust - Kim, Dongmin; Benbasat, Izak (Journal of Management Information Systems, 2009)
The research question examined in this paper is whether or not product price can be used as a proxy to predict how customers' trust will be influenced by different trust-assuring arguments displayed on a business-to-consumer e-commerce Web site. Drawing from the elaboration likelihood model (ELM) and Toulmin's model of argumentation, we examine the effects on consumer trust of two levels of source and two levels of content factors, under two levels of product price, in a laboratory experiment with 128 subjects. Product price was predicted as a moderating factor that would influence the customer's motivation to scrutinize more closely the content of the trust-assuring arguments. The results suggest that customers are more influenced by the content of trust-assuring arguments when the price of a product is relatively high than when it is relatively low. Presumably, Internet stores employ a third party's trust-assuring arguments because customers are less likely to trust an unknown Internet store's own trust-assuring arguments. However, the results paradoxically may imply that when customers have more at stake (e.g., buying a high-price product), they do not necessarily have to rely only on an independent third-party source to form high trust beliefs about the store. When customers purchase a high-price product, they seem to form trusting beliefs by scrutinizing argument content rather than by depending on heuristic cues (e.g., an independent party's opinion) as the ELM would predict.
Keywords: elaboration likelihood model; price; third-party certification; Toulmin argumentation model; trust; trust-assuring arguments; trust in e-commerce

Speed Matters: The Role of Free Software Offer in Software Diffusion - Jiang, Zhengrui; Sarkar, Sumit (Journal of Management Information Systems, 2009)
Many software products are available free of charge. While the benefits resulting from network externality have been examined in the related literature, the effect of free offer on the diffusion of new software has not been formally analyzed. We show in this study that even if other benefits do not exist, a software firm can still benefit from giving away fully functioning software. This is due to the accelerated diffusion process and subsequently the increased net present value of future sales. By adapting the Bass diffusion model to capture the impact of free software offer, we provide a methodology to determine the optimal number of free adopters. We show that the optimal free offer solution depends on the discount rate, the length of the demand window, and the ratio of low-valuation to high-valuation free adopters. Our methodology is shown to be applicable for both fixed and dynamic pricing strategies.
Keywords: Bass model; diffusion of innovations; dynamic pricing; free software

Risks and Benefits of Signaling Information System Characteristics to Strategic Attackers - Cremonini, Marco; Nizovtsev, Dmitri (Journal of Management Information Systems, 2009)
The paper uses a game-theoretic setting to examine the interaction between strategic attackers who try to gain unauthorized access to information systems, or "targets," and defenders of those targets. Our analysis of the attacker--defender interaction shows that well-protected targets can use signals of their superior level of protection as a deterrence tool. This is due to the fact that, all other things being equal, rational attackers motivated by potential financial gains tend to direct their effort toward less-protected targets. We analyze several scenarios differing in the scope of publicly available information about target parameters and discuss conditions under which greater defenders' ability to signal their security characteristics may improve their welfare. Our results may assist security researchers in devising better defense strategies through the use of deterrence and provide new insight about the efficacy of specific security practices in complex information security environments.
Keywords: cost-benefit analysis; crime deterrence; games of complete and incomplete information; information security; information warfare; interdependent strategies; signaling

Estimating Time Required to Reach Bid Levels in Online Auctions - Bandyopadhyay, Subhajyoti; Bandyopadhyay, Seema (Journal of Management Information Systems, 2009)
Sellers in eBay are often small-business owners whose livelihood depends on fast turnaround of their cash flows. Unlike in traditional auctions, these sellers are content to sell as soon as some target price is reached. While a wealth of literature exists on the final rent of the various stakeholders in a traditional auction setting, what is of interest here is to estimate the time required to reach a certain bid level in ongoing auctions. This paper introduces an analytical model to estimate the time it takes an online auction to reach a prespecified price threshold. The motivation for the research is to avoid unnecessary delays in conducting the transaction. Specifying the right duration would benefit small sellers who would realize the revenue proceeds from the sale faster. To this end, we model the bidding process as an infinite quasi-birth-death process, characterized by bursts of rapid bidding and subsequent lulls. We obtain closed-form solutions for the transient probability distribution in the frequency domain of the bid prices in an ongoing auction, which are then used to compute the transient probability distributions in the time domain. Experienced auctioneers can use these results to estimate expected ending times for their auctions. Sample observations from online auctions indicate that there may be potential room for improvement for sellers in setting their auction ending times. Simulations of the quasi-birth-death processes back up the theoretical observations.
Keywords: auction bid price; auction cash turnaround time; auctions; buy-it-now price; correlated random walk; electronic auctions; quasi-birth-death process; small business; transient analysis

An Interdisciplinary Perspective on IT Services Management and Service Science - Bardhan, Indranil R; Demirkan, Haluk; Kannan, P K; Kauffman, Robert J; Sougstad, Ryan (Journal of Management Information Systems, 2010)
The increasing importance of information technology (IT) services in the global economy prompts researchers in the field of information systems (IS) to give special attention to the foundations of managerial and technical knowledge in this emerging arena of knowledge. Already we have seen the computer science discipline embrace the challenges of finding new directions in design science toward making services-oriented computing approaches more effective, setting the stage for the development of a new science--service science, management, and engineering (SSME). This paper addresses the issues from the point of view of service science as a fundamental area for IS research. We propose a robust framework for evaluating the research on service science, and the likely outcomes and new directions that we expect to see in the coming decade. We emphasize the multiple roles of producers and consumers of services-oriented technology innovations, as well as value-adding seller intermediaries and systems integrators, and standards organizations, user groups, and regulators as monitors. The analysis is cast in multidisciplinary terms, including computer science and IS, economics and finance, marketing, and operations and supply chain management. Evaluating the accomplishments and opportunities for research related to the SSME perspective through a robust framework enables in-depth assessment in the present, as well as an ongoing evaluation of new knowledge in this area, and the advancement of the related management practice capabilities to improve IT services in organizations. INSETS: Text Box 1. An Example: SaaS, ASPs, and CRM;Text Box 2. The Services-as-Art Perspective on Service Science....
Keywords: cloud computing; economics; information systems; IT services; literature survey; marketing; operations; research directions; services science; services management; services-oriented systems; system science

Connecting IT Services Operations to Services Marketing Practices - Montoya, Mitzi M; Massey, Anne P; Khatri, Vijay (Journal of Management Information Systems, 2010)
The importance of building relationships with customers and trust in the services provider is well documented in the marketing literature. Conceptually, we extend this logic to the context of internal information technology (IT) services operations through the notion of the service delivery chain. The purpose of the study is to examine how key service mechanisms in operational IT implementation are related to employee perceptions of actual system benefits and trust in the IT services provider. We report on a study with 380 employees of 14 bank affiliates that were recently acquired by a bank holding company. The focus of the study is on postimplementation trust rather than preimplementation or initial trust, and the service provider is viewed as the object of trust rather than the technology. Our findings suggest that training, trial, and social influence are key service mechanisms an IT services provider can use to stimulate trust in the IT services provider and the realization of system benefits.
Keywords: IT services; mandated systems; relational trust; service delivery chain; service mechanisms

Multitask Agency, Modular Architecture, and Task Disaggregation in SaaS - Susarla, Anjana; Barua, Anitesh; Whinston, Andrew B (Journal of Management Information Systems, 2010)
We examine contract choices in the provision of "software-as-a-service" (SaaS), which is a business innovation that transforms information technology (IT) resources into a continuously provided service. We draw upon agency theory and modularity theory to propose that one of the central challenges in service disaggregation is that of knowledge interdependencies across client and provider organizations. The resulting lack of verifiability of certain tasks results in a multitask agency problem. Our key research questions involve (1) the suitability of high- versus low-powered incentives in SaaS contracts when the outsourced tasks involve business analytics that are difficult to verify, and (2) how such contract choices are affected by the modularity of interfaces between the client and the provider. Analysis of data collected from 154 providers of SaaS offering a range of IT services supports our contention that when contracting for business analytics characterized by knowledge interdependencies across clients and providers, incentives should be "low powered." Modularity in the interfaces of the service provider increases the desirability of high-powered incentives in such situations. Our results are robust after accounting for endogeneity issues arising from unobserved matching between service providers and the nature of IT services outsourced by clients. With the increasing importance of information systems in services, this paper suggests that arm's-length relationships and high-powered incentives may be ineffective in incentivizing providers to perform on complex business analytic tasks, unless accompanied by the modularization of interfaces.
Keywords: endogenous matching; information technology; modularity; multitask agency; outsourcing; services science; services

Coordination Strategies in an SaaS Supply Chain - Demirkan, Haluk; Cheng, Hsing K; Bandyopadhyay, Subhajyoti (Journal of Management Information Systems, 2010)
The computing industry is gradually evolving to cater to the demand for software-as-a-service (SaaS). Two core competencies that have emerged over the past few years are that of the application service providers (ASPs) and the application infrastructure providers (AIPs). The arrangements between them result in system dynamics that is typical in supply chain networks. We examine the performance of an SaaS set up under different coordination strategies between these two players. Our analysis indicates that coordination between the monopoly ASP and the AIP can result in an outcome with the same overall surplus as can be achieved by a central planner. Even though the players have an incentive to deviate, it is possible to create the right incentives so that the economically efficient outcome is also the Nash equilibrium. The results of the analysis have significant implications for the coordination strategies for providers in the burgeoning business model of delivering software services over the Internet.
Keywords: cloud computing; economic analysis; information sharing; infrastructure-as-a-service; services science; services; services management; software as a service; strategy; supply chain coordination

Understanding the Economic Potential of Service-Oriented Architecture - Mueller, Benjamin; Viering, Goetz; Legner, Christine; Riempp, Gerold (Journal of Management Information Systems, 2010)
Service-oriented architecture (SOA) is one of the most discussed topics in the information systems (IS) discipline. While most computer scientists agree that the service-oriented paradigm has clear benefits in terms of technical quality attributes, it has been difficult to justify SOA economically. The few studies that have investigated the strategic and economic aspects of SOA are mostly exploratory and lack a more comprehensive framework for understanding the sources of its economic potential. Based on IS and SOA literature, our work goes further in suggesting the SOA economic potential model, which describes the causal relationships between the SOA's style characteristics and value it can provide on the business side. Using this model, we investigate 164 SOA cases published between 2003 and 2008 to explore the economic rationale for adopting SOA. Our findings suggest that SOA's business benefits are currently mainly driven by operational and information technology infrastructural improvements. However, enterprises also realize strategic benefits from SOA; for example, by electronically integrating with their business partners by means of SOA. We use the results of our study to derive propositions and suggest a research model for future studies on SOA's economic potential.
Keywords: business benefits; economic potential; IS value; service-oriented architecture; services science; services

Managers' Judgments of Performance in IT Services Outsourcing - Ramachandran, Vandana; Gopal, Anandasivam (Journal of Management Information Systems, 2010)
An important task for managers in information technology (IT) service settings is the judgment of service performance. The complex and intangible nature of IT services, however, renders this task especially difficult. We use a sample of 85 outsourced software development projects to test for the presence of the "input bias," which is defined as the systematic misuse of nondiagnostic input information in forming managerial judgments of outcomes. The service outcome we examine is process performance. The diagnostic inputs are given by objective performance metrics based on the final cost and duration of completed projects, whereas the nondiagnostic inputs are risk anticipations formed by managers prior to the start of the project. We find strong evidence of the input bias, which leads managers' subjective assessments to diverge considerably from objective outcomes, and that it is moderated by contract type. Our study contributes to better service management by improving our understanding of managers' judgments of service performance and how these judgments are formed.
Keywords: decision-making bias; field studies; input bias; IT services outsourcing; judgment; regression analysis; services science

A Service Science Perspective on Strategic Choice, IT, and Performance in U.S. Banking - Tallon, Paul P (Journal of Management Information Systems, 2010)
With the move to an information-based economy, financial services has become a key contributor to the U.S. gross domestic product. Even as consolidation reduces the number of banks, small banks with under $100 million in assets continue to report higher profit margins than large banks with over $100 million in assets. Lacking scale, small banks employ a service-oriented business strategy (customer intimacy), whereas large banks focus on productivity and throughput (operational excellence). Information technology (IT) plays a key role in applying each strategy, but as banks move toward customer intimacy in general, the challenge is to grow without undermining service quality. Using a balanced panel data set from 43 U.S. banks, this paper finds that banking strategies are becoming more customer focused. Yet for large banks in particular, IT remains resolutely operations focused. This misalignment could restrict future banking performance. In this way, this paper contributes to the service science literature by using size to dissect banking strategies and performance.
Keywords: banking; business value; customer intimacy; financial services; relationship banking; services science; services; strategic alignment; strategic choice; value disciplines

Implementing Service-Oriented Architecture in Organizations - Choi, Jae; Nazareth, Derek L; Jain, Hemant K (Journal of Management Information Systems, 2010)
Service-oriented architecture (SOA) has been promoted as a technology that can enhance information systems agility, interoperability between applications, deployment flexibility, and reusability. As with any new information technology (IT), the decision to adopt SOA cannot be taken lightly, given the nontrivial investment in economic and personnel resources. The complexity associated with industry-wide diffusion, coupled with organization, industry, and environment factors, contributes to a lack of a clear strategy for assessing the business value that SOA provides an organization. This research attempts to shed light on this process of value creation for an organization, using a system dynamics approach. A detailed model of the industry diffusion coupled with organization adoption is presented. After suitable calibration and validation, a series of simulations using the model evaluate the efficacy of SOA under a variety of diverse conditions. The results of the simulations indicate clear benefits of SOA over monolithic ITs when employed under appropriate conditions. Situations where SOA fails to live up to expectations are also identified. The model and accompanying simulations can serve as a practical decision support tool for an organization to help make the strategic decisions of adopting and implementing SOA.
Keywords: adoption; design science; service-oriented architecture; services science; services; system dynamics

Demand Information Sharing in Heterogeneous IT Services Environments - Sen, Sagnika; Raghu, T S; Vinze, Ajay S (Journal of Management Information Systems, 2010)
In an information technology services outsourcing arrangement, variance in demand volume and individual user preferences pose significant challenges to the provider organization in making resource allocation decisions. Such variations affect service levels, especially under fixed resource constraints. We explore the possible role of periodic demand information sharing and subsequent resource-level adjustments as a means of addressing issues arising from demand variation. As information exchange alters the dynamics of the relationship between the customer and provider organizations, incorporating information sharing in service-level agreements requires modifying current pricing schemes. A pricing heuristic is developed and tested under varying levels of information accuracy and granularity. The heuristic is shown to provide better economic welfare for both participants in comparison to the baseline pricing strategies considered. Also, it is shown that information, even at a coarse level of granularity, is very effective in providing stable service levels--a finding that is encouraging for enhanced collaborations between customer and provider organizations in outsourcing arrangements.
Keywords: heterogeneous demand; information sharing; IT services; pricing

Should We Go Our Own Way?: Backsourcing Flexibility in IT Services Contracts - Benaroch, Michel; Dai, Qizhi; Kauffman, Robert J (Journal of Management Information Systems, 2010)
The emergence of new service science approaches to business problems in information technology (IT) services offers new, unusually relevant insights for the senior management of vendors in this business area. This research examines how service-level agreement contract flexibility should be designed when the technological and business market environments result in volatility of demand, based on an understanding of related changes in the cost drivers that underlie IT services contracts. Our approach draws on a blend of well-known methods from financial economics--the real option pricing method and the contingent claims analysis method. In particular, our research examines a setting in which a vendor provides IT services to a client according to a prenegotiated IT services contract in the presence of demand volatility. We analyze the motivation of and value consequences for a vendor that offers the client the flexibility to opt out of the contract. For example, the client might switch to another vendor, or backsource and provide its own services internally. Our core results offer important foundational thinking for how to specify various forms of IT service-related flexibility in terms of put and call options from the point of view of an IT services vendor, so that their value and exercise timing can be estimated. We show that the client firm's demand trigger value for deciding when to backsource its IT services varies, and it depends on the degree of demand volatility as well as the usage-based fees charged by the vendor. Working from our modeling approach, we also are able to characterize the extent to which a vendor can benefit from bearing the costs of making a backsourcing flexibility option available to its client.
Keywords: contingent claims analysis; demand trigger value; demand uncertainty; financial economics; IT services; outsourcing; real options; services science; valuation; vendors; volatility

"Follow the Sun" Workflow in Global Software Development - Carmel, Erran; Espinosa, J Alberto; Dubinsky, Yael (Journal of Management Information Systems, 2010)
The article discusses follow-the-sun (FTS) projects, in which teams around the world pass software development tasks to teams in other time zones, so the project will be worked on 24 hours per day. The topic is analyzed in terms of the social aspects of information systems. The authors present 12 propositions regarding efficiency and coordination issues which are typically associated with the FTS method. The primary factors in making FTS successful are said to be efficiency in terms of scheduling and handing off work, and coordination within and between the work sites.
Keywords: calendar-efficient software development; global coordination; round-the-clock development; software development; software handoff efficiency; time to market; 24-hour development

Perpetual Versus Subscription Licensing Under Quality Uncertainty and Network Externality Effects - Zhang, Jie; Seidmann, Abraham (Journal of Management Information Systems, 2010)
The article analyzes the optimal way for software vendors to license software, in the context of social aspects of information systems. The relative merits of perpetual licensing or subscription models are discussed, and issues such as software upgrade compatibility, uncertainty regarding quality, network effects and price forecasting are addressed. Evidence is presented that software vendors should use a hybrid of perpetual licensing and subscription models in order to optimize both their own profits and the satisfaction of their customers.
Keywords: compatibility; network externalities; price discrimination; quality uncertainty; software licensing; upgrades

The Power of Patterns and Pattern Recognition When Developing Information-Based Strategy - Clemons, Eric K (Journal of Management Information Systems, 2010)
The article discusses competitive advantage, profitability, and the evolution of organizational structures. Six patterns are identified, which are derived from case studies, theoretical work, and empirical analysis of relevant data. A forecast is offered for the intersection of economics, information science and business strategy for the second and third decades of the 21st century. Topics discussed include the impact of changes in transaction costs on corporate boundaries, competitive advantages conferred by resource endowments, hyper-differentiation of products and services, and the geometry of distribution.
Keywords: hyperdifferentiation; newly vulnerable markets; outsourcing risks; platform envelopment strategies; resonance marketing; resource-based competitive advantage; strategic information systems; transaction costs of outsourcing

Models of Collaboration as the Foundation for Collaboration Technologies - Poltrock, Steven; Handel, Mark (Journal of Management Information Systems, 2010)
The article discusses two basic models of collaborative teamwork, comparing their relative merits in terms of technology-based collaboration and the social aspects of information systems. The models are termed ostensive and performative. The ostensive approach defines how things should be done, and is said to be useful for analysis, documentation, simulation and automation. The performative approach focuses on observing actual practices, and is recommended for discovering innovative methods for using existing systems as well as monitoring deviations from normative practice.
Keywords: collaboration; coordination theory; modeling; social network models; temporal models; workflow

Bounded Ideation Theory - Briggs, Robert O; Reinig, Bruce A (Journal of Management Information Systems, 2010)
The article presents information on bounded ideation theory (BIT), which is said to be a means of optimizing brainstorming sessions. BIT challenges the rubric that the percentage of good ideas will remain constant as the number of ideas generated rises. It is argued that limitations in solution space, goal congruence, attention span and knowledge typically result in the number of good ideas tapering off on an inflected curve. Six strategies are suggested for improving ideation sessions, which focus on promoting quality at the expense of quantity.
Keywords: bounded ideation theory; brainstorming; group support systems; ideation

Network Externalities and Technology Use: A Quantitative Analysis of Intraorganizational Blogs - Wattal, Sunil; Racherla, Pradeep; Mandviwalla, Munir (Journal of Management Information Systems, 2010)
The article presents the results of a study which examined the use of blogs in a corporate context, focusing on the social aspects of such information systems. The role of network externalities, positive feedback, and the demographic variables of age and gender were analyzed. The results of the study indicated that network effects were stronger for younger users and women, and strongest for relational networks. The effect of age was nonlinear. Positive feedback and use of blogs by managers correlated with increased blogging.
Keywords: corporate blogs; network externalities; social computing; social networks; technology usage

Technology Dominance in Complex Decision Making: The Case of Aided Credibility Assessment - Jensen, Matthew L; Lowry, Paul Benjamin; Burgoon, Jude K; Nunamaker Jr, Jay F (Journal of Management Information Systems, 2010)
The article presents the results of an experiment which involved novices and experts using a decision aid to detect deception in a law enforcement scenario. Both groups improved their assessment accuracy using the decision support system, but tended to ignore it when it contradicted them. The professionals often did not even look at the decision aid's reasons for contradicting them. The theory of technology dominance (TTD) is discussed in this context, and it is noted that the experiment's results contradicted TTD in two respects.
Keywords: credibility; credibility assessment; deception; deception detection; decision aids; decision making; theory of technology dominance

Team Size, Dispersion, and Social Loafing in Technology-Supported Teams: A Perspective on the Theory of Moral Disengagement - Alnuaimi, Omar A; Robert Jr, Lionel P; Maruping, Likoebe M (Journal of Management Information Systems, 2010)
The article reports the results of a study which investigated social loafing in a team setting. The study involved 32 teams of students assigned to brainstorming tasks using group systems software. Cognitive mechanisms derived from moral disengagement theory were tested as possible drivers of social loafing behavior. These included attribution of blame, diffusion of responsibility, and dehumanization. All of these correlated with the effect of team size on social loafing, but only dehumanization was found to mediate the effect of dispersion.
Keywords: computer-mediated communication (CMC); creativity; electronic brainstorming; idea generation; individuals in teams; social loafing; team performance; team productivity; technology-mediated collaborative environments; technology-supported team efficacy; theory of moral disengagement; virtual collaboration; virtual teams

Antecedents and Effects of CIO Supply-Side and Demand-Side Leadership: A Staged Maturity Model - Chen, Daniel Q; Preston, David S; Xia, Weidong (Journal of Management Information Systems, 2010)
The article presents a study of chief information officers (CIOs), which focuses on changes in the position's leadership role from a supply-oriented to demand-oriented model. The trend toward information technology (IT) as a commodity which can be outsourced has led to CIOs becoming more involved in business strategy planning at the senior executive level. A staged maturity model of the CIO role is presented as a means of analyzing this transition, from IT as an operations-oriented support function to the strategic deployment of IT to achieve a competitive advantage. Matched CIO responses from over 150 corporations were used to identify aspects of this process, such as human capital, CIO structural power, and organizational support for IT.
Keywords: chief information officer; exploitation; exploration; IT functional impact; IT leadership; staged maturity model; strategic value of IT; structural equation modeling; survey research

The Influence of Experiential and Dispositional Factors in Phishing: An Empirical Investigation of the Deceived - Wright, Ryan T; Marett, Kent (Journal of Management Information Systems, 2010)
The article presents the results of a field study which investigated the type of internet fraud known as phishing, focusing on factors which cause people to be more or less susceptible to being deceived in this way. The study participants received a phishing e-mail (electronic mail) message asking for information which they were not supposed to divulge. Four behavioral factors were identified as correlating with a tendency to be duped by the phishing message. Suggestions are provided for antiphishing measures based on this data, centering on computer user education.
Keywords: computer-mediated deception; electronic mail fraud; Internet security; interpersonal deception theory; phishing

Predicting Collaboration Technology Use: Integrating Technology Adoption and Collaboration Research - Brown, Susan A; Dennis, Alan R; Venkatesh, Viswanath (Journal of Management Information Systems, 2010)
The paper presents a model integrating theories from collaboration research (i.e., social presence theory, channel expansion theory, and the task closure model) with a recent theory from technology adoption research (i.e., unified theory of acceptance and use of technology, abbreviated to UTAUT) to explain the adoption and use of collaboration technology. We theorize that collaboration technology characteristics, individual and group characteristics, task characteristics, and situational characteristics are predictors of performance expectancy, effort expectancy, social influence, and facilitating conditions in UTAUT. We further theorize that the UTAUT constructs, in concert with gender, age, and experience, predict intention to use a collaboration technology, which in turn predicts use. We conducted two field studies in Finland among (1) 349 short message service (SMS) users and (2) 447 employees who were potential users of a new collaboration technology in an organization. Our model was supported in both studies. The current work contributes to research by developing and testing a technology-specific model of adoption in the collaboration context.
Keywords: channel expansion theory; collaboration technology; social presence theory; task closure model; technology acceptance; technology adoption; unified theory of acceptance and use of technology

Safe Contexts for Interorganizational Collaborations Among Homeland Security Professionals - Majchrzak, Ann; Jarvenpaa, Sirkka L (Journal of Management Information Systems, 2010)
In many domains of increased turbulence and volatility, interorganizational ad hoc collaborations are common. One such domain is homeland security in which security professionals collaborate virtually with individuals outside of their own organizations in response to a security threat. In such a domain, a safe context is needed to ensure that interactions with collaborators not only help to solve the immediate threat but also avoid the improper use by outside parties of information released during these collaborations. We use the heuristic systematic model of information processing to hypothesize that the relationship between different safe context factors and a security professional's perceptions of collaboration success will be contingent on differences in geographic proximity of the collaborating parties--differences in proximity that are not related to differences in physical face-to-face contact but to differences in social proximity. Our exploratory empirical investigation finds support for the hypothesized interaction effect: safe contexts that require deeper processing are related to higher levels of perceived success when the parties are geographically proximal (with no differences in face-to-face contact), whereas safe contexts that involve heuristic-based processing are related to success when parties are geographically less proximal. Our findings suggest that the utility of safe context factors is contextualized based on the proximity of interacting parties, that geographical proximity's social space dimension plays a key role independent of differences in physical face-to-face contact, and that, practically, to be successful, ad hoc collaborators should have access to a range of safe context factors, using them in different combinations depending on the proximity of network members.
Keywords: dual process theories; geographic proximity; knowledge protection; personal networks; safe contexts; security professionals

Systems Development Ambidexterity: Explaining the Complementary and Substitutive Roles of Formal and Informal Controls - Tiwana, Amrit (Journal of Management Information Systems, 2010)
Although formal and informal control mechanisms are often simultaneously used to govern systems development projects, considerable disagreement exists about whether the use of one strengthens or diminishes the benefits of the other. In other words, are they complements or substitutes? Competing theoretical perspectives favor both sides of the argument, and neither the information systems (IS) controls literature nor the information technology (IT) outsourcing literature has addressed this issue. This study theoretically develops the idea that these competing perspectives are mutually compatible rather than contradictory because informal and formal control mechanisms can simultaneously be complements and substitutes. Using data from 120 outsourced systems development projects, it is shown that informal control mechanisms strengthen the influence of formal behavior control mechanisms on systems development ambidexterity (complementary effects) but weaken the influence of formal outcome control mechanisms (substitutive effects). The key contribution of the paper therefore lies in exploring interactions among control mechanisms in a project's control portfolio to reconcile the competing theoretical perspectives on whether formal and informal controls are complements or substitutes. The findings provide managers guidance on how to carefully combine formal and informal control mechanisms in a project. Combining informal with formal process-based control mechanisms can simultaneously enhance the fulfillment of project goals and development flexibility. However, combining informal with formal outcome-based control mechanisms can instead impair these objectives.
Keywords: ambidexterity; control mechanisms; interaction effects; outsourcing; project governance; signaling; software project control; systems development

Are Consumers More Likely to Contribute Online Reviews for Hit or Niche Products? - Dellarocas, Chrysanthos; Gao, Guodong Gordon; Narayan, Ritu (Journal of Management Information Systems, 2010)
User-generated content has been hailed by some as a democratizing force that enables consumers to discuss niche products that were previously ignored by mainstream media. Nevertheless, the extent to which consumers truly prefer to use these new outlets to discuss lesser-known products as opposed to spending most of their energies on discussing widely marketed or already successful products has so far remained an open question. We explore this question by investigating how a population's propensity to contribute postconsumption online reviews for different products of the same category (motion pictures) relates to various indicators of those products' popularity. We discover that, ceteris paribus, consumers prefer to post reviews for products that are less available and less successful in the market. At the same time, however, they are also more likely to contribute reviews for products that many other people have already commented on online. The presence of these two opposite forces leads to a U-shaped relationship between a population's average propensity to review a movie postconsumption and that movie's box office revenues: moviegoers appear to be more likely to contribute reviews for very obscure movies but also for very high-grossing movies. Our findings suggest that online forum designers who wish to increase the contribution of user reviews for lesser-known products should make information about the volume of previously posted reviews a less-prominent feature of their sites.
Keywords: consumer behavior; econometrics; information intermediaries; online product reviews; online word of mouth; Web 2.0

Empirical Analysis of the Impact of Recommender Systems on Sales - Pathak, Bhavik; Garfinkel, Robert; Gopal, Ram D; Venkatesan, Rajkumar; Yin, Fang (Journal of Management Information Systems, 2010)
Online retailers are increasingly using information technologies to provide value-added services to customers. Prominent examples of these services are online recommender systems and consumer feedback mechanisms, both of which serve to reduce consumer search costs and uncertainty associated with the purchase of unfamiliar products. The central question we address is how recommender systems affect sales. We take into consideration the interaction among recommendations, sales, and price. We then develop a robust empirical model that incorporates the indirect effect of recommendations on sales through retailer pricing, potential simultaneity between sales and recommendations, and a comprehensive measure of the strength of recommendations. Applying the model to a panel data set collected from two online retailers, we found that the strength of recommendations has a positive effect on sales. Moreover, this effect is moderated by the recency effect, where more recently released recommended items positively affect the cross-selling efforts of sellers. We also show that recommender systems help to reinforce the long-tail phenomenon of electronic commerce, and obscure recommendations positively affect cross-selling. We also found a positive effect of recommendations on prices. These results suggest that recommendations not only improve sales but they also provide added flexibility to retailers to adjust their prices. A comparative analysis reveals that recommendations have a higher effect on sales than does consumer feedback. Our empirical results show that providing value-added services, such as digital word of mouth and recommendations, allows retailers to charge higher prices while at the same time increasing demand by providing more information regarding the quality and match of products.
Keywords: collaborative filtering; electronic commerce; e-tailing; experience goods; recommender systems

No Free Lunch: Price Premium for Privacy Seal--Bearing Vendors - Mai, Bin; Menon, Nirup M; Sarkar, Sumit (Journal of Management Information Systems, 2010)
Privacy is a significant concern of customers in the business-to-consumer online environment. Several technical, economic, and regulatory mechanisms have been proposed to address online privacy. A current market-based mechanism is the privacy seal, under which a third party assures adherence by a vendor to its posted privacy policy. In this paper, we present empirical evidence of the effect of displaying a privacy seal on the product prices of online vendors of electronic books, downloadable audiobooks, and textbooks. Using data collected on these relatively homogeneous products sold by online vendors, we find that while controlling for vendor-specific characteristics, vendors bearing privacy seals charge a premium for such products compared to vendors not bearing a seal. The paper provides empirical evidence of the economic value of privacy assurance from the customers' perspective as measured by the price premium charged for products. The research has implications for researchers and policymakers by providing evidence that privacy is another factor that creates friction in e-commerce, and that prices on the Internet for homogeneous products need not converge.
Keywords: partial least squares (PLS) modeling; price dispersion; privacy assurance; risk premium; trust

Donor-to-Nonprofit Online Marketplace: An Economic Analysis of the Effects on Fund-Raising - Ozdemir, Zafer D; Altinkemer, Kemal; De, Prabuddha; Ozcelik, Yasin (Journal of Management Information Systems, 2010)
Online intermediaries have recently started offering database services to donors and certification services to nonprofit organizations through the Internet. We conceptualize a donor-to-nonprofit (D2N) marketplace as an online intermediary that offers these two services and examine its effect on fund-raising strategies of nonprofit organizations using an analytical model based on spatial competition under incomplete information with donor search. We characterize the signaling equilibria where certification of quality conveys information about organizational effectiveness in generating socially valuable services. Interestingly, the emergence of the D2N marketplace may lead to a drop in total net fund-raising revenues in the market, despite the fact that the intermediary's database service eliminates search costs for some donors. We also explain why such a marketplace may deliberately lower the accuracy of its certification process.
Keywords: fund-raising; nonprofit organizations; online marketplaces; online search; quality certification; seal of approval; signaling

Net Neutrality and Vertical Integration of Content and Broadband Services - Guo, Hong; Bandyopadhyay, Subhajyoti; Cheng, Hsing K; Yang, Yu-Chen (Journal of Management Information Systems, 2010)
Whether broadband service providers (BSPs) should be allowed to vertically integrate with content providers is a contentious issue. This is even more so when viewed through the lens of the net neutrality debate, since the vertically integrated firm can prioritize the delivery of its own content at the expense of that of its competitors if net neutrality is not enforced. Using a game-theoretic model, we analyze the issues of vertical integration of content and broadband services surrounding this debate from an economic perspective. Our analysis establishes the various equilibria in the game and shows that the vertically integrated BSP does not have any incentive to abide by the principles of net neutrality. If net neutrality is not enforced, social welfare might, in certain cases, decrease with vertical integration, and in such cases, the BSP's objectives are at odds with that of the social planner. With other ranges of parameter values, social welfare increases with vertical integration at the expense of the competing pure-play content provider. Interestingly, we find that it is not always true that the BSP will always degrade the delivery of the competing content, and in fact will sometimes have the incentive to prioritize the latter over its own. The analysis thus provides crucial inputs to policymakers as they decide on whether to allow vertical integration between a BSP and a content provider in the absence of net neutrality.
Keywords: broadband service providers; consumer surplus; content providers; economics of net neutrality; net neutrality; social welfare; vertical integration

Impact of Internal Open Source Development on Reuse: Participatory Reuse in Action - Vitharana, Padmal; King, Julie; Chapman, Helena Shih (Journal of Management Information Systems, 2010)
Adoption of open source software (OSS) principles to internal software development has gained considerable momentum. Often labeled as "internal open source" (IOS), several large firms have started to implement these programs. Research to date has mostly focused on facilitating IOS adoption. In the present research, we focus on how IOS affects reuse. Employing a qualitative case study, we examine the IOS program at IBM called "Community Source." Analyzing data gathered from multiple sources reveals that IOS adoption facilitates participatory reuse by enhancing information sharing and leveraging of broader community skills. Participatory reuse manifests itself when potential reusers participate in the entire development process leading to the creation of reusable assets. Based on data, we develop a theoretical model to illustrate how IOS affects reuse. While furthering research on IOS and reuse, the model informs managers wishing to foster participatory reuse that they are wise to adopt IOS as a vehicle to promote greater openness of the software development infrastructure for leveraging broader community skills and enhancing information sharing among projects' stakeholders.
Keywords: closed source; internal open source; open source; open source software; participatory reuse; software reuse

Information Technology Diffusion with Influentials, Imitators, and Opponents - Cavusoglu, Hasan; Hu, Nan; Li, Yingjiu; Ma, Dan (Journal of Management Information Systems, 2010)
Information technology (IT) innovations follow a diverse set of diffusion patterns. Early diffusion models explaining technology diffusion patterns assumed that there is a single homogeneous segment of potential adopters. It was later shown that a two-segment model considering two groups of adopters explains variations in diffusion patterns better than the existing one-segment models. While the two-segment model considers a group of adopters promoting adoption by exerting a positive influence on prospective adopters, it does not consider the members of society who aim to inhibit the adoption process by exerting a negative influence on prospective adopters. In fact, most IT innovations face opposition. Yet it is not clear how opposition affects the diffusion process. In this paper, we model the diffusion of an IT innovation through its target population with three types of actors: influentials, who are autonomous in adopting new technology and promote its adoption; opponents, who are opposed to the technology and inhibit its adoption; and imitators, who are information seekers, thus affected by both influentials and opponents. We show that opponents play a crucial role in determining the diffusion path of an innovation. The empirical tests using real as well as simulated data sets demonstrate the ability of our model to fit the data better and to identify the segments of adopters correctly.
Keywords: diffusion of innovations; information technology diffusion; technology opposition

Organizational Learning and Capabilities for Onshore and Offshore Business Process Outsourcing - Whitaker, Jonathan; Mithas, Sunil; Krishnan, M S (Journal of Management Information Systems, 2010)
This paper identifies and analyzes firm-level characteristics that facilitate onshore and offshore business process outsourcing (BPO). We use organizational learning and capabilities to develop a conceptual model. We test the conceptual model with archival data on a broad cross section of U. S. firms. Our empirical findings indicate that firms with experience in onshore information technology (IT) outsourcing and capabilities related to IT coordination applications and process codification are more likely to engage in BPO, and firms with experience in internationalization are more likely to engage in offshore BPO. We also find that IT coordination applications have a greater impact on onshore BPO than on offshore BPO, and the effect of process codification is partly mediated through IT outsourcing.
Keywords: business process outsourcing; offshoring; organizational capabilities; organizational learning; outsourcing

Regulation of Digital Businesses with Natural Monopolies or Third-Party Payment Business Models: Antitrust Lessons from the Analysis of Google - Clemons, Eric K; Madhani, Nehal (Journal of Management Information Systems, 2010)
Some digital business models may be so innovative that they overwhelm existing regulatory mechanisms, both legislation and historical jurisprudence, and require extension to or modification of antitrust law. Regulatory policies that were developed in response to nineteenth- or twentieth-century antitrust concerns dealt principally with economies of scale leading to monopoly power and may not be well suited to the issues of network effects or third-party payer online business models such as sponsored search. From the perspective of information systems economics, we investigate if such third-party payer digital systems require intervention as profound as the government's innovative approach to the problems posed by AT&T in the 1913 Kingsbury Commitment, establishing the first private regulated monopoly. Google provides an example of a company whose innovative digital business model is difficult to fit into current regulatory frameworks, and may provide examples of the issues that might require an extension to regulatory policy.
Keywords: antitrust; bundling and tying; contestability; deterred market entry; digital business strategies; essential facilities doctrine; Google; key word auctions; online search; relevant market share; sponsored search

The Disruptive Effect of Open Platforms on Markets for Wireless Services - Lahiri, Atanu; Dewan, Rajiv M; Freimer, Marshall L (Journal of Management Information Systems, 2010)
Application-based pricing is common in telecommunications. Wireless carriers charge consumers more per byte of traffic for text messages than they do for wireless surfing or voice calls. Such pricing is possible because carriers and handset manufacturers have the ability to tag and meter each application. While tagging and metering are possible in the case of closed platforms such as iPhone, they are not in the case of open platforms such as Android. Android is open source with open application programming interfaces, and anyone can develop applications for it. Because the carriers have little control over applications, Android is inherently disruptive of differential pricing across applications. Users and neutrality advocates support Android, believing that it can increase consumer surplus by disrupting differential pricing. However, we show that the equilibrium under differential pricing is different from the equilibrium under open platforms, and it is particularly so with regard to the sets of consumers served and the quantities consumed. With open platforms, certain consumers are either not served or they are served a quantity that is less than what they would be served under differential pricing. Consequently, the consumer surplus and the social surplus are often lower with open platforms. Similarly, firms are expected to prefer differential pricing. We show that this expectation is also not true under certain circumstances in which open platforms and neutral pricing work like a quasi-bundle.
Keywords: net neutrality; nonlinear pricing; open platforms; quasi-bundling; wireless services

Oligopolistic Pricing with Online Search - Xu, Lizhen; Chen, Jianqing; Whinston, Andrew B (Journal of Management Information Systems, 2010)
In this paper, we set up a game-theoretic model to examine oligopolistic price competition, considering two features of online search: the existence of a common search ordering and shoppers who have nonpositive search cost. We find that in equilibrium firms set their prices probabilistically rather than deterministically, and different firms follow different price distributions. The equilibrium pricing pattern exhibits an interesting local-competition feature in which direct price competition occurs only between firms adjacent to each other. Further, we incorporate consumers' search strategies into the model so that both search order and stopping rules are determined rationally by consumers. We show that similar patterns may continue to hold in the fully rational framework when consumers have higher inspection costs for inferior positions.
Keywords: local competition; oligopolistic competition; online search; price dispersion; pricing

Information Asymmetry in Information Systems Consulting: Toward a Theory of Relationship Constraints - Dawson, Gregory S; Watson, Richard T; Boudreau, Marie-Claude (Journal of Management Information Systems, 2010)
Opportunism, or self-interest seeking with guile, is often witnessed in human behavior, and it bedevils human interactions and relationships. Organizations expend considerable effort to reduce opportunism. Agency theory espouses formal contracts as effective constraints on opportunism; however, a consultant's use of tacit knowledge subjects clients to information asymmetry that is not amenable to formal contracts. The principal-professional lens was developed to accommodate the presence of tacit knowledge, but it ignores formal contracts and, like agency theory, ignores the existence of principal opportunism. This examination of information systems (IS) consulting notes that when information asymmetry is present, both clients and consultants sometimes behave opportunistically. The level of information asymmetry, the type of knowledge, and the level of contract specificity in an IS consulting engagement determine the mixture of legal and social constraints that are efficacious. Based on these revelations and the inadequacy of other theories, a theoretical model of relationship constraints is developed to explain the interplay between signaling and screening, knowledge type, contract specificity, and the levels of information asymmetry in predicting adopted constraint mechanisms. For researchers, this new model offers a lens to study opportunism from a knowledge-based perspective, whereas for practitioners it offers the possibility of forestalling a decline in markets due to rampant opportunism.
Keywords: agency theory; information asymmetry; information systems consulting; opportunism; principal-agent relationship; screening; signaling; tacit knowledge

Developer Heterogeneity and Formation of Communication Networks in Open Source Software Projects - Singh, Param Vir; Tan, Yong (Journal of Management Information Systems, 2010)
Over the past few years, open source software (OSS) development has gained a huge popularity and has attracted a large variety of developers. According to software engineering folklore, the architecture and the organization of software depend on the communication patterns of the contributors. Communication patterns among developers influence knowledge sharing among them. Unlike in a formal organization, the communication network structures in an OSS project evolve unrestricted and unplanned. We develop a non-cooperative game-theoretic model to investigate the network formation in an OSS team and to characterize the stable and efficient structures. Developer heterogeneity in the network is incorporated based on their informative value. We find that there may exist several stable structures that are inefficient and there may not always exist a stable structure that is efficient. The tension between the stability and efficiency of structures results from developers acting in their self-interest rather than the group interest. Whenever there is such tension, the stable structure is either underconnected across types or overconnected within type of developers from an efficiency perspective. We further discuss how an administrator can help evolve a stable network into an efficient one. Empirically, we use the latent class model and analyze two real-world OSS projects hosted at SourceForge. For each project, different types of developers and a stable structure are identified, which fits well with the predictions of our model. Overall, our study sheds light on how developer abilities and incentives affect communication network formation in OSS projects.
Keywords: analytical modeling; economics of information systems; network formation; software development

Task and Social Information Seeking: Whom Do We Prefer and Whom Do We Approach? - Xu, Yunjie; Kim, Hee-Woong; Kankanhalli, Atreyi (Journal of Management Information Systems, 2010)
Employee information-seeking behavior shapes the formation of organizational communication networks and affects performance. However, it is not easy to facilitate, particularly through information technology, and its motivations are not well understood. Recognizing two broad categories of information-that is, task and social information-this study investigates and compares the antecedents of task and social information seeking. Deriving from the relational communication perspective, informational and relational motivations are modeled as the two main antecedents of source preference and sourcing frequency in dyadic information seeking. Through a survey of employee dyads, our findings indicate that perceived information relevance is a significant antecedent of source preference for both task and social information seeking, whereas perceived relational benefit is significant in the context of task information. The results also show that perceived relational benefit has a stronger effect on source preference in task information seeking than in social information seeking. Furthermore, preference for a source is a significant antecedent of the frequency of sourcing in both contexts. This study provides an explanation of the formation of organizational communication networks. It suggests that organizational information and communication technologies not only need to support information delivery but must also facilitate relationship management for the seeker.
Keywords: perceived information relevance; perceived relational benefit; preference for source; social information seeking; sourcing frequency; task information seeking

Bidding Patterns, Experience, and Avoiding the Winner's Curse in Online Auctions - Easley, Robert F; Wood, Charles A; Barkataki, Sharad (Journal of Management Information Systems, 2010)
The design and implementation of online auctions has given rise to a unique set of bidding strategies that has stimulated a growing body of research. We make use of a theoretically grounded, well-understood, and empirically observable bidder behavior-the winner's curse adjustment for the expected number of bidders in an auction-to examine the relationships between bidder experience, bidding patterns, and the winner's curse adjustment in rare coin online auctions. We also examine the impact of uncertainty on the winner's curse adjustment, both by using precise measures of uncertainty and by considering seller and bidder strategies for reducing that uncertainty. We analyze a complete record of all auctions in a three-month period for rare U. S. coins, examining 284,681 bids from 62,625 auctions hosted by eBay, the market leader in online auctions. One of the main contributions of this paper is to demonstrate that the bidding patterns associated with different bidders are strongly related to whether they calculate their bids to take into account the number of competing bidders, as predicted for common-value auctions. This is a substantial extension and empirical confirmation of prior work that has explored the implications of different observed patterns of bidding. We also explore new territory by examining the relationships between bidder experience, bidding patterns observed, and the economic outcomes for bidders. We are able to show that bidders with more domain-specific experience (rather than general auction experience) make better adjustments for the winner's curse, that experience has an effect on the type of bidding strategy, and that the type of bidding strategy has a significant effect on the economic outcomes for the bidders.
Keywords: bidder experience; bidder strategies; bidding patterns; online auctions; winner’s curse

Entertainment Without Borders: The Impact of Digital Technologies on Government Cultural Policy - Cheng, Hsing K; Feng, Juan; Koehler, Gary J; Marston, Sean (Journal of Management Information Systems, 2010)
Many countries limit the influence of foreign entertainment products, such as music, film, and television programs, to protect their domestic cultural industry. Commonly observed policy tools include quotas, tariffs, and subsidies. However, advances in digital technology enable consumers to access digital versions of foreign entertainment programs via the Internet, a leakage channel that bypasses government protection methods. This calls for a reexamination of the effectiveness of these traditional tools. We build a unified analytical framework to study the impact of digital technology on cultural protection policies. We find that in the presence of Internet leakage, imposing a quota is the least effective protection policy to maximize the total domestic social welfare, but using either a tariff or subsidy policy is optimal, depending on the quality difference between domestic and foreign entertainment programs via the traditional channel and the Internet. Using quotas remains the least effective policy when we extend the analyses to consider the presence of piracy. In addition to the quality difference between foreign and domestic entertainment, the proportion of unethical consumers and the cost of piracy determine whether using tariffs or subsidies is the optimal policy.
Keywords: cultural protection policy; digital entertainment; quotas; subsidies; tariffs

Impact of Technostress on End-User Satisfaction and Performance - Tarafdar, Monideepa; Tu, Qiang; Ragu-Nathan, T S (Journal of Management Information Systems, 2010)
Organizational use of information and communications technologies (ICT) is increasingly resulting in negative cognitions in individuals, such as information overload and interruptions. Recent literature has encapsulated these cognitions in the concept of technostress, which is stress caused by an inability to cope with the demands of organizational computer usage. Given the critical role of the user in organizational information processing and accomplishing application-enabled workflows, understanding how these cognitions affect users' satisfaction with ICT and their performance in ICT-mediated tasks is an important step in appropriating benefits from current computing environments. The objective of this paper is to (1) understand the negative effects of technostress on the extent to which end users perceive the applications they use to be satisfactory and can utilize them to improve their performance at work and (2) identify mechanisms that can mitigate these effects. Specifically, we draw from the end-user computing and technostress literature to develop and validate a model that analyzes the effects of factors that create technostress on the individual's satisfaction with, and task performance using, ICT. The model also examines how user involvement in ICT development and support mechanisms for innovation can be used to weaken technostress-creating factors and their outcomes. The results, based on survey data analysis from 233 ICT users from two organizations, show that factors that create technostress reduce the satisfaction of individuals with the ICT they use and the extent to which they can utilize ICT for productivity and innovation in their tasks. Mechanisms that facilitate involvement of users, and encourage them to take risks, learn, explore new ideas, and experiment in the context of ICT use, diminish the factors that create technostress and increase satisfaction with the ICT they use. These mechanisms also have a positive effect on users' appropriation of ICT for productivity and innovation in their tasks. The paper contributes to emerging literature on negative outcomes of ICT use by (1) highlighting the influence of technostress on users' satisfaction and performance (i.e., productivity and innovation in ICT-mediated tasks) with ICT, (2) extending the literature on technostress, which has so far looked largely at the general behavioral and psychological domains, to include the domain of end-user computing, and (3) demonstrating the importance of user involvement and innovation support mechanisms in reducing technostress-creating conditions and their ICT use-related outcomes.
Keywords: end-user performance; end-user satisfaction; information and communications technology use; information overload; survey research; technostress; user involvement

Product Reviews and Competition in Markets for Repeat Purchase Products - Li, Xinxin; Hitt, Lorin M; Zhang, Z John (Journal of Management Information Systems, 2011)
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.
Keywords: game-theoretic model; installed customer base; online product reviews; price competition; repeat purchase products; review informativeness

Drivers of the Long Tail Phenomenon: An Empirical Analysis - Hinz, Oliver; Eckert, Jochen; Skiera, Bernd (Journal of Management Information Systems, 2011)
The Internet makes it easy to offer large assortments of products, tempting managers to chase the â€œlong tailâ€â€”that is, the phenomenon in which niche products gain a significant share of demand among all products. Yet few studies empirically examine the existence and drivers of this long tail phenomenon. This study uses a unique data set with 843,922 purchases from 143,939 customers that a monopolistic video-on-demand operator observed over 111 weeks after its launch of the service. The current analysis centers on the effects of increasing assortment sizes and improved search technologies on measures of the long tail, such as per customer demand, the share of products purchased from the assortment, the distribution of demand across products, and the concentration of demand. Increases in assortment sizes and better assortment quality lead to increases in demand per customer and a longer tail. The length of the tail (i.e., share of purchased products) is also driven by new customers and seasonal effects, such as school vacations, whereas the presence of high-quality blockbuster products shortens the tail. Different search technologies can shift demand toward niche products as well as toward blockbuster products.
Keywords: electronic commerce; long tail; recommendation systems; search technology; video-on-demand

Information Quality in Wikipedia: The Effects of Group Composition and Task Conflict - Arazy, Ofer; Nov, Oded; Patterson, Raymond; Yeo, Lisa (Journal of Management Information Systems, 2011)
The success of Wikipedia demonstrates that self-organizing production communities can produce high-quality information-based products. Research on Wikipedia has proceeded largely atheoretically, focusing on (1) the diversity in members’ knowledge bases as a determinant of Wikipedia’s content quality, (2) the task-related conflicts that occur during the collaborative authoring process, and (3) the different roles members play in Wikipedia. We develop a theoretical model that explains how these three factors interact to determine the quality of Wikipedia articles. The results from the empirical study of 96 Wikipedia articles suggest that (1) diversity should be encouraged, as the creative abrasion that is generated when cognitively diverse members engage in task-related conflict leads to higher-quality articles, (2) task conflict should be managed, as conflict —notwithstanding its contribution to creative abrasion—can negatively affect group output, and (3) groups should maintain a balance of both administrative- and content-oriented members, as both contribute to the collaborative process.
Keywords: co-creation; cognitive diversity; collaboration; community-based production; group composition; information quality; task conflict; Wikipedia

Influence of Industry Characteristics on Information Technology Outsourcing - Qu, Wen Guang; Pinsonneault, Alain; Oh, Wonseok (Journal of Management Information Systems, 2011)
Despite the extensive research on information technology (IT) outsourcing, our knowledge and understanding of how industry characteristics impact the use of IT outsourcing remain limited. Drawing upon theories from organization behavior and industrial economics, this study identifies four major industry characteristics (i.e., munificence, dynamism, concentration, and capital intensity) and investigates how each of these factors affects the use of IT outsourcing. Specifically, we postulate that the extent of industry munificence is positively related to the utilization of IT outsourcing. Since timely strategic actions are the crucial aspects of leveraging munificent resources, IT outsourcing, which can be implemented in short periods of time, is considered to be a preferred option in such environments. Furthermore, industry dynamism is also positively associated with IT outsourcing, given that firms in dynamically evolving industries tend to look for flexibility and avoid a large amount of fixed investments (e.g., IT development in-house). In contrast to these hypotheses, we predict that industry concentration is negatively related to IT outsourcing. Firms in concentrated industries are likely to develop their own IT infrastructures, as they are not constrained by institutional pressures or cost-driven strategic actions. Finally, because firms in capital-intensive industries tend to conform to long-standing traditional practices, and do not highly value novel and risky practices, they will be less likely to use IT outsourcing than firms in industries with low capital intensity. The data from the U.S. Bureau of Economic Analysis along with Compustat empirically validated all of the proposed hypotheses; however, only marginal support was found for the association between industry concentration and IT outsourcing. Our findings offer business executives and IT service providers strategic and managerial insights into the dynamics and complexities involved in the diverse aspects of industry environments and IT outsourcing decisions.
Keywords: capital intensity; industry concentration; industry dynamism; industry environments; industry munificence; information technology outsourcing

Productivity and Performance Effects of Business Process Reengineering: A Firm-Level Analysis - Altinkemer, Kemal; Ozcelik, Yasin; Ozdemir, Zafer D (Journal of Management Information Systems, 2011)
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.
Keywords: business process reengineering; business value of information technology; panel regression; productivity

Privacy Concerns Versus Desire for Interpersonal Awareness in Driving the Use of Self-Disclosure Technologies: The Case of Instant Messaging in Two Cultures - Lowry, Paul Benjamin; Cao, Jinwei; Everard, Andrea (Journal of Management Information Systems, 2011)
Social computing technologies typically have multiple features that allow users to reveal their personal information to other users. Such self-disclosure (SD) behavior is generally considered positive and beneficial in interpersonal communication and relationships. Using a newly proposed model based on social exchange theory, this paper investigates and empirically validates the relationships between SD technology use and culture. In particular, we explore the effects of culture on information privacy concerns and the desire for online interpersonal awareness, which influence attitudes toward, intention to use, and actual use of SD technologies. Our model was tested using arguably the strongest social computing technology for online SD— instant messaging (IM)—with users from China and the United States. Our findings reveal that cross-cultural dimensions are significant predictors of information privacy concerns and desire for online awareness, which are, in turn, found to be predictors of attitude toward, intention to use, and actual use of IM. Overall, our proposed model is applicable to both cultures. Our findings enhance the theoretical understanding of the effects of culture and privacy concerns on SD technologies and provide practical suggestions for developers of SD technologies, such as adding additional control features to applications.
Keywords: instant messaging; privacy; self-disclosure; self-disclosure technologies; social computing technologies; social exchange theory; theory of reasoned action

The Impact of Network Externalities on the Competition Between Open Source and Proprietary Software - Cheng, Hsing K; Liu, Yipeng; Tang, Qian (Journal of Management Information Systems, 2011)
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.
Keywords: competition; network externalities; open source software; software compatibility

Consumer Acceptance of Recommendations by Interactive Decision Aids: The Joint Role of Temporal Distance and Concrete Versus Abstract Communications - Kohler, Clemens F; Breugelmans, Els; Dellaert, Benedict G C (Journal of Management Information Systems, 2011)
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.
Keywords: construal level theory; consumer behavior; electronic commerce; interactive decision aids; recommenders

Mitigating Vendor Silence in Offshore Outsourcing: An Empirical Investigation - Jain, Radhika P; Simon, Judith C; Poston, Robin S (Journal of Management Information Systems, 2011)
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 effectiveness; information technology outsourcing; mum effect; offshore outsourcing; offshore project management; organizational silence; silence mitigation; vendor silence

Individual Virtual Competence and Its Influence on Work Outcomes - Wang, Yinglei; Haggerty, Nicole (Journal of Management Information Systems, 2011)
Witnessing both opportunities and challenges in virtual work arrangements, researchers have explored a number of technological, social, and organizational factors in order to improve virtual work effectiveness. However, there is limited understanding of an important element of virtual work—the individuals. Our review of the literature indicates that the composition of individual knowledge, skills, and abilities (KSAs) required to work virtually would benefit from further research. In this study, we theoretically and empirically develop the construct of individual virtual competence that captures the key KSAs required to perform effectively in today’s virtualized workplace, within a parsimonious nomological network. Substantiated by its explanatory power on individual perceived performance and satisfaction, individual virtual competence contributes to the literature by acknowledging a distinct workplace competency that can be incorporated in future individual-level studies of virtual phenomena. This research provides managers with a lens to understand differences in individual work outcomes and provides a lever to developing individuals’ capabilities so as to improve work outcomes.
Keywords: individual virtual competence; individual work outcomes; virtual organization; virtual work

Embodied Conversational Agent--Based Kiosk for Automated Interviewing - Nunamaker Jr, Jay F; Derrick, Douglas C; Elkins, Aaron C; Burgoon, Judee K; Patton, Mark W (Journal of Management Information Systems, 2011)
We have created an automated kiosk that uses embodied intelligent agents to interview individuals and detect changes in arousal, behavior, and cognitive effort by using psychophysiological information systems. In this paper, we describe the system and propose a unique class of intelligent agents, which are described as Special Purpose Embodied Conversational Intelligence with Environmental Sensors(SPECIES). SPECIES agents use heterogeneous sensors to detect human physiology and behavior during interactions, and they affect their environment by influencing human behavior using various embodied states (i.e., gender and demeanor), messages, and recommendations. Based on the SPECIES paradigm, we present three studies that evaluate different portions of the model, and these studies are used as foundational research for the development of the automated kiosk. The first study evaluates human-computer interaction and how SPECIES agents can change perceptions of information systems by varying appearance and demeanor. Instantiations that had the agents embodied as males were perceived as more powerful, while female embodied agents were perceived as more likable. Similarly, smiling agents were perceived as more likable than neutral demeanor agents. The second study demonstrated that a single sensor measuring vocal pitch provides SPECIES with environmental awareness of human stress and deception. The final study ties the first two studies together and demonstrates an avatar-based kiosk that asks questions and measures the response using vocalic measurements.
Keywords: avatar; deception detection; embodied conversational agents; NeuroIS

A Global Model of Technological Utilization Based on Governmental, Business-Investment, Social and Economic Factors - Pick, James B; Rasool, Azari (Journal of Management Information Systems, 2011)
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.
Keywords: global digital divide; government investment; societal openness; socioeconomic factors; structural equation modeling; technological utilization

Changing the Perspective: Using a Cognitive Model to Improve thinkLets for Ideation - Knoll, Stefan Werner; Horton, Graham (Journal of Management Information Systems, 2011)
In the field of collaboration engineering, thinkLets describe reusable and transferable collaborative activities to reproduce known patterns of collaboration. This paper focuses on thinkLets of the pattern Generate, which define collaboration activities to produce and share new contributions by a group. We address the question whether the small number of published Generate thinkLets can adequately represent the various approaches contained in published idea generation techniques. We used a cognitive model to analyze 101 idea generation techniques with regard to the underlying mental principles that stimulate the ideation process by deliberately activating larger areas of the knowledge network. We present three changes of perspective based on these principles, which can be used to formalize the underlying mechanisms of idea generation techniques. The paper shows how these three principles can be used to improve Generate thinkLets and discusses how this formalization can improve the applicability of information systems for ideation processes.
Keywords: change of perspective; cognitive model of ideation; collaboration engineering; idea generation; thinkLets

Information Technology Spillover and Productivity: The Role of Information Technology Intensity and Competition - Kunsoo, Han; Young Bong, Chang; Jungpil, Hahn (Journal of Management Information Systems, 2011)
We study interindustry information technology (IT) spillover wherein IT investments made by supplier industries increase the productivity of downstream industries. Using data from U.S. manufacturing industries, we find that industries receive significant IT spillover benefits in terms of total factor productivity growth through economic transactions with their respective supplier industries. More importantly, we find that two characteristics of downstream industries, namely, IT intensity and competitiveness, which have been shown to moderate the effect of internal IT investments, play an important role in IT spillovers as well. Our results suggest that IT intensity as well as competitiveness of the downstream industry moderate the effect of IT spillovers-industries that are more IT intensive and more competitive benefit more from IT spillovers. Finally, our results suggest that the long-term effects of spillovers are greater than short-term effects, suggesting that learning periods are required to reap the benefits from the IT spillovers.
Keywords: competition; industry analysis; industry characteristics; IT effects; IT intensity; IT spillover; productivity; total factor productivity

Cultural Signifers of Web Site Images - Zahedi, Fatemeh Mariam; Gaurav, Bansal (Journal of Management Information Systems, 2011)
Web sites rely on pictures and animation to convey subtle messages that are more effectively communicated nonverbally. We argue that such messages could have strong cultural content, which should be understood in developing Web sites. Hence, this paper explores the cultural content of Web site images and develops a theory for Web-image signifiers. This is done in two phases. Phase I has an interpretive qualitative approach that uses Grounded Theory to identify signifiers and to develop the Web-image signifiers (WIS) theory. Phase II quantitatively tests the WIS theory. Together, these two phases identify and validate signifiers of cultural dimensions in Web site images. More interestingly, the results uncover that cultural dimensions are signified in five categories, of which two, humans and buildings categories, are the most prominent. The contribution of this paper is in developing a comprehensive theory for the cultural content of Web images, identifying 48 signifiers in Web images, discovering new categories of signifiers, and providing insights into the nature of cultural signification by testing the theory. Such knowledge could heighten our sensitivity and awareness of hidden cultural messages in Web site images. The WIS theory could provide a novel approach to the cultural studies of Web images and other artifacts with cultural content. The results of this work have immediate application in the design of Web sites for a multicultural audience.
Keywords: cultural signifiers; grounded theory; Hofstede’s cultural dimensions; semiology; Web-image signifiers theory; Web site images

Effects of Automated and Participative Decision Support in Computer-Aided Credibility Assessment - Jensen, Matthew L; Lowry, Paul Benjamin; Jenkins, Jeffrey L (Journal of Management Information Systems, 2011)
Historically, inaccurate credibility assessments have resulted in tremendous costs to businesses and to society. Recent research offers unobtrusive credibility assessment aids as a solution; however, the accuracy of these decision aids is inadequate, and users often resist accepting the aids' recommendations. We follow the principles of signal detection theory to improve the accuracy of recommendations in computer-aided credibility assessment by combining automated and participatory decision support. We also leverage participation in decision-making theory to explain and predict an increased acceptance of assessment aid recommendations when perceptual cues are elicited from users. Based on these two theories, we design and test a hybrid decision aid to perform automated linguistic analysis and to elicit and analyze perceptual cues from an observer. Results from a laboratory experiment indicate that decision aids that use linguistic and perceptual cues offer more accurate recommendations than aids that use only one type of cue. Automatic analysis of linguistic cues improved both the decision aid's recommendations and the users' credibility assessment accuracy. Challenging the generalizability of past findings, the elicitation of perceptual cues did not improve the decision aid's recommendations or the users' assessment accuracy. Elicitation of perceptual cues, however, did improve user acceptance of the decision aid's recommendations. These findings provide guidance for future development of credibility assessment decision aids.
Keywords: credibility assessment; decision support systems; indirect cues elicitation; linguistic analysis; signal detection theory

User Acceptance of Agile Information Systems: A Model and Empirical Test - Weiyin, Hong; Thong, James Y L; Chasalow, Lewis C; Dhillon, Gurpreet (Journal of Management Information Systems, 2011)
In response to the rapid changes in users' requirements, a new generation of information systems (IS), namely, agile IS, has emerged. Agile IS, defined as information systems developed using agile methods, are characterized by frequent upgrades with a small number of new features released periodically. The existing research on agile IS has mainly focused on the developers' perspective with little research into end users' responses to these agile IS. Drawing upon the tripartite model of attitude, the status quo and the omission bias theories, and the availability heuristic, we propose a model that utilizes constructs from the unified theory of acceptance and use of technology, the IS continuance model, habit, and individual differences to examine the drivers of user acceptance of agile IS. Further, we investigate not only users' intentions to continue using the agile IS but also their intentions to use new features when they are released, which is a surrogate for the ultimate success of agile IS. Data from 477 users of an agile IS showed that users' level of comfort with constant changes, the facilitating conditions provided, and users' habit are predictors of both types of intentions, with users' level of comfort with constant changes being the strongest predictor. Users' intentions to continue using agile IS are also determined by users' satisfaction with and perceived usefulness of the past upgrades. Finally, users who are innovative are more likely to use future releases of new features. The present work fills a gap in the software engineering literature and contributes a technology acceptance model specific to agile IS, which are becoming a mainstay of companies' IT portfolio in a fast-changing business environment.
Keywords: agile methods; agile systems; availability heuristic; comfort with change; habit; information systems continuance; omission bias; personal innovativeness; status quo bias; unified theory of acceptance and use of technology

The Role of Communication and Trust in Global Virtual Teams: A Social Network Perspective - Saonee, Sarker; Manju, Ahuja; Suprateek, Sarker; Kirkeby, Sarah (Journal of Management Information Systems, 2011)
The importance of communication and trust in the context of global virtual teams has been noted and reiterated in the information systems (IS) literature. Yet precisely how communication and trust influence certain outcomes within virtual teams remains unresolved. In this study, we seek to contribute some clarity to the understanding of the theoretical linkages among trust, communication, and member performance in virtual teams. To this end, we identify and test three proposed models (additive, interaction, and mediation) describing the role of trust in its relationship with communication to explain performance. In testing the relationships, we note that the concepts of communication and trust are inherently relational and not properties of individuals. Thus, we argue that a social network approach is potentially more appropriate than attribute-based approaches that have been utilized in prior research. Our results indicate that the "mediating" model best explains how communication and trust work together to influence performance. Overall, the study contributes to the existing body of knowledge on virtual teams by empirically reconciling conflicting views regarding the interrelationships between key constructs in the literature. Further, the study, through its adoption of the social network analysis approach, provides awareness within the IS research community of the strengths of applying network approaches in examining new organizational forms.
Keywords: communication; distributed teams; global virtual teams; hybrid teams; individual performance; mediation; networked individualism; social network analysis; trust

Cognitive Conflict and Consensus Generation in Virtual Teams During Knowledge Capture: Comparative Effectiveness of Techniques - Ananth, Chiravuri; Nazareth, Derek L; Ramamurthy, K (Journal of Management Information Systems, 2011)
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 conflict; conflict resolution; consensus generation; Delphi technique; knowledge capture; knowledge management; repertory grid technique; virtual teams

The Influence of Virtuality on Social Networks Within and Across Work Groups: A Multilevel Approach - Ayoung, Suh; Kyung-Shik, Shin; Manju, Ahuja; Min Soo, Kim (Journal of Management Information Systems, 2011)
We examine how the virtuality of work context influences individuals' social networks within and across work groups. Given this purpose, we develop a multilevel research framework that explores the effects of different levels of virtuality on one's intra-group tie strength and extra-group network range based on the computer-mediated communication theory, the proximity theory, and the social network theory. The results of the hierarchical linear modeling indicate that the individual-level virtuality (use of personal and communal communication technologies) significantly influences one's intra-group tie strength and extra-group network range. Moreover, the results show that the effects of individual-level virtuality on social networks vary depending on the group-level virtuality, such as geographic/temporal dispersion and technological support. By illuminating how individuals' social networks can be developed through the appropriate use of personal and communal communication technologies in the context of a virtual group, this study provides useful insights into the mechanics that underlie effective virtual work.
Keywords: computer-mediated communication (CMC); hierarchical linear modeling; multilevel analysis; social networks; virtuality

Measuring Information Diffusion in an Online Community - Garg, Rajiv; Smith, Michael D; Telang, Rahul (Journal of Management Information Systems, 2011)
Measuring peer influence in social networks is an important business and policy question that has become increasingly salient with the development of globally interconnected information and communication technology networks. However, in spite of the new data sources available today, researchers still face many of the same measurement challenges that have been present in the literature for over four decades: homophily, reflection and selection problems, identifying the source of influence, and determining preexisting knowledge. The goal of this paper is to develop an empirical approach for measuring information diffusion and discovery in online social networks that have these measurement challenges. We develop such an approach and apply it to data collected from 4,000 users of an online music community. We show that peers on such networks significantly increase music discovery. Moreover, we demonstrate how future research can use this method to measure information discovery and diffusion using data from other online social networks.
Keywords: data mining; empirical research; information diffusion; new content discovery; online music community; peer influence; social influence

Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict - Granados, Nelson F; Kauffman, Robert J; Lai, Hsiangchu; Lin, Huang-chi (Journal of Management Information Systems, 2011)
Digital intermediaries and Internet search technologies have commoditized many products, resulting in intense price competition and channel conflict. Firms use decommoditization strategies to regain control over distribution channels, as well as to implement resonance marketing and hyperdifferentiation, which allows them to improve margins through differentiation. We test two hypotheses: the decommoditization hypothesis and the resonance marketing hypothesis. We use data from an airline with a new à la carte pricing mechanism, which allows consumers to tailor airline ticket bundles to suit their individual preferences. We compare à la carte ticket pricing, whose features can be modified by the purchaser, and fixed (bundled offer) sales, which cannot be modified. We found that a significant number of travelers do use à la carte pricing, which allows the airlines to regain some control over distribution. We find that travelers customized standard bundles when it was possible for them to make à la carte ticket bookings, but mainly for low-feature standard bundles. Frequent-flyer members purchased higher-feature bundles more often when they had the opportunity. The findings support the proposed hypotheses. We discuss the implications for distribution strategy and channel conflict management.
Keywords: air travel services; a la carte pricing; channel conflict; commoditization; decommoditization; disintermediation; information transparency; intermediaries; reintermediation; resonance marketing

Through a Glass Clearly: Standards, Architecture, and Process Transparency in Global Supply Chains - Steinfield, Charles W; Markus, M Lynne; Wigand, Rolf T (Journal of Management Information Systems, 2011)
Despite evidence that a lack of interoperable information systems results in enormous costs, development, implementation, and effective use of interorganizational systems (IOS) remain an elusive goal for many companies. Lack of interoperability across systems is especially problematic for manufacturers dependent on global supply chains. We develop propositions about the characteristics of IOS that affect information transparency in supply chains. Specifically, we propose that data and process standards are necessary, but not sufficient, to solve such information transparency problems. Instead, standards need to be complemented by hub-type information technology architectures that are shared by organizations participating in an industrial field, not just by the participants in one manufacturer's supply chain. These arguments are supported by an automotive industry case study involving data and process standardization and a shared, cloud-based architecture. We conclude with additional aspects of the case that may be relevant to addressing information transparency problems in global supply chains.
Keywords: automotive industry; case study; data standards; electronic data interchange (EDI); industry study; information transparency; interorganizational systems; software as a service; supply chains

R&D Versus Acquisitions: Role of Diversification in the Choice of Innovation Strategy by Information Technology Firms - Banker, Rajiv D; Wattal, Sunil; Plehn-Dujowich, Jose M (Journal of Management Information Systems, 2011)
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: diversification; firm acquisition; game theory; innovation; R&D

A Study of Sourcing Channels for Electronic Business Transactions - Yoo, Byungjoon; Choudhary, Vidyanand; Mukhopadhyay, Tridas (Journal of Management Information Systems, 2011)
There are two popular forms of business-to-business (B2B) marketplaces: public marketplaces and private channels. We study why firms choose either or both of these sourcing channels. Using a framework of decision making under uncertainty, we explain firms' choice of B2B channels as a hedging strategy and as a method of obtaining greater managerial flexibility for the future. We show that greater uncertainty can lead to higher investment with firms more likely to invest in both public and private channels. We find that the level of information technology (IT) capability and spending is an important factor in firms' decision making. When a firm chooses its level of IT investment simultaneously with the decision about which sourcing channels to use, the firm choosing both channels selects the highest level of IT capability and the firm implementing only one channel selects lower levels of IT capability.
Keywords: analytical modeling; B2B e-commerce; decision making under uncertainty; economic theory; IT capabilities; managerial decision making; private channels; public marketplaces

Innovation and Price Competition in a Two-Sided Market - Lin, Mei; Li, Shaojin; Whinston, Andrew B (Journal of Management Information Systems, 2011)
We examine a platform's optimal two-sided pricing strategy while considering seller-side innovation decisions and price competition. We model the innovation race among sellers in both finite and infinite horizons. In the finite case, we analytically show that the platform's optimal seller-side access fee fully extracts the sellers' surplus, and that the optimal buyer-side access fee mitigates price competition among sellers. The platform's optimal strategy may be to charge or subsidize buyers depending on the degree of variation in the buyers' willingness to pay for quality; this optimal strategy induces full participation on both sides. Furthermore, a wider quality gap among sellers' products lowers the optimal buyer-side fee but leads to a higher optimal seller-side fee. In the infinite innovation race, we perform computations to find the stationary Markov equilibrium of sellers' innovation rate. Our results show that when all sellers innovate, there exists a parameterization under which a higher seller-side access fee stimulates innovation.
Keywords: innovation; price competition; two-sided markets

Understanding Nonmalicious Security Violations in the Workplace: A Composite Behavior Model - Guo, Ken H; Yuan, Yufei; Archer, Norman P; Connelly, Catherine E (Journal of Management Information Systems, 2011)
End users are said to be "the weakest link" in information systems (IS) security management in the workplace. They often knowingly engage in certain insecure uses of IS and violate security policies without malicious intentions. Few studies, however, have examined end user motivation to engage in such behavior. To fill this research gap, in the present study we propose and test empirically a nonmalicious security violation (NMSV) model with data from a survey of end users at work. The results suggest that utilitarian outcomes (relative advantage for job performance, perceived security risk), normative outcomes (workgroup norms), and self-identity outcomes (perceived identity match) are key determinants of end user intentions to engage in NMSVs. In contrast, the influences of attitudes toward security policy and perceived sanctions are not significant. This study makes several significant contributions to research on security-related behavior by (1) highlighting the importance of job performance goals and security risk perceptions on shaping user attitudes, (2) demonstrating the effect of workgroup norms on both user attitudes and behavioral intentions, (3) introducing and testing the effect of perceived identity match on user attitudes and behavioral intentions, and (4) identifying nonlinear relationships between constructs. This study also informs security management practices on the importance of linking security and business objectives, obtaining user buy-in of security measures, and cultivating a culture of secure behavior at local workgroup levels in organizations.
Keywords: information system security; nonlinear construct relationships; nonmalicious security violation; perceived identity match; perceived security risk; relative advantage for job performance; workgroup norms

Moderated Online Communities and Quality of User-Generated Content - Chen, Jianqing; Xu, Hong; Whinston, Andrew B (Journal of Management Information Systems, 2011)
Online communities provide a social sphere for people to share information and knowledge. While information sharing is becoming a ubiquitous online phenomenon, how to ensure information quality or induce quality content remains a challenge because of the anonymity of commentators. This paper introduces moderation into reputation systems. We show that moderation directly affects strategic commentators' incentive to generate useful information, and moderation is generally desirable to improve information quality. We find that when being moderated with different probabilities based on their reputations, commentators might display a pattern of reputation oscillation, in which they generate useful content to build up high reputation and then exploit their reputation. As a result, the expected performance from high-reputation commentators can be inferior to that from low-reputation commentators (reverse reputation). We then investigate the optimal moderation resource allocation and conclude that the seemingly abnormal reverse reputation could arise as an optimal result. Our study underscores the importance of moderation and highlights that the frequency of moderation should be properly chosen for better performance of online communities.
Keywords: knowledge management; moderation; online community; reputation

System Design Features and Repeated Use of Electronic Data Exchanges - Nicolaou, Andreas I; McKnight, D Harrison (Journal of Management Information Systems, 2011)
Oftentimes researchers may not only generalize across a population, but may also extrapolate research findings across time. While either assumption can introduce difficulties, generalizing results in one time frame to another time frame may be especially perilous. We study a data exchange, and find that interventions designed to improve exchange features at two points in time have markedly varying effects, from an initial transaction use (time one) to a second transaction occurring two weeks later (time two). Our research objective is to test whether two system design features have the same effects on the intent to continue using an exchange in time two as they had in time one. The two features are control transparency (the availability of information cues) and interim shipping outcome feedback. These effects are mediated, in varying degrees, by perceived information quality. We use social exchange theory and social cognition theory to develop hypotheses regarding changes between time one (the first user transaction) and time two (the second transaction). These are tested using a combined experiment and survey. Supporting the theory, outcome feedback matters at time two even though it did not matter at time one. While control transparency has direct effects on a user's intent to continue use of the exchange in time one, its effects are reduced in time two if negative outcome feedback is communicated to the user. Outcome feedback's effects grow stronger from time one to time two vis-Ã -vis control transparency's effects. This underscores how critical it is to examine such phenomena at more than one period of time. The study also suggests different strategies for managing data exchanges based on the time frame of use. At the initial transaction use, the exchange should make transparent high-quality information cues to its user. At the next transaction, it should provide feedback showing properly fulfilled orders. These findings have implications for both future research examining effective data exchange design and for professionals who wish to enrich electronic data exchange interactions.
Keywords: control transparency; electronic data exchanges; outcome feedback; perceived information quality; system modifications; two-period model; usage continuance intention

What Motivates Firms to Contribute to Consortium-Based E-Business Standardization? - Zhao, Kexin; Xia, Mu; Shaw, Michael J (Journal of Management Information Systems, 2011)
E-business standards are a key infrastructure for electronic commerce. In many industries, they are collaboratively developed by firms in an open and neutral industry consortium. It is imperative to understand what drives firms' resource investments in such consortia, as they are critical for the success of e-business standardization. Based on collective action theory, we propose a research model to investigate the drivers of standard development within consortia. We test the model through a data set of 232 firms from 7 consortia. Consistent with collective action theory, our results demonstrate that firms' interests, resource availability, and consortium management effectiveness jointly determine their resource expenditures within the consortium. However, our exploratory investigation indicates differences between vendors and users, as vendors are more motivated by perceived standard benefits whereas users are more motivated by perceived process benefits. Our research provides a deeper understanding of firms' behaviors within consortia and factors driving their standard making.
Keywords: collective action theory; e-business standards; IT vendors; motivations to contribute; standard consortia; user organizations

Value Chain Linkages and the Spillover Effects of Strategic Information Technology Alignment: A Process-Level View - Tallon, Paul P (Journal of Management Information Systems, 2011)
The alignment of information technology (IT) and business strategy is a perennial challenge for corporate executives. While earlier studies confirm the value of alignment, there is still some question as to how alignment creates value and the level at which value is created. In this research, we use a series of theoretical arguments based on the interconnected structure of the value chain to consider the extended effects of alignment at the process level. Since processes are often linked to create a complex chain of activities, the absence or presence of alignment in any process could have implications for business performance elsewhere in the value chain. Minimally aligned processes can not only disrupt performance within the focal process, but their effects may also be felt further downstream in the form of bottlenecks and a diminution in the business value of IT. Using a simplified form of the value chain and data from matched surveys of business and IT executives at 317 U.S. and EU firms, we examine how the effects of alignment on a given process spill over into processes further downstream, creating higher IT business value in those downstream processes. We also show that these spillover effects continue along the length of the value chain and do not diminish based on distance from the focal process. Our results reinforce the call for firms to improve the fit between business and IT strategy by showing how efforts to improve alignment in a given process can deliver a stream of benefits along the value chain. This research provides a fresh perspective on the value of alignment, facilitating a deeper understanding and appreciation of the link between strategic IT alignment and firm performance.
Keywords: information technology business value; process bottlenecks; profile deviation; spillover effects; strategic IT alignment; value chain; value disciplines; value flows

Path Dependence of Dynamic Information Technology Capability: An Empirical Investigation - Lim, Jee-Hae; Stratopoulos, Theophanis C; Wirjanto, Tony S (Journal of Management Information Systems, 2011)
Organizations seek to differentiate themselves in the marketplace by deploying information technology (IT) to develop dynamic IT capabilities and resist competitors' attempts to imitate or improve these capabilities. While this strategy has been justified on the grounds that dynamic IT capabilities are durably heterogeneous, there does not seem to be empirical evidence supporting or refuting this assumption. This study empirically validates the assumption of durable heterogeneity of dynamic organizational IT capability (ITC) due to path dependence. We capture ITC heterogeneity by introducing a framework in which firms try to achieve ITC leadership in their industry and we propose that durable ITC heterogeneity can be attributed to path dependence, and hence, it can be tested using Heckman's true state dependence of ITC leadership status. Using random and fixed effect dynamic logit models, we investigate true state dependence of ITC leadership on a sample of large U.S. firms. The results, which are robust to alternative sample, dependent, and control variable specifications, show that achieving ITC leadership is a true state-dependent process, suggesting durable heterogeneity of ITC due to path dependence. The study contributes to the dynamic capabilities literature and has important managerial implications. The proposed framework for conceptualizing durable resource heterogeneity due to path dependence is general and versatile, thus providing a foundation for future research on dynamic capabilities. The findings provide empirical evidence to confirm that ITC is durably heterogeneous and should be managed as a potential source of competitive advantage.
Keywords: dynamic organizational IT capability; dynamic random effects; fixed effects logit models; information technology business value; path dependence; true state dependence

Service Quality in Software-as-a-Service: Developing the SaaS-Qual Measure and Examining Its Role in Usage Continuance - Benlian, Alexander; Koufaris, Marios; Hess, Thomas (Journal of Management Information Systems, 2011)
Despite the need to better understand how customers of software-as-a-service (SaaS) solutions perceive the quality of these software services and how these perceptions influence SaaS adoption and use, there is no extant measure that comprehensively captures service quality evaluations in SaaS. Based on previous SERVQUAL and SaaS literature, field interviews and focus groups, a card-sorting exercise, and two surveys of SaaS using companies, we develop, refine, and test SaaS-Qual, a zones-of-tolerance (ZOT)-based service quality measurement instrument specifically for SaaS solutions. Besides validating already established service quality dimensions (i.e., rapport, responsiveness, reliability, and features), we identify two new factors (i.e., security and flexibility) that are essential for the evaluation of service quality of SaaS solutions. SaaS-Qual demonstrates strong psychometric properties and shows high nomological validity within a framework that predicts the continued use of SaaS solutions by existing customers. In addition to developing a validated instrument that provides a fine-grained measurement of SaaS service quality, we also enrich existing research models on information systems continuance. Moreover, the SaaS-Qual instrument can be used as a diagnostic tool by SaaS providers and users alike to spot strengths and weaknesses in the service delivery of SaaS solutions.
Keywords: information systems continuance; SaaS-Qual; service quality; SERVQUAL; software as a service; zones of tolerance

A Benchmarking Model for Management of Knowledge-Intensive Service Delivery Networks - Dong, Su; Johar, Monica S; Kumar, Ram L (Journal of Management Information Systems, 2011)
Effective management of information technology (IT) and IT-enabled services is becoming increasingly important due to the growing complexity of their context. These services are often delivered by employees who work at widely dispersed locations and interact with each other to constitute knowledge-intensive service delivery networks (KISDNs). This paper contributes to the effective design and management of KISDNs by presenting a mixed-integer programming model that integrates disparate streams of research. This model facilitates analysis and managerial benchmarking of KISDN performance. It captures how the performance of such networks depends on the interaction between workflow decisions, structure of information flow networks (IFNs), and knowledge management decisions. We propose that knowledge about IFNs and worker competence can be effectively used to make workflow decisions. Our results, based on the study of different IFN archetypes, illustrate practices for effective management of KISDNs. Managers can enhance business value by recognizing existing IFNs, increasing randomness in IFNs, nurturing weak or performative ties depending on the archetype, assigning tasks based on effective worker competence, and selectively delaying assignment of tasks to workers. In addition, our results illustrate the impact of training and network density on KISDN performance.
Keywords: benchmarking; IT services; knowledge-based services; knowledge management; Operations Research models; service delivery; services science

Value of Information Integration to Supply Chain Management: Roles of Internal and External Contingencies - Wong, Christina W Y; Lai, Kee-hung; Cheng, T C E (Journal of Management Information Systems, 2011)
While integrating information flows between internal organizational functions and across partner firms is widely acknowledged as a contributor to organizational competitiveness, there is little empirical research on the effects of situational factors on the success of information integration. Based on contingency theory, we address the following question: Under what circumstances does information integration contribute to better performance outcomes in supply chain management (SCM)? Our results provide a contingency perspective of information integration, which highlights that the performance outcomes of information integration are contingent on both external environmental conditions and internal operational characteristics. We find that information integration improves firms' ability to perform, particularly when they operate under favorable environmental conditions-a highly munificent and a less uncertain environment-and when they offer durable and complex products. Our findings advance contingency research on the performance outcomes of information integration for SCM. Our study provides managers with empirical insights on the effects of information integration on the cost and customer-oriented operational performance of SCM under favorable and unfavorable environmental conditions.
Keywords: business environment; information integration; IT-enabled supply chain; IT value

The Influence of Individual, Contextual, and Social Factors on Perceived Behavioral Control of Information Technology: A Field Theory Approach - Elie-Dit-Cosaque, Christophe; Pallud, Jessie; Kalika, Michel (Journal of Management Information Systems, 2011)
Organizations are increasingly concerned about ensuring that workers have sufficient sense of control over the information technology (IT) that they use. However, we know little about the antecedents of the end user's perceived behavioral control (PBC) with respect to IT. Drawing on Kurt Lewin's field theory, the present study responds to this concern by formulating and testing a model whereby individual, contextual, and social forces influence PBC directly and indirectly via computer anxiety. In order to test the model, a survey was conducted in France with IT end users enrolled in professional training programs. The results show that increasing autonomy, offering appropriate managerial support, reducing work overload, and perceived innovativeness with IT can together reduce computer anxiety and increase PBC. These findings emphasize the forces that managers can manipulate in order to foster users' feelings of control with respect to IT in the workplace. Following this, the paper makes three main contributions to research. First, it increases our knowledge of the nomological net surrounding PBC by shedding light on the joint influences of internal, external, and social forces on this variable. Second, it reveals the role of computer anxiety, emphasizing that it is an important conduit through which these forces influence workers' PBC. Third, the paper shows how Lewin's field theory can help to create richer and less fragmented models in order to capture more fully the determinants of IT adoption and adaptation. The practical implications regarding the actions that managers can take in order to increase workers' PBC are discussed.
Keywords: autonomy; computer anxiety; control over IT; demand-control model; field theory; managerial support; perceived behavioral control; personal innovativeness with IT; work environment; work overload

Seller Strategies for Differentiation in Highly Competitive Online Auction Markets - Bockstedt, Jesse; Goh, Kim Huat (Journal of Management Information Systems, 2011)
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.
Keywords: differentiation; electronic auctions; online auctions; seller differentiation; signaling theory

Usability Design and Psychological Ownership of a Virtual World - Lee, Younghwa; Chen, Andrew N K (Journal of Management Information Systems, 2011)
Virtual worlds, immersive three-dimensional virtual spaces where users interact with projected identities of other users (avatars) and objects, are becoming increasingly popular and continue to grow as highly interactive, collaborative, and commercial cyberspaces. However, extant research in this context has not paid much attention to usability design of a virtual world and corresponding effects on users' psychological desire to own and control the space and objects within it and subsequent behavior intention. In this study, we apply concepts of Web site usability and psychological ownership to develop a model that illustrates the relationships between seven usability factors (legibility, firmness, coherence, variety, mystery, classic, and expressive visual aesthetics), four antecedents of psychological ownership (cognitive appraisals, perceived control, affective appraisals, and self-investment), psychological ownership, and use intention. A cross-sectional study with 239 Second Life users was conducted. The results demonstrate that designing a usable virtual world that induces strong psychological ownership is crucial to attract users to spend more time, participate in more activities, and revisit the virtual world. This is an important finding for forward-looking e-business managers looking to invest their limited resources in designing a usable virtual world. In addition, by using our model and corresponding survey items, designers can benchmark and evaluate the usability of their current virtual worlds, compare the results to the designs of competitors, and upgrade the offerings of virtual worlds, as needed, by allocating available resources to the most influential design factors to suit their specific needs.
Keywords: architectural quality model; human-computer interaction; landscape preference model; psychological ownership; usability; virtual worlds

Factors Affecting Bloggers' Knowledge Sharing: An Investigation Across Gender - Chai, Sangmi; Das, Sanjukta; Rao, H Raghav (Journal of Management Information Systems, 2011)
Blogs have emerged as an innovative tool for sharing information and knowledge, and they command significant interest from information technology (IT) users as well as providers. Our study establishes a research framework to provide an understanding of the factors affecting knowledge sharing among bloggers in online social networks. The research results indicate that bloggers' trust, strength of social ties, and reciprocity all have a positive effect on their knowledge-sharing behavior. Further, the impact of each factor on such behavior varies by gender. Our results provide evidence that offline expected social norms tend to persist in the online blogosphere and that gender differences need to be considered as a significant factor in understanding the IT usage behavior in the context of social capital theory. For IT managers and blog service providers, our results also highlight the importance of being gender aware in an effort to elicit participation from all constituent members for the successful adoption and usage of blogs as a knowledge-sharing mechanism.
Keywords: bloggers; blogs; gender; information privacy; knowledge sharing; trust

Same Coin, Different Sides: Differential Impact of Social Learning on Two Facets of Music Piracy - Wang, Jingguo; Yang, Zhiyong; Bhattacharjee, Sudip (Journal of Management Information Systems, 2011)
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.
Keywords: intellectual property infringement; latent class analysis; music piracy; partial least squares regression; social learning theory; unauthorized obtaining; unauthorized sharing

Two Rule-Based Natural Language Strategies for Requirements Discovery and Classification in Open Source Software Development Projects - Vlas, Radu E; Robinson, William N (Journal of Management Information Systems, 2012)
Open source projects do have requirements; they are, however, mostly informal text descriptions found in requests, forums, and other correspondence. Understanding such requirements provides insight into the nature of open source projects. Unfortunately, manual analysis of natural language requirements is time-consuming, and for large projects, error prone. Automated analysis of natural language requirements, even partial, will be of great benefit. Toward that end, we describe the design and validation of an automated natural language requirements classifier for open source projects. We compare two strategies for recognizing requirements in open forums of software features. Our results suggest that classifying text at the forum postaggregation and sentence aggregation levels may be effective. Our results suggest that it can reduce the effort required to analyze requirements of open source projects.
Keywords: natural language processing; open source; requirements classification; requirements discovery; software requirements

Supporting Agile Organizations with a Decision Guidance Query Language - Brodsky, Alexander; Egge, Nathan E; Wang, X Sean (Journal of Management Information Systems, 2012)
Decision optimization is widely used in many decision guidance and support systems (DGSS) to support business decisions such as procurement, scheduling, and planning. In spite of rapid changes in users' requirements, the implementation of DGSS is typically rigid, expensive, and not easily extensible, which is in stark contrast to the agile implementation of management information systems (MIS) based on the database management systems (DBMS) and SQL technologies. This paper focuses on the Decision Guidance Query Language (DGQL) designed to (re-)use SQL programs for decision optimization with the goals of making DGSS implementation agile and intuitive and leveraging existing investment in SQL-implemented MIS. The paper addresses two related technical issues with DGQL: (1) how to annotate existing queries to precisely express the optimization semantics, and (2) how to translate the annotated queries into equivalent mathematical programming formulations that can be solved efficiently.
Keywords: agile organizations; decisional guidance; decision support; optimization

Understanding Technology Support for Organizational Transactive Memory: Requirements, Application, and Customization - Nevo, Dorit; Benbasat, Izak; Wand, Yair (Journal of Management Information Systems, 2012)
Transactive memory is an effective mechanism for locating and coordinating expertise in small groups and has been shown to hold numerous benefits for groups and organizations. To extend transactive memory beyond the scope of small groups, researchers have proposed the use of information technology (IT). This paper provides an integrated discussion of our knowledge from three studies concerning IT support in transactive memory in organizations. Focusing on meta-memory, which is at the heart of transactive memory systems, we examine what meta-memory is maintained by members of transactive memory systems, whether providing this meta-memory in a technology-mediated environment can lead to transactive memory development, whether IT can realistically provide this meta-memory, and whether different requirements exist for different users and in different stages of transactive memory development. We discuss the implications of these studies to both research and practice.
Keywords: expertise location; meta-memory; social media; transactive memory

Theory-Informed Design and Evaluation of an Advanced Search and Knowledge Mapping System in Nanotechnology - Dang, Yan; Zhang, Yulei; Chen, Hsinchun; Brown, Susan A; Hu, Paul Jen-Hwa; Nunamaker Jr, Jay F (Journal of Management Information Systems, 2012)
Effective search support is an important tool for helping individuals deal with the problem of information overload. This is particularly true in the field of nanotechnology, where information from patents, grants, and research papers is growing rapidly. Guided by cognitive fit and cognitive load theories, we develop an advanced Web-based system, Nano Mapper, to support users' search and analysis of nanotechnology developments. We perform controlled experiments to evaluate the functions of Nano Mapper. We examine users' search effectiveness, efficiency, and evaluations of system usefulness, ease of use, and satisfaction. Our results demonstrate that Nano Mapper enables more effective and efficient searching, and users consider it to be more useful and easier to use than the benchmark systems. Users are also more satisfied with Nano Mapper and have higher intention to use it in the future. User evaluations of the analysis functions are equally positive.
Keywords: cognitive fit; cognitive load; information system evaluation; knowledge mapping; search; visualization

Facilitation Roles and Responsibilities for Sustained Collaboration Support in Organizations - Kolfschoten, Gwendolyn L; Niederman, Fred; Briggs, Robert O; De Vreede, Gert-Jan (Journal of Management Information Systems, 2012)
Research shows that under certain conditions, groups using collaboration technologies such as group support systems (GSS) can gain substantial improvements in the effectiveness and efficiency of their work processes. GSS, however, have been slow to develop self-sustaining communities of users in the workplace. Organizations that use collaboration technology may require two kinds of support: process support and technology support. Both types of support involve (1) design tasks (e.g., designing a work process and designing the technology to support the process), (2) application tasks (to apply the process and to use the technology), and (3) management tasks (to monitor and control the process and to oversee the maintenance of the technology). This paper explores how these tasks and associated roles can be anchored in organizations, and the relationship of task allocation patterns to the sustained use of collaboration technology in organizations.
Keywords: collaboration engineering; collaboration support; facilitation; group support systems; group work

Going Concerns: The Governance of Interorganizational Coordination Hubs - Markus, M Lynne; Bui, Quang Neo (Journal of Management Information Systems, 2012)
Business-to-business interactions are increasingly conducted through interorganizational coordination hubs, in which standardized information technology-based platforms provide data and business process interoperability for interactions among the organizations in particular industrial communities. Because the governance of interorganizational arrangements is believed to affect their efficiency and effectiveness, this paper explores how and why interorganizational coordination hubs are governed. Analysis of relevant prior theory and case examples shows that coordination hub governance is designed to balance the sometimes conflicting needs for capital to invest in new technology, for participation of industry members, and for the protection of data resources. Findings suggest that the governance of interorganizational coordination hubs is not the starkly categorical choice between collective (member-owned) and investor-owned forms as suggested by prior theory. Instead, many hybrid arrangements are observed in the five examined cases. Future theoretical development and empirical research are needed to understand the increasingly important phenomenon of coordination hub governance.
Keywords: case study; coordination hubs; corporate governance; interorganizational relationships; IT investment; IT standards; trust

Effect of Information Feedback on the Outcomes and Dynamics of Multisourcing Multiattribute Procurement Auctions - Adomavicius, Gediminas; Gupta, Alok; Sanyal, Pallab (Journal of Management Information Systems, 2012)
Electronic auctions are increasingly being used to facilitate the procurement of goods and services in organizations. Multiattribute auctions, which allow bids on multiple dimensions of the product and not just price, are information technology-enabled sourcing mechanisms that can increase the efficiency of procurement for configurable goods and services compared to price-only auctions. Given the strategic nature of procurement auctions, the amount of information concerning the buyer's preferences that is disclosed to the suppliers has implications on the profits of the buyer and the suppliers and, consequently, on the long-term relationship between them. This study explores novel feedback schemes for multisourcing multiattribute auctions that require limited exchange of strategic information between the buyer and the suppliers. To study the impact of feedback on the outcomes and dynamics of the auctions, we conduct laboratory experiments wherein we analyze bidder behavior and economic outcomes under three different treatment conditions with different types of information feedback. Our results indicate that, in contrast to winner-take-all multiattribute auctions, multisourcing multiattribute auctions, with potentially multiple winners, allow bidders (i.e., suppliers) to extract more profit when greater transparency in terms of provisional allocations and prices is provided. We develop several insights for mechanism designers toward developing sustainable procurement auctions that efficiently allocate multiple units of an asset with multiple negotiable attributes among multiple suppliers.
Keywords: bidder behavior; experimental economics; information feedback; multiattribute auction; procurement

Leveraging Information Technology Infrastructure to Facilitate a Firm's Customer Agility and Competitive Activity: An Empirical Investigation - Roberts, Nicholas; Grover, Varun (Journal of Management Information Systems, 2012)
This paper investigates how information technology (IT) facilitates a firm's customer agility and, in turn, competitive activity. Customer agility captures the extent to which a firm is able to sense and respond quickly to customer-based opportunities for innovation and competitive action. Drawing from the dynamic capability and IT business value research streams, we propose that IT plays an important role in facilitating a "knowledge creating" synergy derived from the interaction between a firm's Web-based customer infrastructure and its analytical ability. This will enhance the firm's ability to sense customer-based opportunities. IT also plays an important role in "process enhancing" synergy obtained from the interaction between a firm's coordination efforts and its level of information systems integration, which facilitates the firm's ability to respond to those opportunities. We also leverage the competitive dynamics and strategic alignment literature to propose that the alignment between customer-sensing capability and customer-responding capability will impact the firm's competitive activity. We test our model with a two-stage research design in which we survey marketing executives of high-tech firms. Our results show that a Web-based customer infrastructure facilitates a firm's customer-sensing capability; furthermore, analytical ability positively moderates this relationship. We also find that internal systems integration positively moderates the relationship between interfunctional coordination and a firm's customer-responding capability. Finally, our results show that agility alignment affects the efficacy of a firm's competitive actions. In particular, action efficacy is higher when sensing and responding capabilities are both high.
Keywords: alignment; competitive dynamics; customer agility; dynamic capabilities; IT infrastructure; IT value; open innovation

Methodology Mashups: An Exploration of Processes Used to Maintain Software - Edberg, Dana T; Ivanova, Polina; Kuechler, William (Journal of Management Information Systems, 2012)
The majority of studies of software development processes explore initial development rather than ongoing software maintenance, yet the majority of the systems development budget in many organizations is devoted to maintenance. Software maintenance projects differ significantly from original development projects, indicating a need for more research specifically concerning maintenance processes. This study uses a grounded theory research method to explore how information technology professionals define and select a methodology to maintain existing software. We found that in-use maintenance methodologies are composed of components from multiple formal methodologies. We developed a factor model describing how these components are chosen. The findings contribute to a better understanding of how standard methodologies are applied in software practice and the critical factors used by professionals when choosing an appropriate methodology for software maintenance activities. This research underscores the need for incorporating the full software life cycle in information systems development research and education.
Keywords: grounded theory; maintenance methodology; software development; software maintenance; software process

Patch Release Behaviors of Software Vendors in Response to Vulnerabilities: An Empirical Analysis - Temizkan, Orcun; Kumar, Ram L; Park, Sungjune; Subramaniam, Chandrasekar (Journal of Management Information Systems, 2012)
Software vulnerabilities have become a serious concern because unpatched software runs the risk of being exploited by hackers. There is a need for software vendors to make software patches available in a timely manner for vulnerabilities in their products. We develop a survival analysis model of software vendors' patch release behavior and test it using a data set compiled from the National Vulnerability Database, United States Computer Emergency Readiness Team, and vendor Web sites. This model helps to understand how factors specific to vulnerabilities, patches, software vendors, and software affect the patch release behavior of software vendors based on their cost structure. This study also analyzes the impact of the presence of multiple vendors and type of vendor on the patch release behavior of software vendors. Our results indicate that vulnerabilities with high confidentiality impact or high integrity impact are patched faster than vulnerabilities with high availability impact. Interesting differences in the patch release behavior of software vendors based on software type (new release versus update) and type of vendor (open source versus proprietary) are found. Our results illustrate that when there are legislative pressures, vendors react faster in patching vulnerabilities. Thus, appropriate regulations can be an important policy tool to influence vendor behavior toward socially desirable security outcomes.
Keywords: patch quality; patch release time; patch types; software vendor types; software vulnerability characteristics; survival analysis

Novelty-Knowledge Alignment: A Theory of Design Convergence in Systems Development - Tiwana, Amrit (Journal of Management Information Systems, 2012)
Recent research emphasizing the need for more business knowledge in information technology (IT) units and more technical knowledge in line functions largely overlooks the question of when maintaining either form of such "peripheral" knowledge-a costly endeavor-is valuable. Further application and process novelty are increasingly unavoidable in systems development projects but remain largely overlooked in theory. It is plausible that one type of peripheral knowledge is valuable under one type of novelty but not the other.I develop the idea that discriminating alignment between project novelty and peripheral knowledge is needed for them to enhance systems development performance. Thus, the valuable type of peripheral knowledge depends on whether a project involves novelty in the project concept or in its development processes. Further, we lack an explanation for how such discriminating alignment translates into improved project performance. I develop and test a middle-range theory built around two ideas to address these gaps. First, alignment between project novelty and peripheral knowledge must be discriminating to enhance systems development performance. Second, such discriminating alignment accelerates design convergence, which in turn enhances systems development performance. Tests using data from 159 projects support the proposed ideas. The primary contribution of this paper is therefore explaining when and how alignment between project novelty and peripheral knowledge in IT and client departments enhances systems development performance. The key implication is that greater application domain knowledge in the IT unit (technical knowledge in the client department) enhances performance in projects involving greater application novelty (process novelty).
Keywords: design convergence; iteration; novelty; oscillations; peripheral knowledge; systems development

The Effect of an Initial Budget and Schedule Goal on Software Project Escalation - Lee, Jong Seok; Keil, Mark; Kasi, Vijay (Journal of Management Information Systems, 2012)
Software project escalation is a costly problem that leads to significant financial losses. Prior research suggests that setting a publicly announced limit on resources can make individuals less willing to escalate their commitment to a failing course of action. However, the relationship between initial budget and schedule goals and software project escalation remains unexplored. Drawing on goal setting theory as well as sunk cost and mental budgeting perspectives, we explore the effect of goal difficulty and goal specificity on software project escalation. The findings from a laboratory experiment with 349 information technology professionals suggest that both very difficult and very specific goals for budget and schedule can limit software project escalation. Further, the level of commitment to a budget and schedule goal directly affects software project escalation and also interacts with goal difficulty and goal specificity to affect software project escalation. This study makes a theoretical contribution to the existing body of knowledge on software project management by establishing a connection between goal setting theory and software project escalation. The study also contributes to practice by highlighting the potential negative consequences that can result from the nature of initial budget and schedule goals that are established at the outset of a project.
Keywords: escalation of commitment; goal setting theory; mental budgeting; project estimation; software project escalation; software project management; sunk cost

What's the Weather Like?: The Effect of Team Learning Climate, Empowerment Climate, and Gender on Individuals' Technology Exploration and Use - Maruping, Likoebe M; Magni, Massimo (Journal of Management Information Systems, 2012)
Given the pervasive use of teams in organizations coupled with high levels of investment in collaboration technology, there is increasing interest in identifying factors that affect the exploration and use of a broader scope of system features so that firms can benefit from the use of such technology. Prior research has called for a deeper understanding of how managers can encourage greater innovation with technology in the workplace. Drawing on the team climate and technology use literatures, we identify team learning climate and team empowerment climate as key factors that affect employees' propensity to explore a new system's features. We develop and test our use in a field study involving 268 employees embedded in 56 work teams. Three main findings come out of this research. First, the results reveal that the two types of team climate differ in their cross-level effects on individual intention to explore, such that team learning climate promotes greater intention to explore, whereas team empowerment climate reduces employees' intention to explore the technology. In addition, we find that team learning climate and team empowerment climate interact in shaping individual intention to explore, such that the presence of a strong learning climate is more effective in promoting intention to explore when teams also have a strong empowerment climate. Second, the findings show that men and women are affected differently by team climate. We find that for men, team empowerment climate has no influence on intention to explore, whereas for women there is a significant negative cross-level effect. Finally, we find that intention to explore has a positive effect on usage scope, suggesting an important link between team climate, individual cognition, and the scope of features used by employees in team settings. Taken together, the model and results highlight the important role of team climate and gender-and the interplay between them-as drivers of technology feature exploration. Our findings, especially those related to team empowerment climate, are counterintuitive when compared to prior literature and offer useful insights for managers. On the one hand, managers should consider leveraging team learning climate to intrinsically stimulate employees to engage in exploration of technology. On the other hand, managers should be cautious and guard against saddling employees with too many additional responsibilities during the stages of exploration and experimentation with system features. It is possible that through an expanded set of responsibilities and expectations fostered by team empowerment climate, employees may be experiencing work overload, thus reducing their likelihood of exploring a broader set of technology features. Managers should be especially attentive to this based on the gender composition of their teams.
Keywords: collaboration technology; intention to explore; multilevel research; postadoption use; team climate; team technology use; usage scope

Contract Performance in Offshore Systems Development: Role of Control Mechanisms - Srivastava, Shirish C; Teo, Thompson S H (Journal of Management Information Systems, 2012)
Although control theory has often been invoked to explain the coordination between client and vendor for information systems development (ISD), insights into its moderating effects for explicating ISD contract performance, especially in the offshore context, is rather limited. Such insights would enable better understanding of variables that have complementary or substitutive effects on performance. Further, the control literature talks about different control modes (e.g., formal and informal control modes classified as behavior, outcome, clan, and self-control modes) without adequately distinguishing among the different control mechanisms enacting each of the control modes. In this research, by explicitly classifying the distinctions that exist within each of the control modes, we uncover the key role played by mechanistic governance in outsourced ISD. Grounding our arguments in the information requirement for performance evaluation, the study theorizes the moderating influence of mechanistic governance on the relationships of contract specificity and relational governance with ISD quality and cost performance. We test the theorized model in a field study comprising 160 offshore ISD projects executed by Indian vendors. Our results establish the significant complementary role of mechanistic governance on the relationships of contract specificity with both cost and quality performance variables. Further, mechanistic governance substitutes the impact of relational governance on cost performance. Thus, the study theoretically as well as empirically establishes the need for conceptualizing mechanistic governance as a viable and significant governance mechanism for offshore ISD contracts. The study also teases out the distinctions between the two prime contract types in vogue for managing offshore ISD contracts, namely, fixed price and time and materials contracts. The study thus contributes not only to control theory but also to the stream of literature examining offshore ISD contracts. Further, the study provides insights to managers on having well-specified contracts and acknowledging the role of mechanistic governance for better performance.
Keywords: contract performance; control mechanisms; control modes; control theory; interaction effects; offshoring; outsourcing; project governance; software development

The Impact of Information Technology Investments on Downside Risk of the Firm: Alternative Measurement of the Business Value of IT - Otim, Samual; Dow, Kevin E; Grover, Varun; Wong, Jeffrey A (Journal of Management Information Systems, 2012)
We examine the effect that investments in information technology (IT) have on downside risk profiles of companies that made public announcements of their investments in technology. Given the limitations of financial and decision theory perspectives on risk, we adopt the strategic management perspective that stresses downside risk as an important alternative measure of firm performance. We examine whether different types of IT investments have a differential impact on firm downside risk. Drawing on the resource-based view of the firm and the real options perspective, we find evidence that IT investments and their timing influence organizational downside risk. Transformational and informational IT investments lead to a reduction in downside risk only if they lead to strategic IT investments in the industry. For competitive necessities such as IT investments that automate business functions, a reduction in downside risk is realized by investing in parity with industry participants. Our study contributes to the literature by offering an alternative perspective on the benefits of IT investments, particularly where no apparent incremental financial results may be evident. It also generates insights on IT investment strategies that may help firms keep up with or stay ahead of the competition.
Keywords: downside risk; IT investment; IT strategic role; real options perspective; resource-based view of the firm

Vertical Differentiation and a Comparison of Online Advertising Models - Lin, Mei; Ke, Xuqing; Whinston, Andrew B (Journal of Management Information Systems, 2012)
Designing business models that take into consideration the role of advertising support is critical to the success of online services. In this paper, we address the challenges of these business model strategies and compare different ad revenue models. We use game theory to model vertical differentiation in both monopoly and duopoly settings, in which online service providers may offer an ad-free service, an ad-supported service, or a combination of these services. Offering both ad-free and ad-supported services is the optimal strategy for a monopolist because ad revenues compensate for the cannibalistic effect of vertical differentiation. In a duopoly equilibrium, exactly one firm offers both services when the ad revenue rate is sufficiently high. Furthermore, we find that a higher ad revenue rate may lead to lower service prices. Consistently across both monopoly and duopoly settings, such price reductions are more severe in the cost-per-thousand-impressions model than in the cost-per-click model. Our findings emphasize the role of advertising revenues in vertical differentiation and offer strategic guidance for monetizing online services.
Keywords: ad-supported business models; electronic commerce; economic analysis; game theory; online advertising; vertical differentiation

Differential Effects of Provider Recommendations and Consumer Reviews in E-Commerce Transactions: An Experimental Study - Benlian, Alexander; Titah, Ryad; Hess, Thomas (Journal of Management Information Systems, 2012)
Despite the importance of online product recommendations (OPRs) in e-commerce transactions, there is still little understanding about how different recommendation sources affect consumers' beliefs and behavior, and whether these effects are additive, complementary, or rivals for different types of products. This study investigates the differential effects of provider recommendations (PRs) and consumer reviews (CRs) on the instrumental, affective, and trusting dimensions of consumer beliefs and shows how these beliefs ultimately influence continued OPR usage and product purchase intentions. This study tests a conceptual model linking PRs and CRs to four consumer beliefs (perceived usefulness, perceived ease of use, perceived affective quality, and trust) in two different product settings (search products versus experience products). Results of an experimental study show that users of PRs express significantly higher perceived usefulness and perceived ease of use than users of CRs, while users of CRs express higher trusting beliefs and perceived affective quality than users of PRs, resulting in different effect mechanisms toward OPR reuse and purchase intentions in e-commerce transactions. Further, CRs were found to elicit higher perceived usefulness, trusting beliefs, and perceived affective quality for experience goods, while PRs were found to unfold higher effects on all of these variables for search goods.
Keywords: consumer reviews; electronic commerce; online product recommendations; perceived affective quality; perceived usefulness; provider recommendations; technology acceptance and usage; trusting beliefs

Attracted to or Locked In?: Predicting Continuance Intention in Social Virtual World Services - Zhou, Zhongyun; Fang, Yulin; Vogel, Douglas R; Jin, Xiao-Ling; Zhang, Xi (Journal of Management Information Systems, 2012)
Internet-based social virtual world (SVW) services have aroused extensive interest among academicians and practitioners. The success of SVW services depends heavily on customers' continuance usage, a topic not yet adequately investigated in information systems research. It is unclear to what extent, and how, the existing theories can be extended to explain the continuance usage of such services. In consideration of the distinctive features of these services, this study adapts the dedication-constraint framework of commitment and develops a model of SVW continuance, which is assessed empirically using data collected from 438 experienced users of Second Life, a typical SVW service. Results indicate that SVW customers' continuance intention is jointly determined by two mechanisms: affective commitment (being attracted to) and calculative commitment (being locked in), with the former playing a more central role. Perceived utilitarian value, hedonic value, and relational capital promote affective commitment directly and indirectly through satisfaction, while service-specific investments in personalization and relational capital increase calculative commitment. Theoretical and practical implications and future research directions are subsequently discussed.
Keywords: commitment; continuance intention; dedication-constraint dual model; Second Life; social virtual world services

The Effects of Self-Regulated Learning Processes on E-Learning Outcomes in Organizational Settings - Wan, Zeying; Compeau, Deborah; Haggerty, Nicole (Journal of Management Information Systems, 2012)
This paper focuses on employees' e-learning processes during online job training. A new categorization of self-regulated learning strategies, that is, personal versus social learning strategies, is proposed, and measurement scales are developed. The new measures were tested using data collected from employees in a large company. Our approach provides context-relevant insights into online training providers and employees themselves. The results suggest that learners adopt different self-regulated learning strategies resulting in different e-learning outcomes. Furthermore, the use of self-regulated learning strategies is influenced by individual factors such as virtual competence and goal orientation, and job and contextual factors such as intellectual demand and cooperative norms. The findings can (1) help e-learners obtain better learning outcomes through their active use of varied learning strategies, (2) provide useful information for organizations that are currently using or plan to use e-learning for training, and (3) inform software designers to integrate self-regulated learning strategy support in e-learning system design and development.
Keywords: e-learning; job training; learning outcomes; learning processes; self-regulated learning strategies; social cognitive theory

Cost-Sensitive Learning via Priority Sampling to Improve the Return on Marketing and CRM Investment - Cui, Geng; Wong, Man Leung; Wan, Xiang (Journal of Management Information Systems, 2012)
Because of the unbalanced class and skewed profit distribution in customer purchase data, the unknown and variant costs of false negative errors are a common problem for predicting the high-value customers in marketing operations. Incorporating cost-sensitive learning into forecasting models can improve the return on investment under resource constraint. This study proposes a cost-sensitive learning algorithm via priority sampling that gives greater weight to the high-value customers. We apply the method to three data sets and compare its performance with that of competing solutions. The results suggest that priority sampling compares favorably with the alternative methods in augmenting profitability. The learning algorithm can be implemented in decision support systems to assist marketing operations and to strengthen the strategic competitiveness of organizations.
Keywords: cost-sensitive learning; customer relationship management; direct marketing; forecasting; priority sampling

Network Positions and Contributions to Online Public Goods: The Case of Chinese Wikipedia - Zhang, Xiaoquan; Wang, Chong (Journal of Management Information Systems, 2012)
We study the effect of collaboration network structure on the contribution behavior of participating editors in Wikipedia. Collaboration in Wikipedia is organized around articles, and any two editors co-editing an article have a collaborative relationship. Based on the economic theories about network games and social role theory, we propose that an editor's position in the collaboration network influences the editor's decisions about her total contribution as well as the allocation of her efforts. By leveraging panel data collected from the Chinese language version of Wikipedia and a natural experiment resulting from blocking it in mainland China, we find strong support for the proposed effect of network position on contribution behavior. Our analysis further reveals that different aspects of an individual's network position have distinct implications. This research enhances our understanding about how collaboration network structure shapes individual behavior in online mass collaboration platforms.
Keywords: effort allocation; mass collaboration; natural experiment; network centrality; online public goods; Wikipedia

Content Contribution for Revenue Sharing and Reputation in Social Media: A Dynamic Structural Model - Tang, Qian; Gu, Bin; Whinston, Andrew B (Journal of Management Information Systems, 2012)
This study examines the incentives for content contribution in social media. We propose that exposure and reputation are the major incentives for contributors. Besides, as more and more social media Web sites offer advertising-revenue sharing with some of their contributors, shared revenue provides an extra incentive for contributors who have joined revenue-sharing programs. We develop a dynamic structural model to identify a contributor's underlying utility function from observed contribution behavior. We recognize the dynamic nature of the content-contribution decision-that contributors are forward-looking, anticipating how their decisions affect future rewards. Using data collected from YouTube, we show that content contribution is driven by a contributor's desire for exposure, revenue sharing, and reputation and that the contributor makes decisions dynamically.
Keywords: content contribution; motivations to contribute; dynamic structural model; reputation; revenue sharing; social media; YouTube

Hacker Behavior, Network Effects, and the Security Software Market - Dey, Debabrata; Lahiri, Atanu; Zhang, Guoying (Journal of Management Information Systems, 2012)
The market for security software has witnessed an unprecedented growth in recent years. A closer examination of this market reveals certain idiosyncrasies that are not observed in a traditional market. For example, it is a highly competitive market with over 80 vendors. Yet the market coverage is relatively low. Prior research has not attempted to explain what makes this market so different. In this paper, we develop an economic model to find possible answers to this question. Our model uses existing classification of different types of attacks and models their resulting network effects. We find that the negative network effect from indirect attacks, which is further enhanced by value-based targeted attacks, provides a possible explanation for the unique structure of this market. Overall, our results highlight the unique nature of the security software market, furnish rigorous arguments for several counterintuitive observations in the real world, and provide managerial insights for vendors on market competition.
Keywords: market structure; mass attacks; negative network effect; network effect; oligopoly; pricing; security software; strategic hacker; targeted attacks

Co-opetition Between Differentiated Platforms in Two-Sided Markets - Mantena, Ravi; Saha, Rajib L (Journal of Management Information Systems, 2012)
Technology is an important factor underlying the value propositions of intermediary platforms in two-sided markets. Here, we address two key questions related to the effect of technology in platform markets. First, how does technology asymmetry affect competition between platforms? Second, how does it affect the incentives for platforms to collaborate? Using a game-theoretic model of a two-sided market where technology strongly influences network value, we show that small asymmetries in platform technologies can translate into large differences in their profitability. We find that technology improvements by the inferior platform do not significantly increase its profits, but can reduce opportunities for fruitful cooperation, since collaboration is less likely in markets with closely matched competitors. We also show that collaboration is most profitable when it takes the form of direct network interconnection. Interestingly, collaboration may provide incentives for a dominant platform to accommodate entry, where it would not otherwise do so.
Keywords: competitive strategy; co-opetition; game theory; network sharing; platform interconnections; technology platforms; two-sided markets

Theory and Analysis of Company-Sponsored Value Co-Creation - Chen, Li; Marsden, James R; Zhang, Zhongju (Journal of Management Information Systems, 2012)
In today's dynamic business environment, companies are under tremendous pressure to become more innovative and maintain a steady stream of ideas that can lead to new and improved products and services. Companies have begun to explore the possibility of capturing consumers' "collective intelligence" by establishing firm-sponsored online brainstorming sites where individuals can share their ideas and offer comments on the ideas contributed by others. We term these sites "Company-Sponsored Online Co-Creation Brainstorming" (COCB). The value of this open and voluntary co-creation depends largely on members' contribution levels, the quality of the contributions, and sustained participation. In this paper, utilizing Zwass's taxonomy of co-creation value as a base, we structure a taxonomic framework of COCBs and an accompanying basic model of COCBs. We then present a series of hypotheses concerning the relationships between the model's various factors and specific COCB activities. We validate the model using empirical data collected over two and a half years, starting from the initiation of a pioneering company-sponsored online brainstorming site. Our analyses demonstrate that the level of peer feedback and the responsiveness (speed) of sponsor company feedback have significant influences on both members' contribution levels and duration of active participation. The sponsoring company's feedback, however, seems to influence only the quality of member's contribution level. On the practical side, the outcomes suggest that sponsoring companies should develop efficient processes for reviewing and responding to submitted ideas. Regarding theory, our findings provide an initial piece of contextualized research that offers implications for theory building in the COCB context, most notably the identification of key relationships between feedback (both peer and company) and participant activity levels and duration of participation.
Keywords: brainstorming; co-creation; contribution quality; sustained participation

A Data-Driven Approach to Measure Web Site Navigability - Fang, Xiao; Hu, Paul Jen-Hwa; Chau, Michael; Hu, Han-Fen; Yang, Zhuo; Sheng, Olivia R Liu (Journal of Management Information Systems, 2012)
Web site navigability refers to the degree to which a visitor can follow a Web site's hyperlink structure to successfully find information with efficiency and ease. In this study, we take a data-driven approach to measure Web site navigability using Web data readily available in organizations. Guided by information foraging and information-processing theories, we identify fundamental navigability dimensions that should be emphasized in metric development. Accordingly, we propose three data-driven metrics-namely, power, efficiency, and directness-that consider Web structure, usage, and content data to measure a Web site's navigability. We also develop a Web mining-based method that processes Web data to enable the calculation of the proposed metrics. We further implement a prototype system based on the Web mining-based method and use it to assess the navigability of two sizable, real-world Web sites with the metrics. To examine the analysis results by the metrics, we perform an evaluation study that involves these two sites and 248 voluntary participants. The evaluation results show that user performance and assessments are consistent with the analysis results revealed by our metrics. Our study demonstrates the viability and practical value of data-driven metrics for measuring Web site navigability, which can be used for evaluative, diagnostic, or predictive purposes.
Keywords: data-driven navigability metrics; Web metrics; Web mining; Web site navigability; Web site navigation

Hybrid Relational-Contractual Governance for Business Process Outsourcing - Rai, Arun; Keil, Mark; Hornyak, Rob; Wüllenweber, Kim (Journal of Management Information Systems, 2012)
We examined 335 business process outsourcing (BPO) ventures to understand the effect of contractual and relational governance factors on BPO satisfaction from the client's perspective. While both contractual and relational factors explain significant variance in BPO satisfaction, relational factors dominate. By examining interactions between key contractual and relational mechanisms, we found that elements of the two governance approaches operate as substitutes with respect to BPO satisfaction. Specifically, the relational mechanism, trust, was found to substitute for contractually specified activity expectations, goal expectations, and contractual flexibility. Similarly, the relational mechanism, information exchange, was found to substitute for contractually specified activity expectations and goal expectations. Finally, the relational mechanism, conflict resolution, was found to substitute for contractually specified goal expectations. Our results can be applied to more effectively realize controls in outsourcing contexts and to design governance systems that integrate contractual and relational governance mechanisms based on the characteristics of client-vendor relationships.
Keywords: business process outsourcing; controls; formal contract; hybrid governance; relational governance; services

Dual Role of IT-Assisted Communication in Patient Care: A Validated Structure-Process-Outcome Framework - Angst, Corey M; Devaraj, Sarv; D'Arcy, John (Journal of Management Information Systems, 2012)
Despite the fact that about 90 percent of information transactions in hospitals are communications between patients, doctors, nurses, and other staff, little research has addressed the role that information technology (IT) plays in improving the efficiency and effectiveness of these communications-based transactions. Addressing this research gap is important considering that a substantial number of adverse hospital events stem from communication failures. Furthermore, effective communication is a major driver of patient satisfaction in hospitals. Using a structure-process-outcome (SPO) framework and guided by the strategic role of IT literature, we develop a model that includes "structure," operationalized as organizational characteristics and two different categories of IT; "process," two different communication-based processes; and "outcomes," quantified as case-mix adjusted mortality, patient loyalty, and patient ratings. Specifically, we hypothesize that a subset of clinical IT (cardiology IT) will affect technical protocols of patient care, which in turn affects mortality, while administrative IT will affect interpersonal patient care, which relates to patient loyalty and ratings. Thus, IT can serve as a double-edged sword affecting both technical and interpersonal processes of care, but possibly independently and differentially. We test our hypotheses on 2,179 hospitals using data collected and matched from three different sources. Our findings suggest that different types of IT differentially affect hospital processes and these same processes influence performance metrics such as mortality and patient satisfaction. For example, cardiology IT has a greater effect on objective patient health status through improvements in the technical protocols of care. Surprisingly, administrative IT was shown to adversely affect interpersonal care processes. It could be true that the IT is intrusive and interferes in the doctor-patient relationship; however, a post hoc analysis suggests the possibility of curvilinear impacts. Thus, managers should recognize that over- and underinvestment in IT can potentially have negative effects on performance and these results vary by IT type. Both technical and interpersonal processes yielded significant relationships to their respective outcomes and some cross-outcome effects were found, further suggesting that the mediating role of processes is an important link between IT and value.
Keywords: business value of information technology; health information technology; operational IT; strategic IT; structure-process-outcome

Understanding Contingencies Associated with the Early Adoption of Customer-Facing Web Portals - Baird, Aaron; Furukawa, Michael F; Raghu, T S (Journal of Management Information Systems, 2012)
Web-based portals extend many convenient and collaborative capabilities to consumers and are being adopted by small firms with ever greater frequency, especially in the context of health care. The early adoption of patient portals by ambulatory-care clinics (outpatient health providers) presents a unique opportunity to more fully understand the characteristics of supply-side adopters in a context where firms (ambulatory-care clinics) are extending digital services to consumers (patients). Using diffusion of innovations literature and contingency theory as the theoretical base, we expand upon the firm characteristics traditionally considered to be predictors of adoption (e.g., firm size, slack resources, competition, capabilities, and management support) and examine how demand contingencies, service contingencies, and learning externality contingencies affect patient portal adoption by ambulatory-care clinics in the United States. We find that early adopters often have a structure in place that provides support for innovations (e.g., part of integrated delivery systems), as would be predicted by diffusion of innovation theory. We also find, though, that service contingencies associated with continuity of care, learning externality contingencies associated with local influences, and select demand contingencies associated with the local market significantly influence patient portal adoption decisions. Our findings suggest that the adoption and diffusion of patient portals may be affected by more than traditionally considered "dominant" firm characteristics and provide insights into how such customer-facing systems may be affected by contingent factors.
Keywords: innovation adoption; bivariate probit with sample selection; demand contingencies; factors of adoption; learning externality contingencies; patient portals; service contingencies; Web portals

Resource Structuring or Capability Building?: An Empirical Study of the Business Value of Information Technology - Wang, Nianxin; Liang, Huigang; Zhong, Weijun; Xue, Yajiong; Xiao, Jinghua (Journal of Management Information Systems, 2012)
This paper examines two ways to create business value of information technology (BVIT): resource structuring and capability building. We develop a research model positing that IT resources and IT capabilities enhance a firm's performance by providing support to its competitive strategies and core competencies, and the strengths of these supports vary in accord with environmental dynamism. The model is empirically tested using data collected from 296 firms in China. It is found that IT resources generate more business effects in stable environments than in dynamic environments, while IT capabilities generate more business effects in dynamic environments than in stable environments. The results suggest that the BVIT creation mechanism in stable environments is primarily resource structuring while the mechanism in dynamic environments is primarily capability building.
Keywords: business value of information technology; capability building; competitive strategy; core competencies; environmental dynamism; resource structuring

Everybody Needs Somebody: The Influence of Team Network Structure on Information Technology Use - Magni, Massimo; Angst, Corey M; Agarwal, Ritu (Journal of Management Information Systems, 2012)
Team network structure has been shown to be an important determinant of both team and individual performance outcomes, yet few studies have investigated the relationship between team network structure and technology usage behaviors. Drawing from social network and technology use literature, we examine how the structure of a team's advice-seeking network affects individual use of a newly implemented information technology. We develop cross-level hypotheses related to the effects of the structure of mutually interconnected ties within the team (i.e., internal closure) as well as the structure of nonredundant ties outside the team boundaries (i.e., external bridging). The hypotheses are tested in a field study of 265 employees working in 44 teams in a large financial services institution. Results show that internal closure has a U-shaped effect on individual use such that individual usage of the system is higher when the number of internal advice-seeking ties within the team is low or high, suggesting that medium levels of internal closure are the least desirable network configurations because in such instances teams neither realize the benefits of high closure information sharing nor are they able to avoid in-group biases associated with low closure conditions. Our results also reveal that in addition to having a direct positive effect on individual use, external bridging interacts with internal closure in a complex manner. The U-shaped effect of closure is dominant when bridging is high but assumes an inverted U-shaped pattern when bridging is low. Several implications for managers follow from these findings. First, in order to increase usage of technology, in teams characterized by low internal closure, managers should encourage the development of ties across team boundaries. Second, managers should maximize within-team interconnections in order to facilitate the circulation of external knowledge within team boundaries. Finally, managers should be aware that maximizing internal closure by facilitating interconnections among team members could be dangerous if not accompanied by mechanisms for external bridging.
Keywords: advice-seeking network; external bridging; integration perspective; internal closure; social categorization theory; technology use

Toward an Integrated Model of Group Development: Disruption of Routines by Technology-Induced Change - Garfield, Monica J; Dennis, Alan R (Journal of Management Information Systems, 2012)
Current research argues that the most prominent models of group development (the linear stage model and the punctuated equilibrium model) are simply different lenses for studying the same phenomenon. We argue that the two models are distinct (groups do not simultaneously follow both models) and that the key to understanding their use lies in routines. We studied six newly formed groups whose members came from the same organization that worked on similar projects over a seven-week period. Three groups worked nonmediated and three groups used a collaboration technology that was new to them. The three nonmediated groups followed the punctuated equilibrium model and the three collaboration technology groups followed the stage model. We argue that groups that enact the shared routines common in their organizations will experience a different group development path than those groups whose shared routines are disrupted and which must adapt to a new technology. When group members enact shared routines (which they may share due to having a common organizational culture), they can quickly begin work, and group development follows the punctuated equilibrium model. When groups cannot enact shared routines, they must first negotiate how they will work before work can begin, so group development follows the stage model. Thus, the introduction of new collaboration technology (or any new technology or work process) influences how group development occurs.
Keywords: case study; collaboration technology; field experiment; group development models; mixed methods; routines

Corporate Wikis: The Effects of Owners' Motivation and Behavior on Group Members' Engagement - Arazy, Ofer; Gellatly, Ian R (Journal of Management Information Systems, 2012)
Originally designed as a tool to alleviate bottlenecks associated with knowledge management, the suitability of wikis for corporate settings has been questioned given the inherent tensions between wiki affordances and the realities of organizational life. Drawing on regulatory focus theory and social cognitive theory, we developed and tested a model of the motivational dynamics underlying corporate wikis. We examined leaders (owners) and users of 187 wiki-based projects within a large multinational firm. Our findings revealed two countervailing motivational forces, one oriented toward accomplishment and achievement (promotion focus) and one oriented toward safety and security (prevention focus), that not only predicted owners' participation but also the overall level of engagement within the wiki groups. Our primary contribution is in showing that, notwithstanding the potential benefits to users, wikis can trigger risk-avoidance motives that potentially impede engagement. Practically, our findings call for an alignment between organizational procedures surrounding wiki deployment and the technology's affordances.
Keywords: knowledge management; knowledge management systems; knowledge sharing; motivation; owner; regulatory focus theory; social cognitive theory; wiki

Information Security Outsourcing with System Interdependency and Mandatory Security Requirement - Hui, Kai-Lung; Hui, Wendy; Yue, Wei T (Journal of Management Information Systems, 2012)
The rapid growth of computer networks has led to a proliferation of information security standards. To meet these security standards, some organizations outsource security protection to a managed security service provider (MSSP). However, this may give rise to system interdependency risks. This paper analyzes how such system interdependency risks interact with a mandatory security requirement to affect the equilibrium behaviors of an MSSP and its clients. We show that a mandatory security requirement will increase the MSSP's effort and motivate it to serve more clients. Although more clients can benefit from the MSSP's protection, they are also subjected to greater system interdependency risks. Social welfare will decrease if the mandatory security requirement is high, and imposing verifiability may exacerbate social welfare losses. Our results imply that recent initiatives such as issuing certification to enforce computer security protection, or encouraging auditing of managed security services, may not be advisable.
Keywords: information security; information security outsourcing; interdependency risks; mandatory security requirement; security compliance

Organizations' Information Security Policy Compliance: Stick or Carrot Approach? - Chen, Yan; Ramamurthy, K; Wen, Kuang-Wei (Journal of Management Information Systems, 2012)
Companies' information security efforts are often threatened by employee negligence and insider breach. To deal with these insider issues, this study draws on the compliance theory and the general deterrence theory to propose a research model in which the relations among coercive control, which has been advocated by scholars and widely practiced by companies; remunerative control, which is generally missing in both research and practice; and certainty of control are studied. A Web-based field experiment involving real-world employees in their natural settings was used to empirically test the model. While lending further support to the general deterrence theory, our findings highlight that reward enforcement, a remunerative control mechanism in the information systems security context, could be an alternative for organizations where sanctions do not successfully prevent violation. The significant interactions between punishment and reward found in the study further indicate a need for a more comprehensive enforcement system that should include a reward enforcement scheme through which the organizational moral standards and values are established or reemphasized. The findings of this study can potentially be used to guide the design of more effective security enforcement systems that encompass remunerative control mechanisms.
Keywords: coercive control; compliance theory; general deterrence theory; information security policy; punishment; remunerative control; reward

Competitive Target Advertising and Consumer Data Sharing - Zhao, Xia; Xue, Ling (Journal of Management Information Systems, 2012)
Advances in information technologies enable firms to collect detailed consumer data and target individual consumers with tailored ads. Consumer data are among the most valuable assets that firms own. An interesting phenomenon is that competing firms often trade their consumer data with each other. Based on a common-value all-pay auction framework, this paper studies the advertising competition between two firms that target the same consumer but are asymmetrically informed about the consumer value. We characterize firms' equilibrium competition strategies. The results show that better consumer information does not help the better-informed firm save the advertising expenditure but does enable it to reap a higher expected profit in competition. Sharing individual-level consumer data may soften the competition even though firms compete head-to-head for the same consumer. We also find that the better-informed firm may sell its data to its competitor but never voluntarily shares it with its competitor.
Keywords: advertising; all-pay auction; common-value auction; information asymmetry; information sharing; target marketing

Alternate Strategies for a Win-Win Seeking Agent in Agent-Human Negotiations - Yang, Yinping; Singhal, Sharad; Xu, Yunjie (Journal of Management Information Systems, 2012)
With the growth of e-commerce and e-markets, there is an increasing potential for the use of software agents to negotiate business tasks with human negotiators. Guided by design science methodology, this research prescribes and validates a win-win seeking negotiation agent using strategies of "simultaneous-equivalent offers" and "delayed acceptance" and compares their effects against the use of conventional sequential-single offer and immediate acceptance strategies. To evaluate the alternate strategies, a negotiation agent system was implemented and an experiment was conducted in which 110 agent-human dyads negotiated over a four-issue online purchase task. Our results indicate that the proposed agent strategies can enhance the economic performance of the negotiated outcome (counterpart agreement ratio, individual utility, joint utility, and the distance to Pareto-efficient frontier) and maintain the human counterparts' positive perceptions toward the outcome and the agent. The findings confirm the efficacy of the proposed design and showcase an innovative system to facilitate e-commerce transactions.
Keywords: agent-human negotiation; delayed acceptance; design science; electronic markets; negotiation agent; simultaneous-equivalent offers; win-win negotiation

Inducing Intrinsic Motivation to Explore the Enterprise System: The Supremacy of Organizational Levers - Ke, Weiling; Tan, Chuan-Hoo; Sia, Choon-Ling; Wei, Kwok-Kee (Journal of Management Information Systems, 2012)
The adoption of an organization-wide system, such as an enterprise system (ES), has often been mandated by organizational management, which may not necessarily motivate users to proactively explore the system's features and subsequently apply pertinent features that best support their job tasks. Anchoring on self-determination theory, this research investigates the antecedents and consequences of users' intrinsic motivation to explore ES features. We propose two organizational levers (i.e., autonomous job design and socialization tactics) that the management could exercise to trigger intrinsic motivation, thereby leading to improved ES feature exploration. Intrinsic motivation is manifested by hedonic motivation and normative motivation, whereas ES feature exploration is conceptualized as a dual-dimensional outcome reflected by cognitive behavior (exploratory usage) and positive affect (exploration satisfaction). Through a two-stage survey of 127 organizational users in China, we find general support for our research model. We further observe significant moderating effects of prevention focus on the association between organizational levers and intrinsic motivations. Beyond demonstrating how organizational users respond to different organizational levers, this research examines a broader, enduring challenge, which is to determine how organizational users can be induced to be intrinsically inspired to innovatively harness implemented information systems.
Keywords: enterprise systems; exploration usage; intrinsic motivation; organizational levers

Understanding Postadoptive Behaviors in Information Systems Use: A Longitudinal Analysis of System Use Problems in the Business Intelligence Context - Deng, Xuefei; Chi, Lei (Journal of Management Information Systems, 2012)
For an organization to gain maximum benefits from a new information system (IS), individual users in the organization must use it effectively and extensively. To do so, users need to overcome many problems associated with their system use in order to integrate the new IS into their work routines. Much remains to be learned about the types of problems that users encounter in using the new system, in particular, the root causes of system use problems and how they relate to and co-evolve with the problems over time. In this study, we seek to develop a comprehensive and dynamic view of system use problems in organizations. Using a combined method of revealed causal mapping and in-depth network analysis, we analyze nine-month archival data on user-reported problems with a new business intelligence application in a large organization. Our data analysis revealed seven emergent constructs of system use problems and causes, including reporting, data, workflow, role authorization, users' lack of knowledge, system error, and user-system interaction. The seven constructs were found to interact differentially across two usage phases (initial versus continued) and between two types of users (regular versus power user). This study contributes to advancing our theoretical understanding of postadoptive IS use by focusing on its problematic aspect. This study also suggests useful methods for organizations to effectively monitor users' system use problems over time and thus guides organizations to effectively target mechanisms to promote the use of new technologies.
Keywords: business intelligence; information system use; postadoptive behavior; revealed causal mapping; social network analysis; system use problem

Investigating the Value of Sociomaterialism in Conceptualizing IT Capability of a Firm - Kim, Gimun; Shin, Bongsik; Kwon, Ohbyung (Journal of Management Information Systems, 2012)
Sociomateriality (or sociomaterialism) allows us to approach the information technology (IT) capability research from an angle that has been rarely visited by information systems scholars. While relevant studies presume that humans and materials are distinct and largely independent, sociomateriality emphasizes agency that represents the relational, emergent, and shifting capacity realized through the association of actors (both humans and materials). The objective of this paper is to explore the value of conducting IT capability research through the theoretical lens of sociomaterialism. For this, we expand the imbrication metaphor introduced in an early study to explain the formation and advancement of a firm's IT capability from the sociomaterial perspective. Then, the key building blocks of IT capability of an organization are conceptualized based on the combination of existing studies and the expanded imbrication metaphor. Lastly, the effectiveness of formulating IT capability as a third-order construct that substantiates the entanglement concept of sociomaterialism is examined in comparison with that of traditional modeling approaches. We confirm the value of sociomaterialism in conceptualizing IT capability and subsequently in unraveling the true contribution of IT capability toward strengthening business performance. The findings also have practical implications in which IT capability is a function of IT management capability as well as IT personnel capability and IT infrastructure capability.
Keywords: imbrication metaphor; IT capabilities; sociomaterialism; sociomateriality; third-order factor

Information Systems Success: The Quest for the Independent Variables - Petter, Stacie; DeLone, William H; McLean, Ephraim R (Journal of Management Information Systems, 2013)
In 1992, DeLone and McLean suggested that the dependent variable for information systems (IS) research is IS Success. Their research resulted in the widely cited DeLone and McLean (D&M) IS Success Model, in which System Quality, Information Quality, Use, User Satisfaction, Individual Impact, and Organizational Impact are distinct, but related dimensions of IS success. Since the original IS Success Model was published, research has developed a better understanding of IS success. Meanwhile, comprehensive and integrative research on the variables that influence IS success has been lacking. Therefore, we examine the literature on the independent variables that affect IS success. After examining over 600 articles, we focused our attention on integrating the findings of over 140 studies. In this research, we identify 43 specific variables posited to influence the different dimensions of IS success, and we organize these success factors into five categories based on the Leavitt Diamond of Organizational Change: task characteristics, user characteristics, social characteristics, project characteristics, and organizational characteristics. Next, we identify 15 success factors that have consistently been found to influence IS success: Enjoyment, Trust, User Expectations, Extrinsic Motivation, IT Infrastructure, Task Compatibility, Task Difficulty, Attitudes Toward Technology, Organizational Role, User Involvement, Relationship with Developers, Domain Expert Knowledge, Management Support, Management Processes, and Organizational Competence. Finally, we highlight gaps in our knowledge of success factors and propose a road map for future research.
Keywords: independent variables; information system success; research integration; success determinants; success factors

Effect Mechanisms of Perceptual Congruence Between Information Systems Professionals and Users on Satisfaction with Service - Benlian, Alexander (Journal of Management Information Systems, 2013)
With the proliferation of available electronic service channels for information systems (IS) users such as mobile or intranet services in companies, service interactions between IS users and IS professionals have become an increasingly important factor for organizational business-IT alignment. Despite the increasing relevance of such interactions, the implications of agreement or disagreement on the fulfillment of critical service quality factors for successful alignment and higher user satisfaction are far from being well understood. While prior research has extensively studied the question of matching different viewpoints on IS service quality in organizations, little or no attention has been paid to the role of perceptual congruence or incongruence in the dyadic relationship between IS professionals and users in forming user satisfaction with the IS function. Drawing on cognitive dissonance theory, prospect theory, and perceptual congruence research, this study examines survey responses from 169 matching pairs of IS professionals and users in different organizations and explains how perceptual fit patterns affect user satisfaction with the IS function. The paper demonstrates that perceptual congruence can, in and of itself, have an impact on user satisfaction, which goes beyond what was found before. Moreover, the results of the study reveal the relevance of nonlinear and asymmetric effect mechanisms arising from perceptual (in)congruence that may affect user satisfaction. This study extends our theoretical understanding of the role of perceptual alignment or misalignment on IS service quality factors in forming user satisfaction and lays the foundation for further study of the interplay between perceptions in the dyadic relationship between IS professionals and IS users. Managers who seek to encourage particular behaviors by the IS professionals or IS users may use the results of this study to reconcile the often troubled business-IT relationship.
Keywords: alignment; IS service quality; perceptual congruence; polynomial modeling; response surface analysis; SERVQUAL

Strategic Alignment and Misalignment of Knowledge Management Systems: A Social Representation Perspective - Dulipovici, Alina; Robey, Daniel (Journal of Management Information Systems, 2013)
To derive more business value from existing organizational knowledge, many organizations seek to rely on strategically aligned knowledge management systems (KMS). However, as documented in prior studies, they often underestimate the challenges about social interactions and users' perceptions in response to new information systems. Based on an interpretive case study, this paper examines the implementation of a KMS to show how social representations of four groups of users resulted in the misalignment of the KMS with the organizational strategy. The social representation lens allows us to interpret strategic alignment in terms of dynamic processes of anchoring and objectification that aid individuals and groups to make sense of KMS initiatives. The groups studied developed different cognitive views of the KMS that ultimately led to a strategic misalignment. The key implication is that social interactions within and among groups shape KMS alignment with organizational strategy, thus elucidating the nature of system use.
Keywords: interpretive research; IS alignment; IS implementation; knowledge management systems; social representation

Service Expansion of Product Firms in the Information Technology Industry: An Empirical Study - Han, Shu; Kuruzovich, Jason; Ravichandran, T (Journal of Management Information Systems, 2013)
The provision of services has become an increasingly important component of the economy of industrialized countries and the revenue stream for many traditional product companies. This is especially true for companies that offer information technology (IT) products. This paper examines factors that are associated with the extent to which IT product companies are able to develop service revenue, which we refer to as service expansion of IT product companies. We identify the characteristics of the product portfolio-specifically, the composition and scope of firm offerings among hardware, application software, and infrastructure software-as key to successful service expansion. We also propose that this relationship is moderated by prior performance of the product business and industry characteristics such as concentration and maturity. Data from IT product vendors spanning five years are used to test the proposed relationships. Overall, this research provides a theoretical foundation for understanding service expansion and diversification in the IT industry as well as practical guidance for IT product companies considering expansion to services.
Keywords: IT services; IT stack; IT vendors; service diversification; software product portfolio

Facilitator-in-a-Box: Process Support Applications to Help Practitioners Realize the Potential of Collaboration Technology - Briggs, Robert O; Kolfschoten, Gwendolyn L; De Vreede, Gert-Jan; Lukosch, Stephan; Albrecht, Conan C (Journal of Management Information Systems, 2013)
The potential benefits of collaboration technologies are typically realized only in groups led by collaboration experts. This raises the facilitator-in-the-box challenge: Can collaboration expertise be packaged with collaboration technology in a form that nonexperts can reuse with no training on either tools or techniques? We address that challenge with process support applications (PSAs). We describe a collaboration support system (CSS) that combines a computer-assisted collaboration engineering platform for creating PSAs with a process support system runtime platform for executing PSAs. We show that the CSS meets its design goals: (1) to reduce development cycles for collaboration systems, (2) to allow nonprogrammers to design and develop PSAs, and (3) to package enough expertise in the tools that nonexperts could execute a well-designed collaborative work process without training.
Keywords: collaboration; collaboration engineering; collaboration support system; collaboration technology; computer-assisted collaboration engineering; process support application

Sparking Creativity: Improving Electronic Brainstorming with Individual Cognitive Priming - Dennis, Alan R; Minas, Randall K; Bhagwatwar, Akshay P (Journal of Management Information Systems, 2013)
Much of human behavior involves subconscious cognition that can be manipulated through "priming"-the presentation of a stimulus designed to subconsciously implant a concept in working memory that alters subsequent behavior. Priming is a well-known phenomenon for individual behavior, but we do not know whether priming can be used to influence group behavior. We developed a Web-based computer game that was designed to improve creativity through priming. Participants were exposed to a priming game and then worked as members of a group using electronic brainstorming (EBS) to generate ideas on a creativity task. Our results show that when users played the game, designed to improve performance, their groups generated significantly more ideas that were more creative than when they were exposed to neutral priming. Our findings extend the literature by providing evidence that individual priming substantially affects group idea generation performance. Avenues for future research include designing EBS software that optimizes group ideation through priming, examining the conditions under which priming has the most substantial impact on ideation performance, and examining whether priming can be used to enhance other group processes (e.g., convergence tasks).
Keywords: collaboration; creativity; electronic brainstorming; idea generation; individual cognition; priming; virtual groups

Emotions and Information Diffusion in Social Media-Sentiment of Microblogs and Sharing Behavior - Stieglitz, Stefan; Dang-Xuan, Linh (Journal of Management Information Systems, 2013)
As a new communication paradigm, social media has promoted information dissemination in social networks. Previous research has identified several content-related features as well as user and network characteristics that may drive information diffusion. However, little research has focused on the relationship between emotions and information diffusion in a social media setting. In this paper, we examine whether sentiment occurring in social media content is associated with a user's information sharing behavior. We carry out our research in the context of political communication on Twitter. Based on two data sets of more than 165,000 tweets in total, we find that emotionally charged Twitter messages tend to be retweeted more often and more quickly compared to neutral ones. As a practical implication, companies should pay more attention to the analysis of sentiment related to their brands and products in social media communication as well as in designing advertising content that triggers emotions.
Keywords: information diffusion; sentiment; social media; Twitter

Are Users Threatened by Credibility Assessment Systems? - Elkins, Aaron C; Dunbar, Norah E; Adame, Bradley; Nunamaker Jr, Jay F (Journal of Management Information Systems, 2013)
Despite the improving accuracy of agent-based expert systems, human expert users aided by these systems have not improved their accuracy. Self-affirmation theory suggests that human expert users could be experiencing threat, causing them to act defensively and ignore the system's conflicting recommendations. Previous research has demonstrated that affirming an individual in an unrelated area reduces defensiveness and increases objectivity to conflicting information. Using an affirmation manipulation prior to a credibility assessment task, this study investigated if experts are threatened by counterattitudinal expert system recommendations. For our study, 178 credibility assessment experts from the American Polygraph Association (n = 134) and the European Union's border security agency Frontex (n = 44) interacted with a deception detection expert system to make a deception judgment that was immediately contradicted. Reducing the threat prior to making their judgments did not improve accuracy, but did improve objectivity toward the system. This study demonstrates that human experts are threatened by advanced expert systems that contradict their expertise. As more and more systems increase integration of artificial intelligence and inadvertently assail the expertise and abilities of users, threat and self-evaluative concerns will become an impediment to technology acceptance.
Keywords: credibility assessment systems; deception detection; expert systems; user anxiety

Using Accountability to Reduce Access Policy Violations in Information Systems - Vance, Anthony; Lowry, Paul Benjamin; Eggett, Dennis (Journal of Management Information Systems, 2013)
Access policy violations by organizational insiders are a major security concern for organizations because these violations commonly result in fraud, unauthorized disclosure, theft of intellectual property, and other abuses. Given the operational demands of dynamic organizations, current approaches to curbing access policy violations are insufficient. This study presents a new approach for reducing access policy violations, introducing both the theory of accountability and the factorial survey to the information systems field. We identify four system mechanisms that heighten an individual's perception of accountability: identifiability, awareness of logging, awareness of audit, and electronic presence. These accountability mechanisms substantially reduce intentions to commit access policy violations. These results not only point to several avenues for future research on access policy violations but also suggest highly practical design-artifact solutions that can be easily implemented with minimal impact on organizational insiders.
Keywords: access policy violations; accountability; accountability theory; awareness; evaluation; factorial survey method; identifiability; information security; monitoring; social presence

The Effect of Social Capital of the Relationship Between the CIO and Top Management Team on Firm Performance - Karahanna, Elena; Preston, David S (Journal of Management Information Systems, 2013)
The paper empirically examines the effects of social capital of the relationship between the chief information officer (CIO) and top management team (TMT) on organizational value creation based on responses from CIOs and matched TMT respondents from 81 hospitals in the United States. Specifically, we theorize how the three dimensions of social capital-structural, cognitive, and relational social capital-facilitate knowledge exchange and combination between the CIO and TMT resulting in the alignment between the organization's information systems (IS) strategy and business strategy. Results show that IS alignment significantly influences the firm's financial performance and mediates the relationship between CIO-TMT social capital and performance. The findings also indicate that cognitive and relational social capital influence information systems strategic alignment but that structural social capital exerts its influence through its effects on cognitive social capital. Recommendations are provided as to how organizations can develop CIO-TMT structural, cognitive, and relational social capital to positively influence firm performance via IS strategic alignment.
Keywords: chief information officer; cognitive social capital; financial performance; information systems; IS leadership; relational social capital; social capital; strategic alignment; structural social capital; top management team

Sustainability of a Firm's Reputation for Information Technology Capability: The Role of Senior IT Executives - Lim, Jee-Hae; Stratopoulos, Theophanis C; Wirjanto, Tony S (Journal of Management Information Systems, 2013)
This study investigates the development and sustainability of a firm's information technology (IT) capability reputation from an IT executive's standpoint. Building on institutional theory, we argue that IT executives will try to achieve external legitimacy (i.e., project an image of superior IT capability to external stakeholders) in the hope that the top management team and board members will reciprocate by elevating the internal legitimacy of IT executives. Firms that develop such a culture of reciprocity with their IT executives are more likely to sustain their IT capability reputation. Econometric results based on panel data for 1,326 large U.S. firms from a wide spectrum of industries over a 13-year period (1997-2009) validate these predictions. More specifically, we find that IT executives with greater structural power (e.g., higher job titles) or IT-related expert power (e.g., IT-related education or experience) are more likely to attract public recognition for their firm's IT capability. Firms that build such an IT capability reputation are more likely to promote their IT executives, and IT executives who are promoted are more likely to stay longer with their firms. This continuity in IT strategic leadership is positively associated with the firm's ability to sustain its IT capability reputation. Our findings have important practical implications related to a firm's IT reputation strategy as well as the motivation and career of IT executives. Firms wanting to develop and sustain their IT capability reputation would do well to foster the creation of a cycle of positive reciprocity with their IT executives. IT executives hoping to increase their power within their firm's top management team and improve the legitimacy of the firm's IT organization need to project an image of IT superiority to external stakeholders.
Keywords: external legitimacy; institutional theory; internal legitimacy; IT capability reputation; IT executives; IT strategic leadership; reciprocity; structural power

Information Technology and Productivity in Developed and Developing Countries - Dedrick, Jason; Kraemer, Kenneth L; Shih, Eric (Journal of Management Information Systems, 2013)
Previous research has found that information technology (IT) investment is associated with significant productivity gains for developed countries but not for developing countries. Yet developing countries have continued to increase their investment in IT rapidly. Given this apparent disconnect, there is a need for new research to study whether the investment has begun to pay off in greater productivity for developing countries. We analyze new data on IT investment and productivity for 45 countries from 1994 to 2007, and compare the results with earlier research. We find that upper-income developing countries have achieved positive and significant productivity gains from IT investment in the more recent period as they have increased their IT capital stocks and gained experience with the use of IT. We also find that the productivity effects of IT are moderated by country factors, including human resources, openness to foreign investment, and the quality and cost of the telecommunications infrastructure. The academic implication is that the effect of IT on productivity is expanding from the richest countries into a large group of developing countries. The policy implication is that lower-tier developing countries can also expect productivity gains from IT investments, particularly through policies that support IT use, such as greater openness to foreign investment, increased investment in tertiary education, and reduced telecommunications costs.
Keywords: developed countries; developing countries; human resources; IT and productivity; longitudinal analysis; openness to trade and investment; production function; telecommunications cost; telecommunications infrastructure

Managing Interdependent Information Security Risks: Cyberinsurance, Managed Security Services, and Risk Pooling Arrangements - Zhao, Xia; Xue, Ling; Whinston, Andrew B (Journal of Management Information Systems, 2013)
The interdependency of information security risks often induces firms to invest inefficiently in information technology security management. Cyberinsurance has been proposed as a promising solution to help firms optimize security spending. However, cyberinsurance is ineffective in addressing the investment inefficiency caused by risk interdependency. In this paper, we examine two alternative risk management approaches: risk pooling arrangements (RPAs) and managed security services (MSSs). We show that firms can use an RPA as a complement to cyberinsurance to address the overinvestment issue caused by negative externalities of security investments; however, the adoption of an RPA is not incentive-compatible for firms when the security investments generate positive externalities. We then show that the MSS provider serving multiple firms can internalize the externalities of security investments and mitigate the security investment inefficiency. As a result of risk interdependency, collective outsourcing arises as an equilibrium only when the total number of firms is small.
Keywords: cyberinsurance; information security; interdependent risks; managed security services; risk management; risk pooling

The Drivers in the Use of Online Whistle-Blowing Reporting Systems - Lowry, Paul Benjamin; Moody, Gregory D; Galletta, Dennis F; Vance, Anthony (Journal of Management Information Systems, 2013)
Online whistle-blowing reporting systems (WBRS) have become increasingly prevalent channels for reporting organizational failures. The Sarbanes-Oxley Act and similar international laws now require firms to establish whistle-blowing (WB) procedures and WBRSs, increasing the importance of WB research and applications. Although the literature has addressed conventional WB behavior, it has not explained or measured the use of WBRSs in online contexts that could significantly alter elements of anonymity, trust, and risk for those using such reporting tools. This study proposes the WBRS model (WBRS-M). Using actual working professionals in an online experiment of hypothetical scenarios, we empirically tested the WBRS-M for reporting computer abuse and find that anonymity, trust, and risk are highly salient in the WBRS context. Our findings suggest that we have an improved WB model with increased explanatory power. Organizations can make WB less of a professional taboo by enhancing WBRS users' perceptions of trust and anonymity. We also demonstrate that anonymity means more than the mere lack of identification, which is not as important in this context as other elements of anonymity.
Keywords: anonymity; computer abuse; IT artifacts; organizational failure; organizational governance; risk; trust; whistle-blowing; whistle-blowing reporting systems

The Impact of Influence Tactics in Information System Development Projects: A Control-Loss Perspective - Narayanaswamy, Ravi; Grover, Varun; Henry, Raymond M (Journal of Management Information Systems, 2013)
Information systems development (ISD) projects are prone to high levels of failure. One of the major reasons attributed to these failures is the inability to harmonize values held by a diverse set of participants in an environment that is characterized by uncertainty due to changing requirements. In this paper, we focus on a relational approach to achieve congruence between a project manager and a team member with respect to influence tactics. Constructs of perceptual congruence and communication congruence that reflect a level of agreement and degree of shared understanding between the project manager and team members are described. A congruence model is constructed and tied to an intermediate outcome variable of control loss. One hundred and thirteen dyadic pairs of project managers and team members are surveyed in order to test the model. The results indicate that having strong relational equity and common understanding can minimize control loss. It is important to consider the perspectives of both the project manager and a team member while formulating and assessing monitoring strategies to promote the success of an ISD project. Especially, encouraging team members to discuss disagreements constructively can motivate them to perform better and keep things under control. Finally, it is critical to address the performance problems as they occur rather than wait until the completion of the project.
Keywords: developer relationships; development project; influence tactics; information systems development; leadership exchange; project management; project manager; shared understanding; teams

Service-Oriented Methodology for Systems Development - Keith, Mark; Demirkan, Haluk; Goul, Michael (Journal of Management Information Systems, 2013)
Despite advances in software development practices, organizations struggle to implement methodologies that match the risk in a project environment with needed coordination capabilities. Plan-driven and agile software development methodologies each have strengths and risks. However, most project environments cannot be classified as entirely "risky" or "stable," suggesting the need for hybrid approaches. We leverage a design science approach to implement a novel hybrid methodology based on concepts from the service-oriented paradigm. We motivate the approach using theory on interdependence and coordination, and design the methodology using theory on modularity and service-dominant logic. We also examine the effects of its adoption at a large electrical power company over a three-year period. The results imply that service-oriented theory should be applied to the human processes involved in systems development in order to achieve better fit between project risk, interdependencies, and the selected methodology(ies) in order to improve overall project performance.
Keywords: design science; modularization; project management; service orientation

A Test of Two Models of Value Creation in Virtual Communities - Porter, Constance Elise; Devaraj, Sarv; Sun, Daewon (Journal of Management Information Systems, 2013)
Does a firm get any extra value from investing resources in sponsoring its own virtual community above and beyond the value that could be created for the firm, indirectly, via customer-initiated communities? If so, what explains the extra value derived from a firm-sponsored virtual community and how might this understanding inform managers about appropriate strategies for leveraging virtual communities as part of a value-creating strategy for the firm? We test two models of virtual community to help shed light on the answers to these questions. We hypothesize that in customer-initiated virtual communities, three attributes of member-generated information (MGI) drive value, while in firm-sponsored virtual communities, a sponsoring firm's efforts, as well as MGI, drive value. Drawing on information search and processing theories, and developing new measures of three attributes of MGI (consensus, consistency, and distinctiveness), we surveyed 465 consumers across numerous communities. We find that value can emerge via both models, but that in a firm-sponsored model, a sponsor's efforts are more powerful than MGI and have a positive, direct effect on the trust-building process. Our results suggest a continuum of value creation whereby firms extract greater value as they migrate toward the firm-sponsored model.
Keywords: attribution theory; co-creation; online communities; online trust; user-generated content; virtual communities

Credibility of Anonymous Online Product Reviews: A Language Expectancy Perspective - Jensen, Matthew L; Averbeck, Joshua M; Zhang, Zhu; Wright, Kevin B (Journal of Management Information Systems, 2013)
Online reviews play a significant role in forming and shaping perceptions about a product. With the credibility of online reviewers a frequent question, this research investigates how potential buyers assess the credibility of anonymous reviewers. Technology separates the reviewer from the review, and potential buyers are left to rely on characteristics of the review itself to determine the credibility of the reviewer. By extending the language expectancy theory to the online setting, we develop hypotheses about how expectancy violations of lexical complexity, two-sidedness (highlighting positive and negative aspects of a product), and affect intensity influence credibility attributions. We present an experiment in which favorable experimental reviews were generated based on actual reviews for a digital camera. The results indicate that two-sidedness caused a positive expectancy violation resulting in greater credibility attribution. High affect intensity caused a negative expectancy violation resulting in lower credibility attribution. Finally, high reviewer credibility significantly improved perceptions of product quality. Our results demonstrate the importance of expectancies and violations when attributing credibility to anonymous individuals. Even small expectancy violations can meaningfully influence reviewer credibility and perceptions of products.
Keywords: affect intensity; credibility; electronic word of mouth; eWOM; language expectancy theory; lexical complexity; persuasion; product reviews; two-sidedness

Risk Mitigation in Supply Chain Digitization: System Modularity and Information Technology Governance - Xue, Ling; Zhang, Cheng; Ling, Hong; Zhao, Xia (Journal of Management Information Systems, 2013)
Firms face significant risk when they adopt digital supply chain systems to transact and coordinate with their partners. Drawn upon modular systems theory, this study proposes that system modularity mitigates the risk of adopting digital supply chain systems and therefore motivates firms to digitize more of their supply chain operations. The study theorizes how the risk-mitigating effect of system modularity can be enhanced by the allocation of decision rights to the IT (information technology) unit. The main logic is that IT managers with more domain IT knowledge can better utilize their knowledge in decision making to achieve effective system modularity. We tested these theoretical propositions using a survey study of Chinese companies and found empirical support. We also found that the allocation of decision rights to the IT unit does not directly mitigate the perceived risk of digital supply chain systems, which highlights the role of decision allocation to the IT unit as a key moderator in risk mitigation. The study generates theoretical and practical implications on how IT governance and system modularity may jointly mitigate risk and foster supply chain digitization.
Keywords: IT governance; modular systems; risk mitigation; supply chain management (SCM)

Firm Strategy and the Internet in U.S. Commercial Banking - Goh, Kim Huat; Kauffman, Robert J (Journal of Management Information Systems, 2013)
As information technology (IT) becomes more accessible, sustaining any competitive advantage from it becomes challenging. This has caused some critics to dismiss IT as a less valuable resource. We argue that, in addition to being able to generate strategic advantage, IT should also be viewed as a strategic necessity that prevents competitive disadvantage in rapidly changing business environments. We test a set of hypotheses on strategic advantage and strategic necessity in the context of Internet banking investments for the population of U.S. Federal Deposit Insurance Corporation (FDIC) banks from 2003 to 2005. We seek to understand whether their IT investments were made as a strategic choice or as a result of strategic necessity. Our econometric analysis suggests that IT investments (1) were made to complement firm strategy for strategic advantage as well as due to strategic necessity, and (2) paid off by enhancing firm performance and addressing the issue of strategic necessity. In addition, our analysis reveals the simultaneous relationship between performance and IT investments: high-performing banking firms appear to have been more likely to invest in IT. The econometric analysis methods that we employ made it possible for us to state all of our quantitative findings for the FDIC data to be stated after adjusting for this endogeneity through simultaneity.
Keywords: banking; econometrics; financial services IS and technology; Internet banking; IT investment; strategic advantage; strategic necessity; strategy; transaction costs

Health-Care Security Strategies for Data Protection and Regulatory Compliance - Kwon, Juhee; Johnson, M Eric (Journal of Management Information Systems, 2013)
This study identifies how security performance and compliance influence each other and how security resources contribute to two security outcomes: data protection and regulatory compliance. Using simultaneous equation models and data from 243 hospitals, we find that the effects of security resources vary for data breaches and perceived compliance and that security operational maturity plays an important role in the outcomes. In operationally mature organizations, breach occurrences hurt compliance, but, surprisingly, compliance does not affect actual security. In operationally immature organizations, breach occurrences do not affect compliance, whereas compliance significantly improves actual security. The results imply that operationally mature organizations are more likely to be motivated by actual security than compliance, whereas operationally immature organizations are more likely to be motivated by compliance than actual security. Our findings provide policy insights on effective security programs in complex health-care environments.
Keywords: compliance; data breaches; healthcare; organizational maturity; security

The Impact of Cloud Computing: Should the IT Department Be Organized as a Cost Center or a Profit Center? - Choudhary, Vidyanand; Vithayathil, Joseph (Journal of Management Information Systems, 2013)
How does the adoption of cloud computing by a firm affect the organizational structure of its information technology (IT) department? To analyze this question, we consider an IT department that procures IT services from a cloud computing vendor and enhances these services for consuming units within the firm. Our model incorporates the competitive environment faced by the cloud vendor, which affects the price of the cloud vendor. We find that when the cloud vendor faces intense competition, the cost-center organizational model is preferred over the profit-center model. Infrastructure services such as basic storage, e-mail, and raw computing face intense competition, and our results suggest that such services be offered as a free corporate resource under the cost-center organizational structure. When the cloud vendor has pricing power, a profit-center organizational structure is likely to be preferred. Our results suggest that highly differentiated services such as cloud-based enterprise-wide enterprise resource planning or business intelligence be offered under the profit-center structure. Finally, the profit-center structure provides greater internal quality enhancement to cloud-based IT services than the cost center.
Keywords: chargeback; cloud; cloud computing; cost center; infrastructure-as-a-service; IT governance; platform-as-a-service; profit center; software as a service; supply chain

Channel Capabilities, Product Characteristics, and the Impacts of Mobile Channel Introduction - Bang, Youngsok; Lee, Dong-Joo; Han, Kunsoo; Hwang, Minha; Ahn, Jae-Hyeon (Journal of Management Information Systems, 2013)
Drawing on the notion of channel capability, we develop a theoretical ramework for understanding the interactions between mobile and traditional online channels for products with different characteristics. Specifically, we identify two channel capabilities-access and search capabilities-that differentiate mobile and online channels, and two product characteristics that are directly related to the channel capabilities-time criticality and information intensity. Based on this framework, we generate a set of predictions on the differential effects of mobile channel introduction across different product categories. We test the predictions by applying a counterfactual analysis based on vector autoregression to a large panel data set from a leading e-market in Korea that covers a 28-month period and contains all of the transactions made through the online and mobile channels before and after the mobile channel introduction. Consistent with our theoretical predictions, our results suggest that the performance impact of the mobile channel depends on the two product characteristics and the resulting product-channel fit. We discuss implications for theory and multichannel strategy.
Keywords: counterfactual analysis; electronic commerce; mobile commerce; multichannel strategy; multivariate baseline analysis; substitute and complement; time series; vector autoregression

The Competitive Business Impact of Using Telemedicine for the Treatment of Patients with Chronic Conditions - Rajan, Balaraman; Seidmann, Abraham; Dorsey, Earl R (Journal of Management Information Systems, 2013)
The use of telemedicine to improve patients' health has been evolving rapidly over the past few years. Initially, our clinical research focus was on the development of effective ways for treating chronically ill patients, mostly those suffering from neurological disorders. While we identified the medical benefits of this information technology, there remains a salient strategic question addressing its competitive impact. In this paper, we analyze the impact of introducing telemedicine on the market share of the specialty hospital deploying this technology and on the competing hospitals in the region. Our analytical results prove that, contrary to earlier expectations, the value of telemedicine relative to in-person visits is not always increasing with the distance of the patient from the hospital. This result explains why patients located far from the specialty hospital may not prefer telemedicine care. We prove that telemedicine, unlike numerous other e-commerce applications, does not lead to the "winner takes all" phenomenon. We found that the advent of telemedicine changes the competitive equilibrium between specialty hospitals and community hospitals. Both hospital types will significantly benefit from delivering complementary care to chronic patients, rather than continuing to compete with each other.
Keywords: chronic conditions; community hospitals; economics of telemedicine; health-care competition; health-care Information Technology; telemedicine

Competing with Piracy: A Multichannel Sequential Search Approach - Geng, Xianjun; Lee, Young-Jin (Journal of Management Information Systems, 2013)
We consider an online market where consumers may obtain digital goods from two mutually exclusive channels: a legitimate channel consisting of many law-abiding retailers and a piracy channel consisting of many piracy services. We analyze consumer choice, retailer strategy, and piracy control using a sequential-search approach where information acquisition is costly for some consumers (nonshoppers), yet costless for others (shoppers). First, we show that a nonshopper's channel choice is determined by a simple comparison of two reservation prices. Second, we analyze how piracy threats affect in-channel pricing among retailers. If the in-channel competition intensity among retailers is high, piracy does not affect retailer pricing. If the intensity is medium, retailers respond to piracy by giving up some shoppers and, surprisingly, raising prices. If the intensity is low, the legitimate channel loses some shoppers as well as some nonshoppers to the piracy channel. Third, we consider several mechanisms for fighting piracy and analyze their effects on firm profit and consumer surplus. Reducing piracy quality and increasing piracy search costs are both effective in controlling piracy, yet they affect consumer surplus differently. Reducing the number of piracy services is less effective in controlling piracy.
Keywords: channel competition; digital good; digital piracy; price dispersion; search cost

Network Structure and Observational Learning: Evidence from a Location-Based Social Network - Shi, Zhan; Whinston, Andrew B (Journal of Management Information Systems, 2013)
In recent years, there has been stellar growth of location-based/enabled social networks in which people can "check in" to physical venues they are visiting and share with friends. In this paper, we hypothesize that the "check-ins" made by friends help users learn the potential payoff of visiting a venue. We argue that this learning-in-a-network process differs from the classic observational learning model in a subtle yet important way: Rather than from anonymous others, the agents learn from their network friends, about whose tastes in experience goods the agents are better informed. The empirical analyses are conducted on a unique data set in which we observe both the explicit interpersonal relationships and their ensuing check-ins. The key result is that the proportion of checked-in friends is not positively associated with the likelihood of a new visit, rejecting the prediction of the conventional observational learning model. Drawing on the literature in sociology and computer science, we show that weighting the friends' check-ins by a parsimonious proximity measure can yield a more intuitive result than the plain proportion does. Repeated check-ins by friends are found to have a pronounced effect. Our empirical result calls for the revisiting of observational learning in a social network setting. It also suggests that practitioners should incorporate network proximity when designing social recommendation products and conducting promotional campaigns in a social network.
Keywords: experience goods; location-based social network; matrix factorization; observational learning; social effect; social networks

How Do Consumer Buzz and Traffic in Social Media Marketing Predict the Value of the Firm? - Luo, Xueming; Zhang, Jie (Journal of Management Information Systems, 2013)
Consumer buzz in the form of user-generated reviews, recommendations, and blogs signals that consumer attitude and advocacy can influence firm value. Web traffic also affects brand awareness and customer acquisition, and is a predictor of the performance of a firm's stock in the market. The information systems and accounting literature have treated buzz and traffic separately in studying their relationships with firm performance. We consider the interactions between buzz and traffic as well as competitive effects that have been overlooked heretofore. To study the relationship between user-initiated Web activities and firm performance, we collected a unique data set with metrics for consumer buzz, Web traffic, and firm value. We employed a vector autoregression with exogenous variables model that captures the evolution and interdependence between the time series of dependent variables. This model enables us to examine a series of questions that have been raised but not fully explored to date, such as dynamic effects, interaction effects, and market competition effects. Our results support the dynamic relationships of buzz and traffic with firm value as well as the related mediation effects of buzz and traffic. They also reveal significant market competition effects, including effects of both a firm's own and its rivals' buzz and traffic. The findings also provide insights for e-commerce managers regarding Web site design, customer relation management, and how to best respond to competitors' strategic moves.
Keywords: consumer buzz; firm value; online reviews; social media; stock market performance; vector autoregression; Web traffic

Consumer Learning and Time-Locked Trials of Software Products - Dey, Debabrata; Lahiri, Atanu; Liu, Dengpan (Journal of Management Information Systems, 2013)
The usefulness of a software product becomes obvious to consumers only after they get to experience it and, upon experiencing it, they may reach different conclusions regarding its true value. We examine the problem of designing free software trials under a general learning function. Our analyses lead to several new findings. We find that a time-locked trial is optimal only when the rate of learning is sufficiently large. It is not optimal in other situations, even when it has an overall positive effect on consumers' valuations. We also find that positive network effects have a minimal impact on this optimality. Interestingly, we find that neither the optimal trial period nor the optimal price is monotonically increasing in the rate of learning. At moderate rates, the software manufacturer pursues a dual strategy of offering a longer trial as well as a lower price. At higher rates of learning, the manufacturer does the opposite. Our results are robust, and incorporating possibilities such as a trial providing a signal of quality or learning being correlated with prior valuation has little impact on their applicability.
Keywords: consumer learning; experience goods; free trial; network effect; signaling; software trial; time-locked trial

Reducing Buyers' Uncertainty About Taste-Related Product Attributes - Markopoulos, Panos M; Clemons, Eric K (Journal of Management Information Systems, 2013)
It is becoming increasingly important for firms to know when to take steps to reduce buyers' uncertainty about products and services. This paper focuses on investments that firms can make to reduce buyers' uncertainty about taste-related product attributes. Using an analytical model, we show that firms should disclose more taste-related information when the customer segment they directly target represents a larger share of the overall market. We further show that there are practical ways by which managers can decide if such disclosure investments are financially beneficial to their firms. Specifically, we show that the variance of consumer reviews can guide such decisions. The paper's main contribution to the extant literature is to show that firms must consider the variance, but not the mean, of buyer reviews, to determine the need to invest in reducing consumer uncertainty about taste-related attributes. The papers's findings are managerially important due to the ubiquity of consumer reviews. They are novel because most of the previous literature views the mean of the review as the key indicator. Finally, they are general in their applicability since they are independent of any assumptions about heuristics that buyers may use to ascertain product quality from the reviews of previous buyers.
Keywords: consumer uncertainty reduction; information dissemination; product ratings; product review variance

Horizontal Allocation of Decision Rights for On-Premise Applications and Software-as-a-Service - Winkler, Till J; Brown, Carol V (Journal of Management Information Systems, 2013)
This study addresses a major gap in our knowledge about the allocation of information technology (IT) decision rights between business and IT units at the application level, including the governance of applications delivered on-premise versus those delivered with a software-as-a-service (SaaS) model. Building on the findings from a multicase qualitative study of organizations that had adopted the same SaaS application, we draw on three theoretical lenses (agency theory, transaction cost economics, and knowledge-based view) to develop a theoretically grounded model with three organization-level factors, three application-level factors, and application-level IT governance. Hypotheses derived from the model, as well as a set of differential hypotheses about factor influences due to on-premise versus SaaS delivery, are tested with survey responses from 207 firms in which application-level governance is operationalized with two dimensions: decision control rights (decision authority) and decision management rights (task responsibility). Three antecedents (origin of the application initiative, scope of application use, business knowledge of the IT unit) were significantly associated with application governance postimplementation, and the on-premise/SaaS subgroup analyses provide preliminary evidence for the mode of application delivery as a moderator of these relationships. Overall, this study contributes to a growing body of research that takes a more modular approach to studying IT governance and provides theoretical explanations for differing application-level governance designs.
Keywords: agency theory; application governance; cloud computing; field survey; IT governance; knowledge-based view; multigroup analysis; software-as-a-service; transaction cost economics

The Governance and Control of Open Source Software Projects - Di Tullio, Dany; Staples, D Sandy (Journal of Management Information Systems, 2013)
A comprehensive set of governance mechanisms and dimensions were investigated to identify combinations of mechanisms that are effectively used together in on-going volunteer-based open source software (OSS) projects. Three configurations were identified: Defined Community, Open Community, and Authoritarian Community. Notably, Defined Community governance had the strongest coordination and project climate and had the most extensive use of outcome, behavior, and clan control mechanisms (controller driven). The controls in the Defined Community governance configuration appear to effectively enable open, coordinated contribution and participation from a wide variety of talented developers (one of the virtues of open source development) while managing the development process and outcomes. The results add to our theoretical understanding of control in different types of information systems projects, as the combination of control modes found in OSS projects is different from those found in previous research for internal or outsourced information systems development projects. This could be due to unique features of OSS projects, such as volunteer participation and the controller being part of the development team. The results provide guidance for practitioners about how to combine 19 identified governance mechanisms into effective project governance that stimulates productive participation.
Keywords: configuration theory; control modes and mechanisms; control theory; coordination; development activity; governance; IS development; open source software projects; OSS; project climate

A Process Model of Complementarity and Substitution of Contractual and Relational Governance in IS Outsourcing - Huber, Thomas L; Fischer, Thomas A; Dibbern, Jens; Hirschheim, Rudy (Journal of Management Information Systems, 2013)
This paper develops a process model of how and why complementarity and substitution form over time between contractual and relational governance in the context of information systems outsourcing. Our analysis identifies four distinct process patterns that explain this formation as the outcome of interaction processes between key elements of both contractual and relational governance. These patterns unveil the dynamic nature of complementarity and substitution. In particular, we show that the relationship between contractual and relational governance oscillates between complementarity and substitution. Those oscillations are triggered mainly by three types of contextual events (goal fuzziness, goal conflict, and goal misalignment). Surprisingly, substitution of informal control did not occur as an immediate reaction to external events but emerged as a consequence of preceding complementarity. Thus, our study challenges the prevailing view of an either/or dichotomy of complementarity and substitution by showing that they are causally connected over time.
Keywords: contract; contractual governance; formal control; informal control; information systems outsourcing; outsourcing; process view; relational governance; trust

Evolution of Governance: Achieving Ambidexterity in IT Outsourcing - Cao, Lan; Mohan, Kannan; Ramesh, Balasubramaniam; Sarkar, Sumantra (Journal of Management Information Systems, 2013)
Two types of information technology (IT) outsourcing governance-contractual and relational-are commonly employed to address different goals in IT service management in outsourcing arrangements. Contractual governance helps improve efficiency in an outsourcing relationship, whereas relational governance facilitates satisfying changing business needs. Past literature argues that both forms of governance are important and that an appropriate balance between them is necessary. This study finds that these two forms of governance often conflict with one another. We contribute to the research on IT outsourcing governance by opening the black box of the evolutionary process of achieving ambidexterity in this context. Organizations shift their focus between contractual and relational forms of governance in an attempt to develop practices that address conflicts between the two forms. We present the findings from a qualitative study of an organization that outsourced its IT services. Our findings reveal how a balance between contractual and relational governance can be achieved through a process we call the ambidexterity pendulum.
Keywords: IT outsourcing; IT outsourcing governance; organizational ambidexterity; outsourcing; outsourcing governance; pendulum process

The Information Artifact in IT Governance: Toward a Theory of Information Governance - Tallon, Paul P; Ramirez, Ronald V; Short, James E (Journal of Management Information Systems, 2013)
In recent years, chief information officers have begun to report exponential increases in the amounts of raw data captured and retained across the organization. Managing extreme amounts of data can be complex and challenging at a time when information is increasingly viewed as a strategic resource. Since the dominant focus of the information technology (IT) governance literature has been on how firms govern physical IT artifacts (hardware, software, networks), the goal of this study is to extend the theory of IT governance by uncovering the structures and practices used to govern information artifacts. Through detailed interviews with 37 executives in 30 organizations across 17 industries, we discover a range of structural, procedural, and relational practices used to govern information within a nomological net that includes the antecedents of these practices and their effects on firm performance. While some antecedents enable the speedy adoption of information governance, others can delay or limit the adoption of information governance practices. Once adopted, however, information governance can help to boost firm performance. By incorporating these results into an extended theory of IT governance, we note how information governance practices can unlock value from the ever-expanding mountains of data currently held within organizations.
Keywords: big data; data growth; information artifact; information governance; information life cycle management; information management; information risk; information value; IT governance

Centralizing Data Management with Considerations of Uncertainty and Information-Based Flexibility - Velu, Chander K; Madnick, Stuart E; Van Alstyne, Marshall W (Journal of Management Information Systems, 2013)
This paper applies the theory of real options to analyze how the value of information-based flexibility should affect the decision to centralize or decentralize data management under low and high uncertainty. This study makes two main contributions. First, we show that in the presence of low uncertainty, centralization of data management decisions creates more total surplus for the firm as the similarity of business units increases. In contrast, in the presence of high uncertainty, centralization creates more total surplus as the dissimilarity of business units increases. The pivoting distinction trades the benefit of reduction of uncertainty from dissimilar businesses for centralization (with cost saving) against the benefit of flexibility from decentralization. Second, the framework helps senior management evaluate the trade-offs in data centralization that drive different business models of the firm. We illustrate the application of these propositions formally using an analytical model and informally using case vignettes and simulation.
Keywords: economics of IS; flexibility and information systems decentralization; real options; uncertainty

Effects of Different Types of Free Trials and Ratings in Sampling of Consumer Software: An Empirical Study - Lee, Young-Jin; Tan, Yong (Journal of Management Information Systems, 2013)
Giving away trial software is a common practice for software developers to maximize the exposure of their products to potential consumers and to minimize the consumers' uncertainty about software quality. There are two types of free trials: (1) freeware, which consists of very basic features of focal software without a time lock, and (2) trialware, which has the full functionality of focal software with a time lock. In this paper, we study what factors make some free-trial software attract more potential adopters than others. Our empirical model under the traditional Bass-type diffusion examines the effects of the different types of free-trial software and ratings on consumer software sampling and reveals the dynamics of sampling over time. Using free-trial software downloading data on Download.com, we observe that the consumer software sampling process can be described by the theory of information diffusion. We find that user ratings affect sampling performance positively and that third-party ratings need to be positive to be effective. Finally, our results do not show any discernible differences between freeware and trialware with regard to their impact on sampling performance. This study contributes to the understanding of software free-trial practice from the perspective of consumer sampling growth of different types of free trials. Our findings can help design free-trial strategies to extrapolate the extent of consumer awareness of focal software and effectively convey its quality information to potential customers.
Keywords: freeware; Hausman-Taylor estimation; information diffusion; online user and third-party ratings; software commercialization; software free trials; software sampling; trialware

Integrating Biosignals into Information Systems: A NeuroIS Tool for Improving Emotion Regulation - Astor, Philipp J; Adam, Marc T P; Jer?i?, Petar; Schaaff, Kristina; Weinhardt, Christof (Journal of Management Information Systems, 2013)
Traders and investors are aware that emotional processes can have material consequences on their financial decision performance. However, typical learning approaches for debiasing fail to overcome emotionally driven financial dispositions, mostly because of subjects' limited capacity for self-monitoring. Our research aims at improving decision makers' performance by (1) boosting their awareness to their emotional state and (2) improving their skills for effective emotion regulation. To that end, we designed and implemented a serious game-based NeuroIS tool that continuously displays the player's individual emotional state, via biofeedback, and adapts the difficulty of the decision environment to this emotional state. The design artifact was then evaluated in two laboratory experiments. Taken together, our study demonstrates how information systems design science research can contribute to improving financial decision making by integrating physiological data into information technology artifacts. Moreover, we provide specific design guidelines for how biofeedback can be integrated into information systems.
Keywords: biofeedback; design science; decision-making processes; emotion regulation; financial decision making; IT artifacts; NeuroIS; serious games

Impact of Prior Reviews on the Subsequent Review Process in Reputation Systems - Ma, Xiao; Khansa, Lara; Deng, Yun; Kim, Sung S (Journal of Management Information Systems, 2013)
Reputation systems have been recognized as successful online review communities and word-of-mouth channels. Our study draws upon the elaboration likelihood model to analyze the extent that the characteristics of reviewers and their early reviews reduce or worsen the bias of subsequent online reviews. Investigating the sources of this bias and ways to mitigate it is of considerable importance given the previously established significant impact of online reviews on consumers' purchasing decisions and on businesses' profitability. Based on a panel data set of 744 individual consumers collected from Yelp, we used the Markov chain Monte Carlo simulation method to develop and empirically test a system of simultaneous models of consumer review behavior. Our results reveal that male reviewers or those who lack experience, geographic mobility, or social connectedness are more prone to being influenced by prior reviews. We also found that longer and more frequent reviews can reduce online reviews' biases. This paper is among the first to examine the moderating effects of reviewer and review characteristics on the relationship between prior reviews and subsequent reviews. Practically, this study offers businesses effective customer relationship management strategies to improve their reputations and expand their clientele.
Keywords: consumer review; elaboration likelihood model; hierarchical modeling; MCMC simulation; reputation systems; simultaneous equations model

Comprehension and Assessment of Product Reviews: A Review-Product Congruity Proposition - Huang, Liqiang; Tan, Chuan-Hoo; Ke, Weiling; Wei, Kwok-Kee (Journal of Management Information Systems, 2013)
This work anchors on the theories of cognitive fit and schema congruity to advance a review-product congruity proposition. The proposition states that the effects of product review content (either attribute or experience based) on the product review comprehension (reflected by perceived cognitive effort and review comprehension time) and assessment (manifested by perceived review helpfulness) of a consumer are contingent on the assessed product type (either search or experience product). The results of our first experiment support the proposition by revealing that the two matching conditions, (1) attribute-based reviews describing a search product and (2) experience-based reviews describing an experience product, could lead consumers to perceive higher review helpfulness and lower cognitive effort (subjective measure) to comprehend the reviews. However, the subjective evaluation of cognitive effort is not reinforced by the resulting review comprehension time (an objective assessment of comprehension effort), which suggests that consumers spend significantly more time processing reviews in the presence of the two matching conditions. A second experiment was conducted using the think-aloud method to gain further insights into the effects. We found that under the review-product matching conditions, consumers engage in deeper-level comprehension and expend more time in comprehension without realizing it, compared to consumers under the mismatching conditions. This research extends our current understanding of how review content and product reviews jointly influence the comprehension and assessment behavior of the consumer, and provides guidelines on the identification and the presentation of reviews to facilitate the judgment and decision making of potential consumers.
Keywords: cognitive fit; product reviews; review assessment; review comprehension; schema congruity

Neuroscience and a Nomological Network for the Understanding and Assessment of Emotions in Information Systems Research - Gregor, Shirley; Lin, Aleck C H; Gedeon, Tom; Riaz, Amir; Zhu, Dingyun (Journal of Management Information Systems, 2014)
Human emotions' role in phenomena related to information systems (IS) is increasingly of interest to research and practice, and is now informed by a burgeoning literature in neuroscience. This study develops a nomological network with an overarching view of relationships among emotions and other constructs of interest in IS research. The resulting 3-emotion systems' nomological network includes three interacting emotion systems: language, physiology, and behavior. Two laboratory experiments were conducted to test the nomological network, with six online travel service Web pages used as stimuli. The first study used paper-based self-report measures and qualitative comments, whereas the second included both self-reports and electroencephalography (EEG) measures. An outcome measure of e-loyalty was included in each study. The results of both studies showed positive and negative emotion-inducing stimuli were related to positive and negative emotions when viewing the Web sites as indicated by both self-reports and EEG data. In turn, positive and negative emotions as measured by both self-reports and EEG measures were linked to e-loyalty to some degree. This research is novel and significant because it is possibly the first in-depth study to link the study of emotions in IS with a sound theory base and multiple measurement approaches, including neuroscience measures. It shows that an EEG measure has some predictive power for an outcome such as e-loyalty. Implications of the research are that IS studies should distinguish between the different emotion systems of language and physiology, choose emotion measures carefully, and also recognize the intertwining of the emotion systems and cognitive processing.
Keywords: emotions in information systems; measurement; NeuroIS; neuroscience; nomological net