Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decision‐making authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision‐making authority and argue that the CIO's level of strategic decision‐making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decision‐making literature to identify the direct antecedents to the CIO's strategic decision‐making authority. A theoretical model is presented and empirically tested using survey data collected from a cross‐industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision‐making authority within the organization. The results also suggest that the CIO's strategic decision‐making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision‐making authority.     

Using Real‐Time Decision Tools to Improve Distributed Decision‐Making Capabilities in High‐Magnitude Crisis Situations*

Multi‐organizational collaborative decision making in high‐magnitude crisis situations requires real‐time information sharing and dynamic modeling for effective response. Information technology (IT) based decision support tools can play a key role in facilitating such effective response. We explore one promising class of decision support tools based on machine learning, known as support vector machines (SVM), which have the capability to dynamically model and analyze decision processes. To examine this capability, we use a case study with a design science approach to evaluate improved decision‐making effectiveness of an SVM algorithm in an agent‐based simulation experimental environment. Testing and evaluation of real‐time decision support tools in simulated environments provides an opportunity to assess their value under various dynamic conditions. Decision making in high‐magnitude crisis situations involves multiple different patterns of behavior, requiring the development, application, and evaluation of different models. Therefore, we employ a multistage linear support vector machine (MLSVM) algorithm that permits partitioning decision maker response into behavioral subsets, which can then individually model and examine their diverse patterns of response behavior. The results of our case study indicate that our MLSVM is clearly superior to both single stage SVMs and traditional approaches such as linear and quadratic discriminant analysis for understanding and predicting behavior. We conclude that machine learning algorithms show promise for quickly assessing response strategy behavior and for providing the capability to share information with decision makers in multi‐organizational collaborative environments, thus supporting more effective decision making in such contexts.     

The Effect of Team Leader Characteristics on Learning,Knowledge Application,and Performance of Cross‐Functional New Product Development Teams

This study examines how leadership characteristics in new product development teams affect the learning, knowledge application, and subsequently the performance of these teams. Using data from a study of 229 members from 52 high‐tech new product projects, we empirically demonstrate that team learning has a strong positive effect on the innovativeness and speed to market of the new products. Moreover, a democratic leadership style, initiation of goal structure by the team leader, and his or her position within the organization were positively related to team learning. Managerial implications of these results are discussed.     

Fostering Risk Taking in Research and Development: The Importance of a Project's Terminal Value

Large firms face a conflict in managing a portfolio of high-risk projects. When an ongoing project is thought to have a low likelihood of success, project team members take risks to improve its chances of success. However, upper-level managers who allocate resources tend to withhold resources from a project with a low likelihood of success in favor of others in the portfolio that look more promising. Because this paucity of resources influences project team members to avoid risk, the total effect of success likelihood on risk taking is conflicted. The influence on risk taking of a project's terminal value—defined as the value that remains in the firm in the event of project failure—is unequivocally positive, because both senior management resource allocation and project team risk-taking propensity are encouraged by terminal value. Thus, firms can override the ambivalent effect of likelihood of success on project decision making by focusing attention on a project's terminal value.     

A Framework for Examining the Interface between Operations and Information Systems: Implications for Research in the New Millennium*

Even though much research has been published in operations and information systems, both functional areas find their roots in other disciplines. While operations management evolved from operations research in the 1960s, the field of information systems is of more recent vintage and traces its original roots to computer science. Both disciplines now naturally have come closer together as information and process-technology-based changes force manufacturing firms to become more efficient and customer focused. Market and technology-driven e-commerce initiatives that are likely to dominate business strategies in the future cannot be successfully achieved without a successful integration of operations and information systems. In this paper, we present a unifying framework that can be used to better understand the management of the functional interface between operations and information systems. We also categorize and highlight the contributions of the articles that appear in this special research focus issue. Finally, research directions that emerge from our understanding of this interface are outlined in an effort to stimulate further thinking and research that can advance our knowledge of this interface area.     

A Structural Equation Model of New Product Design and Development*

This research uses structural equation modeling to analyze the effects of supplier assessment, Just‐In‐Time, and quality management strategies on new product design and development. A survey of senior managers who are members of the American Production and Inventory Control Society in the United States was used to test the relationships between the constructs in the model. In general, the survey results supported the proposed structural equation model. The data showed that supplier assessment and Just‐In‐Time strategies were correlated and affected the quality management strategy used, which in turn influenced the new product design and development strategy. The data also showed that the Just‐In‐Time strategy directly influenced the new product design and development strategy.     

Project‐Level Reuse Factors: Drivers for Variation within Software Development Environments*

Systematic reuse can dramatically improve software development productivity and quality even though a software reuse methodology may require substantial investments. Some projects may fail to achieve the targeted amounts of reuse within organizations that are overall successful in employing reuse. To explain such variation, this research explores the effects of project‐level factors in the success of software reuse. A model that relates project factors to project reuse success is developed using an information‐rich case study approach. The results are based on the insights obtained in a nominal group technique session, triangulated with structured interviews and comparative case studies. Success factors identified by the study relate to client influence, project culture, project attributes, and developer reuse experience. An organization that can successfully identify the factors affecting potential software reuse will be able to better target investments for the improvement of its reuse methodology and thus positively affect its software development productivity and quality.     

Coordinating Service‐Sensitive Demand and Capacity by Adaptive Decision Making: An Application of Case‐Based Decision Theory*

The subject of this article is the simultaneous choice of product price and manufacturing capacity if demand is stochastic and service‐level sensitive. In this setting, capacity as well as price have an impact on demand because several aspects of service level depend on capacity. For example, delivery time will be reduced if capacity is increased given a constant demand rate. We illustrate the relationship between service level, capacity, and demand reaction by a stylized application problem from the after‐sales services industry. The reaction of customers to variations in service level and price is represented by a kinked price‐demand‐rate function. We first derive the optimal price‐capacity combination for the resulting decision problem under full information. Subsequently, we focus on a decision maker (DM) who lacks complete knowledge of the demand function. Hence the DM is unable to anticipate the service level and consequently cannot identify the optimal solution. However, the DM will acquire additional information during the sales process and use it in subsequent revisions of the price‐capacity decision. Thus, this decision making is adaptive and based on experience. In contrast to the literature, which assumes certain repetitive procedures somewhat ad hoc, we develop an adaptive decision process based on case‐based decision theory (CBDT) for the price‐capacity problem. Finally, we show that a CBDT DM in our setting eventually finds the optimal solution, if the DM sets the price based on absorption costs and adequately adjusts the capacity with respect to the observed demand.     

Enterprise Resource Planning (ERP) Competence Constructs: Two‐Stage Multi‐Item Scale Development and Validation*

This paper defines and operationalizes eight ERP competence constructs. We define ERP competence as a portfolio of managerial, technical and organizational skills and expertise posited as antecedents to improved business performance occurring after an ERP system is operational and functionally stable. To improve responses to changes in markets and products, manufacturers are increasingly adopting ERP systems. However, anecdotal accounts indicate that the realization of ERP's potential benefits is rare. Because of its pervasive influence on manufacturing and business performance, the need for scientifically developed and tested multi‐item scales pertaining to ERP competence is highly relevant to manufacturing strategy research. We follow a two‐stage normative process of scale development. First, we identify a portfolio of eight generic constructs that are hypothesized to be associated with successful ERP adoption. Each construct is then operationalized as a multi‐item measurement scale by applying a manual item sorting technique iteratively to independent panels of expert judges until tentative reliability and validity is established. Second, we further refine and validate the multi‐item scales using survey data from 79 North American manufacturing users of ERP systems.     

Endogenous Adaptation: The Effects of Technology Position and Planning Mode on IT‐Enabled Change*

The redesign of information technology (IT)‐enabled work processes often necessitates fundamental design changes to the intended work process, the IT platform hosting the work process, or both. Research suggests that such design changes often can be traced to earlier decisions involving endogenous adaptation or internal organizational change. Two such decisions are a firm's technology position and planning mode. This study examines the relationship between technology position and planning mode in predicting the magnitude of design change in process redesign projects. The conceptual frame applied in examining these relationships involves a synthesis of Miles and Snow's adaptive cycle with elements central to concurrent engineering. Our results indicate that the magnitude of design change is related to differences in technology position and planning mode. To effectively implement organizational change, firms must leverage their IT platform by carefully timing IT investments in accordance with their adopted technology position. Directing the trajectory of a firm's IT platform and deploying it so as to complement the firm's technology position reduces design uncertainty, promoting reengineering success.     

The Impact of Geographic Proximity on What to Buy,How to Buy,and Where to Buy: Evidence from High‐Tech Durable Goods Market*

Social contagion effects due to geographical proximity refer to the social effects wherein the behavior of an individual varies with the behavior of other individuals who are geographically close. Although the influence of such effects on consumer choices has been established in several contexts, much of the extant studies have focused on its effect on consumers’ decision of whether to buy a new product or adopt a new innovation. There has been no systematic examination of the influence of geographic proximity on other aspects of consumers’ product buying process such as what to buy (i.e., brand choice), how to buy (i.e., the channel), and where to buy (i.e., retailers). Such effects can matter significantly in high‐technology and durable goods markets and therefore, it is critical to understand the scope of these on consumers’ choice of retailers and channel as well. Drawing on literatures from word of mouth effects, ecommerce, and consumers’ perception of risk in their purchase process, we develop a set of hypotheses on the effect of geographic proximity on consumers’ choices of what to buy, how to buy, and where to buy. Leveraging a microlevel dataset of purchases of personal computers, we develop brand‐, retailer‐, and channel‐related measures of proximity effects at the individual consumer level and estimate a joint disaggregate model of the three choices that make up a product purchase process to test these hypotheses. Our results indicate a significant contagion effect on each of the three choices. Furthermore, we find evidence of a greater effect of geographic proximity on inexperienced consumers—those who are new to the product category. Our results thus help develop a holistic understanding of the influence of social contagion effects on consumers’ decision making.     

Supplier Opportunism in Buyer–Supplier New Product Development: A China‐U.S. Study of Antecedents,Consequences, and Cultural/Institutional Contexts

Collaborating with a supplier in a buying firm's new product development (NPD) project is commonly advocated and adopted, but does not always improve project performance. Some pre‐existing collaboration contexts, such as buyer–supplier NPD projects, are especially exposed to supplier opportunism due to the uncertain nature of the collaboration process. Adopting agency theory and transaction cost theory perspectives, we examine: (i) contextual antecedents and project consequences of supplier opportunism and (ii) if these causal influences vary in different cultural and institutional contexts. Using a survey sample of 214 United States (U.S.) and 212 Chinese buying firms’ responses about buyer–supplier NPD projects, we find that supplier opportunism is significantly influenced by the task and relational contexts. We also show that supplier opportunism damages both design quality and efficiency, two aspects of project performance. When comparing U.S. to China, we find that task and relational contexts have a greater impact on supplier opportunism in the U.S., but design efficiency is less hurt by supplier opportunism there. Finally, we show challenges of preventing supplier opportunism in certain NPD collaboration contexts, and offer solutions for overcoming these challenges.     

Complementary Drivers of New Product Development Performance: Cross‐Functional Coordination,Information System Capability,and Intelligence Quality

Coordination efforts that access and align relevant cross‐functional expertise are regarded as an essential element of innovation success. In recent years, these efforts have been further augmented through complementary investments in information systems, which provide the technological platforms for information sharing and coordination across functional and organizational boundaries. Somewhat overlooked has been the critical mediating role of the intelligence gained through these efforts and capabilities. This study draws on the theory of complementarity to elaborate on the nature of this mediating concept. Theoretical predictions of the model are tested using instrument variable regression analysis of data collected from a sample of publicly traded US manufacturing firms. The findings suggest that the effects of both internal and external coordination on market intelligence and supply‐chain intelligence are moderated by the firm's information system capability. The effect of both types of intelligence quality on new product development performance was contingent with the effects being enhanced (attenuated) when the market conditions were dynamic (stable). The results are robust to common‐method bias, endogeneity concerns, and alternative estimation methods.