EFFECTS OF INQUIRY METHODS AND AMBIGUITY TOLERANCE ON PREDICTION PERFORMANCE*

This study examined the comparative effectiveness of four inquiry methods on a financial prediction task. Inquiry methods included the expert (E), devil's advocate (DA), and dialectical inquiry (DI) techniques as well as a combined devil's advocate-dialectical inquiry (DADI) technique. Also, the moderating effects of ambiguity tolerance were considered. Results indicated that when the state of the world was opposite to the assumptions underlying a plan, the DA, DI, and DADI approaches were all superior to the E approach. Further, for high ambiguity-tolerance subjects, the DA and DADI approaches led to significantly better prediction performance than the E approach, and the superiority of the DADI approach over the DI approach was marginally significant. Results suggest that decision makers' levels of ambiguity tolerance should be considered before recommending their use of either the DA or DADI approach as an ill-structured decision-making aid.     

INQUIRY METHOD,GOAL DIFFICULTY,AND CONTEXT EFFECTS ON PERFORMANCE

The decision-making in this study compares the performance of the dialectical inquiry (DI) and the devil's advocate (DA) techniques. In addition, the task was structured to include three levels of goal difficulty and three decision-making contexts. Over all contexts, there were no significant differences between the DI and DA methods. When the DI technique was employed, however, the context of the decision appeared to be an important factor. The goal-difficulty factor was associated with significant effects on decision quality only when individuals were divided according to their perceptions of goal relevancy and meaning. Finally, the order in which the contexts were considered was important.     

Formalized Dissent and Cognitive Complexity in Group Processes and Performance*

Research suggests that two methods of introducing dissent, the dialectic inquiry (DI) and devil's advocate (DA) methods, show promise for increasing the cognitive complexity of decision makers. We investigated the joint effects of formalized dissent and group cognitive complexity by manipulating the formalized dissent method (DI or DA) used by 25 interacting groups engaged in a complex, ill-structured planning task. Participants were classified as either high or low cognitive complexity and assigned to stratified groups with members of homogeneous complexity. Results indicated that: (1) DA groups produced higher quality assumptions but took longer to generate plans than did DI groups, (2) high complexity groups generated more recommendations relative to low complexity groups, and (3) DA groups with low complexity members produced lower quality recommendations and participated less equally in decision making than did the other groups. We conclude by discussing the implications of the results for formalized dissent, cognitive complexity, and assessing managerial performance.     

Structuring Conflict in Individual,Face-to-Face,and Computer-Mediated Group Decision Making: Carping Versus Objective Devil's Advocacy*

Researchers and practitioners have long been interested in the effects of cognitive conflict techniques on individual and group decision making. One widely used and studied technique, devil's advocacy (DA), has been found to enhance decision-making performance for both individuals and groups. Devil's advocacy begins with a recommended decision, followed by a critique of the decision that questions its assumptions. Researchers have not yet examined the effects of the objectivity of the devil's advocacy comments in computer-mediated environments. This paper reports the results of a laboratory experiment that focused on this question by comparing the effects of an objective, nonemotional DA to an emotional, “carping” DA within individuals and groups using either computer-mediated or face-to-face communication. In a manner consistent with prior research, both DA treatments were operationalized through the use of paper-based consulting reports. The results suggest that individuals and computer-mediated groups develop and consider more solution alternatives than face-to-face groups, and that subjects given the objective DA treatment produce higher quality decisions than those given the carping DA treatment. Face-to-face groups in the carping DA treatment considered the fewest alternative solutions in their decision-making process, reached the lowest solution quality, yet reached decision consensus in the fewest voting rounds. The practical implications of the results suggest that questioning statements made by a devil's advocate should be objective, regardless of group communication condition. Carping devil's advocacy appears to stifle group decision outcomes when groups are using face-to-face communication.     

The Effects of Process and Outcome Similarity on Users' Evaluations of Decision Aids*

Decision aids (DA) used in online shopping contexts have been shown to improve users' product choices. Given that previous research (e.g., Byrne & Griffitt, 1973 ) has demonstrated the positive effects of perceived similarity on an individual's evaluation of others, this study investigates the effects of users' perceived similarity with a DA on their evaluations of that DA. More specifically, we investigate the effect of users' perceptions of the similarity between their own decision process and that followed by the DA to arrive at a recommendation (decision process similarity), as well as the similarity between the recommendations made by the DA and users' initial choices (outcome similarity), on their evaluations of the DA's usefulness and trustworthiness. The results of this study show that perceived process similarity exerts positive and significant effects on users' perceptions of the DA's usefulness and trustworthiness. However, the effects of perceived outcome similarity on trust are completely mediated by perceived process similarity. It is also observed that the level of the user's domain knowledge moderates the effects of perceived decision process similarity on both perceived usefulness and trustworthiness. These results have implications for DA design. It is important that designers consider the process by which users make decisions for themselves and align the DA's decision process with those of the user's, especially for the novice user. The full mediation of the effect of outcome similarity on trust by process similarity highlights how a similar decision process can mitigate some of the negative effects of outcome dissimilarity.     

The Role of Task Uncertainty in IT Project Team Advice Networks

Advice seeking is often the most critical success factor in today's IT project teams. To understand how advice seekers are motivated, we integrate the antecedents of advice seeking—as defined by network theory (Granovetter, 1983)—into a cost/benefit model based on expectancy theory (Vroom, 1964). To contribute to the research on advice network formation, we integrate the role of task uncertainty—one of the defining characteristics of IT projects—into that research (Wallace & Keil, 2004). Based on a controlled quasi‐experiment, this study demonstrates that when task uncertainty is low, individuals with attractive personalities and similar demographics will be sought out for advice more frequently, regardless of their knowledge and resources (i.e., the benefits to the advice seekers). However, when task uncertainty is high, individuals with greater knowledge and access to resources are sought out more often in an advice network. These results provide clarity to prior research that has found mixed results concerning the effectiveness of the traditional antecedents to advice seeking (e.g., knowledge, power, and transactive memory) (e.g., Xu, Kim, & Kankanhalli, 2010a). In addition, project managers may choose to alter their team structure in order to optimize the advice network based on the anticipated level of IT project risk or task uncertainty.     

Introduction to Innovation WITHIN and ACROSS Borders: A Review and Future Directions

Innovation is an integral part of every firm's ongoing operations. While new product and service creation is an essential task to ensure a firm's immediate success in the marketplace, process and supply chain innovations can also create a unique source of competitive advantage for the future. Encouraging innovative thinking, developing new innovations, and managing the processes by which those innovations are developed are critical aspects of today's firm. Consequently, research which aids in the creation and maintenance of innovative firms is an important topic of inquiry for research communities on innovation management, including the operations management and information systems communities. We review the literature in this important area and offer suggestions for future research on the following topics: innovation within a firm and across the supply chain, technology management, and new product and service development.     

Conflict of Interest Mitigation Procedures May Have Little Influence on the Perceived Procedural Fairness of Risk‐Related Research

Two between‐subject experiments explored perceived conflict of interest (COI)—operationalized as perceived procedural unfairness—in a hypothetical public–private research partnership to study the health risks of trans fats. Perceived fairness was measured as subjects’ perceptions that health researchers would be willing to listen to a range of voices and minimize bias (i.e., COI) in the context of a research project. Experiment 1 (n = 1,263) randomly assigned research subjects to a partnership that included (1) a combination of an industry partner, a university partner, and a nongovernmental organization (NGO) partner; and (2) one of three processes aimed at mitigating the potential for COI to harm the quality of the research. The procedures included an arm's‐length process meant to keep the university‐based research team from being influenced by the other partners, an independent advisory board to oversee the project, and a commitment to making all data and analyses openly available. The results suggest that having an industry partner has substantial negative effects on perceived fairness and that the benefit of employing a single COI‐mitigation process may be relatively small. Experiment 2 (n = 1,076) assessed a partnership of (1) a university and either an NGO or industry partner and (b) zero, one, two, or three of the three COI‐mitigation procedures. Results suggest there is little value in combining COI‐mitigation procedures. The study has implications for those who aim to foster confidence in scientific findings for which the underlying research may benefit from industry funding.     

Rule-Based Expert Systems and Linear Models: An Empirical Comparison of Learning-By-Examples Methods*

Building models of expert decision-making behavior from examples of experts’ decisions continues to receive considerable research attention. In the 1960's and 70's, linear models derived by statistical methods were studied extensively. More recently, rule-based expert systems derived by induction algorithms have been the focus of attention. Few studies compare the two approaches. This paper reports on a study that compared linear models derived by logistic regression with rule-based systems produced by two induction algorithms—ID3 and the genetic algorithm. The techniques performed comparably in modeling the experts at one task, graduate admissions, but differed significantly at a second task, bidder selection.     

The influence of follower mood on leader mood and task performance: An affective,follower-centric perspective of leadership

Based on the notion that leadership involves affective exchange (Dasborough, Ashkanasy, Tee & Tse, 2009), we hypothesize that a leader's mood and task performance can be determined in part by follower mood displays. In two laboratory experiments, leaders supervised teams where the team members were confederates instructed to display positive or negative moods. Results were that followers' mood influenced leader mood and task performance. Moreover, leaders of positive mood followers were judged to have performed more effectively and expediently than leaders of followers who expressed negative mood states. We replicated these findings in Study 2 and found further that leaders high on neuroticism performed less effectively than their low neuroticism counterparts when interacting with negative-mood followers. Collectively, by demonstrating that follower moods influence leader affect and behaviors, our studies provide support for a core element of the Dasborough et al. (2009) reciprocal affect theory of leadership.     

Impulse Balance and Multiple‐Period Feedback in the Newsvendor Game

Human subjects in the newsvendor game place suboptimal orders: orders are typically between the expected profit‐maximizing quantity and mean demand (“pull‐to‐center bias”). In previous work, we have shown that impulse balance equilibrium (IBE), which is based on a simple ex post rationality principle along with an equilibrium condition, can predict ordering decisions in the laboratory. In this study, we extend IBE to standing orders and multiple‐period feedback and show that it predicts—in line with previous findings—that constraining newsvendors to make a standing order for a sequence of periods moves the average of submitted orders toward the optimum.     

The Effects of Memory Structure on Using Rule-Based Expert Systems for Training: A Framework and an Empirical Test*

One justification for eliciting and representing the judgment strategy of an expert in a rule-based expert system (RBES) is to facilitate knowledge transfer to individuals with less expertise. However, prior research suggests complexities and potential problems when using RBESs for training. In this paper, a conceptual framework of user learning from RBESs is presented. It is proposed that learning may be ineffective when the problem representation of the RBES is inconsistent with the user's mental representation of the task-domain knowledge. An experiment was conducted to examine the effects of consistency (inconsistency) between the problem-solving strategy of RBESs and individuals' memory structures. Groups of subjects whose memory structure either matched or did not match two RBESs' problem-solving strategies were examined using an internal control evaluation task. The results suggest that learning was facilitated only for groups with congruence between the RBES's problem-solving strategy and a subject's memory structure.     

Using Advance Purchase Discount Contracts under Uncertain Information Acquisition Cost

We study the use of advance purchase discount (APD) contracts to incentivize a retailer to share demand information with a dual‐sourcing wholesaler. We analyze such contracts in terms of two practical considerations that are relevant in this context but have been overlooked by previous work that has largely studied the direct offer of APD to customers: the retailer's information acquisition cost and the wholesaler's limited information about that cost. The wholesaler's limited knowledge of the retailer's cost leads to a departure—from the normal “full observability” APD design—that is asymmetric and depends on the extent of unobservability; if the uncertainty is small (resp., large) then the optimal discount is higher (resp., lower) than in the case of full observability. An APD contract that ignores the retailer's cost or the wholesaler's uncertainty about it will yield fewer benefits for the wholesaler and the supply chain. We offer a numerical illustration (calibrated on real industry data) establishing that for a representative product, an APD contract can improve the wholesaler's profit margin by as much as 3.5%.     

A Depository Institution's Optimal Currency Supply Network Under the Fed's New Guidelines: Operating Policies,Logistics, and Impact

The overuse of its currency processing operations by depository institutions (DIs) has motivated the Federal Reserve (Fed) to propose new currency recirculation guidelines. The Fed believes that DIs should play a more active role in recirculating fit (i.e., usable) currency so that the societal cost of providing currency to the public is minimized. The Fed characterizes the overuse by the extent of cross shipping, a practice in which the same DI deposits and withdraws currency of the same denomination within five business days in the same geographic region. The Fed's proposal encourages DIs to fit sort and reuse deposited currency through two components: a custodial inventory program and a recirculation fee that would be charged on withdrawals of cross‐shipped currency. Given the geographical network of the various branches of a DI, the extent of its participation in the proposed programs depends on a variety of factors: the nature of demand and supply of currency, number and locations of the processing centers, and the resulting fit‐sorting, holding, and transportation costs. The interrelated nature of these decisions motivates the need for an integrated model that captures the flow of currency in the entire network of the DI. Based on our work with Brink's Inc., a leading secure‐logistics provider, we develop a mixed‐integer linear programming (MILP) model to provide managers of DIs with a decision‐making tool under the Fed's new guidelines. Broadly, we analyze the following questions: (i) Over all typical practical realizations of the demand for currency that a DI may face, and over all reasonable cost implications, is there a menu of “good” operating policies? (ii) What is the monetary impact of fit‐sorting and custodial inventories on a DI? and (iii) To what extent will the Fed's new guidelines address its main goal, namely, a reduction in the practice of cross shipping by encouraging DIs to recirculate currency?     

An Ecological Systems Perspective on Mentoring at Work: A Review and Future Prospects

After nearly 30 years as a subject of inquiry, mentoring remains a mainstay in the organizational literature, as relationships are arguably more important than ever to employees' personal and career growth. In this paper, we take an ecological perspective to situate and review topical areas of the literature with the intention of enhancing our understanding of how mentoring outcomes for protégés and mentors are determined not only by individual differences (e.g., personality) and dyadic factors (e.g., the quality of a relationship)—both of which represent the most frequently examined levels of analyses—but also the influences of the people from various social spheres comprising their developmental network, the larger organization of which they are a part, and macrosystem factors (e.g., technological shifts, globalization) that enable, constrain, or shape mentoring and other developmental relationships. Our review examines multi-level influences that shape mentoring outcomes, and brings into focus how the study of mentoring can be advanced by research at the network, organizational, and macrosystem levels. To help guide future research efforts, we assert that adult development and relational schema theories, Positive Organizational Scholarship, a social network perspective, signaling theory, and institutional theories can help to address emerging and unanswered questions at each ecological level.     

Planning Forward by Looking Backward: Retrospective Thinking in Strategic Decision Making*

Retrospective thinking occurs whenever one remembers something from the past, but one can also think retrospectively about hypothetical future events, by imagining that the event has already transpired and then working backward in the mind from the future toward the present. Designers, artists, planners, and other creative individuals utilize retrospective thinking when they mentally envision the object they wish to create and then thinkabout how it might be constructed. Some theorists and some previous research have suggested that forward and backward thinking are different cognitive processes, but there has been little investigation on the nature of these differences. This article examines the literature and describes a laboratory study designed to investigate retrospective thinking as a technique for increased idea generation. Subjects (n=64) were professional planners and managers with an average business experience of over 20 years. In a planning task, significantly more ideas were generated in the retrospective thinking mode than in the prospective mode, but the ideas were not found to be of greater quality. Evidence emerged that a subset of subjects were better able to make use of the retrospective technique, suggesting that selection along with training may be appropriate for the technique's mosteffective use.     

Relative Performance Evaluation and Risk Taking in Delegated Investment Decisions*

Providing proper incentives to firm managers is increasingly important in the current competitive environment. Analytical research has suggested that evaluating a manager's performance relative to that of a peer group, in conjunction with standard-based pay, can induce efficient risk-sharing between firm owners and managers while maintaining the latter's incentives to exert effort. To date, direct empirical tests of this proposition have not been reported. This study uses a laboratory experiment to test the effect of relative performance evaluation on the risk-aversion of delegated investment decisions. Project-specific risk is operationalized using operating leverage, in part because the variability of a project's operating profits generally increases with this variable, and in part because many of the new manufacturing approaches held to be important to competitive advantage require significant capital investments and attendant increases in operating leverage. Across two levels of environmental uncertainty, subjects under a relative (as opposed to absolute) performance standard selected investments with significantly higher project-specific risk. Also, as environmental uncertainty increased, subjects under an absolute standard significantly reduced the riskiness of their investments. In contrast, subjects shielded from environmental uncertainty by a relative standard chose investments of about equal riskiness under both low and high uncertainty conditions. If supported by future research, these findings would suggest that relative performance evaluation may reduce managers' reluctance to adopt risky capital investments, especially in firms operating in high-risk economic or technological environments.     

Strategic Assessment Model (SAM): A Multiple Criteria Decision Support System for Evaluation of Strategic Alternatives*

The evaluation of strategic alternatives is a particularly difficult task. This difficulty is due to the complexities inherent in the evaluation process and the lack of structured information. The evaluation process must consider a multitude of relevant information from both the internal and external environments of the organization. Various analytical and normative models have helped decision makers utilize large volumes of information in strategic evaluation; however, most of these models have some limitations. We present a multiple criteria decision support system, called strategic assessment model (SAM), that addresses some of the limitations inherent in the existing models. SAM captures the decision maker's beliefs through a series of sequential, rational, and analytical processes. The environmental forces—decomposed into internal, task, general opportunities, and threats—are used along with the analytic hierarchy process (AHP), subjective probabilities, the entropy concept, and utility theory to enhance the decision maker's intuition in evaluating a set of strategic alternatives.     

IS THE ENDOWMENT EFFECT AN EXPECTATIONS EFFECT?

A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Kőszegi and Rabin ( 2006 , Quarterly Journal of Economics, 121, 1133–1165) explains such endowment effect with a model of expectations‐based reference‐dependent preferences. Departing from past work, we conduct complementary experiments to disentangle expectations—verified probabilistic beliefs held by subjects—from other features of endowment—such as “assignment” to a good—hence allowing us to compare the effect of expectations with that of other variations. While mere assignment can affect choices, we do not find a large role in the effect for Kőszegi–Rabin expectations.     

Perceptions and Expected Immediate Reactions to Severe Storm Displays

The National Weather Service has adopted warning polygons that more specifically indicate the risk area than its previous county‐wide warnings. However, these polygons are not defined in terms of numerical strike probabilities (p_s). To better understand people's interpretations of warning polygons, 167 participants were shown 23 hypothetical scenarios in one of three information conditions—polygon‐only (Condition A), polygon + tornadic storm cell (Condition B), and polygon + tornadic storm cell + flanking nontornadic storm cells (Condition C). Participants judged each polygon's p_s and reported the likelihood of taking nine different response actions. The polygon‐only condition replicated the results of previous studies; p_s was highest at the polygon's centroid and declined in all directions from there. The two conditions displaying storm cells differed from the polygon‐only condition only in having p_s just as high at the polygon's edge nearest the storm cell as at its centroid. Overall, p_s values were positively correlated with expectations of continuing normal activities, seeking information from social sources, seeking shelter, and evacuating by car. These results indicate that participants make more appropriate p_s judgments when polygons are presented in their natural context of radar displays than when they are presented in isolation. However, the fact that p_s judgments had moderately positive correlations with both sheltering (a generally appropriate response) and evacuation (a generally inappropriate response) suggests that experiment participants experience the same ambivalence about these two protective actions as people threatened by actual tornadoes.