ALBERT

Description: This study presents an investigation of the relationship between internalization of ISO 9000 practices and the development of intellectual capital within organizations. We posit that intellectual capital, which comprises of human capital, organizational capital, and social capital, leads to improved processes in an organization. Process improvement, in turn, results in superior operational performance. Using a sample of 321 ISO 9001 certified organizations, the hypothesized relationships are tested by means of the structural equation modeling technique. The results of this study lend strong support for the hypotheses and show that performance benefits from the internalization of ISO 9000 standards occur mainly through the development of human and organizational capital, and the consequent improvement in business processes. This study discusses theoretical and managerial implications, and presents directions for future research.

Description: This paper presents a methodology for developing a spare parts inventory management system with a focus on the nuclear power sector. Often, demand for spare parts is highly intermittent and cannot be accurately forecasted through traditional methods. Examples include nuclear power generation equipment, ground space systems, and aircraft engine parts. We take a data-driven engineering management approach and develop a four-step methodology for spare parts management in such environments. These steps comprise an influence diagram for identifying relevant factors, weighting of influences through the analytic hierarchy process, grouping parts according to inventory criticality indices, and the development of base stock inventory policies for each group. This approach allows the system to be actively managed within a continuous improvement framework through employee engagement and input, and mathematical assumptions are not made in the models. To our knowledge, no such integrated, comprehensive methodology for spare parts has been developed. The techniques employed in this research can be effectively used together to holistically manage the entire spare parts process, or they may be used separately to manage portions of the process. This paper provides an overview of the methodology, and the entire approach is illustrated via a test bed nuclear power generation facility.

Description: This study investigates the influence of supply chain portfolios on the paradox of exploration and exploitation within interfirm collaborations. This study deploys two supply chain portfolio characteristics, supplier diversity and repeated partnerships, to explain the evolution of technological innovations and supply chain portfolios. It tests a set of hypotheses using a longitudinal study of 76 Taiwanese high-tech companies between 2001 and 2005. The findings support the premise that a diverse supplier base and deep familiarity with individual suppliers stimulate firms’ exploration and exploitation activities. This study also finds that the threshold effects of these two characteristics on exploration activities clarify how determinants of firms’ supply chain portfolios influence the developmental paths in the firm's evolution of exploration and exploitation activities.

Description: Researchers have argued that specialization within groups yields productivity gains. We evaluate this statement with a focus on groups of Ph.D. students. Using an established technique in computer science called Latent Dirichlet Allocation, we construct a novel measure of the dispersion of Ph.D. students’ research interests based on their dissertation abstracts. We then relate this measure to Ph.D. group publications. For our study, we use a rich dataset on groups of Ph.D. students who studied at a major Swiss University, during the 1993–2008 period. We find robust evidence that within-group knowledge specialization is associated with a larger number of publications. However, when specialization increases beyond a critical level, it hinders the group’s publication output. We interpret these results as an indication that gains, in the amount of research output, can be achieved if Ph.D. students specialize according to their comparative advantages. However, beyond a certain level, knowledge specialization has a detrimental impact on research output, due to increasing communication costs and an increased likelihood of conflict insurgence.

Description: This study elucidates how a firm accesses external technological knowledge (TK) and utilizes such TK, facilitated by slack resources, to determine the scope of technological development. We examine data from 947 cooperative technology agreements among 248 electronics and information technology firms in Taiwan. The results demonstrate that there is an inverted U-shaped relationship between TK distance and the scope of technological development. Furthermore, we find that the moderating effect of unabsorbed slack can extend the inverted U-shaped relationship in the direction of higher levels of technological diversification and greater TK distance. Additionally, unabsorbed and absorbed slack, respectively, moderate the linear relationship between TK distance and a firm's scope of technological development toward two striking favorable contrasts: technological diversification and specialization. Unabsorbed slack plays a positive catalytic role in the creation of technological diversification; however, absorbed slack does not serve such a role.

Description: This paper develops a scenario generation framework for modeling demand and supply uncertainties. This framework is applied to a decision problem at an illustrative manufacturing company facing risks caused by uncertainties in end product demand and component availability. In particular, we focus on the impact of interdependent demand and supply uncertainty. To evaluate analytically the impact of interdependence between these two uncertainties, we analyze a simple newsvendor model with a bivariate normal distribution for demand and supply yield. Then, in more complex settings, we use scenarios based on copula functions, which can account for both linear and nonlinear dependences. These scenarios are used in conjunction with stochastic programming models to evaluate sourcing costs and risks under various conditions. In particular, we study a decision problem faced by a manufacturer which uses capacity reservation contracts in the presence of an unreliable supplier and uncertain product demand. Our results indicate that worst-case risks grow significantly when the dependences in uncertainties about demand and supply yield are stronger. We also highlight differences caused by linear and tail-dependent dependence structures. Based on the results, we argue that using the proposed framework to model uncertainties and their interdependences allows managers to better manage risks.

Description: Provides a listing of current staff, committee members and society officers.

Description: Design for supply chain has become an essential consideration while designing a new product. Previous studies pointed out that early supplier involvement can contribute to the success of the product development and enhance the competitive advantage of the enterprise. However, most of the studies coordinating supplier selection and supply chain configuration make these decisions during the detail design stage, which is the last phase of product design. This research aims to investigate the supply chain scenarios for their relevant performance at the conceptual design stage. The performance of different supply chain scenarios (i.e., centralized and decentralized), are compared and discussed. The results show that the decentralized supply chain scenario is advantageous for the time performance of the supply chain network, whereas the centralized supply chain scenario demonstrates superiority on the cost performance.

Description: In a previous paper in this journal named The TOC-Based Algorithm for Solving Multiple Constraint Resources, Ray considered an integrated heuristic approach named AHP/TOC comprising the analytic hierarchy process (AHP) and theory of constraints (TOC) in a multiple constraints resource product mix problem. This paper gives three typical examples and points out that the proposed approach would not generate the optimal solution. Furthermore, the reasons are analyzed in terms of the ranking approach of product priority using AHP and the adjustment approach of product mix after a new bottleneck has been identified. We clarify the cases under which the AHP/TOC method can and cannot output the optimal solution. Finally, some possible improvements are given.

Description: Rapid changes of new technologies, market dynamics, and swift fluctuation of customer tastes acerbate the needs for companies to identifying the emerging customer requirements and incorporate them in the conceptual design stage. Discovering emerging customer needs has great potential to create new product opportunities for the success of business. However, identifying customers’ requirements in an early design stage has not been well addressed in the traditional design methodology. Because emerging needs are usually not obvious at the budding stage, the related observations are rare in dataset. Traditional methods fall short of providing enough support of eliciting the below-the-radar needs. This paper reports a new approach to identify emerging customer needs in the growing popular online interactive environment with customer participation. The Bayes factor, a methodology to quantify the occurrence possibility of a certain event, is used to calculate the likelihood that current offering cannot meet the customer's requirements whenever a new specification is incorporated. With the sequential input from customers, a series of the Bayes factor value can then be calculated as the weight of evidence that emerging customer needs appear. We show that the decreased value will be the potentially emerging needs which cannot be satisfied by the current product family. Numerical and analytical results are derived to demonstrate the viability and effectiveness of the proposed approach.

Description: Interorganizational relationships are an integral part of an organization's decision-making process. The reason is that an organization's decision affects and is affected by the decision of its partners, particularly in the context of technology adoption and diffusion. Therefore, it is important to explore the role of this social network of organizations in shaping the process of technology diffusion. We conduct a series of experiments using the agent-based simulation modeling technique to identify strategically located firms in a network that can significantly influence the process of software diffusion. Our findings suggest that: 1) structural location of organizations does significantly influence the process of diffusion; and 2) the criteria for identifying strategically located firms depend on contextual factors, such as network topology, network density, and interoperability costs. To illustrate the practical use of these results, we propose a “network-aware” pricing strategy that takes advantage of information regarding organizational social networks. We illustrate that contrary to prevalent practice in the enterprise software market, where firms are generally targeted on the basis of their size, network-aware pricing has the potential to facilitate the development of a more effective market penetration strategy.

Description: This study extends quality management from an individual company perspective to a supply chain perspective. We propose a concept of supply chain quality integration (SCQI) that consists of internal, supplier, and customer integration for quality improvement, and develop a model that specifies the relationships among competitive hostility, the organization-wide approach to quality, three types of SCQI, and quality-related performance. We test the model using data collected from 291 high-performance manufacturing plants from ten countries. The results indicate that competitive hostility has a positive effect on the organization-wide approach to quality, and that both have positive effects on SCQI. In addition, internal quality integration significantly enhances external quality integration with both suppliers and customers. Further, internal quality integration significantly improves all quality-related performance (i.e., product quality, cost, delivery, and flexibility), and both supplier and customer quality integration significantly improve cost performance. Whereas customer quality integration significantly improves delivery performance and supplier quality integration significantly improves quality performance, only internal quality integration can improve flexibility performance. The findings reveal how different types of SCQI are related to quality-related performance and highlight internal quality integration as a core strategic resource for quality improvement. As such, they provide important managerial insights for supply chain quality managers to improve quality-related performance.

Description: This paper considers a sourcing problem faced by a manufacturer who outsources the manufacturing of a product to one of several competing suppliers, whose cost and quality capabilities are unknown. We consider a two-stage sourcing process in which the first stage is the qualification stage, while the second stage is the supplier selection stage. In the first stage, the manufacturer exerts effort to learn about the quality level of each of the suppliers and then must determine the set of qualified suppliers, subject to some tolerance for error. In the second stage, the manufacturer runs a price-only procurement auction, in which the qualified suppliers compete for the manufacturer’s business. We model this two-stage sourcing process with the goal of obtaining insights into manufacturer’s optimal decisions. We seek to determine the optimal qualification standard, the optimal amount of effort to be exerted in the qualification process and the appropriate tolerance for error in the qualification process, and to understand the interactions between these decision variables. We are particularly interested in understanding how the manufacturer can design the process to 1) ensure the firm only sources from qualified suppliers and 2) encourage competition among the suppliers during supplier selection.

Description: We explore the boundary conditions of Christensen's theory of disruption. Using technological changes that were potentially disruptive to the manufacturers of industrial robots as the context, we find that, unlike Christensen's suggestions, large hydraulic robot manufacturers introduced new products with the disruptive technology fairly early during the changes. We extend Christensen's theory by suggesting that the boundary conditions of the theory are more nuanced than what the extant literature suggests.

Description: To gain competitive leverage, firms that design and develop complex products seek to optimize the organization structure in their new product development (PD) projects. The overlapped process is a fundamental feature of concurrent engineering, which not only reduces project duration but also increases coordination, communication, and interaction between organizational units. In order to reduce complexity of coordination, this paper proposes a design structure matrix (DSM) method for measuring interaction strength and clustering organizational units. This paper analyzes the impact of overlapping on interaction strength between teams performing these overlapped activities. Further, evolution DSM and sensitivity DSM are constructed for representing evolution degree and sensitivity degree. Based on the concepts of overlapping ratio and relative coordination frequency, this paper proposes a quantitative model using the evolution DSM and sensitivity DSM to measure the interaction strength between teams performing overlapped activities. The two-stage clustering criterion model is proposed for clustering numerical DSM, of which the first-stage clustering criterion is the maximization of the added average interaction strength of the selected organizational units and the second-stage clustering criterion is the minimization of the total coordination time of the PD project. An industrial example is provided to illustrate the proposed model. Results indicate that the clustered numerical DSM can reduce coordination time significantly. The model yields and reinforces several managerial insights, including: how to analyze the interaction strength based on overlapping, the impact of interaction strength on clusters and coordination time.

Description: In the last decade, industrial research for sustainable development and environment has become more strategically oriented, due to increasing of environmental pressures coming from local laws, stakeholders, and final customers. The goal of this research is to create a methodical approach for integrating the development of environmental and quality audits by prioritizing corrective actions (CA). The work starts and develops within a firm that produces smartcards for mobile phones, where environmental audits have been integrated with quality audits by a fuzzy inference engine that addresses gravity determinations of environmental and quality nonconformities. The findings of this study provided some general principles to integrate environmental management system (EMS) in quality management system (QMS) development and suggested an implementation of Continuous Improvement, which addresses, analyzes, prioritizes, and measures activities within the Deming wheel.

Description: An ongoing challenge that enterprises currently face is that of fostering agile mindsets and behaviors among employees as necessary to achieve enterprise agility by leveraging IT. Although existing studies focus on the shortening business processes and adopting agile methods of system implementation, little attention is directed toward the “people” factor as a critical factor in enterprise agility. As a means to inspire agile mindsets and behaviors in employees, our study proposes an important concept, organizational identity of IT department which encourages organization members to achieve IT-enabled enterprise agility. We term such an identity as IT organizational identity. As rapid environmental changes continue, a firm's IT department should develop different types of IT organizational identities to maintain agile behaviors and mindsets among its employees. Therefore, our study reveals how IT departments can develop appropriate and positive organizational identity at various stages of organizational development.

Description: Provides a listing of current committee members and society officers.

Description: This study integrates theories on self-efficacy and the role theory to explore how role ambiguity influences employee task performance through task self-efficacy in a curvilinear manner. Openness to experience was found to moderate such a curvilinear relation. In addition, this study suggests that task self-efficacy mediated the relationship between role ambiguity and task performance, and between the interactive terms and task performance: role ambiguity, openness to experience. This study emphasizes the importance of considering both the positive and negative effects of role ambiguity, so that the maximum level of task self-efficacy, therefore task performance, can be achieved. It also highlights an individual difference variable, i.e., openness to experience, such that it comes to play in deciding levels of task efficacy and performance. Theoretical contributions, practical implications, and future research directions are discussed.

Description: Line extensions—variants of existing products with new appearances, functions, or forms—constitute a significant fraction of products launched each year. While line extensions typically share components with existing products, they can also cannibalize the demand of existing products. The choice of an appropriate set of line extensions is an important recurring issue for a firm and they must incorporate constraints that arise naturally from operational, financial, and marketing considerations, resulting in an analytically challenging optimization problem. We consider several variants of this problem, develop efficient heuristics that deliver near-optimal solutions, and derive a variety of interesting insights on the inherent tradeoffs in the selection of line extensions.

Description: Originating from the strategic management theory, resource-based view of firm believes that firms rely on bundles of resources which enable them to gain competitive advantage. Patent, as an integral part of intellectual capital, is an important resource for organizations building capabilities. With the heterogeneous in nature and imperfectly mobile, patent and its management becomes increasingly crucial for organizations facing globalization, information transparency, and intensified competition in developing a sustainable competitive advantage. Drawing upon the literature on strategic alliance, resource-based view, and patent management, we study how sharing patents can create sharing value added and synergy value added that enable participants in the patent alliance to obtain better financial payoff. Specifically, in this paper, we use the evolutionary stable strategy and replicator dynamic from evolutionary game theory to model the synergy effects in patent alliance. Our evolutionary dynamic modeling shows that an evolutionary stable state converges when organizations share patents, and supports that both patent sharing value added and synergy value added from patent alliance would be financially beneficial to organizations.

Description: Team member turnover presents significant risks to the performance of information systems development (ISD) projects. While prior studies have identified various antecedents of turnover with the general objective of reducing its occurrence, turnover cannot be completely prevented in practice. This study examines practices for mitigating the negative impact of turnover when it occurs. Since ISD is knowledge intensive and turnover typically involves knowledge degradation, this study focuses on key practices for reducing such knowledge degradation, i.e., job enlargement, use of electronic knowledge repositories, and succession planning. Our model for explaining the effects of the practices, based on the human capital and organizational forgetting theories, is tested through a survey of 138 project managers of ISD teams experiencing turnover. The results indicate that the use of electronic knowledge repositories and succession planning reduce the negative effect of turnover on the project performance. In contrast, job enlargement does not have a significant mitigating effect. This study contributes to research by looking beyond the antecedents and prevention of turnover to understand how it can be managed effectively. The findings also offer pragmatic suggestions for alleviating the detrimental effects of team member turnover on the ISD project performance.

Description: We use a principal-agent model to examine how venture capitalists can determine the ownership division when fund-seeking entrepreneurs possess private information on their disutility of effort. This situation is especially applicable to early-stage first-time entrepreneurs seeking funding, since no history exists on their potential performance. The venture capitalist must thus consider this private information by forming a belief on the entrepreneur's effort level toward the proposed investment opportunity. Formal modeling enables us to describe how the deal process unfolds and to build a simulation. We then identify a unique investor's belief and resulting ownership sharing that maximizes the return to the entrepreneur, one that maximizes the return to the venture capitalist, as well as one that maximizes the deal welfare. We also conjecture an ordering relationship between these critical beliefs and between their resulting ownership allocations. Furthermore, we identify conditions under which the venture capitalist should choose to revise the investment offer if rejected by the entrepreneur. This paper thus moves us closer to a comprehensive theory of venture investment decisions.

Description: Projects should create value. That is the desire and plan, but uncertainties cloud the paths to this destination. All project work should add value in terms of both the resources consumed and the benefits provided (e.g., scope, quality, technical performance, features, and functions), yet adding value is not always straightforward. Conventional techniques such as earned value management focus on time and cost but do not address quality, uncertainty, risk, and opportunity. An integrated approach is needed to account for all of these. This paper presents an integrated framework for quantifying and monitoring project value in terms of the key attributes that matter to its stakeholders. The framework distinguishes four types of project value: desired , goal , likely , and actual . Project management is value management. Project goals, capabilities, risks, and opportunities are evaluated with respect to each key attribute of the desired value. The project value, risk, and opportunity framework is useful for project planning, monitoring, control, and tradeoff decision support. An example project, developing a drone aircraft, demonstrates the framework's application to project planning and monitoring, including setting project goals that balance risk and opportunity. New indices for risk, opportunity, and learning are introduced to track project progress and operationalize new constructs for researchers.

Description: Software as a Service (SaaS) has been one of the fastest-growing delivery models in the software industry. The industry's trade press often considers economies of scale as the main benefit of SaaS firms, because information technology management and the associated resources are centralized at the SaaS vendors. However, centralized information technology management also requires the associated cost of expanding the firm's IT infrastructure to serve more customers. Intuitively, it is not necessary that the former effect must dominate the latter. Using public firm-level data from Compustat, this study attempts to analyze the economies of scale of SaaS firms relative to their traditional counterparts by using the stochastic frontier analysis (SFA) approach. Our empirical findings suggest SaaS firms have smaller economies of scale than traditional software firms. By utilizing the technical efficiency score obtained from SFA, we further examine the effects of R&D expense and advertising expense on technical efficiency. The analysis suggests that R&D expense, not the advertising expense, could be the cause of smaller economies of scale at SaaS firms.

Description: New information is the fuel that allows organizations to innovate. Yet the generation of new information may yield little benefit if existing practices prevent the firm from integrating new insights effectively. This study provides evidence that existing knowledge has both an enhancement effect that improves the firm's ability to benefit from new information, and an inhibition effect that lowers its motivation to learn. Firms that utilize a moderate level of existing knowledge benefit from new information more than firms that rely too little or too much upon existing knowledge. We call this optimal circumstance the “learning zone.” Furthermore, we find that the moderating effects of existing knowledge are stronger for new products of lower novelty that provide a similar learning context. In addition, as novelty increases, the prominence of the enhancement effect increases, whereas the inhibition effect becomes less prevalent. Highly novel products that are able to utilize existing knowledge are therefore most likely to benefit from new information. Existing technical knowledge is also found to inhibit the use of new information to a greater degree than market knowledge. The findings suggest that organizations should evaluate their reliance on existing knowledge and create a learning zone that provides the best condition for innovation.

Description: This paper studies the incentive issues that arise when firms in a multilevel supply chain create value jointly by investing in information sharing. We consider three types of information sharing: 1) supply-chain-wide information sharing; 2) downstream information sharing; and 3) upstream information sharing. We showed that the value of information sharing is higher for the upstream firms than for downstream firms regardless of information sharing type. Furthermore, the value of information sharing for any firm is higher under downstream information sharing than upstream information sharing, and the incremental value of information sharing to a firm decreases when more downstream firms share information. Therefore, if there is a cost associated with information sharing, then upstream firms have an incentive to free ride on downstream firms’ information sharing efforts. These results suggest that serious incentive misalignments may impede supply-chain-wide information sharing, even though it maximizes the value to the supply chain, and that a mechanism to distribute the overall surplus equitably may become essential. If a contract distributes the surplus according to each firm's incremental contribution to it, then firms that are in the middle levels of the supply chain receive a higher share than those that are in either end of the supply chain. That is, interestingly, neither the firm that possesses the information that is propagated throughout the supply chain by information sharing nor the most upstream firm realizes the highest value from information sharing obtains the maximum share of the surplus generated under such a contract.

Description: Effectuation and causation are two contrasting approaches to new business development. We argue that these two approaches are generic decision-making mechanisms that can coexist with one another and that they are configured in specific ways during different phases in the process of new product creation. These decision-making mechanisms are influenced by internal and external market factors: the nature of activities of a phase and the interplay between the business model and tactics. Our research framework is a generic two-stage competitive process that separates business models from tactics. We conducted an in-depth case study of a console game creation project to examine these decision-making mechanisms and to explore how business models are formulated and how each mechanism influences subsequent tactics during the new product creation process. Our findings suggest the following four decision-making configurations with unique modes of interplay between business models and tactics: effectuation centric, discovery centric, causation centric, and tactic centric. The theoretical insights on the linkage between decision-making mechanisms and business models have important practical implications for new product creation.

Description: We use a $k$ -means clustering algorithm to partition national electricity demand data for Great Britain and apply a novel profiling method to obtain a set of representative demand profiles for each year over the period 1994–2005. We then use a simulated dispatch model to assess the accuracy of these daily profiles against the complete dataset on a year-to-year basis. We find that the use of data partitioning does not compromise the accuracy of the simulations for most of the main variables considered, even when simulating significant intermittent wind generation. This technique yields 50-fold gains in terms of computational speed, allowing complex Monte Carlo simulations and sensitivity analyses to be performed with modest computing resource.

Description: A buyout option allows a bidder to acquire an auctioned product immediately at a posted price without going through the hassle of monitoring the auction process and submitting bids. This study examines the influence of three forms of buyout options, namely, temporary without reserve price (TempNR) (i.e., option ceases to exist once the first bid is received), temporary with reserve price (TempR) (i.e., option ceases to exist once the bid received is equal to or more than the reserve price), and permanent (Perm) (i.e., option is available until the end of the auction or when a bidder chooses to buy out) on the decision of a bidder in Internet auctions. The first two auction forms can be labeled as temporary buyout options. By using two studies, we demonstrate that a bidder is more likely to be averse to losses and exhibits a higher propensity to buy out in the presence of Perm. However, when faced with temporary buyout options (i.e., TempNR or TempR), a bidder would prevent other bidders from prematurely ending the auction by attempting to “remove” the buyout option.

Description: An important decision problem faced by design managers is identifying an appropriate sequence of many interrelated activities. This study presents an effective tool for determining the activity sequence with minimum total feedback length in a design structure matrix. This problem can be modeled as the linear ordering problem with quadratic objective function and is extremely difficult to solve even for small problem instances. We first transform this problem into two equivalent linear integer programming problems, which can be solved exactly when the number of interrelated activities is not large. To provide good solutions for large problem instances, we further develop an exchange-based heuristic. Finally, the usefulness of the proposed methodology is validated through case study, computer experiments, and benchmark analysis.

Description: The climate change debate and economic recovery strategies in various industries demand highly innovative projects featuring stretched performance goals for developing clean technology. These projects face multiple sources of uncertainty in high risk situations, and require specialized know-how and longer periods for revenue growth than their counterparts in other industries. We use data from 207 clean technology projects funded by the U.S. Advanced Research Projects Agency-Energy to conduct a comparative study of how operations design can hedge risk and enhance project valuation in technology development and deployment stages. We find that deployment feasibility is significantly and positively related to project valuation. On the other hand, stretched technical performance goals, development feasibility and market growth targets are associated with lower valuation. We also find some significant differences for these results across institution types: mature firms, start-ups, universities, and research centers. We examine the risk profile of these projects by technology and institution type, and discuss the managerial and policy implications for these findings.

Description: In many markets, battles are fought over technology standards. Often, these battles result in a single standard that achieves dominance. Decision making in standards battles is complex due to the lack of insights about the factors that influence the outcome of such battles. These include the characteristics of the standard, the stakeholders, the standard supporters, and the standard support strategies. The importance of these factors determines the dominance of a technology standard. This study investigates the usability of a multiattribute utility approach named fuzzy analytic hierarchy process in decision making in technology standards battles. Three technology standards battles are analyzed using a fuzzy analytic hierarchy process approach. The empirical results show that the outcome of these standards battles is not fully characterized by path dependency, but that factors for standard dominance can be used to explain the outcome of these battles. We show that it is possible to model the process of standard selection. The fuzzy analytic hierarchy process decision support tool is useful to determine the relative weight of factors for standard dominance, and can be successfully used in decision-making problems relating to standardization.

Description: In this paper, we consider a firm that leases a single product to a service provider under the assumption that this firm can decide when to replace the leased product and remanufacture it. The cost of remanufacturing is assumed to follow a geometric Brownian motion process, which is characterized by its drift and volatility. Under these assumptions, we construct and analyze a basic real options model for product remanufacturing. Specifically, we derive the remanufacturing cost threshold at which the remanufacturing option is exercised. We also perform extensive sensitivity analysis to examine how the remanufacturing cost uncertainty and other factors influence the remanufacturing decision. Furthermore, we present an extension where a remanufacturing subsidy and a disposal fee by the government are considered. The impacts of these economic instruments on the remanufacturing decision as well as on the environment are investigated.

Description: The program evaluation and review technique (PERT) is a popular method for measuring and controlling activity progress in projects. Its structure is simple, and the result is fairly accurate as long as none of its base assumptions is violated. Many authors have challenged these assumptions and suggested improvements to the mean and variance formulas. This paper quantifies the accuracy of a wide range of PERT mean-variance estimation formulas. In addition, we develop a new PERT variant using common percentiles. The proposed method uses three points for estimation, just like the classical PERT. However, it provides options for the selection of the three points. It provides different set of probability weights by the selection of the three points and what parameter to estimate, i.e., mean or variance, which minimizes the estimation error. We compare the accuracy of our approach with existing methods using the Pearson distribution system. Our use of the Pearson system allows us to systematically compare different PERT methods over a wider range of distribution shapes than has previously been considered. This analysis shows that, despite its simple structure, our new method outperforms existing methods when estimating means and variances of most bell-shaped and J-shaped beta distributions. We also demonstrate how practitioners could use our new methods in actual project settings.

Description: Wars of all degrees and intensities have the potential to intensely affect the economic, social, political, and institutional values of a nation. Among air power (AP) , land power, and sea power, AP plays the most decisive role in the outcome of any war. Formation of any air combat unit ( ACU) to encounter hostility is faced with twofold problems. The first one lies in raising the unit taking into account the configuration of various categories of weapons the unit should hold for its functional role and subject to various constraints. Second, any combat unit is interested in selecting the right vendor who can supply the required category of weapons based on budget allocation. In this paper, the selection of alternatives for the procurement of weapons is initially discussed with the help of analytic network process approach. This paper then discusses a hierarchical weapon systems valuation model framework and applies analytic hierarchy process in establishing two major indices used to evaluate AP effectiveness and AP potential. They are termed as air power index ( API) and air power value (APV). Using API and APV as tools, an optimization model for raising an ACU considering several representative constraints, which the unit may come across, is developed. All models are demonstrated with the help of illustrative examples.

Description: Many global engineering organizations have gradually shifted away from the provision of tangible products toward the provision of high-value-combined product-service solutions. This business paradigm is purported to represent a key strategic opportunity for such firms, and has attracted the attention of practitioners, consultants, and researchers. However, it has also been recognized that many firms fail to generate increased financial returns, the so-called the “service paradox.” Despite an emerging international research literature which alludes to cultural and human resource challenges, few studies have explicitly explored such issues from a human resource (HR) perspective. Informed by two in-depth case studies of global engineering organizations in the U. K., this paper examines the HR challenges and reveals the complex realities of enacting product-service (PS) strategies in practice. It reveals that even where services have proved profitable, firms may still encounter various HR challenges, and struggle to fully exploit their service strategies. Addressing such challenges may represent a key enabler in delivering integrated product-services in organizations attempting to mesh distinctive engineering and service paradigms.

Description: Due to the presence of dependence linkages, changing one element of a product (e.g., functions and components) can trigger changes to other related elements and lead to numerous possible propagation paths (i.e., the “snowball effect”). To address this issue, this paper proposes the matrix-based clustering method. Two matrix models are considered in this research: design structure matrix for the linkages of components and domain mapping matrix for the linkages of functions and parameters. After denoting some product elements as “target” representing the initial changes, the clustering method is used to form and classify the clusters according to the change impacts from target elements. The interfaces between the clusters are also identified to manage the propagation process. The purpose of this method is to provide the cluster and interface information for implementing change requests. In view of the methodical advancement, the clustering method can tailor a clustered matrix for specific change requests and handle two types of matrices. Two examples have been used to demonstrate and support the utility and flexibility of the proposed method to manage matrix-based change propagation.

Description: Most catch up studies focus on “external” foreign sources of technological learning as a means of building up latecomer technological capability. By contrast, strategic management studies in advanced countries center on the “internal” sources of organizational learning and routines (including R&D) within a firm, aimed at developing and renewing its knowledge and its absorptive capacity. This paper draws from both groups of studies to examine how latecomer firms accumulate in-house knowledge bases and assimilate foreign knowledge to create strategic innovation capabilities. We propose a clear three-stage development framework to examine two leading firms, AU Optronics (AUO) and Chimei Innolux (CMI), in Taiwan's flat panel display industry. This paper shows the coevolution of the firms’ knowledge bases and external foreign sources of knowledge over time. We find that, with their increasing knowledge bases and strategic advancement over time, the firms are able to benefit from knowledge transfer; to build up their high-level innovative capabilities, and in the process to move from junior to senior status with foreign firms. These developments appear to allow leading firms to move “across” the technological frontier, contributing to a strengthening competitive position in the international market.

Description: The iron and steel industry of China has a wide distribution structure, which leads to low production efficiency, high resource use, and weak bargaining power among global competitors. A carefully planned and executed restructuring of the industry will provide the enterprise with a competitive advantage. Making the optimal restructuring decisions, however, is not easy because: 1) the decisions involve qualitative measures within a complex and uncertain environment, 2) the alternatives include up to 31 administrative regions, and 3) there are astounding differences in the economic development among the 31 alternatives. The orders-of-magnitude approach of the analytic hierarchy process (OM-AHP) could be a useful method to tackle the first and second challenges. However, this approach does not currently explain how to address the large differences between small items in a cluster and big items in a cluster when there are no medium items between them. A model of OM-AHP with a dummy pivot is proposed to tackle this particular challenge. This approach is then applied in a multicriteria decision making problem to both demonstrate how the proposed approach works and provide a solution for the restructuring of the steel industry in China.

Description: This research investigates how retail businesses may promote their products online to induce offline sales via social media-enabled online-to-offline (O2O) commerce. We focus on a country context where such an emerging e-commerce model is particularly prevalent, i.e., China. Key to leveraging this model is to attract consumer attention and stimulate their actions both online and offline, which may be achieved through information technology (IT)-enabled promotional approaches, such as administering banner adverts and digital coupons. The former focuses on communicating product attribute information, whereas the latter focuses on communicating incentives. Building on a collectivism cultural perspective, word-of-mouth (WOM) communication motives framework, and digital advertising literature, we hypothesize their different effects online (generating produce review) and offline (inducing sales). We first conducted a survey comparing consumers in China with their U.S. counterparts, and show that a cultural perspective is pertinent and valuable. We then collaborated with China's largest O2O social media website for restaurant reviews, and conducted a field investigation of consumer responses to the two promotional approaches. Our findings afford important insights for retail businesses seeking to leverage O2O commerce, and provide research implications to the areas of e-commerce and digital advertising.

Description: Information systems (IS) investments fail largely because a newly implemented system is not fully infused into its users’ everyday life at work. IS infusion beyond an organization's mandated usage requires that users are actively motivated to use it and that they hold authority over usage of the system. Psychological empowerment represents one's motivational orientation, as well as one's authority to tap into a system's maximum potential. This empowerment is likely an important mechanism underlying successful IS infusion. The main objectives of this study are to: 1) understand the antecedents of empowerment; and 2) examine the effect of empowerment on IS infusion. We developed a theoretical model that was empirically tested through a field study, which focused upon individuals’ use of a customer relationship management system. The results strongly support our theoretical model and reveal that the design of a work environment (i.e., IS, job, and social structure) affects the development of user empowerment. User empowerment in-turn plays a prominent role in regulating various aspects of IS infusion (i.e., extended use, integrative use, and emergent use). Overall, this paper contributes to postadoption research by introducing the concept of user empowerment and demonstrating its critical role in regulating IS infusion. It also helps managers promote user empowerment and eventually achieve IS infusion in organizations.

Description: Considering the strategic effects of networking relationships on firm performance, it is important to understand how networking capability drives and exerts its impact on network structural relationships, which in turn affect new product development (NPD) performance. Grounded on dynamic capability view of the firm, we theorized that networking capability fosters NPD and plays a significant role in developing and affecting network structural relationships on NPD performance. We disaggregate networking capability into network partner finding capability and network managing capability. We tested our theoretical predictions, and the findings offer novel insights into the ability of firms in building network structural relationships that enable the firms to successfully develop and commercialize new products. We find that strong ties and bridge ties positively affect NPD performance only when firms have adequate networking capability (managing). Also, we illustrate that strong ties and bridge ties, respectively, mediate the positive relationship between networking capability (finding) and NPD performance. In addition, the findings demonstrate that the synergy of strong ties and bridge ties has highest impact on NPD performance when networking capability (managing) is high. This study, thus, suggests that networking capability and network structure need to be simultaneously considered and integrated to better account for performance.

Description: Given a set of R&D projects drawing on the same underlying technology, a technology trajectory refers to the order in which projects are executed. Due to their technological interdependence, the successful execution of one project can increase a firm's technological capability, and help to efficiently and effectively develop other projects from this set. In this paper, we present a model for determining the optimal sequence for performing such projects. Based on Huchzermeier and Loch's real-option value model, we demonstrate that accounting for interproject learning and discount rates has: 1) a positive effect on the maximum option value that different project sequences can achieve; and 2) the maximum value of the technology trajectory is particularly sensitive to the selection of the first project.

Description: We propose a model of software-as-a-service (SaaS) in a competitive marketplace that brings clarity to the choices that competing vendors must make for pricing and quality strategy. We focus on several features of SaaS competition, including differences in vendor offerings, incomplete information on application functionality, the potential lock-in risk of SaaS clients, and their cost of learning about what it will take to make the vendors’ software work well. Clients can sample the fit costs of adoption, but can switch to another vendor. We obtained several findings through the use of a game-theoretic model. First, a client's switching cost is important for its decision-making regarding SaaS adoption. With a relatively high switching cost, a more cost-efficient vendor of IT services will be able to drive the less cost-efficient competitor out of its market. Second, the impact of the client's switching cost on vendors works differently. An increase in switching cost enables one vendor to charge a higher price and achieve higher profit, while the other will be forced to charge a lower price and hardly make a profit. Third, what matters is not how much a vendor can enhance service quality, but instead how costly it will be to improve quality enough to attract sufficient customer interest to achieve profitability.

Description: U.S. hospitals are confronted with challenges of increasing service volume demand and inequitable payment by different private payers. Under this circumstance, budgeting the medical service volume efficiently and allocating the volume among private payers strategically becomes very important. Our paper proposes a hospital service volume assignment model to provide feasible solutions for hospitals. We develop our base model in the radiology department that provides comparatively homogenous medical service and involves high fixed cost. Under the fee-for-service payment schedule, the base model suggests that the hospital contracting decision with a private payer (insurance company) depends on an intuitive critical ratio. The critical ratio measures the tradeoff between the outsourcing cost generated from the actual service volume in excess of the capacity and the idling cost generated from the actual service volume below the capacity. Besides the base model, we explore two model extensions. First, we examine the criteria to budget the service volume above or below the service volume capacity. Second, we include the processing cost in the cooperation of the hospital and the insurance company. Efficient algorithms are presented for all models. Our findings provide managerial insight on hospital service volume budgeting decision by incorporating inequitable payment information.

Description: In the exploration, development, and production of hydrocarbons, a sovereign state faces conflicting challenges: maximizing its welfare while maintaining an attractive investment environment for developers. The terms and conditions of a production sharing contract (PSC) between the government and international oil companies (IOC) are usually finalized prior to the commencement of operations and with partial knowledge of the reserve level. In addition, hydrocarbons have several potential uses. This paper formulates an optimization model that assists the government in these challenges. Given an initial estimated reserve volume and hydrocarbon price, the model determines values for both the PSC's key parameters and the allocation of the government share into different uses to generate the maximum benefit to the state while providing an acceptable rate of return for the IOC. The model is applied to Lebanon. We find that an optimal PSC for Lebanon involves no royalty for all reasonable values of potential reserves, and a high cost recovery and profit share for low reserve volumes. In addition, sensitivity analysis indicates that the preferred export mode is via the Arab pipeline, due to the low level of the current gas price and high cost of the alternative liquefied natural gas export mode.

Description: This paper uses a detailed empirical process study to explore the mechanisms that drive complex hierarchically integrated technologies to regress in apparent maturity (“switchback”) over the course of their innovation pathways. Three mechanisms are identified that explain the underlying behavior: switchbacks occur 1) as a natural discovery dynamic, the result of mid-pathway efforts to fill gaps revealed through systems integration; 2) as a strategic framing used by technologists to survive funding shortfalls; or 3) as a revisit of known problems in response to uncertainty in a discrete mission opportunity environment. Although switchbacks are traditionally thought of as deviant events that should be suppressed by managers, this study reveals that many “switchbacks” represent a natural, and necessary, part of the complex technology development process. The implications of these findings are demonstrated by analyzing one dominant funding decision heuristic in terms of the assumptions it embodies and its consistency with the above-described mechanisms. The analysis reveals that efforts to eliminate switchbacks may stifle important innovations without necessarily improving efficiency.

Description: This study addresses the understudied question of how content integrity for digital goods is signaled ex-ante in the absence of centralized oversight in self-organizing platforms. We build on signaling theory to theorize three classes of signals to explain how and why they influence platform user behavior. Experimental data from 380 users show that in the absence of centralized oversight in platforms a portfolio of signaling mechanisms is used to assess content integrity. Platform users differentially weigh platform, content, and contributor signals but simultaneously triangulate them to form holistic inferences about risk vis-à-vis benefit to spot potential “lemons” in a platform market. Implications for practice, especially for platform design, are also discussed.

Description: The present study examines the relationship between innovation and product diversification as growth strategies for new ventures. Specifically, it considers whether the relationship between these growth dimensions is unidirectional, with one preceding or following the other, or bidirectional, with both dimensions developing simultaneously. To develop theoretical arguments, we draw upon the divergent assertions of two theoretical traditions: the resource-based view and sociocognitive theory (SCT). The results show strong evidence of simultaneity and endogeneity between innovation and diversification. This finding strengthens the interpretation provided by SCT, suggesting that new venture strategies are extensions of an entrepreneur's ability scripts. They point to the prominent role of an entrepreneur's self-efficacy and education-related knowledge. Implications are discussed.

Description: This study investigates how firm age and environmental adversity influence exploration and exploitation and whether the balance between them increases new product development. We also examine if new product development in new and mature firms leads to equivalent growth rates. Empirical results obtained from a survey of small- and medium-sized technology-based manufacturing firms in Korea show that while relative exploration generally remains lower in mature firms than in new firms, it more rapidly increases in mature firms when they operate in adverse environments. Interestingly, our results show that mature firms achieve lower growth rates through new product development than new firms in adverse environments. These empirical findings advance our understanding of the age-dependent antecedents and consequences of new product development.

Description: The emergence of cloud computing services has led to an increased interest in the technology among the general public and enterprises marketing these services. Although there is a need for studies with a managerial relevance for this emerging market, the lack of market analysis hampers such investigations. Therefore, this study focuses on the end-user market for cloud computing in Korea. We conduct a quantitative analysis to show consumer adoption behavior for these services, particularly infrastructure as a service (IaaS). Bayesian mixed logit model and the multivariate probit model are used to analyze the data collected by a conjoint survey. From this analysis, we find that the service fee and stability are the most critical adoption factors. We also present an analysis on the relationship between terminal devices and IaaS, classified by core attributes such as price, stability, and storage capacity. From these relationships, we find that larger storage capacity is more important for mobile devices such as laptops than desktops. Based on the results of the analysis, this study also recommends useful strategies to enable enterprise managers to focus on more appropriate service attributes, and to target suitable terminal device markets matching the features of the service.

Description: Despite the increased focus on making energy more efficient, research has rarely examined the temporal impact of energy efficiency on environmental performance at the national level. Using archival data, we conduct an econometric analysis that provides empirical evidence indicating the negative effects of the rebound effect and the positive effects of technology. Our results suggest that an increase in per capita energy consumption does not lead to an increase in emissions, but it could negate the environmental benefits arising from energy efficiency. However, energy efficiency leads to an increase in per capita emissions for developed countries. Post hoc results show that energy efficiency influences the three sectors (household, services, and industrial) differently on per capita energy consumption and emissions. Implications for research and practice are discussed.

Description: This paper explores the role of learning in managing the capacities of existing and emerging energy technologies. Specifically, we address how uncertainties in learning rates impact R&D investments into a range of electricity generating technologies. Understanding managerial strategic response under learning uncertainty is particularly important as decision makers face competing R&D portfolios, dwindling and unstable financial resources, and an imminent energy policy. We develop a risk-minimizing optimization model of an abridged global energy system to investigate the effects of uncertainties in technological learning on electricity capacity additions. Addressing the risks associated with uncertainties in technological learning is relevant to distill cost-effective decisions, and to develop risk-hedging strategies. We find that 1) the willingness to hedge against the inherent risks associated with uncertainty in energy technological learning is positively correlated with the risk premium; 2) near-term or early investments are required to achieve a mix of sustainable energy technological portfolios as a hedge against R&D uncertainty; and 3) the management of electricity generation capacities under learning uncertainty allows decision makers to chart a more prudent intermediate path for energy technological growth through the creation of a more diversified technological portfolio.

Description: One of the most fundamental indicators of a facility's social sustainability is the health and safety of its workers. Yet the literature provides little guidance for engineering managers, workers or researchers trying to understand how practices designed to enhance productivity will impact the safety of operational workers. The present research addresses that gap by simultaneously examining operational “best” practices such as quality management and just-in-time and performance outcomes such as productivity and worker safety. To control for the myriad of potential problems with self-reports of worker safety performance, we match secondary data provided by the state of Oregon with managers’ self-reported responses to operational practices. The results show that the relationship between operational practices and safety outcomes is nuanced with just-in-time harming worker safety, an impact that can be mitigated by the adoption of team-based work up to a point, as the relationship between JIT and team-based work is U-shaped.

Description: Innovation has become the cornerstone for achieving competitive advantage and is currently one of the principal topics of debate in the management literature. Innovations can be internally generated or can be adopted from external sources. Innovations also vary in terms of degree of radicalness. In this study, we examine the nature of innovation (in terms of where it is generated and its degree of radicalness) and an external environmental factor (dynamism) to identify the types of innovation that are more likely to succeed in different environments. Organizations expend substantial financial and human resources innovating. While some innovations succeed in enhancing organizational performance, many fail and may affect performance adversely in the short term. A sample of 381 Spanish firms was used to analyze how organizations, in order to be competitive, need to identify the appropriate type of strategies—in terms of innovation generation versus adoption, and extent of radicalness—that are consistent with the environmental conditions that they operate in. First, we find that in dynamic environments, the more radical and internally generated the innovations, the higher the company's perceived and objective performance. Second, we find that in stable environments, the less radical and more internally generated the innovations, higher the company's objective performance. Implications for theory and practice are discussed.

Description: The development of important components for a new product is frequently outsourced to suppliers. As this transfers a major opportunity to determine the component’s production cost to the development supplier, the manufacturer has to ensure that the supplier makes an effort to keep production costs low. During the production phase, the development supplier is not necessarily the source of supply, since there may be other suppliers who can produce the component at a lower cost. The challenge for the manufacturer is to choose a sourcing strategy that allows to profit from the cost advantage of these suppliers while making sure that the cost reduction potential during component development is exploited as well. Building on an analytical model of the supply chain, we compare various sourcing and contracting strategies with respect to their ability to resolve this tradeoff. The results suggest that dual sourcing with a combined wholesale price and licensing agreement or single sourcing with subcontracting dominate various other strategies. We reflect our findings in view of several real-world development and supply agreements.

Description: Concurrent minimization of project time and project cost is an important issue in construction planning and management. Tradeoff optimization between these two variables is necessary to maximize overall construction project benefit. This paper presents a two-phase differential evolution (DE) model to resolve these problems. This model is able to effectively consider both time–cost effects and resource constraints. First, we introduce a novel multiple-objective algorithm, the chaotic initialized multiple objective differential evolution with adaptive-mutation strategy-based time–cost tradeoff, to determine the execution mode that best optimizes the time–cost balance. Subsequently, we introduce a DE-based resource-constrained method to generate a feasible schedule. A real construction case study is then used to illustrate the application of the proposed algorithm. Performance comparisons done with the nondominated sorting genetic algorithm, multiple objective particle swarm optimization, and multiple objective differential evolution further verify the efficiency and effectiveness of the proposed algorithm.

Description: Despite decades of imitation and apparent convergence, there are still major differences in product development practices between Japanese automakers and their North American counterparts. Through an in-depth investigation of product development practices at the project level, we study two firms—Toyota and a major North American automaker—that possess very different approaches to product development. We take the perspective of a major supplier to both automakers. Adopting a grounded theory approach and by selecting similar projects performed by the same supplier for different original equipment manufacturer (OEM) customers, we hold constant variables such as product, supplier, and period of observation. We find that the lack of best practice proliferation in product development can be explained by a lack of organizational culture that sustains and facilitates best practices. We view our results through the lens of cultural frameworks offered in the literature and derive a model linking organizational culture to product development effectiveness.

Description: The adoption of open innovation creates a dilemma for firms. On one hand, a commitment to openness facilitates the flow of knowledge between firms, with this flow (generally) unconstrained by royalties and other appropriation mechanisms. However, openness has also led to unintended knowledge spillovers, limiting firms’ abilities to protect their core knowledge. This dilemma has created a need to consider the relationship between openness and firms’ appropriability regimes. In order to explore this “paradox of openness,” an investigation of the appropriability regimes adopted by Australian firms through an empirical analysis of innovation-related data from 4 322 businesses was undertaken. It was found that the relationship between two indicators of openness (the breadth of external knowledge sources and the scope of interorganizational collaborations) and the scope of appropriability regimes employed by a firm exhibits a nonlinear inverse-U (∩) form. The results also indicated that open innovators actually increase controls on their intellectual property through informal appropriability regimes rather than loosening appropriability mechanisms to promote knowledge spillovers as open innovation theories suggest.

Description: Redundancy queuing-location-allocation problems (RQLAPs) involve the economical allocation of facilities, each with a number of servers, to suitable locations with appropriate levels of redundancy or reliability. The goal in RQLAPs is to find the facilities which are both inexpensive and reliable. We take into consideration the congestion of the system by modeling each facility as an M/M/m queuing system and formulate the problem as a multiobjective nonlinear mixed integer programming problem. However, these problems are nondeterministic polynomial-time hard (NP-hard) problems where an exact solution cannot be produced in polynomial time. We propose a novel soft-computing approach based on the vibration theory called vibration damping optimization (VDO) to solve the RQLAP. We develop a multiobjective version of the VDO called multiobjective VDO (MOVDO) based on the fast nondominated sorting and crowding distance concepts in the literature. The performance of the proposed MOVDO is statistically compared with two other commonly used metaheuristic algorithms called the nondominated sorting genetic algorithm and multiobjective simulated annealing. A comparison of the results based on different problem sizes favors the MOVDO method proposed in this study.

Description: Past strategy and innovation research has basically ignored potential effects of portfolio management governance issues on portfolio innovativeness, and thereby on innovation management results such as firm performance. Building on the dynamic capabilities view, we hypothesize that portfolio management governance enhances firm performance by enabling higher levels of portfolio innovativeness through market and technological aspects. Our findings support the relevance of considering portfolio management governance to explain higher innovation outcomes. In particular, we can show that formality and explicitness, information support, as well as partial review frequency have a strong impact on the innovativeness of the firm's product portfolio. Consequently, higher technological and market innovativeness drives firm performance. We derive implications for both managers and researchers.

Description: Presents a survey form covering the publication topics of most (or least) interest to readers.

Description: Presents a list of seven papers that have been accepted for publication. They will appear in future issues of this TRANSACTIONS.