Xiaolin Li

In the past few weeks, I have focused on the general research design of the study and the formulation of a research model of the adoption of online direct sales channel (ODSC) among small and medium-sized enterprises (SMEs).

I first propose a simple but comprehensive theoretical adoption framework, which classifies adoption factors in three dimensions: Decision Entity (DE: an individual or an organization), Decision Object (DO: the information technology to be adopted), and Decision context (DO: the environment where a decision is made). Adoption process is essentially a decision-making process. The outcome of such process is a decision (to adopt or not to adopt), which is made by a DE on a specific DO in a particular DC. Factors in any of the three dimensions, the DE, DO, and DC, may impact the adoption decision that the DE makes.

I then operationalize the general adoption classification framework with a model of critical factors underlying the adoption and use of the online direct sales channel (ODSC) by small and medium-sized enterprises (SMEs). Building upon, and synthesizing, major existing IT adoption and diffusion theories, I propose that DO factors, including relative advantage and ease of use, DE factors, including risk tolerance, resource availability, and expertise in the Internet, and an important DC factor, competitive pressure, significantly impact, directly or indirectly, an SME’s intention to adopt (for those that have not adopted) or continue to use (for those that have already adopted) ODSC.

To test the model of ODSC adoption by SMEs, I develop and administer a survey to SMEs in the State of Ohio of the United States.  Structural Equation Modeling (SEM) will be used to analyze the goodness of fit of the model. Other parameters are also analyzed to test a series of hypotheses in the model.

David Baker

DOES THE ENTROPY FUNCTION TRULY MEASURE DIVERSITY?

Background

An important objective states that the measurement of business portfolio diversity has become an extremely valuable component of management strategy research and that multiple statistics have been proposed to measure this portfolio diversity.  One problem is that often the properties of these statistics are unknown, which causes the results of diversification studies to many times depend upon the statistics used as much as on the corporations being examined.  In this study, I first met with Professor Booth to learn what was expected of me for this research, and then we talked in great detail about our overall approach and the methods that were to be utilized throughout the project.  Then I spent much time with Professor Acar to learn in more detail about diversification methods, his measurement techniques, the many articles that he had written on this subject and what the literature review had to say about these methods.  An approach was discussed and determined with input from both Professors Booth and Acar. 

Professor Acar and I set up appointments with and then discussed our research endeavors with Ms. Janice Winchell in the Kent State University Main Library.  We met with Ms. Winchell to learn much more about Compustat data (since this was used in great detail and analysis in the Robins and Wiersema piece), and exactly how this data could be generated, searched, and specifically how we could properly find the firms that had multiple SIC codes (particularly those in excess of four or five).  Ms. Winchell stated that while she had much experience with the Compustat data she was not that familiar with SIC codes, and that she would research this information and get back to us.  As it turned out there was a specific file that we would need to examine and we would have to look into this in more detail subsequently.  This information was helpful to us in ascertaining the background research offered in the Robins and Wiersema article.  We later discovered that it would be unnecessary to use the SIC codes.

Research

Next, I examined several articles on diversity and diversification measures, particularly emphasizing the Robins and Wiersema (2003) article entitled: “The Measurement of Corporate Portfolio Strategy: Analysis of Content Validity of Related Diversification Indexes”, in the Strategic Management Journal, 24:39-59.  In particular, I reworked each of their five examples (directly from their article) to be certain that the mathematics was entirely correct.  Then I took these five samples and ran them all in multiple Excel spreadsheets with these following six (6) diversification methods:

1.       Uncalibrated Herfindahl

2.       Calibrated Herfindahl

3.       Uncalibrated Entropy

4.       Calibrated Entropy

5.       Calibrated A1, Acar-Bhatnagar

6.       Calibrated A2, Acar-Troutt, Single-Sum Formula

Formulas had to be computed, checked, and rechecked and then entered into each of these six methods as they were placed in the Excel spreadsheets, so that the calculations could essentially be automatically computed in each sample.  So far, the results of the Robins and Wiersema article analysis show that the uncalibrated measures were not very reliable, and the numbers were in a broad range.  There was more consistency with the Acar measures, A1 and A2.  The next step will be to examine these same six measures with various triangular distributions and assess the outcomes accordingly.  Additionally, the entropy measure will be examined for reliability/consistency among authors and disciplines.  Professor Booth and I are proceeding on a review article that will examine the statistical properties of the entropy function and an initial rough draft is currently in preparation but will necessitate considerable work.

Jino Mwaka

Investigating Entrepreneurial Transience

A survey of entrepreneurship research has indicated that entrepreneurial transience is an area to which no significant attention has been given in the literature. The general focus has been on new venture creation, growth, survival and exit. There has also been consideration of concentration of businesses within specific industries and in specific regions (metropolitan areas) and the impact of entrepreneurship on regional development. Some of the factors that make particular areas attractive for businesses in terms of new venture formation and survival have been explored.

While there are no specific theories of entrepreneurial transience, given the lack of research in this specific area, we believe that researches conducted on the different aspects of entrepreneurship can inform and lead towards the exploration of the phenomenon of business transience. A number of variables associated with these aspects of entrepreneurship have been identified. The factors associated with regional concentration of businesses are of particular interest in so far as relocation of businesses ventures (transience) can be associated with concentration (or its opposite – dispersion) of entrepreneurial ventures.

Consultations have been made with individuals who have some experience and/expertise on issues pertaining to business development, retention and community development. Data for some of the variables of interest have been collected. Our focus is geographical not only because transience as we consider it involves change of location (spatial), but also because of the difficulty of getting business level data for the study. We consider the county as the geographical unit of analysis. Multiple sources have been used in the collection of the data. Discrepancies are still being investigated.

Susan Horne

A Structural Equation Model of Supply Chain Information Quality

An initial proposal introduction was developed and sent to Dr. Troutt.  The proposal included the structural model in diagram form, a summary level literature review, proposed methodology, and initial references.

The literature review continues weekly.  Areas of literature researched include inter-company information systems issues, supply chain information exchange (not necessarily related to information systems), quality, and the impact of prior experience on impression, especially as it may relate to perceptions of quality in supply chain partners.

An initial draft of the survey instrument is still being compiled.  I hope to use existing instruments to the greatest extent possible to ensure I am dealing with valid instruments.  I will need to create some questions so some validation will be needed but hopefully less than would otherwise be required.

I am researching how best to communicate to practitioners to obtain responses.  I have joined one professional organization in the hope of improving my response rate by having face time with members.  Both the Akron and Pittsburgh chapters’ meetings are on hiatus for the summer but I have contacted members in both chapters regarding attending meetings in the fall.  My intent is to network sufficiently to gain intelligence about how best to approach the survey process.  So far my plans are to offer the survey online with Starbuck’s gift cards as a reward for responding.   I also expect to use these practitioners to assist with instrument validation.

I am also teaching myself LISREL because, although I am very comfortable with EQS, LISREL is more flexible and more publish-worthy.  So far I have completed the SIMPLIS portion of the manuals without questions.  To assist my understanding, I am using data relating to supply chain information systems provided by a colleague of Dr. Arun Rai.

Lihua Chen 

A Study of Factors Differentiating the Sales of Vehicles in the US market

Background

The increasing technological sophistication and innovations has brought out a growing range of vehicle types and models to meet the needs and preferences of the target customer segments. In the automobile market, there are all kinds of vehicles with different criteria and attributes: Sedans, convertibles, pickup trucks, wagons, SUVs and etc, whose safety, affordability and comfort are different. On the other side, customers’ choices are consistent with their needs and preferences involving safety, comfort, and affordability. Sales of vehicles are also different among vehicle segments and automakers.
 
     There has been considerable interest in figuring out attributes and other related information cared by customers in the automobile market.
  Back in 1976, Wynne and Hoffer had investigated the effects that safety-related recalls have on the sales of vehicles. Their conclusion, which is based on the data from 27-month period ending April 1973, showed that market share was not affected significantly for most makes.  The penalty caused by product recalls is explored by Rhee and Haunschild (2006) in the case of companies’ higher reputation and lower reputation. The relationship between warranty and quality has been studied by introducing joint price, warranty and quality decision with data from US auto market (Douglas et al, 1993). Automaker cost and customer preference were found to account for the negative relationship between warranty and quality. Favero et al. (2006) built a semi-logarithmic hedonic price model to assess the vehicle attributes associated with customers’ preference and sales of vehicles.
 
As far as the relations with suppliers, Richardson (1993) presented parallel sourcing strategy to illustrate the performance differences between U.S. firms and Japanese competitors. The study by Dyer (1996) exploited the relationship between the performance of automakers and their interfirm activities.  A positive relationship between supplier-automaker specialization and automaker performance is confirmed.  Lee and Masters (1997) applied a hedonic price model to judge the competitiveness of U.S. automakers versus Japanese automakers. Meanwhile, automaker performance is measured by used-car prices and quality is found to be the crucial factor of customer loyalty and market demand. U.S. automakers have denied the gasoline price and sales of vehicles for long time. However, the article by McManus (2007) presents theoretical reasons and data from the U.S. auto market to prove Detroit's conventional belief false.  Thus, fuel economy is viewed as a substantial factor that affects auto market share.
The relationship between intermediaries, dealers, and the sales of vehicles has been analyzed by Verhoef et al. (2006) through their contribution to brand retention. The findings show that dealers selling volume brands could support brand retention.  Recalls has
 
In the US automobile market, Japanese automakers have performed greatly with substantially increasing their market share especially in recent years. What has been done by the Japanese automakers to attract customers? Lienert (1998) analyzed how the brand management affect market share.  Biderman et al. (2005) used a model to analyze the effects of the 2mm technology on market share and that on automakers’ make-ups for US-made vehicles.
 
    The objective of this paper is to investigate factors that affect sales of vehicles in the U.S. car market.  In this article, the author would focus on the part of passenger car to know more about the situation. Actually, customer preference is highly related to specifications. However, most of the previous research pays attention to total automobile demand. In addition, the paper also takes other factors into considerations, including recall in the previous year and IQS, VDS, and CSI.

Data Source

The article focuses on the data of vehicles through 2004 in the US automobile market. Specification data of cars and sales of vehicles are from Ward’s yearbook 2005.  IQS (Initial Quality Study), VDS (Vehicle Dependability Study) and CSI (Customer Service Index) are from J.D. Power press release.

Methodology

SEM (Structure Equations Model) is hopefully used to explore the relationship between the sales of vehicles and all the predictor variables.

Analysis

The analysis could provide information of assessment about their relative contribution to sales of vehicles and infer which characteristic customers value the most in terms of comfort, safety, affordability, dependability.

Reference

Bajic, Vladimir. Market shares and Price-Quality relationships: An econometric investigation of the U.S. automobile market. Southern Economic Journal, Apr88, Vol. 54 Issue 4, pp.888-901.

 

Biderman, C.; Polenske, K.; Rockler, N.. Demand and cost of the 2 mm technology program in the US motor-vehicle market. Economics of Innovation & New Technology, Oct2005, Vol. 14 Issue 7, pp.637-655.

 

Cowling, Keith; Cubbin, John. Price, Quality and Advertising Competition: an Econometric Investigation of the United Kingdom Car Market. Economica, Nov71, Vol. 38 Issue 152, p378-394.

 

Douglas, E.J., Clennon, D.C. and Lane, J.I.. Warranty, quality and price in the US automobile market. Applied Economics, 1993, 25, pp.135-141.

Dyer J.H.. Specialized supplier networks as a source of competitive advantage: Evidence from the auto industry. Strategic Management Journal, 1996, Vol.17, pp.271-291.

Favero, Luiz Paulo Lopes; De Angelo, Claudlo Felisoni; Kos, Anthony J.; Eunni, Rangamohan V.. Modeling Customer Preferences: an Empirical Study of the Automobile Market in Brazil. International Journal of Management, Jun2006, Vol. 23 Issue 2, p312-320.

Kwoka Jr., John E.. Market segmentation by price-quality schedules: Some evidence from automobiles. Journal of Business, Oct92, Vol. 65 Issue 4, pp.615-629.

Lee J. and Masters R.. U.S. competitiveness and the secondary auto market. Competitiveness Review, 1997, Vol. 7 Issue 1, pp.26-36.

Lienert, A.. Brand management at the big three. Management Review, May98, Vol. 87 Issue 5, pp.53-58.

Lin, L; Lu I.. Product quality as a determinant of product innovation: an empirical analysis of the global automotive industry. Total Quality Management & Business Excellence, Mar2006, Vol. 17 Issue 2, pp.141-147.

 

McManus, Walter. The link between gasoline prices and vehicle sales. Business Economics, Jan2007, Vol. 42 Issue 1, pp.53-60.

 

Narasimhan, S.L.; Graham, A.W.; Wang, M.. Relative efficiency and quality of global automobile companies. Journal of Applied Business Research, Fall2005, Vol. 21 Issue 4, pp.71-82.

Rhee, M. and Haunschild, P.R.. The Liability of Good Reputation: a Study of Product Recalls in the U.S. Automobile Industry. Organization Science, Vol. 17, No. 1, 2006, pp. 101-117.

Richardson, J.. Parallel sourcing and supplier performance in the Japanese automobile industry. Strategic Management Journal, 1993, Vol.14, pp.339-350.

Gerald DeHondt II

This research reflects ongoing efforts relating to the Offshore Outsourcing of Systems Development work.  It views anticipated cost savings as one of the primary reasons companies seek to have development work performed offshore.  In line with this, it is believed that companies overlook certain costs that are associated with these efforts.  This paper identifies factors that may increase or decrease the cost of Offshore Outsourcing and proposes a theoretical model of the impact of these factors on project cost.  On balance, it is believed that these factors will add to the overall cost of the systems development function in comparison to having these activities performed in-house or contracted to a domestic company.   This paper is currently in advanced stages and is being revised and enhanced for submission to Communications of the ACM, based on their author guidelines.  The expectation is that this paper will be submitted by the end of the Summer.

Suvankar Ghosh

Project Objective: To develop my PhD Dissertation Proposal.

Tasks Accomplished:

1.  Finalized the focus of each of the 3 essays in my dissertation proposal. The titles of the 3 essays are:
1. An Adoption Decision Model for Emerging Capital Budgeting Methodologies
2. An Information-Theoretic Model of Overinvestment in Enterprise Integration
3. A Nested Real Options Approach to Cellular Manufacturing Investments
2. Finished writing Chapter 1 of the proposal document. Chapter 1 contains the following sections:
1. Dissertation Structure and Theme – This section describes the overall theme of this dissertation. My dissertation focuses on the use of emerging methods and techniques for the valuation of technology, which is the common thread tying the 3 essays together. I look at both investments in information technology (IT) as well as manufacturing technology.
2. Motivation – This section discusses why it is important to bring new theories and techniques from the fields of finance and economics, such as Real Options (RO) analysis and Economic Value Added (EVA), to bear upon the problem of the valuation of technology.
3. Synopses of Essays – This section provides a synopsis of each of the 3 essays in the proposal.
4. Status of the Essays – The status of each of the essays is described such as whether versions of these essays have already been presented at conferences.
3. Finished Chapter 2 on the first essay on “An Adoption Decision Model for Emerging Capital Budgeting Methodologies”. This chapter describes the work that has been done so far on this essay both within the context of PhD courses that I have taken as well as additional work put into the essay outside of the formal coursework.
4. In the processing of writing the chapters on the other 2 essays.