For organizations to achieve the benefits of new information technology (IT) systems, their users must adopt and then actually use these new systems. Recent models help to articulate the potentially different explanations for why some users will adopt and then continue using new technologies, but these models have not explicitly incorporated IT knowledge. This is particularly important in contexts where the user base may be non-IT professionalsÑi.e., the users may vary substantially in their basic IT knowledge. We draw on psychology to argue that in situations where there is a wide variance in actual IT knowledge, there will often exist a U-shaped relationship between actual and self-perceived IT knowledge such that the least knowledgeable believe themselves to be highly knowledgeable. We then draw on individual-level adoption theories to argue that users with high self-perceived IT knowledge will be more likely to adopt new technologies and do so faster. We also draw on individual-level continuance theories to argue that users with low actual IT knowledge will be more likely to discontinue using new technologies and do so faster. We test our expectations using a proprietary data set of 225 sales professionals in a large Indian pharmaceutical company that is testing a new customer relationship management system. We find strong support for our hypotheses.
In this paper, we study the differential influence of online user-generated content (UGC), specifically blogs, across the multiple stages of decision making of venture capitalists: screening stage, choice stage, and contract stage. We conjecture that, first, blogs are influential at the screening stage; second, after the screening stage, blogs are noninfluential since decision makers evaluate entities closely at later stages; third, blogs increase the interest from multiple decision makers which in turn increases the cost of the deal for a decision maker. This empirical investigation provides support for the hypotheses, which we tested for funding decisions by venture capitalists in information technology ventures. In particular, this study indicates that blogs can help managers in getting their products/services selected at the screening stage, but, beyond that, blogs do not help directly. However, since more decision makers screen products/services that receive blog coverage, the competition among decision makers helps managers in negotiating better contract terms. We advance the boundary of existing studies on the influence of UGC from single stage process to multiple stages.
Consumer-generated media, particularly blogs, can help companies increase the visibility of their products without spending millions of dollars in advertising. Although a number of companies realize the potential of blogs and encourage their employees to blog, a good chunk of them are skeptical about losing control over this new media. Companies fear that employees may write negative things about them and that this may bring significant reputation loss. Overall, companies show mixed response toward negative posts on employee blogs- some companies show complete aversion; others allow some negative posts. Such mixed reactions toward negative posts motivated us to probe for any positive aspects of negative posts. In particular, we investigate the relationship between negative posts and readership of an employee blog. In contrast to the popular perception, our results reveal a potential positive aspect of negative posts. Our analysis suggests that negative posts act as catalyst and can exponentially increase the readership of employee blogs, suggesting that companies should permit employees to make negative posts. Because employees typically write few negative posts and largely write positive posts, the increase in readership of employee blogs generally should be enough to offset the negative effect of few negative posts. Therefore, not restraining negative posts to increase readership should be a good strategy. This raises a logical question: what should a firm's policy be regarding employee blogging? For exposition, we suggest an analytical framework using our empirical model
External financing is critical to ventures that do not have a revenue source but need to recruit employees, develop products, pay suppliers, and market their products/services. There is an increasing belief among entrepreneurs that electronic word-of-mouth (eWOM), specifically blog coverage, can aid in achieving venture capital financing. Conflicting findings reported by past studies examining eWOM make it unclear what to make of such beliefs of entrepreneurs. Even if there were generally agreed-upon results, a stream of literature indicates that because of the differences in traits between the prior investigated contexts and venture capital financing, the findings from the prior studies cannot be generalized to venture capital financing. Extant studies also fall short in examining the role of time and the status of entities generating eWOM in determining the influence of eWOM on decision making. To address this dearth of literature in a context that attracts billions of dollars every year, we investigate the effect of eWOM on venture capital financing. This study entails the challenging task of gathering data from hundreds of ventures along with other sources including VentureXpert, surveys, Google Blogsearch, Lexis-Nexis, and Archive.org. The key findings of our econometric analysis are that the impact of negative eWOM is greater than is the impact of positive eWOM and that the effect of eWOM on financing decreases with the progress through the financing stages. We also find that the eWOM of popular bloggers helps ventures in getting higher funding amounts and valuations. The empirical model used in this work accounts for inherent selection biases of entrepreneurs and venture capitalists, and we conduct numerous robustness checks for potential issues of endogeneity, selection bias, nonlinearities, and popularity cutoff for blogs. The findings have important implications for entrepreneurs and suggest ways by which entrepreneurs can take advantage of eWOM.