IS

Clemons, Eric K.

Research Interests (82)

List of Topics (82)

Topic Weight Topic Terms
1.034 insurance companies growth portfolios intensity company life portfolio industry newly vulnerable terms composition operating implemented
1.010 procurement firms strategy marketing unified customers needs products strategies availability informedness proprietary purchase resonance policies
0.997 consumer consumers model optimal welfare price market pricing equilibrium surplus different higher results strategy quality
0.993 competitive advantage strategic systems information sustainable sustainability dynamic opportunities capabilities environments environmental turbulence turbulent dynamics
0.832 market trading markets exchange traders trade transaction financial orders securities significant established number exchanges regulatory
0.816 information issue special systems article introduction editorial including discusses published section articles reports various presented
0.745 risk risks management associated managing financial appropriate losses expected future literature reduce loss approach alternative
0.675 reviews product online review products wom consumers consumer ratings sales word-of-mouth impact reviewers word using
0.637 market competition competitive network markets firms products competing competitor differentiation advantage competitors presence dominant structure
0.582 business digital strategy value transformation economy technologies paper creation digitization strategies environment focus net-enabled services
0.573 strategic benefits economic benefit potential systems technology long-term applications competitive company suggest additional companies industry
0.572 technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry
0.559 costs cost switching reduce transaction increase benefits time economic production transactions savings reduction impact services
0.477 technologies technology new findings efficiency deployed common implications engineers conversion change transformational opportunity deployment make
0.477 online uncertainty reputation sellers buyers seller marketplaces markets marketplace buyer price signaling auctions market premiums
0.462 price buyers sellers pricing market prices seller offer goods profits buyer two-sided preferences purchase intermediary
0.448 information strategy strategic technology management systems competitive executives role cio chief senior executive cios sis
0.410 channel distribution demand channels sales products long travel tail new multichannel available product implications strategy
0.394 coordination mechanisms work contingencies boundaries temporal coordinating vertical associated activities different coordinate suggests dispersed coordinated
0.368 information environment provide analysis paper overall better relationships outcomes increasingly useful valuable available increasing greater
0.363 change organizational implementation case study changes management organizations technology organization analysis successful success equilibrium radical
0.357 advertising search online sponsored keywords sales revenue advertisers ads keyword organic advertisements selection click targeting
0.348 supply chain information suppliers supplier partners relationships integration use chains technology interorganizational sharing systems procurement
0.336 business large organizations using work changing rapidly make today's available designed need increasingly recent manage
0.331 theory theories theoretical paper new understanding work practical explain empirical contribution phenomenon literature second implications
0.329 information research literature systems framework review paper theoretical based potential future implications practice discussed current
0.322 information types different type sources analysis develop used behavior specific conditions consider improve using alternative
0.322 product products quality used characteristics examines role provide goods customization provides offer core sell key
0.318 outsourcing transaction cost partnership information economics relationships outsource large-scale contracts specificity perspective decisions long-term develop
0.313 infrastructure information flexibility new paper technology building infrastructures flexible development human creating provide despite challenge
0.309 structural modeling scale equation implications economies large future framework perspective propose broad scope resulting identified
0.301 electronic markets commerce market new efficiency suppliers internet changes marketplace analysis suggests b2b marketplaces industry
0.294 research researchers framework future information systems important present agenda identify areas provide understanding contributions using
0.291 privacy information concerns individuals personal disclosure protection concern consumers practices control data private calculus regulation
0.278 systems information objectives organization organizational development variety needs need efforts technical organizations developing suggest given
0.274 countries global developing technology international country developed national economic policy domestic study foreign globalization world
0.263 memory support organizations information organizational requirements different complex require development provides resources organization paper transactive
0.263 markets industry market ess middle integrated logistics increased demand components economics suggested emerging preference goods
0.259 process business reengineering processes bpr redesign paper research suggests provide past improvements manage enable organizations
0.247 internet peer used access web influence traditional fraud world ecology services impact cases wide home
0.245 field work changes new years time change major period year end use past early century
0.235 level levels higher patterns activity results structures lower evolution significant analysis degree data discussed implications
0.234 modeling models model business research paradigm components using representation extension logical set existing way aspects
0.214 relationships relationship relational information interfirm level exchange relations perspective model paper interpersonal expertise theory study
0.213 banking bank multilevel banks level individual implementation analysis resistance financial suggests modeling group large bank's
0.212 information security interview threats attacks theory fear vulnerability visibility president vulnerabilities pmt behaviors enforcement appeals
0.210 time use size second appears form larger benefits combined studies reasons selected underlying appear various
0.187 firms firm financial services firm's size examine new based result level including results industry important
0.184 results study research experiment experiments influence implications conducted laboratory field different indicate impact effectiveness future
0.179 options real investment option investments model valuation technology value analysis uncertainty portfolio models using context
0.176 shared contribution groups understanding contributions group contribute work make members experience phenomenon largely central key
0.170 commitment need practitioners studies potential role consider difficult models result importance influence researchers established conduct
0.169 framework model used conceptual proposed given particular general concept frameworks literature developed develop providing paper
0.161 services service network effects optimal online pricing strategies model provider provide externalities providing base providers
0.155 adaptation patterns transition new adjustment different critical occur manner changes adapting concept novel temporary accomplish
0.148 technology organizational information organizations organization new work perspective innovation processes used technological understanding technologies transformation
0.144 data used develop multiple approaches collection based research classes aspect single literature profiles means crowd
0.133 capabilities capability firm firms performance resources business information technology firm's resource-based competitive it-enabled view study
0.129 evaluation effectiveness assessment evaluating paper objectives terms process assessing criteria evaluations methodology provides impact literature
0.127 percent sales average economic growth increasing total using number million percentage evidence analyze approximately does
0.124 competence experience versus individual disaster employees form npd concept context construct effectively focus functionalities front-end
0.123 network networks social analysis ties structure p2p exchange externalities individual impact peer-to-peer structural growth centrality
0.123 enterprise improvement organizations process applications metaphors packaged technology organization help knows extends improved overcoming package
0.121 industry industries firms relative different use concentration strategic acquisitions measure competitive examine increases competition influence
0.121 customer customers crm relationship study loyalty marketing management profitability service offer retention it-enabled web-based interactions
0.120 implementation systems article describes management successful approach lessons design learned technical staff used effort developed
0.119 perceived results study field individual support effects microcomputer pressure external usefulness test psychological obligations characteristics
0.118 alignment strategic business strategy performance technology value organizational orientation relationship information misalignment matched goals perspective
0.117 differences analysis different similar study findings based significant highly groups popular samples comparison similarities non-is
0.115 small business businesses firms external firm's growth size level expertise used high major environment lack
0.114 structure organization structures organizational centralized decentralized study organizations forms decentralization processing communication sharing cbis activities
0.111 learning model optimal rate hand domain effort increasing curve result experts explicit strategies estimate acquire
0.110 research journals journal information systems articles academic published business mis faculty discipline analysis publication management
0.110 design artifacts alternative method artifact generation approaches alternatives tool science generate set promising requirements evaluation
0.109 role roles gender differences women significant play age men plays sample differ played vary understand
0.108 value business benefits technology based economic creation related intangible cocreation assessing financial improved key economics
0.107 security threat information users detection coping configuration avoidance response firm malicious attack intrusion appraisal countermeasures
0.106 negotiation negotiations using potential power agreement paper bases partners ending negotiators offers visualization messaging instant
0.106 contract contracts incentives incentive outsourcing hazard moral contracting agency contractual asymmetry incomplete set cost client
0.103 case study studies paper use research analysis interpretive identify qualitative approach understanding critical development managerial
0.103 use question opportunities particular identify information grammars researchers shown conceptual ontological given facilitate new little
0.103 information processing needs based lead make exchange situation examined ownership analytical improved situations changes informational

Coauthor Network

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List of Coauthors (21)

Row, Michael C. 6 Weber, Bruce W. 5 Thatcher, Matt E. 3 Aron, Ravi 2
Gu, Bin 2 Hitt, Lorin M. 2 Kauffman, Robert J. 2 Agarwal, Ritu 1
Croson, David C. 1 Dewan, Rajiv M. 1 Gao, Guodong (Gordon) 1 Hann, Il-Horn 1
Jr., Henry C. Lucas 1 Lang, Karl Reiner 1 Madhani, Nehal 1 Markopoulos, Panos M. 1
Reddi, Sashidhar P. 1 Reddi, Sashi 1 Sawy, Omar A. El 1 Weber, Bruce 1
Weber, Thomas A. 1

Article Keywords (117)

resonance marketing 3 Strategic Information Systems 3 competitive information systems 2 contestability 2
Electronic Markets 2 information technology 2 intercorporate coordination 2 interorganizational information systems 2
information asymmetry 2 market segmentation 2 newly vulnerable markets 2 outsourcing 2
online reviews 2 product positioning 2 academic journals 1 automatic teller machine (ATM) networks. 1
adverse selection 1 antitrust 1 BUSINESS HISTORY 1 bargaining power in marketplace 1
business reengineering 1 banking 1 bundling 1 business models for the Internet 1
bundling and tying 1 corporate strategy 1 COMPETITIVE ADVANTAGE 1 consumer informedness 1
consumer uncertainty reduction 1 disruptive technology 1 death spiral 1 dominant firms 1
deterred market entry 1 digital business strategies 1 Experimental Economics 1 electronic block trading 1
electronic commerce 1 economic analysis of information 1 essential facilities doctrine 1 Financial Market Simulation 1
flexible pricing 1 financial markets 1 future of online advertising 1 Google 1
holdup problem 1 hyperdifferentiation 1 Information systems for competitive advantage 1 information technology in banking 1
information systems for strategic advantage 1 investment in information systems 1 interorganizational coordination 1 implementation of information systems 1
insurance 1 information economics 1 insurance regulation 1 information privacy 1
insurance markets 1 insurance policy 1 information products 1 internet advertising 1
Information technology investments 1 incomplete contracts 1 information sharing 1 intellectual property 1
interorganizational work flows 1 information dissemination 1 key word auctions 1 long tail 1
management of information systems 1 market governance 1 market entry 1 market structure 1
music industry 1 managing risks 1 market for lemons 1 marketing strategy 1
monetizing the Internet 1 newspaper industry 1 organizational change 1 OPTION VALUATION 1
onlineauctions 1 onlineconsumer fraud 1 onlinerating systems 1 outsourcing risks 1
online search 1 privacy 1 privacy cost 1 process design 1
Product variety 1 platform envelopment strategies 1 product ratings 1 product review variance 1
research policy 1 risk assessment for information system projects 1 risk of information systems. 1 resource-based competition 1
resource-based competitive advantage 1 relevant market share 1 strategic resources 1 strategic information systems. 1
strategic use of information 1 strategic transformation 1 signaling 1 strategic investments 1
strategic options 1 strategic risks 1 sponsored search 1 Technology Adoption 1
Trading Systems 1 transactions cost economics 1 travel industry 1 transaction cost theory 1
transaction-cost economics 1 transaction costs of outsourcing 1 value of information 1 word of mouth 1
word-of-mouth marketing 1

Articles (30)

Reducing Buyers' Uncertainty About Taste-Related Product Attributes. (Journal of Management Information Systems, 2013)
Authors: Abstract:
    It is becoming increasingly important for firms to know when to take steps to reduce buyers' uncertainty about products and services. This paper focuses on investments that firms can make to reduce buyers' uncertainty about taste-related product attributes. Using an analytical model, we show that firms should disclose more taste-related information when the customer segment they directly target represents a larger share of the overall market. We further show that there are practical ways by which managers can decide if such disclosure investments are financially beneficial to their firms. Specifically, we show that the variance of consumer reviews can guide such decisions. The paper's main contribution to the extant literature is to show that firms must consider the variance, but not the mean, of buyer reviews, to determine the need to invest in reducing consumer uncertainty about taste-related attributes. The papers's findings are managerially important due to the ubiquity of consumer reviews. They are novel because most of the previous literature views the mean of the review as the key indicator. Finally, they are general in their applicability since they are independent of any assumptions about heuristics that buyers may use to ascertain product quality from the reviews of previous buyers.
IMPACTFUL RESEARCH ON TRANSFORMATIONAL INFORMATION TECHNOLOGY: AN OPPORTUNITY TO INFORM NEW AUDIENCES. (MIS Quarterly, 2013)
Authors: Abstract:
    Information technology has arguably been one of the most important drivers of economic and social value in the last 50 years, enabling transformational change in virtually every aspect of society. Although the Information Systems community is engaged in significant research on IT, the reach of our findings may be limited. In this commentary, our objective is to focus the IS community's attention on the striking transformations in economic and social systems spawned by IT and to encourage more research that offers useful implications for policy. We present examples of transformations occurring in four distinct sectors of the economy and propose policy-relevant questions that need to be addressed. We urge researchers to write papers based on their findings that inform policy makers, managers, and decision makers about the issues that transformational technologies raise. Finally, we suggest a new outlet to publish these essays on the implications of transformational informational technology.
The Power of Patterns and Pattern Recognition When Developing Information-Based Strategy. (Journal of Management Information Systems, 2010)
Authors: Abstract:
    The article discusses competitive advantage, profitability, and the evolution of organizational structures. Six patterns are identified, which are derived from case studies, theoretical work, and empirical analysis of relevant data. A forecast is offered for the intersection of economics, information science and business strategy for the second and third decades of the 21st century. Topics discussed include the impact of changes in transaction costs on corporate boundaries, competitive advantages conferred by resource endowments, hyper-differentiation of products and services, and the geometry of distribution.
Regulation of Digital Businesses with Natural Monopolies or Third-Party Payment Business Models: Antitrust Lessons from the Analysis of Google. (Journal of Management Information Systems, 2010)
Authors: Abstract:
    Some digital business models may be so innovative that they overwhelm existing regulatory mechanisms, both legislation and historical jurisprudence, and require extension to or modification of antitrust law. Regulatory policies that were developed in response to nineteenth- or twentieth-century antitrust concerns dealt principally with economies of scale leading to monopoly power and may not be well suited to the issues of network effects or third-party payer online business models such as sponsored search. From the perspective of information systems economics, we investigate if such third-party payer digital systems require intervention as profound as the government's innovative approach to the problems posed by AT&T in the 1913 Kingsbury Commitment, establishing the first private regulated monopoly. Google provides an example of a company whose innovative digital business model is difficult to fit into current regulatory frameworks, and may provide examples of the issues that might require an extension to regulatory policy.
Special Section: Competitive Strategy, Economics, and Information Systems. (Journal of Management Information Systems, 2009)
Authors: Abstract:
    An introduction is presented to a special section of this issue on the role of information technology in corporate strategic planning, including the articles "Business Models for Monetizing Internet Applications and Web sites: Experience, Theory and Predictions," "An Empirical Investigation of the Value of Integrating Enterprise Information Systems: The Case of Medical Imaging Informatics" and "Information Security: Facilitating User Precautions Vis-a-Vis Enforcement Against Attackers."
Business Models for Monetizing Internet Applications and Web Sites: Experience, Theory, and Predictions. (Journal of Management Information Systems, 2009)
Authors: Abstract:
    Almost all attempts to date to monetize Internet applications targeted at individuals have focused on natural extensions of traditional media or traditional retailing. Most are either some form of consumer-focused advertising or of consumer-focused e-commerce. And yet the Net is far more powerful than traditional media on one hand, and far more liberating and thus inappropriate as an alternative to traditional media on the other. There are numerous potential online business models that are not based on advertising. This paper explores several such areas and divides them into two basic categories, those that sell some product, experience, content, or service and earn revenues from the sale, and those that provide access to consumers and charge for access. It further divides each of these major categories into subcategories, and for each subcategory reviews current experience, places it in the context of the relevant literature in competitive strategy, and uses that theory to make predictions. The paper concludes with strategic recommendations for corporations as well as with suggestions for further research.
Special Issue: Impact of Information Systems on Market Structure and Function: Developing and Testing Theories. (Journal of Management Information Systems, 2008)
Authors: Abstract:
    This article discusses various articles published within the issue including one on consumer informedness, one on suppliers and electronic procurement, and one on the theory of newly vulnerable markets.
How Information Changes Consumer Behavior and How Consumer Behavior Determines Corporate Strategy. (Journal of Management Information Systems, 2008)
Authors: Abstract:
    Information availability has increased consumers' informedness, the degree to which they know what is available in the marketplace, with precisely which attributes and at precisely what price. This informedness has altered the demand side of market behavior: customers now discount more heavily when comparable products are available from competitors and when products do not meet their wants, needs, cravings, and longings, but they no longer discount as heavily when purchasing unfamiliar products. Changes in the demand side are producing comparable changes in the supply side: firms earn less than their expectations when competing in traditional mass-market fat spots, while earning far more than previously when entering newly created resonance marketing sweet spots. We trace the impact of hyperdifferentiation and resonance marketing on strategy, with a clear progression from a limited number of fat spots, through reliance on line extensions, and ultimately to fully differentiated market sweet spots.
An Empirical Investigation of Third-Party Seller Rating Systems in E-Commerce: The Case of buySAFE. (Journal of Management Information Systems, 2007)
Authors: Abstract:
    eBay's highly visible feedback-based rating system is also highly flawed, contributing to problems for buyers, which in turn creates problems for sellers. The well-known "market for lemons" phenomenon studied by Akerlof, and the even older Gresham's law effect, are contributing to loss of buyers' confidence in eBay, shrinking sellers' margins, contributing to the erosion of eBay's share price, and, potentially, leading to serious reductions in the value of eBay as an electronic auction site. buySAFE has created an alternative mechanism for reducing buyers' information deficit concerning sellers and their merchandise, involving a third-party certification system and bonding for qualified sellers; the rating is analogous to bond rating services such as Moody's and Standard & Poor's. Analysis of buySAFE's certification and bonding strategies for eBay sellers provides a basis for ongoing theory development related to organizational strategies that recognize the importance of information asymmetries in the digital marketplace and address resolution of consumers' concerns. buySAFE's original business model involves bonding sellers' transactions and protecting consumers for as much as $25,000. This has a number of beneficial effects on the buyers and sellers: it improves the information endowments of the buyers, it increases their willingness to pay for the goods and services offered, and it increases the margins and total revenues of the sellers. Although acceptance of buySAFE has been rapid, it has been slower than anticipated, and slower than theory would suggest. The company's executives are exploring adjusting their approach to the market and finding a way to achieve higher profitability, and working to limit their dependence upon eBay.
When Online Reviews Meet Hyperdifferentiation: A Study of the Craft Beer Industry. (Journal of Management Information Systems, 2006)
Authors: Abstract:
    We analyze how online reviews are used to evaluate the effectiveness of product differentiation strategies based on the theories of hyperdifferentiation and resonance marketing. Hyperdifferentiation says that firms can now produce almost anything that appeals to consumers and they can manage the complexity of the increasingly diverse product portfolios that result. Resonance marketing says that informed consumers will purchase products that they actually truly want. When consumers become more informed, firms that provide highly differentiated products should experience higher growth rates than firms with less differentiated offerings. We construct measures of product positioning based on online ratings and find supportive evidence using sales data from the craft beer industry. In particular, we find that the variance of ratings and the strength of the most positive quartile of reviews play a significant role in determining which new products grow fastest in the marketplace. This supports our expectations for resonance marketing.
Just Right Outsourcing: Understanding and Managing Risk. (Journal of Management Information Systems, 2005)
Authors: Abstract:
    The risks associated with outsourcing have been the principal limitation on the growth of business process outsourcing, especially cross-border outsourcing. In addition to technological improvements in risk management, it is possible to reduce the risk of opportunistic behavior faced by the buyer by redesigning work flows and dividing work among multiple vendors, increasing the range of tasks that are now appropriate candidates for outsourcing. We provide a taxonomy of risks associated with the outsourcing of business processes. We focus on strategic risks and identify the components of this risk and the means by which it can be mitigated.
Poaching and the Misappropriation of Information: Transaction Risks of Information Exchange. (Journal of Management Information Systems, 2004)
Authors: Abstract:
    We address the concept of poaching, the risk that in any transactional relationship, information that is transferred between parties for purposes specified in the contract will deliberately be used by the receiving party for purposes outside the contract, to its own economic benefit, and to the detriment of the party that provided the information. We argue that this form of transactional risk, a component of transaction costs, is increasingly important in our service-centered, information-driven, postindustrial economy. Using case examples and a discussion of the related literature, we demonstrate and discuss the conditions under which shared information creates the potential for poaching, examine the impact and efficacy of traditional remedies for contractual problems in managing poaching, and identify additional mechanisms for managing poaching risk. Our analysis suggests that these risks and their remedies are fundamentally different in nature from those considered in previous theories of supplier relations and contractual governance.
Justifying Contingent Information Technology Investments: Balancing the Need for Speed of Action with Certainty Before Action. (Journal of Management Information Systems, 2003)
Authors: Abstract:
    Executives need to master different mechanisms for analyzing their firms' investment opportunities in uncertain, difficult times. Rapidly changing business conditions require firms to move quickly, with total commitment and the rapid deployment of capital, resources, and management attention, often in several directions at the same time. However, high levels of strategic uncertainty and environmental risk, combined with limits on available funding, require firms to limit their commitment. In brief, we require high levels of strategic commitment to numerous projects, while simultaneously preserving our flexibility and withholding commitment. Whereas achieving both is clearly impossible, techniques exist that enable executives (1) to identify and to delimit their range of investment alternatives that must be considered, and to do so rapidly and reliably, (2) to divide investments into discrete stages that can be implemented sequentially, (3) to determine which chunks can safely and profitably be developed as strategic options, with value that can be captured when subsequent stage investments are made later; and (4) to quantify and to estimate the value of these strategic options with a significant degree of accuracy, so that selections can be made from a portfolio of investment alternatives. This paper also avoids restrictions of common option valuation models by providing a technique that is general enough to be used when the data required by common models are not available or the assumptions are not satisfied.
Newly Vulnerable Markets in an Age of Pure Information Products: An Analysis of Online Music and Online News. (Journal of Management Information Systems, 2002)
Authors: Abstract:
    We describe the emerging competition between music companies and their star acts and the role of online distribution in this industry. We then contrast this with the lack of competition newspapers will face from their reporters, writers, and photographers, but identify other possible competitors for newspaper publishers. We examine what resources have previously enabled record companies to lock in their star acts and ways in which technology has altered artists' abilities to reach the market independently and thus their dependency upon record companies. We examine which resources have seen their value eroded in the newspaper industry and the remaining value that the newspaper company still creates, other than building stories, adding advertising, and printing and selling the papers. We consider what part of the newspaper business is vulnerable, if any, and where threats may arise. We combine the resource-based view of competitive advantage to examine which industry may have become newly easy to enter, and the theory of newly vulnerable markets to assess which industry may actually have become vulnerable as a result. Our analyses are then used to create a computer simulation model to make the implications more explicit under a range of assumptions.
Achieving the Optimal Balance Between Investment in Quality and Investment in Self-Promotion for Information Products. (Journal of Management Information Systems, 2001)
Authors: Abstract:
    When producers of goods (or services) are confronted by a situation in which their offerings no longer perfectly match consumer preferences, they must determine the extent to which the advertised features of the product reflect the product's actual attributes. We find that the two important determinants of sellers' advertising strategy are the Repeg Cost Ratio, and the Repeat Sales Coefficient. The interplay of these two factors gives rise to four possible strategic scenarios. In the ambiguous fourth scenario, we show that sellers' strategy for information production goods will differ considerably from information consumption goods based on product complexity and cost of product return (borne by the buyer). Finally, we demonstrate that markets are often characterized by self-reinforcing limits on the extent of opportunistic advertising by sellers.
Managing the Costs of Informational Privacy: Pure Bundling as a Strategy in the Individual Health Insurance Market. (Journal of Management Information Systems, 2000)
Authors: Abstract:
    Advances in genetic testing and data mining technologies have increased the availability of genetic information to insurance companies and insureds (applicants and policy holders) in the individual health insurance market (IHIM). Regulators, concerned that insurance companies will use this information to discriminate against applicants who have a genetic risk factor but who are still healthy, have implemented genetic privacy legislation in at least 18 states. However, in previous work we have demonstrated that such legislation will have unintended consequences--it will reduce consumer participation in the market without making those remaining better off. This paper identifies a mechanism, a pure bundling strategy, that insurance companies may implement in this regulatory environment to restore (or maximize) consumer participation in the market and to discourage such discrimination among insureds. This problem is examined through System Dynamics, a simulation-based modeling technique. The results will have significant implications for policy designs implemented by insurance companies, and for legislation implemented by industry regulators, and therefore, for the insurability of the individuals that rely on this market for health insurance coverage.
Rosenbluth International: Strategic Transformation of a Successful Enterprise. (Journal of Management Information Systems, 1999)
Authors: Abstract:
    Successful companies find it exceedingly difficult to change their business strategy radically in response to impending changes in their competitive environment. Here, the authors analyze how Rosenbluth International, one of the largest travel agencies, was able to accomplish that. Threatened with disintemediation during the period of drastic restructuring of travel brokerage, the company strategically revised its value proposition. It has divested itself of its leisure travel segment and offered a range of its services on a fee basis to its customers, rather than rely on commissions by the suppliers of travel services, as it had done previously. This strategic change was enabled by information systems, several of them highly innovative, which Rosenbluth had used strategically in its prior business initiatives. The paper analyzes the management of strategic transition at Rosenbluth International in the light of general theory of organizational resistance to change.
Restructuring Institutional Block Trading: An Overview of the OptiMark System. (Journal of Management Information Systems, 1998)
Authors: Abstract:
    Financial markets perform many functions, but principal among them is to bring together buyers and sellers and to provide a mechanism for price discovery. Information technology has had a number of significant impacts on financial markets, enabling enormous increases in volumes and more sophisticated trading techniques, such as program trading and index arbitrage. Despite improvements, some large institutional investors identify shortcomings in today's markets that make the process of buying or selling large, block orders time-consuming and costly. To address these concerns, a new trading system, OptiMark, has been built around several innovations, including (1) a graphical user front end for depicting trading preferences, and (2) a back end built on high-performance computers that process expressions of trading interest according to a price-setting algorithm intended to achieve superior outcomes for traders. OptiMark provides a means for more cost-effective block trading and is expected to contribute to regulatory objectives. This paper details the operations of OptiMark, examines its adoption potential, and assesses the impact it may have on block trading, broker-dealer intermediaries, and the equities markets.
Evaluating Alternative Information Regimes in the Private Health Insurance Industry: Managing the Social Cost of Private Information. (Journal of Management Information Systems, 1997)
Authors: Abstract:
    This paper addresses the cost imposed on an insurance market when individual applicants possess an information advantage over the insurers; in short, we examine the social cost of private information. When consumers differ significantly in terms of their riskiness, and their insurance companies cannot, or are not permitted to assess these differences, insurance companies will attempt to charge all consumers the same premiums for equivalent coverage; unless mechanisms can be designed to allow consumers to signal accurately and credibly their private assessments of their own riskiness, low-risk consumers will consider that they are being overcharged and many will drop out of the market. These consumers, who wish to buy insurance--albeit at a lower price--but who are not now insured, represent a loss of social welfare. As information asymmetries increase, more consumers determine that they are being overcharged, increasing the loss of social welfare. This paper addresses minimizing the loss of social welfare, or maximizing the extent to which the population is insured, in the presence of extremely different consumer risk profiles by examining plausible pricing and policy designs, in order to assess which design minimizes decreases in consumer participation in the insurance market. While unable to make selections among information regimes, which entail a wide range of complex and subjective social choices, the paper does make clear comparisons of alternative designs within each information regime.
Alternative Securities Trading Systems: Tests and Regulatory Implications of the Adoption of Technology. (Information Systems Research, 1996)
Authors: Abstract:
    Reasons for the mixed reactions to today's electronic off-exchange trading systems are examined, and regulatory implications are explored. Information technology (IT) could provide more automated markets, which have lower costs. Yet for an electronic trading system to form a liquid and widely used market, a sufficient number of traders would need to make a transition away from established trading venues and to this alternative way of trading. This transition may not actually occur for a variety of reasons. Two tests are performed of the feasibility and the desirability of transitions to new markets. In the first test, traders in a series of economic experiments demonstrate an ability to make a transition and develop a critical mass of trading activity in a newly opened market. In the second test, simulation is used to compare the floor- based specialist auction in place in most U.S. stock exchanges today to a disintermediated alternative employing screen-based order matching. The results indicate that reducing the role of dealer-intermediaries can actually diminish important measures of market quality. Our findings suggest that the Low trading volumes on many off-exchange systems do not result from traders' inability to break away from established trading floors. Rather, today's off-exchange trading systems are not uniformly superior to the trading mechanisms of traditional exchanges. Thus, regulatory actions favoring off-exchange trading systems are not warranted; but, improved designs for IT-based trading mechanisms are needed, and when these are available, they are likely to win significant trading volume from established exchanges.
Market Dominance as a Precursor of a Firm's Failure: Emerging Technologies and the Competitive Advantage of New Entrants. (Journal of Management Information Systems, 1996)
Authors: Abstract:
    New entrants in many industries are able to challenge the business of historically dominant firms. In many markets, dominant players have pursued pricing and service policies that, although once highly effective, now make their markets attractive targets for aggressive new entrants. The entrants' strategies rely on lower overhead costs, new technologies, alternative distribution channels, and the active targeting of profitable customers. Several factors will make it possible for entrants to attack dominant players; simplistic historical pricing mistakes or policies of promising or providing universal service will make it attractive for new entrants to attack. Restrictions on the flexibility of incumbents--both externally and internally imposed--may make it difficult for dominant players to defend themselves effectively against attack by more flexible entrants with cream-skimming strategies and newer technology. We develop a set of alternatives for incumbent firms facing increasing "contestability" in their markets and the threat of agile entrants.
Identifying Sources of Reengineering Failures: A Study of the Behavioral Factors Contributing to Reengineering Risks. (Journal of Management Information Systems, 1995)
Authors: Abstract:
    Recent experience suggests that many reengineering efforts fail, and that they fail for reasons unrelated to the technical ability of organizations to implement information systems. Our research suggests that the two principal reasons for failure are functionality risk and political risk: respectively, the organization's inability to understand its uncertain future strategic needs, and its inability to make painful and difficult changes in response to these future strategic needs. Recent research in the organizational change literature suggests that these risks are the result of conflict among the organization's current strategy, its espoused degree of change, the actually accepted and generally smaller degree of change, and the generally larger degree of change that would be in some sense optimal. Moreover, the conflicts among these may be unperceived or undiscussable within the organization, exacerbating the risks. We summarize in a few testable hypotheses our experience with managing the risks of reengineering, and use a small set of representative case studies to examine these hypotheses informally.
Segmentation, Differentiation, and Flexible Pricing: Experiences with Information Technology and Segment-Tailored Strategies. (Journal of Management Information Systems, 1994)
Authors: Abstract:
    Information technology (IT) radically alters the cost of capturing, storing, and analyzing information, and thus dramatically alters the value of the historical data represented by a firm's detailed transaction records of customer interactions. Yet, information systems are seldom used to their full potential in developing flexible pricing strategies and tailored offerings for individual customers, based either on the actual cost of serving these customers or on their demonstrated preferences and requirements. This will become increasingly crucial in industries with heterogeneous customers and with costs that vary widely across customers, in order to enable flexible pricing and to provide services that are accurately targeted at the needs of specific customer segments. In addition, accurate, detailed, and robust cost-accounting systems and expertise in the interpretation of performance data will increasingly become essential for competing successfully; those firms prevented from accurate microsegmentation by corporate culture and tradition, by regulation, or by an outmoded information infrastructure will be vulnerable to newer and more nimble competitors. In particular, being the low-cost provider with economies of scale will not provide adequate defense against targeted cream-skimming by opportunistic competitors, able to offer lower prices to selected customer segments. The earliest academic papers on the strategic implications of information technology explicitly adopted a framework recommending that firms adopt a single, simple generic strategy from a small set (cost leadership, differentiation, or niche). In contrast, recent experience suggests that IT may enable firms to select from more finely tuned strategic options, arid that it may require them to implement multiple strategies simultaneously.
Limits to Interfirm Coordination through Information Technology: Results of a Field Study in Consumer Packaged Goods Distribution. (Journal of Management Information Systems, 1993)
Authors: Abstract:
    Researchers have suggested that information technology (IT) can reduce coordination costs, leading to increased coordination and cooperation among buyers and suppliers in an industry. However, improved coordination through IT, and the economic benefits from that coordination, may not be fully realized in practice; this conclusion is suggested by a field study in the consumer packaged goods industry investigating the impact of IT on interactions between manufacturers and retailers. New coordination mechanisms are emerging, driven by checkout scanner systems and IT, that permit more tightly coupled logistics operations in the distribution channel. The potential benefits of this increased coordination, through reduction in inventory and more stable manufacturing, are dramatic. However, we have observed considerable resistance by retailers to these innovations. Analysis of our field study results suggests that this resistance is due to the impact of the new coordination mechanisms on bargaining power; retailers perceive that their bargaining power will be eroded under the new coordination structure, and fear that this will preclude their sharing in the economic benefits.
The Impact of Information Technology on the Organization of Economic Activity: The "Move to the Middle" Hypothesis. (Journal of Management Information Systems, 1993)
Authors: Abstract:
    Investments to increase the level of explicit coordination with outside agents have generally resulted in increased risk to the firm; firms have traditionally avoided this increased risk by becoming vertically integrated or by underinvesting in coordination. This paper argues that information technology (IT) has the ability to lower coordination cost without increasing the associated transactions risk, leading to more outsourcing and less vertically integrated firms. Lower relationship-specificity of IT investments and a better monitoring capability imply that firms can more safely invest in information technology for interfirm coordination than in traditional investments for explicit coordination such as co-located facilities or specialized human resources; firms are therefore more likely to coordinate with suppliers without requiring ownership to reduce their risk. This enables them to benefit from production economies of large specialized suppliers. Moreover, rapid reduction in the cost of IT and reduction in the transactions risk of explicit coordination makes possible substantially more use of explicit coordination with suppliers. The resulting transaction economies of scale, learning curve effects, and other factors favor a move toward long-term relationships with a smaller set of suppliers. We call this combination--a move to more outsourcing, but from a reduced set of stable partnerships--the "move to the middle" hypothesis.
Information Technology and Industrial Cooperation: The Changing Economics of Coordination and Ownership. (Journal of Management Information Systems, 1992)
Authors: Abstract:
    Cooperation is becoming increasingly important in the modern business environment. The resulting emergence of new forms of organizational relationships is challenging managers to understand the fundamental dynamics of cooperation in order to evaluate and restructure their industrial relationships. This paper applies transactions cost economics toward understanding cooperative relationships. Cooperation is viewed as an effort to increase resource utilization and value through higher explicit coordination of economic activities. However, increasing explicit coordination can create transaction risks: exposure to opportunistic behavior by the other party. Transaction risk limits the level of coordination that is achievable. Information technology can reduce the costs of coordination while also reducing the transaction risks associated with increased coordination. These dual effects suggest a move toward tightly coupled, cooperative relationships.
Information Technology at Rosenbluth Travel: Competitive Advantage in a Rapidly Growing Global Service Company. (Journal of Management Information Systems, 1991)
Authors: Abstract:
    Over the past ten years, Rosenbluth Travel has grown from a regional travel agency with $40 million in annual sales to one of the five largest travel agencies in the United States, with sales of $1.3 billion. Their strategy was based on exploiting the structural changes initiated by airline deregulation in 1978, including growth of the corporate travel market and increasing economies of scale leading to consolidation. Information technology (IT) was a fundamental part of this strategy. The case sheds light on several theories on gaining competitive advantage through IT; these theories feature technology leadership, leveraging critical resources, the role of IT infrastructure, and switching costs. While these theories contribute to an explanation of Rosenbluth's success, a critical factor appears to be the vision to see an opportunity and the ability to hustle to exploit it.
Sustaining IT Advantage: The Role of Structural Differences. (MIS Quarterly, 1991)
Authors: Abstract:
    Information systems are strategic business tools, frequently essential to a firm and central to its competitive strategy. Their importance is now acknowledged. But information technology--equipment and services--is available to all firms, and most applications can be duplicated. The copying firm often enjoys the advantages of newer and better technology, learns from the experience of the innovator, and thus can offer comparable services at lower costs. When can an information technology-based strategy confer sustainable competitive advantage? The answer may lie with the role of strategic resources in explaining the allocation of economic benefits from an IT innovation. Specifically, information technology can lead to sustainable competitive advantage when it is used to leverage differences in strategic resources. This may be true even in cases where duplication is relatively easy and there are few dynamic effects, like first-mover advantages, to protect the innovation. An important characteristic of IT is its ability to manage interactions among economic activities; economic theory can be used to establish a link between this characteristic of IT and shifts in resource values. This allows us to identify and examine some opportunities for deploying IT to leverage structural resource differences among firms, including differences in vertical integration and diversification as well as differences in the quality and organization of key resources.
MAC--Philadelphia National Bank's Strategic Venture in Shared ATM Networks. (Journal of Management Information Systems, 1990)
Authors: Abstract:
    Philadelphia National Bank (PNB) lunched MAC, its shared Automatic Teller Machine (ATM) network service, in response to a threat from Girard. Girard had introduced George, the first major ATM offering in Philadelphia, and hoped it would provide competitive advantage in retail banking; PNB used MAC to counter this threat. Despite Girard's scale advantage and first-mover effects, PNB was able to attract enough banks to MAC for MAC to dominate and eventually merge with or acquire all other ATM networks in Pennsylvania. Several factors explain why PNB succeeded with MAC, and why the ownership structure of MAC is unique among the major shared ATM networks in the U.S. Among these, timing is key—MAC emerged before the other shared ATM networks, and before the critical importance of ATM service was evident. Contrasting the structure of ATM networks with other electronic distribution channels, and comparing the profitability of providing each, offers valuable insight into the power associated with the channel provider under different conditions.
Strategic Information Technology Investments: Guidelines for Decision Making. (Journal of Management Information Systems, 1990)
Authors: Abstract:
    As the strategic importance of information technology (IT) has increased, the decision of where and when to allocate resources to IT programs has become more risky and more difficult. Executives are tempted by the opportunities for strategic impact, but struggle with the massive expenditures and uncertainties involved. Evaluating the opportunity afforded by a system and judging its strategic impact in advance have proven difficult, and even when analyses are performed well, they are frequently done on an ad hoc basis. IT can confer advantage under appropriate conditions, and equally important, even when it fails to confer advantage, it may still prove crucial. Both concepts--competitive advantage and strategic necessity--confound traditional financial analysis. We offer seven principles on which to base an evaluation of a strategic IT venture. Although we have not performed a statistically validating study, these principles are expressed as guidelines we believe to be true, based on experience. The guidelines range from modeling the investment decision, through managing risk, to preparing for unanticipated upside and downside implications.