MIS Distinguished Speaker Series

Temple University

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Archives for 2009

Michael Smith to speak on Converting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy

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Converting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy

Michael Smith

Heinz Career Development Associate Professor of Information Systems and Marketing
Heinz College’s School of Information Systems and Management, Tepper School of Business
Carnegie Mellon University

December 4, 2009

Alter Hall 405, 1000am – 1130am

Abstract

The availability of digital distribution channels for media content has raised several important questions for marketers, notably whether the use of digital distribution channels will significantly cannibalize physical sales and whether legitimate digital distribution channels will be able to dissuade consumers from using (illegitimate) digital piracy channels. We address these two questions using the removal of NBC content from Apple’s iTunes store in December 2007, and its restoration in September 2008, as natural shocks to the supply of legitimate digital content, and analyzing its impact on demand through BitTorrent piracy channels and the Amazon.com DVD store.

We address these questions using two large datasets from Mininova and Amazon.com documenting levels of piracy and DVD sales for both NBC and other major networks’ content around these events. We analyze this data in a difference-in-difference model and find that NBC’s decision to remove its content from iTunes in December 2007 is causally associated with an 11.2% increase in the demand for pirated content. This is roughly equivalent to an increase of 49,000 downloads a day for NBC’s content and is approximately twice as large as the total legal purchases on iTunes for the same content in the period preceding the removal. We also find evidence of a smaller, and statistically insignificant, decrease in piracy for the same content when it was restored to the iTunes store in September 2008. Finally, we see no change in demand for NBC’s DVD content at Amazon.com associated with NBC’s closing or reopening of their digital distribution channel on iTunes.

For a copy of the full paper, click here.


Il-Horn Hann to speak on Forecasting the Sales of Music Albums: A Functional Data Analysis of Demand and Supply Side P2P Data

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Forecasting the Sales of Music Albums: A Functional Data Analysis of Demand and Supply Side P2P Data

Il-Horn Hann
Associate Professor of Information Systems
RH Smith School of Business
University of Maryland

November 20, 2009

Alter Hall 405, 1000am – 1130am

Abstract

We predict the sales of music albums by utilizing demand and supply side P2P data using a functional data
analysis (FDA) approach. We find that the characteristics of the functional form of downloading behavior explain
first-week sales by more than 60% after controlling for album characteristics. By updating our forecasts from 4
weeks to 1 week prior to the album release date, we examine the dynamic changes across different quantiles of
the sales-distribution for the demand- and supply-side P2P data. We find that the gap between downloading
effect on sales among high-quantile vs. low-quantile albums reach the highest level one week before the release
date.

For a copy of the full paper, click here.

Eric Clemons to speak on How Information Changes Consumer Behavior And How Consumer Behavior Determines Corporate Strategy

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How Information Changes Consumer Behavior And How Consumer Behavior Determines Corporate Strategy

Eric Clemons

Professor of Operations and Information Management
The Wharton School
University of Pennsylvania

November 6, 2009

Alter Hall 405, 1000am – 1130am

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 upon line extensions, and ultimately to fully differentiated market sweet spots.

For a copy of the full paper, click here.

Arun Rai to speak on Leveraging IT Capabilities and Competitive Process Capabilities for Interorganizational Relationship Portfolio Management

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Leveraging IT Capabilities and Competitive Process Capabilities for Interorganizational Relationship Portfolio Management

Arun Rai

Regents’ Professor and the Harkins Chair in Information Systems
Robinson College of Business
Georgia State University

October 30, 2009

Alter Hall 405, 1000am – 1130am

Abstract

Firms are increasingly dependent on external resources and are establishing portfolios of interorganizational relationships (IRs) to leverage them for competitive advantage. However, the system of IT and process capabilities that firms should establish to dynamically manage IR portfolios are not well understood. We draw on the competitive dynamics perspective and resource dependency theory, and on the literatures on IT business value, interorganizational systems and interorganizational relationship management, to theorize how key IT structural capabilities (IT integration and IT reconfiguration) and competitive process capabilities (process alignment, partnering flexibility and offering flexibility) operate as a system of complements. We also theorize why a firm’s IR portfolio moderates the effects of the structural IT capabilities on the competitive process capabilities, and why a firm’s environmental turbulence moderates the effects of complementary process capabilities on competitive performance. We test our model using survey data from 318 firms in four industries. Our results provide broad support for the position that IT and process capabilities are interdependent and operate as a system of complements, that the relationship between the structural IT capabilities and the competitive process capabilities is contingent on IR portfolio concentration, and that the competitive advantage derived from the complements of competitive process capabilities is contingent on environmental turbulence. We discuss the theoretical and practical implications of how firms should develop a complementary system of IT structural capabilities and competitive process capabilities to dynamically manage IR portfolios and leverage external resources.

For a copy of the complete paper, please send an email to swattal@temple.edu

Wendy Moe to speak on Measuring the Value of Social Dynamics in Online Product Ratings Forums

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Measuring the Value of Social Dynamics in Online Product Ratings Forums

Wendy Moe

Associate Professor of Marketing
R H Smith School of Business
University of Maryland

October 16, 2009

Alter Hall 746, 1130am – 100pm

Abstract

Extant research has shown that consumer online product ratings can significantly influence
product sales. However, these ratings have also been shown to be subject to a number of social
influences. In other words, posted product ratings not only reflect the customers’ experience
with the product but also reflect the influence of others’ ratings. The objective of this paper is to
model posted product ratings in an effort to measure the impact of the social dynamics that may
occur in a ratings environment on both subsequent rating behavior as well as product sales.

Our modeling efforts are two fold. First, we model the arrival of product ratings and separate the
effect of social influences from the underlying or baseline ratings behavior. Second, we model
product sales as a function of posted product ratings. However, rather than simply modeling the
effects of observed ratings, we decompose ratings into a baseline rating and the contribution of
social influence. From this model, we can measure the overall sales impact resulting from
observed social dynamics.

We show that ratings behavior is significantly affected by previously posted ratings. We further
show that the effect on sales resulting from this social dynamic is significant but relatively small
compared to the effect that ratings have when they represent an unbiased and independent
evaluation of the product. With the increased popularity of online discussion and ratings forums,
many marketers have been investing in efforts to moderate these conversations or to contribute
comments of their own, effectively biasing the sentiments expressed in the online forum. Our
results show that while these efforts can affect sales, their effects are limited and short-lived.

Alan Hevner to speak on Design Science Research in Information Systems: Cycles of Activities

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Design Science Research in Information Systems: Cycles of Activities

Alan Hevner

Professor and Eminent Scholar, Citigroup/Hidden River Chair of Dist. Technology
Information Systems and Decision Sciences
College of Business University of South Florida

October 9, 2009

Alter Hall 405, 1000 –  1130am

Abstract

Design science research seeks to extend the boundaries of human and organizational capabilities by creating new and innovative artifacts. In this presentation, I will describe the performance of design research in Information Systems via a concise conceptual framework and clear guidelines for understanding, executing, and evaluating the research. I then analyze design science research as an embodiment of three closely related cycles of activities – the Relevance Cycle, the Rigor Cycle, and the central Design Cycle. The recognition of these three cycles in a research project clearly positions and differentiates design science research from other research paradigms in the Information Systems field. The presentation concludes with a discussion of several key issues concerning Design Science research in IS – publication in top journals, external funding, and academic value.

References

A. Hevner, S. March, J. Park, and S. Ram, “Design Science Research in Information Systems,” Management Information Systems Quarterly, Vol. 28, No. 1, March 2004, pp. 75-105 (pdf).

A. Hevner, “A Three Cycle View of Design Science Research,” Scandinavian Journal of Information Systems, Vol. 19, No. 2, 2007, pp. 87-92 (pdf).

S. Purao, C. Baldwin, A. Hevner, V. Storey, J. Pries-Heje, B. Smith, and Y. Zhu, “The Sciences of Design:  Observations on an Emerging Field,” Communications of the AIS, Vol. 23, Article 29, 2008, pp. 523-546 (pdf).

Detmar Straub to speak on Specifying Formative Constructs in Empirical Research

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Specifying Formative Constructs in Empirical Research

Detmar Straub

J. Mack Robinson Distinguished Professor of Information Systems
Computer Information Systems & Center for Process Innovation  
J. Mack Robinson College of Business
Georgia State University

September 18, 2009
Alter Hall 404, 1000 –  11:30am

Abstract

While researchers go to great lengths to justify and prove theoretical links between constructs, the relationship between measurement items and constructs is often ignored. By default, the relationship between construct and item is assumed to be reflective, meaning that the measurement items are a reflection of the construct. Many times, though, the nature of the construct is not reflective, but rather formative. Formative constructs occur when the items describe and define the construct rather than vice versa.

In this research, we examine whether formative constructs are indeed being mistaken for reflective constructs by information systems researchers. By examining complete volumes of MIS Quarterly and Information Systems Research over the last 3 years, we discovered that a significant number of articles have indeed misspecified formative constructs. For scientific results to be valid, we argue that researchers must properly specify formative constructs. This paper discusses the implications of different patterns of common misspecifications of formative constructs on both Type I and Type II errors. To avoid these errors, the paper provides a roadmap to researchers to properly specify formative constructs. We also discuss how to address formative constructs within a research model after they are specified.

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V. Sambamurty to speak on Competition in Enterprise Software Systems Markets

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Competing in Crowded Markets: The Dynamics of Competition in the Enterprise Systems Software Industry

V. Sambamurty

Eli Broad Professor of Information Technology
Eli Broad College of Business
Michigan State University

September 03, 2009
Alter Hall 505, 1130am –  0100pm

Abstract

Vendors of Enterprise systems software (ESS) offer a portfolio of software components to support a variety of specific business functions.  Client organizations construct a digital platform for their business processes by buying software components from one or more ESS firms and expect the components to be compatible with each other.  Each software component (e.g., ERP, CRM, analytics) forms a market, with multiple ESS firms competing in each of those markets.  As a result, the ESS industry is characterized by multimarket competition.  The existing literature in strategy suggests that multimarket competition is characterized by two findings: (i) Greater multimarket contact improves firm performance because of the potential for mutual forbearance and tacit collusion (ii) Greater domain overlap exposes a firm to the whirlwinds of intense competition and adversely affects its performance.  Yet, the ESS industry exhibits another unique characteristic: potential for indirect network externality.  In their desire to architect seamless digital platforms, customers expect that components bought from multiple firms will integrate relatively easily and at low integration costs.  Therefore, domain overlap might in fact create the potential for positive performance gains in the ESS industry.  Therefore, the nature of multimarket competition in the ESS industry deserves fresh attention.  We examine these competitive dynamics by analyzing data from a set of ESS firms that account for more than 95% of the revenue in this market over 3 time-periods.  Our research suggests that the combination of multimarket contact and domain overlap do lead to findings that are contrary to extant research.  First, our findings suggest that are no obvious benefits to simply increasing the number of component markets where an ESS firms competes.  However, there is clear evidence of economies of scale and scope in expanding a functional component to serve multiple vertical industry segments.  On the other hand, our research suggests that when firms strategically expand their component portfolio so as to increase their domain overlap, they show positive performance gains.  We propose that the potential for indirect externality effects trumps traditional domain overlap considerations, whereby competing in markets with high overlap may actually be preferable for a firm in the ESS or digital goods industries.  Thus, presence in highly competitive markets is desirable so as to be attractive to client organizations because it signals competitive strength and commitment to digital platforms.  Though the impact of multimarket contact on firm performance is positive and consistent with prior findings, we find that firms are able to extract further value from their multimarket contact when they also have high a degree of market overlap thus underlining the strategic aspects to market selection.  We conclude with recommendations for theory and practice.

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