Sunil Wattal

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

October 15, 2009 By Sunil Wattal

Measuring the Value of Social Dynamics in Online Product Ratings Forums

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

October 2, 2009 By Sunil Wattal

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

September 11, 2009 By Sunil Wattal

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

September 11, 2009 By Sunil Wattal

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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