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JOM 2008 Best Paper Session and Award CeremonyAcademy of Management 2009 Annual MeetingChicago, ILAugust 9, 2009

Kenneth Boyer, Ohio State UniversityMorgan Swink, Michigan State UniversityCo-Editors in Chief

0:05

2008 Best Reviewers Kevin Dooley, Arizona State University Linda Angell, American University of

Sharjah Christian Rossetti, North Carolina State

University Michael Gorman, University of Dayton

0:58

2008 Best Reviewers

Adrian Choo, Rensselaer Polytechnic Institute

Tobias Schoenherr, Michigan State University

1:49

2008 Best Associate Editor Xenophon Koufteros, Texas A & M

University

Congratulations!

2:54

2008 Best Paper Presentations

3:09

Understanding Behavioral Sources of Process Variation Following Enterprise

System Deployment

Elliot Bendoly – Emory UniversityMark Cotteleer – Marquette University

4:24

• Shared perspective of much of the ES literature – that it has a strong standardizing influence on processes and outcomes (c.f., Davenport 1998; Lee and Lee 2000; Scheer and Habermann, 2000; McAfee 2000; Bendoly 2001; Light et al 2001; Jacobs and Bendoly 2003; Razi and Tarn 2003; Rabinovich 2003; Bendoly and Kaefer 2004; Seely Brown and Hagel 2004; Trott and Hoecht 2004; Bendoly and Jacobs 2005)

• Nick Carr (2003, 2004) Does IT Matter?

• Concurrent work illustrates parity followed by divergence in target firm (Cotteleer 2006)

• Little insight into mechanisms driving deviations.• Data on other firm (not published) shows less deviation across sites

• Sparks search for theoretical framework that explores deviations.• Cases great for developing “hypotheses and propositions”. (Yin 1994)• But wide array of differences make such field studies difficult when attempting to

isolate specific factors.

Origins of the Study

5:17

Context : Performance trends following large-scale IT implementation; Case of ERP.

Research Focus: Role of system/operational misalignment and ease of

circumvention of system imposed protocols on trends in system use.

Methods : Case study comparisons and controlled experiments

Study Overview

7:10

Findings : Support for the moderating role of “ease of circumvention” on the intention to circumvent system imposed protocols over time in response to perceived system/operational mismatches.

Strong intention of managers to circumvent systems in the

presence of task-technology mismatches.

Perceived ease of circumvention significantly impacts time-frame for intent.

Study Overview

7:34

Theoretical Motivation• Misfits will be resolved through circumvention where it is easy to do so

(George 2003; Szajna and Scamell 1993; Robbins 1986; Festinger 1957).

• Where circumvention is difficult, other factors may be instrumental in resolving misfits – time and associated experience being obvious candidates (Robey et al. 2002; Tyre and von Hipple 1997; Stein and Vandenbosch 1996; Tyre and Orlikowski 1994).

As people gain experience with use, they also gain insight into possible misuse.

Phased perspectives (e.g., adoption, adaptation, acceptance, use) of implementation may be inadequate….,

…, and initially observed levels of user acceptance may be very different from those observed at later points – as adaptation continues.

7:50

Theoretical Motivation

In essence, I will bide my time with current protocols until I can figure out a way around the misfit. 9:45

Peripherals Division • Demonstrates strong adherence to and

communication of the centralized model from the start

• Deploys knowledge and policing resources

• Realizes minimal deviations from anticipated long-term results

Tristen• Faces perceived mismatches between

local requirements and a centralized ERP deployment

• Leads users to continue seeking ways to circumvent the system-driven business process

• Management reports focus on unanticipated behavioral phenomena

Field Evidence: Case Comparisons

11:50

In the presence of local task-technology mismatches…

Easy to circumvent = Immediate intention to circumvent (H1)

Difficult to circumvent = Initially low intention to circumvent

= Perseverance of intention (and ability) to circumvent in the long-term (H2)

H1: For a given level of perceived mismatch, short-term intentions to circumvent will be greater when circumvention options are more apparent then when circumvention options are less apparent.

H2: At higher levels of perceived mismatch, differences between long-term and short-term intentions will be greater when circumvention options are perceived to be less available and obvious.

Experimental Hypotheses

(i.e., If circumvention is easy, I will do it right away)

(i.e., If circumvention is hard [but important], I will keep at it until I succeed)

15:05

• Evaluate differences between intended short- and long-term behavioral reactions to: ― Task-technology mismatches in the context of ERP

implementation. ― The moderating role of “Ease of circumvention”.

• Design goals:― Avoid operational complexities that would risk confounding

examinations at a firm-level of analysis.― Reduce the risk of common-source common-method bias.― Retain adequate sample size for evaluation.

Experimental Study

16:50

Extent to which workarounds are available and obvious (ease-of-circumvention)

High Low

Exte

nt to

whi

ch th

e IT

pro

toco

l is

perc

eive

d as

a p

oor f

it to

task

-sp

ecifi

c pr

oces

sing

nee

ds

Low

Users are likely to largely comply with new protocols, both in the short- and long-term (little drive to do otherwise).

Users are likely to comply almost entirely with new protocols, both temporarily and in the long-term (little drive to do otherwise).

Hig

h Users are likely to pursue circumvention immediately and to maintain such resolutions of misfit (i.e. not increase such efforts).

Users are likely to temporarily comply with new protocols, but are also likely to view workarounds as obtainable and pursuable in the long run. Implication: Delayed circumventions and delayed increases in process variation.

For unshaded cells: Time is unlikely to be viewed as a valuable mechanism for additional circumvention, since additional circumvention itself provides little added value.

Treatment Types

16:32

Two separate scales for circumvention intent. - Drew upon similar scales used in the literature on behavioral intent and applications of the theory of reasoned action (e.g., Fishbein and Ajzen 1975; Gentry and Calantone 2002).

Adapted from established related literature on the “ease of system use” construct (Goodhue and Thompson 1995, Somers, Nelson and Karimi 2003). These items also mimic the scale items used to depict general perceptions of behavioral control in technology acceptance studies (Ajzen 1991; Davis, 1989; Davis et al. 1989).

The task-technology fit literature general guidance in terms of assessing the degree of mismatch perceived between centralized protocols and the centralized/decentralized nature of established operating processes (Goodhue, 1998; Goodhue and Thompson, 1995).

Perceived Mismatch:

Perceived Ease-of-circumvention:

Circumvention Intent (Dependent Variable):

Measurement Scales

Scales test reliable ( > 0.80). Differences among treatment groups significant and in anticipated direction.

17:07

Full Sample: Initial support for Hypothesis 1―High Ease of Circumvention Greater short-term intention to circumvent (p<0.005)*

― Observable in both low (p<0.01) and high (p<0.001),mismatch conditions when tested separately.

General Treatment Comparisons

H1: Significant differences between EOC conditions

*Similar results, although not formally hypothesized, are observed with regard to long-term intention to circumvent for low (p<0.005) and high (p<0.05) mismatch treatments. 17:27

High Mismatch Treatments: Initial support for Hypothesis 2 ―High Ease of Circumvention No short- vs. long-term difference in circumvention intent. ―Low Ease of Circumvention Significant (p<0.001) short- vs. long-term difference in

circumvention intent.― i.e., adopt early but circumvent in the long-term.

General Treatment Comparisons

H2: Significant differences between short- and long-term intention among EOC conditions

18:09

If mismatch is low, I don’t try that hard to circumvent the process•I do a little more if it is really easy…

General Results (simplified)

19:03

If mismatch is high, my response depends on how I see my options•If circumvention is easy, I do it right away•If circumvention is hard, I bide my time

General Results (simplified)

19:13

Statistical ResultsTable 3: GLS regressions of controlled treatments and interactions on circumvention forms

** p < .01, one-tailed, * p < .05, one-tailed; Note: Since no other preliminary controls are significant in the regressions, either w.r.t. total model R2 or factor coefficients, their numbers are excluded from this table.

DV: Short-term Circumvention

DV: Long-term Circumvention Test of Coeff.

Diffs (SE) (SE) Controls Constant 2.74** (0.10) 2.68** (0.08) n.s. Age 0.03* (0.01) 0.01 (0.02) p<0.05 Gender (Male=0, Female=1) -0.08 (0.06) -0.09* (0.03) n.s. Primary Independents Misfit (Low=0, High=1) 0.41** (0.10) 1.99** (0.13) p<0.01 Ease-of-circumvention (Low=0, High=1) 0.58** (0.12) 0.57** (0.11) n.s.

Interaction term Misfit x Ease-of-circumvention 1.05** (0.19) 0.04 (1.63) p<0.01 R 2 (On addition of Interaction term) 0.048** 0.004 Final R2 0.453** 0.644**

If mismatch is high, my response depends on how I see my options•If circumvention is easy, I do it right away•If circumvention is hard, I bide my time

19:33

Managerial Prescriptions :• Strong communication and understanding during the

implementation process • Strong management of organizational ‘perceptions’ of mismatch.• Continuous monitoring and control beyond go-live (to mitigate

lagged-shifts from initial results)• Emphasis on the difficulty, inappropriateness and/or policing of

circumvention may be warranted.

Research Prescriptions :• Longitudinal perspective may be critical when studying adoption

and performance• As traditional phased deployment perspectives may miss crucial

interweaving of adaptation and acceptance.

Prescriptions for Management and Research

19:49

Thank you.

Discussion

21:20

AoM 2009Sunday, August 9, 2009

ISO 9000 Practices and Financial Performance: A Technology Coherence Perspective

FRANCISCO VELOSOCarnegie Mellon University andUniversidade Católica Portuguesa

MARY BENNERWharton School of Management

University of Pennsylvania

25:36

PROCESS MANAGEMENT AND FIRM PERFORMANCE

Do Process Management Practices

Matter for Firm Economic Performance?

Do Technology Capabilities Play a Role? How and Why?

Focus on ISO 9000 Adoption

Framework to Analyze Performance Impact of Process Management Practices (PMP) Adoption

Statistical Testing of the Relevant Propositions

26:50

RELATED LITERATURE AND EARLY FINDINGS

Prior research on adoption of Process Management Practices (PMP) - including ISO 9000 - suggests

– Adoption decision comes from ambition to legitimize superior performance as well as from institutional pressure

– Adoption has a positive impact on yield, waste and other related process efficiency metrics

– Adoption is seen by managers and workers as having had a positive impact on performance (perception metrics)

– Equivocal results in terms of impact of adoption on financial performance

Limitations of Existing Research – Interest mostly in determinants of adoption for most ‘fads’

– Limited use of hard data for assessing impact on performance

– Using cross sections and control groups, especially for performance evaluation

– Assessment of impact on performance hasn’t explored firm heterogeneity, especially not the role of technology

27:40

SIGNALING, ADOPTION AND PERFORMANCE

What is ISO 9000?– Standard established by the International Standards Organization

– Set of guidelines on how should a firm map, document and support the quality management system in a given operating facility, regardless of what it does

– Adherence to ISO 9000 certified by external auditor and requires renewal

What can it to for organizations?– Tighten linkages and coordination among routines across organization

– Increase the interdependence and “fit” in organizational activities, creating unique and inimitable complementarities

Why is ISO adoption likely to impact performance?– Increased revenue from access to additional customers as a result of legitimacy

associated with adoption

– Increases in operational effectiveness and resulting cost reductions associated with PMP implementation

But benefits less likely with widespread adoption– Firms cannot claim ISO as legitimating superior performance

– Most competitors will have undergone same process improvement path29:46

THE COMPETITION HYPOTHESIS

H1a: : Adoption of ISO 9000 practices by a firm will

result in improved financial performance

H1b: Adoption of ISO 9000 practices by firms in an industry will be associated with performance benefits for early adopters, but lower performance benefits for later adopters

31:33

BASE MODEL, DATA & VARIABLES

Data from one Industry: Automotive Suppliers– At least one Segment with Auto Industry Sales above 50%– Comprehensive panel of 90 US public firms from 1988 to 1997– Data Represents more than 65% of the total supplier industry

Model: Firm Fixed Effects Regression Model

Dependent Variable: Performance– ROS, ROA, MTB ratio

Independent Variables– ISO 9000 Adoption (0-1)

• Direct Effect• Interaction with Early adopters (Until 95)

Control Variables– Product/Process Identifier – Log of Sales (Proxy for Size)– Capital Expenditures– Customer Concentration (Herfindahl on 3 big sales)– Geographic Concentration (Herfindahl on Europe US Japan)– Market Diversification (Herfindahl on sales across SIC codes)– Time Effects

32:00

PATTERN OF ISO 9000 ADOPTION OVER TIME

0

10

20

30

40

50

60

70

80

90

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Ninety Firms in the Sample

50% of the sample

33:21

IMPACT OF ISO ADOPTION ON FIRM PERFORMANCE

Dependent: ROS ROA MTB ROS ROA MTB

Adoption n.s. n.s. +** n.s. +** +***

Log of Sales

Capital Expenditures

Customer Concentration Controls Controls

Segment Diversification

Geographic Diversification

Observations 457 457 457 457 457 457Method: Firm Fixed Effects Regression with time dummies * sig at 10%; ** sig at 5%; *** sig at 1%

Testing H1a: 0-1 Adopt Testing H1a: Trend

34:10

IMPACT OF ISO ADOPTION ON FIRM PERFORMANCE

Dependent: ROS ROA MTB ROS ROA MTB

Adoption (after 95) n.s. --* n.s. n.s. n.s. n.s.

Adoption*Until 95 +* +*** +*** +* +** n.s.

Log of Sales

Capital Expenditures

Customer Concentration Controls Controls

Segment Diversification

Geographic Diversification

Observations 457 457 457 457 457 457Method: Firm Fixed Effects Regression with time dummies * sig at 10%; ** sig at 5%; *** sig at 1%

Testing H1b: 0-1 Adopt Testing H1b: Trend

34:44

EXPLORING TECHNOLOGY HETEROGENEITY

Idea that all firms benefit from adopting PMP at odds with existing literature on operations and strategy

– Research emphasizes role of unique capabilites!

Can we find what firms can gain sustainable competitive advantage from the adoption of PMP?

– Recognize that PMP are customized by individual firms

– Find contexts where PMP create firm-specific complementarities

Look at the complexity and focus of the technology base

35:30

Potential best fit for benefitingfrom ISO adoption

THE TECH COHERENCE HYPOTHESIS: H2

Glass processing 151

Narrow Technology

Base

Welding 124

Forging 126

Glass processing 151

BroadTechnology

Base

Diverse Technology

Base

Forming 123

Welding 124

Stamping 131

Foaming 133

Laminates 134

Composites 135

Rubber 136

Extrusion 137

Forging 126

Powder sintering 127

Extrusion 128

Easy to imitate and limited opportunities

for customizationor improvement ofprocess linkages

PMP benefitsoutweighted by costs

or the creation of organizational

straight-jackets

Opportunity to use PMP to

tighten linkages in organization

H2 to be tested: Inverted U relation – Exponent on benefits side of adoption smaller than on cost side

36:19

MEASURING PRODUCT & PROCESS RELATEDNESS

Coherence expresses the relatedness of technological capabilities

– A relational classification scheme developed based on criteria of technological relatedness of processes

• Science & technology• Process Engineering• Properties of materials

– Gathered by analysis of annual reports and SEC filings of the companies

Concentration Measure– Herfindahl Index

• ni – Number of technologies in area i

• NT – Total Technologies

• Varies from zero to 1

Pro

cess

es

1

Metal processing 12

Machining 122

Casting 121

Forming 123

Welding 124

Stamping 125

Stamping 131

Molding 132

Foaming 133

Laminates 134

Composites 135

Rubber 136

Extrusion 137

Textile processing 171

Chemical processing 181

Electronic component mfg 191

Plastics processing 13

Textile processing 17

Chemical processing 18

Electronic component mfg 19

Ceramics 161Ceramics 16

Glass processing 151Glass processing 15

Coating 142

Painting 141Surface treatment 14

Forging 126

Powder sintering 127

Extrusion 128

Assembly 11 Assembly 111

Example of Classification

Scheme for Processes

2 levels

HCI niNT

2

i

38:10

BASE MODEL, DATA & VARIABLES

Model: Firm Fixed Effects Regression Model

Dependent Variable: Performance– ROS, ROA, MTB ratio

Independent Variables– ISO 9000 Adoption (0-1 & Trend)

• Interaction with Technology Focus and its square

Control Variables– Product/Process Identifier – Log of Sales (Proxy for Size)– Capital Expenditures– Customer Concentration (Herfindahl on 3 big sales)– Geographic Concentration (Herfindahl on Europe US Japan)– Market Diversification (Herfindahl on sales across SIC codes)– Time Effects

39:18

IMPACT OF ISO ADOPTION ON FIRM PERFORMANCE

Adoption 0-1 Adoption Trend

Dependent Var: ROS ROA MTB ROS ROA MTB

Adoption --*** --*** n.s. --*** --** +*

Adopt * TechCoh +*** +*** n.s. +*** +*** n.s.

Adopt * TechCoh2 --*** --*** n.s. --*** --*** n.s.

Log of Sales

Capital Expenses

Customer Concen. Controls Controls

Segment Diversif.

Geographic Diversif.

Observations 403 403 403 403 403 403

Method: Firm Fixed Effects Regression with time dummies * sig at 10%; ** sig at 5%; *** sig at 1%

39:28

CONCLUSIONS AND IMPLICATIONS

The average firm does not seem to gain from ISO adoption

Earlier adopters gain, but benefits competed with entry– Later adopters have less opportunity to gain from adoption

Ability to gain from PMP adoption contingent on firm nature– The technical complexity of the firm matters!– Benefits accrue when some (but not too much) process streamlining happens

Policy Implication: Be careful when jumping the bandwagon!– PMP are not a silver bullet, they can benefit as much as they can hurt– Strategy and Capability fit condition opportunity for improvement– Widespread adoption transforms improvement and signaling tool in entry

condition, with questionable results…

40:17

AoM 2009Sunday, August 9, 2009

ISO 9000 Practices and Financial Performance: A Technology Coherence Perspective

FRANCISCO VELOSOCarnegie Mellon University andUniversidade Católica Portuguesa

MARY BENNERWharton School of Management

University of Pennsylvania

41:30

Creating Consumer Durable Retailer Creating Consumer Durable Retailer Customer Loyalty through Order Customer Loyalty through Order Fulfillment Service OperationsFulfillment Service Operations

Beth Davis-Sramek,

John T. Mentzer,

&

Theodore P. Stank

47:35

Supply Chain RealitiesSupply Chain Realities

Diminishing “brand power” Products becoming commoditized “Polygamous” loyalty Retailers’ role in consumer purchasing

How do manufacturers create retailer loyalty?

50:17

Challenge to Operations ManagementChallenge to Operations Management

How do manufacturers implement operational strategies that help the

retailer achieve its objectives?

By understanding the retailers’ order fulfillment needs and expectations

53:38

Conceptual Model and HypothesesConceptual Model and Hypotheses

Satisfaction

AffectiveCommitment

PurchaseBehavior

LoyaltyLoyalty

OperationalOrder Fulfillment

Service

H1

H2

H3

H4

H6

H5RelationalOrder Fulfillment

Service

55:09

ImplicationsImplications

Manufacturers need to build customer focused operations capabilities

Moves operations from efficiency focus (“doing things right”) to effectiveness focus (“doing the right things”) (Stank et al. 1999)

Operations management strategies should also focus on the “soft” side of service

Loyalty is not just behavior – building bonds with customers is key to retention

58:30

Limitations and Further ResearchLimitations and Further Research

Sample limited to one company in one industry “Big box” retailers Industries relying on more self-service Objective measures of order fulfillment

performance Inter-disciplinary focus that examines

linkages between OM strategy and other firm functions/processes

62:18

A Conceptual Framework of A Conceptual Framework of Demand and Supply IntegrationDemand and Supply Integration

Demand/SupplyIntegration SUPPLYDEMAND

SupplyMarket

Knowledge

DemandMarketKnowledge

DSI-BasedSupply Mgmt.Plans

DSI-BasedDemand Mgmt.

Plans

Demand Management Domain

Supply Management Domain

62:39

Conceptual Model and HypothesesConceptual Model and Hypotheses

Satisfaction

AffectiveCommitment

PurchaseBehavior

LoyaltyLoyalty

OperationalOrder Fulfillment

Service

H1

H2

H3

H4

H6

H5RelationalOrder Fulfillment

Service

64:54

THANK YOU!THANK YOU!

Questions?Questions?

65:20

2008 Best Paper Nominees

• “Understanding behavioral sources of process variation following enterprise system deployment,” Pages 23-44, Vol. 26, No. 1, Elliot Bendoly and Mark J. Cotteleer

• “Creating consumer durable retailer customer loyalty through order fulfillment service operations,” Pages781-797,   Vol. 26, No. 6, Beth Davis-Sramek, John T. Mentzer and Theodore P. Stank

•“ISO 9000 practices and financial performance: A technology coherence perspective,” Pages 611-629, Vol. 26, No. 5, Mary J. Benner and Francisco M. Veloso

68:35

2008 Best Paper Finalist ISO 9000 practices and

financial performance: A technology coherence perspective

Beth Davis-Sramek and Ted Stank

Not pictured: John Mentzer

71:06

2008 Best Paper Finalist Creating consumer

durable retailer customer loyalty through order fulfillment service operations

Mary Benner and Francisco Veloso

71:56

2008 Best Paper Understanding behavioral

sources of process variation following enterprise system deployment

Mark Cotteleer and Elliot Bendoly

0:00

Thank you and congratulations!

72:37