Anindita Chakravarty

Information Technology Competencies, Organizational Agility, and Firm Performance: Enabling and Facilitating Roles

The hypercompetitive aspects of modern business environments have drawn organizational attention toward agility as a strategic capability. Information technologies are expected to be an important competency in the development of organizational agility. This research proposes two distinct roles to understand how information technology competencies shape organizational agility and firm performance. In their enabling role, IT competencies are expected to directly enhance entrepreneurial and adaptive organizational agility. In their facilitating role, IT competencies should enhance firm performance by helping the implementation of requisite entrepreneurial and adaptive actions. Furthermore, we argue that the effects of the dual roles of IT competencies are moderated by multiple contingencies arising from environmental dynamism and other sources. We test our model and hypotheses through a latent class regression analysis on data from a sample of 109 business-to-business electronic marketplaces. The results provide support for the enabling and facilitating roles of IT competencies. Moreover, we find that these dual effects vary according to environmental dynamism. The results suggest that managers should account for multiple contingencies observed and unobserved while assessing the effects of IT competencies on organizational agility and firm performance.

The Stock Market in the Driver's Seat! Implications for R&D and Marketing

The budgets for research and development (RD instead, firms display moderate myopic reactions, in the form of unanticipated decreases in R&D budgets but increased budgets for marketing functions. The tendency to manage myopically in response to past stock returns and volatility increases as firm size or industry concentration decrease. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.

Customer Orientation Structure for Internet-Based Business-to-Business Platform Firms

Internet-based business-to-business platforms involve a buyer side transacting with a seller side, both of which are customers of an intermediary platform firm. Dyadic viewpoints implicit in conventional theories of customer orientation thus must be modified to apply to a triadic relationship system (seller–platform–buyer) in platform settings. The authors propose that customer orientation of platform firms consists of total customer orientation (customer orientation toward both the buyer and seller sides) and customer orientation asymmetry (customer orientation in favor of the seller relative to the buyer side) and examine the antecedents and consequences of these orientations. Data from 109 business-to-business electronic platforms reveal that buyer- (seller-) side concentration increases total customer orientation and customer orientation asymmetry toward sellers (buyers). These positive effects are weaker when buyers and sellers interact directly (two-sided matching) versus indirectly (one-sided matching) and are stronger when the offering prices vary (dynamic price discovery) versus remain stable (static price discovery) during negotiations. Finally, total customer orientation increases platform performance by itself and in interaction with customer concentration, but orientation asymmetry increases performance only in conjunction with customer concentration.

Organizational Debut on the Public Stage: Marketing Myopia and Initial Public Offerings

Successful initial public offerings (IPOs) provide firms with access to valuable resources, but also put pressure on firms to impress potential investors with evidence of their current well-being and prospects for future growth. To impress investors IPO firms might curtail their marketing budgets, which appears to inflate current earnings and provide evidence of current well-being. However, curtailing marketing budgets unexpectedly during an IPO may be a myopic practice, in that the immediate benefits of these budget cuts are offset by their longer-term adverse consequences on financial well-being. The extent of these adverse consequences in turn may be moderated by external firm factors, including strategic alliances and key customer relationships, and internal firm factors, such as the strategic emphasis on value creation versus value appropriation. A sample of 1,095 IPOs during 2000–2011 reveals evidence of myopic marketing practices in more than 37% of the sample. Investors seem misled during IPOs, but they correct their beliefs in the three years following the IPO and penalize these firms. The penalty for myopic marketing budgeting practices also increases with more strategic alliances and a strategic emphasis on value creation versus value appropriation, but it decreases in the presence (versus absence) of key customer relationships.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0970 .

Influencing Acquisition Performance in High-Technology Industries: The Role of Innovation and Relational Overlap

Acquisition is an important activity that enables firms to adapt their resource configurations. Acquisition literature has focused only on the levels of innovation or relational resources, the primary dimensions of organizational resource bases. The authors argue that in addition to the levels, the degree of overlap between the acquiring and target firms, in terms of innovation and relational resources, should influence acquisitions. Furthermore, they argue for the importance of the quality of the targets resources along with factors influencing the acquirers absorptive capacity (e.g., the chief executive officers [CEOs] functional background and the acquiring firms marketing intensity and acquisition experience) as contingencies. Using 319 biopharmaceutical acquisitions and a random-effect regression model that accounts for unobserved heterogeneity and the endogeneity of relational and innovation overlap, the authors find that innovation overlap has a positive effect, whereas relational overlap has a negative effect, on acquisition outcomes. Furthermore, the acquirer CEOs throughput background and acquisition experience negatively moderate, whereas the targets innovation resource quality and the acquirers marketing intensity positively moderate, the influence of innovation overlap. The targets relational resource quality and the acquirer CEOs throughput background positively moderate the influence of relational overlap.

Analyst Earning Forecasts and Advertising and R&D Budgets: Role of Agency Theoretic Monitoring and Bonding Costs

Because security analysts, who serve as brokers between public firms and investors, arrive at their forecasts by incorporating guidance from managers, there is immense pressure on the managers to meet or beat analyst earnings forecasts; moreover, investors reward (penalize) firms for exceeding (missing) analyst forecasts. Reasoning that decisions taken in response to analyst forecasts involve discretionary budgets, the authors study four contingent conditions under which quarterly analyst forecasts drive unanticipated adjustments to advertising and R&D budgets, and the long-term consequences of these budgetary changes. The choice of contingent conditions is related to agency theory–driven concepts of monitoring and bonding costs. Results from a panel data set of 515 firms and a hierarchical Bayesian model that provides firm-level coefficients show that both artificially imposed incentives on managers (monitoring costs) and personal career management concerns (bonding costs) moderate the extent to which managers react to analyst forecasts. Specifically, (1) bonus versus equity proportion of CEO compensation enhances the likelihood of managers reacting to analyst forecasts with unanticipated decreases in advertising and R&D budgets; (2) output experience of CEOs decreases this likelihood; (3) throughput experience of CEOs increases this likelihood; and (4) increasing marketing and R&D intensity decreases this likelihood. The authors also find that the unanticipated adjustments in advertising and R&D budgets adversely affect long-term firm returns and risk.