John Ni

Why be first if it doesn’t pay? The case of early adopters of C-TPAT supply chain security certification

Purpose The purpose of this paper is to focus on adoption of certified management standards, specifically public standards. Such standards play an increasingly important role in today’s business environment. However, to generate adoption benefits, they must be first widely accepted – a situation where they have become viewed as the de facto norms. For this state to occur early adopters play a critical role. Past research has argued that early adopters, in exchange for assuming more risk, are rewarded with higher economic returns. Yet, these findings are based on private, not public standards. With public standards, early adopters do not receive such benefits. There is evidence that public standards are becoming more important. This situation leads to a simple but important question addressed in this study – if early adopters assume the risks of embracing a new public standard without economic benefits, then what is their motivation? To resolve this question, this study draws on agency theory and prospect theory. The authors argue that early adopters embrace such standards because of their desire to minimize risk resulting from failure to support the goal at the heart of the public standards. Design/methodology/approach Data were obtained from the Customs-Trade Partnership Against Terrorism (C-TPAT) Partners Cost Benefit Survey and analyzed through structural equation modeling. Findings Early adopters of public standards are not driven by economic benefits but rather by the need to minimize their exposure to the risks associated with failing to satisfy the goals associated with a public standard. In other words, they were motivated by the need to minimize costs. In the case of C-TPAT, these costs are those of failing to provide or improve network security. Research limitations/implications This study has shed new light on the standards adoption process by clarifying the specific motivations that drive early adoption of a public standard. In addition to identifying the loss aversion motives of early adopters and economic benefit motives of later adopters, the authors have also elaborated on the notion that standards have differing levels of precedence, particularly when comparing private with public standards. Practical implications In a world characterized by increasing demands for outcomes such as improved security and where governmental funding is falling, due to growing deficits and governments that are becoming more conservative, the authors expect the use of public standards to increase. Originality/value Different from prior research on private standard, the paper focuses on the organizations involved in the adoption and diffusion of a public standard, with special attention being devoted to the early adopters. The paper provides a theoretical explanation for the actions of early adopters of a public standard through the theoretical lens of prospect theory.

Application developers’ product offering strategies in multi-platform markets

Abstract Mobile application (app) developers usually face challenges in product offering decisions. Our research develops an analytical framework to address a product offering problem that app developers face when introducing paid or free apps in a two-platform market. We provide optimal conditions and platform decisions for each strategy (in single and two platforms) by providing a framework for offering either a paid or a free app. When offering a paid app, we identify platforms’ willingness-to-pays, user densities, and platform-specific app-launching costs as key factors that determine platform selection strategy; if a free app is considered, users’ disutility sensitivity to advertisement is an extra factor for app developers to consider. The developers intrinsic capability and the apps nature form the quality upper bound for the app. When the quality upper bound is low and users are less sensitive to advertisement, these apps are often offered free in the app market. We find that if users’ disutility sensitivities to advertisements are small, introducing a free app is preferable to a paid app.

Eastern Truss Company: the technology adoption decision

Synopsis Located in the Mid-Atlantic region of the United States, Eastern Truss Company produced trusses used in construction of both large warehouses and custom homes. This case presents the student with the opportunity to analyze the critical factors associated with the decision of whether Eastern should adopt a new production technology and whether cash flows from reduction of temporary workers will cover adoption coasts. The student must evaluate the decision to adopt the production technology through the lens of operations management tools. This case is appropriate for undergraduate business studies in the field of operations management. Research methodology Case study. Relevant courses and levels Undergraduate operations management.